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New Delhi: "Consumer is
the king", the Supreme Court said Wednesday upholding the
government's policy of allowing foreign direct investment (FDI) in
multi-brand retail, holding that it did not suffer from any
constitutional infirmity.
While the court underlined the consumer's supremacy, it described
the middleman as an "enemy", "sucker", "curse" and "Shylock" of
the retail market.
The apex court bench of Justice R.M. Lodha, Justice Madan B. Lokur
and Justice Kurien Joseph said: "On matters affecting policy, this
court does not interfere unless the policy is unconstitutional,
contrary to statutory provisions, arbitrary, irrational, or in
abuse of power."
"Consumer is the king. Middleman is the enemy of the retail
market. Middleman is a sucker of the economy and if he is being
eliminated then it directly benefits the consumer and the
producer," Justice Lodha said.
Dismissing a petition challenging FDI in multi-brand retail, the
court said the impugned policy did not suffer from any vires and
there was no merit in the challenge.
The policy was challenged by advocate M.L. Sharma who contended
that FDI in multi-brand retail was introduced by issuing two press
notes, without amending the provisions and rules regulating the
sector.
Noting that permitting FDI in multi-brand retail was aimed at
eliminating the middleman from the retail market and to benefit
the consumer and the producer, Justice Lodha said: "Middlemen are
a curse to the economy and they work like Shylock."
As Sharma insisted that FDI in multi-brand retail would eliminate
the traditional retail marketing chain in the country, Justice
Lodha gave the example of the onion producers in Maharashtra's
Nashik.
Justice Lodha said while the onion growers of Nashik didn't get
even Re.1 per kg for their produce, the same was sold for Rs.25
per kg to the consumer.
Referring to the government's reply to the petition, the court
said the experience of China, Brazil, Indonesia, Thailand and
other countries showed that both the organised and unorganised
sector in retail market could co-exist and grow.
"Why don't you expect that happening in India?" asked the court.
The government in its affidavit said the prime focus in allowing
the FDI in multi-brand retail was to "benefit the consumer by
enlarging the choice of purchase".
The government pointed to a World Bank report which said the
average price that farmer received for a typical horticulture
product was only 12-15 percent of the price the consumer paid at a
retail outlet.
The court also pointed to the Indian Council for Research and
International Economic Relations report which said "unorganised
and organised retail not only co-exist, but also grow
substantially in size, as a result of the growth of organised
retail".
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