Need for Checks on the Functioning of Tribunals

Shikhar Verma comments on the need for checks on the functioning of Tribunals.

Introduction

The emergence of a Welfare State led to the State bearing the culpability to take care of people’s socio-economic needs. All the aspects of this responsibility cannot be endured by a single branch of the State, especially one as underfunded as the judiciary. This created an opening for the executive to assist the judiciary by performing many quasi-judicial functions for example, levying of fines, penalties etc. The legislature decided to ease the load of problems faced by the Indian Courts by instituting provisions under Articles 323A and 323B of the Constitution of India, 1950 to form adjudicating authorities exercising quasi-judicial powers, and these evolved into tribunals.

The Apex Court in Bharat Bank Ltd. V/s. Employees¹, stated that all adjudicatory bodies performing quasi-judicial functions are not tribunals. Only those Governmental bodies which pass the basic test under Articles 136 and 227 of being vested with State’s judicial power under a statute or a statutory rule, can be classified to be a tribunal². So, on one hand a Court derives its power directly from the Constitution, whereas Tribunals derive their powers from statutes enacted under Articles 323A and 323B of the Indian Constitution. Thus, the Judiciary as an organ is free from legislative control i.e., they can interpret the statutes enacted by the Legislature howsoever they desire (with appropriate reasons) and can render a judgement which, according to their own viewpoint, is correct. However, a Tribunal is a child of a statute which has been specially enacted for its creation and is bound by the statutes that have created it. Given that they are still a part of the judicial system, it is imperative to ensure that they are not decorated with unfettered power. There has to be a system of checks and balances over their functioning and a High Court must be given authority over their working.

Dependence on Government Departments:

Tribunals are formed by the legislature through a statute to solve particular kinds of cases i.e. pertaining to a particular department of the Government like the Income Tax Appellate Tribunal or the Appellate Tribunal for Electricity. These departments receive the funding to maintain their infrastructure, support, services, workspace etc. from the Government which can be highly influential in regards to the working of these tribunals. The Government officials may try to influence the decisions being taken by these departments in a way that would favour the State. This was a problem in Union of India v/s. R. Gandhi³ (the NCLT Case) where the sponsoring agency had appointed its own Director as a member of the selection committee of the National Company Law Tribunal. This allowed the department to select the kind of officers that would rule in the department’s favour. It was also observed that the civil servants who are inculcated as part of a Tribunal are aligned with the interests of their own department. This creates bias towards the welfare of their own department especially, when it is one of the parties in a dispute. To remedy this situation, the Court proposed a new four-member selection committee including the Chief Justice of India (or his/her nominee), a Senior judge of Supreme Court or a High Court Chief Justice, Secretary of Ministry of Finance and Company Affairs and Secretary of Ministry of Law and Justice⁴. This committee would be free from any departmental members interfering in the selection of the constituting body of the tribunal ensuring its independence.

The same issue also came up in Madras Bar Association vs. Union of India⁵ (the NTT Case). A five-judge bench of the Supreme Court declared the National Tax Tribunal Act, 2005 to be unconstitutional. The Court overturned the provisions which allowed the Central Government to decide the venue, setting up of branches, transferring representatives etc. of these tribunals The objective of this statute was to strengthen the executive’s and Government’s dominance over the tribunals undermining their independence. Government itself, being a stakeholder added to the prospect of these adjudicators indulging in bias. It was also held that constituting a tribunal of a majority of executive’s officers rather than judicial members would undermine its ability to act independently⁶.

Contrary to these tribunals, a High Court is independent from the influence of any other branch of the State. They are not answerable to any particular Governmental department and has the authority to direct the Legislatures and State Governments to act in a certain manner.

The only authority over and above the High Courts is that of the Supreme Court of India. Robbing the High Court of their power would increase the work pressure on the Supreme Court as they would have to indulge in matters that could have been decided by the High Court. High Courts have a considerably greater number of judges and can easily tackle increased workload. Thus, having a High Court overseeing the functioning of the tribunals as well as the Trial Courts is ideal.

42^nd Amendment to the Indian Constitution:

The 42^nd Amendment to the Constitution of India, 1950,brought about a severe change to the provisions of the Constitution which severely diminished the powers of judicial review exercised by the High Courts and the Supreme Court. There were two principle changes curtailing their power. First, Article 227(1),which restricted the authority of the High Court to exercise its power over all Courts subject to its appellate jurisdiction⁷, excluded tribunals (a tribunal is not a proper Court) from the provision effectively. Further, Clause 5⁸ was inserted to the Article, which withdrew the power of the High Court to question or review any judgement of a lower Court unless one of the parties prefers an appeal or a revision. The second change was the incorporation of Articles 323A and 323B which empowered the Parliament to pass laws for creation of Administrative Tribunals (categories were mentioned under these Articles as well) which would only submit to the jurisdiction of the Supreme Court.

