Apex court says no to order tabling amended FDI regulation in Parliament

The Supreme Court on Monday refused to direct the Centre to place its amended regulations allowing Foreign Direct Investment (FDI) in multi-brand retail before Parliament during its winter session.

Attorney General G E Vahanvati informed a bench of Justices R M Lodha and A R Dave that the government had amended the RBI regulation 2000 as per the Foreign Exchange Management Act (FEMA), 1999, allowing 51 per cent foreign direct investment in multi-brand retail.

He said that the amended regulation has been published in the gazette notification on October 30.

Advocate M L Sharma, who filed a PIL pointing out legal inadequacy of the government, submitted that the government would not place the amended regulation before the Parliament and keep on issuing licences, causing a huge loss to the people.

He said the amended regulations have to be passed by both Houses of Parliament within 30 days. In case the amended regulation is not passed by Parliament, the licences issued would not be invalidated due to Section 48 of the FEMA Act, he said. Describing Sharma’s apprehension “ill-founded”, the court, however, asked him to wait till the winter session of Parliament.

“Petitioner submits that though Section 48 of the FEMA,1999, Act mandates the regulations or modifications made in the regulation shall be placed before each House of Parliament within 30 days, there was every likelihood that 2012 regulation whereby 2000 regulations has been amended may not be laid before both houses of Parliament.”

“We are afraid the apprehensions of the petitioner are premature and ill-founded. We are informed that the next session of Parliament shall commence on November 23. The petitioner must wait and see until the next Parliament session,” the bench said.
The court decided to hear arguments on January 22, if necessary, on a plea made by Sharma challenging Section 48 of the Act, which stated that even though Parliament rejected the amendments in the FDI regulations or in any other similar matter, the provision protected all the acts until the date of rejection. 

Sharma had challenged government’s circular issued on September 20 allowing FDI in multi-brand retail saying that it had no legal sanctity. He contended that FDI could be allowed only by the RBI after having affected changes in its regulations as mandated under FEMA, 1999. The court, meanwhile, did not pass any order on a plea by Swadeshi Jagran Manch to be impleaded in the matter.

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