Tribunals in Troubled Waters: Highlights of the IPAB Decision

Continuing from our earlier post breaking the news of the Madras High Court striking down key provisions of IPAB appointments as unconstitutional, we’ve now uploaded the actual text of the order here. Here are some of the key highlights of the decision (warning: long post follows)

1. Independence of the Judiciary/Separation of Powers

The court agrees with the main thrust of our petition that the current composition of the IPAB (and the eligibility criteria) poses a grave threat to the independence of the judiciary and the separation of powers doctrine under the constitution of India. Both these are sacrosanct norms that qualify as the “basic structure” of the constitution. The court draws from a long line of well-established precedents in this regard (including the recent NTT judgment) where the court comes down rather strongly on the government tendency to usurp judicial powers through tribunals).

2. A Reticent/Furtive Government That Failed to Make Amends?

The court more than amply indicates its displeasure with the government by referring to their stand as “reticent” and “furtive”:

“The stand taken in the counter affidavit qua the position of Committee on the understanding of the earlier decisions of the Supreme Court would only exhibit the conduct of the 1st respondent as reticent. The 1st respondent has looked at the decisions of the Supreme Court in a furtive manner.”

In particular, the court notes that it offered the government an opportunity to set this anomaly (in IPAB composition and selection criteria) right. Unfortunately, the government failed to do so, forcing the court to play its hand in terms of rendering a hard-hitting ruling on the merits.

“At this juncture, we may point out that during the course of hearing, we made a suggestion to the learned Additional Solicitor General to inform the 1st respondent to have a re-look at the impugned provisions and take remedial measures in the light of the two decisions referred supra. During the subsequent hearing, we were informed that the 1st respondent was not willing to undertake the said exercise. Accordingly, we proceeded to decide the matter on merits.”

3. Selection Panel Must be Predominantly Judicial

The court agrees with our latest petition (filed in 2014) that the selection committee for the selection of Vice Chairman (and other members of the IPAB) ought to be predominated by judicial minds and not stacked with executive picks. In fact, it was this latest petition and strategic thrust that effectively moved the main writ out of its long 4 year slumber and got us today to where we are. Kudos to Vineet Subramani for pushing this through so strategically and to Sai Vinod for all his painstaking RTI’s and research on a number of data points that we put together for this last mile fight. The court notes:

“The selection process has been left entirely to the Executive, though the functions of the Tribunal are judicial. This act is a direct affront to the basic structure, which is fundamental to the Constitution of India. The 1st respondent has totally overstepped and acted in disregard to the law laid down by the Supreme Court in Union of India Vs. R.Gandhi, President, Madras Bar Association, ((2011) 10 SCC 1) by turning a blind eye….. The Committee as it exists today is packed with an over-dose of Executive with the lone voice of the Chairman of IPAB is restricted to that of a member.”

The court therefore orders as below:

“The Constitution of the Committee for the appointment of members, both for the Vice-Chairman, Judicial Member and Technical Member is declared as contrary to the basic structure of the Constitution. In consequence thereof, the 1st respondent will have to re-constitute the Committee providing a predominant role in the selection process to the judiciary.”

4. Technical Adjudicator Must Still Have Legal/Judicial Wherewithal

The court agrees with our proposition that a technical member appointed to the IPAB also participates in the decision making process and is not therefore just a “technical” aid to the decision making process. But an active adjudicator on points of law, despite not possessing the requisite judicial competence. More egregiously, such a person becomes eligible to be Vice Chairman and then to even head the IPAB as “Chairman”. Therefore it is critical that the technical member have enough legal/judicial competence before he/she can be called upon to adjudicate on the IPAB.

To appreciate this point, some background is essential. Section 85 of the Trademarks Act stipulates that the following persons are eligible for appointment as technical members of the IPAB (trademarks).

“(a) has….held a post not lower than the post of a Joint Registrar for at least five years; or

(b) has, for at least ten years, been an advocate of a proven specialised experience in trade mark law.”

A government of India notification then goes on to provide that a Joint Registrar (trademarks) must possess the following qualifications:

”(i) Degree in Law from a recognised University; (ii) Twelve years practice at a Bar or Twelve years experience in a State Judicial Service or in the Legal Department of a State Government or of the Central Government or in the processing of applications for registration filed under the Trade Marks Act or Geographical Indications Act or in teaching law in a recognised University or Institute; OR Masters Degree in Law of a recognised University with ten years’ experience in teaching law or in conducting research in law in a recognised University or Research Institution.”

The court rules as under:

“In the present case, a technical member takes part on equal terms along with a judicial member in the decision making process. The qualification is also prescribed as 12 years of practice at the bar or 12 years experience in a State Judicial Service with a Degree in Law. With the above said qualification, along with other qualifications, there cannot be any difficulty in appointing such a person as a technical member. However, the problem would possibly arise when a person sought to be appointed as a technical member merely because he works in the Legal Department of a State Government or Central Government or involved in the process of applications for registration filed under the Trade Marks Act or Geographical Indications Act or in teaching law in a recognised University or Institute. Similarly, a Masters Degree in Law of a recognised University with ten years’ experience in teaching law that may be a qualification for appointment of a Registrar cannot be termed as a qualification requisite for appointment of a technical member. The Scheme of the Act also provides for the appointment of a technical member as a Vice Chairman and then as Chairman. Therefore such persons cannot be made eligible.”

