M/S.ASMA RUBBER PRODUCTS (PVT) LTD. V. THE UNION OF INDIA

WP(C)/1770/2015

AI Insights

The case revolves around a writ petition filed by M/S Asma Rubber Products (Pvt) Ltd. and others, challenging the constitutionality of Rule 3 of the Debts Recovery Tribunal (Procedure for Appointment as Presiding Officer of the Tribunal) Rules, 1998. The petitioners argued that the rule was arbitrary, unreasonable, and violated the independence of the judiciary and the separation of powers. The respondents, including the Union of India and the State Bank of India, defended the rule, emphasizing the qualifications required for the appointment of Presiding Officers and the role of the Selection Committee chaired by the Chief Justice of India or a Supreme Court Judge. The court's decision was influenced by precedents and constitutional provisions ensuring the independence of the judiciary and the proper functioning of tribunals.

• Counselvise Citation: [2016] 140 COUNSELVISE.COM (IT) 722357 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 08-11-2016
• Assessment Year: misc
• Other Referred Cases: Madras Bar Association v. Union of India, Union of India and Another v. Delhi High Court Bar Association and Others, State of Maharashtra v. Labour Law Practitioners' Association and others, State of Gujarat and Another v. Gujarat Revenue Tribunal Bar Association and Another, Siraj K.H. v. High Court of Kerala and Others, All India Judges Association and Others v. Union of India and Others, R.K.Jain v. Union of India and Others
• Laws Referred To: Debts Recovery Tribunal (Procedure and Appointment as Presiding Officer of the Tribunal) Rules, 1998, Recovery of Debts due to Banks and Financial Institutions Act, 1993, Code of Civil Procedure, Indian Constitution
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: K RAMAKUMAR; JAGADEESH LAKSHMAN; GEORGE THOMAS; N NAGRESH
• Assessee Lawyers: P CHANDRA SEKHAR; C S ULLAS
• Keywords: Arbitrary; Debt Recovery Tribunal; Unconstitutional; Unreasonable; Void; Violation of independence of judiciary; Separation of powers; Qualification for appointment; Presiding Officer
• Section: 22; 4(1); 5; 234; 236; 235; 36(2)(e); 233(2)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE TUESDAY, THE 8TH DAY OF NOVEMBER 2016/17TH KARTHIKA, 1938 WP(C).No. 1770 of 2015 (U) --------------------------- PETITIONER(S)/PETITIONERS: ------------------------- 1. M/S.ASMA RUBBER PRODUCTS (PVT) LTD., PLOT NO.39B,CSEZ,KAKKANAD,COCHIN-682 037, REPRESENTED BY ITS MANAGING DIRECTOR MR.C.Y.A.RAHIM. 2. C.Y.A.RAHIM, VII/115,15,NOEL HERITAGE,KIZHAKKEKARA ROAD, THRIKKAKARA.P.O,THRIKKAKARA,COCHIN-682021. 3. NISA RAHIM, W/O.C.Y.A.RAHIM,VII/115,15,NOEL HERITAGE, KIZHAKKEKARA ROAD,THRIKKAKARA P.O., THRIKKAKARA,COCHIN-682 021. BY ADVS.SRI.P.CHANDRASEKHAR SRI.C.S.ULLAS RESPONDENT(S)/RESPONDENTS: -------------------------- 1. THE UNION OF INDIA, REPRESENTED BY ITS SECRETARY, MINISTRY BY ITS SECRETARY, MINISTRY OF FINANCE (DEPARTMENT OF ECONOMICS AFFAIRS),NEW DELHI-110 001. 2. THE DEBTS RECOVERY TRIBUNAL(ERNAKULAM & LAKSHADWEEP), 5TH FLOOR,KERALA STATE HOUSING BOARD BUILDING, PANAMPILLY NAGAR,ERNAKULAM-682014, REPRESENTED BY ITS REGISTRAR. 3. THE STATE BANK OF INDIA, OVERSEAS BRANCH,WELLINGTON ISLAND,KOCHI-682 004, REPRESENTED BY ITS ASSISTANT MANAGER. 4. SHRI.N.SOMASUNDAR, THE PRESIDING OFFICER,DEBT RECOVERY TRIBUNAL, (ERNAKULAM & LAKSHADWEEP)5TH FLOOR, KERALA STATE HOUSING BOARD BUILDING, PANAMPILLY NAGAR,ERNAKULAM-682 014. msv/ -2- -2- WP(C).No. 1770 of 2015 (U) -------------------------- * ADDITIONAL R5 TO R36 IMPLEADED 5. THE PRESIDING OFFICER, DEBT RECOVERY TRIBUNAL-1, (AHAMEDABAD), DIAMOND JUBILEE HALL GUJRATVIDYAPEETH, NEAR INCOME TAX ASHRAM ROAD, AHMEDABAD-380 014. 6. THE PRESIDING OFFICER, DEBT RECOVERY TRIBUNAL-II, (AHAMEDABAD), DIAMOND JUBILEE HALL GUJRATVIDYAPEETH, NEAR INCOME TAX ASHRAM ROAD, AHMEDABAD-380 014. 7. THE PRESIDING OFFICER, DEBT RECOVERY TRIBUNAL (ALLAHABAD), 9/3 PANNALAL ROAD, ALLAHABAD, PIN - 211 001. 8. THE PRESIDING OFFICER, DEBT RECOVERY TRIBUNAL (AURANGABAD), \"JEEVANSUMAN\", LIC BUILDING, PLOT NO.3, N-5, CIDCO, AURANGABAD, PIN - 431 003. 9. THE PRESIDING OFFICER, DEBT RECOVERY TRIBUNAL (BANGALORE), KRISHIBHAWAN, HUTSON CIRCLE, BANGALORE, PIN - 560 002. 10. THE PRESIDING OFFICER, DEBT RECOVERY TRIBUNAL-1, (CHANDIGARH), 1ST & 2ND FLOOR, SCO 39-40, SECTOR 8-C, MADHYA MARGCHANDIGARH, PUNJAB, PIN - 160 018. 11. THE PRESIDING OFFICER, DEBT RECOVERY TRIBUNAL-II, CHANDIGARH, PNB HOUSE, BANK SQUARE, SECTOR 17 BD, RT-II, SECTOR-17, CHANDIGARH, PIN - 160 017. 12. THE PRESIDING OFFICER, DEBT RECOVERY TRIBUNAL-1, (CHENNAI), SPENCER TOWER, 6TH FLOOR, ANNASALAI, CHENNAI, PIN - 600 002. 13. THE PRESIDING OFFICER, DEBT RECOVERY TRIBUNAL -11, (CHENNAI), SPENCER TOWER, 4TH FLOOR, ANNA SALAI, CHENNAI, PIN - 600 002. msv/ -3- -3- WP(C).No. 1770 of 2015 (U) -------------------------- 14. THE PRESIDING OFFICER, DEBT RECOVERY TRIBUNAL -111, (CHENNAI), SPENCER TOWER, 5TH FLOOR, ANNA SALAI, CHENNAI, PIN - 600 002. 15. THE PRESIDING OFFICER, DEBT RECOVERY TRIBUNAL, (COIMBATORE), 1670, CAVERYCOMPLEX, TRICHY ROAD, RAMANATHAPURAM, COIMBATORE, PIN - 641 045. 16. THE PRESIDING OFFICER, DEBT RECOVERY TRIBUNAL, (CUTTACK), C-71, SECTOR 7, CDA, CUTTACK, ORISSA, PIN - 753 014. 17. THE PRESIDING OFFICER, DEBT RECOVERY TRIBUNAL-1, (DELHI), SANSKRIT BHAVAN, JHANDEWALAN, NEW DELHI, PIN - 110 055. 18. THE PRESIDING OFFICER, DEBT RECOVERY TRIBUNAL-11, (NEW DELHI), SANSKRIT BHAVAN, JHANDEWALAN, NEW DELHI, PIN - 110 055. 19. THE PRESIDING OFFICER, DEBT RECOVERY TRIBUNAL-III, (DELHI), SANSKRIT BHAVAN, JHANDEWALAN, NEW DELHI, PIN - 110 055. 