{"id":268780,"date":"2022-06-21T16:30:04","date_gmt":"2022-06-21T11:00:04","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=268780"},"modified":"2022-06-21T16:39:08","modified_gmt":"2022-06-21T11:09:08","slug":"transparency-in-functioning-of-statutory-bodies-need-for-legislative-intervention","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2022\/06\/21\/transparency-in-functioning-of-statutory-bodies-need-for-legislative-intervention\/","title":{"rendered":"Transparency In Functioning Of Statutory Bodies \u2014 Need For Legislative Intervention"},"content":{"rendered":"
\n

An essential characteristic of a vibrant and progressive Democracy is that its citizenry is well informed about the functioning of the decision-making bodies that make laws, rules and regulations governing it. The citizens being aware of their rights are not only entitled but expect and demand transparency, responsiveness, accountability and openness in governance. Due to the technological advancements, there is an information explosion within the society in India, where any information gets a quick and wide reach. Present-day experience demonstrates overwillingness of the people to criticise a particular decision of the State and its instrumentalities through various means including social media platforms. An informed citizenry like ours, has developed over the years, an inherent need and desire to be consulted and allowed to participate, right at the formative stage of the decision-making. It can safely be deduced that the time has come when decision-making statutory bodies\/public authorities can no longer take a decision in a non-transparent manner, without participation of the people and other stakeholders and impose the said decision on them. Transparency is now well established as sine qua non for an effective and efficient decision-making process leading to a decision which is acceptable to the society at large and the various stakeholders.<\/p>\n

However, even though compliance with Transparency is vital in the functioning of the statutory authorities, the concept of Transparency itself lacks clarity and uniformity. There is no standard statutory definition of Transparency nor statutorily prescribed standard procedure\/methodology to guide the authorities. Application of Transparency is subject to the discretion and understanding of the respective public Authority. This needs to change.<\/p>\n

TRANSPARENCY: MEANING, ROLE AND SIGNIFICANCE<\/p>\n

\u201cTransparency\u201d is a term of wide amplitude and can have varied meaning depending on the facts and circumstances. In general terms it is \u201cthe quality or condition of being transparent; state of being transparent; that which is transparent<\/span>. Transparent means easily seen through, recognised, understood, or detected, manifest, evident, obvious, clear<\/span>.\u201d1<\/sup><\/a> In terms of governmental action it means \u201cthe concept that actions of Government and decision processes should be clear and open to easy scrutiny by public<\/span>.\u201d2<\/sup><\/a> The Supreme Court in BALCO Employees’ Union<\/span> v. Union of India<\/span>3<\/sup><\/a> held that Transparency does not mean the conducting of the government business while sitting at the crossroads in public, rather it means that the manner in which the decision is taken, is made known to public.<\/p>\n

In terms of complying with the requirement of transparency by a statutory body\/Regulator, in its decision-making process, the term would largely include the following aspects:<\/p>\n

(a<\/span>) the public and the stakeholders being made aware of the intention of particular statutory body to make a regulation, tariff order or such other decision;<\/p>\n

(b<\/span>) allowing access to the stakeholders including the public to the facts, data, material and other relevant factors that the decision-making body wishes to refer and rely on while making its decision;<\/p>\n

(c<\/span>) holding consultation with stakeholders and allowing them to participate by giving their views and counterviews to the issues raised by the decision-making body;<\/p>\n

(d<\/span>) statutory body takes the decision after taking note of the major views and counterviews on the issue it is addressing, document the same and give reasons in writing in support of its decision which is in a form that is easily accessible to all.<\/p>\n

The benefits of complying with transparency in the decision-making process cannot be emphasised enough. When a statutory\/public authority invites comments on its proposed action from the public at large and the stakeholders, then it at once becomes inclusive. Assurance and application of transparency in reality is directly related to instilling, building and sustaining trust of the public and the stakeholders in the functioning of that body. Transparency ensures openness in governance and presents the authority as accountable and responsive. It ensures minimisation of favouritism and corruption. One of the direct advantages of following principles of transparency in the decision-making process is that consultation with stakeholders and their participation in the form of them giving their views and counterviews to the issues raised by the authority enables it to examine and widen its own perspective. Extensive and wide-ranging views, give it an opportunity to examine certain aspects related to the issue which it never contemplated or had perceived. This leads to a more comprehensive and acceptable decision being taken by the authority.<\/p>\n

