The Trees And The Wood

of law reform is taken.

Within statutory reform, there are three different kinds of issues. First, statutes enacted in the distant past, say 150 years ago, are sometimes dysfunctional and can be lopped off. For example, the earliest Act on the statute books seems to be the Bengal Districts Act of 1836. This has a single sentence and states that the West Bengal government can create as many zilas as it wants. Do we need this statute? Second, there are areas where statutes have been enacted at different points in time and definitions, concepts and case law varies over the years. Labour law is a prime example of this and there is a need for unification and harmonisation.

While these two aspects of statutory reform can be somewhat messy, the third aspect should be easier to handle. These are in areas where necessary legislation doesnt exist today; for example, credit cards, ATMs, automobile finance and computer hackers. It should be easy to model draft legislation on the basis of laws existing in other countries, since the problem of eliminating deadwood does not arise.

The latest example of such an absence of legislation is in the case of tree plantation companies. An estimated 49 tree plantation companies have collected Rs 10,000 crore over the last four years. These companies accept money from people, but these are not straightforward deposits. The companies are, therefore, outside the purview of the Securities and Exchange Board of India (Sebi), the Reserve Bank of India (RBI) and the Department of Company Affairs (DCA). The DCA cannot do anything about agricultural and non-manufacturing activities, the RBI cannot touch companies which do not collect deposits and Sebi is powerless because tree plantation companies do not exactly offer public issues. Nor does the Monopolies and Restrictive Trade Practice Commission have the requisite powers. The government is reportedly drafting a new piece of legislation targeted specifically at tree plantation companies (even as the Sebi board has been goaded into action on this issue, motivated no doubt by the flak it has faced over

the CRB fiasco). The governments initiative is welcome and one hopes that the initiative does not get stuck, as has happened in many other case of law reforms.