Details not found.
An administrative function is called 'quasi-judicial' when there is an obligation to assume a judicial approach and to comply with the basic requirements of natural justice. Quoting various judicial pronouncements, the Apex Court has elaborately defined the meaning of the 'quasi-judicial orders' and 'administrative orders' and the distinction between the two. The Court opined that only quasi-judicial orders are subject matter of appeal under section 15T. Hence, circular issued by SEBI under section 11(1) of the SEBI Act, being an administrative order, cannot be subject matter of an appeal under section 15T.Orders referable to sections 11(4), 11(b), 11(d), 12(3) and 15-I of the SEBI Act, being quasi-judicial orders, and quasi-judicial orders made under the Rules and Regulations are the subject matter of an appeal under section 15T.
1. The word 'quasi' consists of two Latin words: Quam + Si. Quam, in Latin, means 'as much as' and Si means 'if.' The prefix 'quasi' connotes the meaning 'similar to but not exactly the same as.' The term also implies that these authorities are not routinely responsible for holding such proceedings and often may have other duties. An administrative function is called 'quasi-judicial' when there is an obligation to assume a judicial approach and to comply with the basic requirements of natural justice. Thus, the fundamental purpose of a quasi-judicial hearing is to provide the affected parties due process. Due process requires notice of the proceedings and an opportunity to be heard1.
An administrative law, as defined under Black's Law Dictionary 8th Edition, is "An Act made in a management capacity esp., an Act made outside the actor's usual field (as when a judge supervises court personnel). An Administrative Act is often subject to greater risk of liability than an Act within the actor's usual field".2
Recently in a case the Supreme Court elaborately defined the meaning of 'quasi-judicial orders' vis-à-vis 'administrative orders' and also explained the difference between the two. The case is titled as National Securities Depository Ltd. v. Securities & exchange Board of India3, arising on account of Civil Appeal Nos. 5173 of 2006 & 186 of 2007, in which the Supreme Court opined on 7th March, 2017, that only quasi-judicial orders are subject matter of an appeal under section 15T. Hence, circular issued by the SEBI under section 11(1) of the Securities Exchange Board of India Act, 1992 (SEBI Act), being an administrative order, cannot be subject matter of an appeal under section 15T.
Facts of the case:
2. By an administrative circular dated 9th November, 2005, SEBI under the caption "review of dematerialization charges" issued an administrative circular under Section 11(1) of the SEBI Act to protect the interests of investors in securities and to promote the development of, and to regulate the securities market. Depositories were advised by the said circular to amend all relevant bye-laws, rules and regulations in order to see that with effect from 9th January, 2006, no charges shall be levied by a depository on DPs and, consequently, by a DP on a beneficiary-owner when a beneficiary-owner transfers all securities lying in his account to another branch of the same DP or to another DP of the same depository or another depository, provided the BO account at transferee-DP and that transferor-DP are identical in all respects.
3. Appeal before Securities Appellate Tribunal (SAT): A preliminary objection was raised in the appeal filed by the SEBI before the (SAT) urging that under the SEBI Act, SEBI has administrative, legislative and quasi-judicial functions. Appeals preferred to the Securities Appellate Tribunal (SAT) can only be from quasi-judicial orders and not administrative and legislative orders. This preliminary objection was turned down by the impugned judgment dated 29th September, 2006, by the SAT. It was opined that the expression "order" is extremely wide and there being nothing in the Act to restrict an appeal only against quasi-judicial orders, appeals would lie against all three types of orders under the Act, i.e., administrative orders, legislative orders as well as quasi-judicial orders. This was held purportedly following the decision in Clariant International Ltd. v. Securities & Exchange Board of India  54 SCL 519. The Tribunal, therefore, rejected the preliminary objection and went into the merits of the arguments against the impugned circular and dismissed the same.
4. Appeal before the Supreme Court: Cross appeals were filed before the Apex Court:
The Court took up the second appeal first in as much as if the preliminary objections were to succeed, it is clear that the merits would not have to be gone into.
