ROGER MATHEW V SOUTH INDIAN BANK LIMITED: A

CRITIQUE

ABSTRACT

In the 20th century, we witnessed a large number of cases being filed before the traditional
courts. Due to this, we witnessed a lot of pendency and backlogs which was affecting the
administration of justice in our society. It is pertinent to note that the pendency of cases is a
matter of concern for every country which is governed by rule of law. Furthermore, in the
Indian legal system, it often took decades to arrive at a final solution. The delays and pendency
affect the rights of the litigants. Justice delayed is justice denied. With the passage of time, the
pendency has reached an all-time high.

It is also pertinent to note that not only did the number of cases increase but, because of the
advent of science and technology such cases were being filed before the courts for which the
judges needed special expertise. As a result, the need for specialized tribunals was felt. These
tribunals were supposed to consist of members who will have expertise in a particular field.
Furthermore, the creation of the tribunals would have also reduced the pendency of cases in
the traditional courts. As a result, tribunals were introduced into the Indian Legal System.
However, since its inception questions have often been raised over its independence. Over a
period of time, the Supreme Court has delivered a lot of judgments to ensure the independence
of the judiciary. The authors in this case comment have analyzed one such case.
Keywords- Tribunal, Judicial Independence, Pendency.

1. BACKGROUND OF THE CASE

In the year 2017, the Union Government passed the Finance Act. The Act eventually came into
effect on 31st March 2017. Under this Act, certain amendments were made regarding the
structure and organization, as well as the conditions of service of tribunals in India. Section
184 of the Finance Act empowered the Central Government to “notify rules governing persons
appointed to tribunals on the following matters: qualification, appointment, terms of office,
salaries and allowances, resignation, removal, and other terms and conditions of service.”
Furthermore, under Section 184 of the Finance Act, the Union Government also notified the
Appellate Tribunal and Other Authorities (Qualifications, Experience and Other Conditions of
Service of Members) Rules 2017 (Rules).
After the Act was passed and the Rules were notified several petitions were filed before the
Supreme Court challenging the constitutional validity of the Finance Act.1

2. ARGUMENTS OF THE PARTIES

2.1. ARGUMENT OF THE PETITIONERS

The petitioners argued before the Supreme Court that Part XIV cannot be made part of the
Finance Act, 2017 because it has no nature of that of a money bill. Furthermore, by the
inclusion of Part XIV in the Finance Act, of 2017 the entire law has lost the color of the money
bill. It was contended by the petitioners that the Parliament derives its power to make laws on
tribunals from Entry 11-A of List III of the Constitution which deals with the administration of
justice and not financial matters. As a result, the said legislation can’t be classified as a money
bill because it violates Articles 107, 110 and 117 of the Constitution. The petitioners relied
upon the dissenting verdict of Justice Chandrachud in the Aadhaar case to support their cause.
Furthermore, the petitioners also argued before the Supreme Court that the decision of the
speaker that whether a particular bill is a money bill or not is subject to judicial review. 2

On the aspect of independence of the judiciary, the petitioners contended before the Supreme
Court that the Part XIV of the Finance Act, 2017 suffers from the excessive delegation and also
violates the independence of the judiciary. It was alleged by the petitioners that Part XIV of
the Finance Act conflicts with the directions issued by the Supreme Court in the Madras Bar
Association Case of 2010.3

2.2 ARGUMENT OF THE RESPONDENTS

The Attorney General submitted before the Supreme Court that Clauses (a) to (g) of Article
110(1) must be interpreted in their widest amplitude. In doing so we will find that the law is
indeed a money bill. Furthermore, the Attorney General argued before the Supreme Court that
the decision of the speaker that whether a particular bill is a money bill or not is not subject to

1
Rojer Mathew v. South Indian Bank Limited, (2020) 6 Supreme Court Cases 1.
2
“Day 1 Arguments: Tribunals and the Finance Act,” Supreme Court Observer (March 20, 2022, 11:30 p.m.),
https://www.scobserver.in/reports/rojer-mathew-south-indian-bank-ltd-day-1-arguments/
3
Id.
judicial review. The respondents relied upon the majority verdict of Justice Dr A.K. Sikri in
the Aadhaar case to support their cause.4

