Apex court gives govt FDI advice

New Delhi, Jan. 22: The Supreme Court today asked the Centre to ensure its FDI policy does not affect small traders and consumers, rejecting the argument that policy decisions cannot be subject to judicial review.

"Have you got some investments or is it just some political gimmicks? Because it is almost seven weeks since you have issued the notification," a bench of Justices R.M. Lodha and S.J. Mukhopadhya asked.

Investments, however, cannot flow automatically after a notification is issued as there is a long-drawn process involving approvals that have to be granted.

Attorney-general G.E. Vahanvati argued that the FDI decision was part of the reforms process, which cannot be interfered with. But the judges were not convinced.

"Has it (FDI) brought some fruits? Reforms is something but it should not affect small traders. One should not have apprehensions. There is always apprehension that if big companies come, it would affect small traders and lead to monopoly. We have to look from the point of judicial review," the bench said.

The top law officer said it was a policy decision that has been approved by Parliament, making the PIL infructuous. "Your lordships may not go into the issue as it is a policy decision. It would not affect the retail trade," Vahanvati said.

But the bench responded: "Policy is also not sacrosanct. It must meet the constitutional requirements. We don't want to substitute the policy of the government but we have to see whether it is reasonable."

It further said: "If the small traders go out, they (consumers) will not have a choice. If the retailers are there, consumers have a choice. If they are out, consumers have no choice."

The apex court was hearing a PIL filed by advocate Manohar Lal Sharma challenging the notifications for enabling FDI in various sectors, including retail, as unconstitutional, arbitrary and damaging the fundamental rights of citizens.

The judges said they would have to examine whether the policy would affect the fundamental rights of small traders and consumers, as contended by the petitioner.

They asked Vahanvati to list any measures taken by the government to safeguard the interests of these two groups.

"What are the checks you have planned to ensure that there is no restriction of free trade, particularly (for) small traders? There are apprehensions in the minds of the people and the small traders," the bench said.

"Policy is one thing and challenge to the policy is another thing. Is it is a question of violation of Article 19(1)(g) (right to carry out any profession)? There cannot be any unfair practices so that it affects the lower level traders or affect other people.

"Consumers' interest must be protected it must be ensured. You can file a counter-affidavit so that something is on record for us to examine."

The court granted the Centre two weeks to file its written submission and asked the petitioner to file his rejoinder two weeks thereafter.


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