20. THE PRESIDING OFFICER, DEBT RECOVERY TRIBUNAL-II, (GUWAHATTI), DR.B.BARAUN ROAD, ULUBARI, GUWAHATTI, STATE OF ASSAM, PIN - 781 007. 21. THE PRESIDING OFFICER, DEBT RECOVERY TRIBUNAL, (HYDERABAD), 5TH FLOOR, TRIVENI COMPLEX, HYDERABAD, ANDHRA PRADESH, PIN - 500 001. 22. THE PRESIDING OFFICER, DEBT RECOVERY TRIBUNAL, (JABALPUR), 797-IIM SHANTIKUNJ, SOUTH CIVIL LINES, JABALPUR, MADHYA PRADESH, PIN - 482 001. 23. THE PRESIDING OFFICER, DEBT RECOVERY TRIBUNAL, (JAIPUR), SFE 3/4, NEHRUPLACE, TONKROAD, JAIPUR, PIN - 302 015. msv/ -4- -4- WP(C).No. 1770 of 2015 (U) -------------------------- 24. THE PRESIDING OFFICER, DEBT RECOVERY TRIBUNAL-I, (KOLKATTA), 1-A, LOCAL CENTRE (MARKET), 1ST FLOOR, SECTOR -3, SALT LAKE (BIDHAN NAGAR), KOLKATTA - 700 064. 25. THE PRESIDING OFFICER, DEBT RECOVERY TRIBUNAL-II, (KOLKATTA), HUDCOBUILDING, 4TH FLOOR, 15N, KOLKATTA - 700 087. 26. DEBT RECOVERY TRIBUNAL-III, (KOLKATTA), 8TH FLOOR, JEEVANSUDHA, 42-C JAWAHARLAL NEHRU ROAD, KOKATA, PIN - 700 071. 27. THE PRESIDING OFFICER, DEBT RECOVERY TRIBUNAL (LUCKNOW), 600/1 UNIVERSITY ROAD, NEAR HANUMAN SETHU TEMPLE, LUCKNOW, PIN - 226 007. 28. THE PRESIDING OFFICER, DEBT RECOVERY TRIBUNAL, MADURAI, 3RD AND 4TH FLOOR, KALYANI TOWERS, 4/162, MADURAI-MELLUR ROAD, UTHANGUDI, MADURAI, PIN - 625 101. 29. THE PRESIDING OFFICER, DEBT RECOVERY TRIBUNAL-I, (MUMBAI), 5TH FLOOR, SCINDIAHOUSE, N.M.MARG, BALLARD ESTATE, MUMBAI - 400 001. 30. THE PRESIDING OFFICER, DEBT RECOVERY TRIBUNAL-II, (MUMBAI), 5TH FLOOR, SCINDIAHOUSE, N.M.MARG, BALLARD ESTATE, MUMBAI - 400 0001. 31. THE PRESIDING OFFICER, DEBT RECOVERY TRIBUNAL-III (MUMBAI), 6TH FLOOR, SCINDIAHOUSE, N.M.MARG, BALLARD ESTATE, MUMBAI - 400 001. 32. THE PRESIDING OFFICER, DEBT RECOVERY TRIBUNAL, (NAGPUR), B, BLOCK, 2ND FLOOR, C.G.O COMPLEX, SEMINARY HILLS, NAGPUR, PIN - 440 066. 33. THE PRESIDING OFFICER, DEBT RECOVERY TRIBUNAL, (PATNA), 34, LALBHAWAN, BANK ROAD, LODHIPUR, PIN - 811 105. msv/ -5- -5- WP(C).No. 1770 of 2015 (U) -------------------------- 34. THE PRESIDING OFFICER, DEBT RECOVERY TRIBUNAL-1, (PUNE), PMT COMMERCIAL BUILDING, SHANKERSHAET ROAD, SWARGATE, PUNE, PIN - 411 001. 35. THE PRESIDING OFFICER, DEBT RECOVERY TRIBUNAL-I, (RANCHI), BADRI NARAYAN BHAVANSTREET, RATU ROAD, GANGA NAGAR, POST-HEHEL, RANCHI, PIN - 834 005. 36. THE PRESIDING OFFICER, DEBT RECOVERY TRIBUNAL, (VISHAKAPATNAM), SAI BABA STREET, DAHAGARDEN, VISHAKAPATNAM, PIN - 530 001. * ADDL. R5-R36 IMPLEADED AS PER ORDER DTD.1.6.2015 IN IA.5463/2015 R1,R2,R4 BY ADVS. SRI.K.RAMAKUMAR (SR.) SRI.JAGADEESH LAKSHMAN, CGC R3 BY ADV. SRI.GEORGE THOMAS(MEVADA), SC, SBI R1,R32 BY ADV. SRI.N.NAGARESH, ASSISTANT SOLICITOR GENERAL THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 08-08-2016 THE COURT ON 08-11-2016, THE SAME DAY DELIVERED THE FOLLOWING: msv/ WP(C).No. 1770 of 2015 (U) -------------------------- APPENDIX PETITIONER(S)' EXHIBITS ----------------------- EXT.P1 TRUE COPY OF O.A.105/2007 IN THE DEBT RECOVER TRIBUNAL,ERNAKULAM EXT.P2 TRUE COPY OF SA 90/2007 IN THE DEBT RECOVERY TRIBUNAL,ERNAKULAM EXT.P3 TRUE COPY OF ORDER DATED 17.11.2014 IN APPEAL NO.207/2010 IN THE FILE OF APPELLANT AUTHORITY FOR INDUSTRIAL AND RECONSTRUCTION,NEW DELHI EXT.P4 TRUE COPY OF PROCEEDINGS IN O.A.105/2007 IN THE FILE DEBT RECOVERY TRIBUNAL,ERNAKULAM EXT.P5 TRUE COPY OF I.A.2417/2014 FILED BY THE PETITIONERS IN THE DEBT RECOVERY TRIBUNAL,ERNAKULAM EXT.P6 TRUE COPY OF THE COUNTER AFFIDAVIT FILED BY THE 3RD RESPONDENT IN I.A.2417/2014 IN THE DEBT RECOVERY TRIBUNAL,ERNAKULAM EXT.P7 TRUE COPY OF THE FIR NO.RC.5/E/2007CBI/EOW/CHENNAI DATED 21.11.2007 EXT.P8 TRUE COPY OF THE POLICE REPORT NO.27/2008 DATED 20.12.2008 FILED BEFORE THE CHIEF JUDICIAL MAGISTRATE COURT,ERNAKULAM BY THE CBI EXT.P9 TRUE COPY OF ORDER DATED 10.12.2014 IN I.A.2310/2014 BY DEBT RECOVERY TRIBUNAL,ERNAKULAM EXT.P10 TRUE COPY OF ORDER DATED 10.12.2014 IN I.A.2355/2014 BY THE DEBT RECOVERY TRIBUNAL,ERNAKULAM EXT.P11 TRUE COPY OF I.A.2940/2014 FILED BY THE PETITIONERS IN THE DEBT RECOVERY TRIBUNAL,ERNAKULAM EXT.P12 TRUE COPY OF ORDER DATED 19.12.2014 IN I.A.2940/2014 CONTAINED IN THE COMMON ORDER DATED 19.12.2014 BY THE DEBT RECOVERY TRIBUNAL,ERNAKULAM EXT.P13 TRUE COPY OF I.A.3023/2014 FILED BY THE PETITIONERS IN THE DEBT RECOVERY TRIBUNAL EXT.P14 TRUE COPY OF ORDER DATED 19.12.2014 IN I.A.3023/2014 CONTAINED IN THE COMMON ORDER DATAED 19.12.2014 BY THE DEBT RECOVERY TRIBUNAL,ERNAKULAM msv/ -2- -2- WP(C).No. 1770 of 2015 (U) -------------------------- EXT.P15 TRUE COPY OF ORDER DATED 5.1.2015 IN I.A.3038/2014 BY THE DEBT RECOVERY TRIBUNAL,ERNAKULAM EXT.P16 TRUE COPY OF ORDER DATED 6.1.2015 IN I.A.3040/2014 BY THE DEBT RECOVERY TRIBUNAL ERNAKULAM EXT.P17 TRUE COPY OF THE JUDGMENT DATED 6.1.2015 IN I.A.3040/2014 BY THE DEBT RECOVERY TRIBUNAL ERNAKULAM EXT.P18 TRUE COPY OF THE JUDGMENT DATED 27.8.2014 IN OP(DRT)73/2014 EXT.P19 TRUE COPY OF THE ORDER DATED 18.12.2014 IN I.A.17538/2014 IN OP(DRT)73/2014. EXT.P20 TRUE COPY OF THE DEBTS RECOVERY (PROCEDURE AND APPOINTMENT AS PRESIDING OFFICER OF THE TRIBUNAL) RULES, 1988. EXT.P21 TRUE COPY OF NOTIFICATION LETTER F.NO.7.8.2013-DRT ISSUED BY THE UNDER SECRETARY (DRT), GOVERNMENT OF INDIA MINISTRY OF FINANCE, DEPARTMENT OF FINANCIAL SERVICES. RESPONDENT(S)' EXHIBITS ----------------------- EXT.R3(a): TRUE PHOTOCOPY OF THE BALANCE SHEET OF THE ' 1ST PETITIONER DTD.1.11.2007, FOR THE PERIOD 2006-2007. EXT.R3(b): TRUE PHOTOCOPY OF THE WRITTEN STATEMENT FILED BY THE 1ST PETITIONER IN OA.105/2007 DTD.2.11.2007. EXT.R3(c): TRUE PHOTOCOPY OF THE WRITTEN STATEMENT FILED BY THE PETITIONERS 2 AND 3 IN OA.105/2007 DTD.2.11.2007. EXT.R3(d): TRUE PHOTOCOPY OF THE REPLY AFFIDAVIT FILED BY THE 1ST PETITIONER IN CASE NUMBER 17/2008 DTD.18.5.2010. EXT.R3(e): TRUE