Fate of Business Laws
The business community is wondering whether the ordinances aimed at improving the corporate governance issued last year have now expired. The ordinances related to company law, corporate insolvency, stock exchange and loan transaction are still to be presented to the Parliament for approval. The existing constitution says that an ordinance not approved within 60 days of the beginning of a parliamentary session expires automatically. In the absence of any notification issued by the authority concerned, the business community has to depend on the personal opinions of their attorneys. Their attorneys say that presently since only one House of the Parliament is in session the constitutional provision cannot be invoked in case of these ordinances. Repromulgated in early April or late March, these ordinances still have time before it expires in six months.
But that is only an expert opinion, not a legally binding verdict of a court of law. One can only pray that if a legal case is filed under any provision of the ordinance, the presiding judges too think in the same lines as these lawyers. However, the Pratinidhi Sabha (Lower House) has already declared that all the legislative powers will, since May 18, 2006 , be exercised by it and that all the provisions of the constitution that go against this declaration are null and void. By thus decimating the Upper House, the ongoing Pratinidhi Sabha session is in effect the joint session of the Parliament.
However, the problem with this issue is not limited to whether these ordinances are still alive. In fact the government has no choice other than making them alive. As a lot of investment is already made by the business community to fulfil the changed provisions of these laws, going back to the previous law will be a big waste. Despite some technical errors in these laws, they are much more improved than what they replaced. Moreover, as these laws were made to fulfil the conditions of the donor agencies, letting them expire is going to be costly for the government too.
In this situation, the government has to clarify the issue and/or move the ordinances as Bills in the Parliament without delay and then move ahead with the steps required to implement them. For example, the setting up of a commercial bench in the court, formation of the company board, insolvency office and registry of secured transactions are the basic steps that have been pending. Without them, these laws are still just pieces of paper.
Let's hope the government pays attention also to the business matters rather than being preoccupied with negotiations with the Maoists alone.
A recent news that the government has approved an amendment in the Insolvency Law and is preparing to present it at the parliament indicates that it has not forgotten these laws. But why not similar urgency shown towards formalising the rest of the laws and correcting the technical errors in them?
