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Tribunals In Trouble?

Published on Sat, Nov 10,2012 | 10:57, Updated at Tue, Nov 20 at 16:51Source : CNBC-TV18 |   Watch Video :

The Securities Appellate Tribunal is missing a presiding Judicial Officer for almost a year. At the Income Tax Appellate Tribunal, the last 3 Presidents appointed by the government were temporary postings. The National Green Tribunal is severely lacking in infrastructure – its courts are in two different locations. The Debt Recovery Tribunals face a backlog of over 30,000 cases amounting to over Rs 1 lakh crore. And the Competition Appellate Tribunal doubles up as the Appellate Tribunal for the Airports Economic Regulatory Authority.

Wait it gets worse! There are stories of Tribunal hearings being held in a canteen for lack of space, presiding officers traveling by taxi and random pay scales for members! This dismal state of affairs at India’s myriad and ever growing Tribunals is counterproductive to the cause of their existence and seriously jeopardizes the validity of their orders. Hello and welcome to The Firm - joining me this week are retired Supreme Court judge, Justice Ganguly and Senior Counsels Arvind Datar and Mukul Rohatgi.

Doshi: I would like to start with you by bringing up the issue of the invalidity of Securities Appellate Tribunal (SAT) orders given that it has been missing a presiding judicial officer for almost a year now. This has been raised by Sanjay Jain in a writ petition in the Bombay High Court and most lawyers I spoke to believe that without a presiding judicial officer SAT orders could in fact be held null and void. What is your view?

Datar: There is a serious doubt about legality of these orders. The last Chairman retired last November and there is a provision that suppose there is a defect in the composition of the Tribunal, it won’t affect the order. But that’s only for temporary period if there is some small problem but I do not think the law permits you to have a headless organization for 11 months and 12 months and so on. So it is a serious problem. In my view the orders would be seriously open to challenge.

Doshi: Justice Sodhi who is was presiding officer at SAT retired last year in November. For the last one year there has been no presiding officer. PK Malhotra who is a member of the SAT has been appointed as officiating presiding officer but the point made in this petition and I might mention in a side note here that the petition is filed by somebody who has a vested interest because he has been fined Rs 8 lakh in an Fraudulent and Unfair Trade Practises (FUTP) proceeding by Securities and Exchange Board of India (SEBI) and he is a appealing that at SAT. But nonetheless the point made in the petition is that a temporary vacancy may allow for an officiating presiding officer but a one year vacancy cannot be deemed to be a temporary vacancy. In your opinion would the orders of the past one year be held null and void?

Sanjay Jain was fined Rs. 8 lakhs by SEBI for FUTP violations.
He appealed at SAT. Thereafter challenged SAT proceedings validity

Sanjay Jain’s Petition
SAT orders null & void due to absence of Presiding Officer

Rohatgi: On this specific issue I would tend to agree with Mr. Datar but I have a more fundamental question to raise and that is this that the idea of having Tribunals was to have experts in the field manning these Tribunals who understand the complexity of the special law with which they deal in. The idea was to unclog the High Courts because the High Courts have long pendency and then provide maybe one appeal to the Supreme Court. But if you do a legal audit, see where we have reached. We do not have infrastructure. We do not have experts. We have only by and large retired bureaucrats or retired judges and I say with respect since Justice Ganguly is also with us that none of them are experts in those special lines and you then have a Tribunal which consists of placement of retired personnel and finally 50 percent of these cases then land up back in the High Court increasing the pendency which was supposed to have been removed and from the High Court they go to Supreme Court and the remaining 50 percent land up in the Supreme Court in any case. So you are creating – you do not have infrastructure, you do not have money to pay people, you do not have experts, you do not have cars, you do not have staff, you do not have a place. The idea of unclogging the High Court is no longer visible in the scenario; so the better thing would be to invest all these jurisdictions back in the High Court, create several divisions in the High Court like a commercial division, tax division, securities division, advance ruling division and so many other divisions and man them with expert lawyers who can be made judges, who have done this branch of law over the last 10-20 years and maybe it could be better-off because High Court is in one place- you could add some more infrastructure instead of having 100 Tribunals moving around in Delhi. We have not less than 50 Tribunals. Let me give an example, we have a Tribunal of what is called an Advance Ruling Tribunal. It’s an important Tribunal. The idea is that people from abroad who invest in this country must know the taxation structure if they come in. So you get an advance ruling before a dispute arises. I do not think I have come across any significant advance ruling in the last couple of years; so what is the great point of having them when finally everything gets clogged back in the High Court or back in the Supreme Court? So I suggest if you want have a Tribunal have only experts manning them with proper infrastructure otherwise do away with these Tribunals.        