PHOTOCOPY OF THE PROCEEDINGS OF THE BIFR DTD.25.5.2010. EXT.R3(f): TRUE PHOTOCOPY OF THE COMMUNICATION ISSUED BY THE DEVELOPMENT COMMISSIONER AND APPELLATE AUTHORITY CSEZ DTD.19.8.2014. Msv/ -3- -3- WP(C).No. 1770 of 2015 (U) -------------------------- EXT.R3(g): TRUE PHOTOCOPY OF THE IA.2310/2014 IN OA.105/2007 DTDD.19.8.2014. EXT.R3(h): TRUE PHOTOCOPY OF THE IA.130/2015 IN OA.105/2007 FILED BY THE PETITIONERS DTD.14.1.2015. EXT.R3(i): TRUE PHOTOCOPY OF THE IA.182/2015 IN OA.105/2007 FILED BY THE PETITIONERS DTD.20.1.2015. EXT.R3(j): TRUE PHOTOCOPY OF THE COUNTER IN IA 182/2015 IN OA.105/2007 FILED BY THE 3RD RESPONDENT DTD.21.1.2015. //TRUE COPY// P.S.TO JUDGE msv/ A.M.SHAFFIQUE, J * * * * * * * * * * * * W.P.C.No.1770 of 2015 ---------------------------------------- Dated this the 8th day of November 2016 J U D G M E N T This writ petition has been filed inter alia seeking for a declaration that Rule 3 of the Debts Recovery Tribunal (Procedure for Appointment as Presiding Officer of the Tribunal) Rules, 1998 (hereinafter referred to as 'the 1998 Rules') are unconstitutional, violative of independence of Judiciary, separation of powers, arbitrary, unreasonable and void. 2. Though certain other reliefs have been sought for, the learned counsel for the petitioner confines the arguments to the vires of Rule 3 of the 1998 Rules. 3. The main contention urged by the petitioner is based on Constitution Bench judgment in Madras Bar Association v. Union of India [(2014) 10 SCC 1]. The Supreme Court held that though it is open for the Parliament to substitute the appellate jurisdiction vested in the jurisdiction of High Court and establish and constitute Courts/Tribunals to exercise the jurisdiction, it is imperative for the legislature to ensure that redress should be made available with the same convenience and experience as it W.P.C.No.1770/2015 2 was prior to the introduction of the newly created Court/Tribunal. The Supreme Court in the said case declared the National Tax Tribunal Act, 2005 as illegal and unconstitutional. It was held that though Parliament has power to enact such legislation, exercise of such power should not per se violate the basic structure of Constitution. 4. Counter affidavit is filed by the 3rd respondent/the Bank inter alia controverting the stand of the petitioners. It is argued that the petitioners are defaulters of the bank and steps are being taken for recovering more than Rs.4.74 Crores and it is at that stage that the writ petition is being filed. It is submitted that there is no challenge to Section 5 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993, which prescribes the qualification for appointment of a Presiding Officer which includes a person qualified to be a District Judge. Article 233(2) of the Constitution of India in very clear terms stipulates that the qualification for appointment as District Judge is 7 years standing at the Bar. The 4th respondent has more than 15 years experience at the Bar and therefore he is a person qualified for appointment as Presiding Officer of the Tribunal. W.P.C.No.1770/2015 3 5. Counter affidavit has been filed by respondents 1 and 2 also stating that the writ petition has been admitted only to consider the vires of the Rules. Further, it is submitted that the Central Government had framed 1998 Rules by exercising the power under Section 4(1) read with Section 36(2)(e) of the Act. As per the 1998 Rules, candidates who were appointed as Presiding Officer of Tribunal are selected by a Selection committee under the Chairmanship of the Chief Justice of India or a Judge of the Supreme Court of India nominated by the Chief Justice of India. The applications are invited from the Supreme Court, High Court, Ministry of law etc. In terms of Rule 3(4) of the 1998 Rules, Selection Committee is vested with discretion to devise its procedure for selecting candidates for appointment. There is no necessity to conduct any test to appoint a Presiding Officer as is required in the case of District Judge. It is further submitted that the role of the Chief Justice of India in the selection process is not formal. The Chairman of the Selection Committee is vested with the power to take a final decision after consultation with the other members. The Chairman decides the criteria for shortlisting the candidates and only after adopting the criteria as W.P.C.No.1770/2015 4 decided by the Chairman of the Committee, Ministry of Finance prepares the list. It is further contended that in Union of India and Another v. Delhi High Court Bar Association and Others, the Supreme Court considered the validity of the provisions of the Act including the provisions for selection of Presiding Officer and it is held at paragraphs 15 and 25 as under: “15...... For example, Rules have been framed in 1998 for the appointment of Presiding Officers of the Tribunals as well as the Presiding Officers of the Appellate Tribunals. The Rules contemplate appointments being made by a Selection Committee. Each of the Selection committee is to consist of the Chief Justice of India or a Judge of the Supreme Court as nominated by the Chief Justice of India along with other members referred to in the said Rules. The Selection Committee so constituted would ensure fair and impartial selection of competent persons to act as Presiding Officers of the Tribunal......” “25. Such tribunals, whether they pertain to Income-tax or Excise and Customs or Administration, have now become an essential part of the judicial system in this country. W.P.C.No.1770/2015 5 Such specialized institutions may not strictly come within the concept of the judiciary, as envisaged by