ROJER MATHEW v. SOUTH INDIAN BANK LTD. & ORS.

[RANJAN GOGOI, CJI]

questions of law, the composition of Tribunals was put under review A by this Court and a reference to the Law Commission of India was made in this regard. Pursuant to this, the Law Commission of India, in its 272 nd Report titled ‘Assessment of Statutory Frameworks of Tribunals in India’ gave a detailed analysis of statutory framework with respect to Tribunalisation in India. B THE FINANCE ACT, 2017: ITS LEGISLATIVE BACKGROUND

55Copy pinpoint55. Primary challenge in the present batch of cases is to the Finance Act, 2017. Though this enactment was purportedly to give effect to “the finance proposals of the central government for the financial year 2017-18” but Part XIV thereof consists of comprehensive provisions meant to effect “Amendments to Central Acts to Provide for Merger of Tribunals and other Authorities and Conditions of Service of Chairpersons, Members, etc”.

56Copy pinpoint56. A scrutiny of Part XIV of the Finance Act, 2017 discloses how by virtue of Sections 158 to 182, Parliament has amended twenty- five central enactments which form the foundation for multiple Tribunals. It has been submitted by the learned Attorney General, these amendments seek to rationalise the functioning of Tribunals, in conformity with the principles laid down by this Court in its prior decisions. E

57Copy pinpoint57. Sections 158 to 182 of Part-XIV are broadly in pari materia except that each Section deals with a separate Tribunal. In order to comprehend the manner in which Parliament has sought to achieve a uniform pattern of qualifications, appointment, term of office, salaries and allowances, resignation, removal and other terms and conditions F of service of members and presiding officers of various Tribunals, it would be sufficient to illustratively reproduce Sections 158 and 173 of Part XIV of the Finance Act, 2017. Section 173 reads as follows: “I.—AMENDMENT TO THE CINEMATOGRAPH ACT, 1952 G

173. In the Cinematograph Act, 1952, after section 5D, the following section shall be inserted, namely:— “5E. Notwithstanding anything contained in this Act, the qualifications, appointment, term of office, salaries and allowances, resignation, removal and the other terms and conditions of service H

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A of the Chairman and other members of the Appellate Tribunal appointed after the commencement of Part XIV of Chapter VI of the Finance Act, 2017, shall be governed by the provisions of section 184 of that Act: Provided that the Chairman and member appointed before the commencement of Part XIV of Chapter VI of the Finance Act, 2017, shall continue to be governed by the provisions of this Act and the rules made thereunder as if the provisions of section 184 of the Finance Act, 2017 had not come into force.”.

58Copy pinpoint58. In addition to this, some Sections in Part XIV also amalgamate existing Tribunals. Section 158 has been reproduced below as an example of such Sections which in addition to the elements of Section 173 also effect amalgamations: “158. Amendment of Act 14 of 1947.— In the Industrial Disputes Act, 1947,— D (a) in Section 7A, after sub-section (1), the following sub-section shall be inserted, namely:— “(1A) The Industrial Tribunal constituted by the Central Government under sub-section (1) shall also exercise, on and E from the commencement of Part XIV of Chapter VI of the Finance Act, 2017, the jurisdiction, powers and authority conferred on the Tribunal referred to in Section 7D of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952).”;

F (b) after Section 7C, the following section shall be inserted, namely:— “7D. Qualifications, terms and conditions of service of Presiding Officer.— Notwithstanding anything contained in this Act, the qualifications, appointment, term of office, salaries and allowances, G resignation and removal and other terms and conditions of service of the Presiding Officer of the Industrial Tribunal appointed by the Central Government under sub-section (1) of Section 7A, shall, after the commencement of Part XIV of Chapter VI of the Finance Act, 2017, be governed by the provisions of Section H 184 of that Act:

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Provided that the Presiding Officer appointed before the commencement of Part XIV of Chapter VI of the Finance Act, 2017, shall continue to be governed by the provisions of this Act, and the rules made thereunder as if the provisions of Section 184 of the Finance Act, 2017 had not come into force.”

59Copy pinpoint59. There are two significant expressions worth noticing in these similarly worded Sections 158 to 182. First, every such Section opens up with a non-obstante clause and it provides that “notwithstanding anything contained in …… Act the qualifications, appointment, term of office, salaries and allowances, resignation, removal and the other terms and conditions of service of the Chairman and other members of the Appellate Tribunal appointed after the commencement of Part XIV of Chapter VI of the Finance Act, 2017, shall be governed by the provisions of section 184 of that Act”. Second, Section 184 of the Finance Act overrides all other provisions in both the Finance Act, 2017 as well as the other twenty-five enactments which stand amended. D

60Copy pinpoint60. To critical analyse the intention of the legislature in enacting Section 184, reference must be made to the immediately preceding Section 183 which is to be found in sub-part ‘S’ of the Act titled “Conditions of service of Chairpersons and members of Tribunals, Appellate Tribunals and other Authorities”. Since Sections 183 and E 184 would need to be read conjointly, both are reproduced below: “S.—CONDITIONS OF SERVICE OF CHAIRPERSON AND MEMBERS OF TRIBUNALS, APPELLATE TRIBUNALS AND OTHER AUTHORITIES

183. Application of Section 184.— Notwithstanding anything F to the contrary contained in the provisions of the Acts specified in column (3) of the Eighth Schedule, on and from the appointed day, provisions of Section 184 shall apply to the Chairperson, Vice-Chairperson, Chairman, Vice-Chairman, President, Vice- President, Presiding Officer or Member of the Tribunal, Appellate G Tribunal or, as the case may be, other Authorities as specified in column (2) of the said Schedule: Provided that the provisions of Section 184 shall not apply to the Chairperson, Vice-Chairperson, Chairman, Vice-Chairman, President, Vice-President, Presiding Officer or, as the case may H

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A be, Member holding such office as such immediately before the appointed day.

184. Qualifications, appointment, term and conditions of service, salary and allowances, etc., of Chairperson, Vice- Chairperson and Members, etc., of the Tribunal, Appellate B Tribunal and other Authorities.— (1) The Central Government may, by notification, make rules to provide for qualifications, appointment, term of office, salaries and allowances, resignation, removal and the other terms and conditions of service of the Chairperson, Vice-Chairperson, Chairman, Vice-Chairman, President, Vice-President, Presiding Officer or Member of the C Tribunal, Appellate Tribunal or, as the case may be, other Authorities as specified in column (2) of the Eighth Schedule: Provided that the Chairperson, Vice-Chairperson, Chairman, Vice- Chairman, President, Vice-President, Presiding Officer or Member of the Tribunal, Appellate Tribunal or other Authority D shall hold office for such term as specified in the rules made by the Central Government but not exceeding five years from the date on which he enters upon his office and shall be eligible for reappointment: Provided further that no Chairperson, Vice-Chairperson, E Chairman, Vice-Chairman, President, Vice-President, Presiding Officer or Member shall hold office as such after he has attained such age as specified in the rules made by the Central Government which shall not exceed,— (a) in the case of Chairperson, Chairman [President or the F Presiding Officer of the Securities Appellate Tribunal], the age of seventy years; (b) in the case of Vice-Chairperson, Vice-Chairman, Vice- President, Presiding Officer [of the Industrial Tribunal constituted by the Central Government and the Debts G Recovery Tribunal] or any other Member, the age of sixty-seven years: (2) Neither the salary and allowances nor the other terms and conditions of service of Chairperson, Vice-Chairperson, Chairman, Vice-Chairman, President, Vice-President, Presiding H Officer or Member of the Tribunal, Appellate Tribunal or, as the

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case may be, other Authority may be varied to his disadvantage A after his appointment.”

61Copy pinpoint61. Further, the Central Government in purported exercise of its powers under the aforementioned provisions, has notified the ‘Tribunal, Appellate Tribunal and other Authorities (Qualifications, Experience and other Conditions of Service of Members) Rules, 2017’ [in short “the B Rules”]. PETITIONERS’ CASE :

62Copy pinpoint62. The pleadings and arguments in most of the individual cases are similar and overlapping. Hence, for the sake of brevity, it is not necessary to refer to the submissions of each of the counsel individually. C Broadly, however, petitioners have questioned the validity of Part XIV read with the 8th and 9th Schedules of the Finance Act 2017, as being ex-facie unconstitutional, arbitrary, in colourable exercise of legislative power, and offensive to the basic structure of the Constitution.

63Copy pinpoint63. The foremost contention on behalf of the petitioners is that D Part-XIV could not and ought not to have been made part of the Finance Act, 2017 as the said part is not classifiable as a ‘money bill’. Emphasis was placed on the wordings of Article 110 which allows those bills which contain “only” provisions which fall within the metes and bounds of Clauses (a) to (g) thereof, to be treated as ‘money bill’. By virtue E of inclusion of Part XIV, the entirety of the Finance Act, 2017 was contended to have lost its colour as a ‘money bill’ under Article 110 and hence its passage without the assent of the Rajya Sabha as required under Article 107 renders it ultra vires the legislative scheme contemplated in the Constitution. F

64Copy pinpoint64. Learned counsels vehemently placed reliance on the Constituent Assembly Debates to lend strength to the importance of the expression “only” under Article 110(1). They seek to make out a case that such phraseology was deliberately incorporated in the Constitution by making a conscious departure from Section 37 of the Government of India Act, 1935. Inclusion of Part XIV in the Finance G Act, 2017 is shown as being an act of camouflage and a colourable exercise and petitioners assert that such indirect manner of bypassing of the Rajya Sabha is impermissible. A larger narrative was presented before this Court, that is, of the Central Government undermining the character and essence of a bicameral legislature as envisaged under H

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A the Constitution; and interference of this Court was sought through examination of the substance of the legislation and not mere acceptance of the nomenclature accorded by the Lok Sabha Speaker under Article 110(3).

