Appellate tribunals on mission makeover

Appellate tribunals on mission makeover

Belief that they’ve multiplied, with overlapping functions; some will be merged for sectoral synergy

The government has a plan to merge appellate regulators, instead of doing away with them. The broad categories under which non-financial appellate regulators will be clubbed include sectors like infrastructure and company-related matters.

A senior official said there were issues like non-functional appellate tribunals, less work for some and high numbers of regulatory levels. “This is particularly problematic on the tax side, where there are hosts of tribunals. We do not plan to touch the financial sector regulators but sectoral regulators need some restructuring and clubbed wherever there is synergy,” said the official.

Options being considered include a sectoral appellate regulator for infrastructure. Currently, the electricity sector has state-level regulatory commissions; at the apex is the Central Electricity Regulatory Commission. Appeals against CERC order go to the Appellate Tribunal for Electricity, also appellate regulator for the downstream petroleum sector. The Petroleum and Natural Gas Regulatory Board (PNGRB) is the first level of appeal for regulatory disputes; currently, it has no chairman and only one member.

“Over the years, the number of tribunals have multiplied, with overlapping functions. We propose to rationalise the number of tribunals and merge tribunals wherever appropriate,” said Finance Minister Arun Jaitley in his February 1 Union Budget speech.

On the corporate side, there is a thinking to club the National Company Law Appellate Tribunal (NCLAT) with the Competition Appellate Tribunal. Appeals from the National Company Law Tribunal, that adjudicates disputes relating to the Companies Act, go to NCLAT. “The issue which needs to be resolved is that the Competition Act is applicable to more than only companies, while NCLAT functions under the Companies Act,” said the official.

In telecom, “It is felt that there is not much power left with the Telecom Regulatory Authority of India (Trai) after the creation of TDSAT (its appellate body). So, there is scope for synergy with some other infrastructure regulator.” Trai was set up in February 1997 under an Act of the same name, to regulate telecom services, including fixation/revision of rates. These powers were earlier vested in the Union government.

The Trai Act was amended in January 2000 to set up a Telecommunications Dispute Settlement and Appellate Tribunal (TDSAT), to take over the adjudicatory and disputes functions from Trai. TDSAT was to adjudicate any dispute between a licensor and licensee, between two or more service providers, between a service provider and a group of consumers, and to hear and dispose of appeals against any direction, decision or order of Trai.

Similarly, it is felt the aviation sector does not require the Airports Economic Regulatory Authority, said the official. “It can be clubbed with any other infrastructure regulator.”

The proposal to revamp the regulatory set-up is in the initial stages. “These appellate tribunals can have sectoral experts representing each of the sectors, while the judicial members are fungible because they can adjudicate based on the rules and norms of any sector,” said the official.

A beginning has been made in the port sector. The Tariff Authority for Major Ports (Tamp) will not have powers to come out with orders after the Major Ports Authority Bill becomes law. It was introduced in December 2016 as a Money Bill in the Lok Sabha and would, therefore, not require Rajya Sabha approval. The new law would leave room for extension of current Tamp regulations through a port-level mechanism. It would also empower major ports to regulate their activities themselves.

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