Tribunals

The first answer: substitution allowed

Facts. S.P. Sampath Kumar v. Union of India, 1987 AIR 386, 1987 SCR (1) 435, decided 9 December 1986 by a Bench of five. The Administrative Tribunals Act 1985, made under article 323A, set up the Central Administrative Tribunal and by section 28 excluded the High Courts under articles 226 and 227 in service matters. Section 6(1)(c) allowed a person who had held the post of Secretary to the Government of India to be Chairman, and the Government appointed alone, with no obligation to consult the Chief Justice of India. Both the exclusion and the composition were challenged.

Held. The exclusion was upheld, the composition was not. Per Bhagwati C.J., "Judicial review is a basic and essential feature of the Constitution and no law passed by Parliament in exercise of its constituent power can abrogate it or take it away"; but it is "within the competence of Parliament to amend the Constitution so as to substitute in place of the High Court another alternative institutional mechanism or arrangement for judicial review", provided "it is no less efficacious than the High Court". Such a law "must not leave a void but it must set up another equally effective alternative authority."

On composition the Court was severe. "It is the High Court which is being supplanted by Administrative Tribunal", so the Chairman must be equated with a Chief Justice of a High Court, and section 6(1)(c) was "struck down as invalid" because a Secretary with no legal or judicial experience would "render the Administrative Tribunal a much less effective and efficacious mechanism than the High Court." "Total insulation of the judiciary from all forms of interference from the coordinate branches of Government is a basic essential feature", so appointments had to follow consultation with the Chief Justice of India or a committee headed by him, and benches were required wherever a High Court sits.

Why it matters. It is the high water mark of the substitution theory: a properly constituted tribunal could, the Court thought, be the High Court for that purpose. Everything else in the case follows from that premise, and so does its later fate.

The second answer: substitution forbidden

Facts. L. Chandra Kumar v. Union of India, AIR 1997 SUPREME COURT 1125, 1997 (3) SCC 261, decided 18 March 1997 by a Bench of seven. A Division Bench had referred the matter, concluding that Sampath Kumar "needs to be comprehensively reconsidered" because later decisions had gone in different directions. Three questions were framed: whether the exclusion worked by article 323A(2)(d) and article 323B(3)(d) runs counter to the judicial review conferred by articles 226, 227 and 32; whether such tribunals may test the validity of a statutory provision; and whether, as they were then functioning, they were effective substitutes for the High Courts.

Held. The exclusion is unconstitutional. "The power of judicial review over legislative action vested in the High Courts under Articles 226 and in this Court under Article 32 of the Constitution is an integral and essential feature of the Constitution, constituting part of its basic structure", and "the power vested in the High Courts to exercise judicial superintendence over the decisions of all Courts and Tribunals within their respective jurisdictions is also part of the basic structure." The reason is structural: the safeguards that protect the superior judiciary "are not available to the Judges of the subordinate judiciary or to those who man Tribunals created by ordinary legislations", so judges of that category "can never be considered full and effective substitutes for the superior judiciary in discharging the function of constitutional interpretation."

The operative order: "Clause 2(d) of Article 323A and Clause 3(d) of Article 323B, to the extent they exclude the jurisdiction of the High Courts and the Supreme Court under Articles 226/227 and 32 of the Constitution, are unconstitutional", and so are section 28 of the Administrative Tribunals Act and every similar exclusion clause. Tribunals may test the vires of statutory provisions and rules, but not of their own parent statutes, and their "function in this respect is only supplementary". Every decision goes before a Division Bench of the High Court within whose jurisdiction the tribunal falls, and no appeal lies direct to the Supreme Court under article 136. Tribunals "will, nevertheless, continue to act like Courts of first instance". The directions operate prospectively.

Why it matters. It reverses the relationship. Sampath Kumar allowed a tribunal to replace the High Court; L. Chandra Kumar holds that it may only supplement it. Note what was not decided: the tribunals were not abolished, articles 323A and 323B survive but for the two sub-clauses, and the Court refused to hold that they rest on "a fundamentally unsound principle", declining the Malimath Committee's recommendation that the theory be abandoned. A student who writes that L. Chandra Kumar struck down the tribunal system has the case backwards.

The third answer: match the court replaced

Facts. Madras Bar Association v. Union of India, AIR 2015 SUPREME COURT 1571, decided 25 September 2014 by a Bench of five, Nariman J. concurring in the result. The National Tax Tribunal Act 2005 created a tribunal to hear appeals on questions of law from the appellate tribunals under the Income Tax Act, the Customs Act 1962 and the Central Excise Act 1944, a jurisdiction that had belonged to the High Courts. Section 24 gave an appeal direct to the Supreme Court. Article 323B and section 46 of the Forty-second Amendment were also challenged.