Doshi: Alright, that's a fair point and I think in a sense you have got to the core of this debate right away. Let me take this to justice Ganguly. Two-fold question for you - first both the Senior Counsel on this discussion believe that without a presiding officer the orders of the Securities Appellate Tribunal could in fact be held as null and void. What is your view and if that is in fact the case, then the last one year of orders would be dismissed, would be held null and void. What does that mean for the litigation that's taken place over the course of the last one year?

Ganguly: I will tell you one thing, justice is basically rooted in confidence. Therefore, people to have confidence in the system must have a properly structured Tribunal, but on the validity of the order, I will refrain from making any sort of comments since this is a pending matter before the honorable Supreme Court. It is not a done thing for a judge to comment on that. But anyway I will go to the core of the issue, which was been slightly touched by Mr. Rohatgi. The question is that Mr. Rohatgi has said and rightly so that these Tribunals have been created to unclog the High Courts. First of all, why High Court is getting congested in our country, it is a very well-known fact that the litigant and the judge ratio in this country is the poorest, even poorest among developing countries- this is number one. Even then the vacancies, which are there in the High Courts, are not filled up for various reasons- entirety of the same not lies in the hands of the government, but the government is also to be blamed for it. The third question is you have in the High Court, if I may say with great respect, not sufficiently competent judges. The selection process in the High Courts and also in the Supreme Court is open to serious criticism. I am not criticizing that in collegium system. There you have incompetent judges, you have huge vacancies in the High Courts and also in the Supreme Court. And the cases are piling up because you are making so many laws without an impact assessment of judicial (interrupted…).

Doshi: Let me put this question to you differently. I understand there are several vacancies in both the High Courts as well as I think in the Supreme Court. The question I would like to ask you is this. Why are judges so averse to manning Tribunal positions because I am not sure whether it is that the Finance Ministry has been dragging its feet, at least when it comes to the Securities Appellate Tribunal, or is it that they are unable to find a judge who is agreeable to in fact take on the position of presiding officer at the SAT?

Ganguly: I will answer you the judges are - these days it is fashionable to bash the judges. Now the judges have been attacked by very eminent, I don't want to name them for accepting the Tribunal position after the retirement. Some learned - previously they were members of the bar holding very important position. They are saying this should be two years cooling off period and I can tell you about this National Green Tribunal. Initially, there was a Supreme Court judge who took it up, I think justice Panta- because of very poor infrastructure he did not accept it; then it was offered to Justice Raveendran. I think then whole thing was so dilly-dallied that Justice Raveendran rightly felt a bit, I don't know, I haven't talked with him, but he also declined. Now there is no third charge, on that also there has been some controversy, which has recently cropped up. So judges are not very keen to take it up.

Doshi: But that may apply to the National Green Tribunal, the Securities Appellate Tribunal at least does have some infrastructure, is located in Mumbai, which is the commercial capital. I understand has pay scales comparable to such similar government positions. I am just curious to know why is it- is there any other reason that judges choose not to man Tribunal positions.

Ganguly: I don't know the reason, but I can tell you one thing. There were many judges who were retired judges in Mumbai, who are placed in Mumbai, but I don't think the vacancy has been filled up because the judges are not very keen to accept this position.

