When a tribunal gets benched

It is the known unknown in the field of law. When a member of a tribunal retires, his successor in office would be far from being identified. It matters not how premier the tribunal’s reputation, standing and indeed, relevance, is around the globe.

Last week, the Securities Appellate Tribunal (SAT) saw its presiding officer demit office. The tribunal had already been missing one member for several months. Its functioning is now grounded — no final hearings are possible. The only member left is not a “judicial member”. Until a judicial member joins the bench, only interim reliefs and admissions of new appeals can be handled by the SAT.

The SAT had begun life in 1995 as an appellate court to hear challenges over just monetary penalties imposed by the Securities and Exchange Board of India (Sebi), the capital market regulator. Since then, the SAT’s role has expanded steadily — first to hear all appeals against all orders of the Sebi, and in recent years, to hear appeals against all orders passed by the insurance and pensions regulator as well. Beginning life as a one-man bench, the SAT was expanded to comprise three members with a retired or sitting Supreme Court judge or Chief Justice of a High Court to act as the presiding officer. 

In terms of regulatory design, the SAT is meant to eventually play the role of a “financial sector appellate tribunal”. Unlike the Income Tax Appellate 

Tribunal (a well-known institution with a long legacy; in fact, a tribunal formed pursuant to an amendment to the Constitution of India), the SAT was formed through an amendment to the Sebi Act. Other Acts of Parliament conferred special jurisdiction on the SAT over time.

While the role of the SAT is quite significant — it is a vital check and balance over the expansive and wide-ranging scope of powers conferred on regulators whose orders can be appealed against — the institution has been at the receiving end of apathy in how vacancies are filled up. This is a universal trend without regard to the colour of the political parties in power at the Centre. Only once did a government take care to ensure that the presiding officer is appointed in time -- and that too perhaps because ministerial and political attention had been drawn by an incumbent resigning ahead of scheduled departure. 

Otherwise, every single retirement of a presiding officer or a member, although pre-scheduled and well known, is never backed up with proper succession planning.

When a judge is appointed to any court, his date of retirement is known. As night follows day, with the certainty of death being assured for every mortal born, not only is the demise of office well known but also the date of retirement is well known. However, succession planning is completely absent. This author has had occasion to file a writ petition in the Bombay High Court on one occasion — many years ago, the members of the SAT had retired one after another, leaving the presiding officer alone in office. With Parliament having expanded the structure of the SAT by converting it from one-judge tribunal to a multi-member tribunal, despite the then incumbent being a former Chief Justice of a High Court, his limbs had been cut off. 

Governments often take recourse to provisions of law that protect decisions of a tribunal taken in the absence of members due to unfilled vacancies. That is missing the woods for the trees. If one were to run state agencies efficiently, there simply cannot be an absence of advance planning to ensure the tribunals we create are also well-manned by judges.

The absence of planning is not the only fetter here. Bizarre propositions that are fundamentally violative of commonsensical human resource planning have developed. If a former judge were to be a member of a tribunal, the pension he gets would stand deducted from the salary paid for the new job. Such a proposition begs the question why anyone should be economically motivated to take up assignment as a member of the tribunal. Pension is consideration for service already rendered while the salary in the new job is consideration for work being done. But ask a bureaucrat and he would come up with multiple reasons and conditions of service to explain why the pension amount should be deducted from the salary. Someone up there has to think about how to amend these rules and bring in sensible conditions of service to attract the right talent. If one is sincere about working towards maximum governance and minimum government, this is a good place to apply oneself.

For now, financial sector regulators, wielding the power of civil courts with other civil courts’ jurisdiction being ousted in their favour, are at large, with just one conscientious member at the SAT being able to hear requests for urge  reliefs and interim measures. Not a happy place for ease of doing business.

The author is an advocate and independent counsel. Tweets @SomasekharS