Page 1 Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No. 3185 OF 2005

Union of India and others ….. Appellants

Versus

S. Srinivasan … Respondent

WITH

CIVIL APPEAL NOS. 3186-3190 OF 2005

Union of India and others ... Appellants

Versus

Saroj Kumar Shukla and others ... Respondents

J U D G M E N T

Dipak Misra, J.

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,

Page 2 2

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

Page 3 3

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

1

, Shri Kumar Padma

Prasad v. Union of India and others

2

and State of

Maharashtra v. Labour Law Practitioners’ Association and

others

3

.

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

1

(1967) 1 SCR 77

2

(1992) 2 SCC 428

3

(1998) 2 SCC 688

Page 4 4

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

4

.

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

4

(2002) 4 SCC 275

Page 5 5

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 Appellate Tribunal.-(1) The

Appellate Tribunal shall consist of a Chairperson

and such number of Members as the Central

Government may deem fit.

(2)Subject to the provisions of this Act, -

(a)the jurisdiction of the Appellate Tribunal

may be exercised by Benches thereof;

(b)a Bench may be constituted by the

Chairperson with one or more Members as

the Chairperson may deem fit;

(c)the Benches of the Appellate Tribunal shall

ordinarily 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.”

Page 6 6

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 Member under the

scheme of the Act.

9.At this juncture, it is profitable to refer to Section 21 of the

Act that provides for qualification for appointment of

Chairperson, Member and Special Director (Appeals). Regard

being had to the controversy, it is apt to reproduce the provision

in entirety: -

“21.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 –

(a)in the case of Chairperson, is or has been,

or is qualified to be, a Judge of a High

Court; and

(b)in the case of a Member, is or has been, or

is qualified to be, a District Judge.

Page 7 7

(2)A person shall not be qualified for

appointment as a Special Director (Appeals)

unless he –

(a)has been a member of the Indian Legal

Service and has held a post in Grade I of

that Service; or

(b)has been a member of the Indian Revenue

Service and has held a post equivalent to a

Joint Secretary to the Government of India.”

10.On a scanning of the aforesaid provision, it is quite clear

that a person, in order to be qualified for appointment as the

Chairperson, is required to be or has been qualified to be a

Judge of the High Court and a person to be a Member is required

to be or has been qualified to be a district judge and to be

appointed as a Special Director (Appeal), he has to be a member

of the Indian Legal Service and is required to have held a post of

Grade I or that service or a member of the Indian Revenue

Service as a post equivalent to Joint Secretary to the Government

of India. Thus, a member of the Indian Legal Service who is

qualified as per Section 21 (2) (a) is entitled to be appointed as a

Special Director (Appeal).

11. Section 16 of the Act provides for appointment of the

Adjudicating Authority. Section 17 provides for appeal to the

Special Director (Appeals). Section 18 provides for establishment

Page 8 8

of the Appellate Tribunal to hear the appeals against the order of

the Adjudicating Authorities and the Special Director (Appeals)

under the Act. Section 19 provides for appeal to the Appellate

Tribunal and lays down the postulates as to what categories of

appeals can be preferred. From the aforesaid provisions, it is

quite clear that there are three distinctive forums for adjudication

and there is a hierarchical system. We have already 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.

Page 9 9

(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) of section 16;

(d)the form of appeal and fee for filing such

appeal under sections 17 and 19;

(e)the salary and allowances payable to and

the other terms and conditions of service

of the Chairperson and other Members of

the Appellate Tribunal and the Special

Director (Appeals) under section 23;

(f)the salaries and allowances and other

conditions of service of the officers and

employees of the Appellate Tribunal and

the office of the Special Director (Appeals)

under sub-section (3) of section 27;

(g)the additional matters in respect of which

the Appellate Tribunal and the Special

Director (Appeals) may exercise the

powers of a civil court under clause (i) of

sub-section (2) of section 28;

(h)the authority or person and the manner

in which any document may be

authenticated under clause (ii) of section

39; and

(i)any other matter which is required to be,

or may be, prescribed.”

Page 10 10

12.Emphasis has been laid on the rule making power by Mr.

Bhatt, learned senior counsel, to build an edifice that there lies

the source for framing the rules which has been erroneously

declared by the High Court to be ultra vires.

13.At this juncture, we may refer with profit to Rule 2(1)(b)

which reads as follows: -

“2.Qualification for recruitment – (1) A

person shall not be qualified for appointment

as Chairperson or a member unless he : -

a)xxxxxx

b)in the case of a Member, is or has been or

is qualified to be a District Judge.”

Rule 5 of the Rules reads as follows:-

“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 the Indian Legal Service who fulfil

the qualifications prescribed under clause (b)

of sub-rule (1) of Rule 2 of these rules.”

