Supreme Court Strikes Down Core Provisions of Tribunals Reforms Act, 2021

New Delhi: In a major victory for judicial independence, the Supreme Court on Wednesday declared several key provisions of the Tribunals Reforms Act, 2021 unconstitutional and directed the Union Government to establish a fully independent National Tribunals Commission (NTC) within four months.

A Bench comprising Chief Justice of India B.R. Gavai and Justice K.V. Chandran delivered the 137-page judgment in  a batch of petitions led by the Madras Bar Association and Congress leader Jairam Ramesh. The court held that the 2021 Act was essentially a “repackaged version” of the Tribunals Reforms Ordinance, 2021, which had already been struck down by the Supreme Court in July 2021 (Madras Bar Association v. Union of India, 2022).

Provisions Declared Unconstitutional

The court invalidated the following provisions of the 2021 Act:

• Sections 3, 5 and 7, which gave the Central Government overriding powers to prescribe qualifications, tenure, salaries, allowances and other service conditions of tribunal members “notwithstanding anything contained in any judgment, rule or law”.
• The stipulation of a minimum age of 50 years for appointment as chairperson or member of a tribunal (held arbitrary and violative of Article 14).
• The uniform four-year tenure for chairpersons and members (instead of the earlier five-year norm).
• Consequential amendments made to more than a dozen parent statutes (including the Income Tax Act, Customs Act, Companies Act, Trade Marks Act, Copyright Act, and Consumer Protection Act) that replaced existing tribunal provisions with references to the 2021 Act.

The Bench restored the earlier judicially mandated five-year tenure and retirement ages of 62 years for members and 65 years for chairpersons of major tribunals such as the Income Tax Appellate Tribunal (ITAT) and the Customs, Excise and Service Tax Appellate Tribunal (CESTAT).

“Legislative Override” of Binding Precedents

Chief Justice Gavai, who authored the main judgment, described the 2021 Act as a “legislative override” of the Supreme Court’s 2021 verdict that had invalidated the Ordinance. The court found that several provisions of the Act were reproduced verbatim or with only cosmetic changes from the Ordinance.

Justice K.V. Chandran, in a concurring opinion, colourfully remarked that the legislation was “old wine in a new bottle, the wine whets not the judicial palate, but the bottle merely dazzles”.

The Bench rejected the Union Government’s contention, argued by Attorney General R. Venkataramani, that Parliament enjoys the discretion to disregard Supreme Court rulings. Quoting Dr B.R. Ambedkar, CJI Gavai reminded the government that constitutional governance requires the executive and legislature to respect binding judicial pronouncements.

National Tribunals Commission: Final Deadline

Reiterating directions first issued more than a decade ago, the court granted the Centre a strict deadline of four months — until 19 March 2026 — to constitute the National Tribunals Commission. The NTC is envisaged as an independent statutory body that will:

• Oversee appointments, removals and service conditions of tribunal members;
• Ensure judicial dominance in selection processes;
• Provide uniform administrative and infrastructural support across all tribunals;
• Function free from executive control.

The court warned that until the NTC is established and appropriate legislation enacted, the principles laid down in the Madras Bar Association series of judgments (2014–2022) and Rojer Mathew (2020) will continue to govern all tribunal-related matters.

Protection for Existing Members

In significant relief to serving members, the court directed that:

• Members of the Income Tax Appellate Tribunal appointed in September–October 2021 will continue under the pre-2021 regime.
• All appointments where the selection process was completed before the 2021 Act came into force, even if formal notifications were issued later, will be governed by the earlier rules and judicial directions.

Long-Standing Battle for Tribunal Independence

The judgment traces a consistent judicial stance since S.P. Sampath Kumar (1987) and L. Chandra Kumar (1997) that tribunals, though created by statute, perform judicial functions and must remain independent of the executive — particularly because the Union Government is the largest litigant before most tribunals.

Despite repeated rulings striking down executive-heavy appointment rules (2017 Rules, 2020 Rules, 2021 Ordinance), the government continued to reintroduce similar provisions, prompting the court to express “deep anguish” at the waste of judicial time in an already overburdened system.

Reactions and Road Ahead

Senior advocates representing the petitioners welcomed the verdict as a decisive reaffirmation of separation of powers and the basic structure doctrine. The judgment is expected to have far-reaching consequences for over 20 major tribunals dealing with taxation, company law, consumer disputes, intellectual property, environment, and armed forces matters.

With the four-month deadline now in place, all eyes are on the Union Ministry of Law and Justice to frame fresh legislation that finally gives statutory shape to the National Tribunals Commission and brings India’s tribunal system in line with constitutional mandates.

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