Doshi: Why are they not keen - that's the question I am asking you justice Ganguly?

Ganguly: Why should they be keen because look at - they have held very high position, they have done their duties and to the best of their abilities they have held their heads high. Very few self-respecting judges will be willing to accept this position. Look at what has been said in that famous case of L Chandra Kumar. In L Chandra Kumar's case in 1997, as early it was in 1997, there has been said by constitution bench of this court that this Tribunal there must be a supervisory body, there must be an independent agency. If it is not possible to have an independent agency, the nodal ministry, the law ministry should have to look after the administrative set up, nothing has been done.

'We are of the view that, until a wholly independent agency for the administration of all such Tribunals can be set-up, it is desirable that all such Tribunals should be, as far as possible, under a single nodal Ministry which will be in a position to oversee the working of these Tribunals'

Datar: I just spoke to some very eminent retired judges and asked them that why is there a reluctance on the part of High Court judges to accept posts of chairmanship of Tribunals and one answer I got from variety of judges, some very good judges is that they don't have the same service conditions as they had as High Court judges. They don't have infrastructure. They are at the mercy of the bureaucracy for simple things like travel, car and so on and so forth. So, the feedback I got was that if you make the service conditions the same as what they enjoyed as a High Court judge, then they won't really mind becoming members of the Tribunal for the further period of three years.

Doshi: You have argued at the Securities Appellate Tribunal, since we started with that illustration. You know that it has maybe better infrastructure than most of the Tribunals in the country. Why do you think that the SAT has failed to be able to find somebody, is this that the government is dragging its feet? It doesn't really want to appoint judges in these positions because that's another accusation that the Tribunal system faces that the government has converted this into sinecures for retired bureaucrats and that Tribunals are full of technical members who may not even have experience in that specific industry or field?

Ganguly: May I try to answer this, from a judge's point of view. I tell you that the government, of whatever color it maybe, never wants a strong judiciary. Let us start with that. Constitution talks of equal justice. Now the constitution does not talk of one kind of a justice in High Court and the kind of secondary justice or a second grade justice in the Tribunals. The Tribunals are replacing the High Court, so there must be of equal stature, of equal eminence, of equal independence.

Now what is happening you see- - sponsoring ministry is sending an administrative member those persons - this is I am not saying on my own, this is recorded in Raveendran's judgment. They are sending those people as administrative members who are still working and they retain the lien in the sponsoring ministry. Now think of a situation, suppose you make me the judicial member - my partner who is on the bench, I will get a person who is coming from the sponsoring ministry and that sponsoring ministry is the litigant before me and that gentleman who is my partner on the bench is having his lien in that ministry, where do expect justice.

'The Tribunals cannot become providers of sinecure to members of civil services, by appointing them as Technical Members'

' If any member of the Tribunal is permitted to retain his lien over his post with the parent cadre or ministry or department in the civil service for his entire period of service as member of the Tribunal, he would continue to think, act and function as a member of the civil services'

'The administrative support for all Tribunals should be from the Ministry of Law & Justice'

'In respect of such Tribunals, only members of the Judiciary should be the Presiding Officers/members of such Tribunals'

Doshi: Mr. Rohatgi right at the beginning of this conversation said this system has failed and therefore we probably need to use an alternative, go back to creating specialized benches in the High Court system itself. Is that something that you think is the best solution given that we have already gone ahead and created dozens of Tribunals, new ones are being created every year and yet we face all these challenges that all of you already spoken about?

Rohatgi: Just as you create Tribunals you can abolish the Tribunals. It’s only a matter of repealing of an Act and Tribunals can be abolished.

Doshi: Don’t several Acts have to be repealed because the several different sectoral Tribunals are…(Interrupted)

Rohatgi: Everyday laws are repealed and laws are enacted. It is not a big deal at all for Parliament to repeal those Acts and vest the jurisdiction back in the High Court- that is one and second, as Justice Ganguly gave another version, that you send serving bureaucrats and those serving bureaucrats ministry itself maybe a litigant. So how do you expect impartial justice? I suggest and submit that if you intent to have Tribunals, then you must man them with independent expert persons who need not be retired personnel only. You create a judicial cadre like you have a higher judicial cadre for District Judges.