Page 11 11

14.As far as Rule 2(1)(b) is concerned, there can be no trace of

doubt that it is in consonance with the provisions contained in

the Act inasmuch as Section 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

far 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

Page 12 12

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’ would include a part time Member

and for the sake of convenience, the Central Government has

framed the Rules to carry out the purposes of the Act.

15.In oppugnation, Mr. Mahabir Singh, learned senior counsel

for the respondent, would contend that when the specific

meaning has been given to the term ‘Member’ by the Act and the

existence of a part time Member is conceptually absent under the

scheme of the Act, the introduction by the rule is totally

impermissible. Mr. Singh would further submit that a member of

Indian Legal Service can only be appointed as a Special Director

(Appeals) and, therefore, the rule providing that a member of

Indian Legal Service can be appointed a Member runs counter to

the provisions in the Act.

16.At this stage, it is apposite to state about the rule making

powers of a delegating authority. If a rule goes beyond the rule

Page 13 13

making power conferred by the statute, the same has to be

declared ultra vires. If a rule supplants any provision for which

power has not been conferred, it becomes ultra vires. The basic

test is to determine and consider the source of power which is

relatable to the rule. Similarly, a rule must be in accord with the

parent statute as it cannot travel beyond it. In this context, we

may refer with profit to the decision in General Officer

Commanding-in-Chief v. Dr. Subhash Chandra Yadav

5

,

wherein it has been held as follows:-

“......Before a rule can have the effect of a

statutory provision, two conditions must be

fulfilled, namely (1) it must conform to the

provisions of the statute under which it is

framed; and (2) it must also come within the

scope and purview of the rule making power of

the authority framing the rule. If either of these

two conditions is not fulfilled, the rule so framed

would be void.”

17.In Additional District Magistrate (Rev.) Delhi

Administration v. Shri Ram

6

, it has been ruled that it is a well

recognised principle 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.

5

AIR 1988 SC 876

6

AIR 2000 SC 2143

Page 14 14

18.In Sukhdev Singh v. Bhagat Ram

7

, the Constitution

Bench has held that the statutory bodies cannot use the power to

make rules and regulations to enlarge the powers beyond the

scope intended by the legislature. 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 and another v. H. Ganesh Kamath

etc.

8

, 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 and others v. State of H.P.

and others

9

, 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

7

AIR 1975 SC 1331

8

AIR 1983 SC 550

9

AIR 2000 SC 1069

Page 15 15

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. Regional

Director

10

, it has been observed that a regulation is a rule or

order prescribed by a superior for the management of some

business and implies a rule for general course of action. Rules

and Regulations are all comprised in delegated legislation. The

power to make subordinate legislation is derived from the

enabling Act and it is fundamental that the delegate on whom

such a power is conferred has to act within the limit of authority

conferred by the Act. Rules cannot be made to supplant the

provisions of the enabling Act but to supplement it. What is

permitted is the delegation of ancillary or subordinate legislative

functions, or, what is fictionally called, a power to fill up details.

22.In Global Energy Ltd. and another v. Central

Electricity Regulatory Commission

11

, this Court was dealing

with the validity of clauses (b) and (f) of Regulation 6-A of the

Central Electricity Regulatory Commission (Procedure, Terms

10

AIR 2003 SC 1533

11

(2009) 15 SCC 570

Page 16 16

and Conditions for Grant of Trading Licence and other Related

Matters) Regulations, 2004. In that context, this Court

expressed thus:-

“It is now a well-settled principle of law that

the rule-making power “for carrying out the

purpose of the Act” is a general delegation.

Such a general delegation may not be held to

be laying down any guidelines. Thus, by

reason of such a provision alone, the

regulation-making power cannot be exercised

so as to bring into existence substantive

rights or obligations or disabilities which are

not contemplated in terms of the provisions of

the said Act.”

23.In the said case, while discussing further about the

discretionary power, delegated legislation and the requirement of

law, the Bench observed thus:-

“The image of law which flows from this

framework is its neutrality and objectivity: the

ability of law to put sphere of general decision-

making outside the discretionary power of

those wielding governmental power. Law has

to provide a basic level of “legal security” by

assuring that law is knowable, dependable and

shielded from excessive manipulation. In the

contest of rule-making, delegated legislation

should establish the structural conditions

within which those processes can function

effectively. The question which needs to be

asked is whether delegated legislation

promotes rational and accountable policy

implementation. While we say so, we are not

oblivious of the contours of the judicial review

Page 17 17

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. and another v. P. Krishnamurthy and

others

12

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

Madhya Pradesh and others

13

, while discussing about the

conferment of extensive meaning, it has been opined that the

Court would be justified in giving the provision a purposive

construction to perpetuate the object of the Act while ensuring

12

(2006) 4 SCC 517

13

(2011) 9 SCC 573

Page 18 18

that such rules framed are within the field circumscribed by the

parent Act. It is also clear that it may not always be absolutely

necessary to spell out guidelines for delegated legislation when

discretion is vested in such delegated bodies. In such cases, the

language of the rule framed as well as the purpose sought to be

achieved would be the relevant factors to be considered by the

Court.