65Copy pinpoint65. A nuanced argument was also furthered by petitioners’ B counsels who highlighted that Tribunals are governed by Article 323-A and 323-B of the Constitution and laws enacted in this regard cannot be classified as money bills. Further, Parliament in making changes to Tribunals can trace its competence to Entry 11-A of List III of the Constitution which deals with administration of justice, and not financial matters. C

66Copy pinpoint66. Part XIV was also impugned for its effect of terminating the services of presiding officers and members of various now-defunct Tribunals, which was claimed as being a direct interference in the independence of the judiciary.

67Copy pinpoint67. Section 184(1) of the Finance Act, 2017, in so far as it empowers the Central Government to make rules to provide for qualifications and procedure of appointment, conditions of service, terms and salaries was contended to suffer from the vice of excessive delegation. It was stated that the said provision takes away all judicial safeguards and makes the Tribunals amenable to the whims and fancies E of the largest litigant, the State. This was contended as being against the grain of the Constitution, besides affecting administration of justice. In the alternative, counsels also contended that the present formulation of Rules under Section 184 was ultra vires the parent enactment and the binding dictum expressed by this Court in a catena of judgments.

68Copy pinpoint68. Further, during the course of arguments, various other deficiencies and contradictions in the administration of Tribunals and certain anomalous situations like providing direct appeals to this Court were highlighted, which were contended as being against the spirit of the Constitution. Petitioners, in addition to challenging the vires of the G Finance Act, 2017 also prayed for a mandamus directing the State to mandatorily conduct ‘Judicial Impact Assessment’ of legislations. UNION OF INDIA’S CASE :

69Copy pinpoint69. Learned Attorney General, on the other hand, passionately drew attention to the existence of over 40 tribunals, statutory H commissions, and authorities functioning under the Government of India,

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each of which has been established under a different enactment and is A governed by different set of rules. As a result, the conditions of service, modes of appointment, tenures etc. of members and presiding officers in different Tribunals were shown as vastly varying from one to another, giving rise to several anomalies and distortions. He put forth multiple examples; like how while members of some of the Commissions/ B Tribunals enjoy the status of Supreme Court judges, others like the members of the Debt Recovery Tribunal have only been kept at par with District Court judges. Similarly, while a person once appointed to the ITAT can continue till the age of superannuation, tenures of persons appointed to the APTEL was merely three years. The Attorney General attributed such inconsistencies as drafting errors and further stressed C the need to streamline and harmonise the applicable rules, which is what was attempted through the Finance Act, 2017.

70Copy pinpoint70. He also highlighted the inherent contradiction in according status and rank equivalent to that of Constitutional Court judges to members and presiding officers of such Tribunals and regulatory bodies. D It was argued that the two have different functions and roles in our Constitutional setup. While the Supreme Court had a strength of 31 judges (when the matter was argued), he pointed out, that there are more than 50 functionaries enjoying the conditions of service of a Supreme Court judge and more than 150 such functionaries who have been brought at par with High Court judges. After placing on record E multiple problems arising in the administration of justice as a result of such practice, he advocated the need to keep ‘rank’ and ‘status’ separate from ‘salary’ and ‘allowances’.

71Copy pinpoint71. Learned Attorney General further relied upon an order passed by this Court in Rajiv Garg vs. Union of India (WP No. 120 of 2017) F on 08th February, 2013 directing that a decision be taken by the Central Government on uniformity of service conditions in various tribunals. Reliance was also placed on the 13th Report of the 2nd Administrative Reforms Commission submitted in April 2009 which recommended greater uniformity in service conditions in various tribunals. It was G pointed out that, in fact, the Tribunals, Appellate Tribunals and other Authorities (Conditions of Service) Bill, 2014 was introduced in the Rajya Sabha on 14 th February, 2014 but somehow could not be passed. Introducing separate amendments for each of these Tribunals would have been unwieldy and impractical, besides resulting in several inconsistencies. Resultantly, he submits a holistic view was taken and H

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A a single enactment was sought to be introduced in order to harmoniously bring uniformity.

72Copy pinpoint72. On behalf of the Union, the petitioners’ contentions were elaborately refuted. It was submitted that it is a settled principle of Constitutional interpretation that terms of the Constitution, including B Clauses (a) to (g) of Article 110(1), must be interpreted in their widest amplitude, with the result that when the principal enactment had the dominant character of a ‘money bill’, all matters incidental thereto and inserted therein would also draw the colour and characteristic of a ‘money bill’.

73Copy pinpoint73. In the alternative, he took aid of Clause (3) of Article 110 to contend that the Speaker of the Lok Sabha was the final and only Constitutional authority to adjudge the nature of a bill sought to be introduced under Article 109. Such decision was both final and hence not subject to any judicial review by any Court; even otherwise such D exercise of passing legislations and certifications by the Speaker were “proceedings in Parliament” and could hence “not be called in question” before this Court in view of Article 122(1).

74Copy pinpoint74. Both sides have extensively relied upon case law and Constitutional history to substantiate their respective pleas. Relevant E portions of the same are being referred to in the latter parts of this judgment whenever necessary. BRIEF REFERENCE TO INTERLOCUTORY ORDERS:

75Copy pinpoint75. After considering the suggestions filed during the course of hearing in SLP(C) No. 15804/2017, this Court passed an interim order on 9 February 2018, suggesting: “1. Staying the composition of Search-cum-Selection Committee as prescribed in Column 4 of the Schedule to the Tribunal, Appellate Tribunal and Other Authorities (Qualification, experience and other conditions of service of members) Rules, 2017 both in respect of Chairman/ Judicial Members and Administrative Members. A further direction to constitute an interim Search-cum- Selection Committee during the pendency of this W.P. in respect of both Judicial/Administrative members as under :

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a. Chief Justice of India or his nominee - Chairman A b. Chairman of the Central Administrative Tribunal - Member c. Two Secretaries nominated by the Government of India - Members B

2. Appointment to the post of Chairman shall be made by nomination by the Chief Justice of India.

3. Stay the terms of office of 3 years as prescribed in Column 5 of the Schedule to the Tribunal, Appellate Tribunal and other Authorities (Qualification, experience C and other conditions of service of members) Rules, 2017. A further direction fixing the term of office of all selectees by the aforementioned interim Search-cum- Selection Committee and consequent appointees as 5 years. D

4. All appointments to be made in pursuance to the selection made by the interim Search-cum-Selection Committee shall be with conditions of service as applicable to the Judges of High Court.

5. A further direction to the effect that all the selections E made by the aforementioned interim selection committee and the consequential appointment of all the selectees as Chairman/Judicial/Administrative members for a term of 5 years with conditions of service as applicable to Judges of High Court shall not be affected by the final outcome of the Writ Petition.” F

76Copy pinpoint76. The learned Attorney General agreed with all except the fourth and fifth suggestions reproduced above, and suggested certain modifications as follows: “4. All appointments to be made in pursuance to the G selection made by the interim Search-cum-Selection Committee shall abide by the conditions of service as per the old Acts and the Rules.

5. A further direction to the effect that all the selections made by the aforementioned interim selection committee H

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A and the consequential appointment of all the selectees as Chairman/Judicial/Administrative members shall be for a period as has been provided in the old Acts and the Rules.”

77Copy pinpoint77. This Court agreed to the learned Attorney General’s B suggestions and accordingly made the following operative directions: “In view of the aforesaid, we accept the suggestions and direct that the same shall be made applicable for selection of the Chairpersons and the Judicial/Administrative/ Technical/Expert Members for all tribunals.”

78Copy pinpoint78. Since many of the Search-cum-Selection Committees had initiated selection processes and had completed a substantial portion of the exercise prior to the above order dated 9th February, 2018, this Court, on 12th February, 2018 passed the following order: “As some Committees had proceeded, the matter was listed for D further hearing. We have heard learned counsel for the parties. Mr. Rohit Bhat, learned counsel assisting the learned Attorney General for the Union of India shall file the status of the selection process by the Committees, by 13.2.2018. Mr. Arvind Datar, Mr. C.A. Sundaram and Mr. Mohan Parasaran, E learned senior counsel shall also file through their Advocates-on- Record a joint memorandum with regard to which tribunals are covered and not covered. The same shall be filed by 10.30 a.m. on 13.2.2018. Orders reserved.” F

79Copy pinpoint79. Further, vide order dated 20th March 2018, this Court clarified its previous order of 9th February 2018 and directed: “(iii) The tenure of the Chairperson and the Judicial/ Administrative/Expert/Technical Members of all the Tribunals shall be for a period of five years or the maximum age that was fixed/determined under the old Acts and Rules;”

80Copy pinpoint80. The following directions were also issued on 16th July, 2018 with regard to the age of superannuation of Members of the ITAT: “At this juncture, we may note that there is some confusion with regard to the Income Tax Appellate Tribunal (ITAT) as regards

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the age of superannuation. We make it clear that the person selected as Member of the ITAT will continue till the age of 62 years and the person holding the post of President, shall continue till the age of 65 years.”