On the aspect of independence of the judiciary, the Attorney General argued that we need to
streamline and harmonize the applicable rules pertaining to tribunals. The same has been
attempted through the Finance Act, of 2017. The Attorney General then relied upon the Apex
Court verdict in the case of Rajiv Garg vs. Union of India (WP No. 120 of 2017) wherein the
Court directed that “a decision be taken by the Central Government on uniformity of service
conditions in various tribunals.” The respondents then relied upon the 13th Report of the 2nd
Administrative Reforms Commission (Submitted in April 2009) which recommended greater
uniformity of in-service conditions in various tribunals. 5

2.3 ARGUMENTS OF THE AMICUS CURIAE

Mr Arvind Datar who served as the amicus curiae in this case argued for the establishment of
an independent body in light of the Supreme Court verdicts in L. Chandra Kumar, Madras Bar
Association v. Union of India to the effect that Tribunals or their members should not be
dependent upon the Executive.6

3. JUDGMENT OF THE COURT

ISSUE 1- Can the Court review the decision of the Lok Sabha Speaker certifying a bill as
a Money Bill?

In a unanimous opinion, Chief Justice Ranjan Gogoi observed that “the wisdom of the Speaker
must be valued unless it is blatantly violative of the Constitutional Scheme.” But, the decision
of certification is subject to judicial review.7 For arriving at this decision, the Court relied upon
the Aadhaar judgment and the Kihoto Hollohan v Zachillhu judgment 8 wherein a Constitution
Bench of the Supreme Court held that “the finality attributed to the decision of the Speaker of

4
“Day 3 Arguments: Tribunals and the Finance Act,” Supreme Court Observer (March 21, 2022, 11:30 p.m.),
https://www.scobserver.in/reports/rojer-mathew-south-indian-bank-ltd-day-3-arguments/
5
Id.
6
“Day 2 Arguments: Tribunals and the Finance Act,” Supreme Court Observer (March 22, 2022, 11:30 p.m.),
https://www.scobserver.in/reports/rojer-mathew-south-indian-bank-ltd-day-2-arguments/
7
Rojer Mathew v. South Indian Bank Limited, (2020) 6 Supreme Court Cases 1.
8
Kihoto Hollohan v Zachillhu, 1992 SCR (1) 686.
the Lok Sabha or the Chairman of the Rajya Sabha in paragraph 6 (1) of the Tenth Schedule
of the Constitution does not abrogate judicial review.”

ISSUE 2- Was Part XIV validly enacted as a Money Bill under Article 110 of the
Constitution of India?

Chief Justice Ranjan Gogoi in his majority opinion observed that the majority verdict in the
Aadhaar case did not provide guidelines as to how to interpret a money bill. Therefore, this
matter should be referred to a larger bench.

In a separate opinion, Justice Chandrachud held that Part XIV is not a money bill. For this, he
relied upon his dissenting verdict in K.S. Puttaswamy v Union of India. 9

ISSUE 3- Even if Part XIV was validly enacted as a Money Bill, did the legislature
excessively delegate its legislative powers to the executive?

On the constitutionality of Section 184, Chief Justice Gogoi observed that “Part XIV was added
in the Finance Act, 2017 because of the earlier decisions to bring change in the tribunal system,
and such precedents already form a basis of terms of qualification and methods of appointment
in tribunals. Hence Section 184 is constitutionally valid.” For arriving at this decision Chief
Justice Gogoi relied upon the following verdicts of the Supreme Court- RK Jain v Union of
India10, L Chandra Kumar v Union of India 11, Union of India v R. Gandhi12, Madras Bar
Association v Union of India. 13

In his minority verdict, Justice Gupta observed that “Section 184 of the Finance Act, 2017
insofar as it delegates the powers to lay down the qualifications of Chairperson, Vice-
Chairperson, Chairman, Vice-Chairman, President, Vice-President, Presiding Officer or
Member of the Tribunal, Appellate Tribunal or, as the case may be, other Authorities suffers
from the vice of excessive delegation and therefore should be struck down.” For his dissent,

9
K.S. Puttaswamy v Union of India, (2019) 1 SCC 1.
10
RK Jain v Union of India (1994) 4 SCC 119
11
L Chandra Kumar v Union of India (1997) 3 SCC 261
12
Union of India v R. Gandhi (2010) 11 SC 1
13
Madras Bar Association v Union of India (2014) 10 SCC 1
Justice Gupta relied upon the In Re Article 143, Constitution of India and Delhi Laws Act
(1912).

