SC seeks law officers assistance on plea against FDI in retail

New Delhi: The Supreme Court today sought the assistance of top law officers in hearing a plea against opening of FDI in multi brand retail sector saying there was a need for clarification since some link is missing pertaining to the RBI regulation on the issue.

The court, which was initially reluctant to entertain the PIL on the issue by terming it as a policy matter, decided to take the aid of Attorney General G E Vahanvati or Solicitor General Rohinton Nariman after the petitioner submitted that RBI nod was missing in allowing the FDI in retail sector.

It was submitted by advocate M L Sharma, who filed the PIL on the issue, that retail trading is strictly prohibited under the law of Foreign Exchange Management Act (FEMA) under which the power to come out with circular is vested with the Reserve Bank of India (RBI) which has not issued any regulation after 2008.

He said government circular on the FDI in retail after bringing amendment in the law was without authority.Taking note of his submission, a bench comprising justices R M Lodha and A R Dave said, “we are concerned and want a clarification that in the absence of regulation of RBI, can this circular have legal sanction.”

“We just want to have little clarity on the issue because some link is missing,” the bench said while asking the advocate to delete the name of the Prime Minister as a party in the petition.After making the observation, the bench made an effort to seek the assistance of the Solicitor General during the hearing which did not materialise.

The court posted the matter for hearing on October 12 asking the advocate to serve the copy of the writ petition either to the Attorney General or the Solicitor General.
The bench at one stage accused the advocate of “misleading” the court, saying allowing FDI in retail sector was a policy matter which is exclusively in the domain of the government of the day. “Some may say it is good and some may say it is bad but nothing is ultra vires,” it said.

In the PIL, Sharma alleged that the notification was issued without the authority of law as approval of neither the President nor the Parliament was secured.
The bench, however, observed that “this assumption that the policy has to be in the name of the President is flawed and unfounded.”

“The Constitution does not provide that the policy should be in the name of the President,” it observed.”These are matters dealt with exclusive ministries,” the bench further observed and wanted to know from the advocate whether he had stated anywhere in the petition that consequent to the circular issued by Government, no follow up circular was issued by the RBI.

The bench said the correctness of the policy has to be challenged on the touch stone of the circular whether it is ultra vires of the law or not.It further said policy is never required to be placed before Parliament.