4.1. Arguments made by the NSDL: In the second civil appeal the NSDL argued that the appeal filed under Section 15T of the SEBI Act is only restricted to quasi-judicial orders and not administrative or legislative orders or directions passed by the SEBIunder the SEBI Act, and the decision given by the SAT is wrong and needs to be reversed inasmuch as it has clearly stated that even against legislative regulations, the SAT would have jurisdiction, which is contrary to two direct judgments under allied Acts, namely, PTC India Ltd. v. Central Electricity Regulatory Commission4 under pari materia provisions under the Electricity Act, 2003, and Bharat Sanchar Nigam Ltd. v. Telecom Regulatory Authority of India 5 under the Telecom Regulatory Authority of India Act, 1997. NSDL stated that the same fate would await administrative orders as well and that the reasoning of these two judgments would lead us necessarily to this conclusion.
4.2 Arguments made by the SEBI: On the other hand, the SEBI urged that the word "order" not having been defined, is extremely wide and would, therefore, include all orders of the Board which, as has been pointed out, would be administrative and legislative orders as well.
5. Relevant provisions in the law: The controversy being in a narrow compass, it is necessary to lay down the law with some clarity.
5.1 Section 15T of the SEBI Act: Appeal to the Securities Appellate Tribunal.
5.2 It is interesting to note that under Section 15M, a person shall not be qualified for appointment as the Presiding Officer of the three member Appellate Tribunal unless he is a sitting or retired Judge of the Supreme Court, or a sitting or retired Chief Justice of a High Court, or is a sitting or retired Judge of a High Court who has completed not less than 7 years of service as a Judge in a High Court. This is one indicia of the fact that the Appellate Tribunal, being manned by a member of the higher judiciary, is intended to hear appeals only against quasi-judicial orders. Also, appeals are to be filed by persons aggrieved not only by an order of the Board made under the SEBI Act, Rules or Regulations, but by orders made by an adjudicating officer under the Act.
5.3 Under Section 15-I, the Board can appoint an officer not below the rank of a Division Chief to be an adjudicating officer to hold an inquiry, give a hearing to the person concerned and thereafter, impose a penalty, all of which points to only quasi-judicial functions being exercised by such officers.
5.4 Generally administrative orders and legislative regulations made by the Board are never received personally by "the person aggrieved". This is another pointer to the fact that the order spoken of in Section 15T(1) is only a quasi-judicial order. Under sub-section (4) the SAT may ultimately pass orders confirming, modifying or setting aside the order appealed against. In the Clariant judgment referred to hereinabove, paragraph 74 clearly states that "the jurisdiction of the appellate authority under the Act is not in any way fettered by the statute and, thus, it exercises all the jurisdictions as that of the Board". This being the case, it is clear that the appeal being a continuation of the proceeding before the Board, the proceeding can only be quasi-judicial in nature.
5.5 Yet another indicator can be found under Section 15T(5) by which a copy of every order made by the SAT is to be sent to the Board, the parties to the appeal and to the concerned adjudicating officer. The concerned adjudicating officer and the parties to the appeal obviously refer only to persons involved in a quasi-judicial proceeding.
5.6 Under Section 15Zof the Act, an appeal lies from any "decision or order" of the SAT to the Supreme Court on questions of law arising out of such orders. Obviously, these orders are also quasi-judicial in nature. All this leads to distinctions between quasi-judicial and administrative orders that have to be made on first principles.
6. Definition of quasi-judicial order as per various decisions:
6.1 The definition of a quasi-judicial order, as pronounced in the celebrated classic case of King v. Electricity Commissioners7 by Lord Justice Atkin, is as under:
"Whenever any body of persons having legal authority to determine questions affecting rights of subjects, and having the duty to act judicially, act in excess of their legal authority, they are subject to the controlling jurisdiction of the King's Bench Division exercised in these writs."
6.2 This celebrated passage has been referred to time and again in the Supreme Court's judgments. Thus, in Province of Bombay v. Kushaldas S. Advani8, it was held:
6.3 This statement of the law has been followed in Shivji Nathubhai v. Union of India 9, where the question which before the Supreme Court was whether the Central Government's power under Rule 54 of the Mineral Concession Rules, 1949, to review administrative orders could be stated to be in a quasi-judicial capacity. After setting out Lord Justice Atkin's passage in Advani's case (supra), this Court held that three requisites were necessary in order that the act of an administrative body be characterized as quasi-judicial:
Applying the aforesaid tests, it was held that the Central Government's power of review under Rule 54 was quasi-judicial in that there is legal authority to determine questions affecting the rights of subjects and the duty to act judicially which involves a hearing and a decision on the merits of the case.
