| PM slated to formalise pharma FDI norms today |
|
New Delhi, 2 December Ahead of the discussion in Parliament on foreign direct investment ( FDI) in retail slated to begin on Tuesday, Prime Minister Manmohan Singh will formalise the pharmaceutical FDI policy guidelines at a meeting on Monday, sources said. Officials in the know said the Prime Minister was expected to approve a framework, allowing continuous flow of foreign investment into the sector, with essential checks and balances. The strategy would be to keep foreign companies interested in India without compromising on the availability and price of critical medicines, they added. Two important issues to be decided in the pharma FDI policy are how much stake a foreign company will be allowed to take in an Indian firm and the role of the Competition Commission of India in the mergers and acquisitions ( M& As) in the sector. The government woke to the issues pertaining to M& As after acquisition of big Indian companies such as Ranbaxy, Shanta Biotech and Piramal Health Care's health unit by foreign companies. According to the finance ministry, only those cases involving FDI beyond 49 per cent in existing units need to be considered by the Foreign Investment Promotion Board ( FIPB). On the other hand, the commerce ministry wants all foreign investments in existing pharma units to be approved by the FIPB. |
| Should FEMA be amended? |
|
In a parallel development, no sooner had the DIPP Press Notes 4 to 8 been released, a Delhi Lawyer lodged a PIL in the Indian Supreme Court challenging these Press Notes as being ultra vires in overreaching the RBI, as the relevant provisions of ( FEMA) had not been amended. The court was apprised by the attorney general that on the next working day itself, RBI had issued a notification pursuant to DIPP's action, permitting deletion of the item of multibrand retail from Schedule 'A' of FEMA and providing for amendments to provide for the sectoral holding. On the returnable date i. e. November 11, 2012, the Attorney General, informed the Court that the amendments to the relevant regulations had been carried out. The petitioner expressed certain apprehensions as to whether the amendments would be placed before the Parliament was doubtful. The court dismissed his apprehensions as unfounded. There is nothing on record to suggest that the FIPB should not proceed with any application, though the media has reported this. Meanwhile, Chinese whispers were doing the rounds that Walmart, Carrefour, and Tesco were putting final touches to their India business plans, but clearly the underlying concerns remained. With the festive season over, it was time for Parliament to reassemble for the winter session. Expectedly, on the first day of the winter Session, the former ally party moved a no confidence motion against the Government, which was rejected by the Speaker on account of paucity of numbers. Opposition parties were demanding adiscussion under Rule 184 of the Constitution read with Rule 191 of the Rules of Procedure and Conduct of Business in the Lok Sabha (" Rules") i. e. discussions with voting. The ruling party initially took a hard line agreeable to a discussion under Rule 193 of the Rules, i. e. not permitting voting. Consequently, the Lok Sabha was non- functional for three consecutive days and the possibility that some non controversial Bills, which had been long languishing in the wings, particularly the Companies Bill, the Banking Laws Amendment Bill, the Money Laundering Act, seemed to be doomed. But on the 29 of November, the impasse was averted with the Ruling Party agreeing to discussions with voting on multinbrand Retail under Rule 184. Also the Money Laundering Bill was passed. The discussion and voting on the Policy is a political resolution and the answer lies in the numbers. In the meanwhile the BJP and the Communist Party have joined hands on the issue of the FEMA amendment under Regulations 47 and 48, which after being passed has to be placed before the House before the 15th day of the Session in a case where the amendment is made during a time that Parliament is not in session and, if not possible in a single session, in two or more successive ones. Section 48 provides that if Parliament makes any changes in annulment of a notification, the same will be without prejudice to anything previously done under that rule or regulation. This clearly implies that no changes to approvals under the Regulations already granted can be reversed. The Opposition will try and fault this one, because there are interpretational issues involved, and a pending Court case. But it is doubtful that the entire opposition in both Houses will agree that the provision in regarding existing approvals in Section 48 being reversed. There are too many vested interests even in the states that are opposing multibrand retail but have substantial FDI. Gujarat is the first that comes to one's mind. In my opinion, the courts are likely to decline to interfere. So the week ahead promises to be an interesting one. Kumkum Sen is a partner at Bharucha & Partners Delhi Office and can be reached at kumkum. sen@ bharucha. in THINKSTOCK LEGAL EYE KUMKUM SEN Chinese whispers were doing the rounds that Walmart, Carrefour, and Tesco were putting final touches to their India business plans, but clearly underlying concerns remained. With the festive season over, it was time for Parliament to reassemble for the winter session NLAWMAKERS DILEMMA N |