ISSUE 4- Even if Part XIV does not suffer from either of the defects in (2) and (3) are the
rules enacted under it – Appellate Tribunal and Other Authorities (Qualifications,
Experience and Other Conditions of Service of Members) Rules 2017 – valid?

On the aspect of the constitutionality of the Appellate Tribunal and Other Authorities
(Qualifications, Experience and Other Conditions of Service of Members) Rules 2017, the
Constitution Bench unanimously held that the rules framed violate the independence of the
judiciary and therefore it should be struck down. The bench observed that “(a) search-cum-
selection committee for tribunal personnel was composed predominantly of nominees of the
Central Government. (b) Technical members have not been mandated any prior adjudicatory
experience, this goes against the dicta of the Court in the Madras Bar Association judgment;
(c) The role of the judiciary in the procedure for removal of tribunal members has been
completely taken away; (d) Lack of uniform age of superannuation for different tribunal
members and short tenure, paved way for increased executive interference; (e) Re-appointment
of tribunal members will erode the independence of the tribunal members and thus erode public
faith in the system.”

ISSUE 5- What measures should be taken to streamline the functioning of tribunals?

On this issue, the Court passed a series of directions relying upon its previous verdicts in RK
Jain v Union of India14, L Chandra Kumar v Union of India 15, Union of India v R. Gandhi16,
and Madras Bar Association v Union of India. 17

The Court insisted on judicial impact assessment and the creation of a National Tribunal
Commission.

14
RK Jain v Union of India (1994) 4 SCC 119
15
L Chandra Kumar v Union of India (1997) 3 SCC 261
16
Union of India v R. Gandhi (2010) 11 SC 1
17
Madras Bar Association v Union of India (2014) 10 SCC 1
 4. ANALYSIS OF THE JUDGMENT

The verdict of the Supreme Court in the case of Roger Mathew v South Indian Bank Limited
and Others is a landmark judgment in the field of tribunals. The Apex Court in this case has
dealt with two complicated issues. Firstly, upon the issue pertaining to the review of the
speaker’s power that whether a particular bill is a money bill or not. Secondly, upon a larger
issue, this pertains to the independence of the judiciary and tribunals.

The majority verdict in the Aadhaar case did not provide guidelines as to how to interpret a
money bill. The same was also observed by Chief Justice Ranjan Gogoi in his majority verdict
in which he observed that “upon an extensive examination of the matter, we notice that the
majority in K.S. Puttaswamy (Aadhaar) pronounced the nature of the impugned enactment
without first delineating the scope of Article 110(1) and principles for interpretation or the
repercussions of such process. It is clear to us that the majority dictum in K.S. Puttaswamy
(Aadhaar) did not substantially discuss the effect of the word only in Article 110(1) and offers
little guidance on the repercussions of a finding when some of the provisions of an enactment
passed as a Money Bill do not conform to Article 110(1)(a) to (g). Its interpretation of the
provisions of the Aadhaar Act was arguably liberal and the Court’s satisfaction of the said
provisions being incidental to Article 110(1)(a) to (f), it has been argued is not convincingly
reasoned, as might not be in accord with the bicameral Parliamentary system envisaged under
our constitutional scheme. Without expressing a firm and final opinion, it has to be observed
that the analysis in K.S. Puttaswamy (Aadhaar) makes its application difficult to the present
case and raises a potential conflict between the judgements of coordinate Benches.”18

As a result, the Chief Justice has rightly referred the matter to a larger bench. Furthermore, the
Court has rightly observed that the speaker’s certification is subject to judicial review thereby
overruling the judgments of the Court in Raja Ram Pal and Siddique. It should be ensured that
by adopting the route of money bill the government does not over-shadow the upper house.
Therefore, the speaker’s certification should be subject to judicial review. However, the scope
of judicial review in such cases should be extremely restricted.