Article 50, but it cannot be presumed that such tribunals are not an effective part of the justice delivery system, like courts of law. It will be seen that for a person to be appointed as a Presiding Officer of a Tribunal, he should be one who is qualified to be a District Judge and, in case of appointment of the Presiding Officer of the Appellate Tribunal he is, or has been, qualified to be a Judge of a High Court or has been a member of the Indian Legal Service who has held a post in Grade-I for at least three years or has held office as the Presiding Officer of a Tribunal for at least three years. Persons who are so appointed as Presiding Officers of the Tribunal or of the Appellate Tribunal would be well versed in law to be able to decide cases independently and judiciously. It has to be borne in mind that the decision of the Appellate Tribunal is not final, in the sense that the same can be subjected to judicial review by the High Court under Articles 226 and 227 of the Constitution.” 6. The 4th respondent has also filed a Counter affidavit disputing the contentions urged by the petitioner. W.P.C.No.1770/2015 6 7. Having regard to the aforesaid submission, the short question to be considered is regarding the vires of the Rules. Rule 3 of the 1998 Rules, which is impugned is extracted under: “3. Method of appointment under sub- section (1) of Sec.4 of the Act.- (1) For the purpose of appointment to the post of a Presiding Officer, there shall be a Selection Committee consisting of - (i) The Chief Justice of India or a Judge of the Supreme Court of India as nominated by the Chief Justice of India; (ii) The Secretary to the Government of India in the Ministry of Finance (Department of Economic Affairs); (iii) The Secretary to the Government of India in the Ministry of Law and Justice; (iv) The Governor of the Reserve Bank or the Deputy Governor of the Reserve Bank nominated by the Governor of the Reserve Bank; (v) Secretary or Additional Secretary to the Government of India in the Ministry of Finance, Department of Financial Services] (2) The Chief Justice of India or the Judge of the Supreme Court shall be the W.P.C.No.1770/2015 7 Chairman of the Selection Committee. (3) Any three members of the Committee including the Chairman shall form a quorum for meeting of the Committee. (4) The Selection Committee may devise its own procedure for selecting a candidate for appointment as Presiding Officer. (5) The Selection Committee shall recommend persons for appointment as Presiding Officer.- (i) from amongst the persons from the list of candidates prepared by the Ministry of Finance after inviting necessary applications; and (ii) from amongst judicial officers nominated by a High Court. (6) The Central Government shall, on the basis of the recommendations of the Selection Comm, make a list of persons selected for appointment as Presiding Officer and the said list shall be valid for a period of two years. The appointment of a Presiding Officer shall be made from the list so prepared.” 8. Heard the learned counsel for the petitioner and the learned counsel appearing for the respondents. W.P.C.No.1770/2015 8 9. Learned counsel for the petitioner also relied upon the following judgments: i) State of Maharashtra v. Labour Law Practitioners' Association and others [1998(2) SCC 688]. The challenge in this case was to a notification issued by the Government appointing Assistant Labour Officers having a specified qualification and experience, as Presiding Officers of Labour Courts. The High Court set aside the notification. The State carried the matter before the Supreme Court and it was held at paragraphs 10, 11 and 20 as under: “10. The District Judge, therefore, covers a judge of any Principal Civil Court of original jurisdiction. With an increase in the numbers of specialised courts and tribunals which are being set up to deal with specific kinds of civil litigation which would otherwise have been dealt with by the ordinary civil courts, we now have a number of specialised courts exercising different categories of civil original jurisdiction. It can be specialised civil original jurisdiction pertaining to labour and industrial disputes specified in the relevant Acts as in the case of Labour and Industrial Courts, or it could be pertaining to recovery of bank debts and so on. W.P.C.No.1770/2015 9 The structure of civil courts exercising original jurisdiction is no longer monolithic. The judge of the Principal Civil Court heading the set of courts concerned under him and exercising that jurisdiction can also fall in the category of a “District Judge” by whatever name called. Learned Single Judge and learned Judges of the Division Bench have, therefore, held that an Industrial Court is a civil court exercising civil original jurisdiction; and the person presiding over it could well be termed as a District Judge. The term “District Judge” should not be confined only to the judge of the Principal Civil Court in the hierarchy of general civil courts. The term would now have to include also the hierarchy of specialised civil courts, such as a hierarchy of Labour Courts and Industrial Courts. The fact that the Chief Presidency Magistrate and the Sessions Judge were also included in the definition of “District Judge” indicates that a wide interpretation is to be given to the expression “District Judge”. The extensive definition of a District Judge under Article 236 is indicative of the same. 11. Under Article 236(b), the expression “judicial service” is defined to mean “a service consisting exclusively of persons intended to fill the post of District Judge and other civil W.P.C.No.1770/2015 10 judicial posts inferior to the post of District Judge”. Judicial service thus postulates a hierarchy of courts with the District Judge as the head and other judicial officers under him discharging only judicial functions.