1. Draft E-Commerce Guidelines for Protection of Consumers released by the Ministry of Consumer Affairs – What should e-commerce entities and sellers on e-commerce platforms look out for in the proposed guidelines?
The Ministry of Consumer Affairs has proposed the E-Commerce Guidelines for Consumer Protection, 2019 (“Guidelines”) and has invited comments and suggestions from various stakeholders on the draft Guidelines by September 16, 2019. These Guidelines are yet to be notified.
Objective of the Guidelines – The proposed Guidelines have been drafted with a two-fold object. One being the protection of interests and rights of consumers and the other being the prevention of unfair trade practices by e-commerce entities. Some of the key highlights of these Guidelines are as follows:
i. Who will be treated as an “E-Commerce Entity” under the proposed Guidelines?
An E-Commerce Entity shall include any company incorporated under the Companies Act, 1956 or the Companies Act, 2013 or a foreign company covered under section 2 (42) of the Companies Act, 2013 or an office, branch or agency in India as provided in Section 2 (v) (iii) of FEMA 1999, owned or controlled by a person resident outside India and includes an electronic service provider or a partnership or proprietary firm, whether inventory or market place model or both and conducting the e-Commerce business.
ii. Proposed guidelines for carrying out E-Commerce Business:
a. Requirement of mandatory registration as a legal entity under the applicable laws of India. For example – registration as a company under the Companies Act, 2013 or as an LLP under the LLPAct, 2008.
b. Submission of self-declaration by such entity to the Ministry of Consumer Affairs declaring compliance with these Guidelines.
c. Promoters and key managerial personnel must not be convicted of any offence punishable with imprisonment in preceding 5 years.
d. E-Commerce Entity should be in compliance with Information Technology (Intermediaries Guidelines) Rules, 2011.
e. Payments for sale may be facilitated by the E-Commerce Entity in conformity with the guidelines prescribed by the Reserve Bank of India (“RBI”)
f. Complete details of the sellers on the platform (ex: legal name, principal geographic address, name of website, e-mail address, including clarification of their business identity, the products they sell, and how they can be contacted by customers) to be displayed on the website of the E-Commerce Entity.
iii. Obligations of E-Commerce Entities and Sellers under the Proposed Guidelines:
The Guidelines set out the obligations of both the e-commerce entity and the sellers who have their presence on the e-commerce platform. As per the proposed Guidelines, it will be mandatory for the e-commerce entity and the sellers to enter into a contract for the subscription of the e-commerce platform.
a. Some of the key obligations of an E-Commerce Entity shall include: (i) adopting fair trade practices; (ii) mentioning safety and health care information of the goods and service advertised for sale on the e-commerce platform; (iii) ensure that the advertisements for marketing of goods or services are consistent with the actual characteristics, access and usage conditions of such of goods or services; (iv) providing information on payment options made available to a user and implementing adequate security of those payment methods; (v) Ensuring that personally identifiable information of customers are protected and the collection and usage of consumer data complies with provisions prescribed under the Information Technology (Amendment) Act, 2008 etc.
b. Key obligations of a seller: A seller on an e-commerce platform shall: (i) display the break-up price of goods or service by showing all compulsory charges such as taxes, postage charges etc.; (ii) comply with mandatory display requirements as per Legal Metrology (amendment) rules 2017 for pre-packaged commodities; (iii) provide mandatory safety and health care warnings and shelf life that a consumer would get at any physical point of sale; (iv) be responsible for any warranty/guarantee obligation of goods and services sold etc.
iv. Procedure for addressing Consumer grievances: As per the proposed Guidelines, every e-commerce entity shall: (i) Publish on its website the name of the Grievance Officer and his contact details as well as mechanism by which users can notify their complaints about products and services availed through their web site; (ii) The Grievance Officer shall redress the complaints within one month from the date of receipt of complaint; (iii) provide facility to consumers to register their complaints over phone, email or website and shall provide complaint number for tracking the complaint; and (iv) Provide mechanism/system to converge with the National Consumer Helpline for the purposes of redressing their grievances.
