Kerala High Court Scrutinizes Tribunal Reforms Act and Key DRT Appointments

The Kerala High Court is examining a significant writ petition challenging the constitutional validity of the Tribunal Reforms Act, 2021, and the appointments of judicial officers to the Debts Recovery Appellate Tribunal (DRAT) in Chennai and the Debts Recovery Tribunal (DRT) in Ernakulam, raising fundamental questions about the separation of powers and the independence of quasi-judicial bodies.

Kochi, India – In a move with far-reaching implications for the Indian tribunal system, the Kerala High Court has begun hearing a petition that strikes at the heart of the Tribunal Reforms Act, 2021. The petition, filed by M/s Jis International Exports Pvt. Ltd. and its directors, argues that recent appointments to key debt recovery tribunals violate foundational principles laid down by the Supreme Court, particularly concerning judicial independence from executive control.

The case, M/s Jis International Exports Pvt. Ltd. and Ors. v. Union of India and Ors. (WP(C) No. 37508/2025), specifically challenges the appointments of Retired Justice G. Chandrasekharan as Chairperson of the DRAT, Chennai, and Retired District Judge Su Williahm as the Presiding Officer of the DRT, Ernakulam. When the matter was heard on October 10, Justice Mohammed Nias C.P. made a crucial observation, stating, "Any measures taken by the respondents pending the writ petition will be subject to the result of the writ petition." This interim order signals the court's serious consideration of the issues at hand and protects the petitioners from potentially irreversible actions while the constitutional questions are adjudicated. The matter is scheduled for further hearing on November 3.

The Core of the Constitutional Challenge

The petitioners, represented by a legal team including Senior Advocate George Poonthottam and Advocate Nisha George, contend that the entire appointment process under the 2021 Act is fundamentally flawed. Their argument is anchored in the Supreme Court's landmark judgment in Rojer Mathew v. South Indian Bank Ltd. . In that case, the apex court had mandated that the selection and appointment process for tribunal members must be "judicially dominated" to ensure their independence. The Court also called for the establishment of an independent National Tribunals Commission (NTC) to oversee these appointments, thereby insulating tribunals from potential executive influence.

The petition alleges that these binding directives have been disregarded in the appointments of the concerned officials. The plea explicitly seeks a declaration that several key provisions of the Tribunal Reforms Act, 2021—specifically the proviso to Section 3(1) and Sections 3(7), 5, and 7(1)—are unconstitutional and ultra vires Articles 14 (Right to Equality), 21 (Right to Life and Personal Liberty, which encompasses the right to a fair trial), and 50 (Separation of judiciary from executive) of the Constitution of India.

Allegations of Executive Overreach and Lack of Impartiality

Beyond the procedural challenge to the appointments, the petition paints a troubling picture of the operational environment at the DRT, Ernakulam. The petitioners claim they have been denied a fair trial, asserting that the tribunal functions more like an "appendage to the Finance Ministry" than an impartial adjudicatory body.

This serious allegation is substantiated by claims that the Central Government has effectively usurped the supervisory function over the Debt Recovery Tribunals. The plea states, “The Central Government therefore has taken over the function of supervision of Debt Recovery Tribunals and this attitude of the Government has given an impression to the 5th respondent [DRT, Ernakulam] that it is duty bound to obey the directions of the Central Government and do all necessary to help the Bank to recover the debt without any adjudication.”

Further fueling these concerns is the submission that temporary staff at the DRT are sponsored by the lead national bank in the region. This arrangement, the petitioners argue, creates a clear conflict of interest and compromises the structural impartiality required of a judicial forum. Consequently, the petitioners have sought a writ of prohibition to prevent the Ministry of Finance from exercising any administrative control over the DRAT, Chennai, and have prayed for a directive to the Central Government to finally constitute the long-overdue National Tribunals Commission.

The Factual Matrix: A Debt Recovery Dispute

The constitutional challenge stems from a contentious debt recovery dispute between the petitioners and the Indian Overseas Bank. The petitioners had availed credit facilities, and upon an alleged default, the bank initiated recovery proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002. The bank issued a demand notice and took symbolic possession of six of the petitioners' properties.

The petitioners dispute the validity of the alleged mortgage. Their grievance escalated when the bank issued a prohibitory order to a tenant of the petitioner company, causing the tenant to cease rent payments. While a Securitisation Application (SA) challenging these actions was pending before the DRT, the bank proceeded to seek physical possession of the properties through the jurisdictional Magistrate Courts.

Faced with the lack of a regular sitting at the DRT and the imminent threat of losing physical possession, the petitioners initially approached the High Court, which granted a temporary stay to allow them to seek relief from the tribunal. However, the DRT granted only a conditional stay, contingent on the payment of approximately ₹5.4 crores. The petitioners allege that while their stay application was still being heard, the bank managed to obtain an order for physical possession, leading to further litigation and culminating in the present writ petition, which includes an interim prayer to halt all proceedings for taking physical possession of their properties.

Broader Implications for the Justice System

This case transcends the specific facts of a single debt recovery matter. It revitalizes the long-standing debate over the independence and efficacy of India's tribunal system. Tribunals were established to provide speedy and specialized justice, but their functioning has often been marred by concerns of executive interference, inadequate infrastructure, and appointment delays.

The Supreme Court, through a series of judgments including Madras Bar Association v. Union of India and Rojer Mathew , has repeatedly emphasized that tribunals, being quasi-judicial bodies that have taken over functions once vested in High Courts, must be free from executive dominance. The establishment of an NTC was envisioned as the institutional safeguard to achieve this.

The Tribunal Reforms Act, 2021, which was passed after the government's previous ordinance was struck down by the Supreme Court, has been criticized by many in the legal community for failing to adequately incorporate the Court's directions. This petition before the Kerala High Court now serves as a crucial test case for the Act's constitutionality. The outcome could either validate the current framework or compel the government to undertake significant legislative reforms to align the appointment and administrative mechanisms for tribunals with the constitutional principle of separation of powers. For legal professionals and litigants across the country, the court’s final decision will be a critical determinant of the future independence and integrity of tribunal-based justice in India.