Supreme Court Upholds: Abolition of Orissa Administrative Tribunal Constitutionally Valid

Supreme Court Upholds: Abolition of Orissa Administrative Tribunal Constitutionally Valid

The Supreme Court in an appeal against the judgment of the Orissa High Court, in a batch of writ petitions challenging the abolition of the Odisha Administrative Tribunal (‘OAT’), wherein the Court dismissed the writ petition, held that the abolition of the OAT was constitutionally valid.

The division bench comprising of Chief Justice Dr. DY Chandrachud and Justice Hima Kohli, rejected the challenge to the constitutional validity of the impugned notification dated 2 August, 2019 by which the OAT was abolished.

The brief background of the case is that in pursuance of the power conferred upon it by Article 323-A (1) of the Constitution of India, Parliament enacted the Administrative Tribunals Act 1985. Section 4(1) of the Administrative Tribunals Act provides that the Central Government shall establish an administrative tribunal known as the ‘Central Administrative Tribunal’ to adjudicate disputes concerning the recruitment and conditions of service of persons in connection with posts under the Union or All-India Service, including disputes with respect to remuneration, pension, tenure, leave, and disciplinary matters.

The appellants in this case are the OAT Bar Association and the Odisha Retired Police Officers’ Welfare Association. Both associations were registered under the Societies Registration Act 1860 (SR Act).

The Union Government had taken the recourse to Section 21 of the General Clauses Act, 1897 and abolished the OAT by issuing Notification GSR 552(E) dated 02-08-2019. Aggrieved by this, the appellants filed a writ petition before the Orissa High Court, wherein the Court held that Article 323-A is an enabling provision.

The impugned judgment stated, it does not make it mandatory for the Union Government to establish administrative tribunals or refrain from abolishing them once they are established. The decision to abolish the OAT is an administrative decision. There is therefore no bar to the Union Government invoking Section 21 of the General Clauses Act read with Section 4(2) of the Administrative Tribunals Act to rescind the notification establishing the OAT.

Following are the key issues addressed by the Apex Court:

Whether Article 323-A of the Constitution makes it mandatory for the Union Government to establish SATs?

The Court noted that Article 323-A and said that Clauses (1) and (2) of Article 323-A use the expression “may,” indicating that Article 323-A does not compel Parliament to enact a law to give effect to it. Parliament is entrusted with the discretion to enact a law which provides for the adjudication of certain disputes by administrative tribunals. It is a permissive provision. The provision is facilitative and enabling. However, in certain cases, the power to do something may be coupled with a duty to exercise that power.

Additionally, the Court listed down non-exhaustive factors which will aid courts in interpreting whether a provision is directory or mandatory, and said that Article 323-A does not specify the conditions in which the power to enact laws providing for the adjudication of certain disputes by administrative tribunals must be exercised. It therefore, cannot be said that Parliament was obligated to exercise this power upon the fulfilment of certain conditions.

Thus, the Court held that the word “may” in Article 323-A of the Constitution is not imparted with the character of the word “shall.” Article 323-A is a directory, enabling provision which confers the Union Government with the discretion to establish an administrative tribunal. The corollary of this is that Article 323-A does not act as a bar to the Union Government abolishing an administrative tribunal once it is created.

Whether Section 21 of the General Clauses Act can be invoked to rescind the notification establishing the OAT, thereby abolishing the OAT?

The Court observed, Section 21 of the General Clauses Act can be invoked when its application is not repugnant to the subject-matter, context, and effect of the statute and when it is in harmony with its scheme and object.

After analyzing the scheme of the Administrative Tribunals Act, the Court opined that this Act does not contain a provision and a corresponding procedure for the abolition of an SAT once it is established. However, this does not mean that the abolition of an SAT, once it is set up, is impermissible. Therefore, it held that there was nothing in the Administrative Tribunals Act repugnant to the application of Section 21 of the General Clauses Act.

Whether the abolition of the OAT is arbitrary and therefore violative of Article 14 of the Constitution?

In this regard, the Court noted that the State Government was not only concerned with the additional tier of litigation at the Orissa High Court but also with the expenditure incurred to operate the OAT as well as the rate at which the OAT disposed of cases. It was persuaded to abolish the OAT due to a combination of all these factors.

Further, the State Government’s act of consulting the Orissa High Court (upon receiving a request to this effect from the Union Government) before deciding to abolish the OAT was not irrelevant or extraneous. Thus, it held that the decision to abolish the OAT was not one which was so absurd that no reasonable person or authority would ever have taken it.

The Court referred the decision passed by Madhya Pradesh High Court Bar Assn. vs. Union of India, (2004), the Court held that the abolition of the OAT is not arbitrary or unreasonable. It does not violate Article 14 of the Constitution. Further, the notification dated 2 August, 2019 was not based on irrelevant or extraneous consideration.

Whether the abolition of the OAT is violative of the fundamental right of access to justice?

The Court emphasized that fundamental right of access to justice is no doubt a crucial and indispensable right under the Constitution of India. The High Court of Orissa has creatively utilized technology to bridge the time taken to travel from other parts of Odisha to Cuttack. Indeed, other High Courts must replicate the use of technology to ensure that access to justice is provided to widely dispersed areas.

Further, it said that the abolition of the OAT does not leave litigants without a remedy or without a forum to adjudicate the dispute in question. The litigants must approach the Orissa High Court for the resolution of disputes. It is therefore not violative of the fundamental right of access to justice.

Whether the Union and State Governments have violated the principles of natural justice by failing to provide the OAT Bar Association and the litigants before the OAT with an opportunity to be heard before arriving at a decision to abolish the OAT?

The bench observed, “the absence of a right to be heard before the formulation or implementation of a policy does not mean that affected parties are precluded from challenging the policy in a court of law. What it means is that a policy decision cannot be struck down on the grounds that it was arrived at without offering the members of the public at large an opportunity to be heard.”

The challenge to a policy may be sustainable if it is found to vitiate constitutional rights or is otherwise in breach of a mandate of law. Thus, it was held that the principles of natural justice have not been violated.

Whether the failure of the Union Government to conduct a judicial impact assessment before abolishing the OAT vitiates its decision to abolish the OAT?

The Court referred the decision passed in the Rojer Mathew vs. South Indian Bank Ltd., (2020) and said that the direction to conduct a judicial impact assessment was of a general nature. It was not geared towards proposals to abolish specific tribunals such as the OAT.

Thus, the Court held that failure to conduct a judicial impact assessment does not vitiate its decision to abolish the OAT. Nothing in the judgment in Rojer Mathew (supra) also indicated the need for the Union Government to obtain the permission of this Court before abolishing the OAT.

Whether the Union Government became functus officio after establishing the OAT?

The Court remarked that the decision to establish the OAT was administrative and based on policy considerations. If the doctrine of functus officio were to be applied to the sphere of administrative decision-making by the state, its executive power would be crippled. The state would find itself unable to change or reverse any policy or policy-based decision and its functioning would grind to a halt. All policies would attain finality and any change would be close to impossible to effectuate.

Thus, it held, the Union Government did not become functus officio after establishing the OAT because the doctrine cannot ordinarily be applied in cases where the government is formulating and implementing a policy.

In terms of the conclusions recorded, the Apex Court held that the judgment of the High Court shall stand affirmed and accordingly, dismissed the appeals.