The recent ruling came after All India Footwear Manufacturers and Retailers Association (AIFMRA) filed a petition against 21 e-commerce companies including Snapdeal, Myntra and Jabong, over allegations that they violated India’s foreign direct investment rules.
The Delhi HC however asked the Enforcement Directorate(ED) to initiate a probe against the 21 companies for investigating the same. However, the court, yesterday refused to pass any interim order against the companies over the allegations.
The Enforcement Directorate was already investigating into six e-commerce companies (not disclosed) for allegedly violating FDI norms.
“Investigate all the other entities…and publish the information in this regard over the next four weeks,” said Justice Rajiv Sahai Endlaw on Thursday while investigating into the case.
The Centre, Delhi Government, Central Bank and ED had also been instructed to file affidavits within four weeks, “detailing steps already taken so if any need for further directions is felt, the same can be issued”.
The Petitioner’s Argument
AIFMRA’s petition states that India doesn’t allow FDI in business to consumer e-commerce, but a 100% is allowed in B2B segment at present.
The lawyers for AIFMRA argue that online retailers behave just like any other traditional retailer—process payments, deliver items, take returns, and make refunds—despite the e-retailers stating that they are just an online marketplace built to facilitate transactions.