C.W.P.No. 7606/2003 IN THE HIGH COURT OF DELHI Civil Writ Nos.7606/2003 and 1335, 1336, 1337, 1344 and 1345 of 2004 Date of Decision: -April )~ -, 2004 S.Srinivasan ................................................ Petitioner Through: Mr.V.Sudeer with Ms.S.Sunita, Advocate in CW.7606 of 2003 Mr.Jatinder .Kumar, Advocate in CWs. 13 3 5,13 3 6,13 3 7,13 44 and 1345 of 2004. Versus Union of India and others ...................... Respondents Through: Mr.Maninder Singh with Mr.Karan Bharioke, Advocates. Coram:- THE HON'BLE MR. JUSTICE B.C.PATEL, C.J. THE HON'BLE MR. JUSTICE BADAR DURREZ AHMED. Whether Reporters of local papers may be allowed to see the judgment. To be referred to the reporter or not? Whether the judgment should be reported in -the Digest? B.C.PATEL, C.J. 1 . In any civilized society rendering justice to its citizens is an elementary function of the State. Particularly, democracy would be on paper if I Digitally Signed By:AMULYA Certify that the digital file and physical file have been compared and the digital data is as per the physical file and no page is missing. Signature Not Verified C.W.P.No. 7606/2003 the country does not have an independent, adequate and effective judiciary. It is also an I accepted principle that there should be separation of the judiciary fromthe executive. Unfortunately, attempts are being made to have inroads effecting independence of judiciary by establishment of various tribunals and forums, which are under direct control of the executive. Now, the persons from executive are being posted as members of the Tribunals or as their Chairpersons. The whole purpose envisaged by the Constitution of having an independent separate judiciary is frustrated by taking away functions which are to be discharged by the civil courts and assigning the same to government departments or to Tribunals which are directly under the control of the executive and to make persons working in executive departments as part of the judiciary. It is required to be avoided for giving ample protection to the citizens under the law for saving the foundation of democracy. Let 4X F~ C.W.P.No. 7606/2003 \ there by no unison (combination) of the executive and the judiciary. .2. All the aforesaid petitions raise common questions and hence are disposed of by this common judgment. Status of the petitioner 3. The petitioner, S.Srinivasan, (in CWP 7606/2003) is a practicing Advocate in the Supreme Court for the last 23 years and for the proper functioning of the institutions, has filed this petition. He has specifically stated that he has no personal interest or grievance against any of the members of the Tribunal. However, he submitted that he is seriously concerned with the efficient functioning of the Appellate Tribunal for Foreign Exchange as a dispenser of justice to those charged under the said Act and strongly believes that gross violation of the provisions of the Act in the appointment of Members of the Appellate Tribunal for Foreign Exchange will, insteadi,of leading to dispensation of justice in W C.W.P.No. 7606/2003 accordance with law, result in miscarriage of justice to those approaching it for justice. Subject matter of a challenge 4. In C.W.No. 7606/2003, the petitioner has prayed to quash 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") as being ultra vires the Foreign Exchange Management Act, 1999 (hereinafter referred to as "the Act"); to quash a notification No. F.No. A. 110 11/ l/ 2000-Admn. IV (LA) dated 21.3.2001 (Annexure-P.2) issued by the Government of India, Ministry of Law, Justice and Company Affairs appointing respondent No.3, D.P. Sharma a part-time member, in exercise of powers under Rule 5 of the Rules; to quash a notification No. F.No. A. 110 11/ 1/ 2000-Amn.IV (LA) dated 22.3.2001 .(Annexure-P.3) issued by the Government of India, Ministry of Law and Justice, Department of Legal Affairs appointing 4 C.W.P.No. 7606/2003 respondent No.4, O.P. Nahar, as a part-time member, in exercise of powers under Rule 5 of the Rules; and to quash an Order No. 197 [No. F.No. A.11011/l/2000-Admn.IV (LA)l dated 21.5.2003 (Annexure-P.4) issued by the Government of India, Ministry of Law, Justice and Company Affairs appointing respondent No.3, D.P.Sharma, as a part-time member to act -as a Chairper . son. 5. In another petition being C.W.No. 1335/2004, it is prayed to quash Rules 1, 2, 3 and 5 of the Rules (Annexure-P.4) as ultra vires the rule making powers conferred under Section 46 of the Act as also contrary to the provisions of Section 20 of the