81Copy pinpoint81. Corollary to the order dated 16th July 2018, six officers who had been selected as Member (Judicial) in CESTAT, also demanded the age of superannuation as noted in the case of Members of ITAT, to be applicable to them. Following the same dictum, vide order dated 21st August 2018, clarification regarding the age of superannuation for Members of CESTAT, Armed Forces Tribunal and Central Administrative Tribunal was made. The relevant portion of that order reads as follows: “CESTAT:

2. In IA 113281 of 2018, the applicant is an Additional District and Sessions Judge in the State of West Bengal, who has been selected as Member (Judicial) in the CESTAT. The notification of appointment of six officers who have been selected as Member (Judicial), including the applicant, stipulates that they shall hold office for a period of five years or till attaining the age of 62 years, whichever is earlier “in terms of the Hon’ble Supreme Court’s order dated 20 March 2018". A member of the judicial service would have ordinarily continued until the date of superannuation in the state judicial service, subject to the service rules. It would be manifestly inappropriate to adopt an interpretation as a result of which, upon assuming office as Member (Judicial) in CESTAT the officer will have a tenure which will expire after five years, if it falls prior to attaining the age of 62 years. We, accordingly, are of the view that the clarification issued for the ITAT in the order dated 20 March 2018 needs to be reiterated in the case of the members of the CESTAT, which we do. We clarify that a person selected as Member of the CESTAT will continue until the age of 62 years while a person holding the post of President shall continue until the age of 65 years. AFT:

3. Members of the Armed Forces Tribunal shall hold office until the attainment of the age of 65 years. Chairpersons who have H

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A been former Judges of the Supreme Court shall hold office until the attainment of the age of 70 years. CAT:

4. In the case of the Central Administrative Tribunal, we clarify that the old rules/provisions shall continue to apply.” B CONCEPT NOTE OF LEARNED AMICUS CURIAE :

82Copy pinpoint82. On the request of this Court, learned Senior Advocate Arvind Datar has provided invaluable assistance as the Amicus Curiae. In his detailed Concept Note, he has stressed the need for setting up an independent oversight body in light of the observations in L. Chandra C Kumar (supra), and as reiterated in Madras Bar Association v. Union of India (2015) (supra) to the effect that Tribunals or their members should not be required to seek facilities from the sponsoring or parent ministries or concerned departments.

83Copy pinpoint83. The Concept Note also emphasised the need to implement the ‘74th Report of the Parliamentary Standing Committee’ which recommended the creation of a `National Tribunal Commission’ (NTC) to oversee all the Tribunals in the country. Mr. Datar further suggests that such National Tribunal Commission may consist of the following: Two retired Supreme Court Judges (with the senior-most amongst them to be Chairman). Two retired High Court Judges (Members). Three members representing the Executive.

84Copy pinpoint84. It is further suggested in the concept note that such members be appointed by the following Selection Committee : F Chief Justice of India (as Chairperson of the Committee who exercises a casting vote); Two senior-most judges of the Supreme Court after the Chief Justice of India; G Current Law Minister; and Leader of the opposition.

85Copy pinpoint85. The Concept Note also contains the following suggestions: The NTC should oversee functioning of central Tribunals H and similar body may be constituted for State Tribunals.

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The NTC should deal with appointment and removal of A members of the Tribunals by constituting sub-committees. The member of the Tribunals should be recruited by national competition. Once recruited they should continue till the age of 62/65 years subject to their efficiency and satisfactory working. B The Tribunals should not be haven for retired persons and appointment process should not result in decisions being influenced if the Government itself is a litigant and the appointing authority at the same time. There should be restriction on acceptance of any employment after retirement. Bypassing of High Court jurisdiction under Article 226/ 227 need to be remedied by statutory amendment excluding direct appeals to this Court. D There should be proper mechanism for removal of members.

86Copy pinpoint86. The aforementioned Concept Note of Learned Amicus Curiae was considered by this Court on 07.05.2018, resulting in the following observations:- E “We broadly approve the concept of having an effective and autonomous oversight body for all the Tribunals with such exceptions as may be inevitable. Such body should be responsible for recruitments and oversight of functioning of members of the Tribunals. Regular cadre for Tribunals may be necessary. Learned F amicus suggests setting up of all India Tribunal service on the pattern of U.K. The members can be drawn either from the serving officers in Higher Judicial Service or directly recruited with appropriate qualifications by national competition. Their performance and functioning must be reviewed by an independent body in the same was as superintendence by the G High Court under Article 235 of the Constitution. Direct appeals must be checked. Members of the Tribunals should not only be eligible for appointment to the High Courts but a mechanism should be considered whereby due consideration is given to them on the same pattern on which it is given to the members of Higher H

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A Judicial Service. This may help the High Courts to have requisite talent to deal with issues which arise from decisions of Tribunals. A regular cadre for the Tribunals can be on the pattern of cadres for the judiciary. The objective of setting up of Tribunals to have speedy and inexpensive justice will not in any manner be hampered in doing so. Wherever there is only one seat of the B Tribunal, its Benches should be available either in all states or at least in all regions wherever there is litigation instead of only one place.”

87Copy pinpoint87. On 07.05.2018 itself, the following additional issues were also suggested for consideration: C “(i) Creation of a regular cadres laying down eligibility for recruitment for Tribunals; (ii) Setting up of an autonomous oversight body for recruitment and overseeing the performance and discipline of the members so recruited and other issues relating thereto; (iii) Amending the scheme of direct appeals to this Court so that the orders of Tribunals are subject to jurisdiction of the High Courts; E (iv) Making Benches of Tribunals accessible to common man at convenient locations instead of having only one location at Delhi or elsewhere. In the alternative, conferring jurisdiction on existing courts as special Courts or Tribunals.”

88Copy pinpoint88. Thereafter, this Court opined the following recourse :- “20. The above issues may require urgent setting up of a committee, preferably of three members, one of whom must be retired judge of this Court who may be served in a Tribunal. Such Committee can have inter action with all stakeholders and suggest G a mechanism consistent with the constitutional scheme as interpreted by this Court in several decisions referred to above and also in the light of recommendations of expert bodies. This exercise must be undertaken in a time bound manner.”

89Copy pinpoint89. This was followed by yet another order of 16th May, 2018 H recommending constitution of a Committee within two months and

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expecting the Committee to give its report within three months thereafter. FORMULATION OF ISSUES:

90Copy pinpoint90. The core issues canvassed at the Bar concern the constitutionality of the Finance Act, 2017, particularly whether it satisfies the test of a ‘money bill’ under Article 110 of the Constitution? Further, in the eventuality that it is held that the impugned legislation has been validly enacted, then does it through Section 184 excessively delegate legislative power to the Executive? Finally, whether the Rules thus framed as delegated legislation are ultra vires their parent enactments and are liable to be struck down? C

91Copy pinpoint91. In addition, learned Counsel for the parties have drawn attention to the need to rationalise the administration of Tribunals, especially the conditions of service, mode of appointment, security of tenure and requisite qualifications of members and presiding officers of various Tribunals. They have also highlighted the growing menace D of pendency before this Court arising from direct statutory appeals from orders of such Tribunals.

92Copy pinpoint92. In light of these arguments put forth by learned Counsels and the suggestions of by the Amicus Curiae, the following issues arise for our consideration: E

I. Whether the ‘Finance Act, 2017’ insofar as it amends certain other enactments and alters conditions of service of persons manning different Tribunals can be termed as a ‘money bill’ under Article 110 and consequently is F validly enacted? II. If the answer to the above is in the affirmative then Whether Section 184 of the Finance Act, 2017 is unconstitutional on account of Excessive Delegation? III. If Section 184 is valid, Whether Tribunal, Appellate G Tribunal and other Authorities (Qualifications, Experience and other Conditions of Service of Members) Rules, 2017 are in consonance with the Principal Act and various decisions of this Court on functioning of Tribunals? H

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A IV. Whether there should be a Single Nodal Agency for administration of all Tribunals? V. Whether there is a need for conducting a Judicial Impact Assessment of all Tribunals in India? VI. Whether judges of Tribunals set up by Acts of B Parliament under Articles 323-A and 323-B of the Constitution can be equated in ‘rank’ and ‘status’ with Constitutional functionaries? VII. Whether direct statutory appeals from Tribunals to the Supreme Court ought to be detoured? C VIII. Whether there is a need for amalgamation of existing Tribunals and setting up of benches. ISSUE I: WHETHER THE ‘FINANCE ACT, 2017’ INSOFAR AS IT AMENDS CERTAIN OTHER ENACTMENTS AND ALTERS CONDITIONS OF D SERVICE OF PERSONS MANNING DIFFERENT TRIBUNALS CAN BE TERMED AS A ‘MONEY BILL’ UNDER ARTICLE 110 AND CONSEQUENTLY IS VALIDLY ENACTED?

93Copy pinpoint93. The Indian Parliament is a bicameral legislature. In order to become law, as per the general legislative scheme as provided under E Article 107, an ordinary bill must be passed by a simple majority of both the Rajya Sabha and the Lok Sabha and must then receive Presidential ratification. Ordinary bills can be introduced either by the government or by any private member in either house of Parliament. After securing requisite majority in the House it is introduced in, ordinary bills are then sent to the other House for its assent. The Constitution, however, makes two exemptions to this general legislative procedure for formulation of laws.

94Copy pinpoint94. Article 368 provides for the Constituent power of the Parliament to amend the Constitution itself and concomitantly requires a higher threshold of majority in both houses of Parliament, and in certain cases also require the assent of a simple majority of the State legislatures. Article 110, in stark contrast, reverses the threshold and significantly reduces the role of the Rajya Sabha for ‘money bills’. Articles 109 and 110 provide that: “109. (1) A Money Bill shall not be introduced in the Council of H States.

