STATUTORY, REGULATORY AND VARIOUS QUASI-JUDICIAL BODIES

Regulatory bodies in India Security exchange board of India (current head:U.K.Sinha) Established in current form under SEBI act,1992 The Board shall consist of the following members, namely: Chairman 2 members from officials of the Finance Ministry one member from RBI five other members (at least three shall be whole-time members) to be appointed by the Central Government. Manages Capital markets in India.Its functions include: Regulating work of stock exchanges and other securities markets Promoting development of markets and investor knowledge Preventing insider trading in securities Creating regulations on issues related to securities or capital. It can by its powers conduct inquiries into functioning of companies listed in stock markets Call for evidence from any bank or corporation or board as part of its investigation Suspend the selling of any stock or selling by or to a person suspected in fraudulent practices. It can also regulate collective investment schemes that are not under other acts like chit fund act,cooperative societies,insurance or PF etc

Forward markets commission(Current head(interim): Ramesh Abhishek ) Established by Forward Contracts (Regulation) Act 1952. Regulates forward markets. It has powers to: To keep forward markets under observation To collect information regarding goods traded and submit reports and recommendations to GOI on Forward markets To conduct inspection of accounts of associations as necessary. From 2013,It is under MoF.

What is commodity market and spot/forward/future trading? 1. A commodities exchange can be the location for trade in the commodities themselves or in forward and/or futures contracts relating to those commodities. 2. When a buyer and seller transact in a commodity, with the former making a payment against delivery of the said commodity by the latter, the trade is in the nature of a spot trade. A forward trade is when a potential seller contracts with a buyer to deliver and accept payment for a certain quantity of a commodity at a specified price on a specified date in the future. 3. Forward contracts, however, are cumbersome. They require intending sellers of specific quantities of specific quality at specified times to find the appropriate number of buyers. This entails costs of search and inspection. Further, since there is no centralised market or exchange where the contract is drawn up, prices tend to vary and there is uncertainty about delivery. It is for this reason that futures contracts were evolved. 4. Futures contracts differ from forward contracts in important respects. Futures contracts are standardised contracts to buy or sell a standard quantity of a standard quality of a commodity. These are traded in exchanges, through brokers, with no need for the buyer and seller to meet and negotiate. An important feature is that a contract need not be settled by actual delivery. 5. In futures market actual delivery of goods takes place only in a very few cases. It can be matched by an offsetting contract taken by the buyer or seller, and the two can be squared at any point at some gain or loss. The administration of the exchange guarantees that contracts will be settled, and requires traders to pay up margins to cover ongoing losses, if any, to secure the viability of the exchange. 6. Current futures markets include Multi Commodity Exchange, Mumbai National Commodity and Derivatives Exchange, Mumbai ,National Multi Commodity Exchange, Ahmedabad etc Commodities traded include: Food grains,Oil seeds,metals,spices,crude oil etc Why are commodity futures trading allowed? By normal methods, Farmers get low prices during harvest season for their produce due to excess supply.Later in the lean season prices rise but farmers cannot get the benefits. Similarly consumers have to pay excess prices in the lean season Futures trading balances this scenario.It also provides guidance to farmers on what to cultivate and they can plan accordingly.

NSEL Scam NSEL is a company promoted by Financial technologies group. NSEL was meant to be a spot exchange and therefore unlike a futures exchange had to combine a trading platform with facilities such as warehousing and inspection because all contracts that were being reported on the exchange were expected to be backed with actual supplies of the commodity concerned.These were required to be stored in the warehouses of the exchange and the trades were to be settled with delivery of the commodity. Sellers deliver their produce to the warehouses of the exchange, which checks for quality and issues a warehouse receipt. This receipt is then posted on the electronic exchange allowing buyers to make bids. Having won a bid they obtain the warehouse receipt that is exchanged for the commodity at a warehouse located close to them. Government decided to allow spot contracts to be settled with a lag ie 11 days.This allowed NSEL to make futures trading though was technically a spot exchange.To make matters worse,NSEL allowed settlement peiods of upto 36 days in some cases. NSEL existed in a regulatory vacuum because since it was neither a forward exchange(under FMC) or financial market(under SEBI & RBI) The sales in NSEL were not backed by actual stocks and sellers were hoping that they could acquire stocks when the time to settle came. In july Consumer affairs ministry asked NSEL to immediately settle all contracts in excess of 11 days (as it was illegal).This led to large scale default. Competition Commission of India(current head:ashok chawla) Established under competition act 2002 Functions: To prevent practices having adverse effect on competition to promote and sustain competition in the market to protect the interest of consumers and to ensure freedom of trade. Examples of such steps that prevent competition are: cartelisation in an industry such that it affects prices Abuse of dominant position by a company on another Acquire of control through shares by a person who controls another venture which has similar products CCI consists of one chairperson and 2-6 members appointed by GOI Insurance Regulatory and Development Authority(chairman:T.S.VIJAYAN) Insurance Regulatory and Development Authority Act,1999 10 members: chairman,5 full time and 4 part time members all appointed by GOI Functions To protect of the interests of the policy holders in matters concerning assigning of policy, nomination by policyholders, insurable interest, settlement of insurance claim, etc.