Held. The Act was struck down in its entirety, but the constitutional amendment was upheld. Parliament "has the power to enact legislation, and to vest adjudicatory functions, earlier vested in the High Court, with an alternative court/tribunal", and doing so "would not per se violate the 'basic structure'". The limit is that the basic structure "will stand violated, if while enacting legislation pertaining to transfer of judicial power, Parliament does not ensure, that the newly created court/tribunal, conforms with the salient characteristics and standards, of the court sought to be substituted."

Applying that, sections 5, 6, 7, 8 and 13 fell: section 5, because the tribunal was to sit ordinarily in Delhi and the Central Government, "a stakeholder in each and every appeal", could fix benches and transfer members; section 6, because the qualifications did not match those of High Court judges; section 7, because Secretaries to the Central Government sat on the selection committee, and "a party to a litigation" cannot "participate in the selection process"; section 8, because a renewable five-year term "would itself have the effect of undermining the independence" of the members. Since those provisions "constitute the edifice of the NTT Act", "the entire enactment is declared unconstitutional."

Why it matters. It supplies the working test after L. Chandra Kumar. Transfer of jurisdiction is permitted; the tribunal must then carry the salient characteristics of the court whose work it takes: the same manner of appointment, stature of members, security of tenure, distance from the executive, accessibility. It also disposes of a common examination error. L. Chandra Kumar does not make tribunalisation unconstitutional; this case shows what does.

The three in line

What it does NOT mean

It does not mean articles 323A and 323B are gone. Only the exclusion sub-clauses failed, and only so far as they exclude articles 226, 227 and 32. The Constitution still prints the struck words because no amendment has removed them.

It does not mean a litigant may go straight to the High Court. Tribunals remain courts of first instance, and it is "not open for litigants to directly approach the High Courts" by raising the vires of a statute, the one exception being a challenge to the parent Act itself.

It does not mean tribunals cannot decide constitutional questions. They can test the vires of statutes and rules. What they cannot decide is the validity of the Act that created them, and what they cannot be is the last word.

A worked example

A State legislature enacts a Rent Tribunals Act under article 323B(2)(h). It bars the High Court's jurisdiction, gives an appeal direct to the Supreme Court, and provides for members appointed by the State Government for renewable three-year terms, with the Housing Secretary on the selection committee. Farida, a tenant, challenges the Act.

Step one, was the legislature competent? Yes. Rent and tenancy are in article 323B(2)(h), and "the appropriate Legislature" in article 323B(1) here includes a State legislature.

Step two, the exclusion of the High Court, and the direct appeal. Both fall on L. Chandra Kumar. Articles 226 and 227 are basic structure and cannot be ousted, whatever article 323B(3)(d) still says on the page; and the route to the Supreme Court runs through a Division Bench of the High Court first.

Step three, the composition. On Madras Bar Association this tribunal takes work that was the High Court's, so it must carry the salient characteristics of a High Court. A renewable three-year term in the State Government's gift does not, and the Housing Secretary sits on the selection committee for a body before which the State will be a litigant.

Step four, the result. The exclusion and appeal clauses fall; whether the whole Act falls depends on whether the survivors are left "otiose and worthless". Either way Farida cannot ignore the tribunal, which remains her court of first instance.

Quick revision

• Part XIVA, articles 323A and 323B, was inserted by the Forty-second Amendment, from 3 January 1977. Article 323A: Parliament only, service matters only. Article 323B: either legislature, nine listed subjects. Both permitted the exclusion of all courts except the Supreme Court under article 136.
• Sampath Kumar (1986, five judges): exclusion valid if an equally efficacious alternative institutional mechanism replaces the High Court. Section 6(1)(c) of the 1985 Act struck down; appointment to follow consultation with the Chief Justice of India.
• L. Chandra Kumar (1997, seven judges): those sub-clauses are unconstitutional so far as they exclude articles 226, 227 and 32, that jurisdiction being "part of the inviolable basic structure". Tribunals are therefore supplemental courts of first instance, may test the vires of statutes and rules but not of their parent Act, and their orders go to a Division Bench of the High Court before article 136.
• Madras Bar Association (2014): transfer of the High Court's jurisdiction is permitted per se, but the new body must have the salient characteristics of the court replaced. The National Tax Tribunal Act 2005 fell entirely.
• The recurring vices: the executive choosing the members, short renewable tenures, and members who would not qualify as judges of the court replaced.

Test yourself

1. What exactly did Sampath Kumar hold about the exclusion of High Court jurisdiction, and on what theory?

2. What did L. Chandra Kumar overrule and what did it leave standing? Be precise.

3. After L. Chandra Kumar, trace the path of a service dispute from the tribunal to the Supreme Court.

4. State the test in Madras Bar Association and apply it to a tribunal whose members are appointed for renewable two-year terms by the Ministry that will be the respondent before it.