Kolkata court vacates stay on Metro’s cash & carry project

Kolkata court vacates stay on Metro’s cash & carry project

Kolkata: The Indian cash and carry arm of German retail giant Metro AG, which is getting ready for a court battle in Bangalore, where it has been accused of overstepping its mandate of selling only to institutions and retailers, may have reason to smile—in Kolkata.

After eight months of battling it out in Kolkata’s civil court, the high court and even the Supreme Court, the multinational has finally won permission to resume construction of its first store in the city.

This means that the firm can launch its operations in the city in due course. It has been 16 months since Metro leased 7.53 acres of land along the Eastern Metropolitan Bypass from the state government and its industrial development agency. In February, the company found itself dragged into a 45-year-old litigation over the ownership of the land it had leased.

That was when the Alipore civil court, where the case was being heard, issued an injunction restraining Metro, or any third party in the case, from changing the character of the land till the case was cleared. Metro appealed to the court to vacate the injunction, with the state government too pressing its case. When this was not immediately granted, the company moved the Calcutta high court and later the Supreme Court, only to be returned to the lower court each time.

Finally, on Friday, the court vacated the earlier stay. Officially confirming the district court’s ruling vacating the stay on the construction of its wholesale centre, company’s spokesman Manish Bhargava refused to elaborate on what would be next on its agenda.

Another company executive, who did not wish to be identified, said the company’s board is expected to meet this week to chalk out a plan for Kolkata. “The tentative plan is to open about four-five stores in the city by 2010," he said. However, Metro’s efforts to pick up land at other locations in the city have not been successful.

Metro’s entry into Kolkata hinges on the one property it leased. The firm, which has already hired 60-odd people in preparation for its rollout, has been deploying the workforce in Bangalore and Hyderabad where it has stores, while it waited for the litigation to end.

Metro, with its cash and carry format, has not faced much opposition in West Bengal until now. Chief minister Buddhadeb Bhattacharjee, talking about his party’s objection to the entry of foreign direct investment in the retailing of agricultural produce at the meeting of the executive body of industry lobby Ficci, said Metro has been allowed in the state as an experiment.

The strong opposition posed by parties such as Forward Bloc, a constituent of the Left Front government in the state, and the main opposition party Trinamool Congress, has already spooked the rollout plan of several organized players in the agri-retail sector, including Reliance Industries Ltd and ITC Ltd. The Forward Bloc has made some noise about the entry of Metro, too, although it has focused its ire squarely on Reliance.