Supreme Court Strikes Down Tribunal Reforms Act 2021

The Supreme Court’s November 2025 judgment invalidated key parts of the Tribunal Reforms Act, 2021. This marks another chapter in a three-decade-long tussle between the judiciary and legislature over the structure and staffing of tribunals and regulators. The ongoing cycle of legislative changes followed by judicial invalidations has stalled reform efforts and weakened institutional credibility in India.

Historical Context of Tribunal Reforms

For over thirty years, courts have repeatedly found legislative attempts to reform tribunals constitutionally flawed. Parliament responds with amendments, but these are often marginal and fail to address core issues. This back-and-forth creates a cycle where neither branch gains lasting primacy. The executive plays a key role in shaping and defending these reforms, adding complexity to the institutional dynamics.

Institutional Design and Turf Wars

India’s experience shows tribunals and regulators are often designed around turf battles rather than functional needs. The Competition Commission of India case in the early 2000s exemplifies this. The creation of a separate appellate tribunal was driven by power struggles instead of effective design. This led to lost years in building regulatory expertise and jurisprudence.

Mismatch Between Purpose and Practice

Regulators and tribunals are intended to operate differently from traditional ministries and courts. However, executives treat regulators as administrative wings, while the judiciary views tribunals as subordinate courts. Appointing retired bureaucrats and judges reinforces these patterns. This results in institutions that mimic existing systems rather than innovating for specialised mandates.

Challenges in Regulatory Independence

Although legal frameworks since 1995 allow regulators to frame rules without prior government approval, many regulations still require it. This reluctance to grant autonomy undermines the rationale for independent regulators. The persistent oscillation between control and independence reveals a lack of consensus on the role of these bodies.

Tenure and Capacity Issues

Tribunal members typically have short, post-retirement terms of three to five years. This hampers the development of expertise and institutional memory. Regulators perform better due to professional secretariats and longer tenures. The debate over extending tribunal terms misses the need for recruiting mid-career professionals with fixed retirement ages to build long-term capacity.

Need for Evidence-Based Institutional Reform

India now has enough experience to conduct a comprehensive study of how regulators and tribunals function. An evidence-driven approach should map workloads, decision processes, and organisational capacity. Such data can identify best practices and structural weaknesses. Reforms must be based on this analysis rather than ad hoc legislative fixes.

Principles for a Coherent Regulatory Architecture

A mature regulatory state requires a common design template with clear functions, robust governance, calibrated independence, fixed retirement tenures, transparent recruitment, ethics rules, and professional secretariats. These principles should be adapted to each institution’s context rather than copying ministries or courts. Institutional design must prioritise capability and independence over hierarchy or inheritance.

Breaking the Cycle of Institutional Drift

Only by grounding reforms in evidence and functional purpose can India end the cycle of judicial invalidations and legislative patchwork. A genuinely independent regulatory state is essential for effective governance and sustained reform momentum.

Questions for UPSC:

1. Critically analyse the role of the judiciary in shaping institutional reforms in India with suitable examples.
2. Explain the importance of regulatory independence in governance. How does it impact policy implementation?
3. What are the challenges in designing effective regulatory bodies? Comment on the balance between independence and accountability.
4. With reference to India’s experience, discuss the impact of short tenure appointments on institutional capacity and continuity.

Answer Hints:

1. Critically analyse the role of the judiciary in shaping institutional reforms in India with suitable examples.

1. The judiciary has repeatedly invalidated legislative attempts to reform tribunals, citing constitutional flaws (e.g., Tribunal Reforms Act, 2021).
2. This judicial scrutiny enforces constitutional compliance but often leads to cycles of reform and invalidation, stalling progress.
3. Example – Competition Commission of India’s bifurcation reflected turf wars influenced by judiciary and bureaucracy, delaying regulatory development.
4. Judicial primacy ensures protection of institutional independence but can clash with legislative intent and executive roles.
5. The judiciary’s insistence on constitutional principles shapes institutional design but may not always align with practical governance needs.
6. Overall, the judiciary acts as a guardian of constitutional norms but sometimes contributes to institutional uncertainty and reform inertia.

2. Explain the importance of regulatory independence in governance. How does it impact policy implementation?

1. Regulatory independence allows regulators to frame rules without undue executive or political interference, ensuring impartiality.
2. It encourages specialized expertise and consistent decision-making, essential for complex sectors like competition, environment, and finance.
3. Independent regulators can enforce policies effectively, enhancing credibility and investor confidence.
4. Lack of independence leads to prior government approvals, causing delays and weakening regulatory authority.
5. Regulatory autonomy helps balance competing interests and reduces capture by bureaucratic or political interests.
6. Ultimately, independence improves policy implementation by enabling timely, expert, and unbiased regulatory actions.

3. What are the challenges in designing effective regulatory bodies? Comment on the balance between independence and accountability.

1. Challenges include ensuring long-term institutional capacity amid short tenures and post-retirement appointments.
2. Design often influenced by turf battles rather than functional needs, undermining effectiveness.
3. Maintaining independence while ensuring accountability requires transparent recruitment, clear governance, and ethical frameworks.
4. Excessive executive control compromises independence; unchecked autonomy risks lack of accountability.
5. Effective bodies need calibrated mechanisms – fixed retirement ages, professional secretariats, and performance oversight.
6. Balancing independence and accountability ensures regulators act impartially yet remain answerable to law and public interest.

4. With reference to India’s experience, discuss the impact of short tenure appointments on institutional capacity and continuity.

1. Short terms (3-5 years), often post-retirement, hinder development of expertise and institutional memory.
2. Frequent turnover disrupts policy continuity and weakens long-term strategic planning.
3. Short tenures discourage mid-career professionals from joining, limiting fresh talent and innovation.
4. Regulators with dedicated secretariats and longer tenures perform better in capacity building.
5. Fixed retirement-based tenures linked to age can improve stability and professional growth.
6. Overall, short appointments contribute to institutional drift and undermine the effectiveness of tribunals and regulators.