| LEGAL DIGEST |
|
The Supreme Court last week upheld the view of the commissioner of central excise and ruled that the ' soft serve' provided by McDonalds is in fact ice cream for purposes of excise. The firm had argued that it was liable to pay less duty since the product is marketed and sold around the world as ' soft serve'. The court, while allowing the appeal of the revenue authorities in the case, Commissioner vs Connaught Plaza Restaurant Ltd, stated that " the manner in which a product may be marketed by a manufacturer does not necessarily play a decisive role in affecting the commercial understanding of such a product. What matters is the way in which the consumer perceives the product at the end of the day." A person who walks into the restaurant to buy ice cream is not likely to know the intricacies of the manufacture of the product and its difference from soft serve, the judgment explained. >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> Signature variation in cheque The Supreme Court set aside the view of the Gujarat high court which had held that prosecution for issuing a dishonoured cheque was valid only in cases where the cheque is dishonoured either because the amount of money is insufficient to pay the cheque amount or the cheque amount exceeds the amount arranged to be paid from the account. Dishonour of a cheque on the ground that the signatures of the drawer do not match the specimen signatures available with the bank does not, according to the high court, fall in either of these two contingencies. In such cases prosecution was not permissible. The Supreme Court overruled this decision and stated that so long as the change in the signature is brought about " with a view to preventing the cheque being honoured the dishonour would become an offence under Section 138 of the Negotiable Instruments Act, subject to other conditions prescribed being satisfied." There may be change in the directors of a company or other valid reasons for the mismatch between the signatories on the cheque. These cases would not attract the penal provisions. >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> Himachal tourism official acquitted The Supreme Court has ruled that if a government servant is acquitted of a charge under Section 7 ( taking illegal gratification of official work) of the Prevention of Corruption Act, he cannot be convicted and sentenced under Section 13( 2) of the same law which prescribes punishment for the offence. In this case, Rakesh Kapoor vs State of Himachal Pradesh, the allegation was that an officer of the state tourism development corporation had demanded bribe for sanctioning a hotel in Dharamshala. The courts below had acquitted him of the charge under Section 7 but convicted him under Section 13. The Supreme Court set him free granting him the benefit of doubt. >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> NTC arbitration appeal dismissed The Delhi high court has dismissed the writ petition moved by National Textiles Corporation (NTC) against the arbitration notice in its dispute with the government and UCO Bank. NTC assailed the notice issued by the arbitrator, who is acting under the aegis of the Permanent Machinery of Arbitrators ( now said to be defunct). The dispute started when UCO bank laid monetary claim against Sita Ram Mills. Since several complicated issues were involved, including whether the mills were the property of NTC, the high court stated that it was not proper to interdict the arbitral proceedings at this stage. It would result in delaying the adjudication of the disputes. The court added that the arbitrator was right in holding that to avoid delay, all issues need to be decided together as much depended on facts and evidence. " The sensible course would be the one adopted by the arbitrator, which is to decide the all issues at one go." >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> Disqualification of co- op directors The Bombay high court has dismissed a batch of petitions against notices issued to 14 directors of Yavatmal District Central Cooperative Bank asking them to show cause why they should not be disqualified from holding the office under the provisions of the Maharashtra Co- operative Societies