Transparency in the decision-making process plays a vital role when the authority is intending to take a decision to ensure level playing field in the sector and is trying to ensure an orderly growth. It also enables the authority in laying down a positive roadmap for the future of the industry after taking into consideration the views, concerns and goals of the various stakeholders. The authority during the consultation process gets an opportunity to understand the competing interests and is able to form a decision which in its opinion balances those interests. This enables it in taking a decision which is non-discriminatory, non-arbitrary, fair and reasonable. The participative consultation process also ensures that the decision of the authority which is reasoned has certainty and uniformity which in turn may lead to reduction in litigation.<\/p>\n

The Supreme Court has recognised Transparency in the functioning of statutory bodies as significant and invaluable. In Global Energy Ltd.<\/span> v. Central Electricity Regulatory Commission<\/span>4<\/sup><\/a>, the Supreme Court emphasised the role of transparency and openness in governance and held that compliance with these principles satisfies the requirements of Articles 14<\/span><\/span><\/a>, 19<\/span><\/span><\/a> and 21<\/span><\/span><\/a> of the Constitution of India<\/span><\/span><\/a>. It held that: (SCC p. 589, para 71)<\/p>\n

71.<\/span> The law sometimes can be written in such subjective manner that it affects the efficiency and transparent function of the Government. If the statute provides for pointless discretion to agency, it is in essence demolishing the accountability strand within the administrative process as the agency is not under obligation from an objective norm, which can enforce accountability in decision-making process. All law-making, be it in the context of delegated legislation or primary legislation, has to conform to the fundamental tenets of transparency and openness on one hand and responsiveness and accountability on the other<\/span>. These are fundamental tenets flowing from due process requirement under Article 21, equal protection clause embodied in Article 14 and fundamental freedoms clause ingrained under Article 19. A modern deliberative democracy cannot function without these attributes.<\/p>\n

(emphasis supplied)<\/p>\n

Again, in Reliance Petrochemicals Ltd.<\/span> v. Indian Express Newspapers Bombay (P) Ltd.<\/span>5<\/sup><\/a> the Supreme Court held the right to know as a fundamental right under Article 21<\/span><\/span><\/a> of the Constitution of India<\/span><\/span><\/a>. It held: (SCC p. 613, para 34)<\/p>\n

34.<\/span> \u2026 We must remember that the people at large have a right to know in order to be able to take part in a participatory development in the industrial life and democracy. Right to know is a basic right which citizens of a free country aspire in the broader horizon of the right to live in this age in our land under Article 21<\/span><\/span><\/a> of our Constitution<\/span><\/span><\/a><\/span>. That right has reached new dimensions and urgency. That right puts greater responsibility upon those who take upon themselves the responsibility to inform.<\/p>\n

(emphasis supplied)<\/p>\n

The Constitution Bench of the Supreme Court in S.P. Gupta<\/span> v. Union of India<\/span>6<\/sup><\/a> held: (SCC p. 275, para 67)<\/p>\n

67.<\/span> \u2026 The concept of an open Government is the direct emanation from the right to know which seems to be implicit in the right of free speech and expression guaranteed under Article 19(1)(a<\/span>). Therefore, disclosure of information in regard to the functioning of Government must be the rule and secrecy an exception justified only where the strictest requirement of public interest so demands. The approach of the court must be to attenuate the area of secrecy as much as possible consistently with the requirement of public interest, bearing in mind all the time that disclosure also serves an important aspect of public interest.<\/p>\n

Similarly, the Constitution Bench in State of U.P.<\/span> v. Raj Narain<\/span>7<\/sup><\/a> had held: (SCC p. 453, para 74)<\/p>\n

74.<\/span> \u2026 The people of this country have a right to know every public act, everything that is done in a public way, by their public functionaries. They are entitled to know the particulars of every public transaction in all its bearing<\/span>. The right to know, which is derived from the concept of freedom of speech, though not absolute, is a factor which should make one wary, when secrecy is claimed for transactions which can, at any rate, have no repercussion on public security. To cover with veil of secrecy, the common routine business, is not in the interest of the public. Such secrecy can seldom be legitimately desired.<\/p>\n

(emphasis supplied)<\/p>\n

It is evident that the Supreme Court always recognised Right to Know and conformity with principles of transparency and openness in decision making process as flowing out of Article 14<\/span><\/span><\/a>, 19<\/span><\/span><\/a> and 21<\/span><\/span><\/a> of the Constitution of India<\/span><\/span><\/a>.<\/p>\n

In Cellular Operators Assn. of India<\/span> v. TRAI<\/span>8<\/sup><\/a>, the Supreme Court while referring to the Right of Information Act, 2005<\/span><\/span><\/a> held that openness in governance is a legislatively established fact. It held: (SCC pp. 753-54, paras 86-88)<\/p>\n