6.4 Similarly, in Indian National Congress (I) v. Institute of Social Welfare 10., this Court held that the exercise of powers under Section 29A of the Representation of the People Act, 1951 by the Election Commission is a quasi-judicial power. After referring to R. v. Electricity Commissioner (supra) and Kushaldas S. Advani (supra), this Court laid down as follows:
"The legal principles laying down when an act of a statutory authority would be a quasi-judicial act, which emerge from the aforestated decisions are these:
Where (a) a statutory authority empowered under a statute to do any act (b) which would prejudicially affect the subject (c) although there is no lis or two contending parties and the contest is between the authority and the subject and (d) the statutory authority is required to act judicially under the statute, the decision of the said authority is quasi-judicial.
Applying the aforesaid principle, we are of the view that the presence of a lis or contest between the contending parties before a statutory authority, in the absence of any other attributes of a quasi-judicial authority is sufficient to hold that such a statutory authority is quasi-judicial authority. However, in the absence of a lis before a statutory authority, the authority would be quasi-judicial authority if it is required to act judicially." [paras 24 and 25]
It can be seen from the aforesaid decision that in addition to the tests already laid down, the absence of a lis between the parties would not necessarily lead to the conclusion that the power conferred on an administrative body would not be quasi-judicial – so long as the aforesaid three tests are followed, the power is quasi-judicial.
6.5 In Shankarlal Aggarwala v. Shankarlal Poddar11, the question posed before this Court was whether an order of a Company Judge which confirms a sale is administrative or judicial. This Court held as follows –
"It is perhaps not possible to formulate a definition which would satisfactorily distinguish, in this context, between an administrative and a judicial order. That the power is entrusted to or wielded by a person who functions as a Court is not decisive of the question whether the act or decision is administrative or judicial. But we conceive that an administrative order would be one which is directed to the regulation or supervision of matters as distinguished from an order which decides the rights of parties or confers or refuses to confer rights to property which are the subject of adjudication before the Court. One of the tests would be whether a matter which involves the exercise of discretion is left for the decision of the authority, particularly if that authority were a Court, and if the discretion has to be exercised on objective, as distinguished from a purely subjective consideration, it would be a judicial decision. It has sometimes been said that the essence of a judicial proceeding or of a judicial order is that there should be two parties and a lis between them which is the subject of adjudication, as a result of that order or a decision on an issue between a proposal and an opposition. No doubt, it would not be possible to describe an order passed deciding a lis before the authority, that it is not a judicial order but it does not follow that the absence of a lis necessarily negatives the order being judicial." [at pages 728-729]
7. Difference between Administrative and Quasi-judicial orders: Two other decisions give an interesting insight into the difference between administrative and quasi-judicial orders.
7.1. In Jayantilal AmritLal Shodhan v. F.N. Rana .12, this Court held that the report of a Collector made under Section 5A of the Land Acquisition Act is an administrative decision, despite the fact that the Collector has to give the objector an opportunity of being heard. This was held because the Collector is not required to arrive at any decision on the lis presented to him. He has to submit the case for the decision of the appropriate Government together with a report containing recommendations on objections. It is thus clear that the Collector's report would not determine any question that affects rights, even though there may be a duty to act judicially in the sense that the Collector has to hear objectors before him before making his report.
7.2 Similar is the case of Govindbhai Gordhanbhai Patel v. Gulam Abbas Mulla Allibhai 13 This judgment decided that the function of a Collector under Section 63(1) proviso of the Bombay Tenancy and Agricultural Lands Act is administrative and not quasi-judicial. In arriving at this conclusion this Court referred to various earlier decisions of this Court, which had held that an Advocate General granting or refusing sanction under Section 92 of the Civil Procedure Code was an administrative decision, just as granting or withholding sanction to file a suit under Section 55(2) of the Muslim Wakfs Act, 1954, is also an administrative decision. An order made in a reference under Section 10 of the Industrial Disputes Act is similarly an administrative order. In each of these three cases no lis is decided on merits affecting the rights of the subject. This is the reason why these decisions have been held to be administrative and not quasi-judicial in nature. One other judgment may be referred to.