Doshi: Isn’t this a fairly ambitious solution to repeal a bunch of Acts that provide for the creation of different kinds of Tribunals to create a separate cadre. Wouldn’t it be simpler to fix this system by instances of what the Madras Bar Association is trying to do which is to enforce the Supreme Court decision and create an independent…(Interrupted)

Rohatgi: I do not agree because - for drastic remedies you have to have drastic measures. As Justice Ganguly said, the judge ratio with the population is very poor. By adding few judges, filling up a few vacancies is not going to help. We are in a big mess, so drastic measures are required. One of the most drastic measures is we must have – we have a law commission, that law commission must look into millions of laws which are floating around in this country, some of which are obsolete, which are 100 years old, which were enacted in different scenarios. Those laws are still operating.

Doshi: I don’t know what is more feasible. What Mukul Rohatgi is suggesting or what the Madras Bar Association is trying to enforce in terms of a 13 year hold decision by the Supreme Court that has yet not been put into practice and that is to at least bring all Tribunals under one nodal ministry and eventually create an independent supervisory body which mans them correctly and which givens them the adequate infrastructure and funding etc?

Datar: I think the most important thing is to make sure that all the Tribunals come under one ministry which has been recommended in Chandra Kumar’s case 15 years ago, repeated in Madras Bar Association PIL and we have the pathetic situation where the Supreme Court has given a judgment two years earlier and we have one more case to implement a two year old judgment. The first thing is you must have all the Tribunals coming under one roof, under the ministry of law. Today only the Income Tax Appellate Tribunal is under ministry of law; all other Tribunals are functioning as department of various ministries. I agree with Mr. Rohatgi that there is a very important case to reconsider these new Tribunals which are coming up for e.g. the National Company Law Tribunal, there is no justification for that. You have totally 6000 company cases all over India, why do you require 21 Tribunals in 21 states with 62 members. Why do you require a National Tax Tribunal and 50 members? You just require an additional tax bench in each court.

Doshi: And the problem being that we do not have people with a right technical expertise to fill all those member positions, right- neither do we have retired judges nor do we have the right technical experts?

Datar: You are not able to recruit 9 company law board members for the last 22 years; ultimately what happens is if you see the entire structure the whole thing is completely designed in such a way that no competent lawyer, no competent judge will opt for the Tribunal and ultimately it will be filled up by retired civil servants. You just see the entire structure. You take Board for Industrial and Financial Reconstruction (BIFR), its manned by retired bureaucrats, you take any Tribunal, most of the Tribunals how many good lawyers go to them.   

Doshi: This is a curious position- politicians like Arun Jaitly say that judges are lobbying pre-retirement for post-retirement jobs. The judges say that all Tribunal positions have become sinecures for bureaucrats. Eventually I am looking at this from the point of view of citizens of corporate entities who go to these Tribunals for speedy justice and now could possibly be told for all of those who fought cases in SAT over the course of the last one year that those decisions may be null and void. This is an unacceptable position from a commercial law point of view because for all these businesses time is money? What do you think is the better solution? What Mukul Rohatgi is suggesting or what the Madras Bar Association is suggesting that is the implementation of the Supreme Court judgment?

Arun Jaitley
"Pre-retirement judgements are influenced by post-retirement jobs."

Ganguly: It is a very sad commentary on the government. If there are judgments of Supreme Court and another petition has to be filed for implementing the judgment, it is a very bad thing. But the Tribunals, the basic reason for a Tribunal are two things; one is expedition, the other is expertise. But the Tribunals have failed in both the points. Matters are pending in Tribunals for a much longer time than they were in the High Court. It is merely creating another tier of litigation, complicating the entire process. What Mr. Rohatgi said is very sound and sensible. What is happening in England, they have – as Mr. Rohatgi has said – various divisions of High Court so every adjudicating authority is located in or around the High Court so that it is equally possible to have good lawyers because you must understand these Tribunals not just function on the basis of judges; you would need a proper Bar. Most of these Tribunals do not have a proper Bar.

