Seminar 2020
SPA New Delhi
The regulators relish certain judicial powers; their proceedings are often quasi-judicial and they have the status of a civil court. But certainly, they are not the judiciary as the judiciary is majorly responsible for the resolution of disputes and interpretations, defence, and application of the law in the name of the state (“Judiciary,” 2020). They usually deal in cases involving disputes among two parties, whereas the regulatory bodies are required to manage the interests of multiple groups and establish an equilibrium among them for the overall development of their respective sector. Examples of regulatory bodies are IRDA (Insurance Regulatory and Development Authority), RBI (Reserve Bank of India), and SEBI (Securities and Exchange Board of India). IRDA is for the insurance industry which looks after the well-being of policyholders. They also manage the growth of the insurance industry. RBI is the regulatory authority for the banking industry which reinforces rules to ensure financial stability. The regulatory body of the securities and commodity market in India is SEBI. SEBI looks after the interest of investors, they also manage and build the securities market4 in India. Unlike the judiciary, the regulators must work within the constraints of specified regulatory objectives, which are made clear within the legislation itself and are obligated to the stated policy of the govt. The judicial process is retrospective whereas the regulatory process, charged with accountability for competence, evolution, and sector development, must be proactive and, where necessary, transcend current data to appear in the longer term (Sundar et al.). Before moving the court for any disputes, both the parties often choose to resolve the conflict privately by appointing one or several arbitrators. These arbitrators are chosen consensually, and the case is heard in confidentiality. This process allows both the parties a neutral ground and an agreement is reached by the arbitrator that is appealing to both the parties. Arbitration is preferred as it avoids any penalty depositions, interrogations, and time consuming court hearings while providing a flexible solution in complete confidence. However, when arbitration does not resolve the dispute, the judiciary is consulted. To understand the importance of the Judiciary in the infrastructure sector, let’s take the example of DND Flyway, which was, in fact, the very first instance where the public sector was seeking help from the private sector in India. DND flyway is a 9.2km, 8 lane road connecting Noida and East Delhi to South Delhi. In 1992, an MOU (Memorandum of Understanding) was signed between the UP government, Delhi administration, and IL&FS to build a toll bridge across the Yamuna. IL&FS made it a BOOT project (Build-Own-Operate-Transfer basis) and promoted Noida Toll Bridge Company Ltd (NTBCL) to take charge. With Rs 10 as the toll tax, DND started functioning in February 2001.
Securities market helps move resources from those who have idle resources to others who have productive needs for it. It provides channels for allocation of savings to investments and thereby separating these two activities. 4
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