In the guise of taking the case load off of the High Courts, the Legislature attempted to increase the control of the Government over the judicial system. Ousting the authority of the High Court would have allowed the State Governments to influence the decisions of the Tribunal to be more favourable to their cause. As mentioned above, the Supreme Court would be unable to deal with this bias of the tribunals due to the exorbitant amount of work that would inculcate for them. However, some relief was granted to them when the Constitution (44th Amendment) Act, 1978 was enacted.

Power of Judicial Review and Status of High Courts

Under Article 323A of the Constitution of India, 1950, the Parliament sanctioned the Administrative Tribunals Act, 1985. Section 28 of the said Act eliminated the High Court’s power of judicial review under Articles 226 and 227of the Constitution. However, the aforesaid provision of the Act could not eliminate the power of the Supreme Court to conduct judicial review of the decisions rendered by the tribunals under Article 136 of the Constitution. In Sampath Kumar vs. Union of India⁹, a five judge Bench upheld the constitutionality of this Act. Justice Ranganath Misra stated that a tribunal must be a de jure and de facto replacement of the High Courts. He sought solace in the knowledge that the Supreme Court’s power of judicial review was left unaltered. Chief Justice Bhagwati¹⁰ stated that the statute would have been in violation of the Basic Structure of the Constitution had they excluded the jurisdiction of the High Court to perform judicial review without setting up an alternate mechanism to conduct this function. Thus, the amendment had to be read implicitly as replacing the jurisdiction of the High Courts with that of Administrative Tribunals under Articles 226 and 227 of Constitution, thereby making the amendment Constitutional.

Even though the Supreme Court at first saw Tribunals as a viable substitute for High Courts in the country, it soon became too apparent that their functioning was far from satisfactory. They did not inspire the confidence of people in the same way that High Courts used to do. In this context, the Supreme Court in the case of RK Jain vs. Union of India¹¹ communicated its agony over not being able to exercise its power of judicial review over the decisions of tribunals effectively, especially considering that these tribunals were not living up to the task of imparting justice while taking the work load off of the High Courts.

However, the Court’s anguish was short lived because in L. Chandra Kumar vs. Union of India¹², where the proceedings were referred to a Seven Judge Bench, it was held that the power of the higher Courts to conduct judicial review is their essential right. The jurisdiction given to the High Courts under Articles 226 and 227 is a part of the Basic Structure of the Constitution. Judicial Review is an important tool to ensure the independence of the judiciary and the Parliament cannot use their authority to amend the Constitution in a way that would destroy its basic structure. It was stated that the decisions of administrative tribunals will be subject to the inspection of the Division Benches of the respective High Courts. An Administrative Tribunal can supplement the powers of the High Court but it cannot be a substitute for the High Courts themselves. The changes made through the 42^nd Amendment were held to be unconstitutional on account of being contrary to the basic essence of the Constitution¹³. High Courts were required so that they could exercise and enforce their powers to ensure that tribunals were operating in an efficient and justice-oriented manner.

No Rules of Evidence:

Tribunals are very similar to Courts in certain aspects of their operation. They are entitled to summon witnesses, inspect and analyse documents etc. However, subject to the provisions under the statutes that bring them into existence, tribunals are not required to follow the strict rules of procedures and evidence as are imposed upon traditional Courts. This was affirmed by the Apex Court in State of Mysore vs. Shivabasappa Shivappa Maharpur¹⁴, reason being that unlike Courts, Tribunals practise quasi-judicial functions and are eligible to obtain information to cover all the points under investigation. They are not obliged to follow all the rules and regulations imposed by the Civil Procedure Code, Indian Evidence Act etc. to corroborate the facts of the cases through evidence in the same way Courts do. Any evidence discovered must be presented to the parties and Tribunals have the obligation to not act on such information and to allow the party a fair opportunity to defend themselves against such evidence¹⁵. Once a fair chance is provided, none of the parties can claim that the proceedings were not conducted as per the proper procedure. In State of Haryana vs. Rattan Singh¹⁶ it was ruled that Tribunals can accept even hearsay evidence given that there should be a decent amount of credibility to the information being presented. If Departments and Tribunals allow information (other than the ones prescribed under the Indian Evidence Act) to be presented as evidence, they must not do it readily and must scrutinize it to a fault to ensure that it is from a credible source¹⁷.

Even after all the leeway provided to the Tribunals in terms of procedure, they are still bound to follow the principles of natural justice. This encompasses providing reasons for the decisions that they take. In MP Industries Ltd. vs. Union of India¹⁸, Justice (as he then was) Subba Rao opined that Tribunals were necessary for the establishment of a welfare state. However, they cannot exercise arbitrariness by omitting to give reasons for their decisions as this would destroy the concept of a welfare state. By disclosing the reasoning for a decision, the Tribunal guarantees that they have applied consideration, it also gives clarity and satisfaction to the party against whom the order has been passed¹⁹. Doing so will also allow the higher Courts to inspect the Order for any anomalies with respect to their reasoning. The Court²⁰ also drew a distinction between the training of judicial officers and executive officers. It was held that an executive officer was trained to look at things from the point of view of policy. They are not in the habit of thinking objectively and this is why they have to render reasons for their decisions which can affect the rights of individuals²¹.