Act; to quash the Standing Order No. 530 (E) dated 1.6.2000 known as the Foreign Exchange Management (Removal of Difficulties) Order, 2000 (Annexure-P.7) as ultra vires the powers conferred under Section 45 of the Act; to issue a writ of quo warranto or any other appropriate writ to quash an order No. 197 dated 21.5.2003, which is in t~ ) 14 violation of the provisions of Section 25 of the 5 rt"i "."k, ,f C.W.P.No. 7606/2003 Act; to quash notifications dated 21.3.2001 and 22.3.2001 (Annexures P-2 and P-3) and has also prayed for certain directions. Case Law relied upon by the parties 6. The learned counsel for the petitioner drew our attention to the reported decisions of the Apex Court in case of Shri Kumar Padma Prasad v. Union of India and others reported in (1992) 2 S.C.C. 428; Chander Mohan v. State of Uttar Pradesh and others reported in (1967) 1 S.C.R.77; State of Maharashtra v. Labour Law Practitioners' Association and others reported in (1998) 2 S.C.C. 688 and Salwan Public School v. D.K.Dass and others decided by a Division Bench of this Court, reported in 1982 D.R.J.397. On behalf of the respondents, the decision of the Supreme Court reported in the case of Union of India and Another v. Delhi High Court Bar Association and others reported in (2002) 4 SCC 275 was pressed into i service. Relevant Provisions 2 C.W.P.No. 7606/2003 Section 17 of the Act provides for an appeal to Special Director (Appeals). Section 18 of the Act empowers to establish an Appellate Tribunal to be known as the Appellate Tribunal for Foreign Exchange to hear appeals against the orders of the Adjudicating Authority and the Special Director (Appeals) under the Act. It is this authority, which has 1_1~ to act as the First Appellate Authority to hear the appeals against the orders of the Adjudicating Authorities. Section 20 of the Act refers to composition of Appellate Tribunal. Clause (b) of sub-section (2) of Section 20 makes a provision for a bench which may be 6 constituted by the Chairperson with one or more Members as the Chairperson may deem fit. Member is defined in sub -clause (s) of Section 2 of the Act, which reads as under:- "Member" means a Member of the Appellate Tribunal and includes the Chairperson thereof." Section 21 of the Act prescribes the qualifications for appointment of Chairperson, 7 C.W.P.No. 7606/2003 Member and Special Director (Appeals). The said section reads as under:- "Qualifications for appointment of Chairperson, Member and Special Director (Appeals) - (1) A person shall not be qualified for appointment as the Chairperson or a Member unless he - in the case of Chairperson, is or has been, or is qualified to be, a Judge of a High Court. in the case of a Member, is or has been, or is qualified to be, a District Judge. _14~ (2) A person shall not be qualified for appointment as a Special Director (Appeals) unless he - has been a member of the Indian Legal Service and has held a post in Grade I of that Service; or has been a member of the Indian Revenue Service and has held a post equivalent to a Joint Secretary to the Government of India. 9. Rule 2(l)(b) of the Rules reads as under: "2. Qualification for recruitment—(l) A person shall not be qualified for appointment as Chairperson or a Member unless he xxx xxx xxx in the case of a Member, is or has been or is qualified to be a district Judge." 1 0. Rule 5 of the Rules reads asunder: "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 8 V C.W.P.No. 7606/2003 the Indian legal Service who fulfill the qualifications prescribed under clause (b) of sub- rule (1) of rule 2 of these rules." Section 21 and Rules 2,3 and 5 In view of the language of Section 2 1 of the Act, it is very clear that a person who is or has been or is qualified to be a District Judge can be appointed as a Member. So far as the appointment as a Special Director (Appeals) is concerned, if one is a member of Indian Legal Service and has held a post in Grade I of that Service can be appointed as the Special Director (Appeals), in view of clause (a) of sub- section (2) of Section 2 1. The learned counsel for the petitioner, reading the provisions contained in Section 21 of the Act, submitted that a person who'is a Member of Indian Legal Service and has held a post in Grade I in that Service, then he can be appointed only as the Special Director (Appeals) and not as a Member or a part-time member. Learned counsel drew our attention to Section 46 of the Act, which empowers the Central W C.W.P.No. 7606/2003 Government to make rules to carry out the provisions of this Act. Reading the rules, learned counsel for the petitioner submitted that rule, making authority is entitled to make the rules to carry out the provisions of this Act and not otherwise. 