SC dismisses plea against FDI in multi-brand retail
02 May 2013
In a relief to the scam-beleaguered government, the Supreme Court on Wednesday dismissed a public interest litigation challenging the government's decision to allow foreign direct investment in multi-brand retail, saying that it would help eliminate middlemen and improve consumer choice as well as farmers' remuneration.
A three-judge bench of Justices R M Lodha, Madan B Lokur and Kurian Joseph 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 advocate for the petitioner M L Sharma, the court noted the government had already ensured passage of amendments in Parliament in the Reserve Bank of India rules as mandated under the Foreign Exchange Maintenance Act, so nothing survived in the petition.
"The middlemen are a curse to the country. They work like Shylocks and suckers. If they are sought to be thrown out of the system, what is wrong with the policy?" the bench said, adding that the new rules further the principle that the consumer is king.
''Now rules are amended. Everything is in accordance with the law. Our job is to see if policy violates any constitutional principle. Policy matters cannot be substituted by courts. Courts can interfere only if it suffers from constitutional infirmities,'' the bench said.
The bench also pointed out that middlemen were prohibited from functioning under the new agricultural laws.
The petitioner had challenged the government's circular issued on 20 September last year allowing FDI in multi-brand retail, saying that it had no legal sanctity. He contended that 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 after Sharma claimed the government could not take a policy decision through issuing a press release.
Expressing concern over the plight of farmers, the court said, ''They do not get even 50 per cent (of the 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 every day in Maharashtra and Karnataka because the farmers do not get their due price?'' the bench observed.
