FEMA Tribunal still not set up as ministries quibble

FEMA Tribunal still not set up as ministries quibble
RITU SARIN

NEW DELHI, JULY 6: The ghost of FERA has not been exorcised even a month after the act was repealed. Despite the Foreign Exchange Management Act (FEMA) coming into effect from beginning June, the Government has failed to constitute and frame the rules for functioning of the Appellate Tribunal for Foreign Exchange, which will decide all appeals under the new act. The reason: The Ministry of Legal Affairs and the Department of Personnel and Training (DoPT) have disagreed on crucial aspects on the functioning of the Tribunal including the procedure for appointing its Chairman.

The final decision on framing of rules for the Tribunal and finalising the gazette notification has been left to Prime Minister Atal Behari Vajpayee, who is also the Personnel Minister and sources say the file has been lying pending for almost a month.

The backlog of appeals, in the meantime, is mounting every day. The pendency of over 5,000 cases was automatically transferred to the Tribunal from its predecessor organisation, the FERA Appellate Board, which has long suffered on account of shortage of members on its jury and staff. Just last year, 600 more appeals were added to the pending pile (taking the figure up to 5,000) and FERA Board officials say some 50-odd more appeals have landed on their desks after FEMA came into force.

DoPT officials says that the principal cause for delay in issuing the notification is the variance of opinion on how the Chairman should be appointed. The new act states that the Chairman should be an official of the rank of a High Court judge and the procedure framed by the DoPT -- in consultation with the Ministry of Law -- was for a committee comprising the Secretary (Personnel), Secretary (Law), a nominee of the Chief Justice of India and the Chief Justice of the Delhi High Court to appoint the Chairman.

The Law Ministry subsequently altered its opinion and in the file sent back to the DoPT noted that there was no need for a selection committee and that recommendation should be made by it. Sources say that the DoPT has again pressed for a selection system with incorporates ``checks and balances'' and taken view that the appointment system as suggested by the Law Ministry would be open to criticism. The file was sent to the Prime Minister early last month.

The delay in constituting the Appellatel Tribunal has led to a highly incongruous situation. While its staff and office machinery stand transferred to the Tribunal, the outgoing Chairman, Additional Secretary Sarvesh Chandra, has not been informed about his next move. It was only this week that a proposal was sent by the Law Ministry for Chandra to be given a six-month extension on the job, primarily owing to the delay in framing rules for his successors appointment.

While it may have been functioning as a moribund sort of organisation, the FERA board played a crucial role in rationalising decisions taken by the Enforcement Directorate (ED). Precise figures are not available but roughly half the number of appeals filed before the Board have been admitted and orders of adjudication set aside by the erstwhile Board. What is not clear -- even a month after FEMA was enacted -- is how the head of the appeals Tribunal will be appointed, what its stength of members will be and most importantly, how the mounting backlog of cases will be disposed off.