Updated: The earlier post was drafted on the misconception that there is a steep increase in the salaries payable to the Tribunal Members. However, as this is not so, the post has been corrected. The error is regretted
The Ministry of Finance has issued a notification dated 1st June 2017 titled the “Tribunal, Appellate Tribunal and other Authorities (Qualifications, Experience and other Conditions of Service of Members) Rules, 2017” by which various conditions relating to the appointment of Tribunal Members (including the ITAT) have been specified.
While the President of the Tribunal is entitled to salary and allowances of Rs. 2,50,000 (fixed) per month, the Members are entitled to receive Rs. 2,25,000 (fixed) per month.
This is an increase from current Rs 2,25,000 (fixed) for President and Rs 2,05,000-3%- Rs 2,25,000 for Members and the Vice Presidents. The new Members will also not be eligible for any retirement gratuity (currently upto Rs 20,00,000) and regular family pension roughly equivalent to 50% of last salary.
Incidentally, since 2005, Government has introduced contributory pension, instead of regular family pension, for all Government servants including the ITAT Members. It may be mentioned that the salaries of the Members, VPs and President were last increased with effect from 1st January 2016 as a result of 7th Pay Commission.
However, there are several onerous conditions attached to the appointment of the Tribunal Members which is probably intended to justify the high salary.
The following are the salient terms of the new Rules:
Appointments by a Government Committee
At present the appointment of Members of the ITAT is done by a Committee headed by a senior judge nominated by the Chief Justice of India.
Under the new Rules, the appointment will be done by a Committee appointed by the Government.
There is no involvement of the higher judiciary in the appointment process which means that the various checks and balances to ensure that only worthy personnel are appointed have been dispensed with.
However, for the selection of VPs and President, Selection Committee will continue to be headed by a sitting Supreme Court judge nominated by the Chief Justice of India.
Fixed tenure of three years for new Members, Vice Presidents and President
Members will be appointed for a fixed period of three years. Thereafter, the Government has the discretion to extend the appointment by another three years.
It is not clear whether there is any scope to extend the appointment beyond the period of six years.
Ban on practice and taking up employment after end of tenure
The old Members, as on now, are not eligible to practice before the Tribunal in any part of the Country. This is a lifetime ban. However, there does not seem to be any such restriction for the new Members.
In addition, for a period of two years after the end of the tenure, the new Members are not entitled to take up employment with any entity which has been party to any litigation before the Tribunal. The bar does not apply to Government companies.
Two categories of Members will be created
The peculiar situation that will arise is that there will be two categories of Members in the Tribunal. The Members who are appointed prior to the Notification will continue to receive the existing salary which is slightly less than the new Members will receive a salary of Rs. 2,50,000 per month.
The old Members are subject to some of the onerous requirements that the new Members are subject to such as the ban on practice before the Tribunal.
For some reason, different retirement ages have been prescribed for different Tribunals.
While the retirement age of the President of the CESTAT is pegged at sixty seven years, the retirement age of the President of the ITAT is 65 years. On the other hand, the Chairman of the National Company Law Tribunal gets to retire at the age of seventy years.
The salary and allowances payable to the Chairperson/ President has been fixed at Rs 2,50,000 per month. Vice Presidents and Members are entitled to receive Rs 2,25,000 per month.
Appointment of Vice Presidents
If an ‘old’ Member of the ITAT is appointed to the post of Vice-President, the question arises whether he will be subject to the new Rules or will continue to be governed by the old service conditions. Once the old Members are appointed as Vice Presidents, their tenure may remain restricted to 3 years as VP and the reappointment will be at the discretion of the Government.
Comments/ suggestions invited
All stakeholders are requested to carefully consider the terms of the Rules and offer suggestions on whether they regard the terms to be beneficial to the ITAT or not.