The court however does not strike down section 85 (4) (a) of the Trademarks Act providing for the eligibility criteria, but reads it down to mandate that only a joint registrar with 12 years experience as a litigator or a civil judge would be eligible to be appointed as a technical member.

“Accordingly, we hold that under Section 85(4)(a), a person holding the post of not less than the post of Joint Registrar can be qualified for appointment as Technical Member only when he was appointed in the said post of Joint Registrar with 12 years of practice in a State Judicial Service or at the bar and not otherwise. …By adopting this methodology, this approach, we believe, would also uphold the confidence of public apart from increasing the efficiency of the Tribunal. Thus, Section 85(4)(a) of the Trade Marks Act, 1999 will have to be read down to make eligible only those who held a post not lower than the post of Joint Registrar with the qualification of practice at bar or experience in the State Judicial Service as desired in the Notification dated 17.2.2011 issued by the Ministry of Commerce and Industry.”

5. Whither Patent Technicalities?

Unfortunately, the court appears to have missed out on the fact that the “technical member” on the patents side also poses the same risk i.e. that of adjudicating on points of law despite not having the requisite legal/judical qualifications. And more egregiously that of being elevated as the Vice Chairman, and then as Chairman. My counsel, Vineet Subramani will be raising this as an issue of clarification before the court soon.

6. End of the ILS Mafia

For many of us who’ve watched the ILS mafia take over plum positions at various tribunals, the most welcome part of the ruling is the courts’ admonishment of this practice:

“….However high one may be in holding an Executive post, the role of a judicial member, being different, such a person cannot be asked to exercise the function particularly as a Judicial Member without any experience. …..merely because someone holds the post in a Government Department he cannot be bestowed with the eligibility of being appointed as a Judicial Member sans experience. Also such a person cannot be treated on par with a Judicial Officer. We do not understand as to how an Officer working with the Executive would satisfy the requirement of legal training and experience. In other words, when such an Officer cannot become a judge, he cannot also act in the said capacity. We only reiterate the reasoning assigned by the Supreme Court in this regard. Therefore, we have no hesitation in holding that Section 85(3)(a) is unconstitutional, particularly, in the light of the directions (i) and (ii) rendered in Union of India Vs. R.Gandhi, President, Madras Bar Association, ((2011) 10 SCC 1)…..”

The court therefore holds as below:

“Section 85(3)(a) of the Trade Marks Act, 1999, which provides for the eligibility of a member of the Indian Legal Service and has held the post of Grade I of that Service for at least three years for qualification for appointment to the post of a Judicial Member in IPAB, is declared as unconstitutional, being contrary to the basic structure of the Constitution” The court also holds that such ILS officers cannot be eligible to be considered for election to the post of Vice Chairman: “1) Sub-section 2(b) of Section 85, which provides for a qualification qua a member of Indian Legal Service who held the post of Grade I of service or of higher post at least five years to the post of Vice-Chairman is declared unconstitutional, being an affront to the separation of powers, independence of judiciary and basic structure of the Constitution.”

7. The CJI Consultation Process

Section 85 (6) of the Trademarks Act provides that: “No appointment of a person as the Chairman shall be made except after consultation with the Chief Justice of India.” The practice has been that the CJI recommends a person for consideration as Chairman and the name is then sent to the Appointments Committee of the Cabinet (ACC) for “approval”.

The court takes issue with this, noting that the consultation with the CJI does not mean that his recommendation must be “approved” by the ACC. The court notes:

“Learned counsel appearing for the petitioner submitted that an attempt is being made to sit over the decision of the Chief Justice of India by subjecting it to the approval of the appointment Committee of the Cabinet. Again, at the cost of repetition, we reiterate that the principle, as we understand in the decision rendered in R.Gandhi’s case, would govern this issue as well. The word ”consultation” has got a different connotation on different fact situations. If we are to interpret the same on the touchstone of separation of powers, judicial independence and basic structure, then the only irresistible conclusion that could be arrived at is that the view of the Chief justice of India in the appointment of Chairman should be taken note of in the proper perspective…..

….However, we have no hesitation in holding that the view of the Chief Justice of India on the choice of selection to the post of Chairman should be given due weightage. Thus, we hold that the procedure adopted in seeking ”approval” by the appointment committee of Cabinet is illegal. From the counter affidavit it is seen that the word ”consultation” has been taken as recommendations of the Chief Justice of India. Therefore, we can infer that the recommendations are being made by the Chief Justice of India. Thus, we hold that the recommendations of the Chief Justice of India should have primacy, subject to the approval of the President. Such a recommendation is required to be considered in its perspective in the normal circumstances.”

The court therefore orders as below:

“Recommendation of the Chief Justice of India to the post of Chairman should be given due consideration by the Appointment Committee of the Cabinet and the process does not involve any ”approval”.

The above propositions are unfortunately not worded in the clearest of terms and the court could have been a bit more explicit on this count.