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(2) After a Money Bill has been passed by the House of A the People it shall be transmitted to the Council of States for its recommendations and the Council of States shall within a period of fourteen days from the date of its receipt of the Bill return the Bill to the House of the People with its recommendations and the House of the B People may thereupon either accept or reject all or any of the recommendations of the Council of States. (3) If the House of the People accepts any of the recommendations of the Council of States, the Money Bill shall be deemed to have been passed by both Houses C with the amendments recommended by the Council of States and accepted by the House of the People. (4) If the House of the People does not accept any of the recommendations of the Council of States, the Money Bill shall be deemed to have been passed by both Houses D in the form in which it was passed by the House of the People without any of the amendments recommended by the Council of States. (5) If a Money Bill passed by the House of the People and transmitted to the Council of States for its E recommendations is not returned to the House of the People within the said period of fourteen days, it shall be deemed to have been passed by both Houses at the expiration of the said period in the form in which it was passed by the House of the People. F

110. (1) For the purposes of this Chapter, a Bill shall be deemed to be a Money Bill if it contains only provisions dealing with all or any of the following matters, namely:— (a) the imposition, abolition, remission, alteration or regulation of any tax; G (b) the regulation of the borrowing of money or the giving of any guarantee by the Government of India, or the amendment of the law with respect to any financial obligations undertaken or to be undertaken by the Government of India; H

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A (c) the custody of the Consolidated Fund or the Contingency Fund of India, the payment of moneys into or the withdrawal of moneys from any such Fund; (d) the appropriation of moneys out of the Consolidated Fund of India; B (e) the declaring of any expenditure to be expenditure charged on the Consolidated Fund of India or the increasing of the amount of any such expenditure; (f) the receipt of money on account of the Consolidated Fund of India or the public account of India or the C custody or issue of such money or the audit of the accounts of the Union or of a State; or (g) any matter incidental to any of the matters specified in sub-clauses (a) to (f).

D (2) A Bill shall not be deemed to be a Money Bill by reason only that it provides for the imposition of fines or other pecuniary penalties, or for the demand or payment of fees for licences or fees for services rendered, or by reason that it provides for the imposition, abolition, remission, alteration or regulation of any tax by any local authority or body for local purposes. E (3) If any question arises whether a Bill is a Money Bill or not, the decision of the Speaker of the House of the People thereon shall be final. (4) There shall be endorsed on every Money Bill when it is transmitted to the Council of States under article 109, and when F it is presented to the President for assent under article 111, the certificate of the Speaker of the House of the People signed by him that it is a Money Bill.”

95Copy pinpoint95. ‘Money bills’ as defined under Article 110(1) thus include bills which contain “only” provisions covered by sub-clauses (a) to (g). These G money bills can be introduced only in the Lok Sabha and the role of the Rajya Sabha is merely consultative. Unlike in the case of ordinary bills where the Upper House can block the proposed legislation and act as a check on the power of the directly elected Lower House, in case of money bills, the Rajya Sabha merely has the ability to H recommend amendments, that too only within fourteen days. In case

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the Lok Sabha refuses to accept those recommendations or in case no A recommendations are made by the Rajya Sabha within the period of fourteen days, the money bill can be directly sent for Presidential ratification and thereafter it becomes valid law.

96Copy pinpoint96. Such an exceptional provision has its roots in British tradition and is an inheritance of the Westminster form of government. The B Parliament Act of 1911 was formulated by the United Kingdom Parliament in response to the Constitutional crisis of 1909 whereby the unelected Upper House (House of Lords) had stalled important budgetary bills passed by the elected Lower House (House of Commons), causing a governmental crisis and forcing the elected government to resign and seek re-election. Through Section 3, the said enactment required the Speaker of the House of Commons to certify that the bill was a ‘money bill’ and post such certification, the Upper House would forfeit its ability to amend or veto the bill. Further, it also allowed ‘public bills’ to become law irrespective of refusal by the House of Lords, in case the House of Commons had passed the same draft thrice in a minimum span of two years. It must be noted that the Indian adaptation under Article 109 and 110 do not have exceptions for ‘public bills’ nor do they explicitly provide that such certification shall not be amenable to judicial review unlike in the Parliament Act of 1911.

97Copy pinpoint97. The Constitution of India by Article 110(4), requires that every E ‘money bill’ be certified to be so by the Speaker before it is transmitted to the Rajya Sabha for their non-binding consideration. The Speaker of the Lok Sabha hence is the only appropriate authority to decide the nature of a bill under Article 110(3).

98Copy pinpoint98. In the present dispute, the Union has relied upon the finality F accorded to such certification by the terminology of Article 110(3) which provides that in case of any dispute as to the nature of a bill, “the decision of the Speaker of the House of the People thereon shall be final.” The Lok Sabha Speaker, in fact, on a dispute having so arisen has adjudicated the then Finance Bill, 2017 to be a ‘money bill’. Further, G the Union also places emphasis on Article 122(1) of the Constitution which provides that: “122. (1) The validity of any proceedings in Parliament all not be called in question on the ground of any alleged irregularity of procedure.” H

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99Copy pinpoint99. The Union thus, alternatively, contends that the challenge before this Court to the certification of the Speaker of the Finance Bill, 2017 as a ‘money bill’ and its consequent passage without the assent of the Rajya Sabha would at best amount to an ‘irregularity of procedure’ of ‘proceedings in Parliament’ and hence cannot be inquired into by this Court. B

100Copy pinpoint100. It must be noted once again, that like Articles 109 and 110, Article 122 of our Constitution too can be traced to the Constitutional history and developments in the United Kingdom. Certain Members of Parliament were tried and imprisoned for their remarks in Parliament during the seventeenth century resulting in the enactment of Article 9 C of the Bill of Rights, 1688 which specifies that “…. proceedings in Parliament ought not to be impeached or questioned in any Court….” Article 212(1) of the Constitution of India provides a direct corollary of Article 122(1) with respect to State legislatures.

101Copy pinpoint101. This provision was initially interpreted in MSM Sharma vs. D Dr. Shree Krishna Sinha20 to mean that legislative business cannot be invalidated even if it is not strictly in compliance with law for such issues were within the “special jurisdiction” of the legislature to regulate its own business.

102Copy pinpoint102. The Union’s contention that Article 122 would exempt from E judicial scrutiny passage of bills is a far-fetched contention. If such a blanket exemption were to be granted, then it would open the floodgates to deviation from any Constitutional provision governing the functioning of Parliament and its legislative procedure. Since the Constitution explicitly provides a self-contained detailed procedure for enactment of legislation, and does not suggest that mere assent of the President F to a law, by whatsoever method adopted, would become a valid law, it is necessary that this Court being the highest Constitutional forum for judicial review is provided with enough space for enforcement and protection of the Constitutional scheme. A perusal of the expressions used in Article 122 and a comparison with its British roots make it clear G that the “proceedings” referred to include the power of the Parliament to frame its own rules, set out procedures for debate and discussion and powers to enforce disciple. Section 3 of the Parliament Act, 1911 in the United Kingdom makes the decision of the Speaker of the House of Commons ‘conclusive for all purposes’ and ‘shall not be questioned 20 H AIR 1959 SC 395.

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in any court of law’. The Constitution of India however, under Article A 110(3), states that ‘if any question arises whether a Bill is a Money Bill or not, the decision of the Speaker of the House of the People thereon shall be final’. A different syntax seems to indicate that our Constitution makes the decision of the Speaker as to the nature of Bill final qua members of both the Houses of Parliament, though it is not conclusive and unchallengeable before the Courts. The scope of judicial review of decisions that enjoy the status of finality under the Constitution has been examined by this Court on several occasions. We would like to refer to a few precedents in this regard. In Raja Ram Pal v. Lok Sabha21, this Court had examined the ambit and scope of judicial review in matters of Parliamentary privileges and powers under Article 105 of the Constitution. The Court had held that under Article 122(1) and 212(1), immunity that has been granted is limited to ‘irregularity of procedure’ and does not extend to substantive illegality or unconstitutionality by observing: “Any attempt to read a limitation into Article 122 so as to restrict the court’s jurisdiction to examination of the Parliament’s procedure in case of unconstitutionality, as opposed to illegality would amount to doing violence to the constitutional text. Applying the principle of “expressio unius est exclusio alterius” (whatever has not been included has by implication been excluded), it is plain and clear that prohibition against examination on the touchstone of “irregularity of procedure” does not make taboo judicial review on findings of illegality or unconstitutionality.” In Union of India v. Jyoti Prakash Mitter22, this Court had examined clause (3) to Article 217 which makes the decision of the F President after consultation with the Chief Justice of India ‘final’, if the question arises as to the age of a Judge of a High Court. It was observed that notwithstanding the declared finality of the order of the President, the Court can, in appropriate cases when the order has been passed on collateral considerations or the rules of natural justice are G not observed or when the judgment of the President is coloured by the advice or representation made by the Executive or is made with no evidence, set aside the order of the President made under Article 217(3). 21 (2007) 3 SCC 184 22 (1971) 1 SCC 396 H

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A The Courts, however, do not sit in appeal over the judgment of the President or decide the weight to be attached to the evidence which is entirely within the domain of the President. Reading of the above decisions exposit that ‘finality’ of decisions under the Constitution has been subject to judicial review by the Courts. B However, the jurisdiction exercisable by the Courts in such matters is rather limited and is subject to the satisfaction of specific conditions as discussed. We find no good ground and reason to take a different view with respect to the power of judicial review against certification of a bill as a Money Bill by the Speaker under Article 110(4). Article 110(3) which makes this decision final qua both the Houses of Parliament and C Article 122(1) which prohibits review by the courts in matters of ‘irregularity of procedure’ cannot operate as a bar when a challenge is made on the ground of illegality or unconstitutionality under the Constitutional scheme.

103Copy pinpoint103. Determining whether an impugned action or breach is an exempted irregularity or a justiciable illegality is a matter of judicial interpretation and would undoubtedly fall within the ambit of Courts and cannot be left to the sole authority of the Parliament to decide. Such a position has also been taken in the United Kingdom by the House of Lords in R (Jackson) vs. Attorney General23 where notwithstanding the explicit bar to judicial consideration of all Parliamentary proceedings (and not just procedural irregularities as under the Constitution of India), the Court assumed jurisdiction whilst noting that interpretation of statutes dealing with legislative processes would fall within the domain of the Courts; statutory interpretation being a judicial exercise, regardless of the immunities granted to parliamentary proceedings under the Bill of F Rights.

104Copy pinpoint104. It would hence be gainsaid that gross violations of the Constitutional scheme would not be mere procedural irregularities and hence would be outside the limited ambit of immunity from judicial scrutiny under Article 122(1). In the case at hand, jurisdiction of this G Court is, hence, not barred.

