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SC clears decks for FDI in retail

New Delhi:May 1, 2013, DH News Service:

The Supreme Court on Wednesday dismissed a PIL challenging the government’s decision to allow FDI in multi-brand retail, saying that it would enlarge choices to consumers and do away with middlemen.

A three-judge bench said that the court does not interfere with the matter of policy unless it is “unconstitutional, contrary to statute, arbitrary, irrational and in abuse of power”.  
After hearing long arguments on behalf of petitioner advocate M L Sharma, the court noted the government had already ensured passage of amendments in Parliament in the RBI rules as mandated under the FEMA so nothing survived in the petition.

“Now rules are amended. Everything is in accordance with the law. Our job is to see if policy is violative of any constitutional principle. Policy matters cannot be substituted by courts. Courts can interfere only if it suffers from constitutional infirmities,” the bench said.
In his PIL, Sharma had challenged the government’s circular issued on September 20 allowing FDI in multi-brand retail saying that it had got no legal sanctity. He contended the FDI could be allowed only by the RBI after having affected changes in its regulations as per the FEMA, 1999.


The court had then asked the government to bring necessary amendments in RBI regulations 2000 after Sharma claimed the government could not take a policy decision through issuing a press release.

Consumer is king


“Consumer is king. If that is the principle, we have to accept it. The idea is to do away with middlemen. They are suckers of our economy. They are ‘Shylocks’. Actually, they are curse to Indian economy,” the bench said, while pointing out that middlemen were prohibited under the new agricultural laws.

The court also said the amended rules have already been published in the gazette on October 30, 2012, permiting 100 per cent FDI in single-brand retail trade and up to 51 per cent in multi-brand retail.

According to the gazette, the states and Union territories are free to decide on implementation of the policy.

The court rejected Sharma’s arguments that the policy was not based on any material obtained from any government agency or no extensive consultations were held.

Concerned over the plight of farmers, the court said: “They do not get even 50 per cent (of sale price). The plight of farmers is shocking. We do not know if it (policy) is successful or a failure. How many suicides take place everyday in Maharashtra and Karnataka because the farmers do not get their due price,” the bench observed.

Trouble for Mayawati in DA case
The Supreme Court on Wednesday said CBI is free to investigate the disproportionate assets case against former Uttar Pradesh Chief Minister Mayawati and this could spell fresh trouble for her.

A bench of justices P Sathasivam and Dipak Misra, who had quashed the proceedings against her on July 6 last year, said that it had passed the earlier order without going into the merit of DA case against her.

It said the FIR in the DA case was quashed because the agency proceeded against her without properly understanding its orders which were confined to Taj Corridor case. It clarified that the judgement has not taken away CBI’s power to proceed against her in a separate DA case.

“CBI can investigate the disproportionate assets case against her”, the bench said adding that it would pass an order clarifying the earlier judgement.

The bench reserved its order on a review petition filed against its July 6 verdict.
It also said that the court will take note of CBI findings on the assets of Mayawati.
Senior advocate S C Mishra, appearing for Mayawati, opposed the review plea and said that judgement was clear and there was no need for any clarification.

“No clarification is required as CBI can go ahead with the probe. This review plea is like appeal which should not be entertained,” Mishra said.

The CBI, however, was reluctant to take a stand on the issue and the bench asked Solicitor General Mohan Parasaran thrice on what its stand was.

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