7.3 In Neelima Misra v. Dr. Harinder Kaur Paintal14 Following a passage in Wade's Administrative Law this Court held that a judicial decision is made according to law, whereas an administrative decision is made according to administrative policy. A quasi-judicial function lying somewhere in between is an administrative function which the law requires to be exercised in some respects as if it was judicial. A quasi-judicial decision is, therefore, a decision which is subject to a certain measure of judicial procedure.
The Apex Court referred to two judgments of this Court under Acts which deal with expert bodies like SEBI.
7.4 In PTC India Ltd. (Supra)15 this Court had to construe various sections of the Electricity Act, 2003, and ultimately came to the conclusion that the Appellate Tribunal for Electricity had no jurisdiction to decide the validity of Regulations framed under the Central Electricity Regulatory Commission under Section 178 of the Electricity Act, 2003. The validity of the Regulations may, however, be challenged by seeking judicial review under Article 226 of the Constitution of India.
In so stating, a summary of findings is given in paragraph 92 of the said judgment. Sub-paras (iii), (iv), and (v) are important from our point of view, where it is stated as follows :
"(iii) A regulation under Section 178 is made under the authority of delegated legislation and consequently its validity can be tested only in judicial review proceedings before the courts and not by way of appeal before the Appellate Tribunal for Electricity under Section 111 of the said Act.
(iv) Section 121 of the 2003 Act does not confer power of judicial review on the Appellate Tribunal. The words "orders", "instructions" or "directions" in Section 121 do not confer power of judicial review in the Appellate Tribunal for Electricity. In judgment we do not wish to analyse the English authorities as we find from those authorities that in certain cases in England the power of judicial review is expressly conferred on the tribunals constituted under the Act. In the present 2003 Act, the power of judicial review of the validity of the regulations made under Section 178 is not conferred on the Appellate Tribunal for Electricity.
(v) If a dispute arises in adjudication on interpretation of a regulation made under Section 178, an appeal would certainly lie before the Appellate Tribunal under Section 111, however, no appeal to the Appellate Tribunal shall lie on the validity of a regulation made under Section 178." [para 92]
7.5 This judgment was followed in Bharat Sanchar Nigam Ltd. (Supra).16. The Telecom Authority of India Act, 1997 had been amended in the year 2000 to take away from the expert body under the Act, viz, TRAI, all quasi-judicial functions. Post-amendment the question posed before this Court was whether TDSAT, viz, the Appellate Tribunal had in exercise of powers under Section 14(b) of the TRAI Act, the jurisdiction to entertain a challenge to regulations framed by the TRAI under Section 36 of the TRAI Act. This Court referred in detail to the PTC India judgment (supra) and ultimately held that TDSAT does not have such jurisdiction, regulations being framed by the TRAI under Section 36 of the TRAI Act being legislative in nature.
7.6 A judgment of this Court dealing with the very Act we are dealing with is reported as Clariant International Ltd. (Supra)17. In our view certain observations made in this judgment almost conclude the matters raised in this appeal. While discussing the effect of the Board, being an expert body, this Court in paragraph 71 stated -
"The Board is indisputably an expert body. But when it exercises its quasi-judicial functions, its decisions are subject to appeal. The Appellate Tribunal is also an expert Tribunal."
In paragraph 77 this Court further went on to state –
"The Board exercises its legislative power by making regulations, executive power by administering the regulations framed by it and taking action against any entity violating these regulations and judicial power by adjudicating disputes in the implementation thereof. The only check upon exercise of such wide-ranging powers is that it must comply with the Constitution and the Act. In that view of the matter, where an expert Tribunal has been constituted, the scrutiny at its end must be held to be of wide import. The Tribunal, another expert body, must, thus, be allowed to exercise its own jurisdiction conferred on it by the statute without any limitation."