86.<\/span> The question of transparency raises a more fundamental question, namely, that of openness in governance. We find that the Right to Information Act, 2005<\/span><\/span><\/a> has gone a long way to strengthen democracy by requiring that the Government be transparent in its actions, so that an informed citizenry is able then to contain corruption, and hold the Governments and their instrumentalities accountable to the people of India. The Preamble to the said Act, in ringing terms, states:<\/p>\n

Whereas the Constitution of India<\/span><\/span><\/a> has established democratic Republic;<\/p>\n

And whereas democracy requires an informed citizenry and transparency of information which are vital to its functioning and also to contain corruption and to hold Governments and their instrumentalities accountable to the governed<\/span>;<\/p>\n

And whereas revelation of information in actual practice is likely to conflict with other public interests including efficient operations of the Governments, optimum use of limited fiscal resources and the preservation of confidentiality of sensitive information;<\/p>\n

And whereas it is necessary to harmonise these conflicting interests while preserving the paramountcy of the democratic ideal;<\/p>\n

Now, therefore, it is expedient to provide for furnishing certain information to citizens who desire to have it.<\/p>\n

87.<\/span> We find that under Section 4(1) every public authority is not only to maintain all its records duly catalogued and indexed but is to publish, within 120 days from the enactment of the said Act, the procedure followed by it in its decision-making process, which includes channels of supervision and accountability. Section 4(1)(b<\/span>)(iii<\/span>) states:<\/p>\n

4. Obligations of public authorities<\/span>.\u2014(1) Every public authority shall\u2014<\/p>\n

***<\/p>\n

(b<\/span>) publish within one hundred and twenty days from the enactment of this Act\u2014<\/p>\n

***<\/p>\n

(iii<\/span>) the procedure followed in the decision-making process, including channels of supervision and accountability;<\/p>\n

88.<\/span> Under Section 8, there is no obligation to give to any citizen information disclosure of which would prejudicially affect the sovereignty and integrity of India, the security of the State, etc. Subject, therefore, to well-defined exceptions, openness in governance is now a legislatively established fact<\/span>.<\/p>\n

(emphasis in original and supplied)<\/p>\n

The Supreme Court while interpreting the provisions of the Right to Information Act, 2005<\/span><\/span><\/a> held in Chief Information Commr.<\/span> v. State of Manipur<\/span>9<\/sup><\/a> that: (SCC pp. 6-7, paras 5-6)<\/p>\n

5.<\/span> Before dealing with the controversy in this case, let us consider the object and purpose of the Act and the evolving mosaic of jurisprudential thinking which virtually led to its enactment in 2005.<\/p>\n

6.<\/span> As its Preamble shows, the Act was enacted to promote transparency and accountability in the working of every public authority in order to strengthen the core constitutional values of a democratic republic. It is clear that Parliament enacted the said Act keeping in mind the rights of an informed citizenry in which transparency of information is vital in curbing corruption and making the Government and its instrumentalities accountable<\/span>. The Act is meant to harmonise the conflicting interests of the Government to preserve the confidentiality of sensitive information with the right of citizens to know the functioning of the governmental process in such a way as to preserve the paramountcy of the democratic ideal. The Preamble would obviously show that the Act is based on the concept of an open society<\/span>.<\/p>\n

(emphasis supplied)<\/p>\n

The fact that the public authority\/statutory body has to necessarily comply with the principles of Transparency and openness in the decision-making process and governance in general and the stakeholders including the public have a right to know is not only recognised as a facet flowing out of Articles 14<\/span><\/span><\/a>, 19<\/span><\/span><\/a> and 21<\/span><\/span><\/a> of Constitution of India<\/span><\/span><\/a> but is legislatively mandated under the Right to Information Act, 2005<\/span><\/span><\/a> subject to certain exceptions. In other words, every public authority\/statutory body while discharging its functions has to necessarily adhere to the principles of Transparency failing which the decision may be manifestly arbitrary and unreasonable.<\/p>\n

TRANSPARENCY: SCOPE, EXTENT AND LIMIT \u2014 NEED FOR LEGISLATIVE INTERVENTION<\/p>\n

While setting out the obligations of public authorities under Section 4(1)(b<\/span>)(iii<\/span>) of the Right to Information Act, 2005<\/span><\/span><\/a>, Parliament mandates that every public authority must publish within 120 days of the enactment of the said Act, the procedure followed in the decision-making process, including channels of supervision and accountability. Even though the said provision mandates the public authority to publish its procedure followed in the decision-making process, it does not specify what should be the minimum mandatory procedural steps that should be included in the said process to satisfy transparency. In fact, it leaves it to the discretion of the public authority to devise its own methodology.<\/p>\n