\" \"20. The constitutional scheme under Chapter V of Part VI dealing with the High Courts and Chapter VI of Part VI dealing with the subordinate courts shows a clear anxiety on the part of the framers of the Constitution to preserve and promote independence of the judiciary from the executive. Thus Article 233 which deals with appointment of District Judges requires that such appointments shall be made by the Governor of the State in consultation with the High Court. Article 233(2) has been interpreted as prescribing that “a person in the service of the Union or the State” can refer only to a person in the judicial service of the Union or the State. Article 234 which deals with recruitment of persons other than District Judges to the judicial service requires that their appointments can be made only in accordance with the Rules framed by the Governor of the State after consultation with the State Public Service Commission and with the High Court. Article 235 provides that the control over district courts and courts subordinate thereto W.P.C.No.1770/2015 11 shall be vested in the High Court; and Article 236 defines the expression “District Judge” extensively as covering judges of a City Civil Court etc. as earlier set out, and the expression “judicial service” as meaning a service consisting exclusively of persons intended to fill the post of the District Judge and other civil judicial posts inferior to the post of District Judge. Therefore, bearing in mind the principle of separation of powers and independence of the judiciary, judicial service contemplates a service exclusively of judicial posts in which there will be a hierarchy headed by a District Judge. The High Court has rightly come to the conclusion that the persons presiding over Industrial and Labour Courts would constitute a judicial service so defined. Therefore, the recruitment of Labour Court judges is required to be made in accordance with Article 234 of the Constitution.” ii) State of Gujarat and Another v. Gujarat Revenue Tribunal Bar Association and Another [2012(10) SCC 353] in which paragraphs 16, 17, 22, 26 and 32 are relevant which reads as under: “16. Although the term “court” has not been defined under the Act, it is indisputable W.P.C.No.1770/2015 12 that courts belong to the judicial hierarchy and constitute the country’s judiciary as distinct from the executive or legislative branches of the State. Judicial functions involve the decision of rights and liabilities of the parties. An enquiry and investigation into facts is a material part of judicial function. The legislature, in its wisdom has created tribunals and transferred the work which was regularly done by the civil courts to them, as it was found necessary to do so in order to provide efficacious remedy and also to reduce the burden on the civil courts and further, also to save the aggrieved person from bearing the burden of heavy court fees, etc. Thus, the system of tribunals was created as a machinery for the speedy disposal of claims arising under a particular statute/Act. Most of the tribunals have been given the power to lay down their own procedure. In some cases, the procedure may be adopted by the tribunal and the same may require the approval of the competent authority/Government. However, in each case, the principles of natural justice are required to be observed. Such tribunals therefore, basically perform quasi-judicial functions. The system of tribunals is hence, unlike that of the regularly constituted courts W.P.C.No.1770/2015 13 under the hierarchy of judicial system which are not authorised to devise their own procedure for dealing with cases. Under certain statutes tribunals have been authorised to exercise certain powers conferred under some provisions of the Code of Civil Procedure (hereinafter referred to as “CPC”) or the Code of Criminal Procedure (hereinafter referred to as “Cr.PC”), but not under the whole Code, be it Civil or Criminal. However, in a regular court, the said Codes, in their entirety, Civil as well as Criminal, must be strictly adhered to. Therefore, from the above, it is evident that the terms “court” and “tribunal” are not interchangeable. “17. A tribunal may not necessarily be a court, in spite of the fact that it may be presided over by a judicial officer, as other qualified persons may also possibly be appointed to perform such duty. One of the tests to determine whether a tribunal is a court or not, is to check whether the High Court has revisional jurisdiction so far as the judgments and orders passed by the tribunal are concerned. The supervisory or revisional jurisdiction is considered to be a power vesting in any superior court or tribunal, enabling it to satisfy itself as regards the correctness of the orders W.P.C.No.1770/2015 14 of the inferior tribunal. This is the basic difference between appellate and supervisory jurisdiction. The appellate jurisdiction confers a right upon the aggrieved person to complain in the prescribed manner to a higher forum whereas, supervisory/revisional power has a different object and purpose altogether as it confers the right and responsibility upon the higher forum to keep the subordinate tribunals within the limits of the law. It is for this reason that revisional power can be exercised by the competent authority/court suo motu, in order to see that subordinate tribunals do not transgress the rules of law and are kept within