26.Keeping in view the aforesaid enunciation of law, we think it

appropriate to consider the nature, object and scheme of the

enabling Act, the power conferred under the rule, the concept of

purposive construction and the discretion vested in the delegated

bodies. Before bringing the legislation in the year 1994, a task

force was constituted to have an overall look on the subjects

relating to foreign exchange and foreign trade to suggest the

required changes. Considering the significant developments,

namely, substantial increase in the foreign exchange reserve,

growth in foreign trade, rationalization of tariffs, current account

convertibility, liberalization of Indian investments abroad,

increased access to external commercial borrowings by Indian

Corporates and participation of foreign institutional investors in

our stock markets and the spectrum of world economy, the Act

Page 19 19

was brought into force to consolidate and amend the law relating

to foreign exchange with the objective of facilitating external

trade and payments and for promoting the orderly development

and maintenance of the foreign exchange market in India. To

have a balance in the field of economic growth, the Parliament

provided the hierarchical system under the Act itself. Section 20

deals with the composition of the Appellate Tribunal, the highest

tribunal under the Act. Section 21 deals with the qualification

for appointment of Chairperson, Member and Special Director

(Appeals). Section 22 provides that the Chairperson and every

other Member shall hold office for a term of five years from the

date on which he enters upon office. Section 25 deals with

resignation and removal. The removal can only take place by

order of the Central Government on the ground of proved

misbehaviour or incapacity after an inquiry made by such person

as the President may appoint for this purpose in which the

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

Page 20 20

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 upto 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 time Member. Section 20, the

enabling provision, empowers the Central Government to fix such

number of persons as the Government may deem fit. The main

part of Rule 5 provides that a tribunal shall have one

Chairperson and Members not exceeding four. To that extent, it

is in consonance with the Act and it comes within the framework

of the provision.

Page 21 21

28. The first proviso stipulates that the number of either full

time Members or part time Members shall not exceed two. This

proviso introduces the concept of part time Member. There can

be no trace of doubt that it travels beyond the enabling provision

and is totally inconsistent with it. The rule does not conform to

the main enactment. Therefore, in our opinion, the High Court is

justified in declaring the said provision as ultra vires.

29.The second proviso, if we allow ourselves to say so, is an

innovative one. It provides for qualification of a part time

Member who can be appointed from amongst officers belonging to

the Indian Legal Service who fulfil the qualification prescribed

under Clause (b) of sub-rule (1) of Rule 2 of the Rules. Clause

(b) of sub-rule (1) of Rule 2 spells out that a person shall not be

qualified for appointment as a Member unless he is or has been

or is qualified to be a district judge. As far as the word ‘is’ or

‘has been’ is concerned, there can be no cavil. The core of the

controversy is the qualification associated with part time

Member. Article 233 of the Constitution deals with the

appointment of district judges. It provides for the qualification to

be a district judge. It reads as follows:-

Page 22 22

“233. Appointment of district judges

(1) Appointments of persons to be, and the

posting and promotion of, district judges in

any State shall be made by the Governor of the

State in consultation with the High Court

exercising jurisdiction in relation to such State

(2) A person not already in the service of the

Union or of the State shall only be eligible to

be appointed a district judge if he has been for

not less than seven years an advocate or a

pleader and is recommended by the High

Court for appointment.”

30.To understand the real purport of the said Article in the

present context, it is appropriate to refer to the decision in Satya

Narian Singh v. High Court of Judicature at Allahabad and

Others.

14

In the said case, a contention was advanced before a

three-Judge Bench that there 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.

14

(1985) 1 SCC 225

Page 23 23

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 may be appointed as district judges, while in

the case of candidates who are members of Judicial Service, the

seven years’ rule has no application but there has to be

consultation with the High Court. Thereafter, the Bench referred

to the decisions in Chandra Mohan v. State of Uttar Pradesh

15

and Rameshwar Dayal v. State of Punjab

16

and eventually held

as follows:-

5. Posing the question whether the expression

"the service of the Union or of the State" meant

any service of the Union or of the State or

whether it meant the judicial Service of the

Union or of the State, the learned Chief Justice

15

AIR 1966 SC 1987

16

AIR 1961 SC 816

Page 24 24

emphatically held that the expression "the

service" in Article 233(2)could only mean the

Judicial Service. But he did not mean by the

above statement that persons who' are already

in the service, on the recommendation by the

High Court can be appointed as District

Judges, overlooking the claims of all other

Seniors in the Subordinate Judiciary contrary

to Article 14and Article 16 of the Constitution.”

