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CASE COMMENTRY Rojer Mathew v. South Indian Bank Ltd. And Ors.

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  • Facts

The case of ‘Rojer Mathew v. South Indian Bank Ltd. And Ors.’ revolves around the Finance Act, 2017, which was introduced on March 31, 2017. This Act made crucial changes to the structure and organization of tribunals in India. Specifically, it allowed the Central Government to set the rules concerning the qualifications, appointments, terms of office, and conditions of service for tribunal members. These changes were codified in Section 184 of the Finance Act, which led to the creation of the Appellate Tribunal and Other Authorities (Qualifications, Experience, and Other Conditions of Service of Members) Rules 2017. The legality of this Act, especially its classification as a “Money Bill” and its impact on the independence of tribunals, was questioned in court by several petitioners.

  • [1]Issues Raised

The Supreme Court was asked to consider several critical issues:

1. Can the decision of the Speaker of the Lok Sabha, certifying the Finance Act as a Money Bill, be reviewed by the judiciary?

2. Was Part XIV of the Finance Act, which dealt with the restructuring of tribunals, appropriately classified as a Money Bill under Article 110 of the Indian Constitution?

3. Did Section 184 of the Finance Act improperly delegate legislative powers to the Executive, violating the Constitution?

4. Were the rules made under Part XIV valid, and did they uphold the independence of the judiciary?

5. What steps should be taken to enhance the functioning of tribunals in India

  • [2]Contentions

Petitioners’ Arguments:

The petitioners argued that Part XIV of the Finance Act shouldn’t have been classified as a Money Bill because it didn’t strictly pertain to financial matters. They believed that this classification infringed key constitutional provisions that regulate the passage of Money Bills in Parliament. The petitioners also emphasized that the Parliament’s authority to legislate on tribunals comes from a different part of the Constitution, which deals with the administration of justice, not finances.

Furthermore, the petitioners were concerned that allowing the Executive to set the rules for tribunals could undermine the independence of the judiciary. They pointed out that this went against previous Supreme Court judgments that emphasized the need to keep the judiciary free from executive control.

They also questioned whether the Speaker’s decision to certify the Finance Act as a Money Bill could be challenged in court.

Respondents’ Arguments:

The respondents, represented by the Attorney General, defended the classification of the Finance Act as a Money Bill, arguing that it fell within the scope of Article 110 of the Constitution. They claimed that the Speaker’s decision in this matter was final and beyond judicial scrutiny.

They further maintained that the Finance Act was needed to create a uniform and efficient system for tribunals across the country. They cited past judgments and reports to support their view that the changes were in the best interest of the public and the judiciary.

Amicus Curiae’s Perspective:

The Amicus Curiae, Mr. Arvind Datar, highlighted the significance of establishing an independent body to oversee tribunals. He referred to previous Supreme Court cases that stressed the necssity to keep the judiciary insulated from the influence of the Executive.

  • [2]Rationale
  • Judicial Review of Speaker’s Certification:

The Supreme Court admitted that while the Speaker’s certification of a bill as a Money Bill should generally be respected, it is not immune from judicial review. This decision was influenced by past cases, where the Court held that certain actions by the Speaker could be challenged in court.

  • Validity of Part XIV as a Money Bill:

The Chief Justice noted that the interpretation of what comprises a Money Bill was not entirely clear, leading to the decision to refer this matter to a larger bench for further examination. Justice Chandrachud, in a separate opinion, firmly believed that Part XIV did not qualify as a Money Bill, drawing from his earlier dissent in the Aadhaar case.

  • Excessive Delegation of Legislative Powers:

The Court found that Section 184 of the Finance Act was valid, arguing that it was necessary to address the functioning of tribunals. However, a dissenting opinion from Justice Gupta suggested that this section allowed for too much power to be delegated to the Executive, which could threaten judicial independence.

  • Validity of Rules Under Part XIV:

The Court unanimously assented that the rules created under Part XIV did not adequately protect the independence of the judiciary. They pointed out several flaws, such as the

dominance of executive appointees in key roles, and the insufficient qualifications required for tribunal members, which could lead to executive interference.

  • Streamlining Tribunal Functioning:

The Court emphasized the need for reforms to improve the functioning of tribunals, suggesting measures like judicial impact assessments and the creation of a National Tribunal Commission. These steps were recommended to ensure that tribunals could operate independently and effectively.

  • Defects of Law

The ruling in this case brings to light several issues in the existing legal framework for tribunals in India:

  1. Ambiguity in Money Bill Classification: There is a lack of clear guidelines on what comprises a Money Bill under Article 110. This ambiguity can lead to misuse, allowing the Executive to bypass the Rajya Sabha, thus undermining the checks and balances within the legislative process.
  2. Excessive Delegation: The delegation of legislative powers to the Executive, particularly through Section 184, raises concerns about the erosion of the separation of powers. The minority opinion in this case rightly questions whether essential legislative functions should be delegated to the Executive, as this could undermine the independence of the judiciary.
  3. Independence of Tribunals: The rules under the Finance Act fail to adequately protect tribunal independence, allowing for potential executive overreach in matters like appointments and tenure. This compromises the impartiality of tribunals and could weaken public trust in the judicial system.
  4. Judicial Review Clarity: Although the Court affirmed that the Speaker’s certification of a Money Bill could be reviewed, it did not clearly define the scope of such review, leaving room for future legal challenges and uncertainty in the legislative process.
  • Inference

The judgment in the above represents a critical moment in the ongoing effort to preserve the judicial independence and ensure the proper functioning of tribunals in India. The Supreme Court’s conclusion to refer the Money Bill issue to a larger bench acknowledges the complexity and necessity of this matter, indicating that more definitive legal principles are needed to guide the classification of Money Bills.

The Court’s recognition of the need for judicial review of the Speaker’s certification is a significant step towards maintaining the integrity of the legislative process. However, the judgment also highlights persistent challenges in safeguarding the independence of tribunals from executive control. The striking down of the rules under Part XIV of the Finance Act underscores the need for substantial reform in the legal framework governing tribunals.

The recommendation to establish a National Tribunal Commission is a promising step forward. Such a body could provide a better structured and independent mechanism for overseeing the functioning of tribunals, ensuring that they remain impartial and operative.

In summary, while the judgment addresses key concerns, it also underscores the ongoing need for reform in the way tribunals are structured and governed in India. The upcoming considerations by the larger bench on the Money Bill issue will be crucial in defining the balance of power between the Executive and the Legislature, and in ensuring that the judiciary can continue to function independently and protect the constitutional rights of citizens.

Samruddhi Kharat

ILS Law College

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