the framework of powers conferred upon them. Such revisional powers have to be exercised sparingly, only as a discretion in order to prevent gross injustice and the same cannot be claimed, as a matter of right by any party. Even if the person heading the tribunal is otherwise a “judicial officer”, he may merely be persona designata, but not a court, despite the fact that he is expected to act in a quasi- judicial manner. In the generic sense, a court is also a tribunal, however, courts are only such tribunals as have been created by the statute concerned and belong to the judicial department of a State as opposed to the W.P.C.No.1770/2015 15 executive branch of the said State. The expression “court” is understood in the context of its normally accepted connotation, as an adjudicating body, which performs judicial functions of rendering definitive judgments having a sense of finality and authoritativeness to bind the parties litigating before it. Secondly, it should be in the course of exercise of the sovereign judicial power transferred to it by the State. Any tribunal or authority therefore, that possesses these attributes, may be categorised as a court. 22. The High Court’s power of judicial superintendence, even under the amended provisions of Article 227 is applicable, provided that two conditions are fulfilled; firstly, such tribunal, body or authority must perform judicial functions of rendering definitive judgments having finality, which bind the parties in respect of their rights, in the exercise of the sovereign judicial power transferred to it by the State, and secondly, such tribunal, body or authority should be the subject to the High Court’s appellate or revisional jurisdiction. 26. A Constitution Bench of this Court in Statesman (P) Ltd. v. H.R. Deb examined the provisions of Sections 7(3)(d) and (g) of the Industrial Disputes Act, 1947, which contain W.P.C.No.1770/2015 16 the expression “judicial office”, and held that a person holds “judicial office” if he is performing judicial functions. The scheme of Chapters V and VI of Part VI of the Constitution deal with judicial office and judicial service. Judicial service means a separation of the judiciary from the executive in public services. The functions of the Labour Court are of great public importance and are quasi-judicial in nature, therefore, a man having experience of the civil side of the law is more suitable to preside over it, as compared to a person working on the criminal side. Persons employed performing multifarious duties and, in addition, performing some judicial functions, may not truly fulfil the requirement of the statute. Judicial office thus means a fixed position for the performance of duties which are primarily judicial in nature. 32. The aforesaid observations made by the High Court, taking into consideration various statutes dealing with not only the revenue matters, but also covering other subjects, make it crystal clear that the Tribunal does not deal only with revenue matters provided under Schedule I, but has also been conferred appellate/revisional powers under various other statutes. Most of those statutes provide that W.P.C.No.1770/2015 17 the Tribunal, while dealing with appeals, references, revisions, would act giving strict adherence to the procedure prescribed in CPC, for deciding a matter as followed by the civil court and certain powers have also been conferred upon it, as provided in CrPC and IPC. Thus, we do not have any hesitation in concurring with the finding recorded by the High Court that the Tribunal is akin to a court and performs similar functions.\" iii) Siraj K.H. v. High Court of Kerala and Others [2006 (6) SCC 395] in which paragraph 57 is relevant which reads as under: “57. The qualities which a judicial officer would possess are delineated by this Court in Delhi Bar Assn. v. Union of India. A judicial officer must, apart from academic knowledge, have the capacity to communicate his thoughts, he must be tactful, he must be diplomatic, he must have a sense of humour, he must have the ability to defuse situations, to control the examination of witnesses and also lengthy irrelevant arguments and the like. Existence of such capacities can be brought out only in an oral interview. It is imperative that only persons with a minimum of such W.P.C.No.1770/2015 18 capacities should be selected for the judiciary as otherwise the standards would get diluted and substandard stuff may be getting into the judiciary. Acceptance of the contention of the appellant-petitioners can even lead to a postulate that a candidate who scores high in the written examination but is totally inadequate for the job as evident from the oral interview and gets zero marks may still find a place in the judiciary. It will spell disaster to the standards to be maintained by the subordinate judiciary. It is, therefore, the High Court has set a benchmark for the oral interview, a benchmark which is actually low as it requires 30% for a pass. The total marks for the interview are only 50 out of a total of 450. The prescription is, therefore, kept to the bare minimum and if a candidate fails to secure even this bare minimum, it cannot be postulated that he is suitable for the job of Munsiff Magistrate, as assessed by five experienced Judges of the High Court.” iv) All India Judges Association and Others v. Union of India and Others [2002(4) SCC 247] in which paragraph 27 is relevant which reads as under: W.P.C.No.1770/2015 19 “27. Another question which falls for consideration is the method of recruitment to the posts in the cadre of Higher Judicial Service i.e. District Judges and Additional