On the issue of independence of judiciary and tribunals, the researcher believes that the
minority verdict of Justice Deepak Gupta is more legally tenable than the majority verdict of
the Chief Justice. In his minority verdict, Justice Gupta rightly observed that “Section 184 of

18
Rojer Mathew v. South Indian Bank Limited (2020) 6 SCC 1.
the Finance Act, 2017 insofar as it delegates the powers to lay down the qualifications of
Chairperson, Vice-Chairperson, Chairman, Vice-Chairman, President, Vice-President,
Presiding Officer or Member of the Tribunal, Appellate Tribunal or, as the case may be, other
Authorities suffers from the vice of excessive delegation and therefore should be struck
down.”19

It is pertinent to note that the Parliament can’t delegate essential legislative functions to the
Executive. The same has also been observed by the Apex Court in the case of In Re Article
143, Constitution of India and Delhi Laws Act (1912). Therefore, the authors believe that the
minority verdict ensures greater judicial independence for the tribunals.

Unfortunately, the Government of India has not taken into consideration the guidelines issued
by the Apex Court. As a result, the newly framed law has now again been challenged before
the Apex Court. One can only hope that the Union Government will realize its fault and would
adhere to the guidelines laid down by the Supreme Court while framing Tribunal rules.

5. WAY AHEAD

The Law Commission of India in October 2017 published a report titled, “Assessment of
Statutory Frameworks of Tribunals in India”. This report however has raised serious questions
about the working of tribunals in India. Even though the Supreme Court has upheld the
constitutionality of tribunals, it can’t be denied that the tribunals have diluted the doctrine of
separation of powers. It is because it’s the judiciary which is supposed to decide the disputes.
However today it’s the tribunals are deciding a large number of cases. It is pertinent to note
that it’s the executive who controls the tribunal and not the judiciary. Be it the manner of
appointment, remuneration or terms of services. Everything is under the control of the
Executive and not the legislature.20

Secondly, in most cases, the appeal from these tribunals lies directly to the Supreme Court. The
jurisdiction of the High Courts has been taken away. As a result, the Supreme Court is
bombarded with appeals. The number of matters has increased to such a level that the court is

19
Rojer Mathew v. South Indian Bank Limited (2020) 6 SCC 1.
20
Somasekhar Sundaresan, The Problem with Tribunalisation, Somasekhars (March 20, 2022, 4:00 p.m.),
https://somasekhars.wordpress.com/2017/11/02/the-problem-with-tribunalisation/
unable to perform its original role as a Constitutional Court. The Supreme Court has become
more of a Court of Appeal. 21

Thirdly in most of the cases, the appointees of these tribunals are the retired High Court and
Supreme Court judges and not professionals. The retired judges mostly lack the expertise
needed in that field. As a result, the objective of creating tribunals goes frustrated. Hence the
tribunal system in India needs a complete turnover.

Firstly, the judiciary should have control over the functioning of the tribunals and not the
executive. Be it appointment, remuneration or terms of services it should be the judiciary that
should have a say. It is because these tribunals are doing the functions of a regular court and
not the executive. Secondly, the High Courts should have control over the tribunals located
within their jurisdictions and the appeal should lie to the High Court and not the Supreme
Court. Lastly and most importantly it’s the professionals who have expertise in that particular
field should be appointed to these tribunals and not the retired judges or bureaucrats. If the
same is done then only the creation of tribunals would serve its purpose or else the creation of
tribunals will do no justice.

In a recent development, the Supreme Court has asked the Union Government to constitute a
National Tribunal Commission for the appointment of members in various tribunals. The Apex
Court has also directed the Union Government to frame rules which would allow advocates
with a practice experience of 10 years for appointment as judicial members in these tribunals.22
The authors believe that these directives will play a crucial role in improving the functioning
of tribunals in India.

21
Id.
22
Supreme Court Directs To Constitute National Tribunal Commission For Appointments To Tribunals, Lawyers
With 10Yrs Practice Eligible For Appointment As Judicial Members, Live Law (March 25, 2022; 11;30 p.m.),
https://www.livelaw.in/top-stories/supreme-courtnational-tribunal-commission-for-appointments-to-tribunals-
lawyers-eligible-for-judicial-members-166456