Mismatch of perceptions leads to abuse

The future landscape of justice delivery by tribunals in economic matters in India has the potential to be transformed by the recent decisions by five judges of the Supreme Court. Or perhaps not — until some future litigation presents itself against (yet) another violation of this very ruling.

The bench was considering the constitutional validity of provisions of the Finance Act, 2017, which materially and substantially altered the composition and terms of appointment of tribunals under various special legislation, passing the legislation off as a “money bill”.  Essentially, various other legislation that became law upon being passed by both Houses of Parliament had been sought to be materially amended by tucking the amendments in the Finance Act, 2017, which, as legislation primarily dealing with fiscal matters, could be passed by the directly-elected Lok Sabha alone.
  
At the heart of the challenge was Section 184, which essentially entailed the executive being totally empowered to determine what the qualifications, appointment, and terms and conditions of service of members of various tribunals should be. Tribunals are a form of providing easier access to justice, removing the informal trappings of formal courts, but that cannot erode the need for independence from the executive. That the executive got Parliament to pass legislation to empower the executive to be in charge of these facets, led to the independence of such a justice-delivery system being called into question.

Trickily, the issue of whether such legislation can be passed as a money bill has been referred to a larger bench, even while upholding the constitutional validity of delegation of such power to the executive. A dissenting judgement, both on the validity of such delegation and the usage of the device of money bills by Justice D Y Chandrachud, makes for compelling reading. His, coupled with a partly-dissenting judgement by Justice Deepak Gupta holding that the delegation of powers to the executive is indeed excessive and unconstitutional, should hopefully be the much-quoted “appeal to the brooding spirit of the law” when a future bench takes a look at another abusive legislation.

The net effect is that the rules made by the executive pursuant to the delegation (held to be constitutional by the majority) have been unanimously struck down.

The case now disposed of in 2019, involved enforcement of past rulings of the Supreme Court — made in 1997 and 2010 — in the context of legislation passed in 2017 violating the directions and the law laid down in those earlier cases. Whichever party is in political power, the executive gets the political system to table and pass in Parliament legislation that directly violate the Supreme Court’s past directions and rulings. Although the system has been found to have returned a legislative product that clearly disregards the Supreme Court, the ruling does not nudge the system into a space of accountability and a disincentive for preventing future abuse.

The inability to enforce and hold to account violations of the apex court’s rulings on constitutional matters and important facets of governance, and the resultant incentive to the executive to indulge in continued violation, is a key theme in Arun Shourie’s book Anita Gets Bail. Each of the three rulings (the majority judgement and the two others) makes a compelling reading of yet another iteration of this theme. With such a resounding finding of violation of the law already declared by the apex court, the absence of any intervention for accountability, beyond a finding of unconstitutional conduct, is underwhelming.  

Not too long ago, a two-judge bench of the Supreme Court imposed costs on the government for agitating a dispute on a question that had clearly been closed by past rulings, by engaging senior law officers to give a sense of importance and re-agitate a closed issue. It had turned out that in the past too, costs had been imposed for one round of vexatious re-agitation of a closed issue. Among the three pillars of the state, in constitutional matters (as opposed to bilateral disputes), constitutional restraint leads to courts tending to appeal to the good sense of those in positions of governance. Those in the executive see this as a perpetual availability of a long rope. This mismatch of perceptions incentivises abusive conduct.

One clear direction this time has the potential for long-term positive impact on the higher judiciary and its experience and quality of work content. The government has been asked to correct the position of direct appeals to the Supreme Court from the tribunals, by instead, providing for appeals to the High Court, to division benches, if necessary. Such action is directed to be taken “preferably within a period of six months”. This measure is a crying need — today, regulatory disputes over most economic legislation completely bypass the high courts. When high court judges go to the Supreme Court, without having handled such cases either as lawyers or as judges, the absence of domain experience, impacts justice delivery. This is a direction that must be complied with.
The author is an advocate and independent counsel. Tweets @SomasekharS




Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel