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TMI Blog2012 (7) TMI 710X X X X Extracts X X X X X X X X Extracts X X X X ..... - - Dated:- 21-5-2012 - DR. B.S. CHAUHAN AND DIPAK MISRA, JJ. R.P. Bhatt for the Appellant. Mahabir Singh for the Respondent. JUDGMENT Dipak Misra , J. Calling in question the legal penetrability of the order dated April 12, 2004 passed by the Division Bench of the High Court of Judicature of Delhi in Writ Petition Nos. 7606 of 2003, 1335, 1336, 1337, 1344 and 1345 of 2004 by a common judgment, the present batch of appeals by way of special leave under Article 136 of the Constitution has been filed. 2. Though prayers in different writ petitions were couched differently, yet the three basic reliefs which were sought before the High Court are - Rule 5 of the Appellate Tribunal for Foreign Exchange (Recruitment, Salary and Allowances and Other Conditions of Service of Chairperson and Members) Rules, 2000 (hereinafter referred to as 'the Rules') is ultra vires the Foreign Exchange Management Act, 1999 (for brevity 'the Act); for quashment of certain notifications issued by the Government of India, Ministry of Law, Justice and Company Affairs, appointing part time Members of the Appellate Tribunal by issue of a writ of quo warranto as they did not satisfy the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge Management Act, 1999 repealing the Foreign Exchange Regulation Act, 1973 as a result of which the Appellate Board constituted under Section 52 of the 1973 Act stood dissolved. Thereafter, the new Appellate Board was to be constituted and, accordingly, it was constituted. Regard being had to the principal issue whether the Rule runs contrary to the main provision, it is condign to refer to Section 20 of the Act which deals with the composition of the Appellate Tribunal. It reads as under: - "20. Composition of Appellate Tribunal. -(1) The Appellate Tribunal shall consist of a Chairperson and such number of Members as the Central Government may deem fit. (2) Subject to the provisions of this Act, - ( a ) the jurisdiction of the Appellate Tribunal may be exercised by Benches thereof; ( b ) a Bench may be constituted by the Chairperson with one or more Members as the Chairperson may deem fit; ( c ) the Benches of the Appellate Tribunal shall ordinarily sit at New Delhi and at such other places as the Central Government may, in consultation with the Chairperson, notify; ( d ) the Central Government shall notify the areas in relation to which each Bench of the Appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Indian Legal Service and is required to have held a post of Grade I or that service or a member of the Indian Revenue Service as a post equivalent to Joint Secretary to the Government of India. Thus, a member of the Indian Legal Service who is qualified as per Section 21(2)(a) is entitled to be appointed as a Special Director (Appeal). 11. Section 16 of the Act provides for appointment of the Adjudicating Authority. Section 17 provides for appeal to the Special Director (Appeals). Section 18 provides for establishment of the Appellate Tribunal to hear the appeals against the order of the Adjudicating Authorities and the Special Director (Appeals) under the Act. Section 19 provides for appeal to the Appellate Tribunal and lays down the postulates as to what categories of appeals can be preferred. From the aforesaid provisions, it is quite inclined that there are three distinctive forums for adjudication and there is a hierarchical system. We have already referred to Section 20 which deals with the composition of the Appellate Tribunal. As is indicated hereinabove, Section 21(1) clearly lays a postulate as to what is the qualification for a Chairperson and that of a Member. Sub- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ( b ) in the case of a Member, is or has been or is qualified to be a District Judge." Rule 5 of the Rules reads as follows:- " Composition - The Appellate Tribunal shall have one Chairperson and Members not exceeding four: Provided that the number of either full time Members or part time Members shall not exceed two; Provided further that the part time Members shall be appointed from amongst officers belonging to the Indian Legal Service who fulfil the qualifications prescribed under clause (b) of sub-rule (1) of Rule 2 of these rules." 14. As far as Rule 2(1)(b) is concerned, there can be no trace of doubt that it is in consonance with the provisions contained in the Act inasmuch as Section 20 (1) confers power on the Central Government to constitute the tribunal consisting of one Chairperson and such number of Members. The said fixation of the number is in accord with the Act. Rule 5 provides that there would be one Chairperson and Members not exceeding four. As far as the number is concerned, the Act does not provide the number of Members and, therefore, as we have stated above, the Central Government under the Rules has the power to fix the number. There ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en held as follows:- "Before a rule can have the effect of a statutory provision, two conditions must be fulfilled, namely (1) it must conform to the provisions of the statute under which it is framed; and (2) it must also come within the scope and purview of the rule making power of the authority framing the rule. If either of these two conditions is not fulfilled, the rule so framed would be void." 17. In Addl. District Magistrate (Rev.) Delhi Admn. v. Siri Ram AIR 2000 SC 2143, it has been ruled that it is a well recognised principle that the conferment of rule making power by an Act does not enable the rule making authority to make a rule which travels beyond the scope of the enabling Act or which is inconsistent therewith or repugnant thereto. 18. In Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi AIR 1975 SC 1331, the Constitution Bench has held that the statutory bodies cannot use the power to make rules and regulations to enlarge the powers beyond the scope intended by the legislature. Rules and regulations made by reason of the specific power conferred by the statute to make rules and regulations establish the pattern of conduct to be followed. 19. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elines. Thus, by reason of such a provision alone, the regulation-making power cannot be exercised so as to bring into existence substantive rights or obligations or disabilities which are not contemplated in terms of the provisions of the said Act." 23. In the said case, while discussing further about the discretionary power, delegated legislation and the requirement of law, the Bench observed thus:- "The image of law which flows from this framework is its neutrality and objectivity: the ability of law to put sphere of general decision-making outside the discretionary power of those wielding governmental power. Law has to provide a basic level of "legal security" by assuring that law is knowable, dependable and shielded from excessive manipulation. In the contest of rule-making, delegated legislation should establish the structural conditions within which those processes can function effectively. The question which needs to be asked is whether delegated legislation promotes rational and accountable policy implementation. While we say so, we are not oblivious of the contours of the judicial review of the legislative Acts. But, we have made all endeavours to keep ourselves con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... institutional investors in our stock markets and the spectrum of world economy, the Act was brought into force to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of the foreign exchange market in India. To have a balance in the field of economic growth, the Parliament provided the hierarchical system under the Act itself. Section 20 deals with the composition of the Appellate Tribunal, the highest tribunal under the Act. Section 21 deals with the qualification for appointment of Chairperson, Member and Special Director (Appeals). Section 22 provides that the Chairperson and every other Member shall hold office for a term of five years from the date on which he enters upon office. Section 25 deals with resignation and removal. The removal can only take place by order of the Central Government on the ground of proved misbehaviour or incapacity after an inquiry made by such person as the President may appoint for this purpose in which the Chairperson or a Member concerned has been informed of the charges against him and given a reasonable opportunity of b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'has been' is concerned, there can be no cavil. The core of the controversy is the qualification associated with part time Member. Article 233 of the Constitution deals with the appointment of district judges. It provides for the qualification to be a district judge. It reads as follows:- "233. Appointment of district judges (1) Appointments of persons to be, and the posting and promotion of, district judges in any State shall be made by the Governor of the State in consultation with the High Court exercising jurisdiction in relation to such State (2) A person not already in the service of the Union or of the State shall only be eligible to be appointed a district judge if he has been for not less than seven years an advocate or a pleader and is recommended by the High Court for appointment." 30. To understand the real purport of the said Article in the present context, it is appropriate to refer to the decision in Satya Narain Singh v. High Court of Judicature at Allahabad [1985] 1 SCC 225. In the said case, a contention was advanced before a three-Judge Bench that there was no constitutional inhibition against members of any Subordinate Judicial Service seeking t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pointments of persons other than District Judges to the judicial service in accordance with the Rules made by him in consultation with the High Court. Article 235 vests control over district courts and courts subordinate thereto in the High Court. The judicial service whether at the level of district courts or courts subordinate thereto is under the control of the High Court in all respects. The subordinate judiciary which means the courts subordinate to the district courts consists of judicial officers who are recruited in consultation with the High Court. The district judges are recruited from amongst the members of the bar and by promotion from the subordinate judiciary. The judicial service in a State is distinct and separate from the other services under the executive. The members of the judicial service perform exclusively judicial functions and are responsible for the administration of justice in the State." Thereafter, their Lordships referred to Articles 233, 235, 236 and further referred in extenso to the Constitution Bench Judgment in Chandra Mohan ( supra ) and ultimately proceeded to state thus: "This court has thus authoritatively laid down that the appointment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oyer, then he ceases to be an advocate. " Thereafter, their Lordships opined that the expression used "from the bar" would only mean from the class or group of advocates practising in the courts of law. It does not have any other attribute. 33. We have referred to the aforesaid pronouncements to highlight who could be a person to be qualified to be a district judge. Rule 2 (1) (b) provides the qualification to be a Member. Needless to say, the same is in total accord with the Act. The first proviso to Rule 5 introduces part time Member. We have held that the said proviso, as far as it introduces the concept of part time Member, is contrary to the provision contained in the enabling Act. Section 46 of the Act nowhere envisages about the part time Members. The second proviso, we have already mentioned, is an innovative one. Thereafter, we have at length referred to the qualifications for a person to be a Member who is eligible to be a district judge. Once we have held that there cannot be a part time Member, a person who is qualified to be a district judge can be a Member if he meets the criterion laid down in the pronouncements of this Court. They are strictly followed. We rea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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