14. Our attention was drawn to Rule 2, which refers to qualification for recruitment. Clause I (b) of sub-rule (1) of Rule 2 refers to appointment of a Member. Reading the language, learned counsel submitted that it is in consonance with the provisions of Section 21(l)(b) of the Act. He invited our attention to method of recruitment indicated in Rule 3. Rule 5 refers to composition of the Appellate Tribunal, which states that the Tribunal shall have one Chairperson and Members not exceeding four. However, the first proviso states that h_umber of either full time member or part time member shall not exceed two. The second proviso of Rule 5 states that part time member shall be appointed from amongst officers belonging to Indian Legal Service, who 10 C.W.P.No. 7606/2003 fulfills the qualifications prescribed under clause (b) of sub-rule (1) of Rule 2 of these Rules. According to learned counsel, proviso 1st and 2ndboth are contrary to the Act. 15. The rule making authority has traveled beyond the authority under the Act while making this rule. Learned counsel for the petitioner submitted that the concept of full time and part time member together has been incorporated for the first time. The Act does not provide the appointment of Member of Indian Legal Service as a Member of the Tribunal under clause (b) of sub-Section (1) of S. 21 of the Act. Section 21(2)(a) provides that a'member of the Indian Legal Service who is 46 holding a post in Grade I of that Service can be appointed as a Special Director (Appeals) but it does not say that such a person can be appointed as a Member. Clause (b) of sub- section (1) of Section 21 prescribes the qualification of a member. According to learned counsel, a person who is not qualified to be appointed as a Member, as indicated in C.W.P.No. 7606/2003 clause (b) of sub-section (1) of Section 21 of the Act, then such person cannot be appointed as a member and if the appointment is so made, it is required to be quashed. He further submitted that under the shelter of rules, which are ultra vires, if the appointment is made, the same is required to be quashed. He further submitted that the rules, which are contrary to the provisions contained in the act, must be quashed. - The learned counsel for the petitioner submitted that the Legislature's intention was that a person who is or has been or is qualified to be a District Judge be appointed as a member and if the rule making authority in contravention of this provision has made rules, then the rules must be struck down as ultra vires the Act. The Act does not provide for a full time as well as part time member. How the rule making authority can say that there shall be two full time members and two part time members and 12 C.W.P.No. 7606/2003 that the part time members shall be appointed from amongst the offi,cers belonging to Indian Legal Service, who fulfill the qualifications prescribed under clause (a) of sub-Section (2) of Section 21 of the Act, in contradistinction to the provisions contained in clause (b) of sub- rule (1) of Rule 2 as also clause (b) of sub- Section(l) of Section 21 of the Act. A person who is qualified to be appointed only as a special Director (Appeals) cannot be appointed as a member of the Tribunal by back door entry with the aid of Rule 5 which is ultra vires the provisions contained in Section 21(l)(b) of the Act and contrary to Rule 2 (1) (b) of the Rules. One who is or has been or is qualified to be a District Judge, alone can be appointed as a member. 18. It is at this juncture, learned counsel for the petitioner submitted that who could be a person qualified to be appointed as a District Judge? Our attention was drawn to Articles 233, 234 and 236 of the Constitution of India. 13 C.W.P.No. 7606/2003 The fact is that there are three independent wings, namely, judiciary, legislative and executive. It is.in view of the scheme of the Constitution of India, judicial independence is required to be maintained. Persons so recruited as subordinate judicial officers under Article 234 of the Constitution can be posted by way of promotion to the cadre of District Judge in the manner laid down in Article 233 of the Constitution of India or persons qualified as indicated in clause (2) of Article 233, can be appointed to the cadre of District Judge. On behalf of Union of India, Mr.Jashwant Singh, Under Secretary to the Government of India, Ministry of Law and Justice, Shastri Bhawan, New Delhi has filed an affidavit. In paragraph 15, it is pointed out that respondent No. 3 was enrolled as an advocate with the Bar Council of Delhi with effect from 5.5.1972 and practiced as an advocate up. to February, 1973. Thereafter he served as a Lecturer in Law, University of Delhi till June, 1976. 