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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 ..... 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 Chandra Mohan v. State of UP [1967] 1 SCR 77 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dinarily 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 Appellate Tribunal may exercise jurisdiction. (3) Notwithstanding anything contained in sub-section (2), the Chairperson may transfer a Member from one Bench to another Bench. (4) If at any stage of the hearing of any case or matter it appears to the Chairperson or a Member that the case or matter is of such a nature that it ought to be heard by a Bench consisting of two Members, the case or matter may be transferred by the Chairperson or, as the case may be, referred to him for transfer, to such Bench as the Chairperson may deem fit." On a perusal of the aforesaid provision, it is quite clear that the Appellate Tribunal shall consist of Chairperson and such number or Members as the Central Government may deem fit. 8. Section 2(s) defines a Member as follows: - ""Member" means a Member of the Appellate Tribunal and includes the Chairperson thereof;" On a studied scrutiny of the aforesaid provision, it is manifest that there is no conception of a part time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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-section (2) of Section 21 provides for the qualification of a Special Director (Appeals). At this juncture, we may refer to Section 46 which provides for the rule making power. It stipulates that the Central Government by notification makes rules to carry out the provisions of the Act. Section 46(2) states the nature of the rules to be framed by the Central Government. We think it appropriate to reproduce Section 46 of the Act as under: - "46. Power to make rules. - (1) The Central Government may, by notification, make rules to carry out the provisions of this Act. (2) Without prejudice to the generality of the foregoing power, such rules may provide for, -- (a) the imposition of reasonable restrictions on current account transactions under section 5; (b) the manner in which the contravention may be compounded under sub-section (1) of section 15; (c) the manner of holding an inquiry by the Adjudicating Authorities under sub-section (1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 cannot be any kind of cavil over the same. The High Court has perceived, as we have seen from the impugned judgment, difficulty in accepting the validity of the two provisos of the said Rule. The first proviso lays a postulate that the number of full time Members or part time Members shall not exceed two. The concept of part time Member has been introduced by the rule making authority. The second proviso states 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. The submission of Mr. Bhatt, learned senior counsel, is that when Rule 2(1)(b) clearly lays down that a Member is or has been qualified to be a district judge and that has been referred to in the second proviso for the part time Members, the same could not have been declared as ultra vires by the High Court. The learned senior counsel would further submit that the term 'Member' woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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. In State of Karnataka v. H. Ganesh Kamath AIR 1983 SC 550, it has been stated that it is a well settled principle of interpretation of statutes 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. 20. In Kunj Behari Lal Butail v. State of H.P. AIR 2000 SC 1069, it has been ruled thus:- "13. It is very common for the legislature to provide for a general rule making power to carry out the purpose of the Act. When such a power is given, it may be permissible to find out the object of the enactment and then see if the rules framed satisfy the test of having been so framed as to fall within the scope of such general power confirmed. If the rule making power is not expressed in such a usual general form then it shall have to be seen if the rules made are protected by the limits prescribed by the parent act... " 21. In St. Johns Teachers Training Institute v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are not oblivious of the contours of the judicial review of the legislative Acts. But, we have made all endeavours to keep ourselves confined within the well-known parameters." 24. In this context, it would be apposite to refer to a passage from State of T.N. v. P. Krishnamurthy [2006] 4 SCC 517 wherein it has been held thus:- "16. The court considering the validity of a subordinate legislation, will have to consider the nature, object and scheme of the enabling Act, and also the area over which power has been delegated under the Act and then decide whether the subordinate legislation conforms to the parent statute. Where a rule is directly inconsistent with a mandatory provision of the statute, then, of course, the task of the court is simple and easy. But where the contention is that the inconsistency or non-conformity of the rule is not with reference to any specific provision of the enabling Act, but with the object and scheme of the parent Act, the court should proceed with caution before declaring invalidity." 25. In Pratap Chandra Mehta v. State Bar Council of MP [2011] 9 SCC 573, while discussing about the conferment of extensive meaning, it has been opined that the Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chairperson or a Member concerned has been informed of the charges against him and given a reasonable opportunity of being heard in respect of such charges. Section 26 provides the Member to act as a Chairperson in certain circumstances. The senior most Member has been empowered to act as Chairperson until the date on which a new Chairperson is appointed in accordance with the provisions of the Act. 27. On a scrutiny of the objects and reasons, the purpose and various provisions of the Act, it is graphically clear that the Appellate Tribunal has been conferred jurisdiction to decide an appeal from the Appellate Tribunal and it has to deal with matters relating to foreign exchange. A fixed tenure has been stipulated for the Chairperson and Members. A Chairperson can continue up to the age of 65 years and the age of retirement of a Member is 62 years. They are entitled to resign subject to certain conditions and they can be removed on proven misbehaviour or incapacity. Thus, if the object and purpose of the Act is to confer power on the Appellate Board to deal with the issue of economy under the scheme of the Act, it is well nigh impossible to conceive of the appointment of a part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere was no constitutional inhibition against members of any Subordinate Judicial Service seeking to be appointed as district judges by direct recruitment provided that they had completed 7 years' practice at the bar. It was also urged that if a construction is placed on Article 233 of the Constitution which would render a member of Subordinate Judicial Service ineligible for appointment to the Higher Judicial Service because of the additional experience gained by him as a Judicial Officer, the same would be both unjust and paradoxical. Their Lordships referred to Article 233 and came to hold that the first clause of Article 233 deals with "appointment of persons to be, and the posting and promotion of, district judges in any State" while the second clause is confined in its application to persons "not already in the service of the Union or of the State". The Bench opined that the service of the Union or of the State has been interpreted to mean "Judicial Service". It was further stated therein in the case of candidates who are not members of Judicial Service that they must be advocates and pleaders for not less than 7 years and they have to recommended by the High Court before they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thus: "This court has thus authoritatively laid down that the appointment of district judges under Article 233 (2) can only be from the judicial service of the State as defined under Article 236 (b) of the Constitution." 32. In Sushma Suri v. Govt. of National Capital Territory of Delhi [1999] 1 SCC 330, a three-Judge Bench was dealing with the issue about the eligibility of a person who is on the roll of any bar council and engaged either by the employer or otherwise of the Union or the State to be considered for the post of district judge as provided under Article 233 (2) of the Constitution. The Bench referred to the Rules framed by the High Court, the decisions in Chandra Mohan (supra) and Satya Narain Singh (supra). Section 2(a) of the Advocates' Act and Rule 49 of the Rules framed by the Bar Council and posed the issue as follows:- "If a person on being enrolled as an advocate ceases to practise law and takes up an employment, such a person can by no stretch of imagination be termed as an advocate. However, if a person who is on the rolls of any Bar Council is engaged either by employment or otherwise of the Union or the State or any corporate body or person practises befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this Court. They are strictly followed. We really perceive no justification for the introduction of the second proviso to bring in officers from the Indian Legal Service who are qualified to become district judges to be part time Members. If the officer satisfies the requisite qualification, he can be appointed as a Member. Therefore, in our consideration, the second proviso has been incorporated to bring in only part time Members and once the introduction of part time Members is treated to be ultra vires the Act, the rest part of the Rule is absolutely redundant. To repeat at the cost of repetition, if the officer belonging to Indian Legal Services is qualified to be a district judge, he can compete and be selected for the post of Member and that qualification is to be in accord with the pronouncements of law of this Court. 34. The High Court, as we find, had quashed the appointment of part time Members and the appointment of Chairperson who was a part time Member once. As the appointment of part time Member was quashed, as a logical corollary, such a person could not be allowed to be appointed to the post of Chairperson. To elaborate; the disqualified Member cannot hold the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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