105Copy pinpoint105. On the substantive question of whether the Finance Act, 2017 was a ‘money bill’ under Article 110(3) it must be noted that until the turn of the twenty-first century, this Court took a consistent position 23 H [2005] UKHL 56.

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that Article 110(3) of the Constitution would act as an express bar A against judicial inquiry into the correctness of the certificate of ‘money bill’ given by the Speaker of the Lok Sabha.

106Copy pinpoint106. In Mohd. Saeed Siddiqui vs. State of Uttar Pradesh24, a three-judge bench refused to judicially review the speaker’s certification of the Uttar Pradesh Lokayukta and Up-Lokayuktas (Amendment) Bill B as a Money bill. The phrase “proceedings of the Legislature” under Article 212(1) was interpreted to include “everything said or done in either house”. This Court thus held: “43. As discussed above, the decision of the Speaker of the Legislative Assembly that the Bill in question was a Money Bill C is final and the said decision cannot be disputed nor can the procedure of the State Legislature be questioned by virtue of Article 212. Further, as noted earlier, Article 255 also shows that under the Constitution the matters of procedure do not render invalid an Act to which assent has been given to by the President or the Governor, as the case may be. Inasmuch as the Bill in question was a Money Bill, the contrary contention by the Petitioner against the passing of the said Bill by the Legislative Assembly alone is unacceptable.”

107Copy pinpoint107. This was relied upon in Yogendra Kumar Jaiswal vs. State of Bihar25, wherein a division bench of this Court refused to judicially review the certification of ‘money bill’ accorded by the Speaker to the Orissa Special Courts Bill noting that it was settled post Mohd. Siddiqui (supra) that any such certification would be an “irregularity” and not a “substantiality”.

108Copy pinpoint108. A co-ordinate bench of this Court in Justice Puttaswamy F (Retd.) and Anr. v. Union of India 26, was tasked with a similar question of the certification of ‘money bill’ accorded to the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 by the Speaker of the Lok Sabha. The majority opinion after noting the important role of the Rajya Sabha in a bicameral G legislative setup, observed that Article 110 being an exceptional provision, must be interpreted narrowly. Although the majority opinion did not 24 (2014) 11 SCC 415. 25 (2016) 3 SCC 183 26 (2019) 1 SCC 1. H

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A examine the correctness of the decisions in Md. Siddiqui (supra) and Yogendra Kumar Jaiswal (supra) or conclusively pronounce on the scope of jurisdiction or power of this Court to judicially review certification by the Speaker under Article 110(3), yet, it independently reached a conclusion that the impugned enactment fell within the four- corners of Articles 110(1) and hence was a ‘money bill’. The minority view rendered, however, explicitly overruled both Md. Siddiqui (supra) and Yogendra Kumar Jaiswal (supra).

109Copy pinpoint109. The majority opinion in Puttaswamy (supra) by examining whether or not the impugned enactment was in fact a ‘money bill’ under Article 110 without explicitly dealing with whether or not certification of the speaker is subject to judicial review, has kept intact the power of judicial review under Article 110(3). It was further held therein that the expression ‘money bill’ cannot be construed in a restrictive sense and that the wisdom of the Speaker of the Lok Sabha in this regard must be valued, save where it is blatantly violative of the scheme of the Constitution. We respectfully endorse the view in Puttaswamy (supra) and are in no doubt that Md. Siddiqui and Yogendra Kumar Jaiswal in so far as they put decisions of the Speaker under Article 110(3) beyond judicial review, cannot be relied upon.

110Copy pinpoint110. It must be emphasized that the scope of judicial review in matters under Article 110(3) is extremely restricted, with there being a need to maintain judicial deference to the Lok Sabha Speaker’s certification. There would be a presumption of legality in favour of the Speaker’s decision and onus would undoubtedly be on the person challenging its validity to show that such certification was grossly unconstitutional or tainted with blatant substantial illegality. Courts ought not to replace the Speaker’s assessment or take a second plausible interpretation. Instead, judicial review must be restricted to only the very extreme instance where there is a complete disregard to the Constitutional scheme itself. It is not the function of Constitutional Courts to act as appellate forums, especially on the opinion of the G Speaker, for doing so would invite the risk of paralyzing the functioning of the Parliament.

111Copy pinpoint111. In light of the aforementioned narrow scope of inquiry and the high burden to be discharged by the petitioner(s) against the Speaker’s certification, we may now examine the challenge laid to the H Finance Act, 2017.

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112Copy pinpoint112. Provisions of Part XIV can be broken down into three broad categories. First, abolition and merger of existing Tribunals; second, uniformizing and delegating to the Central Government through the Rules the power to lay down qualifications; method of appointment and removal, and terms and conditions of service of Presiding Officers and members; and third, termination of services and payment of compensation to presiding officers and members of certain tribunals that have now become de-funct.

113Copy pinpoint113. Interpretation of Article 110 was made by a coordinate Constitution Bench in K.S. Puttaswamy (Aadhaar-5) and is relied upon by both sides. C

114Copy pinpoint114. The majority judgment in K.S. Puttaswamy (Aadhaar-5) under the heading ‘Money Bill’, in paragraph 448 and then in paragraphs 452 to 461, had recorded the submissions made by the learned counsel, including the submission made on behalf of the petitioners relying upon the word ‘only’ appearing in Article 110 which defines a ‘Money Bill’. D With regard to the interpretation to be given to the meaning of the word ‘only’, reliance was placed on Hari Ram v. Babu Gopal Prasad27 and M/s Saru Smelting (P) Ltd. v. Commissioner of Sales Tax, Lucknow28. The majority judgment had thereupon referred to the power of judicial review notwithstanding the use of the word ‘final’ with reference to the power of the Speaker under Article 110(3) of the E Constitution, an aspect which we have already answered earlier, and examined Section 7 of the Aadhaar Act to observe “it is also accepted by the petitioners that Section 7 is the main provision of the Act”. Thereafter, reference was made to the other provisions of the Aadhaar Act to record the majority opinion that the bill in question was rightly F introduced as a “Money Bill”. The majority judgment, therefore, did not elucidate and explain the scope and ambit of sub-clauses (a) to (f) to clause (1) of Article 110 of the Constitution, a legal position and facet which arises for consideration in the present case and assumes considerable importance. G

115Copy pinpoint115. Ashok Bhushan, J., in his concurring judgment, from paragraph 886 onwards, had examined the issue of “Money Bill” and its justiciability and as noticed above, overruled Mohd. Saeed Siddiqui

27 (1991) Supp. 2 SCC 608 28 (1993) Supp. 3 SCC 97 H

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A (supra) and Yogesh (supra) as not laying down the correct law by relying upon the decisions of this Court in Kihoto Hollohan v. Zachillhu and Others29 and Raja Ram Pal (supra). Referring to the definition of “Money Bill” and the meaning and purpose of the word ‘only’ used in Article 110(1) of the Constitution, Ashok Bhushan, J. had observed that legislative intent was that the main and substantive provision of an enactment should only be any or all of the sub-clauses from (a) to (f). In the event the main or substantive provisions of the Act are not covered by sub-clauses (a) to (f), the bill cannot be said to be a “Money Bill” {See paragraph 905}. It was further observed that the use of the word ‘only’ in Article 110(1) has its purpose, which is clear restriction for a bill to be certified as a “Money Bill” {See paragraph 906}. Referring to the Aadhaar Act, it was observed that it veers around the government’s constitutional obligation to provide for subsidies, benefits and services to individuals and other provisions are only incidental provisions to the main provision. Therefore, the Aadhaar Bill was rightly certified by the Speaker as a “Money Bill”. D

116Copy pinpoint116. Dr. D.Y. Chandrachud, J., in his minority opinion on the said question, referring to the word ‘only’ in Article 110(1) of the Constitution had observed that the pith and substance doctrine which is applicable to legislative entries would not apply when deciding the question whether or not a particular bill is a “Money Bill”. Referring to sub-clause (e) of E Article 110(1), it was held that the Money Bill must deal with the declaration of any expenditure to be charged on the Consolidated Fund of India (or increasing the amount of expenditure) and, therefore, Section 7 of the Aadhaar Act did not have the effect of making the bill a Money Bill as it did not declare the expenditure incurred on services, benefits or subsidies to be a charge on the Consolidated Fund of India. Section 7 mandates Aadhaar for availing services, benefits or subsidies which were already charged to the Consolidated Fund of India. However, this view was not accepted by the majority judgment.

117Copy pinpoint117. In the context of Article 110(1) of the Constitution, use of the word ‘only’ in relation to sub-clauses (a) to (f) pose an interesting, albeit a difficult question which was not examined and answered by the majority judgment in K.S. Puttaswamy (Aadhaar-5). While it may be easier to decipher a bill relating to imposition, abolition, remission, alteration or regulation of any tax, difficulties would arise in the 29 H (1992) Supp. 2 SCC 651

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interpretation of Article 110(1) specifically with reference to sub-clauses A (b) to (f) in a bill relating to borrowing of money or giving of any guarantee by the Government of India, or an amendment of law concerning financial obligation. In the book, “Practices and Procedures of Parliament” by Kaul and Shakdher, it is opined that unless the word ‘only’ is interpreted in a right manner, Article 110(1) would be a nullity. B A liberal and wide interpretation, on the other hand, possibly exposits an opposite consequence. Relevant portion of the opinion by Kaul and Shakdher reads: “Speaker Mavalankar observed as follows: “Prima facie, it appears to me that the words of article 110 (imposition, abolition, remission, alteration, regulation of any tax) are sufficiently wide to make the Consolidated Bill a Money Bill. A question may arise as to what is the exact significance or scope of the word ‘only’ and whether and how far that word goes to modify or control the wide and general words ‘imposition, abolition, remission, etc.’. I think, prima facie, that the word ‘only’ is not restrictive of the scope of the general terms. If a Bill substantially deals with the imposition, abolition, etc., of a tax, then the mere fact of the inclusion in the Bill of other provisions which may be necessary for the administration of that tax or, I may say, necessary for the achievement of the objective of the particular Bill, cannot take away the Bill from the category of Money Bills. One has to look to the objective of the bill. Therefore, if the substantial provisions of the Bill aim at imposition, abolition, etc., of any tax then the other provisions would be incidental and their inclusion cannot be said to take it away from the category of a Money Bill. Unless one construes the word ‘only’ in this way it might lead to make article 110 a nullity. No tax can be imposed without making provisions for its assessment, collection, administration, reference to courts or tribunals, etc, one can visualise only one section in a Bill imposing the main tax and there may be fifty other sections which may deal with the scope, method, manner, etc., of that imposition. Further, we have also to consider the provisions of sub-clause (2) of article 110; and these provisions may be helpful to clarify the scope of the word ‘only’, not directly but indirectly.”

