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Calling for monumental changes in the appointment of judges, Arun Jaitley said currently there was no objective assessment of judges before appointment.
"Judicial activism is welcome but activism and restraint are two sides of the same coin," Mr Jaitley said.
Mr Jaitley also said the desire of a post-retirement job is a danger to the judiciary. "The temptation to occupy a Lutyen's bungalow is very serious," he commented.
Law Minister Kapil Sibal said there was no dispute that the present system did not work. "How judges are chosen, there is no access or transparency to that decision as the RTI does not apply. It is very sad the way in which the chachas and bhatijas (relatives) of some judges are practising in courts."
The Judicial Appointments Commission Bill gives the government a say in the appointment of judges of the Supreme Court and high courts.
The bill provides for a Judicial Appointments Commission (JAC) for appointing judges to the Supreme Court and 24 High Courts and also to recommend transfers.
Currently, judges for the higher judiciary are appointed by a Supreme Court collegium of five judges headed by the Chief Justice, a system implemented two decades ago.
The proposed commission will be headed by the Chief Justice and have the two most senior judges of the Supreme Court, the Law Minister and two eminent persons as members and Secretary (Justice) in the Law Ministry as Convener.
The BJP wants the Bill to be referred to the parliamentary standing panel.
The government had said the current system of appointing judges was flawed and had led to a huge shortfall in courts across the country.
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