The Supreme Court struck down key provisions of the Tribunal Reforms Act, 2021, which aimed to centralize the appointment and functioning of tribunals.

• The Court also directed the Centre to establish a National Tribunal Commission within four months.

What Are Tribunals?

• Tribunals are specialised quasi-judicial bodies created to provide speedier and expert resolution of disputes in fields such as taxation, intellectual property, environment, and administrative service matters.
• Need for Tribunals:
  • To reduce the burden on regular courts.
  • To provide domain expertise for complex technical matters.
  • To ensure faster adjudication compared to traditional courts.
• Constitutional Basis: Tribunals are established under –
  • Article 323-A – Administrative tribunals
  • Article 323-B – Tribunals for subjects like taxation, land reforms, labour, industrial disputes, etc.
  • Supreme Court (2010): The Court held that subjects listed under Article 323B are not exhaustive; legislatures may create tribunals for any matter within their legislative competence under the Seventh Schedule.
• Jurisdiction and Appeals
  • Each tribunal has a defined jurisdiction limited to its specialised domain.
  • Appellate: Appeals generally lie before the High Courts, unless a statute provides a direct appeal to the Supreme Court. 

Tribunals Reforms Act, 2021 

• The Tribunals Reforms Act, 2021 was passed by Parliament on 13 August 2021 and came into effect retroactively from 4 April 2021.
• Key Features:
  • Merger/Dissolution of Tribunals: It seeks to dissolve or merge specified tribunals listed in its schedules such as Intellectual Property Appellate Board, Airport Appellate Tribunal and transfer their functions to existing judicial bodies such as High Courts or other appellate forums
  • Service Conditions: The Act also standardises the service conditions, appointment procedure, tenure, salaries and allowances for tribunal Chairpersons and Members across tribunals.
• Appointment & Conditions of Service
  • The Act mandates the formation of a Search‑cum‑Selection Committee where the Chairperson will be the Chief Justice of India (or a Supreme Court Judge nominated by him) along with two Secretaries of the Government of India and other nominated members.
  • It sets minimum age eligibility of 50 years for appointments as Chairperson or Member and defines a term of office of four years for them.

Court’s Observations on the Provisions of the Tribunal Reforms Act

• Violation of Constitutional Principles: The Supreme Court ruled that the Act undermined the independence of the judiciary and the separation of powers, particularly by allowing excessive executive control over tribunal appointments and tenure.
• Repackaging of Ordinance Provisions: The Bench noted that the 2021 Act was a re-enactment of provisions previously struck down in the Tribunal Reforms Ordinance of 2021, with minor tweaks that did not address constitutional flaws identified by the Court.
• Judicial Independence: The Court emphasized that judicial independence is a core constitutional requirement, essential for the effective functioning of the judiciary and the rule of law.
• Parliament Cannot Override Court’s Judgment: The Court stated that once a provision has been struck down by the judiciary for violating the Constitution, Parliament cannot simply repurpose or reintroduce it. 
  • Any new legislative response must address the constitutional defects identified by the Court.
• Constitutional Supremacy: The Court reiterated that constitutional supremacy mandates that Parliament and the executive respect judicial decisions.

Provisions Struck Down by the Court

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Rationale for Striking Down the Act

• Judicial Review and Separation of Powers: The Bench emphasized that judicial review and the separation of powers are not abstract principles but essential structural pillars of the Constitution. 
  • These principles underpin the distribution of authority among the executive, legislature, and judiciary.
• Judicial Independence: Judicial independence is linked to judicial review, which ensures all state actions, including legislative and executive actions, conform to the Constitution.
• Minimum Age and Short Tenure:
  • Age restriction of 50 years excludes younger advocates and harms diversity in appointments.
  • A four-year tenure undermines independence, as it creates dependence on the executive for reappointment. 
• Interference in Tribunal Independence: The Court criticized the involvement of executive officials in the search-cum-selection committee for tribunal appointments, arguing that it compromised impartiality, given that the executive is often a party to litigation before these tribunals.
• Constitutional Safeguards: The Court reminded the Union Government that provisions regarding tenure, selection processes, and independence of tribunals are constitutional requirements under Articles 323-A and 323-B.

Directions Issued

• Need for the Commission: The Supreme Court stressed the importance of setting up the National Tribunal Commission as an “essential structural safeguard” to ensure independence, transparency, and uniformity in the functioning of tribunals.
• Timeline for Implementation: The Centre was directed to establish the Commission within four months to oversee the appointments, functioning, and administration of tribunals in the country.

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