To regulate investment of funds by insurance companies. Control and regulation of the rates, advantages, terms and conditions that may be offered by insurers in respect of general insurance business. Recent events in insurance sector: Insurance repository scheme:insurance repository system set up by IRDA will be the first of its kind in the world. According to IRDA, the objective of creating an insurance repository is to provide policyholders the facility to keep insurance policies in electronic form. It is also to undertake changes, modifications and revisions in the insurance policy with speed and accuracy in order to bring about efficiency, transparency and cost reduction in the issuance and maintenance of insurance policies. The repository will issue a unique code number to all policyholders, and their policies will come under that number. It maintains the history of the policy details such as claims, nominees, beneficiaries and other data. The repositories are expected to bring down the management cost of each policy from the present Rs.120 per policy to Rs.25 per annum. 5 companies have been given the status of insurance repositories IRDA is in the process of revamping life insurance sector of the country and over 400 life policies of various companies are set to be revamped Telecom Regulatory Authority of India(Current head:Rahul khullar ias) Telecom Regulatory Authority of India Act, 1997 mission is to create and nurture conditions for growth of telecommunications in the country TRAI fixes tariffs that can be charged in various fields of telecommunication Makes recommendations to GOI on issues like spectrum sale By an amendment in 2000,the adjudicatory and disputes function of TRAI was passed onto TDSAT Directorate General of Civil Aviation HQ:Delhi,Regional airworthiness offices at 14 places in India It investigates accidents and ensures safety of aircrafts by formulating safety standards,licensing of aircrafts,aircraft staff,ATCs etc Grossly understaffed,DGCA is under investigation by FAA which could result in downgrading of safety grade of indian aviation. DGCA will soon be replaced by civil aviation authority modelled on FAA of america. Pension fund regulatory and development authority PFRDA was set up in 2003 as the regulator of the pension sector especially the national pension scheme It got statutory backing with the passing of PFRDA bill in 2013 Note: NPS has on pan India basis close to 55 lakh subscribers and a corpus of Rs.35000 crore. It is now open to general public along with Govt employees.

Central Drugs Standard Control Organization (Drugs control general: Dr.G.N.Singh) National regulatory body for drugs and pharmaceuticals Under ministry of health and family welfare India Similar to FDA of USA Controversies w.r.t CDSCO Accused of failing to ensure standards in pharma sector regularly Accused of in collusion with the drug industry especially after Ranbaxy was fined by US.F.D.A. Multiple times. In 2010 it was in controversy when it (along with ICMR) failed to ensure medical trials of H.P.V vaccines by an organization on tribal girls in Andhra pradesh followed safety standards and informed consent. In 2013 November it was made mandatory to video record informed consent+in writing. Electricity regulatory commissions Formed under the electricity act,2003.There is a central ERC (CERC) and state ERCs Issues licences to transmission licensee and traders in electricity It performs a regulatory role in that they try to regulate tariffs,issue and enforce standards wrt service quality in electricity sector Advice central/state govts on matters like electricity policy tariff policy etc Electricity ombudsman are appointed by SERCs to address consumer grievances against distributors Pollution control boards Central and state pcbs are constituted under the Water act 1974 and also derives powers from air act and EPA. CPCB coordinates activities of SPCBs.It has & zonal offices with HO at delhi and 5 laboratories. CPCB runs programs like national air quality monitoring program PCBs have powers to advise the government on environmental issues, investigate compliance of industries with regulations, close down defaulting industries, evolve methods to treat waste, monitor water, air qualities etc. Problems: Political meddling in appointing chairmans of SPCBs Minimum tenure of appointment of board members is 3 years according to section 4 of water act. This is often violated. Though the act says the person as chairman should be an expert in the field people ranging from 10th standard pass to MLAs are appointed. SPCBs are severely understaffed, do not meet regularly and the experts like engineers taken on contract basis leave work due to work overload.

