One of the main tasks of the Parliament is to frame laws through debate and discussion on the floor of the House.  However, there have been repeated instances where Bills introduced by the government have been passed without substantive discussion (For news reports, click here and here).  Even where Bills are debated extensively, occasions where the government introduces changes in the Bill directly as a response to Parliamentary debate are hard to find.

One recent exception is the list of amendments introduced to the National Green Tribunal Bill, 2010 by the Minister for Environment and Forests directly in response to issues raised on the floor of the House.

The Bill

The National Green Tribunal Bill, 2009 aims to set up specialised environmental courts in the country.  It will hear initial complaints as well as appeals from decisions of authorities under various environmental laws.  The Tribunal shall consist of both judicial and expert members.  Expert members have to possess technical qualifications and expertise, and also practical experience.

The Tribunal shall hear only ‘substantial question relating to the environment’.  Substantial questions are those which (a) affect the community at large, and not just individuals or groups of individuals, or (b) cause significant damage to the environment and property, or (c) cause harm to public health which is broadly measurable.

PRS in its analysis of the original (unamended) Bill, had raised the following issues (for detailed analysis, clickhere) :

  • The criteria to determine what a ‘substantial question related to the
    environment’ are open to interpretation.
  • The Bill may reduce access to justice in environmental matters by taking away the jurisdiction of civil courts.  All cases under laws mentioned in the Bill will now be handled by the Tribunal which will initially have benches at only five locations.
  • The Bill does not give the Tribunal jurisdiction over some laws related
    to the environment.
  • The qualifications of judicial members of the Tribunal are similar to that of the existing National Environment Appellate Authority (NEAA).  The government has been unable to find qualified members for the NEAA for the past three years.  The Green Tribunal Bill gives an explicit option to the government to appoint members with administrative experience as expert members.
  • The Bill does not specify the minimum number of members the Tribunal and also does not mention of the composition of the Selection Committee for selecting members.

The Debate

In the debate on the Bill in the Lok Sabha on April 21, 2010 a number of MPs raised substantive issues with respect to the Bill.  Some of the issues raised were (From the news article quoted above):

1. The Bill fell short on parameters of “scope, efficiency, and access to justice”.

2. Setting up five benches while barring the jurisdiction of courts will “create huge distance for the poor community members and tribals to seek justice”.

3. Offenses under the Wildlife Protection Act and the Wildlife Protection Act will not be heard by the Tribunal.

4. “Section 15 puts an embargo against [persons] other than retired Judge of Supreme Court or Chief Justices of High Court. The other clause puts 15 years of administrative experience, which would open the path for packing the Tribunal with bureaucrats of the kind who did not enforce the environment related laws in their time in service.”

The Minister acknowledged the contribution of the members by stating that: “The members have made important suggestions. Even though their exact demands may not be part of the official amendments moved by the government… but I am open to their suggestions…I will remove all objectionable clauses or sections in the proposed law and keep the window of discussion open.”

The Minister’s response

In response to these issues, the Minister Mr. Jairam Ramesh introduced 10 amendments to the Bill on April 30, 2010.  Though not all the issues raised were addressed, a number of changes were made.  In addition, the Minister also assured the House that issues regarding access would be addressed by the government by following a “circuit” approach for the benches of the Tribunal i.e. the benches would travel around the area within their jurisdiction to hear complaints. (To read the response, click here, page 15250)

Some of the main amendments are:

1.  Now any aggrieved person can can approach the Tribunal.  Earlier limited access was provided.

2. The whole Act will be operational by notification at the same time.  Different provisions will not be enforced separately at different points of time.

3. There is a procedure for direct appeal to the Supreme Court from the judgement of the Tribunal.

4. The number of expert and judicial members is clearly specified.

In addition, the Minister also assured that the Selection Committee for picking the members of the Tribunal will be transparent and will ensure that members are not “a parking place for retired civil servants”.

Recently, there have been instances of certain collective investment schemes (CISs) attempting to circumvent regulatory oversight.  In addition, some market participants have not complied with Securities and Exchange Board of India's (SEBI) orders of payment of penalty and refund to investors. In August, the Securities Laws (Amendment) Bill, 2013 was introduced in the Lok Sabha to amend the Securities and Exchange Board of India Act, 1992 (the SEBI Act, 1992), the Securities Contract (Regulation) Act, 1956 (SCRA, 1956) and the Depositories Act, 1996. The Bill replaced the Securities Laws (Amendments) Ordinance, 2013. The Bill makes the following key amendments: a) Definition of Collective Investment Schemes The SEBI Act, 1992 defines CISs as schemes in which the funds of investors are pooled, yield profits or income and are managed on behalf of investors.  It also exempts certain types of investments which are regulated by other authorities. The Bill introduces a proviso to the definition of CIS.  This proviso deems any scheme or arrangement to be a CIS if it meets all three of the following conditions: (a) funds are pooled, (b) it is not registered with SEBI, or it is not exempted by SEBI Act, 1992, and (c) it has a corpus of Rs 100 crore or more.  These provisions could potentially lead to some schemes not conventionally defined as CIS to fall under the definition. For instance, partnership firms operating in the investment business or real estate developers accepting customer advances could be termed as CISs. SEBI has been given the power to specify conditions under which any scheme or arrangement can be defined as a CIS. This raises the question of whether this is excessive delegation of legislative powers - usually the parent act defines the entities to be regulated and the details are entrusted to the regulator. b) Disgorgement (repayment) of unfair gains/ averted losses SEBI has in the past issued orders directing market participants to refund i) profits made or ii) losses averted, through unfair actions.  The Bill deems SEBI to have always had the power to direct a market participant to disgorge unfair gains made/losses averted, without approaching a court.  This power to order disgorgement without approaching a court is in contrast with the provisions of the recently passed Companies Bill, 2011 and the draft Indian Financial Code (IFC) which require an order from a court/tribunal for disgorgement of unfair gains. Further, the Bill specifies that the disgorged amount shall be credited to the Investor Education and Protection Fund (IEPF), and shall be used in accordance with SEBI regulations.  The Bill does not explicitly provide the first right on the disgorged funds to those who suffered wrongful losses due to the unfair actions, unlike the draft IFC. c) Investigation and prosecution The Bill empowers the SEBI chairman to authorise search and seizure operations on a suspect’s premises.  This does away with the current requirement of permission from a Judicial Magistrate.  This provision removes the usual safeguards regarding search and seizure as seen in the Code of Criminal Procedure, 1973, the recently passed Companies Bill, 2011 and the draft Indian Financial Code. The Bill also empowers an authorised SEBI officer to, without approaching a court, attach a person’s bank accounts and property and even arrest and detain the person in prison for non-compliance of a disgorgement order or penalty order.  Most regulators and authorities, with the exception of the Department of Income Tax, do not have powers to such an extent. d) Other Provisions of the Bill The Bill retrospectively validates consent guidelines issued by SEBI in 2007 under which SEBI can settle non-criminal cases through consent orders, i.e., parties can make out-of-court settlements through payment of fine/compensation.  The United States Securities and Exchange Commission settles over 90% of non-criminal cases by consent orders. The Bill retrospectively validates the exchange of information between SEBI and foreign securities regulators through MoUs. The Bill sets up special courts to try cases relating to offences under the SEBI Act, 1992. For a PRS summary of the Bill, here.