Considering the fact that transparency has become an essential obligation for the statutory bodies to comply with while discharging their functions, it is necessary that the scope, extent and limit of transparency is defined. This is essential for the purposes of ensuring certainty and uniformity in the functioning of the public authority\/statutory bodies. Each decision-making body cannot be allowed to interpret transparency as per their discretion and evolve their own methodology to ensure compliance with the same. This will create great deal of confusion and lack of clarity which will be an impediment to developing a culture of transparency.<\/p>\n

Parliament has recognised the need to stipulate adherence to principles of transparency in the functioning of certain statutory body\/sector regulators and has made a specific provision in that regard in the statute concerned. For example, Section 11(4)<\/span><\/span><\/a> of the Telecom Regulatory Authority of India Act, 1997<\/span><\/span><\/a> stipulates that the authority shall ensure transparency while exercising its powers and discharging its functions. However, such a stipulation is not there for every regulatory body constituted under a parliamentary Act. Thus, it is evident that even though the concept of adherence to transparency is a necessary condition for any statutory body during its decision-making process, Parliament itself has not mandated it for all such statutory bodies in their respective statutes.<\/p>\n

This raises the question whether sufficient action has been taken by the legislature and executive in clearly spelling out the scope, extent and limits of transparency to be exercised by the various authorities and whether it would not be proper to legislatively set out uniform pattern to be followed procedurally?<\/p>\n

Parliament has incorporated provisions regarding transparency in certain statutes which constitutes a regulatory body\/authority to regulate the affairs of a particular sector\/industry like TRAI, which is constituted for regulating Telecom and broadcasting services under the TRAI Act, 1997<\/span><\/span><\/a>. A study of the provisions of such Acts where provisions of transparency have been incorporated would demonstrate that the concept of transparency is not effectively infused in the functioning of the statutory bodies. The term transparency itself lacks clarity and has either not been defined or its scope has been laid out in different fashion by Parliament in different enactments. Further, there is no methodology or procedural steps provided under the Act which the authority can follow so as to discharge its obligation of adhering to transparency by performing its functions.<\/p>\n

In the absence of clear definition of transparency and guidelines stating the minimum procedural steps that are required to be taken by the authority for ensuring transparency, the statutory bodies interpret the same in varied ways and exercise unguided discretion to evolve their own methodology.<\/p>\n

The concept of transparency being vital cannot be left unclear and opaque and its functional implementation\/application be subjected to the discretion of the decision-making body. There is a need for institutionalising transparency as a mandatory requirement by defining its normative and functional\/procedural characteristics.<\/p>\n

NORMATIVE CHARACTERISTICS OF TRANSPARENCY<\/p>\n

The necessity to define normative characteristics of the concept of transparency can be ascertained by examining 4 legislations. These are:<\/p>\n

(i<\/span>) the TRAI Act, 1997<\/span><\/span><\/a>;<\/p>\n

(ii<\/span>) the Electricity Act, 2003<\/span><\/span><\/a>;<\/p>\n

(iii<\/span>) the Airports Economic Regulatory Authority of India Act, 2008<\/span><\/span><\/a> (\u201cAERA Act\u201d);<\/p>\n

(iv<\/span>) the Competition Act, 1992.<\/p>\n

Under the TRAI Act, 1997<\/span><\/span><\/a>, the authority regulates telecommunications services which includes broadcasting services. The authority discharges various functions under the said Act which includes recommendatory, regulatory, tariff fixation functions and issuance of directions. Section 11(4) states that \u201cthe authority shall ensure transparency while exercising its powers and discharging its functions<\/span>.\u201d<\/p>\n

Similarly, under Section 79(3)<\/span><\/span><\/a> of the Electricity Act, 2003<\/span><\/span><\/a> it is provided that \u201cthe Central Commission shall ensure transparency while exercising its powers and discharging its functions<\/span>.\u201d<\/p>\n

The Airports Economic Regulatory Authority of India Act, 2008<\/span><\/span><\/a> provides:<\/p>\n

13. Functions of authority<\/span>.\u2014(1)-(3) ***<\/p>\n

(4) The Authority shall ensure transparency while exercising its powers and discharging its functions, inter alia\u2014<\/p>\n

(a<\/span>) by holding due consultations with all stakeholders with the airport;<\/p>\n

(b<\/span>) by allowing all stakeholders to make their submissions to the authority; and<\/p>\n

(c<\/span>) by making all decisions of the authority fully documented and explained.<\/p>\n

