Finance Bill: Rationalised Tribunals, Irrational Tribulations

Whether the Modi government can succeed in assuring the independence of India's tribunals from the executive remains to be seen.

A finance Bill is a money Bill tabled every year by the government along with the Union Budget and requires substantive assent solely from the Lok Sabha. The Finance Bill, 2017 has been hotly debated since it was first presented by finance minister Arun Jaitley at the Lok Sabha on February 1, 2017. A second money Bill, passed by the Lok Sabha, two weeks ago, is proving to be no less controversial.

The Bill substantially amends the Finance Bill, 2017 and a slew of other legislations ranging from environmental law to information technology and copyright. 

Significantly, it substantially alters 19 ‘tribunals’ and dissolves several others. The list of abolished tribunals includes the much-criticised Cyber Appellate Tribunal (CyAT) under the Information Technology Act, 2000 (IT Act), whose powers now reside with the Telecom Disputes Settlement Authority of India (TDSAT). As noted in a 2016 report by the comptroller and auditor general of India, as well as a 2015 parliamentary standing committee report, the post of the CyAT chairperson remained vacant since 2011, as a consequence of which none of the pending appeals could be heard or disposed. Thus, it is safely presumed that the CyAT will not be missed.

The same cannot be said, however, regarding the Bill’s handling of the Copyright Board. While the Copyright Board was no more functional than the CyAT, the similarities end there. The Copyright Board is being unceremoniously abolished with its functions and powers transferred to the Intellectual Property Appellate Board (IPAB) established under the Trade Marks Act, 1999. While both boards are charged with serving as the first appellate body under their respective acts, the powers vested in the Copyright Board are far wider than the powers of the IPAB under the Trade Marks Act, the Geographical Indicators (GI) Act, 1999 and the Patents Act, combined.

The IPAB was constituted in 2003 and eventually grew to include appellate functions against the orders of the registrar of trade marks, the registrar of GIs and the controller of patents. The IPAB’s original jurisdiction extends to cancelling or rectifying registered trademarks, GIs and patents. Similarly, a major function of the Copyright Board is to hear appeals against the registrar of copyrights. However, along with rectification, the Copyright Board also holds the original jurisdiction for granting compulsory licenses over work that is withheld from being published/broadcast by the copyright holder, if it deems fit for a range of reasons, including for the benefit of the disabled. It also has the power to grant licenses for cover versions of original work, re-broadcasting and translations as well as determine the royalty applicable while granting such license. The Copyright Board is further charged with determining the term of copyright in certain cases such as in other jurisdictions in relation to India, and investigating and determining disputes over assignment of copyright.

The Copyright Board’s wide powers were partially the stimulus for lengthy litigation over its composition and for ensuring its proper functioning, including suo moto proceedings by the Delhi high court. The last among these, by ‘South Indian Music Companies’, was disposed a year earlier by the Madras high court, which lay down a roadmap for invigorating the Copyright Board. Before last week, every stakeholder in the copyright ecosystem, from the Department of Industrial Policy and Promotion (DIPP) to industry and civil society, was preparing for the constitution of the Copyright Board with requisite expertise and judicial independence. A week later, the amendments to the Finance Bill have raised more questions than were resolved in any previous litigation. At this stage, only the bill, with its cosmetic amendments that abolish the Copyright Board is available for public scrutiny. Without the rules and substantive amendments required to veritably enable the transition, there is little that is certain regarding the future of the copyright-based industry, except continued uncertainty.

The transfer of new subject-matters to existing tribunals is by no means an unprecedented practice in India. Illustratively, the TDSAT’s jurisdiction was doubled in 2004 when the mandate of broadcasting services was included as a telecommunication service under the Telecom Regulatory Authority of India Act, 1997 (TRAI Act) without materially amending the TRAI Act or TDSAT’s composition. However, the ensuing situation that has persisted for over a decade spurred Justice Aftab Alam, the last chairman of TDSAT, to observe that, “80%–85% of cases in the broadcasting services are based on fact-based issues and hardly involve any legal concern. Legal issues of low importance are likely to be best dealt with at the local level, and it is worth contemplating if they call for a tribunal comprising retired judges of the Supreme Court and experts in telecommunication”.

A 2016 report by Vidhi Centre for Legal Policy, published on the request of Justice Alam, found that between 2013 and 2016 the TDSAT exercised its original mandate of adjudicating on telecommunications appeals only once out of nearly two thousand cases due to the sheer volume of petty recovery petitions from the broadcasting sector. Thus, whether the TDSAT can reasonably shoulder the additional mandate of the CyAT as well as the Airports Economic Regulatory Authority Appellate Tribunal (AERAAT) while also effectively regulating its original mandate of the telecommunications sector is also uncertain.

A more fundamental amendment introduced by the Bill concerns the qualifications, appointment, service terms and conditions, allowances, etc, of chairpersons, vice-chairpersons and members of the amended tribunals. In other words, the Bill also alters the very reason the Copyright Board had remained dysfunctional and unpopulated – the composition and appointment of key members. Determined by the Madras high court to have been unconstitutional, last year, unless done entirely in consultation with the chief justice, the same question is once again garbed in suspense and stakeholders are required to await further rule-making by the government.

Whether the government can succeed in assuring the independence of the tribunal from the executive – a requirement that is part of the basic structure of the constitution and cannot even be amended out of it, through new rules (a decidedly executive-centric instrument) – remains to be seen. However, if the government fails to do so, the newly empowered tribunals may go back to being respondents in further litigation rather than reliable specialised forums for speedy dispute resolution. 

 Prachi Arya is head of Legal, Koan Advisory, Delhi. This article presents the private views of the author and not those of her institution or its clients.