Unconstitutional Functioning of DRT & DRAT

Querist : Anonymous (Querist) 17 October 2010 This query is : Resolved
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I am the petitioner herein as such I am well acquainted with the facts of the petition.
I humbly submit that this writ petition is filed questioning the constitutional validity of the functioning of the Debts’ Recovery Tribunal under the administrative, regulatory and financial sponsorship of the Ministry of Finance (respondent No.1), in strict violation of the Article 50 of the Constitution of India.
I humbly submit that, legislatures have enacted different legislations for establishment of Tribunals for speedier adjudication of cases and reducing the load of the Hon’ble High Courts and its subordinate courts. The legislature has enacted the Recovery of Debts Due to Banks and Financial Institutions Act (Hereinafter referred to as RDDBFI Act) and establishment of Debt Recovery Tribunals (hereinafter referred to as DRT). The said DRT function under the Judicial officers appointed as per the said RDDBFI Act.
I humbly submit that, while the said Ministry of Finance maintains control of DRT, it is also simultaneously in control and owner of Banks and financial Institutions. The said Ministry of Finance officials are also Board Directors in Banks and Financial Institutions. Thus Ministry of Finance officials are in control of both litigants (i.e. Banks) and adjudicator i.e. the Judicial officers of DRT. Ministry of Finance provides salaries, perks, vehicles, accommodation along with other benefits to the Judicial Officials of Hon DRT. The said Ministry Officials being the employers of the Judicial officers, audit and put Financial Recovery Targets unlike case disposal targets to be achieved by the Judicial Officers of DRT. Ministry of Finance officials meet the Hon DRT judges to review their performance. By suspending Judicial Officers based on complaints the Ministry of Finance has put fear of tenure and reputation in the minds of Judicial Officers. The DRT Judicial officers are hence not given independence and Judicial Freedom to fulfill their constitutional obligations of an unbiased fair trial without fear or favor. In the circumstances, prima facie violation of Constitutional mandate of Article 50 can safely be presumed.
The Legislature has enacted many similar Acts for establishment of different tribunals and appellate tribunals including the National Company Law Tribunal (hereinafter referred to as NCLT) and National Company Law Appellate Tribunal (hereinafter referred to as NCALT) and all the Tribunals and Appellate Tribunals where placed under the administrative control and supervision of their respective departments and concerned Ministries.
In these circumstances, the Question of Judicial Independence, appointments, safety of tenure, termination, funding for salaries, benefits and facilities was sought to be clarified by the Constitutional Bench of the Hon’ble Supreme Court of India. The said questions were answered by the Constitutional Bench of Hon’ble Supreme Court of India in Union of India vs R. Gandhi, President Madras Bar Association and Union of India ( 2010 INDLAW SC 405 = 2010 (4) Supreme 193).

The Hon’ble Supreme Court held (Para 57(ii)) that Parts 1B and 1C of the Companies (Second Amendment) Act 2002 as structured (i.e. without separation of judiciary and executive) in the NCLT and NCALT as unconstitutional. Whereas to make these unconstitutional Sections operational Govt of India is to make suitable amendments as ordered by Hon’ble Supreme Court in the said Constitutional Bench Judgment.

The Hon’ble Supreme Court in the aforesaid judgement had made the following observations and orders:

Para 15 (re: Independence of Judiciary)...Its existence depends however not only on philosophical, ethical or moral aspects but also upon several mundane things- security in tenure, freedom from ordinary monetary worries, freedom from influences and pressures within and without.

Para 20 (Recommendations for better working of Tribunals); Only if continued judicial independence is assured, Tribunals can discharge judicial functions. In order to make such independence a reality, it is fundamental that the members of the Tribunal shall be independent persons, not civil servants. They should resemble courts and not bureaucratic boards. Even the dependence of Tribunals on the sponsoring or parent department for infrastructural facilities or personnel may undermine the independence of Judiciary,

Para 35. ....If Tribunals are to be vested with Judicial power hitherto vested in or exercised by courts, such Tribunals should possess the independence, security and capacity associated with courts.
Para 40......Rule of Law has several facets, one of which is that disputes of citizens will be decided by judges who are independent of the Executive. Another facet of Rule of Law is equality before Law. The essence of equality is that it must be capable of being enforced and adjudicated by an independent judicial forum.
Para 44 (b)... Any Tribunal to which any existing jurisdiction of courts is transferred should also be a Judicial Tribunal......and the members of the Tribunal should have the independence and security of tenure associated with Judicial Tribunals.
Para 55 ......the provision for routine suspension pending enquiry and the lack of any kind of immunity, are aspects which require to be considered and remedied.
Para 56(xii) To maintain independence and security in service, sub-section (3) of section 10FJ and section 10FV should provide that suspension of the President/Chairman or member of a Tribunal can be only with the concurrence of the Chief Justice of India.
Para 56 (xiii)…. The administrative support for all Tribunals should be from the Ministry of Law & Justice. Neither the Tribunals nor its members shall seek or be provided with facilities from the respective sponsoring or parent Ministries or concerned department.
I humbly submit that to prevent the appearance of partiality and to separate Judiciary from Executive branch in the conduct of Judicial Proceedings and decisions in the Tribunals, the Hon’ble Supreme Court decided to give Judicial Freedom by ordering the transfer of all Tribunals to Ministry of Law & Justice.
In pursuance of the decision, the Central Income Tax Tribunal and Central Income Tax Appellate Tribunals have been transferred under Ministry of Justice and Law as per the directions of the Hon’ble Supreme Court vide the said judgment.
But, Ministry of Finance has still not transferred the administrative and supervisory control of Hon DRT to the Ministry of Law & Justice in contempt of the said decision of Hon’ble Constitutional Bench of Supreme Court of India and the Hon’ble DRT Hyderabad are still functioning under the Administrative, Financial and Supervisory control of Ministry of Finance, Banking Division. It is violation of Article 142 of Constitution of India.

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