The Competition Act, 2002<\/span><\/span><\/a> did not contain any provision specifically mandating transparency. In the Amendment Bill of 2020, a new provision Section 64-A is proposed which states as follows:<\/p>\n

64-A. Process of issuing Regulations<\/span>.\u2014The governing board of the Commission shall ensure transparency while exercising its powers to issue regulations under Section 64, by\u2014<\/p>\n

(a<\/span>) publishing draft regulations along with such other details as may be specified on its website and inviting public comments for a specified period prior to issuing regulations;<\/p>\n

(b<\/span>) publishing a general statement of its response(s) to the public comments, not later than the date of notification of the regulations;<\/p>\n

(c<\/span>) periodically reviewing such regulations:<\/p>\n

Provided that if the governing board is of the opinion that certain regulations are required to be issued or existing regulations are required to be amended urgently in public interest or the subject-matter of the regulation relates solely to the internal functioning of the Commission, it may make regulations or amend the existing regulations, as the case may be, without following the provisions stated in this section and record the reasons for doing so in writing.<\/p>\n

A bare perusal of the provisions of the four legislations demonstrates that Parliament itself has not provided any clarity to the scope and extent of the concept of transparency. The term transparency is not defined under the TRAI Act as well as the Electricity Act. The authority under the said Acts, interprets transparency in their own way and develop their own methodology to ensure compliance.<\/p>\n

Under the AERA Act, 2008<\/span><\/span><\/a>, there is some basic minimum outline of the scope of transparency provided, yet again, under the proposed amendment of 2020 to the Competition Act, 2002<\/span><\/span><\/a>, the concept of transparency is different from what is provided under the AERA Act, 2008<\/span><\/span><\/a>. In fact, even though one of the facets of transparency is understood to be consulted right at the beginning of the decision-making process i.e. formative stage, the proposed amendment to the Competition Act involves participation on the draft regulations i.e. on the proposed decision and not at the very initial stage. This in effect gives a completely different meaning to the term transparency. There is no uniformity in the concept of Transparency under various statutes.<\/p>\n

The requirement of adherence to transparency under Section 11(4)<\/span><\/span><\/a> of the TRAI Act, 1997<\/span><\/span><\/a> fell for consideration before the Supreme Court in Cellular Operators Assn. of India<\/span> v. TRAI<\/span>9<\/sup><\/a> where the Hon’ble Court referred to the provision under the AERA Act, 2008<\/span><\/span><\/a> and held as follows: (SCC p. 751, paras 80-81)<\/p>\n

80.<\/span> Section 11(4) of the Act requires that the Authority shall ensure transparency while exercising its powers and discharging its functions. \u201cTransparency\u201d has not been defined anywhere in the Act. However, we find, in a later parliamentary enactment, namely, the Airports Economic Regulatory Authority of India Act, 2008<\/span><\/span><\/a>, that Section 13 deals with the functions of the Airports Economic Regulatory Authority (which is an Authority which has legislative and administrative functions). \u201cTransparency\u201d is defined, by sub-section (4)\u2026.<\/p>\n

81.<\/span> This definition of \u201ctransparency\u201d provides a good working test of \u201ctransparency\u201d referred to in Section 11(4)<\/span><\/span><\/a> of the TRAI Act<\/span><\/span><\/a>.<\/p>\n

Thus, as per the Supreme Court the scope of Transparency given under the AERA Act, 2008<\/span><\/span><\/a> is a good working test of Transparency. For the sake of uniformity, certainty and to give due importance to the mandatory requirement to comply with Transparency in the decision-making process, the scope of transparency as provided under the AERA Act, 2008<\/span><\/span><\/a> must be incorporated through appropriate statutory amendments, to begin with, in every statute where a regulatory body is constituted to regulate a particular sector.<\/p>\n

It is equally important for Parliament to define the limits of Transparency. The proviso to the proposed Section 64-A of the Amendment Bill to the Competition Act should be taken note of. The authorities must be given the required elbow space to exercise its wisdom not to follow the Transparency requirement in certain emergent cases involving public interest, public order or security of the State. It is also important to set some limit to the extent of consultation process. The consultation cannot be endless and can also not be so extensive that it creates logistic burden, consumes excessive time and affects the other day-to-day functioning of the Authority.<\/p>\n