118Copy pinpoint118. The majority judgment did not advert to the doctrine of pith and substance whereas judgment of Ashok Bhushan, J. had referred H

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A to the dominant purpose. The test of dominant purpose possibly has its own limitation as many a legislation would have more than one dominant objective especially when this prescription is read with reference to sub-clauses (a) to (f) of Article 110(1) of the Constitution. Further, determination of what constitutes paramount and cardinal B purpose of the legislation and the test applicable to determine this compunction and incertitude itself is not free from ambiguity. Difficulties would arise with reference to sub-clauses (b), (c), (d) and (e) of Article 110(1), when we apply the principles of dominant or the main purpose of an enactment test. Sub-clause (c) to Article 110(1) refers to payment of monies into or withdrawal of monies from the C Consolidated Fund of India. Sub-clause (d) refers to appropriation of monies out of the Consolidated Fund of India. Sub-clause (e) refers to declaration of any expenditure charged on the Consolidated Fund of India or increasing of the amount of such expenditure. Sub-clause (f) relates to receipt of money on account of Consolidated Fund of India D or Public Account of India or issue of such money or the audit of the accounts of the Union or of State. Even clause (b) in its amplitude includes an amendment of the law in respect of a financial obligation undertaken or to be undertaken by the Government of India. Once we hold that the decision of the Speaker under clause (3) of Article 110 of the Constitution though final, is subject to judicial scrutiny on the principle of constitutional illegality, the provisions of Article 110(1) have to be given an appropriate meaning and interpretation to avoid and prevent over-inclusiveness or under-inclusiveness. Any interpretation would have far reaching consequences. It is therefore, necessary that there should be absolute clarity with regard to the provisions and any ambiguity and debate should be ironed out and affirmatively decided. In case of doubt, certainly the opinion of the Speaker would be conclusive, but that would not be a consideration to avoid answering and deciding the scope and ambit of “Money Bill” under Article 110(1) of the Constitution. For example, taxation enactments like the Income Tax Act would qualify as Money Bill under sub-clause (a) to clause (1) of Article 110 and may include provisions relating to Appellate Tribunals which would possibly qualify as incidental provisions covered under sub-clause (g) to clause (1) of Article 110, even if we exclude application of sub-clause (d) to clause (1) of Article 110. The position it could be argued would be different with reference to provisions for constitution of a tribunal under the Administrative Tribunal Act or the National Green Tribunal

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Act. The bill could however state that the expenditure would be charged on the Consolidated Fund of India.

119Copy pinpoint119. Another aspect which would arise for consideration would be the legal consequences in case a Non-Money Bill certified by the Speaker as a Money Bill, when presented before the Rajya Sabha is specifically objected to on this count by some Members, but on being put to vote no recommendations are made in respect of “Non-Money” Bill related provisions.

120Copy pinpoint120. The petitioners had argued on the strength of the concurring opinion by Ashok Bhushan, J. holding that in addition to at least one provision falling under Article 110(1) (a) to (f), each of the other remaining provisions must also be incidental to such core provision(s), and hence must satisfy the requirement of Article 110(g). Such an interpretation, it was contended, would make the insertion of the word ‘only’ under the prefatory part of Article 110(1) purposeful, which was said to have been glossed over by the Union. Further, it was contended that the manner in which the majority correlated Section 7 of the Aadhaar Act to Article 110(1)(e) was erroneous, for it only regulated procedure for withdrawal by imposing a requirement for authentication and did not declare any expenditure to be a charge on the Consolidated Fund of India. They had contended that the interpretation of the enactment by the majority judgement was constitutionally inexact and that a similar analysis ought not to be made in the present case. The petitioners, therefore, contend that every impugned provision be individually examined and brought either under Article 110(1)(a) to (f) or be incidental thereto, as permitted by Article 110(g). In case even a single provision did not satisfy either of the aforementioned two categories, then the entire Finance Act, 2017 would be an affront to the prefatory phraseology of Article 110(1) and must be declared as being unconstitutional.

121Copy pinpoint121. However, the learned Attorney General has propounded that constitutionality of the Finance Act, 2017 would be safe if its dominant provisions, which form the core of the enactment, fall within the ambit of Article 110(1)(a) to (f). Other minor provisions, even if not strictly incidental, could take the dominant colour and could be passed along with it as a Money Bill. As per such interpretation, provisions ought not to be read in a piece-meal manner, and judicial review ought to be applied deferentially. H

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122Copy pinpoint122. Upon an extensive examination of the matter, we notice that the majority in K.S. Puttaswamy (Aadhaar-5) 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-5) did not substantially discuss the effect of the word ‘only’ B 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 C 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-5) makes its application difficult to the present case and raises a potential conflict between the judgements of coordinate Benches.

123Copy pinpoint123. Given the various challenges made to the scope of judicial review and interpretative principles (or lack thereof) as adumbrated by the majority in K.S. Puttaswamy (Aadhaar-5) and the substantial precedential impact of its analysis of the Aadhaar Act, 2016, it becomes essential to determine its correctness. Being a Bench of equal strength as that in K.S. Puttaswamy (Aadhaar-5), we accordingly direct that this batch of matters be placed before Hon’ble the Chief Justice of India, on the administrative side, for consideration by a larger Bench.

124Copy pinpoint124. There is yet another reason why we feel the matter should be referred to a Constitution Bench of seven judges. L. Chandra Kumar (supra), which was decided by a Bench of seven Judges, had also interpreted on the ambit of supervision by the High Courts under Article 227(1) of the Constitution to observe that the Constitutional scheme does not require all adjudicatory bodies which fall within the territorial jurisdiction of the High Courts should be subject to their supervisory jurisdiction, as the idea is to divest the High Courts of their onerous burden. Consequently, adding to their supervisory functions vide Article 227(1) cannot be of assistance in any manner. Thereafter, it was observed that different tribunals constituted under different enactments are administered by the Central and the State Governments, H yet there was no uniformity in administration. This Court was of the

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view that until a wholly independent agency for 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. For a number of reasons, the Court observed that the Ministry of Law would be the appropriate ministry. The Ministry of Law in turn was required to appoint an independent supervisory body to oversee the working of the Tribunals. As noticed above, this has not happened. In these circumstances, it would be appropriate if these aspects and questions are looked into by a Bench of seven Judges. ISSUE II: WHETHER SECTION 184 OF THE FINANCE ACT, 2017 IS UNCONSTITUTIONAL ON ACCOUNT C OF EXCESSIVE DELEGATION?

125Copy pinpoint125. The second challenge against Part XIV of the Finance Act, 2017 is predicated on the assertion that this is a case of excessive delegation as it falters on the anvil of “essential legislative functions” and “policy and guidelines” tests. D

126Copy pinpoint126. The Eighth Schedule referred to in Section 183 contains a list of 19 tribunals with corresponding enactments under which they were constituted. Section 183 overrides the provisions of the enactments specified in column (3) of the Eighth Schedule and mandates that from the appointed date, the Chairperson, Vice-Chairperson, E Chairman, Vice Chairman, President, Vice-President, Presiding Officer or Member of the Tribunal, Appellate Tribunal or, as the case may be, other Authorities as specified in column (2) of the Eighth Schedule shall be appointed in terms of provisions of Section 184 of the Finance Act. These provisions however, do not apply to those who have already been appointed to the said posts immediately before the appointed date, that is the date on which the Central Government may, by a notification in the Official Gazette, bring the said provisions into effect.

127Copy pinpoint127. Section 184, to repeat, reads as under: “184. Qualifications, appointment, term and conditions of service, salary and allowances, etc., of Chairperson, Vice- Chairperson and Members, etc., of the Tribunal, Appellate Tribunal and other Authorities.—(1) The Central Government may, by notification, make rules to provide for qualifications, appointment, term of office, salaries and allowances, resignation, removal and the other terms and conditions of service of the H

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A 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 as specified in column (2) of the Eighth Schedule: Provided that the Chairperson, Vice-Chairperson, Chairman, Vice- B Chairman, President, Vice-President, Presiding Officer or Member of the Tribunal, Appellate Tribunal or other Authority shall hold office for such term as specified in the rules made by the Central Government but not exceeding five years from the date on which he enters upon his office and shall be eligible for reappointment: C Provided further that no Chairperson, Vice-Chairperson, Chairman, Vice-Chairman, President, Vice-President, Presiding Officer or Member shall hold office as such after he has attained such age as specified in the rules made by the Central Government which shall not exceed,— D (a) in the case of Chairperson, Chairman or President, the age of seventy years; (b) in the case of Vice-Chairperson, Vice-Chairman, Vice- President, Presiding Officer or any other Member, the age of sixty-seven years: (2) Neither the salary and allowances nor the other terms and conditions of service 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 Authority may be varied to his disadvantage after his appointment.” Section 184 has conferred upon the Central Government power to make rules by way of notification to provide for (a) qualifications; (b) appointment; (c) term of office; (d) salaries and allowances; (e) resignation; and (f) removal and other terms and conditions of service of the 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 as specified in column (2) of the Eighth Schedule. The first proviso states that the incumbent officers shall hold office for such terms as may be specified in the rules made by the Central Government but the term shall not

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exceed five years from the date on which he assumes the office and A shall be eligible for reappointment. The second proviso states that the persons so appointed shall hold office till they attain the age specified in the rules made by the Central Government which shall not exceed in the case of Chairperson, Chairman and the President, the age of 70 years and in the case of Vice-Chairperson, Vice-Chairman, Vice- B President or any other Members, the age of 67 years. Sub-section 2 to Section 184 states that the salaries and allowances and other terms and conditions of service of the persons appointed may not be varied to their disadvantage after appointment.

