A K Bhattacharya: The more things change
RAISINA HILL
| The Union Cabinet approved two new pieces of legislation "" one to constitute the Competition Commission of India (CCI) and the other to set up the National Company Law Tribunal (NCLT). |
| The government, then headed by Atal Bihari Vajpayee, was of the view that too many organisations were entrusted with the responsibility of dealing with issues like closure and revival of sick companies, monopolistic and restrictive trade practices committed by companies and administration of the various provisions under the Companies Act like mergers and acquisitions. |
| So, the CCI was expected to look at all competition-related issues and, in addition, take over the functions of the Monopolies and Restrictive Trade Practices Commission (MRTPC). |
| And the NCLT was to take over the functions of the Board for Industrial and Financial Reconstruction (BIFR) and the Company Law Board. All cases of mergers and acquisitions were also expected to be heard and adjudicated upon by the NCLT, instead of the high courts in different states. |
| Two years later, in 2003, the government moved relevant bills in Parliament and got its approval to change the laws. This meant that the BIFR and the Company Law Board were to be dissolved and merged with the NCLT. And the MRTPC was to be merged with the CCI. |
| But the government in our country moves at a very slow pace. The BIFR continues to exist and holds close to 30 hearings a month in different cities. |
| These cases pertain to companies that are declared sick under a law that has already been repealed. But that has not deterred either sick companies from approaching the board for a revival package or the BIFR itself from holding its hearings. |
| Similarly, the Company Law Board and the MRTPC continue to function, even though both of them are aware of the impending changes and, therefore, have many vacancies to fill. |
| What is the state of the new organisations that were created under the law to take over the functions of BIFR, MRTPC and the Company Law Board? |
| The CCI is functioning with only one member. And the NCLT is yet to be constituted. The government, of course, cannot take the entire blame for the slow implementation of the laws that Parliament passed more than a year ago. |
| Indeed, the government has been constrained by the court orders passed in response to petitions questioning the constitutionality of the NCLT and the norms for appointing the chairman of the CCI. Both issues are now being heard by the Supreme Court and it may take some more months before the government can move ahead. |
| No less responsible for these delays is the government. The courts have a valid argument. Several functions, which are now being carried out by the courts, are proposed to be discharged by bodies that will be headed by experts, who will not necessarily be selected from the judiciary. |
| So, the courts are ascertaining if proper procedures are being followed to appoint the members and chairmen of these two bodies "" the CCI and the NCLT. |
| But the problem is that the government does not seem to be in a hurry to complete the court proceedings. Its response to the objections raised by the courts continues to be ambivalent and the courts may not be convinced of the logic of the executive's decision. |
| The irony is that no one in the government seems to be too bothered by this delay. In fact, senior bureaucrats have not hesitated to take advantage of the prevailing scenario. |
| For instance, the department of company affairs has nominated one of its senior officers to the MRTPC as a member, just before he retired. |
| So, it would not be surprising if the finance ministry too decides to park one of its retiring officers to fill one of the many member-level vacancies in the BIFR. Don't forget that the BIFR is under the administrative control of the finance ministry. |
| Just as the department of company affairs has used the MRTPC to park one of its senior officers, the department of economic affairs could also do the same. |
| So, if the CCI or the NCLT is not functioning properly, it is not just because of the court cases. The government and its bureaucrats are equally to blame. |