HIGHLIGHTS OF THE LATEST CONSUMER PROTECTION ACT, 2019

The Government of India has recently passed the Consumer Protection Bill 2019, which received the Presidential assent on 9th August, 2019. This Consumer Protection Act, 2019 (the New Act) is said to have replaced the previous Consumer Protection Act 1986. The New Act aims at strengthening consumer rights and protecting consumer interests, and further lays down simpler procedures to give consumers a speedy redressal. The Act also brings under its jurisdiction, the e- commerce and the tele-shopping industry.

The following are few significant highlights of the New Act: –

  • Establishment of the Central Consumer Protection Authority (CCPA)

The New Act seeks to establish a Central Authority i.e. the Central Consumer Protection Authority (the new Authority). It looks into matters which relates to violation of consumer rights, false and misleading advertisements, unfair trade practices. The new Authority also can “promote”, “protect” and “enforce” the rights a class of consumers. The said Authority would also have a dedicated Investigation wing which will be responsible for conducting various inquiries/ investigations and it will also have the power of search and seizure.

  • Action against Mis -Leading Advertisements and liability of Endorsers

The New Act has provisions which deals with mis- leading advertisements that falsely describe any product or service or give guarantee which can mis- lead the consumers. This act of the advertisers can be penalised with penalty up to Rupees 10 Lakhs and imprisonment for a term which may extend up to 2 years.

  • Product Liability

The New Act has provisions which deals with “product liability”. A product liability action may be brought by a complainant against a product manufacturer or a service provider, as the case maybe for any harm caused to him on account of a defective product.

  • Improved pecuniary jurisdiction

The New Act enhances the pecuniary jurisdictions of the following forums: –

District Commission: – from Rupees 20 Lakhs to Rupees 1 Crore

State Commission: – from Rupees 1 Crore to Rupees Ten Crore

National Commission: – from Rupees 1 Crore to above 10 Crore

However, the New Act mandates the Commission to suggest mediation between parties before admitting the complaint.

Thus, the New Act is said to have brought new and simpler provisions for protection of consumer interests in the country.

Aakritee Gambhir

Associate

The Indian Lawyer

SUPREME COURT HAS UPHELD CONSTITUTIONAL VALIDITY OF AMENDMENTS TO INSOLVENCY AND BANKRUPTCY CODE 2016

The Supreme Court has recently upheld the constitutional validity of the amendments made to the Insolvency and Bankruptcy Code 2016 as amended thereof in 2018 (the Code), in Pioneer Urban Land and Infrastructure Limited & Anr. vs. Union of India & Ors., vide Judgment dated 09-08-2019, thereby treating homebuyers or allottees of real estate projects as financial creditors under the Code and also entitling them to be represented in the Committee of Creditors by authorised representatives.

The real estate developers had challenged the said amendments of the Code on the following significant grounds:

  1. That the amendments would enable the homebuyers to arbitrarily initiate case under Section 7 of the Code to compel them to refund payments which would adversely affect the projects that had already been commenced. Thereafter, the resolution plans would also be rejected by the committee of creditors, of which the homebuyers would also be a part of, and thus, a normal solvent company would have to be forcibly wound up, which would not be in the interest of the developers. Thus, the amendments would infringe the fundamental rights of the developers, i.e. Article 19 (1) (g) of Constitution of India 1950 as amended thereof (the Constitution).
  2. Further, in case of any issue or dispute between allottees and developers, they can approach the authority established under the Real Estate (Regulation and Development) Act, 2016 as amended thereof (the Act), which is a real estate sector-specific legislation, and not approach the authority established under the Code, which is only a general enactment dealing with insolvency. Thus, there is a need that the Act be given precedence over the Code.

But the Apex Court upheld the constitutional validity of the amendments made to the Code on the following grounds:

  1. That an allottee would trigger the provisions of the Code against the developer only in the event that he has lost faith in the management of the developer, because once the petition for insolvency resolution is admitted, then there would be a lengthy process of rehabilitation of the developer and less chances of recovering the entire amount due from the developer as there would be other creditors and stakeholders making claims against the said developer. Whereas, if an allottee triggers the Act, there would be higher probability that the court would direct the developer to refund the money to the allottee or direct him to adhere to the provisions of the Act and the agreement executed between the allottee and the developer for completion of the construction of the flat/apartment, etc. Thus, there is no or limited scope for allottees to trigger the provisions of the Code arbitrarily and thus, there is no or limited scope for any adverse effect on the interests of the developers.
  2. That the Act provides that the remedies provided to allottees under the Act are only in addition to any other provision of law, and thus, are not exclusive remedies.
  3. That the allottee makes payments in instalments in order to obtain a flat/apartment, which are co-terminus with phases of completion of the real estate project, and thus, homebuyers can be placed equally with other financial creditors who advance certain amounts to the developer-corporate debtor.