Act. The basic ground raised in the show cause notices by the Joint Registrar, Co- operative Societies was on the basis of a report of NABARD. The directors were members of Primary Agricultural Co- operative Credit Societies, which societies were defaulters and as such, they had incurred disqualification. The first bench dismissed the petitions based on lack of effective consultation and violation of principles of natural justice. The division bench rejected the appeals against that decision. >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> Don't blame the lawyers The National Consumer Commission has rejected the appeal of Citibank in a credit card case because it filed the appeal after a delay of 214 days and it blamed its lawyer for causing the delay. Dismissing the appeal in the case, Citibank vs GC Padmini, it said: " Now- a- days, it has become a fashion to transfer the responsibility upon the advocate and that, too, in his absence. It is the duty of the litigant ( bank) to peruse the order and take action accordingly. It is also the duty of the litigant to go to the office of the advocate and find out the true state of affairs." MJ ANTONY THINKSTOCK |
| Fema notification needs nod of only one House: Kamal Nath |
|
New Delhi, 2 December The Foreign Exchange Management Act ( Fema) notification dealing with foreign direct investment ( FDI) in the retail sector has to be passed by only one House of Parliament, Parliamentary Affairs Minister Kamal Nath has claimed. Opposition stand is that the decision cannot be implemented if it falls in the Rajya Sabha, where the United Progressive Alliance ( UPA) government lacks a majority. "If one House has passed it, it passes. It does not need both Houses to pass it. Thats what is prescribed in the rules," he told Karan Thapar on CNN- IBN's programme, Devils Advocate. CPI( M) leader Sitaram Yechury had said that going by the rules, the Fema notification on allowing 51 per cent FDI in multi- brand retailing has to be laid and passed in both Houses of Parliament. Failure to do so will be challenged in court, he had said last week. Nath did not agree with this contention of the Opposition. " Anything can go to court. If it goes, we will deal with it," he said. The minister insisted the rules are separate for the Lok Sabha and Rajya Sabha. Nath, however, agreed the FEMA notification — which can be passed in the Budget session as well, as the government has 30 working days of Parliament to get the nod — might drag into the next session, which is three months away. He said he has got no assurance from the Samajwadi Party (SP) and Bahujan Samaj Party (BSP) on the issue, which will be debated and voted upon this week in both Houses but expressed confidence they will support the UPA. "I have good reason to believe that they ( SP and BSP) will vote with the government because they are responsible parties and they will understand the politics of it... They are not going to vote for the politics of the Bharatiya Janata Party ( BJP)," Nath said. "At this moment, I have no assurance from any political party. All I know is I believe that I will be able to prevail upon political parties to make them understand what is behind this vote," Nath said. The minister stated he is in talks with everybody. "We are in talks with them (political parties)... We are confident that we will be able to carry it through in the Lok Sabha and the Rajya Sabha... I am confident of my numbers," he said. He denied the government was trying to manipulate the members into abstaining or coming to vote on FDI. "Just as I am not arranging for abstention of Sachin Tendulkar, I am not arranging for abstention from any party. I am not giving a thought to whether we will win here or lose there. I am confident of winning in the Rajya Sabha," he said. Nath maintained that the BJP does not control Parliament anymore and the whole FDI issue has become "messy" due to the Opposition. "I dont think anybody has a veto over us. Let's not be under this delusion," he said. The minister is also confident of getting the other pending Bills of the finance ministry, including the insurance and pensions Bills, passed in this session. "If one House has passed it, it passes. It does not need both Houses to pass it. Thats what is prescribed in the rules" KAMAL NATH Parliamentary Affairs Minister |
--
Company Secretary, Chennai
email csarengarajan@gmail.com
This mail and its attachments (if any) are confidential information intended for persons to whom the email is planned for delivery by the sender. If you have received this mail in error please notify the sender of the error by forwarding the email and its attachments (if any) and then deleting the mail received in error and the relevant email trail in this connection without making any copies or taking any prints.
__._,_.___
No comments:
Post a Comment