Article

‘Fall-back liability’ under the Consumer Protection (e-Commerce) Rules, 2020: Stricter norms in digital diaspora

By Vidhi Madan

The article in this issue of Corporate Amicus discusses the proposed amendments relating to the fall-back liability in the Consumer Protection (E-Commerce) Rules, 2020. The clause makes a paradigm shift in the liability of the online retailers who until now majorly functioned in the nature of middlemen but with these Rules coming into force, will become directly and vicariously responsible for the damage caused by the vendor to the customer. Elaborating on the judicial position relating to vicarious liability in India, the author examines the implication of the Rules for the online retailers. According to the author, the ‘fall-back liability’ clause is likely to cause more harm than good, by placing e-retailers at an unfavourable footing. She suggests that some carve-outs should be made to waive the liability of e-retailers where they can prove that enough deligence and precautions were taken. The author is also of the view that otherwise the fall-back liability clause may encourage unnecessary litigation...

Notifications and Circulars

• Last date for filing Cost Audit Report to the Board extended
• Format for filing financial information of issuers of Non-Convertible Securities notified
• Mechanism for exit option to dissenting unit holders under the SEBI (Real Estate Investment Trusts) Regulations, 2014 and SEBI (Infrastructure Investment Trusts) Regulations, 2014 revised
• Master Circular on Prudential Norms on Income Recognition, Asset Classification and Provisioning pertaining to advances notified
• Master Directions – Reserve Bank of India (Market-makers in OTC Derivatives) Directions, 2021 notified
• Liquidators to disclose notices for public auction on IBBI’s electronic platform
• Relaxation on procedural matters related to Issues and Listing by SEBI
• Timelines for Investment Advisors to conduct annual audit extended

Ratio decidendi

• Notification banning online rummy played for stakes quashed for being arbitrary, illegal and violative of fundamental right to trade and commerce – Kerala High Court
• Chairman of a company is ineligible to act as an arbitrator to resolve dispute between the company and another party – Supreme Court
• Arbitration – Interim relief application when already heard and reserved for orders by Court, it is not feasible to be considered before Arbitral Tribunal – Supreme Court
• More flexible capital reorganization for private companies – Reclassification of equity shares as preference shares not impermissible – NCLT Mumbai

News Nuggets

• Production Linked Incentive (PLI) scheme for automobile and auto components notified
• Production Linked Incentive (PLI) scheme for textiles notified
• Timelines extended to ease compliance
• Contractual employees cannot approach principal employer to exercise their rights; should approach the contractor instead
• Liquidation – 90 days available to auction-purchaser to pay, even when liquidation pending before 25 July 2019
• E-booklet on Boost to Ease of Doing Business and Investment released
• Cyber Security Awareness Campaign launched by IRDAI
• Paytm Payments Bank has been notified as a Scheduled Bank