Doshi: I want to put an additional question to you. I know what you are suggesting is maybe the better long-term cure, but in the shorter term since we need these Tribunals to function given the pendency in courts, how do we fix this?

Rohatgi: I am going to suggest something radical and that is this - in England, a lawyer can be a judge of the High Court for four years or three years and then he can come back to practice. In our country if you want to become a judge of the High Court, you will remain a judge for 15 or 20 years and maybe more if you go to the Supreme Court. So a lot of lawyers are not willing to put in 15-20 on the Bench. So why can't you have - and we have a system of a provision of an ad hoc judge of the Supreme Court or a High Court, an ad hoc judge. Under the constitution, you could be an ad hoc judge for a couple of years and you come back. But the problem is this government does not trust anybody. They don't trust a lawyer that he has become a judge for three years, then he will come back to practice, then he had something to do with the bench. He will have some tie-up with the bench. Now if you are going to have this, why can you not ask 10 or 20 lawyers of every High Court and 10 lawyers of the Supreme Court who are willing to sacrifice two years or three years of their profession, who are good, who have a good standing, come along, give something back for your profession, be a judge of the High Court for three years and disposal of a lot of cases and that lawyer will not have to go to any politician or do anything else to ensure that he gets promoted etc. If you ask me, I wouldn't mind it to have become a judge of the High Court or the Supreme Court for two years and do some sacrifice, dispose of some cases. I don't need anything else from the judiciary, I don't need anything else. I will give two years of my profession and do it, but the government is not willing to think, the problem is this.

Doshi: We started this discussion by trying to understand the problems in SAT and use that to fix the Tribunal system if there is any such possible short-term fix. Instead it seems all of these problems are inextricably linked to the reform of the entire judicial system, not just the Tribunal system and that in itself makes it an unsolvable problem, doesn't it?

Datar: No, I think what Mr. Rohatgi says is a long-term solution, but now I think we must look at some immediate solutions, which can be done. I don't see any difficulty in putting all the Tribunals under the law ministry- that's number one. Secondly, there is no difficulty in conducting an audit. There are 30-40 national Tribunals of which 10 are very important, you select them, just have an audit of their infrastructure, about their service conditions- for example in the Intellectual Property Appellate Board (IPAB), the Chairman doesn't have a car, in fact in the green bench and their Tribunal there is no car parking space available for people. So, these are small problems, which doesn't require kind of great long-term policy solutions. You can just make an audit, find out the problems and select Tribunals, address them and finish it off. So, I don't see immediately why you can't do that and secondly a Tribunal is as good as the members who man it. Now if you knew that the SAT chairman is retiring in November 2011, I don't see why you couldn't start a select process 10-11 months in advance and then find out a person who has got a background, which will suit the SAT and then appoint him. As Mr. Rohatgi rightly put it, you create specialized Tribunals and appoint journalists, civil servants and general judges to man the Tribunal without really going to that expertise in the domain. (interrupted…).

Doshi: Instead we had a Finance Ministry ad that went out in October this year several months after the SAT presiding officer position was vacated. Justice Ganguly, the last word to you on this - do you think there will be or there can be a short-term fix or is it going to have to be a far long-term fix as Mukul Rohatgi as pointed out and that in this political environment is almost impossible to achieve?

Ganguly: It is impossible to achieve because the government is not serious about the whole thing that's my view, a very serious view. The government is not willing to solve the problem. The government doesn't want a strong judiciary. What is happening in most of the important areas, where is the economic justice in this country, in very important areas - tax, excise, central excise, customs we are having these kind of, if I may say so, kangaroo Tribunal, which is hardly a seat of justice. This suits the government.


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