Government of India Volume I: Analysis and Recommendations

FUNCTIONS AND POWERS OF THE REGULATOR
Table of Recommendations 4.13 Requirement of administrative law officers
The system of administrative law functions requires:
◮ The board of the regulator will appoint one of its member as administrative law member;
◮ The creation of a special class of officers called administrative law officers; and
◮ While serving as administrative law officers, these persons shall not carry out other functions. This is necessary
to maintain separation of their roles and responsibilities from the other staff members of the regulator.
Table of Recommendations 4.14 Judicial review of executive actions
The Commission recommends the following principles for application of administrative law by the regulator:
1. All investigations and internal processes should strictly conform to procedures of fairness;
2. Even minor non-compliance to procedure should be required to be adequately explained by the regulator;
3. Administrative law officers should act as disinterested third parties in a dispute; and
4. The decisions of administrative law officers will lead to the development of a body of cases similar to common
law jurisprudence.
Table of Recommendations 4.15 Procedure for administrative law functions
1. All decisions to impose penalty or decisions requiring any action against any regulated entity should be carried
out by administrative law officers;
2. Administrative law officers should place the proposed decision of the executive and the material on which
the decision was arrived at, before the regulated entity through a notice called a warning notice;
3. The regulated entity must be allowed to respond before a decision is taken;
4. The decision of the administrative office must be a reasoned decision and should be provided to the regulated
entity or other concerned person through a notice called the decision notice; and
5. The regulated entity may ask the administrative law member of the board to review the decision taken by the
administrative law officer.
as an administrative law member. Under the member, the regulator will maintain a class
of administrative law officers. The administrative law member will be responsible for
oversight of the functioning of the administrative law officers. Consequently, such member
will not take active part in executive functions of the regulator and not be involved in
any investigation, inspection or similar other functions.
Like the administrative law members, the administrative law officers will also not be
involved in any investigation proceedings. This would, however, be achieved without
creating a wall of separation within the regulator – administrative law officers would be
drawn from the general pool of employees of the regulator but as long as such persons are
involved in judicial functions they would not be involved in any other regulatory functions
(see Table 4.13).
4.3.2. Procedure for administrative law functions
The administrative law functions of the regulator are at two levels. The first level adjudication
will be done by administrative law officers who will work inside the agency of the
regulator but will not be involved in executive functions. While exercising their functions,
the administrative law officers will examine the data and evidence collected by the regulator’s
executive officers and will assess the appropriateness of their executive orders (see
Table 4.14).
Appeals from the orders of the administrative law officers will go to the administrative
law members of the board. This process will act as a performance review of the administrative
law officers and also reduce the number of appeals to the tribunal by weeding
out flawed orders. Table 4.15 summarises the administrative law related processes of the
regulator.
38 FINANCIAL SECTOR LEGISLATIVE REFORMS COMMISSION