Though new areas like municipal solid waste management, biomedical waste and high-rise buildings have been brought under its ambit staff strengths remain the same as that years back. The Food Safety and Standards Authority of India (FSSAI) Under food safety act 2006 Advises central and state governments on issues that are under its mandate Provides training programs for persons in the food industry Frames regulations related to standards of food, accreditation of labs etc Other regulatory bodies: Body Directorate General of Hydrocarbon Directorate General of Mines Safety Biodiversity authority of india Medical council Ministry Under Ministry of petroleum and natural gas Ministry of labor
Mines Act, 1952

Act if any

Remarks KG gas issue

occupational safety, health and welfare of mine workers

NBA act 2002 IMC act 1956

MCI is dissolved now.Will be replaced by NCHR if NCHR bill is passed Will be replaced by NCHR if NCHR bill is passed

Dental Council

M/o Health & Family Welfare

The Dentists Act, 1948

The Homeopathy Central Council

same as above

The Homeopathy Central Council Act, 1973

Same as above

Pharmacy Council Indian Nursing Council The Indian Medicine Central Council

same as above same as above

The Pharmacy Act, 1948 The Indian Nursing Council Act, 1947

Same as above Same as above

same as above

The Indian Medicine Central Council Act, 1970

Same as above

NCHR:National Commission for Human Resources for Health Bill, 2011

Quasi-judicial bodies Bodies(eg:Tribunals) which are similar in power to courts in that they may exercise the powers of adjudication, compensation, penalization etc w.r.t. to the field they work on/based on the law they derive power from. But their members may not be judges necessarily. They normally work on specific fields where expertise is required. They are usually bound by rules of natural law. For example in India, National green tribunal is not bound by indian evidence act while collecting evidence in a suit.(However this is not always done and some tribunals do have to follow IEA.)

APPELLATE TRIBUNAL FOR ELECTRICITY Formed under the electricity act,2003 Hears appeals by persons aggrieved by orders of penalisation under electricity act Chairperson must be sitting/retd. judge of SC or HC.He is appointed by GOI in consultation with CJI Members may be is/or has been/is qualified to be HC judges or person with knowledge of the field or secretary in MoF/M of infrastructure

Press council of india (chair:Justice.Markandey Katju) Statutory independent regulating body set under PC Act(1965 and 1978) Chairperson is represented by CJI A quasi judicial body with 28 members 20 members from the press,5 from 2 houses of parliament and 1 each as nominee of U.G.C.,Bar council of India and Sahitya Academy. It has powers to censor newspapers if they are found to be in violation of journalistic ethics and conduct.(eg: communal writings,breach of privacy etc) It has the powers of a civil court under code of civil procedure 1908 while trying a suit. Consumer Disputes Redressal Commissions Set up in 1988 under consumer protection act 1986 Current head of NCDRC is Jus.D.K.Jain They are established at district state and state levels At the district level where cases upto Rs.2 million can be tried ,the commission consists of One person qualified to be/or is/has been a district judge 2 persons(1 women at least) with bachelors degree. At the state level ,commission where cases upto Rs.10 million can be tried, consists of One person or is/has been a HC judge

At Least 2,with 1 woman member minimum, with required knowledge in the field At national level One person or is/has been a SC judge At least 4,with 1 woman minimum,of person with knowledge and experience in the field The commissions have the power of a civil court w.r.t to the field and can take procedures like examining witness on oath.

Telecom Disputes Settlement and Appellate Tribunal In 2000,the adjudicatory and disputes function of TRAI was passed onto TDSAT adjudicate any dispute between between a licensor and a licensee; between two or more service providers; between a service provider and a group of consumers consist of a Chairperson and not more than two Members appointed by GOI Chair is, or has been, a Judge of the SC or HC Member:Secretary to GOI or person of eminent knowledge Intellectual property appellate board 3 jurisdictions:Trademarks, Patents and geographical indications.Cases with regards to the above subjects are heard by this board. HQ:Chennai .Current head:Justice K.N.Basha All appeals pending in HCs w.r.t. 3 subjects above were transferred to IPAB once it was constituted Debt recovery tribunals Constituted under Section 3 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. Aim of the DRTs was to receive claim applications from Banks and Financial Institutions against their defaulting borrowers. They are guided by natural justice and is not bound by Code of Civil Procedure 1908 With implementation of SARFAESI act DRTS now deal with both acts (SARFAESI and Debt due to banks act) Problems with DRTs and link with NPAs Initially defaulters exploited loops in DRT act to delay justice administration To counter the problems, a strict act called SARFAESI Act was formed.Though it lead to better performance for a brief period, soon defaulters successfully started preventing recovery under this act also Close to 43,000 cases involving a whopping Rs 1.43 lakh crore were pending with 33 debt recovery tribunals (DRTs) across the country at the end of FY13. This has added to the woes of banks and financial institutions and asset reconstruction companies looking to buy out these assets.