In SN Mukherjee vs. Union of India²², the Supreme Court said that giving reasons is a vital component of delivering justice. It is the right of the parties to be informed about the reason for the tribunals rendering a particular decision. The Supreme Court’s stance ensures that tribunals do not exercise their liberty to such an extent that they are stopped from being held accountable for the decisions that they render. Otherwise, they will perceive it is a green light to use their authority autocratically. This is another reason for allowing High Court’s power of judicial review and general superintendence over Tribunal’s decision so that if a reason has not been given or if an invalid reason has been provided, the High Court can be notified and the decision can be rectified. Leaving such a task on the Supreme Court will make their work too difficult as they have a limited number of the senior most judges in the Country whose time would be better spent interpreting the already established law to evolve it.

Doctrine of Precedent:

As seen in the preceding sections of this paper, tribunals have been provided with a lot of freedom to conduct their proceedings which requires them to be bound by the authority of the Higher Courts. It is imperative that High Courts should maintain their supremacy over tribunals and enforce the settled principles of law over their decisions to avoid any mishap in the administration of justice. Tribunals may divert from a settled position of law if the facts and circumstances of a particular case are such that applying an establish position of law will be detrimental to the cause of one of the parties as was enumerated in Union of India vs. Paras Laminates Ltd.²³

However, in Bishnu Ram Borah vs. Parag Shakia²⁴, it was stated that it is necessary for higher Courts to stand their ground to enforce the rule of law and to ensure that there is restraint on the power of tribunals at all levels. Not doing so would provide a scope for bias and misuse of their discretion. In Bhopal Sugar Industries Ltd. vs. ITO²⁵, the Income Tax Officer declined to carry out the clear and straightforward directions of the Income Tax Tribunal. His declination was held to be destructive of the principles of hierarchy of Courts and administration of justice. Further more, in Jain Export Ltd. vs. Union of India²⁶, the Apex Court stated that in a hierarchy of Courts, the decisions of a higher Court must bind the lower Courts. Authorities practicing quasi-judicial functions are bound by this principle as well.

This Doctrine is set in place to give the parties involved in a tribunal dispute an idea as to the kind of decisions that they may expect. Uniformity in adjudication is thus, a very important factor to argue a case. It allows lawyers to analyse the effect of a particular argument in bringing out a particular kind of decision. Court must deviate from this Doctrine only when applying an established position of law to the facts of a particular case would lead to gross miscarriage of justice.

Analysis and Conclusion:

The Executive is controlled by politicians who win the majority seats in the Legislature. Most of the Government’s actions are stimulated by their need for maintaining control over all the facets of governance. The 42^nd Amendment to the Constitution was enacted in 1976, i.e. during the period of emergency. The Government back then, sought greater power over all the organs of the State. In order to strengthen their grasp over the judiciary, they had enacted this Amendment which endeavoured to limit the power of the High Courts and the Supreme Court to a great extent meanwhile transferring to effectively to Tribunals. These Administrative Tribunals were created by enacting a law which was passed by the Legislature, giving the Government greater control over their day-to-day functioning. The executive had heavy influence over the functioning of these tribunals which were dependent upon the Executive’s departments for provision of most of their infrastructure. This coupled with a heavy amount of involvement of civil servants and Government officers, undermined the independence of these quasi-judicial bodies. The relative informality of these bodies in relation to admission of information as evidence enabled them to blatantly disregard any procedural statute that is customarily adhered to by traditional Courts. All these factors together highlight the need for checks and balances on the powers of these tribunals and also over the statutes enacted to birth these tribunals at various stages. It is necessary for the High Courts to maintain their superintendence over the authority of these tribunals, in absence of which the Supreme Court will not get the assistance that they require to deal with the heavy load of work. As has been demonstrated above that in absence of the High Court’s authority over the tribunals, even the Supreme Court felt helpless in exercising their power of judicial review. Judicial review allows the Courts to analyse the actions of the legislature and the executive (also that of the lower Courts) and to reverse their decisions if they find these actions to be unconstitutional or contrary to the law, especially if the decisions cause grave injustice to the rights of the parties. Supreme Court finding it difficult to exercise judicial review signified their inability to facilitate justice post the 42^nd Amendment for a period of two years and magnified the need to reinstate the former authority of the High Courts.

Administrative tribunals are a useful means to achieve the end of reducing the load of Trial Courts to adjudge cases. This is especially true when these tribunals deal with specialised laws like the statutes that set up the Competition Commission of India or Consumer Protection Forums. The statutes which lays down the laws regarding these specialised cases are vast and extensive and thus, require judges who are well versed in them. It is not entirely possible for a Civil judge to be proficient in all statutes which warrant the creation of tribunals. This is similar to the concept of Family Courts, with the distinction that Family Courts exercise judicial functions and not quasi-judicial functions. Even though the justice system needs specialised tribunals, there is an undisputable need to maintain checks and balances over their power. They cannot be equated to the High Courts in that regard and must hold a subordinate position.