A Division Bench comprising Justices R Banumathi and R Subbiah, in an oral order, directed the Centre to file a preliminary counter affidavit.
A PIL was filed before Madras High Court seeking a direction to authorities to examine investment by a subsidiary of Wal Mart in two Indian firms in March-April 2010.
It submitted the Centre had allowed FDI in multi brand retail on Sept 14, 2012, before which it had been prohibited under Foreign Exchange Management Act, 1999 (FEMA) and Foreign Exchange Management (Transfer or Issue of Security by a person resident outside India) Regulations 2000.
It alleged that in March and April 2012 Wal Mart Stores Inc, USA through its subsidiary, in collusion with two Indian firms, illegally invested Rs 455.80 crore in multibrand retail in India by masquerading it as for 'Services Sector.'
Petitioner T Vellayan,President, Federation of Tamil Nadu Traders' Association contended that Wal-Mart also holds a 49 per cent interest in the Indian company, operating multi brand retails stores in various formats in the country.
He contended that any change in FDI policy and its subsequent introduction by change in regulations can only be prospective and not retrospective. So the present policy change to allow FDI in multi brand retail can never legitimise the "illegal FDI" already made by Wal mart, he contended.
