FEMA Changes: Legal experts disagree with Kamal Nath’s view on one-house vote

NEW DELHI: Three legal experts have disagreed with parliamentary affairs minister Kamal Nath’s claim that the notification dealing with FDI in multi-brand retail need be passed only by the Lok Sabha.

Section 48 of the Foreign Exchange Management Act, 1999, mandates the government to lay down all rules and regulations in the Lok Sabha as well as the Rajya Sabha, experts say. The section, they add, makes it clear that the rules have to be laid on the table of each House within 30 days — whether spread over one session or more.

Former additional solicitorgeneral B Bhattacharyya, however, said that the legislature — both Houses — will have to clear any executive decision post-facto for it to have any legal standing.

“If either House shoots it down, not only the rules go, but the executive order goes (permitting FDI in multi-brand retail),” the law officer, who recently stepped down, said.

Ex-Lok Sabha secretary general Subhash C Kashyap said a defeat in either House was indicative that the legislature has disapproved of the policy and forced a reconsideration. “Everything will depend on the language of the motion,” he said. According to him if the language is disapproving, defeat in any House will make the government’s position on FDI untenable.

Corporate lawyer Sameer Parekh said: “Either you say that it’s a new policy and will override everything else, in which case there’s no need to go to either House, or you concede that the rules have to be placed before each House and have to be cleared by both Houses,” Parekh said.