14 C.W.P.No. 7606/2003 Thereafter was working as Assistant Director, Institute of Company Secretaries of India up to 1978. From April 1978 to September, 198 1, respondent No. 3 worked as Deputy Director, Institute of Company Secretaries of India. From September, 1981 to September, 1982, respondent No. 3 worked as Assistant Company Secretary, DLF. From September, 1982 to August, 1990, respondent No. 3 worked as Law Officer, Employees Provident Fund Department. After August, 1990, respondent No. 3 started rendering his service as Additional Legal Advisor, Joint Secretary and Legal Advisor and Additional Secretary in A the Department of Legal Affairs. 2 1. So far as respondent No. 4 is concerned, it is submitted on behalf of the Union of India that he worked as a Metropolitan Magistrate in the Delhi Judicial Service from May, 19 .77 to March, 1978. Thereafter he worked as Junior/ Assistant Law Officer in the Law Commission, Ministry of Law and Justice till about January, V/ 1 FA 15 C.W.P.No. 7606/2003 1983. Since thereafter he is in Indian Legal Service. 22. In view of what . is stated above, it was submitted on behalf of the Union of India that these two respondents are qualified to be appointed as Judges of the High Court and hence can be appointed as a Chairperson or as a Member of the Appellate Tribunal in view of -7~( Section 20 of the Act. When a legislature made a specific provision for appointment of a member of Indian Legal Service and who has held a post in grade 1, as a special director ( Appeals), it is incorrect to say that such a person can be appointed as a A member of the Tribunal. In view of specific provision being made, it is not open to read the same as per one's convenience. On behalf of the respondent, it was submitted that the Indian Legal Service is constituted in accordance with the Rules and under Article 309 of the Constitution of India. Both the respondents No. 3 and 4 are Members of the Indian Legal Service. It was further submitted t 16 C.W.P.No. 7606/2003 that in view of the decision of the Apex Court in Delhi Hijgh Court Bar Association and others' case (Supra), the members of Indian Legal Service would be eligible for appointment to the Debt Recovery Tribunal. It is in view of this as well as in view of the Explanation (a) and (aa) to Article 217, the Members of Indian Legal Service fulfill the eligibility criteria for appointment of a High Court Judge. In Delhi High Court Bar Association's case (Supra), the Apex Court observed as under:- "It will be seen that that for a persons to be appointed as a Presiding Officer of the Appellate Tribunal he is, or has been, qualified to be a Judge of a High Court or has been a member of the Indian Legal Service who has held a post in Grade 1 for at least three years." It is in view of these observations, it was submitted that there is no need that a person qualified to be a District Judge should be strictly in accordance with the provisions contained in the Constitution of India. So far as the Recovery of Debts Due to Banks and Financial . Institutions Act, 1 1993 (hereinafter referred to as "the Recovery Act") is -k~' 17 C.W.P.No. 7606/2003 concerned, Section 5 provides qualifications for appointment as Presiding Officer. According to that section a person shall not be qualified for appointment as the Presiding Officer of a Tribunal unless he is, or has been, or is qualified to be, a District Judge. Parliament also provided qualifications for appointment as a Chairpers9n of the Appellate Tribunal in section 10 of the Recovery Act, which reads as under:- "Qualifications for appointment as Chairperson of the Appellate Tribunal - A person shall not be qualified for appointment as the Chairperson of an Appellate Tribunal unless he - is, or has been, or is qualified to be, a Judge of a High Court; or he has been a member of the Indian Legal Service and has held a post in Grade 1 of that service for at least three years;or has held office as the Presiding Officer of a Tribunal for at least three years." 