The struggle against the Central Government
apathy towards the tribunal system, including the IP tribunals, continues with yet another Public Interest
Litigation filed by Delhi based lawyers in the High Court of Delhi questioning,
amongst other practices, the functioning of the Securities Appellate Tribunal (SAT)
without the presence of a Presiding Officer. The tribunal is a three member
tribunal, with two members and one Presiding Officer who is required by the
SEBI Act to be a retired judge of the High Court or Supreme Court. In the
normal course, the Presiding Officer is the only judicial member, with judicial
experience since the other two members are usually civil servants with no
judicial experience.
The writ petition filed before the Delhi High
Court can be accessed over here
and for an article by Amit Agarwal, the lawyer representing the petitioner,
please click here
to read the same on the IndiaCorpLaw blog. The last order of the Delhi High
Court can be read over here.
The primary contention of the petitioners in this
case is that SAT is currently functioning in contravention of the SEBI Act since it is
functioning without the presence of a Permanent Presiding Officer, who is
required to be a former judge of the High Court or the Supreme Court. The last
such presiding officer, Justice Sondi retired in November, 2011. Since then the
tribunal has been functioning with just two technical members who are former
civil servants with no judicial experience.
In addition the petitioner also expresses
deep concern about the appointment process to SAT, especially the fact that the
entire process appears to be leaning in favour of only civil bureaucrats and
that the Executive seems to have overwhelming control of the appointments. The current rules which allow for SAT to
function in the complete absence of a judicial officer are also being
challenged by the petitioner.
Interestingly, the government’s handling of
appointments to SAT has already come under scathing attack by a Parliamentary
Standing Committee. The report can be accessed over here.
In pertinent part the petitioner quotes the following paragraph from the
Standing Committee Report, in support of his petition:
“30. There have been instances where the
Ministry of Finance (Department of Economic Affairs) took unjustifiably long
time for selecting the Members of SAT, owing to which, the incumbents were
left with a short term in office, which in turn adversely affected the disposal
of cases by the Tribunal. For instance, during the period 16 January to 9
June, 2009 a piquant situation arose when SAT could not function for want of
quorum, which was owing to the delay in the selection/appointment process. The
Committee desire to be furnished with a detailed report on the reasons for the
undue delay in the selection process which led to the stalling of functioning
of the Tribunal. Such instances also add credence to the Department of
Personnel and Training’s circulars which, with reference to the selection
process of Members of various Tribunals and Statutory bodies pointed out
inter-alia that lack of wide publicity of the vacancies hinder and delay the
selection process of the Members.
31. From the Statement of Objects and Reasons
appended to the Bill as well as the submission made by the Ministry of Finance it
is seen that selection of Members of SAT is by and large restricted to or
weighed towards selecting retired civil servants, or civil servants on the
verge of retirement. Moulding the selection process of members of SAT to
include and consider younger persons with requisite qualifications and
experience from a wider arena of fields will enable greater continuity and
efficiency in the functioning of SAT. The Committee thus are of the view that
apart from the induction age of Members the question of timely completion of
the selection process and widening the arena of choice for selecting the
Members also need to be addressed in right earnest by the Government.”
These problems are not new to the Indian
tribunal system. Virtually every Indian tribunal, be it SAT or CLB or IPAB, has
faced similar problems. Almost like clockwork, every five years, once the terms
of the incumbents expires, we can expect a PIL in one of the High Courts by a
lawyer requesting directions to the Central Government to speed up the process
of the appointments. The Central Govt. then begins to run around like headless
chickens with furious judges in the High Courts threatening contempt action.
Inevitably, the process leads to at-least some flawed appointments not to
mention a terrible backlog. Unfortunately, the Central Govt. never learns from
its mistakes. The Supreme Court in the NCLT case had ordered the Central Govt.
to streamline the entire process of appointments and delegate all such
appointments to one ministry. The Supreme Court's order is yet to be implemented.
The Delhi High Court has cracked the whip on
the Central Govt. in the present case and has ordered it to speed up the
appointment process.
While PILs for speeding up the appointment
process are usually successful, the larger substantive challenges often get
bogged down in the High Courts. The IPAB
challenge filed by Shamnad, almost 2 years ago is making almost no headway
before the Madras High Court and I for one have lost all hope of it being
decided anytime in the next decade. Similarly, the PIL filed by the Madras Bar
Association (MBA), challenging virtually the entire tribunal system before the
Supreme Court, which we blogged about over here,
has not even been responded to by the Central Govt. Contrast this to the
judgment of the Supreme Court in the Namit Arora case where the Supreme Court
ruled on the constitutionality of the Central Information Commission in a record
2 months. There was a gap of just a few days between the filing of the Namit
Sharma petition and the MBA petition. Yet, while one has already been decided
the other is yet to even receive a response from the Central Govt.
Clearly in this land of equals some are more
equal than the rest.
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