On May 16, a Supreme Court bench of Justices Indu Malhotra and AK Goel directed the Central government to constitute a three-member expert committee to study India’s tribunals framework and suggest changes to enhance their operation and access to justice. This is the first major development since the Finance Act, 2017, which merged several tribunals and was criticised for these allegedly inexplicable mergers and for overemphasising the role of the executive. While the Act is under review by the Supreme Court, it is crucial to take a closer look at the framework of central tribunals before the Act to determine the incongruence with established constitutional principles.
Tribunals were conceived as a parallel set-up to courts, meant to offer speedy and specialised dispute resolution for (usually) technical laws. For this reason, tribunals include non-judicial expert members. The pressing need for speedy disposal invites the involvement of the executive in setting up and administering tribunals, providing funds, staff and infrastructure. However, as a frequent litigant before these tribunals, the government stands in a dubious position of administration and oversight. This issue of separate and accountable governance of tribunals has led to them operating in a state of dysfunction and flux, often subject to constitutional challenges. Supreme Court judgements in the L Chandra Kumar case (1997), the R Gandhi case (2010), and the Madras Bar Association case (2014) offer a blueprint for India’s tribunals framework, explaining their constitutional status and relationships with the judiciary and executive.
With respect to the executive, the problem is toeing the line between overseeing administration and maintaining judicial independence. For instance, in the Madras Bar Association case, the Supreme Court struck down the National Tax Tribunal Act, 2005, as unconstitutional, owing to (among other things) the presence of a greater number of executive members in the selection committee that picks the chairperson and members of the tribunal, and the power of the executive to decide the location and jurisdiction of benches. The court said that with the government litigating regularly before tribunals, giving it a greater say in these matters would compromise judicial independence. The statutory threshold for judicial independence with respect to selection committees was clearly identified as having more judicial members determining the tribunal’s composition. However, the reality across central tribunals is far from this.
Executive’s powers
According to a report by the think-tank Vidhi Centre for Legal Policy (which was co-authored by this writer and published on June 11), of the 37 central tribunals in India, only 18 have selection committees, to begin with. Three of these 18 committees do not have any judicial members while in 13, the majority of members are from the executive.
Moreover, the executive has undue power over the removal of members. The statutes that created the Authority for Advance Rulings (Income Tax), the Income Tax Appellate Tribunal and the Appellate Tribunal for Forfeited Property do not have a removal procedure, effectively granting the executive unbridled powers to remove members.
Besides being consistent, these processes must capture the vitality of judicial independence by not giving the executive the power to remove tribunal members with ease. But here too, inconsistencies favouring the executive abound. While a rigorous inquiry process for removal seems obvious, that is not the case for most tribunals. The report, titled “Reforming the Tribunals Framework in India: An Interim Report”, states that 37% of tribunals in India do not have a mandatory inquiry process whereas 11% have inquiry processes for certain grounds of removal but not others. Effectively, there exists a wide scope for executive autonomy in removing members, which opens the door to members favouring the government in their decisions in order to secure their position in the tribunals.
Administration challenges
The lack of clarity and non-uniformity in tribunal administration leads to a dysfunctional system. In L Chandra Kumar, the Supreme Court identified non-uniformity as an important cause for maladministration and advised that tribunals operate under a single, independent nodal agency to ensure smooth functioning. But two decades on, the problem persists – 37 central tribunals operate under 18 ministries. The Ministry of Finance has as many as 12 tribunals operating under it. The Corporate Affairs Ministry oversees five and the Water Resources Ministry three while 15 ministries typically oversee one or two tribunals. There is also often little rationale to the manner of oversight. For instance, the Ministry of Finance oversees multiple tax tribunals such as the Authority for Advance Rulings (Income Tax), the Authority for Advance Rulings (Customs), the Central Sales Tax Appellate Authority, and the Customs, Excise and Service Tax Appellate Tribunal. The Income Tax Appellate Tribunal, on the other hand, operates under the Ministry of Law and Justice (the only tribunal overseen by this ministry).
India’s tribunal reforms have remained unresolved for years. While the Supreme Court’s direction to form an expert committee is welcome, the problem is the cyclical nature of constitutional challenges, creation of committees and submission of recommendations, followed by the Centre maintaining status quo. Between the Law Commission of India’s 272nd Report in 2017, the 74th Parliamentary Standing Committee Report in 2014, independent research, and best practices from places like the United Kingdom (which successfully reformed their tribunals framework over the last decade), the ideas are all there. What we need is for the Centre to not approach tribunal reforms in a piecemeal manner but address it systemically and responsibly in order to have a broader and more meaningful impact on India’s justice system.
Raunaq Chandrashekar is a Vidhi-Tata Trusts Fellow under the Justice, Access and Lowering Delays in India Project with the Vidhi Centre for Legal Policy