Case Note & Summary
The dispute arose from a challenge to the legality of certain appointments made under the Appellate Tribunal for Foreign Exchange (Recruitment, Salary and Allowances and Other Conditions of Service of Chairperson and Members) Rules, 2000. The appellants, Union of India and others, questioned the High Court's order declaring specific provisions of the Rules as ultra vires the Foreign Exchange Management Act, 1999. The High Court found that the Rules improperly introduced the concept of part time Members, which was not provided for in the Act. The appellants contended that the appointments were valid as they were made by a High Level Committee and that the Rules were within the scope of the Act. The Supreme Court, upon reviewing the provisions of the Act, particularly Sections 20 and 21, concluded that the Act did not allow for part time Members and that the High Court's ruling was justified. The Court emphasized that the qualifications for Members and the Chairperson were clearly defined in the Act, and any deviation through the Rules was impermissible. The Supreme Court also clarified that the judgments and orders passed by the Appellate Tribunal during the tenure of the invalidly appointed Members would not be rendered void, ensuring continuity and stability in the judicial process. The appeals were disposed of without any order as to costs.
Headnote
A) Administrative Law - Delegated Legislation - Ultra Vires Rule - Foreign Exchange Management Act, 1999, Section 20 - The High Court declared the first and second provisos to Rule 5 of the Rules as ultra vires the Act, as they introduced the concept of part time Members which is not envisaged by the Act. The Supreme Court upheld this finding, emphasizing that the enabling provision does not allow for part time Members, thus validating the High Court's decision (Paras 5, 28).
Issue of Consideration
Whether the provisions of Rule 5 of the Appellate Tribunal for Foreign Exchange (Recruitment, Salary and Allowances and Other Conditions of Service of Chairperson and Members) Rules, 2000 are ultra vires the Foreign Exchange Management Act, 1999.
Final Decision
The Supreme Court upheld the High Court's ruling declaring the first and second provisos to Rule 5 as ultra vires the Foreign Exchange Management Act, 1999. The Court clarified that the judgments and orders passed by the Appellate Tribunal during the tenure of invalidly appointed Members would not be rendered void.
Law Points
- Ultra vires
- Appellate Tribunal
- Foreign Exchange Management Act
- part time Members
- eligibility criteria
- judicial appointments
