HC issues notice to Govt on plea by traders' body

Jodhpur: The Rajasthan High Court on Tuesday issued a notice to the central government seeking its reply on a plea by a traders' body which has alleged violation of FDI rules by e-commerce giants Amazon and Flipkart.

The Confederation of All India Traders (CAIT) moved the petition accusing the e-commerce companies of working in contravention of the FDI rules and promoting loss funding with a view to capture the market.

Admitting the petition, Justice Dinesh Mehta issued notice to the central government and has listed the matter for hearing on October 14.

"These companies have resorted to unethical trade practices and have resorted to loss funding by giving discounts extending up to 90 per cent with a view to capture the market," argued the petitioner's counsel Rajvendra Saraswat.

Asked about the matter, Flipkart said it was fully complying with FDI rules and was not aware of the litigation, while an e-mail sent to Amazon India did not elicit response.

Saraswat alleged in the court that the e-commerce companies are engaged in two types of violations in their online selling practices. "One is that you cannot have a pre-determined price of any product while selling and the other is you cannot have ownership of the inventory," Sarswat said, adding that most of the goods they are selling belong to their own companies.