By IANS,
New Delhi : The Supreme Court Tuesday heard an application challenging the constitutional validity of a provision of the Foreign Exchange Management Act, 1999 (FEMA).
“You want to challenge the constitutional validity of the last part of the Section 48 of the FEMA?” the apex court bench of the Justice R.M. Lodha and Justice Anil R. Dave asked applicant Manohar Lal Sharma.
Sharma told the court that even if amendments to the FEMA, brought about to pave the way for multi-brand FDI, were rejected by parliament, it would have no bearing on the licences granted under it.
Sharma challenged the permitting of the multi-brand FDI in retail sector in the absence of legal regime to back it.
The court heard Sharma and kept the matter pending.
Sharma referred to Section 48 of the FEMA which reads: “Every rule and every regulation made under this Act shall be laid, as soon as may be after it is made, before each house of parliament, while in session…that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule and regulation.”
Justice Lodha said: “This is the law framed by parliament on the tough stone of the constitution. The doctrine of de-facto is incorporated in Section 48 then how it is unconstitutional?”
Parliament is a law maker. Parliament has itself given these provisions, the court observed.
The petitioner told the court that if amendments paving the way for multi-brand FDI in retail sector were rejected by parliament, then this rejection would not erase the licences issued in pursuance of this amendment.
Sharma urged the court to declare the last part of Section 48 of the FEMA, 1999, “as unconstitutional” and declare it as excess delegation of legislative powers.
The applicant pointed to Attorney General G.E. Vahanvati’s earlier submission wherein he said the government was not liable to follow Section 48 of the FEMA.