As Attorney General K. K. Venugopal resumed his submissions on the constitutionality of the passage as a Money Bill of the Finance Act of 2017 on Monday, Chief Justice Ranjan Gogoi asked for a copy of the Supreme Court's order in Rajiv Garg, where the court had considered whether different conditions of service could be prescribed for different tribunals.

In that case, the court had taken on record the assurance of the then-AG to speak with the different ministries as to uniformity in the retirement, functional facilities and accommodation of the Chairman and members of different tribunals.

AG Venugopal pointed out that in the order, the court had required that the Centre fulfill its commitment, as communicated through the then-AG and the then-Solicitor General, regarding the discrepancies in tenures and other conditions of services of the Members and Presiding Officers of the different Tribunals. "Pursuant to this, the (Finance) Act was passed", said the Mr. Venugopal.

He moved on to show how the Bill was returned to the Lok Sabha by the Upper House with certain recommendations, which were not accepted and that it was finally passed on March 30, 2017, to receive the assent of the President a day later- "none of the (recommended) amendments applied to Part XIV (on the merger of Tribunals and the conditions of service of their Chairperson/Members)", he emphasized.

Indicating the long title of the Act- "An Act to give effect to the financial proposals of the Central Government for the financial year 2017-2018"- he argued that it was certified as a Financial Bill in the whole and not as to any part of it, adding that no portion of the law can be severed provided it is covered under sub-clause (g) of Article 110.

In context of Article 110, which defines 'Money Bill', he advanced,

"So far as sub-clauses (a) to (f) are concerned, they deal with some specific subjects and the bill has to be related only to what has been set out in them. But as for sub-clause (g), it can be any matter, not necessarily subject-oriented, but in relation to (a)-(f). Incidental matters can be relatable to any matter but must have connection to (a)-(f). If there is a payment from or a receipt in the Consolidated Fund of India (CFI), then it will be incidental to (a)-(f). For each one of these tribunals (in Schedule 8 of the Act), the total expenditure is up to 100 crores on salaries and allowances which are paid out of the CFI. Hence, the Finance Act is a money bill as it also comprehends in its scope a matter which is related to (a)-(f)"

"Further, the persons manning the tribunals which have been abolished have to be paid a certain amount and that is covered by section 185. They are entitled to a compensation not exceeding three months' pay and this comes to over a crore of rupees. Also, the balance of all monies received by such a Tribunal and not spent before its abolition shall stand transferred to the Central government. Now, the Central government can't hold money and as such, the entirety of the funds would go to the CFI by virtue of Article 266"

"The entirety of the salaries are being withdrawn from the CFI and the said receipts of the Central government are also being paid into it. 110(1)(c) deals with payments of money into or withdrawals from the CFI. But the (2017 Act's) provisions are not exclusively relatable to this and hence, I have to go to (g). With this, see 110(2). What is significantly omitted from clause (2) is salaries, allowances and pensions. While (a) has been excluded, (c) and (d) have been otherwise included (for qualifying as a Money Bill)", he continued.

"I am treating 110(2) as a proviso to clause (1). Because 110(1) starts by saying 'a bill shall be deemed to be a Money Bill' and (2) starts with 'a bill shall not be deemed to be a Money Bill'. So (2) is an exception to (1). If there is a bill regarding payments out of the CFI by way of salaries, allowances and pensions, it will come under a main provision of (1), which would be most appropriately (g)"

"These payments which are not excluded by 110(2) will necessarily be provisions incidental to and covered by the Finance Act...it has rightfully found a place in (g) as a matter incidental to any of the sub-clauses (a)-(f), specifically (c) and (d)".

Referring to section 7 of the Aadhaar Act of 2017, (which speaks of 'subsidies', 'benefits' and 'services' in respect of which expenditure would be incurred on the CFI and in view of which the Aadhaar Act was held to be a Money Bill by another five-judge bench last year), he advanced that even if it is not so specifically mentioned, there can't be a single case where a payment by the Central government would not involve a payment out of the CFI by virtue of Article 266. He pointed out that in the Aadhaar case, the majority was of the view that all other provisions of the Act are incidental to this Section 7 and thus, protected by Article 110.

"The amount which is involved is not the criteria- it may be 1000 crores or even 100 crores. 110 takes no note of it. But the Majority judgment (in Aadhaar) covers my case. There is a direct nexus between Part XXIV and the provisions of (g) read with (a) to (f), and accordingly, the Finance Act has been justly certified as a money bill...", he submitted.

Next, Mr. Venugopal addressed the claim of excess delegation to the Centre in respect of appointments, removal, qualifications, tenure and other conditions of service of the Presiding Officers and the Members of the Tribunals. In this behalf, He relied on the 1958 D. S. Garewal decision, where the argument of excess delegation under the All-India Services Act (section 3 of which empowers the Central Government to, after consultation with the state Governments concerned, make rules for the regulation of recruitment and conditions of service of persons appointed to an all-India service) did not find favour with a constitution bench of the apex court.

