Courts push foreign workers out of India?

NEW DELHI: Even as it is striving to attract FDI, the government is being forced to rethink its policy of letting foreign professionals such as lawyers, architects and auditors practice in India. This is evident from two judicial directions this month pointing to a clash between the open-door policy and the restrictions placed by the laws governing professions.

On July 9, the Delhi high court put the finance ministry in a fix by reopening an FIPB clearance given to a Singapore architectural firm way back in 1996 to set up an office in Bangalore. Adding to the government’s embarrassment, the order passed by Justice Rajiv Shakdher specifically asked the finance ministry to take into account an admission made by the commerce ministry last year that the 1996 approval to the Singapore firm, RSP Architects, Planners and Engineers, violated the Architects Act 1972.

Five days earlier, in an interim order, the Supreme Court made it harder for foreign lawyers to fly in and fly out. It did so by clarifying that the expression “to practise the profession of law” figuring in the Advocates Act 1961 covered persons engaged not just in litigation work (appearing in courts) but also non-litigation work (consultancy and arbitration). Staying a Madras high court judgment, the apex court also forbade RBI to permit foreign law firms to open liaison offices.

Heralding a strict enforcement of statutory restrictions on foreign professionals, the Supreme Court order is expected to have repercussions beyond the legal profession. For instance, foreign audit firms operating in India may find it harder to provide legal services under the radar of bar councils.

Coming close on the heels of the Supreme Court order on the legal profession, the high court order on foreign architects revealed that the positions taken by the commerce and finance ministries were “apparently contrary” to each other. Though FIPB is with the finance ministry, it was actually part of the commerce ministry when it had granted approval to the Singapore architecture firm in 1996.

Under Section 37 of that law, the government can give only project-specific permission to foreign architects. The norm otherwise is that only those who are ordinarily resident in India are eligible to be registered as architects. Thus, when FIPB automatically granted approval to the Singapore firm in 1996, it was in the teeth of Section 37.

The review of this controversial decision began last year, when it was brought to the notice of the statutory body, Council of Architecture, by Delhi-based architect Anil Kumar Sharma. It was in response to a letter from the council that the commerce ministry issued an office memorandum in October 2011 admitting that the FIPB approval violated the law.

In another significant development, the council filed a criminal complaint last week against the Singapore firm for offering architectural services illegally.