District Judges. At the present moment, there are two sources for recruitment to the Higher Judicial Service, namely, by promotion from amongst the members of the Subordinate Judicial Service and by direct recruitment. The subordinate judiciary is the foundation of the edifice of the judicial system. It is, therefore, imperative, like any other foundation, that it should become as strong as possible. The weight on the judicial system essentially rests on the subordinate judiciary. While we have accepted the recommendation of the Shetty Commission which will result in the increase in the pay scales of the subordinate judiciary, it is at the same time necessary that the judicial officers, hard-working as they are, become more efficient. It is imperative that they keep abreast of knowledge of law and the latest pronouncements, and it is for this reason that the Shetty Commission has recommended the establishment of a Judicial Academy, which is very necessary. At the same time, we are of the opinion that there has to be certain minimum standard, objectively adjudged, for W.P.C.No.1770/2015 20 officers who are to enter the Higher Judicial Service as Additional District Judges and District Judges. While we agree with the Shetty Commission that the recruitment to the Higher Judicial Service i.e. the District Judge cadre from amongst the advocates should be 25 per cent and the process of recruitment is to be by a competitive examination, both written and viva voce, we are of the opinion that there should be an objective method of testing the suitability of the subordinate judicial officers for promotion to the Higher Judicial Service. Furthermore, there should also be an incentive amongst the relatively junior and other officers to improve and to compete with each other so as to excel and get quicker promotion. In this way, we expect that the caliber of the members of the Higher Judicial Service will further improve. In order to achieve this, while the ratio of 75 per cent appointment by promotion and 25 per cent by direct recruitment to the Higher Judicial Service is maintained, we are, however, of the opinion that there should be two methods as far as appointment by promotion is concerned: 50 per cent of the total posts in the Higher Judicial Service must be filled by promotion on the basis of principle of merit-cum-seniority. For W.P.C.No.1770/2015 21 this purpose, the High Courts should devise and evolve a test in order to ascertain and examine the legal knowledge of those candidates and to assess their continued efficiency with adequate knowledge of case- law. The remaining 25 per cent of the posts in the service shall be filled by promotion strictly on the basis of merit through the limited departmental competitive examination for which the qualifying service as a Civil Judge (Senior Division) should be not less than five years. The High Courts will have to frame a rule in this regard.” v) R.K.Jain v. Union of India and Others [1993(4) SCC 119] in which paragraph 70 is relevant which reads as under: “70. In a democracy governed by rule of law surely the only acceptable repository of absolute discretion should be the courts. Judicial review is the basic and essential feature of the Indian constitutional scheme entrusted to the judiciary. It cannot be dispensed with by creating a tribunal under Articles 323-A and 323-B of the Constitution. Any institutional mechanism or authority in negation of judicial review is destructive of basic structure. So long as the alternative institutional mechanism or authority set up by an Act is not less effective W.P.C.No.1770/2015 22 than the High Court, it is consistent with the constitutional scheme. The faith of the people is the bedrock on which the edifice of judicial review and efficacy of the adjudication are founded. The alternative arrangement must, therefore, be effective and efficient. For inspiring confidence and trust in the litigant public they must have an assurance that the person deciding their causes is totally and completely free from the influence or pressure from the Government. To maintain independence and imperativity it is necessary that the personnel should have at least modicum of legal training, learning and experience. Selection of competent and proper people instils people’s faith and trust in the office and helps to build up reputation and acceptability. Judicial independence which is essential and imperative is secured and independent and impartial administration of justice is assured. Absence thereof only may get both law and procedure wronged and wrong-headed views of the facts and is likely to give rise to nursing grievance of injustice. Therefore, functional fitness, experience at the Bar and aptitudinal approach are fundamental for efficient judicial adjudication. Then only as a repository of the confidence, as its duty, the W.P.C.No.1770/2015 23 tribunal would properly and efficiently interpret the law and apply the law to the given set of facts. Absence thereof would be repugnant or derogatory to the Constitution.” 10. On the other hand, learned counsel for the respondents submits that this writ petition is frivolous and vexatious. It is submitted that the petitioner has been proceeded under the Recovery of Debts due to Banks and Financial Institutions Act and he is a debtor who has approached this Court when all steps for avoiding liability to pay has come to a standstill. Being a vexatious litigation, cost has to be imposed on the petitioner as held by the Apex Court in Ramrameshwari Devi and others v. Nirmala Devi and another [(2011) 8 SCC 249] and Maria Margarida Sequeria Fernandes v. Erasmo Jack de Sequeria (Dead) Thr. L.Rs. [2012 KHC 4181]. 