#FinanceAct:The issues surrounding de-tribunalisation

Finance Minister Arun Jaitley’s Budget speech hinted at the reduction in the number of tribunals, and it has emerged that the Centre has done just that with the recent passing of the The Finance Amendment Bill, 2017..The Amendment Bill, which is longer than the original Finance Bill itself, has revealed, among other things, the list of tribunals that are sought to be eliminated and the absorption of their responsibilities..The ninth schedule of the amendment bill provides a list of the tribunals due to be replaced. Here is a list collated by PRS Legislative:.What is the problem with the merging?.There appear to be some issues with the merging of tribunals. While some mergers, such as that of the Copyright Board with the Intellectual Property Appellate Board makes sense but merging COMPAT with the NCLAT hardly makes sense, given the fact that members of the NCLAT aren’t best equipped to deal with competition law matters, and given its highly specialised nature..Further, the Airports Economic Regulatory Authority of India is being merged with the TDSAT, despite the existence of the Airports Appellate Tribunal..Commenting on this decision of the Government, Harish Narasappa, Partner at Samvad Partners says,.“The reason why tribunals were created in the first place was to have experts, who are not necessarily judicial members, to be a part of the decision making process. The purpose behind having a specialised tribunal gets diluted by creating these high profile multi-jurisidictional tribunals. If you’re going to create a super tribunal, what is the purpose of removing it from the high court jurisdiction?”.To add to the woes, there is a possibility that the NCLT will be eventually overburdened. Since its establishment, the NCLT has taken over the jurisdiction of the Board for Industrial and Financial Reconstruction (BIFR), the Appellate Authority for Industrial and Financial Reconstruction (AAIFR), and the Company Law Board (CLB)..It has also taken over jurisdiction and powers relating to winding up, restructuring and other such provisions, currently vested in the high courts. All cases under the newly enacted Insolvency and Bankruptcy Code, 2016 also vest with the NCLT. NCLT commenced operations with eleven benches; however there exists only one bench for its appellate authority i.e. the NCLAT. This single body will be looking after the plethora of appeals being filed against all NCLT orders..Interestingly, Somasekhar Sundaresan, an independent counsel based in Mumbai, says,.“The NCLAT is not overburdened right now. It will become quite burdened in about a year’s time. .But what would also help work this out better would be to attract judicial talent to sit on these benches. If judicial talent is not recruited and terms are not attractive enough to recruit judicial talent, it would be quite inappropriate to have retired bureaucrats sitting in appeal over another set of serving and retiring bureaucrats.”.Are all amendments rightfully a part of the Finance Act?.The Finance Act is being used as an instrument to amend various laws that have nothing to do with the Budget. Laws such as Securities and Exchange Board of India Act, Consumer Protection Act, Administrative Tribunals Act, Income Tax Act, Cinematograph Act, Customs Act, Recovery of Debts Due to Banks and Financial Institutions Act, Electricity Act, Armed Forces Tribunal Act 2007 and the National Green Tribunal Act 2010 are being amended to change the terms of appointment of the members of various tribunals constituted under these laws..So are the amendments to these laws under Finance Act justified? Narasappa answers,.“All these tribunals were created under specific statutes, and they are supposed to be amended under those particular statutes. Finance Bill can’t amend various statutes when there is no direct connection with the budget- it’s against parliamentary process.”.This is not the first time the government has pushed a law as a money bill despite it not being one. The Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 was passed in a similar fashion to bypass Rajya Sabha approval..Sundaresan adds,.“These legislative provisions are those that set up institutions. They are not at all fiscal matters or money bills. The Speaker of the Lok Sabha has a fair bit of answering to do on this front. Almost every legislation that set these tribunals up were not handled as money bills. After the Aadhar experiment, the executive government has become bolder in using the money bill route to get legislation passed. ”.Ask him if judicial intervention will undo this wrong?.“The Supreme Court has been circumspect so far but large scale abuse of a constitutional protection to the finality of the Speaker’s certification will lead to a firm Bench pushing the issue and reading down the provisions on finality of the Speaker’s views. .Bad actions lead to bad law and to that extent, the blanket certification of legislation setting up long-term institutions being passed behind the back of the Rajya Sabha is not right, and will provoke judicial intervention at some point in the future.”.Judicial consultation done away with?.Further, Section 184 of the amended Finance Act allows the government to make rules for the qualifications, appointment, term of office, salaries and allowances, resignation, removal and other terms and conditions of service of all members of the listed tribunals and appellate tribunals..While this suggests that central government has been appointed as the sole authority for determining appointment of members to the tribunals, it would be relevant to note that there continue to exist provisions under the respective laws, which allow consultation with the Chief Justice of India before appointments of tribunal members, provisions which have so far not been struck down, or amended..The Finance Act, however, clearly states that the amended provisions will apply only prospectively and not to appointments made prior to this..In that context, whether the powers of the Chief Justice of India have been done away with completely is a point, which is not clear yet. If the consent of the CJI is removed altogether, it may lead to a problematic situation wherein these post-retirement jobs will serve as an incentive for judges to rule in favour of the government to get these jobs.