Quick View
These Guidelines are the second piece of policy which will cover both domestic as well as foreign based e-commerce entities. Earlier this year, the Draft National E-Commerce Policy was released. However, the same is yet to be notified. While the latter was concerned with the conduct of business by e-commerce entities, these Guidelines focus on protection of consumer interests. Should and when the proposed Guidelines be notified, all e-commerce entities and the sellers should take note of their obligations and have the requisite measures in place in order to be in compliance with the said Guidelines.
2. Tests laid down by the Delhi HC for showcasing films bearing same/similar title with other marks
The Delhi High Court (“Delhi HC”) on July 29, 2019 decided on whether a permanent injunction be granted to restrain the producers, director, and others connected with the film “Khandani Shafakhana” (“defendants”) from using Dr. Vijay Abbot’s proprietary material (i.e., the name of the clinic where Dr. Vijay Abbot and his family practiced ayurvedic medical care for the treatment of sexual dysfunctions) and whether the film was liable to be banned from being screened in the case titled Dr. Vijay Abbot v. Super Cassette Industries.
The Delhi HC laid down the following principles for deciding whether a film should be prevented from being screened or not:
i. effect of allegedly offending words/visuals should be judged from the standards of a reasonable person’;
ii. a film that illustrates consequences of social evil, necessarily must show that social evil;
iii. the film should be seen holistically and not in a restricted manner;
iv. the social relevance and well-being of the society that a film aims to project should be taken into consideration;
v. title alone of a literary work cannot be protected by Copyright Law;
vi. protection of literary titles lies in the field of trade mark and unfair competition;
vii. humour cannot be divorced from reality; we can laugh only in the context of what is known to us and not in abstract; if it were to be held that there can be no contextual humour as the same is bound to be considered to be offensive by someone or the other in the know of the context.
It also noted that the film in question dealt with a socially relevant subject of sex education and was a work of fiction. It depicted the condition of traditional medical practitioners in India and thus should not be prevented from being showcased.
The Delhi HC also went on to hold that there arose no cause of action for Dr. Vijay Abbot to sue the defendants as the film in no way caused defamation towards Dr. Vijay Abbot and his family. Also, the trademark in question was not being used for the past 18 years by Dr. Vijay Abbot and his family. It further held that the words “Khandani Shafakhana” are of generic nature and thus the plaintiff cannot prevent another person from using such words.
Quick View
The decision of the Delhi High Court has laid down the tests to determine whether a film bearing a same/similar title of other marks (that are generic in nature) can be screened or not. It takes into consideration several judicial precedents decided by the Supreme Court as well as the Delhi HC with regard to the subject matter. It also re-affirmed the legal position with respect to use of generic names as part of movie titles.
The Companies (Appointment and Qualification of Directors) Third Amendment Rules, 2019 (“Amendment”) have been published in the Official Gazette on July 25, 2019 and have come to effect from this date.
This Amendment has amended Rule 11 and Rule 12A of the Companies (Appointment and Qualification of Directors) Rules, 2014 (“Rules”) which deal with e-KYC of directors of a company. E-KYC of directors has to be done by filing “e-form DIR-3-KYC” for every person holding a Director Identification Number (“DIN”). This form is detailed and lengthy in nature and had to be filed for every financial year. However, vide this Amendment, a new form “DIR-3-KYC-WEB” has been made available for an individual who has already submitted e-form DIR-3 KYC in relation to any previous financial year. By submitting this web-form DIR-3 KYC-WEB through the web service for any subsequent financial year, the KYC shall be treated as complete and the same shall be deemed to be in compliance of the provisions of this rule for the said financial year. Provided that, in case an individual desires to update his/her personal mobile number or the e-mail address, (as the case may be) he/she shall update the same by submitting e-form DIR-3 KYC only.
The fee for filing the new form has been introduced by way of Companies (Registration Offices and Fees) Fourth Amendment Rules, 2019. There is no fee payable if filing is made by the 30th September of every financial year. A late fee of INR 5000/- is payable in the event there is a delay in filing the e-form DIR-3 KYC or the DIR-3 KYC-WEB (through the web services).
Quick View
This amendment will make filing easier for carrying out KYC of directors as the new form introduced is brief and concise when compared to the original form that was in earlier in place. The new form only requires the concerned director to fill in his/her basic details such as PAN number, Aadhaar Number, Mobile Number, Email ID and residential address.