11. On an overall consideration of the legal issues arising in the matter, there cannot be any dispute regarding the law laid down by the Apex Court in the aforesaid cases. However, the question on facts is whether Rule 3 of the 1998 Rules is liable to be declared unconstitutional. There is a marked difference with the formation of the Tribunal as far as this case is concerned. W.P.C.No.1770/2015 24 First of all there is a selection committee constituted for selecting the presiding officer as provided under Rule 3. Chief Justice of India or a Judge of the Supreme Court of India as nominated by the Chief Justice of India heads the Committee. The Committee includes Secretary to the Government of India in the Ministry of Law and Justice, the Governor of the Reserve Bank of India or the Deputy Governor of the Reserve Bank of India, Secretary or Additional Secretary to the Government of India in the Ministry of Finance, Department of Financial Services. The Chief Justice of India or the Judge of the Supreme Court shall be the Chairman along with any three members of the Committee who forms the quorum. The appointments are made from amongst the persons from the list of candidates prepared by the Ministry of Finance after inviting necessary applications and from amongst the judicial officers nominated by a High Court. 12. The main contention urged by learned counsel for the petitioners is that when persons are appointed from the list of candidates prepared by the Ministry of Finance after inviting applications, it amounts to entrusting judicial function to unqualified persons. Petitioners do not have any complaint with W.P.C.No.1770/2015 25 reference to the appointment being made among judicial officers nominated by a High Court. But it is relevant to note that the selection committee is headed by none other than the Chief Justice or Judge of the Supreme Court of India as the Chairman. Rule 3(4) indicates that the selection committee devises its own procedure for selecting a candidate for appointment as Presiding Officer. Sub Rule (5) further indicates the selection committee shall recommend persons for appointment as Presiding Officer from among the necessary candidates after inviting necessary applications. Therefore, the ultimate authority for appointment of persons is the selection committee which is headed by none other than the Chief Justice or a Judge of the Supreme Court. By appointing a person in a quasi judicial post which involves conducting a trial and determination of the amount, considering the counter claim as if it is a civil court it cannot be taken for granted that the committee will not appoint a person who is not qualified for a job. This is not an instance where the Tribunal is appointed by the Ministry without any guidelines as such. Here the appointment is made through a selection committee in which the Chief Justice or the Judge of the Supreme Court is the W.P.C.No.1770/2015 26 Chairman and therefore the parameters involved for appointment of a Tribunal without interference by judiciary is out of question. Taking into consideration the rules formulated, it has to be viewed that the legislature had taken care of a situation as envisaged by the Apex court in the Constitution Bench judgment and had formulated a scheme for selection of a candidate who has to carry on judicial functions. 13. Coming to the scheme of the Recovery of Debts due to Banks and Financial Institutions Act, 1993, the Tribunal is constituted under Section 3 of the Act. The qualification of the Presiding Officer of the Tribunal is specified under Section 5 which indicates that a person shall not be qualified for appointment as the Presiding Officer of a Tribunal unless he is or has been, or is qualified to be a District Judge. Necessarily, a person competent to become a District Judge alone can be appointed as a Presiding Officer. The Statute also contemplates composition of an appellate Tribunal in terms of Section 9. Chair Person of the Appellate Tribunal is or has been, or is qualified to be, a Judge of a High Court or has been a member of the Indian Legal Service and has held a post in Grade I of that service for at least three years or W.P.C.No.1770/2015 27 has held office as the Presiding Officer of a Tribunal for atleast three years. The procedure and powers of the Tribunal and Appellate Tribunal are dealt with under Section 22 and it is clearly stated that the authority shall be bound by the principles of natural justice and shall have powers to regulate their own procedure in order to discharge the functions under the Act. They shall have powers of a Civil Court under the Code of Civil Procedure for trying a suit in certain aspects of the matter. The validity of the above statute has been upheld by the Apex Court in various judgments especially in Mardia Chemicals v. Union of India [2004 KHC 584]. In fact, in Madras Bar Association (supra), the Apex Court was considering the constitutional validity of the National Tax Tribunal Act, 2005 and it was held that certain provisions of the Act are unconstitutional in the light of the scheme of the said Act which will not apply to the facts of the present case. Therefore, the said judgment will not help the petitioner to contend that Rule 3 is unconstitutional. In the said view of the matter, I do not think that any contentions raised by the petitioner warrants interference by this Court. There is no arbitrariness or illegality in the rules warranting W.P.C.No.1770/2015 28 the same to be declared as unconstitutional. This writ petition is hence dismissed. Sd/- (A.M.SHAFFIQUE, JUDGE) jsr "