FUNCTIONAL\/PROCEDURAL CHARACTERISTICS OF TRANSPARENCY<\/p>\n

In order to effectively implement the requirements of transparency in the decision-making process it is paramount that the procedural steps that are required to be taken by the authority are clearly spelt out. Even though Section 13 of the AERA Act, 2008<\/span><\/span><\/a> spells out the scope of transparency, there are no guidelines or standard operating procedure given either under the said Act or any other Act for fulfilling the requirement of transparency. If the process of implementation of transparency is not carried out through an effective standard procedure, then the entire exercise would be meaningless and redundant.<\/p>\n

The various regulatory bodies while discharging their functions have over a period of time evolved their own procedure which they follow to discharge their obligation of following transparency. TRAI has over the years evolved a very effective procedure to ensure that consultation with and participation of the stakeholders takes place right at the beginning of the decision-making process and ends with the authority making public its decision along with the reasons. The entire process is as follows:<\/p>\n

(i<\/span>) Generally, the authority while discharging its functions tries to ensure transparency by first issuing a consultation paper.<\/p>\n

(ii<\/span>) The said consultation paper broadly speaks about the existing regime, regulatory framework and the problems that are arising in the functioning or application or implementation of the provisions of the existing Regulation or tariff order.<\/p>\n

(iii<\/span>) The Authority shares data, information, the nature of the complaints that it is receiving and may in certain cases give possible solutions as it perceives.<\/p>\n

(iv<\/span>) The Authority then frames certain questions on which it invites comments of the stakeholders which includes the public. Sufficient time is given for this purpose. These questions tend to cover the entire gamut of the problem as perceived by the Authority and the possible solutions for the said problems. Invariably, there would always be a question of a general character where the Authority would ask the stakeholders to give comments on any other aspect which it feels is connected to the main issue.<\/p>\n

(v<\/span>) In that sense, the consultation paper is the starting point for consultation and is a kind of a working document to begin with.<\/p>\n

(vi<\/span>) The stakeholders including general public are invited to give their comments in writing which is put up on the website and made public. Thereafter sufficient time is given to the stakeholders to give counter comments on those comments received. These are again put up on the website. Therefore, each stakeholder is aware of the stand that is taken by the other stakeholders.<\/p>\n

(vii<\/span>) The authority then holds open house discussions where exchange of views take place openly between the stakeholders.<\/p>\n

(viii<\/span>) The entire consultation process comprises of the consultation paper, comments, counter comments, open house discussions and data and materials which are shared by the stakeholders.<\/p>\n

(ix<\/span>) Thereafter, the authority after examining the various views of the stakeholders takes a decision. That decision may involve amendment to certain existing provisions or formation of a completely new Regulation or Tariff Order. The authority does not put up its decision for consultation as it would lead to an endless loop of multiple consultations. The authority gives its elaborate reasons for arriving at its decision which is contained in an explanatory memorandum issued along with the final Regulation or Tariff Order.<\/p>\n

(x<\/span>) In certain cases, depending on the nature and complexity of the proposed Regulation, the authority in its wisdom may put up its draft Regulation or Tariff Order for further consultation.10<\/sup><\/a><\/p>\n

(xi<\/span>) Lastly, a perusal of paras 91 and 92 of the judgment of Supreme Court in Cellular Operators Assn. of India<\/span> v. TRAI<\/span>11<\/sup><\/a>, would show that the authority must give reasons for arriving at its decision and in doing so it must respond in a reasoned manner to the comments that raised significant problems, to explain how the agency resolved any significant problems raised by the comments and to show how that resolution led the agency to the ultimate rule. The agency must articulate a satisfactory explanation for its action including a rational connection between the facts it found and the choices it made. Further it is not necessary that each and every comment must be discussed in great detail but it must broadly take into account what has been stated and the reasons for agreeing or disagreeing with them.<\/p>\n

The abovesaid procedure has stood the test of time and can therefore be adopted as a guideline or standard operating procedure for all regulatory bodies to follow while discharging their obligation of ensuring transparency in the decision-making process.<\/p>\n

In Cellular Operators Assn. of India<\/span> v. TRAI<\/span>12<\/sup><\/a>, the Supreme Court felt the need for a Parliamentary enactment that would generally prescribe the normative as well as functional\/procedural characteristics of the concept of Transparency and which would be applied to make all subordinate Legislation. It held that: (SCC pp. 758-59, paras 91-92)<\/p>\n

91.<\/span> In Corpus Juris Secundum<\/span> (March 2016 Update) it is stated:<\/p>\n

