RADIO HOUSE Vs. UNION OF INDIA

JUDGEMENT

(1.) THE subject matter of this petition is the corporatisation of the retail sector by bringing in foreign Direct Investment ('f. D. I' for short ). The cause of the retail traders is espoused in this petition. The petitioners' grievance is that if the foreign companies are permitted to enter into the field of retail trade, the business of retail traders in India would be affected adversely; it results in the deprivation of their solitary source of livelihood.

(2.) THE second respondent is a wholly owned subsidiary of Metro AG, a German multinational Company, the world's fourth largest retailer. It has established two 'state of the Art' Cash and Carry stores in Bangalore at Yeshwanthpur and on Kanakapura road. The first respondent accorded the approval to the second respondent, to carry on cash and Carry wholesale business in India, subject to certain terms and conditions. The material condition at S1. No. 6 in the approval order, dated 5th December, 2000 (Annexure-B to the writ petition), reads as follows : "6. The approval is subject to the condition that the company would need to ensure that the selling of the products stocked by it to retailers who would possess sales tax registration and not to consumers. "

(3.) THE inclusion of the aforesaid condition is only to ensure that the second respondent would not resort to retail trading. It is not supposed to sell any commodities to the end consumers. It is the petitioners' case that the second respondent, though obtained permission to do wholesale business, has obtained retail licence to deal in over-the-counter pharmaceutical drugs and the retail licence for the sale of IML liquor. It is also doing the business of selling spectacles, jewellery, audio, visual and compact discs, etc. The petitioners have referred to the statement of second respondent's Managing Director that the price would be the same whether a person buys 100 units or one unit, thereby indicating that the second respondent would indulge in retail business by selling even a single unit. Such manifest statements and activities do not lend credence to the claim of second respondent to be doing only wholesale trading. The petitioners have also complained of the distribution of two lakh membership cards of the respondent No. 2 in Bangalore; the card-holders include Architects, interior Designers, Finance Companies, who cannot be construed as retailers by any stretch of imagination. The petitioners have also given illustration that a registered retail trader dealing in garments may purchase the television sets, although he is not dealing in television sets. The mere production of the sale tax registration number would not convert a retail sale into a wholesale sale.