IMPORTANT POINT
The Appellate Tribunal for Foreign Exchange (Recruitment, Salary and Allowances and Other Conditions of Service of Chairperson and Members) Rules, 2000 do not provide for part time Members.

Judgment :-

Dipak Misra, J.

1. 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 eligibility criteria as stipulated in the Act; and further to quash the appointment of respondent No. 3 to act as the Chairperson as he was a part time Member and also was not eligible to hold the post.

3. It was urged before the High Court that the Rule travels beyond the scope and ambit of the Act and, in fact, directly runs counter to the provisions in the Act and, therefore, deserves to be declared as ultra vires. It was canvassed that when the Act did not conceive of part time Members, even a person meeting the eligibility criteria could not be appointed as a part time Member. It was further propounded before the High Court that a part time Member who was disqualified to hold the post could not have been allowed to act as the Chairperson as that would destroy the spirit of the Act. To bolster the said submissions, the petitioners before the High Court placed reliance on Chander Mohan v. State of Uttar Pradesh and others [1967) 1 SCR 77], Shri Kumar Padma Prasad v. Union of India and others [1992) 2 SCC 428] and State of Maharashtra v. Labour Law Practitioners’ Association and others [1998) 2 SCC 688].

4. The contentions raised by the petitioners before the writ court were resisted by the respondent on the ground that the Members of Indian Legal Services were only required to hold the post of part time Member and, therefore, the rule does not really run counter to the Act in question; that as a stopgap arrangement, a part time Member could be appointed as the Chairperson of the Appellate Tribunal and hence, no facet could be found fault with such an appointment; and that a writ of quo warranto could not be issued as the persons, who were meeting the eligibility criteria had been appointed by a High Level Committee. Reliance was placed on the decision in Union of India and another v. Delhi High Court Bar Association and others [2002) 4 SCC 275].

5. The High Court declared the first and second proviso to Rule 5 of the Rules as ultra vires Section 21(1)(b) of the Act and quashed the appointments of respondent Nos. 3 and 4 who were appointed as part time Members and further quashed the appointment of respondent No. 3 as the acting Chairperson of the Appellate Tribunal.

6. We have heard Mr. R.P. Bhatt, learned senior counsel appearing for the appellants, and Mr. Mahabir Singh, learned senior counsel appearing for the contesting respondent.

7. The Parliament enacted the Foreign Exchange 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 App