\u201cUnder the informal rule-making requirements of the Federal Administrative Procedure Act, after a federal administrative agency considers the relevant matter presented, it must incorporate in the rules adopted a concise general statement of their basis and purpose. The purpose of the requirement is to enable courts, which have the duty to exercise review, to be aware of the legal and factual framework underlying the agency’s actions. The requirement is a means of holding an agency accountable for administering the laws in a responsible manner, free from arbitrary conduct. The statement is not intended to be an abstract explanation addressed to an imaginary complaint but is intended, rather, to respond in a reasoned manner to the comments received, to explain how the agency resolved the significant problems raised by the comments, and to show how that resolution led the agency to the ultimate rule<\/span>. The statement must identify what major issues of policy were ventilated and why the agency reacted to them as it did and should enable a reviewing court to ascertain such matters. The statement must respond to the major comments received, explain how they affected the regulation, and, where an old regulation is being replaced, explain why the old regulation is no longer desirable.<\/p>\n

Agencies have a good deal of discretion in expressing the basis of a rule. The requirement is not to be interpreted over literally, but it should not be stretched into a mandate to refer to all specific issues raised in the comments on the proposed regulations. Although an agency must genuinely consider comments it receives from interested parties, there is no requirement that an agency discuss in great detail all comments, especially those which are frivolous or repetitive. Although the agency need not address every comment received, it must respond in a reasoned manner to those that raise significant problems, to explain how the agency resolved any significant problems raised by the comments, and to show how that resolution led the agency to the ultimate rule<\/span>. Conclusory statements will not fulfil the administrative agency’s duty to incorporate in adopted rules a concise general statement of their basis and purpose. The agency must articulate a satisfactory explanation for its action, including a rational connection between the facts it found and the choices it made<\/span>. Under some circumstance, agencies must identify specific studies or data that they rely upon in arriving at their decision to adopt a rule.<\/p>\n

Regulations which lack a statement of basis and purpose may be upheld if the basis and purpose are obvious. Moreover, the failure of an agency to incorporate the statement does not render a rule ineffective as to parties to litigation who had knowledge of the rule.<\/p>\n

Despite the statutory language mandating that the statement of basis of purposes be \u201cincorporate[d] in the rules adopted,\u201d the statement of basis and purpose does not have to be published at precisely the same moment as the rules. Rather, the rules and statement need only be published close enough together in time so that there is no doubt that the statement accompanies, rather than rationalizes, the rules.\u201d<\/p>\n

92.<\/span> We find that, subject to certain well-defined exceptions, it would be a healthy functioning of our democracy if all subordinate legislation were to be \u201ctransparent\u201d in the manner pointed out above. Since it is beyond the scope of this judgment to deal with subordinate legislation generally, and in particular with statutes which provide for rule making and regulation making without any added requirement of transparency, we would exhort Parliament to take up this issue and frame a legislation along the lines of the US Administrative Procedure Act (with certain well-defined exceptions) by which all subordinate legislation is subject to a transparent process by which due consultations with all stakeholders are held, and the rule or regulation-making power is exercised after due consideration of all stakeholders’ submissions, together with an explanatory memorandum which broadly takes into account what they have said and the reasons for agreeing or disagreeing with them. Not only would such legislation reduce arbitrariness in subordinate legislation-making, but it would also conduce to openness in governance. It would also ensure the redressal, partial or otherwise, of grievances of the stakeholders concerned prior<\/span> to the making of subordinate legislation. This would obviate, in many cases, the need for persons to approach courts to strike down subordinate legislation on the ground of such legislation being manifestly arbitrary or unreasonable.<\/p>\n

(emphasis in original)<\/p>\n

CONCLUSION<\/p>\n

Compliance with principles of transparency in the decision-making process by a statutory\/regulatory body assures openness in governance, responsiveness and accountability of the authority making the decision. Consultation with and participation of the stakeholders and the public right at the formative stage of the decision-making, wherein they give their comments and counter comments, makes the process inclusive and instils a certain degree of trust in the functioning of the authority. The fact that the authority considers the views of the stakeholders and then takes a decision supported by reasons which are made public makes the decision more acceptable and weeds out the possibility of discrimination and arbitrariness.<\/p>\n

The honourable Supreme Court through its various judgements has recognised the transparent process of decision-making and the right to know as flowing out of Articles 14<\/span><\/span><\/a>, 19<\/span><\/span><\/a> and 21<\/span><\/span><\/a> of the Constitution of India<\/span><\/span><\/a>. Parliament has also recognised this to be an invaluable right and a part of ensuring open governance.<\/p>\n

Unfortunately, despite the fact that the concept of transparency is considered to be laudable and acceptable there is no uniform definition of transparency wherein its scope, extent and limit is clearly defined nor there is any standard operating procedure or guidelines provided for the statutory bodies to follow so as to ensure that the requirements of transparency would be met. Due to lack of definition of transparency wherein its normative characteristics are spelt out and lack of procedural guidelines, the various statutory\/regulatory bodies exercise their unguided discretion to comply with the requirements of transparency, thereby making the decision liable to be struck down as manifestly arbitrary and unreasonable.<\/p>\n

