Sunday, December 10, 2023

Centre hints at amending consumer protection rules to include entities other than companies in Delhi HC

A divisional bench of the Chief Justice and Justice Jyoti Singh while hearing the petition through video conferencing noted, “if you cannot amend we’ll add Reading down to the rule adding the word ‘if’ to it.”

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The Delhi High Court on Wednesday allowed time to the Centre to think upon amending rule 4(1) of the Consumer Protection (E-Commerce) Rules to the extent that it includes entities not only limited to companies and include partnership firms, cooperative societies, etc. to perform e-commerce business.

A division bench of Chief Justice D.N. Patel and Justice Jyoti Singh noted, “If you cannot amend, we’ll add reading down to the rule adding the word ‘if’ to it.”

The petition has been filed by Dhruv Sethi challenging Rule 4(1) of the Consumer Protection (E-Commerce) Rules which mandates an entity selling goods and services online “shall” be registered as a company in India.

Senior Advocate Anand Grover, appearing for the petitioner, submitted, “Interpretation of Rule 4 is incorrect…it requires a mandate to be company, that is why it is required to be struck down.”

Whereas, the bench told Additional Solicitor General Chetan Sharma, “Mr. Sharma just have a glance upon 4(1) an E-commerce company “Shall” be a company and now if a small man want to do e-commerce business…he might at a later stage become a company but 4(1) says you go for registration.”

Sharma suggested to the bench, “Your lordships may not pass an order and I’ll put in with the department, it is English that is creating the problem.”

On which the Chief Justice stated, “If you cannot amend, we’ll add a reading down with “if”. We do not want to quash you, we are with you… include individuals, firms, partnership, co-operative societies. Co-operative societies are doing huge businesses.”

Whereas, Justice Jyoti Singh said, “My suggestion is that the word ‘shall’ may be changed to ‘may’, it could equalize.”

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The Chief Justice further noted, “Otherwise we also have power, we’ll rephrase it….we are giving you time to think upon.”

The bench has listed the matter for further hearing on March 26, counsel appearing for the Centre stated in the end that we may also amend the rule.

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