128Copy pinpoint128. Section 185 (1) of the Finance Act is also relevant and reads: C “185. Transitional provisions.— (1) Any person appointed as the Chairperson or Chairman, President or Vice-Chairperson or Vice-Chairman, Vice-President or Presiding Officer or Member of the Tribunals, Appellate Tribunals, or as the case may be, other Authorities specified in column (2) of the Ninth Schedule and holding office as such immediately before the appointed day, shall on and from the appointed day, cease to hold such office and such Chairperson or Chairman, President, Vice-Chairperson or Vice-Chairman, Vice-President or Presiding officer or Member shall be entitled to claim compensation not exceeding three months’ pay and allowances for the premature termination of term of their office or of any contract of service.” The Chairperson or Chairman, President or Vice-Chairperson or Vice-Chairman, Vice-President or Presiding Officer or Member of the Tribunals/Appellate Tribunals specified in column (2) of the Ninth Schedule who hold office as per the above provisions before the appointed date shall cease to do so and will be entitled to compensation not exceeding three months’ pay and allowance for the premature termination of the office or the contract of office. However, we would clarify that presently we are not examining constitutional vires of sub- section (1) to Section 185. G

129Copy pinpoint129. Section 186 of the Finance Act, 2017 reads as under: “186. General Power to make rules.— Without prejudice to any other power to make rules contained elsewhere in this Part, the Central Government may, by notification, make rules generally to carry out the provisions of this Part.” H

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A The aforesaid provisions stipulate that without prejudice to any other power to make rules contained elsewhere in the Part XIV of the Finance Act, 2017, the Central Government may, by notification, makes rules generally to carry out the provisions of the said Part.

130Copy pinpoint130. Reading of the said provisions indicates that except for B providing the upper age limit and that the person appointed shall not have tenure exceeding five years from the date on which he enters office and shall be eligible for re-appointment, the Finance Act delegates the power to specify the qualifications, method of selection and appointment, terms of office, salaries and allowances, removal including resignation and all other terms and conditions of service to the Central C Government which would act as a delegatee of the Parliament. The governing statutory provisions embodied in the existing parent legislation specified in the column (3) of the Schedule and the rules made thereunder are overwritten and authority and power is conferred on the Central Government to decide qualifications for appointment, D process for selection, and terms and conditions of service including salaries allowance, resignation and removal through delegated or subordinate legislation. Before we look into the vires of this delegation, it behoves us to recount and reflect on the approach adopted by this Court in gauging the validity of delegated legislation.

131Copy pinpoint131. This Court addressed this conundrum the first time in In re: The Delhi Laws Act,30 wherein a seven-Judge Bench delivered seven different judgements clearly evincing the divergence of opinion on the issue. Albeit, the majority view, as clarified and held by J. M. Shelat, J. speaking for the majority in B. Shama Rao v. Union Territory of Pondicherry,31 can be deduced as under: F “In view of the intense divergence of opinion except for their conclusion partially to uphold the validity of the said laws it is difficult to deduce any general principle which on the principle of state decision can be taken as binding in for future cases. It is trite to say that a decision is binding not because of its G conclusion but in regard to its ratio and the principle laid down therein. The utmost therefore that can be said of this decision is that the minimum on which there appears to be consensus was

30 1951 AIR 332 31 H (2015) 4 SCC 770

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(1) that legislatures in India both before and after the Constitution A had plenary power within their respective fields; (2) that they were never the delegates of the British Parliament; (3) that they had power to delegate within certain limits not by reason of such a power being inherent in the legislative power but because such power is recognised even in the United States of America were separatist ideology prevails on the ground that it is necessary to effectively exercise the legislative power in a modem state with multifarious activities and complex problems facing legislatures and (4) that delegation of an essential, legislative function which amounts to abdication even partial is not permissible. All of them were agreed that it could be in respect of subsidiary and ancillary power.” All the seven Judges were in unison that abdication or effacement by conferring the power of legislation to the subordinate authority even if partial is not permissible. The difference of opinion primarily arose from the meaning and scope of the abdication or effacement of the legislative power. On the said aspect, we would like to refer to the judgments of Fazl Ali, J, Mukherjea, J and Bose, J. Fazl Ali, J. had expressed the said principle as : “The true distinction ..... is this. The legislature cannot delegate the power to make a law; but it can make a law to delegate a E power to determine some fact or state of things upon which the law makes, or intends to make, its own action depend. To deny this would be to stop the wheels of Government.

2. The true import of the rule against delegation is this: “This rule in a broad sense involves the principle underlying the F maxim, delegatus non potest delegate, but it is apt to be misunderstood and has been misunderstood. In my judgment, all that it means is that the legislature cannot abdicate its legislative functions and it cannot efface itself and set up a parallel legislature to discharge the primary duty with which it has been entrusted. G This rule has been recognised both in America and in England ...... xx xx xx What constitutes abdication and what class of cases will be covered by that expression will always be a question of fact, and H

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A it is by no means easy to lay down any comprehensive formula to define it, but it should be recognised that the rule against abdication does not prohibit the Legislature from employing any subordinate agency of its own choice for doing such subsidiary acts as may be necessary to make its legislation effective, useful and complete.” B The learned Judge had further observed that an act is a law when it embodies policies, defines standards and directs the authority chosen to act within certain prescribed limits and not go beyond. The Act should be a complete expression of the will of the Legislature to act in a C particular way and of its command on how it should be carried out. When the Legislature decides the circumstances as the best way to legislate on a subject, then, such legislation does not amount to abdication of powers because from the very nature to legislation it is manifest that when power is misused it can be withdrawn, altered and repealed. Most importantly, the delegate is to only adopt and extend the laws enacted by the Legislature.

132Copy pinpoint132. Mukherjea, J. opined that the legislative functions concern with declaring the legislative policy and laying down the standards which is to be enacted into a rule of law, and what can be delegated as the task of subordinate legislation by its very nature is ancillary to the statute which delegates the power to make it. When the legislative policy is enunciated with sufficient clearness or the standards are laid down, the Courts cannot interfere with the discretion that the Legislature has exercised in determining the extent of necessary delegation. The F delegatee cannot be allowed to check the policy declared by the legislators and cannot be given the power to repeal or abrogate any statute.

133Copy pinpoint133. Bose, J. while observing that the main function of the legislature is to legislate and not leave it to others, nevertheless acknowledged that it is impossible to carry on government of a modern State with its infinite complexities and ramifications without a large devolution of power and delegation of authority. This is a practical necessity which has been acknowledged even by the American Courts. To decide otherwise would make it difficult for the government to function and work effectively.

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134Copy pinpoint134. A Division Bench of this Court in Ramesh Birch v. Union A of India32 had examined the aforesaid seven opinions and culled out the ratio to observe that the lines of reasoning were different but nevertheless the judges had accepted the inevitable- that while Parliament has ample and extensive powers of legislation, these would include the power to entrust some of the functions and powers to another body or authority. At the same time, in Delhi Laws Act (supra) the judges had agreed that there should be limitations on such delegation. However, on the question as to what is this limitation, there was a lack of consensus. The two judges in Ramesh Birch (supra) relying on the ratio in Delhi Laws Act (supra), had observed: “Some thought that there is no abdication or effacement unless it is total i.e. unless Parliament surrenders its powers in favour of a “parallel” legislature or loses control over the local authority to such an extent as to be unable to revoke the powers given to, or to exercise effective supervision over, the body entrusted therewith. But others were of opinion that such “abdication” or D “effacement” could not even be partial and it would be bad if full powers to do everything that the legislature can do are conferred on a subordinate authority, although the legislature may retain the power to control the action of such authority by recalling such power or repealing the Acts passed by the subordinate authority. A different way in which the second of the above views has been enunciated—and it is this view which has dominated since—is by saying that the legislatures cannot wash their hands off their essential legislative function. Essential legislative function consists in laying down the legislative policy with sufficient clearness and in enunciating the standards which are to be enacted into a rule of law. This cannot be delegated. What can be delegated is only the task of subordinate legislation which is by its very nature ancillary to the statute which delegates the power to make it and which must be within the policy and framework of the guidance provided by the legislature.” G Thereupon the Division Bench had referred to the “policy and guideline” theory as a test to decide whether or not it is a case of excessive delegation which it was observed means reference and giving proper regard to the context of the Act and the object and purposes 32 1990 AIR 560 H

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A sought to be achieved which should be clear and it is not necessary that the legislation should “dot all the i’s and cross all the t’s of its policy”. It is sufficient if it gives the broadest indication of the general policy of the legislature.

