The judgment was delivered by a Bench of Chief Justice of India Ranjan Gogoi and Justices NV Ramana, DY Chandrachud, Deepak Gupta and Sanjiv Khanna wherein the Apex Court struck down the Rules framed under Section 184 of the Finance Act, 2017 by which the Centre sought to control the terms of services of members of Tribunals and Appellate Tribunals in its recent judgments.
The judgment was rendered in a batch of petitions challenging the Constitutional validity of Finance Act, 2017 and the Tribunal, Appellate Tribunal and other Authorities (Qualifications, Experience and other Conditions of Service of Members) Rules, 2017 (Rules).
In a significant direction, the Court also referred the challenge to the passage of the Finance Act, 2017 as a Money Bill to a larger Bench while dtriking down the rules framed under Section 184. While the Constitution Bench upheld the validity of Section 184, it has struck down the Rules framed thereunder. It has directed the Centre to reframe the Rules in consonance with the Supreme Court's judgment in R Gandhi v. Union of India case and referred to it.
The petitioners had challenged the Finance Act, 2017 particularly Part XIV on various grounds. One of the major grounds of contest to the Finance Act was on the ground that the same was passed as a Money Bill. Money Bills are those Bills which exclusively contain provisions for imposition of taxes and appropriation of moneys out of the Consolidated Fund. They can only be introduced in the Lok Sabha. The Rajya Sabha can only suggest amendments to money bills.
In the present case, all suggestions made by the Rajya Sabha regarding the Bill passed in the Lok Sabha were jettisoned, and the Act came into force on April 1, 2017 wherein it was the petitioners’ case that the passage of the Finance Act in the form of a Money Bill’ was entirely inappropriate and amounted to a fraud on the major document that is Constitution.
Regarding the Rules relating to appointment, service conditions and removal of the members of various tribunals, the petitioner had submitted that the same were in violation of the guidelines of laid down by the Supreme Court in R Gandhi v. Union of India.
Interestingly, the highest Court of record also heard the following issues which had been framed in the lead case – Rojer Mathew v. South Indian Bank Limited which is mentioned below:
Therefore after noticing all the documents and referring the lead cases the Supreme Court came down to a conclusion and held that passage of Finance Act as Money Bill to larger bench and it further strikes down Rules framed under Section 184.