The Confederation of All India Traders (CAIT) on Monday welcomed the Delhi High Court’s order in which it held Amazon liable for violating the Foreign Exchange Management Act (FEMA) and provisions of the FDI policy of the Government.
The court was hearing a case related to Future Group’s proposed asset sale to Reliance Retail, a deal that is being opposed by Amazon.
While pronouncing the order, the single judge bench of Justice Mukta Gupta said, “prima facie the representation of Amazon based on the plea that the resolution dated 29th August 2020 of FRL (Future Retail Limited) is void and that on conflation of the FCPL SHA and FRL SHA, the ‘control’ that is sought to be asserted by Amazon on FRL is not permitted under the FEMA FDI Rules, without the governmental approvals, this Court finds that FRL has made out a prima facie case in its favour for grant of interim injunction… Amazon has also based its representation on the alleged breach of FCPL SHA and FRL SHA, as also the directions in the EA order.”
“..both FRL and Amazon have already made their representations and counter representations to the statutory authorities/regulators and now it is for the Statutory Authorities/Regulators to take a decision thereon.. Consequently, the present application is disposed off, declining the grant of interim injunction as prayed for by FRL, however, the Statutory Authorities/Regulators are directed to take the decision on the applications/objections in accordance with the law,” the court added.
Against the backdrop of the case, CAIT Secretary General Praveen Khandelwal said, “This judgement vindicates the stand taken by the CAIT since a long time that Amazon is openly violating the FDI Policy of the Government and reinforces Amazon’s blatant conduct and an urgent need for the Enforcement Directorate and other statutory authorities to take corrective measures so as to prevent Amazon from abusing the laws of the land for its benefit.”
He said that the manipulative, coercive, arbitrary and dictatorial policies of Amazon to control & dominate the retail trade of India through e-commerce should come to an end now.
It has been rightly held that Amazon acquired control of Future Retail by virtue of its arbitrary dominance in Future Coupon Limited and in the absence of any Government approval, it is contrary to FEMA & FDI rules, according to CAIT.
The CAIT in the recent past has submitted a detailed complaint along with evidence to the Commerce Minister, Finance Minister, Enforcement Directorate, SEBI and RBI for taking action against Amazon for its violative deal with the Future Group.
The CAIT in its complaint has repeatedly said that Amazon in a most clandestine manner but in violation of FEMA and the FDI policy acquired rights which were not merely protective but rather conferred controlling right in favour of Amazon which is not allowed both under FEMA and the FDI policy.
The findings by the High Court that Amazon has violated provisions of the FEMA rules vindicate CAIT’s consistent efforts to highlight the habitual violations of those rules by major e-commerce players like Amazon, said CAIT.