8. Government Plea that NTT decision does not apply

The government took the ridiculous stand that since IPAB decisions are anyway reviewed by High Courts under Article 226/277, one need to worry too much about infusing the IPAB with judicial competence. The court naturally rubbished this plea noting that:

“A further submission has been made that as the power of judicial review is in tact under Articles 226 and 227 of the Constitution of India, the situation as that was prevalent in the decision rendered in (2014) 10 SCC 1 is not present in this case. The submissions made do not appeal to us. The determination before the IPAB is a judicial one. The IPAB is exercising judicial functions. Therefore, the principles spelt out from the decisions referred supra are applicable on all fours. Merely because a discretionary power of judicial review is available under Article 226/227 of Constitution of India to test the decision making process, it would not mean that the respondents are at liberty to have the composition of the Tribunal as they like violating the basic structure of the Constitution.

The High Court in its exercise of power either under Article 226 or Article 227 is not normally supposed to go into the inter se factual disputes between the parties, as the power of judicial review is required to be exercised only on the decision making process. Viewing from that angle, a decision of IPAB on the factual dispute acquires more significance. Therefore, the contentions raised are hereby rejected.”

9. Importance of the IPAB

The court notes the importance of the IPAB in the present commercial scenario, where the need for specialized and quick justice is paramount.

“The IPAB plays a pivotal role in resolving the commercial disputes. A good adjudicatory process is a sine qua non for the development of the Society, more so, in the filed of Commerce. With India being a rapidly developing Industrial nation, spreading its commercial activities, it is in national interest to have an adjudicatory forum satisfying the needs of various commercial entities. It also creates a good atmosphere of business development and industrial peace. It further enhances the reputation of our justice delivery system from the point of view of other countries. It brings forth an investor’s confidence. Hence, from the context of public interest also, the IPAB has got an eminent role to perform.”

10. Judicial Restraint vs Activism

While this judgment is a good one, it is also very cautious in tone and hones very close to established precedent and case law. In fact, I was very apprehensive of the court ruling at all on this, given that they offered a rather long leash to the government on our latest petition to strike down the committee (predominated by members of the executive) tasked with appointing the Vice Chairman. And appeared to be secretly hoping that the government would oblige. Here are some of the court’s propositions, noting that they are merely relying on past precedent and reading the provisions to arrive at a constitutionally valid result without necessarily legislating.

“Before we proceed with the matter on merits, we are alive to the extent of judicial review that can be exercised in a given case. While a Constitutional Court can declare a provision as unconstitutional, it should stop short of giving any direction to legislature to make an enactment in a particular way. Judicial restraint is being hailed as a virtue. However, we are dealing with a situation where directions have already been issued by the Supreme Court of India while dealing with the functioning of tribunals qua judicial independence and basic structure. The directions, in our considered view, are not recommendatory, but binding on the 1st respondent. If they are not followed in letter and spirit we are duty bound to see their proper implementation…..

….We are quite aware of the settled position of law that a Court of law is required to adopt a dignified reluctance before contemplating to enter upon the field earmarked for the Legislature or Executive, as the case may be. Composition of Search-cum-Selection Committee is the function entrusted to the 1st respondent. However, in the light of the principles deduced from the judgments of the Supreme Court referred supra, we may state with conviction that such a composition should exhibit the leading role of the judiciary. Thus, we feel that the 1st respondent may consider inclusion of judges from the higher judiciary signalling its greater participation, rather than filling the Committee from the Executive.”

11. So what happens now?

Given that the current technical members on the tribunal do not posses the requisite qualifications to sit in on the tribunal, are they to be ousted? What of all the earlier decisions rendered by them and their erstwhile colleagues (who suffered a similar eligibility infirmity). Under the doctrine of necessity, I’m given to believe that none of these earlier decisions are likely to be disturbed. And the existing appointments would to the best of my knowledge, continue unhindered. Senior counsel Aravind Datar (who argued this case probono for us) makes this point in a CNBC interview, aptly titled “The Tribunal Warrior”).

For other media reports on this case, see here and here.

Acknowledgements

Lastly, I have to again reiterate that this victory owes itself to the tireless work of a fantastic team of people who I’d mentioned in my earlier post. I have to really thank them again. Also kudos to Justice Sridevan, one of the very few tribunal heads with the courage and conviction to speak out openly against the legality of the tribunal. Her damning report (on the state of affairs at the IPAB) to the court as also her potent writings (in newspapers etc) helped the cause a lot!

And lastly, thanks to the stars above which aligned just right for us after four long years. The bench in Chennai changed, with Justice Sanjay Kishen Kaul taking charge and entertaining our petition challenging the latest round of prospective appointments at the IPAB (for the post of Vice Chairman). And even as the court appeared to give a long leash to the government, senior counsel Arvind Datar and Vineet Subramani forcefully advocated that the court decide quickly on merits. And then came the NTT case where the Supremes strongly condemned what they saw as an egregious usurpation of judicial powers by the executive. And not to forget the controversial JAC (Judicial Appointments Commission) legislation ushered in by the government, stripping the judiciary of their erstwhile exclusive right to pick from within. We couldn’t have asked for better timing!