135Copy pinpoint135. We would now refer to an earlier decision of this Court in B Devi Das Gopal Krishnan & Ors v. State of Punjab & Ors33 wherein K. Subba Rao, CJ. speaking for the Court had struck down Section 5 of the East Punjab General Sales Tax Act, 1948 which had empowered the State Government to fix rate of tax to such rate as it deemed fit, as bad and unconstitutional observing that the needs of the State and the purposes of the Act did not provide sufficient guidance for fixing the rates of tax. It was observed:

“16. ...But in view of the multifarious activities of a welfare State, it cannot presumably work out all the details to suit the varying aspects of a complex situation. It must necessarily delegate the working out of details to the executive or any other agency. But there is a danger inherent in such a process of delegation. An overburdened legislature or one controlled by a powerful executive may unduly overstep the limits of delegation. It may not lay down any policy at all; it may declare its policy in vague and general terms; it may not set down any standard for the guidance of the executive; it may confer an arbitrary power on the executive to change or modify the policy laid down by it without reserving for itself any control over subordinate legislation. This self effacement of legislative power in favour of another agency either in whole or in part is beyond the permissible limits of delegation. It is for a Court to hold on a fair, generous and liberal construction of an impugned statute whether the legislature exceeded such limits. But the said liberal on construction should not be carried by the Courts to the extent of always trying to discover a dormant or latent legislative policy to sustain an arbitrary power conferred on executive authorities. It is the duty of the Court to strike down without any hesitation any arbitrary power conferred on the executive by the legislature.” 33 H AIR 1967 SC 1895

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136Copy pinpoint136. A year later in Municipal Corporation of Delhi v. Birla A Cotton, Spinning and Weaving Mills, Delhi and Another34 this Court, however, upheld Section 113(2) of the Delhi Municipal Act, 1957 which had empowered the corporation to levy certain optional taxes by observing that there were sufficient guidelines, safeguards and checks in the Act which prevented excessive delegation as the Act had B provided maximum rate of tax. It was observed that the nature of body to which delegation is made is also a relevant factor to be taken into consideration in determining whether there is sufficient guidance in the matter of delegation and also when delegation is made to an elected body accountable to the people including those who paid taxes, as this acted as a sufficient check. It was observed: C

“A review of these authorities therefore leads to the conclusion that so far as this Court is concerned the principle is well established that essential legislative function consists of the determination of the legislative policy and its formulation as a binding rule of conduct and cannot be delegated by the legislature. Nor is there any unlimited right of delegation inherent in the legislative power itself. This is not warranted by the provisions of the Constitution. The legislature must retain in its own hands the essential legislative functions and what can be delegated is the task of subordinate legislation necessary for implementing the purposes and objects of the Act. Where the legislative policy is enunciated with sufficient clearness or a standard is laid down, the courts should not interfere. What guidance should be given and to what extent and whether guidance has been given in a particular case at all depends on a F consideration of the provisions of the particular Act with which the Court has to deal including its preamble. Further it appears to us that the nature of the body to which delegation is made is also a factor to be taken into consideration in determining whether there is sufficient guidance in the matter of delegation.” G Thus, the guidelines in the form of providing maximum rates of tax up to which a local body may be given discretion to make its choice or provision for consultation with the people of the local area and then fixing the rates or subjecting the rate of tax so fixed by the local authority 34 AIR 1968 SC 1232 H

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A to the approval of the Government which acts as watch-dog were treated as satisfying the policy and guideline test.

137Copy pinpoint137. This ratio was followed and expounded in M.K. Papiah & Sons v. Excise Commissioner35 in which this Court had examined what constitutes essential features that the legislature cannot delegate, to observe that this cannot be delineated in detail but nevertheless and certainly it does not include the change of policy. The legislator is the master of the policy and the delegate is not free to switch the policy for then it would be usurpation of legislative power itself. Therefore, when the question of the excessive delegation arises, investigation has to be made whether policy of the legislation has not been indicated sufficiently or whether change of policy has been left to the pleasure of the delegate. This aspect is of substantial importance and relevance in the present case.

138Copy pinpoint138. In Avinder Singh v. State of Punjab36 this Court had highlighted that the founding document, that is, the Constitution had created three instrumentalities with certain basic powers and it is axiomatic that legislative powers are not abdicated for this would mean betrayal of the Constitution and is intolerable in law. Therefore, legislature cannot self-efface its personality and make over in terms the plenary and essential legislative functions. Nevertheless, the complexities of modern administration are bafflingly intricate and present themselves with urgencies and difficulties and the need for flexibility, which the direct legislation may not provide. Delegation of some part of the legislative powers therefore became inevitable and an administrative necessity. Thus, while essential legislative policy cannot be delegated, however inessentials can be delegated over to relevant agencies.

139Copy pinpoint139. Similar opinion was expressed in Registrar of Coop. Societies v. K. Kunjabmu37, wherein it has been observed: “3. …They function best when they concern themselves with general principles, broad objectives and fundamental issues instead of technical and situational intricacies which are better left to better equipped full time expert executive bodies and 35 (1975) 1 SCC 492 36 (1979) 1 SCC 137 37 H (1980) 1 SCC 340

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specialist public servants. Parliament and the State Legislatures A have neither the time nor the expertise to be involved in detail and circumstance. Nor can Parliament and the State Legislatures visualise and provide for new, strange, unforeseen and unpredictable situations arising from the complexity of modern life and the ingenuity of modern man. That is the raison d’etre for delegated legislation. That is what makes delegated legislation inevitable and indispensable. The Indian Parliament arid the State Legislatures are endowed with plenary power to legislate upon any of the subjects entrusted to them by the Constitution, subject to the limitations imposed by the Constitution itself. The power to legislate carries with it the power to delegate. But excessive delegation may amount to abdication. Delegation unlimited may invite despotism uninhibited. So, the theory has been evolved that the legislature cannot delegate its essential legislative function. Legislate it must by laying down policy and principle and delegate it may to fill in detail and carry out policy. The legislature may guide the delegate by speaking through the express provision empowering delegation or the other provisions of the statute, the preamble, the scheme or even the very subject matter of the statute. If guidance there is, wherever it may be found, the delegation is valid. A good deal of latitude has been held to be permissible in the case of taxing statutes and on the same principle E a generous degree of latitude must be permissible in the case of welfare legislation, particularly those statutes which are designed to further the Directive Principles of State Policy.” The above decision states that the policy and principles test can be applied through express provisions empowering delegation or any other provision of the statute including the preamble, the scheme or even the subject matter of the statute.

140Copy pinpoint140. We will refer to a recent decision of this Court in Keshavlal Khemchand and Son Private Limited & Others v. Union of India38 wherein a Division Bench of this Court had observed that in spite of abundance of authority on the subject we are not blessed with certainty, and then observed that in Kunjabmu (supra) this Court had declined to consider whether M.K. Papiah & Sons (supra) had beaten the final retreat from the position enunciated in Delhi Laws Act (supra) and had 38 (2015) 4 SCC 770 H

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A proceeded to examine the theory of “policy and guidelines” referring to several judgments. The Division Bench then went on to observe that the earlier judgments had not been able to lay down the principle including as to what exactly constitutes “essential legislative function”, but the following inferences can be drawn: B “51.1 The proposition that essential legislative functions cannot be delegated does not appear to be such a clearly settled proposition and requires a further examination which exercise is not undertaken by the counsel appearing in the matter. We leave it open for debate in a more appropriate case on a future date. For the present, we confine to the examination of the question: C ‘Whether defining every expression used in an enactment is an essential legislative function or not?’ 51.2 All the judgments examined above recognize that there is a need for some amount of delegated legislation in the modern D world. 51.3 If the parent enactment enunciates the legislative policy with sufficient clarity, delegation of the power to make subordinate legislation to carry out the purpose of the parent enactment is permissible. E 51.4 Whether the policy of the legislature is sufficiently clear to guide the delegate depends upon the scheme and the provisions of the parent Act. 51.5 The nature of the body to whom the power is delegated is also a relevant factor in determining “whether there is sufficient F guidance in the matter of delegation.”

141Copy pinpoint141. Appropriate in regard to ‘policy and guideline’ test would be reference to yet another earlier judgment of this Court in Gwalior Rayon Silk Mfg. (Wvg.) Co. v. Asstt. Commissioner of Sales 39 wherein while referring to the views of an eminent American jurist G Willioughby, it was stated: “24. The matter has been dealt with on page 1637 of Vol. III in Willoughby on the Constitution of the United States, 2nd Edition, in the following words:

39 H (1974) 4 SCC 98

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“The qualifications to the rule prohibiting the delegation of legislative power which have been earlier adverted to are those which provide that while the real law-making power may not be delegated, a discretionary authority may be granted to executive and administrative authorities: (1) to determine in specific cases when and how the powers legislatively conferred are to be exercised; and (2) to establish administrative rules and regulations, binding both upon their subordinates and upon the public, fixing in detail the manner in which the requirements of the statutes are to be met, and the rights therein created to be enjoyed.” C

25. The matter has also been dealt with in Corpus Juris Secundum Vol. 73, page 324. It is stated there that the law- making power may not be granted to an administrative body to be exercised under the guise of administrative discretion. Accordingly, in delegating powers to an administrative body with respect to the administration of statutes, the Legislature must ordinarily prescribe a policy, standard, or rule for their guidance and must not vest them with an arbitrary and uncontrolled discretion with regard thereto, and a statute or ordinance which is deficient in this respect is invalid. In other words, in order to avoid the pure delegation of legislative power by the creation of an administrative agency, the Legislature must set limits on such agency’s power and enjoin on it a certain course of procedure and rules of decision in the performance of its function; and, if the legislature fails to prescribe with reasonable clarity the limits of power delegated to an administrative agency, or if those limits are too broad, its attempt to delegate is a nullity.”

142Copy pinpoint142. It is in this context we have to examine whether the plea of excessive delegation would prevail and merits acceptance as Section 184 of the Finance Act does not prescribe the qualifications for appointment, and terms and conditions of service. It will be difficult to hold that Part XIV of the Finance Act suffers from the vice of unguided delegation as it fails to clearly specify the eligibility qualifications for the Members, Chairpersons, Chairman etc. of different Tribunals as such requirements, though important, are not per se functionally undelegatable. H

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