UNION OF INDIA AND OTHERS versus S. SRINIVASAN

Citation: [2012] 6 S.C.R. 34 · Decided: 21-05-2012 · Supreme Court of India · Bench: B.S. CHAUHAN · Disposal: Disposed off

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
[2012] 6 S.C.R. 34 
UNION OF INDIA AND OTHERS 
v. 
S. SRINIVASAN 
(Civil Appeal No. 3185 of 2005) 
MAY 21, 2012 
[DR. 8.5. CHAUHAN AND DIPAK MISRA, JJ.] 
Foreign Exchange Management Act, 1999 - ss. 21(1}(b}, 
2(s), 46 - Appellate Tribunal for Foreign Exchange 
C (Recruitment, Salary and Allowances and other Conditions of 
Service of Chairperson and Members) Rules, 2000) - r. 5 first 
and second proviso -Appointment of part time members to 
the Appellate Tribunal for Foreign Exchange - Held: Part time 
members cannot be appointed to the Appellate Tribunal for 
D Foreign Exchange - If the object and purpose of the Act is to 
confer power on the Appellate Tribunal to deal with the issue 
of economy under the scheme of the Act, it is impossible to 
conceive of the appointment of a part time Member - It is 
manifest from s. 2(s) that there is no conception of a part time 
E member under the Scheme of the Act - First proviso to r. 5 
stipulates that the number of either full time Members or part 
time Members shall not exceed two - The introduction of the 
concept of part time Member, is contrary to the provision 
contained in the enabling Act - Also, s. 46 nowhere envisages 
F about the part time Members - Further, there is 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, 
G thus, 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 - High Court rightly held the 
first and second proviso tor. 5 as ultra vires s. 21(1)(b) and 
H 
34 
UNION OF INDIA v. S. SRINIVASAN 
35 
quashed the appointment of part time Members and the 
A 
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 - Disqualified 
Member cannot hold the post of a Chairperson as a stop gap 
B 
arrangement. 
Administrative Law - Rule making powers of a delegating 
authority - When ultra vires - Held: If a rule goes beyond the 
rule making power conferred by the statute, it has to be 
declared ultra vires - If a rule supplants any provision for C 
which power has not been conferred, it becomes ultra vires -
Basic test is to determine and consider the source of power 
relatable to the rule - Rule must be in accord with the parent 
statute as it cannot travel beyond it. 
Writ petitions were filed before the High Court 
seeking issuance of writ of quo warranto that Rule 5 of 
the Appellate Tribunal for Foreign Exchange (Recruitment, 
Salary and Allowances and Other Conditions of Service 
of Chairperson and Members) Rules, 2000 is ultra vires 
the Foreign Exchange Management Act, 1999; 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; and 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. The High Court held the first and second proviso 
D 
E 
F 
to Rule 5 of the Rules as ultra vires Section 21(1)(b) of 
the Act and quashed the appointments of respondent G 
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. 
Therefore, the appellants filed the instant appeals. 
Disposing of the appeals, the Court 
H 
36 
SUPREME COURT REPORTS 
[2012] 6 S.C.R. 
A 
HELD: 1.1 Rule 2(1 )(b) of the Appellate Tribunal for 
Foreign Exchange (Recruitment, Salary and Allowances 
and other Conditions of Service of Chairperson and 
Members) Rules, 2000) is in consonance with the 
provisions contained in the Act inasmuch as Section 
B 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 
C far as the number is concerned, the Act does not provide 
the number of Members and, therefore, the Central

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