8. Whether Section 15T refers only to quasi-judicial orders. The Apex Court stated that SEBI is an expert body created by the Act which, as has been stated earlier, has administrative, legislative and quasi-judicial functions. Some of the Sections which deal with the Board's quasi-judicial functions are set out here in below:-
8.1 Section 11. Functions of Board.
(4) Without prejudice to the provisions contained in sub-sections (1), (2), (2A) and (3) and section 11B, the Board may, by an order, for reasons to be recorded in writing, in the interests of investors or securities market, take any of the following measures, either pending investigation or inquiry or on completion of such investigation or inquiry, namely:—
Provided that the Board may, without prejudice to the provisions contained in sub-section (2) or sub-section (2A), take any of the measures specified in clause (d) or clause (e) or clause (f), in respect of any listed public company or a public company (not being intermediaries referred to in Section 12) which intends to get its securities listed on any recognised stock exchange where the Board has reasonable grounds to believe that such company has been indulging in insider trading or fraudulent and unfair trade practices relating to securities market :
Provided further that the Board shall, either before or after passing such orders, give an opportunity of hearing to such intermediaries or persons concerned.
8.2 Section 11B. Power to issue directions. Save as otherwise provided in section 11, if after making or causing to be made an enquiry, the Board is satisfied that it is necessary, —
Explanation.—For the removal of doubts, it is hereby declared that the power to issue directions under this section shall include and always be deemed to have been included the power to direct any person, who made profit or averted loss by indulging in any transaction or activity in contravention of the provisions of this Act or regulations made thereunder, to disgorge an amount equivalent to the wrongful gain made or loss averted by such contravention.
8.3 Section 11D. Cease and desist proceedings. After causing an inquiry to be made If the Board finds, that any person has violated, or is likely to violate, any provisions of this Act, or any rules or regulations made thereunder, it may pass an order requiring such person to cease and desist from committing or causing such violation: Provided that the Board shall not pass such order in respect of any listed public company or a public company (other than the intermediaries specified under section (12) which intends to get its securities listed on any recognised stock exchange, unless the Board has reasonable grounds to believe that such company has indulged in insider trading or market manipulation.
8.4 Section 12. Registration of stock brokers, sub-brokers, share transfer agents, etc.
(3) The Board may, by an order, suspend or cancel a certificate of registration in such manner as may be determined by regulations:
Provided that no order under this sub-section shall be made unless the person concerned has been given a reasonable opportunity of being heard.
8.5 Section 15-I. Power to adjudicate.
8.6 Administrative functions of the Board broadly referable to Section 11(1) of the Act, subject to the provisions of this Act, it shall be the duty of the Board to protect the interests of investors in securities and to promote the development of, and to regulate the securities market, by such measures as it thinks fit."
8.7 Legislative functions, namely, that of making of Regulations is referable to Section 30 of the Act which reads as follows :
"30. Power to make regulations. (1) The Board may, by notification, make regulations consistent with this Act and the rules made thereunder to carry out the purposes of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, such regulations may provide for all or any of the following matters, namely :—
9. Decision of the Apexe Court:
10. Conclusion: Quoting various judicial pronouncements, the Apex Court elaborately defined the meaning of the 'quasi-judicial orders' and 'administrative orders' and the distinction between the two. The Court opined that only quasi-judicial orders are subject matter of appeal under section 15T, hence, circular issued by the SEBI under section 11(1) of the SEBI Act, being an administrative order, cannot be subject matter of an appeal under section 15T.Orders referable to sections 11(4), 11(b), 11(d), 12(3) and 15-I of the SEBI Act, being quasi-judicial orders, and quasi-judicial orders made under the Rules and Regulations are the subject matter of appeal under section 15T.
2. http://lawbriefs.in /2017/02 / 14/there-is - a-thin - line-of-difference - between-administrative - acts-and – quasi - judicial - acts-sc - case-brief/
 79 taxmann.com 247 (SC)
4. [(2010) 4 SCC 603]
5. [(2014) 3 SCC 222]
6. Sub-section (2) omitted by the Securities Laws (Amendment) Act, 2014, w.e.f. 18-7-2013.
7. [(1924) 1 KB 171]
8. [(1950) SCR 621]
9. AIR 1960 SC 606
10. [(2002) 5 SCC 685]
11. [(1964) 1 SCR 717]
12. [(1964) 5 SCR 294]
13. [(1977) 2 SCR 511].
14. [(1990) 2 SCR 84]
17. [(2004) 54 SCL 519]