The slowing down of DRTs is a reason for mounting NPAs in banking sector

Railway claims tribunal Based on Railway Act 1989 which lays down substantive liability of the Railway Administration for loss, destruction, damage, deterioration or non-delivery of goods entrusted to them for carriage and for death or injuries or loss to a passenger in a railway accident or untoward incident The tribunal has 21 benches at 18 major cities in the country With its Benches in different parts of the country with Judicial and Technical Members, itl provides much relief to the rail users and reduces burden of the civil courts. National green tribunal act 2010 and NGT Part of implementing promises at Rio conference 1992 NGT will act as appellate authority to persons aggrieved under the acts: Water (Prevention and control of Pollution) Act 1974 Water (Prevention and Control of Pollution) Cess Act 1977 Forest (Conservation) Act 1980 Air (Prevention and Control Pollution) Act 1981, Environment (Protection) Act 1986 Biological Diversity Act 2002. The NGT has powers to regulate its own procedure and is not bound by Indian Evidence Act 1872 or Code of Civil Procedure 1908 The NGT Act 2010 applies to civil cases and it excludes criminal offences. There is no limit for the compensation that the green tribunal can award to the victims of environmental degradation /damage Whoever fails to comply with the order or award of the tribunal shall be punishable with imprisonment, which may extend to 3 years or with a fine, which may extend to Rs 10 crores. In case of companies, the penalty may extend to Rs 25 crores. Appeal against NGT is filed SCI NGT has a full time chairperson and max of 20 each judicial and technical members. Information commissions Constituted at central and state levels as per RTI act Central information commission will consist of Chief election commissioner information commissioners not exceeding 10 The members of CIC is appointed by a committee of Prime minister who is the chairperson Leader of opposition Union cabinet minister nominated by Prime minister Members of information commission must not be MPs or MLAs and should be persons of eminence and knowledge.

State information commission members are elected by a committee of Chief minister who is the chairperson Leader of opposition Union cabinet minister nominated by Chief minister Information commissioners can only be removed on disciplinary grounds only by order of president/governor after an inquiry by SCI finds him guilty. The commissions have the power of a civil court while trying a suit.

Interstate river water tribunals Article 262 of the constitution refers to parliaments role in solving river water disputes 262. Adjudication of disputes relating to waters of inter State rivers or river valleys (1) Parliament may by law provide for the adjudication of any dispute or complaint with respect to the use, distribution or control of the waters of, or in, any inter State river or river valley (2) Notwithstanding anything in this Constitution, Parliament may by law provide that neither the Supreme Court nor any other court shall exercise jurisdiction in respect of any such dispute or complaint as is referred to in clause ( 1 ) Coordination between States GOI thus made the Interstate River Water Disputes Act, 1956 which provides for tribunals to solve river disputes in India A tribunal is set up when one or more of the states make a complaint under section 3 of the IRWD act The Tribunal shall consist of a Chairman and two other members nominated in this behalf by the Chief Justice of India from among persons who at the time of such nomination are Judges of the Supreme Court or of a High Court. Every tribunal thus formed has the powers of a civil court. Tribunals have been formed for krishna, kaveri, godavari, narmada etc

CAT,SAT,National/State commission for human rights can be termed also quasi-judicial bodies because of the powers bestowed(given in laxmikanth).Avoiding lokpal also. Other tribunals Tribunal Income tax appellate tribunal
Customs, Excise and Service Tax Appellate Tribunal

Remarks constituted in 1941

Criticism of tribunals/quasi-judicial bodies (taken from an article in the hindu) Tribunals are formed under article 323A and 323b of the constitution both inserted by the famous 42nd amendment The justification often for this is the need to settle cases fast.

Article 247 of the constitution refers to provision of setting up additional courts under jurisdiction of high courts. But this option is not used for setting up courts for matters that need fast resolution and instead tribunals are set up. The independence of judicial bodies like NGT has been questioned by law experts By the principle of separation of powers members of executive (who are mostly nominated by Govts as technical members of tribunals) should not be on board judicial bodies like tribunals. Though SCI once asked govt of India to set up an independent agency to oversee tribunals, this has not been done. In Union of India vs. R. Gandhi (2010) SCI said that when the jurisdiction of an existing court is transferred to a tribunal its members should be of rank, capacity and status as equal to as possible to that of the court which was handling the matter till then. SCI also said in the same case that the administrative support for the members of tribunal must come from ministry of law and not form any other department. This is also not observed raising questions on the independence and impartiality of tribunals. However in spite of these criticisms it should be noted that many such bodies have done commendable work in their field, like consumer courts or information commissions.

Rajath g krishnan References:GOI sites Times of india,the hindu