As transparency is a general concept which is applicable to all public authorities\/statutory bodies, it is imperative that Parliament makes a separate independent legislation which clearly spells out the normative characteristics of the concept of transparency, its scope, extent and limits. The said legislation should also provide for the procedural steps that the authorities must conform to as minimum mandatory requirement to discharge the obligation of maintaining transparency in the decision-making process. The said legislation should be made applicable to all public authorities.<\/p>\n

In this independent legislation on transparency, Parliament could adopt the scope of transparency as defined under Section 13 of the AERA Act, 2008<\/span><\/span><\/a> (supra<\/span>) and for the procedural aspect it can adopt the elaborate procedure evolved by TRAI as stated above and the guidelines provided in the US Administrative Procedure Act. It would be also worthwhile to list out the circumstances under which the authority may not be required to follow the process of transparency subject to it following certain conditions like recording reasons in writing for such a departure. The Act may also define the limits of transparency, like by stating to what extent consultation should be carried out as the same cannot be an endless process.<\/p>\n

India is a progressive democracy where the citizenry, largely comprising of young generation, is increasingly becoming aware of its rights and is getting well informed. People don’t hesitate to question the decisions of the authorities. Transparency in decision-making process is the norm. As such, it is the need of the hour that Parliament takes upon itself to frame a suitable legislation which not only makes compliance with transparency as a mandatory condition for all public authorities but also clearly defines its normative and functional\/procedural characteristics.<\/p>\n

\u2014\u2014\u2014<\/p>\n

*The article has been published with kind permission of SCC Online cited as (2021) 10 SCC J-1<\/a><\/p>\n

\u2020 Advocate, Supreme Court of India.<\/p>\n

1<\/a>. Oxford English Dictionary<\/span>, 2nd Edn., Vol. XVIII, (Clarendon Press, Oxford, New York 1989) p. 419.<\/p>\n

2<\/a>. Aiyar, P. Ramanatha, Advanced Law Lexicon<\/span>, 3rd Edn., Vol. 4, (Wadhwa and Co., Nagpur 2005) p. 4757.<\/p>\n

3<\/a>. (2002) 2 SCC 333<\/a> at p. 373, para 67.<\/p>\n

4<\/a>. (2009) 15 SCC 570<\/a> at p. 589, para 71.<\/p>\n

5<\/a>. (1988) 4 SCC 592<\/a> at p. 613, para 34.<\/p>\n

6<\/a>. 1981 Supp SCC 87<\/a> at p. 275, para 67.<\/p>\n

7<\/a>. (1975) 4 SCC 428<\/a> at p. 453, para 74.<\/p>\n

8<\/a>. (2016) 7 SCC 703<\/a> at pp. 753-54, paras 86-88.<\/p>\n

9<\/a>. (2011) 15 SCC 1<\/a> at pp. 6-7, paras 5-6.<\/p>\n

10<\/a>. (2016) 7 SCC 703<\/a> at pp. 751, paras 80-81.<\/p>\n

11<\/a>. As an example, to show the procedure followed by TRAI, the Explanatory Memorandum to \u201cThe Telecommunication (Broadcasting and Cable) Services Interconnection (Addressable Systems)(Second Amendment) Regulations, 2020<\/span>\u201d framed by TRAI can be seen on TRAI Website <https:\/\/www.trai.gov.in\/release-publication\/regulation<\/a>> Serial No. 8, dt. 1-1-2020, p. 7, paras 3-5.<\/p>\n

12<\/a>. Cellular Operators Assn. of India<\/span> v. TRAI<\/span>, (2016) 7 SCC 703<\/a> at pp. 758-59, paras 91-92.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

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Earlier, an RTI request was filed by the applicant before President\u2019s\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2016\/03\/rashtrapatibhawan.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2016\/03\/rashtrapatibhawan.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2016\/03\/rashtrapatibhawan.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2016\/03\/rashtrapatibhawan.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2016\/03\/rashtrapatibhawan.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":243298,"url":"https:\/\/www.scconline.com\/blog\/post\/2021\/02\/03\/cal-hc-adjudicate-or-legislate-what-is-the-role-of-courts-in-our-country-hc-frames-a-precedential-examination-while-discussing-scope-of-judicial-inquiry\/","url_meta":{"origin":268780,"position":4},"title":"Cal HC | Adjudicate or Legislate? 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