31.In Shri Kumar Padma Prasad v. Union of India and

Others

17

, a three-Judge Bench adverted to the concept of

Judicial Service and observed as follows:-

“Article 236(b) defines ‘judicial service’ to mean

District Judges and Judges subordinate

thereto. Under Article 234 the Governor of the

State makes appointments of persons other

than District Judges to the judicial service in

accordance with the Rules made by him in

consultation with the High Court. Article 235

vests control over district courts and courts

subordinate thereto in the High Court. The

judicial service whether at the level of district

courts or courts subordinate thereto is under

the control of the High Court in all respects.

The subordinate judiciary which means the

courts subordinate to the district courts

consists of judicial officers who are recruited in

consultation with the High Court. The district

judges are recruited from amongst the

members of the bar and by promotion from the

subordinate judiciary. The judicial service in a

State is distinct and separate from the other

services under the executive. The members of

the judicial service perform exclusively judicial

17

(1992) 2 SCC 428

Page 25 25

functions and are responsible for the

administration of justice in the State.

Thereafter, their Lordships referred to Articles 233, 235, 236

and further referred in extenso to the Constitution Bench

Judgment in Chandra Mohan (supra) and ultimately proceeded

to state 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 and Another

18

, 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:-

18

(1999) 1 SCC 330

Page 26 26

“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 before a court as an advocate for and

on behalf of such Government, corporation or

authority or person, the question is whether

such a person also answers the description of

an advocate under the Act. That is the precise

question arising for our consideration in this

case.”

Eventually, the Bench did not accept the view taken by the

Delhi High Court in Oma Shanker Sharma v. Delhi

Administration in CWP No. 1961 of 1987 and affirmed by this

Court in SLP (C) 3088 of 1988 decided on 13.1.1988 and ruled

thus :-

“An advocate employed by the Government or

a body corporate as its law officer even on

terms of payment of salary would not cease to

be an advocate in terms of Rule 49 if the

condition is that such advocate is required to

act or plead in courts on behalf of the

employer. The test, therefore, is not whether

such person is engaged on terms of salary or

by payment of remuneration, but whether he

is engaged to act or plead on its behalf in a

court of law as an advocate. In that event the

terms of engagement will not matter at all.

What is of essence is as to what such law

officer engaged by the Government does –

Page 27 27

whether he acts or pleads in court on behalf of

his employer or otherwise. If he is not acting

or pleading on behalf of his employer, then he

ceases to be an advocate. ”

Thereafter, their Lordships opined that the expression used “from

the bar” would only mean from the class or group of advocates

practising in the courts of law. It does not have any other

attribute.

33.We have referred to the aforesaid pronouncements to

highlight who could be a person to be qualified to be a district

judge. Rule 2 (1) (b) provides the qualification to be a Member.

Needless to say, the same is in total accord with the Act. The

first proviso to Rule 5 introduces part time Member. We have

held that the said proviso, as far as it introduces the concept of

part time Member, is contrary to the provision contained in the

enabling Act. Section 46 of the Act nowhere envisages about the

part time Members. The second proviso, we have already

mentioned, is an innovative one. Thereafter, we have at length

referred to the qualifications for a person to be a Member who is

eligible to be a district judge. Once we have held that there

cannot be a part time Member, a person who is qualified to be a

district judge can be a Member if he meets the criterion laid

Page 28 28

down in the pronouncements 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 post of a

Chairperson as a stop gap arrangement. Thus, we do not find

Page 29 29

any error in that regard in the judgment passed by the High

Court.

35.At this juncture, we are obliged to clarify the position

further. This Court while issuing notice had granted stay on the

operation of the judgment. We have been apprised by Mr. Bhatt

that the Central Government, at present, has been scrupulously

following the mandate of the Act and only qualified persons are

appointed as Members and Chairperson. To avoid any

confusion, we clarify that the judgments and orders passed by

the Appellate Tribunal by the Chairperson or Members who were

not qualified and whose appointments have been quashed shall

not be treated to be null and void. In this regard we may refer

with profit the decisions in Gokaraju Rangaraju v. State of

Andhra Pradesh

19

and M.M. Gupta and others v. State of J.

& K. and others

20

wherein this Court, while quashing the

appointments of the respondents, had clarified that the orders

and judgments delivered by them during the period they had

continued to function as district judges on the basis of invalid

appointments could not be rendered as legally invalid and void.

In the larger interest of justice, they are treated as valid and

19

AIR 1981 SC 1473

20

AIR 1982 SC 1579

Page 30 30

binding. Relying on the said dictum, we clarify the position

accordingly.

36.The appeals stand disposed of without any order as to

costs.

............................................J.

[DR. B.S. Chauhan]

............................................J.

[Dipak Misra]

New Delhi;

May 21, 2012.