27. In the present Act, a Member of Indian Legal Service, who has held post in Grade 1 in that service can be appointed as a Special Director (Appeals) while -in the Recovery Act, a person who has been a Member of Indian Legal Service and has held a post in Grade 1 of that service for at least three years, can be 18 C/ C.W.P.No. 7606/2003 appointed as the Presiding Officer of the Appellate Tribunal. Thus reading the two Statutes, it is very clear that in one Statute a person who is Member of Indian Legal Service is held to be qualified for appointment as the Presiding Officer of the Tribunal, it does not mean that in other Statute when he is qualified to be appointed as Special Director " 'M*~ (Appeals), he should be also held to be qualified for being appointed as a Member. It is required to be noted that in the Recovery Act, the functions of the trial court are discharged by the Debt Recovery Tribunal and the qualification prescribed for such a Tribunal is that of a District Judge. So far as the Appellate Tribunal is concerned, the qualification is prescribed in Section 10 of the Recovery Act while in the present Act, there is an adjudicating authority, the Special Director (Appeals), the First Appellate Authority and the Appellate Tribunal, Thus the provisions of both the Acts cannot be put at par. 19 C.W.P.No. 7606/2003 1W On behalf of the respondent, it was further submitted that Rule 5 of the Rules if perused, it becomes clear that it provides for appointment of a Member. as also Part Time Member. It is for the appointing authority to consider. , whether that person should be appointed as part time, full time or on a contract basis. It is required to be noted that the Act does not provide the rule making authority with any right to prescribe different type of appointment than indicated in the Act. It was submitted that the part time member was appointed as the Chairperson on account of administrative exigencies. It was stated 111~11 that selection process is not complete. If the appointment is quashed, then the Tribunal will have to be closed. It may be noted that the appointment must be in accordance with law and if the appointment is not in accordance with law, the same is required to be quashed. It was submitted on behalf of the petitioner in reply to the submissions made by the Union of 20 C.W.P.No. 7606/2003 'If India that a person who is not qualified to be appointed as District Judge, can he be appointed as a High Court Judge? Learned counsel for the petitioner submitted that in the Government of India Act, 1935, there was a provision, namely, Section 220(3). However, the framers of the Constitution thought it proper to provide different provisions for the appointment of a District Judge, a High Court Judge -and a Judge of the Supreme Court. It was submitted , that a distinguished jurist can be appointed as a Judge in the Supreme Court I but such is not the position for appointment in the High Court. He drew our attention to vl~_~ Section 220 of the Government of India Act, 1935. Clause (b) of sub-section (3) of Section 220 of the said Act reads as under:- "(3) A person shall not be qualified for appointment as a Judge of a High Court unless he - .......................................... is a member of the Indian Civil Service of at least ten years standing, who has for at least three years served as, or exercised powers of a district judge; or .......................................... 21 1 C.W.P.No. 7606/2003 3 1. It was submitted that the framers of the Constitution were of the opinion that judiciary and executive being separate, a person from executive cannot be brought in judiciary and, therefore, no similar provision has been made for appointment as a Judge of the High Court. Learned counsel for the petitioner drew our attention.to the Draft Constitution Article 193 and the proceedings dated 6 ,'.7.1949 of the Constituent Assembly of India. A proposal was made to add sub-clause (e), which reads a's under:- "(e) is a distinguished jurist." This was with a view to see that a distinguished jurist may be appointed as a High Court Judge. 32. At page 662 of the proceedings of the Constituent Assembly of India with regard to this aspect, it is pointed out as under:- "I have also made provision for the appointment of a distinguished jurist. When we have made this provision in the -case of the Supreme Court, I do not see why we should not provide that a distinguished jurist should be appointed as a Judge of the High Court also. I think, Sir that in view of the fact that the principle has already been accepted, this amendment