Locked in face-offs with two different regulatory agencies CCI and Sebi, realty major DLF's Chairman K P Singh on Monday suggested a provision in laws to sue regulators if their decisions get overturned at later stages.
CCI Chairman Ashok Chawla immediately rejected the idea, which was made to him by Singh during an interactive session at an event organised by industry chamber Assocham. DLF had earlier challenged an order passed by the Competition Commission of India (CCI), while it also appealed against an order passed by capital markets regulator Sebi against it last year.
The Competition Appellate Tribunal had also upheld the CCI order imposing Rs 630 crore penalty against DLF, after which the realty major has moved the Supreme Court. The DLF's appeal against Sebi order, in a matter related to inadequate disclosure in public offer documents, is pending before the Securities Appellate Tribunal. Reacting to Singh's suggestion, Chawla said it will not acceptable anywhere to have a provision whereby private players can sue the regulators.
The CCI had imposed penalty on DLF after finding it guilty of unfair business practices in the realty sector. During the Assocham event, Singh also said there should be checks and balances in place before regulators' pass orders. Singh, who is also a former Assocham president, said there should be a provision in the law to hold those regulators accountable who pass judgements on flimsy grounds and do immense damage to the reputation of the companies, and investors.
These regulators pass judgements and then go while companies suffer loss of reputation, he said, while adding that by the time the aggrieved companies get justice, damage is already done to their reputation. In response, Chawla said he does not think that the idea of suing regulators is going to be accepted in India or anywhere else. It does not happen in the UK, Japan, the US.
Regulators are basically surrogate states. Of course state can make a mistake but that has to be corrected within the framework of the Constitution.
"That private corporates or players can sue the state and sue the regulators on behalf of the state., I think that will not be acceptable," he said. He said regulators have to ensure balance, both in terms of developing the sector as well as on the oversight side.
"I substantially agree some of the new regulators with new found zeal tend to become policemen maybe we are over-doing in terms of regulation," he said.
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