Govt illegally appoints law secy in FEMA tribunal

New Delhi: In April 2004, the Delhi High Court held that officers of the Law Ministry cannot officiate as Chairman or members of the Appellate Tribunal for Foreign Exchange.
Despite that, the government appointed O P Nahar, additional secretary in the Law Ministry, as the Tribunal's chairman.
“This is unconstitutional. It’s against the basic concept of the structure of the Constitution of the separation of the powers - of judiciary and executive powers,” said legal expert, Mathew Nedumpara.
It is now alleged that Nahar's appointment was his reward for favoring Union Minister for Company Affairs, Prem Chand Gupta, in a FERA violation case. The case involved Cecil Corporation, a firm owned by Gupta. The Enforcement Directorate had slapped a Rs 10 Crore penalty on Gupta. But as part-time chairman of the Appellate Tribunal, Nahar had waived off the penalty in an out-of-turn hearing.
“I have given the judgement. That is what my duty is, giving judgement every day. Who that PC Gupta is, at that time I never knew he is a minister. Frankly speaking, only the name is given,” said Nahar.
The Enforcement Directorate had earlier investigated Gupta's role in the Hawala transfer of Fodder Scam money to Hong Kong. Yet it did not challenge Nahar's ruling in favour of Gupta.
In response to an RTI query, the ED said the reasons for not challenging the Tribunal Order cannot be disclosed.
When contacted, Gupta said, "The cases filed against me by the Enforcement Directorate are politically motivated".
Prem Chand Gupta's appeal was disposed off in just five months, while appeals more than a decade old are still pending at the Foreign Exchange Tribunal.
Handling the fate of penalties that run into thousands of crores, surely the functioning of this Tribunal needs to be fully transparent.

IBNLive
Zabeeh Afaque / CNN-IBN
Fri, Mar 07, 2008