Supreme Court says Central government hell bent on not respecting its orders on tribunals

The Supreme Court on Monday came down heavily on the Central government for enacting the Tribunal Reforms Act, 2021 in an arbitrary manner, reducing the terms of members and chairmen of Tribunals and being identical to the “earlier law struck down” by the apex court.

A Bench comprising Chief Justice of India N.V. Ramana, Justice D.Y. Chandrachud and Justice L. Nageswara Rao, while issuing notice on the petition filed by Congress leader and MP Jairam Ramesh, said the government “appears hell bent on not respecting the Supreme Court orders”.

While noting the fact that the Central government appointed nine Supreme Court judges within seven days of receiving recommendation for the same, the apex court asked, “Why is it taking one-and-a-half year to appoint tribunal members and chairpersons?”

Justice DY Chandrachud said,

“The National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) are cornerstones for the economy of the country. These are important for rehabilitation of corporate entities. Important cases are not being heard because of vacancies. Not appointing judges at NCLT and NCLAT creates a very critical position.”

Giving one more week time to the Centre (till Monday) to implement the SC recommendations, the Bench said, “We do not want confrontation with the government, but we will be left with no other option but either to close down the tribunals or take over the appointments and initiate contempt, if the government does not implement the recommendations.”

The petition challenged the constitutional validity of various provisions of the Tribunal Reforms Act, 2021 . The petition assailed Section 3(1), section 3(7), section 5 and section 7(1) of Tribunal Reforms Act, 2021.

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Senior Advocate Dr Abhishek Manu Singhvi, appearing for Ramesh, told the bench that he has prepared a chart of the provisions in the Act, which are the re-enactments of the provisions struck down in the Madras Bar Association case.

Earlier, in the case of Roger Matthew, the constitutional validity of Section 184 of Finance Act, 2017 was assailed by the Madras Bar Association, however, the Constitutional Bench upheld Section 184 of Finance Act, 2017 which went on to strike down the Tribunal Rules 2017. Soon after that, the Madras Bar Association vs Union of India filed a Writ Petition, assailing the validity of Tribunal Rules 2020 framed by the Central Government. The three-judge Bench directed the Centre to set up the National Tribunals Commission, along with several directions. Post this judgment, Parliament passed the Tribunal Reforms Bill, 2021, wherein the same provisions were constituted that were already struck down by the Supreme Court.

Earlier on June 1, 2021, the apex court had directed that the process of constituting a search-cum-selection committee had to be initiated at earliest. The Bench also passed directions not to issue any advertisement for participation of other eligible candidates’ appointment as members. earlier, the Bench of Justices L. Nageswara Rao, S. Ravindra Bhat and Hemant Gupta held that Central government should fill up vacancies in NCLT and the NCLAT in two months.