"The All-India Services Act (AIS) is an Act passed by the Parliament under Article 312(1) and it also provides for rules to be framed by the Central government", he averred.

He indicated certain other provisions of the Finance Act to the effect that the salaries, allowances and other conditions of service of the Chairperson and the Members shall not be varied to their disadvantage after the appointment; that in case of an amalgamation of tribunals, the officers and other employees shall be entitled to the same rights and privileges as to pension and gratuity; and that every rule framed under Part XXIV shall be laid down before the Parliament.

"We are facing the same situation as in the AIS Act. Services were governed by statutory rules under the government of India Act. When the constitution came, the parliament was authorised to make rules as to conditions of service and the delegation in that behalf was held to be valid", was his case.

At this juncture, Justice D. Y. Chandrachud reflected,

"The service conditions of all tribunals have been laid down by specific acts. What the finance act now does is that in respect of all acts in its 8th schedule, it makes a delegation to the Central government. The moment the Central government makes rules, they would prevail over the parent provisions, even as the acts still continue and are not amended. The moment the rules are framed, the non-obstante clause of 183 and 184 kicks in...the moment the Central government amends the schedule by an executive act, then again the parent act is superseded"

"The conditions of service would be only one part of all statutes- the overlapping of the rules would only be as to a minimal part...Even if a merger of tribunals takes place, neither would disappear- it would be just two tribunals being managed by one set of people...This would not be very different from what is happening under AIS...", replied the AG.

"The Constitution itself empowers the President and Governor to frame rules till the act is passed (under Article 309). But here, where the legislation has been passed, can you amend the Acts by rules?", asked Justice Sanjeev Khanna.

In response, The AG again sought to show that there is no over-delegation in as much as these rules framed by the Central government under the Finance Act are concerned-

"These are not Article 309 rules. For example, The industrial disputes act specifies the qualifications of the Chairman and the members, then rules would be made under that act for the purpose of the conditions of service, the tenure etc based on the nature of the tribunal.

"Over a period of two years, this court has examined the rules (under the Finance Act) and modified them and brought into existence an altogether new set of rules by a series of interim order", he iterated.

The AG, on Monday, also advanced how the persons recruited to man these Tribunals are lawyers, retired judges who are now practicing and accountants and how today they are all claiming a status equivalent to a High Court judge-

"Even in the Lokpal, houses, 4 Leave Travel Concessions and staff has to be assigned. The burden on the exchequer is huge!...Every committee is making such claims- 'Why the Secretary to the government of India gets a much lesser Leave Travel Concession while the others are getting four?'"

"There are claims because the Chairman of several of these Tribunals has to be a retired Supreme Court judge and the status of a Supreme Court judge has to be given to him. Because of this, the technical members also start claiming...a retired judge, once he completes his tenure, it is entirely unto him to take up an alternative employment...", observed Chief Justice Ranjan Gogoi.

In as much as a Selection Committee reviews the Members after the five-year tenure, the Chief Justice weighed in,

"Suppose a man gets into a tribunal and is not performing well from day 1. You would wait for 5 years? Why should incompetence be tolerated till then?"

"There also must be a sense of security. The other alternative is 3 years. But we can't change the conditions of service of those already holding office", replied the AG.

"Whether this is a money bill, it is not very difficult to decide. Similar is the issue of excessive delegation. You tried to bring in uniformity and in the process, there has been an encroachment by the rules, which you say have been corrected by interim orders. Now whether these tribunal rules which apply across the board are a breach of [unclear] is the question...Suppose there are twenty tribunals, it is desired to have uniformity as to the conditions of tenure, status and salaries. But what we have today is absolute un-uniformity from Tribunal to tribunal and even within...as for the tenures, if you wanted to bring him in a judicial officer at the age of 57 and give him a tenure of 3 years, Why would he come?", noted Chief Justice Gogoi.

"Some uniformity must be there. Some places, it (tenure) is 5 years, some places 3. Then there are differences of salaries. As it is, some tribunals are under operating under the old Acts, while others are under the new one", concurred Justice N. V. Ramana.

"Suppose Your Lordships decide that the decision of the Speaker as to the certification is final, or even if it is not final, the whole of the Act is upheld as a money bill, and even the contention of excessive delegation is rejected, then a smaller bench may hash out the discrepancies and monitor other aspects like the maintenance of independence, not giving of unacceptable benefits...These tribunals have come to stay and exercise the judicial powers of the State...However, If excessive delegation fails, then the parliament may frame the rules as suitable to Your Lordships...", suggested Mr. Venugopal.

The five-judge bench reserved its verdict on Tuesday.