Govt can't make rules contrary to the Act: SC

Supreme court

The government cannot make rules which are not in consonance with the statutory provisions, the Supreme Court has ruled, while holding as unconstitutional the Centre's decision to appoint part-time members for the Appellate Tribunal for Foreign Exchange.

"If a rule goes beyond the rule-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," the apex court said, citing its earlier rulings.

A bench of justices B S Chauhan and Dipak Misra gave the ruling dismissing the Union government's appeal challenging a 2006 order of the Delhi High Court, which had declared as ultra vires the appointment of part-time chairperson and part-time members for the tribunal.

The apex court concurred with the high court findings 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 of the Foreign Exchange Management Act, 1999 as it provided for part-time members.

The bench pointed out that when the original Act did not envisage any concept of part-time member, the authorities have no power under the statute to introduce such a provision.

Interpreting Section 2(s) of the Act, the bench said " 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."

"As far as it introduces the concept of part time member, it is contrary to the provision contained in the enabling Act.

"Section 46 of the Act nowhere envisages part-time members (in the tribunal)," the bench said. According to the Act, a chairperson should have all the qualifications required for appointment of a high court judge and in the case of the members, he/she shall have all the qualifications required for appointment as a district judge.

... contd.

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