Thus, the Supreme Court upheld the constitutional validity of the amendments made to the Code and held that the Act has to be read harmoniously with the Code. The Court further directed the National Company Law Tribunal (NCLT) to take up applications filed by homebuyers or real estate allottees under the Code, to decide the matters in light of the Judgment of the Supreme Court dated 09-08-2019.

Harini Daliparthy

Senior Legal Associate

The Indian Lawyer

CONSEQUENCES OF AMENDMENT OF ARTICLE 370 AND REVOCATION OF ARTICLE 35 A OF THE CONSTITUTION OF INDIA

Under Article 1 of the Indian Constitution, the State of Jammu and Kashmir is a constituent state of Indian Union and its territory forms a part of the territory of India. On the other hand, Article 370 in Part XXI of the Constitution grants a special status to it. Accordingly, all the provisions of the Constitution of India do not apply to it. It was also the only State in the Indian Union which had its own separate State
Constitution – the Constitution of Jammu and Kashmir. Constitutional provisions of Article 35A and Article 370 have been repealed and amended respectively as announced by our Home Minister Mr Amit Shah with an official notification passed in the Gazette of India signed by the President. This revocation could possibly have positive or negative consequences in the coming future which only time will tell.

Article 35A gave Jammu and Kashmir (J&K) Government the right to decide as to who will qualify to be a permanent resident of J&K, which furthered them to acquire or own land in the J&K region. However, revoking Article 35 A will now open gates for investment in property in J&K. Though its early to predict the impact but one can assume safely that the investment rate would be higher than normal. Since Kashmir had always been a region where political tension is on the rise one cannot be sure as to the increase in the rate of investment there now. Locals fear that it might change the State demographically from Muslim majority state to a Hindu majority one.

The Government has passed Constitution (Application to Jammu and Kashmir) Order, 2019 which will now supersede the Constitution (Application to Jammu and Kashmir) Order, 1954. Thus, the special status granted to Jammu and Kashmir stands revoked.

Also, the Centre has bought J&K Reorganisation Bill 2019 which splits the State into two separate Union Territories — Jammu and Kashmir, which will have a legislature, and Ladakh without a legislature. The consequences of this would be of such a nature that it will bring a lot of political tension especially in the region of Kashmir. The law and order of J&K will now onwards be looked after by the Central Government Also, the Central Government would be empowered to impose financial emergency under Article 360 in the J&K region.

Since the passing of this revocation the Union Government had passed an order for Delimitation of J&K Assembly. The whole political scenario has changed and its consequences are yet to be felt. Laws which previously did not apply to J&K will now apply to it. Moreover, both J&K and Ladakh will share the same High Court.

The real scenario will unfurl itself in a few weeks. But it is certainly a step to put an end to a most unfair provision of the law that helped differ State from State. The days of pampering J&K it seems are over.

Aakritee Gambhir

Associate

The Indian Lawyer

ARTICLE 35-A OF THE CONSTITUTION OF INDIA CEASES TO EXIST

Article 35-A of the Constitution of India 1950 as amended thereof (the Constitution) is an Article which empowers the State of Jammu and Kashmir to define the residents of the State and provide the special rights and privileges to those permanent residents. This Article was added through a Presidential Order. This Article was issued by the Government of India on 14 August, 1954 exercising the powers conferred by Article 370(1) of the Constitution.

Article 35-A confers certain special rights to the people of Jammu and Kashmir who have Permanent Residence Certificate (PRC). However, people who hither to did not have a PRC were compelled to do menial jobs. Now that Article 35-A has been repealed these people can apply for a PRC and live a better and more dignified life. They can also purchase property, participate in Panchayats, and general elections, study in any Government institutions.

Because of not having the PRC, the refugees and some people of Jammu and Kashmir cannot enjoy the right to have their own Property. These refugees who do not have the PRC, do not have the right to participate in Panchayats, elections and these refugees cannot study in any Government institutions.

After the Article 35A will be declared as unconstitutional, the refugees of Jammu and Kashmir can get the right to property, education in government institutions, etc.

Till now the residents of Jammu and Kashmir did not have a right to join the central services of India. In fact, the resident girls of Jammu and Kashmir did not have a right to choose a groom outside the State.

Now that Article 35-A ceases to exist, the residents of Jammu and Kashmir will be able to enjoy fundamental rights that the people of India have.

GOVIND GUPTA

ASSOCIATE

THE INDIAN LAWYER

The After-Effects of Amending Article 370

President Ram Nath Kovind on Monday issued Constitution (Application to Jammu and Kashmir) Order, 2019, which called for provisions of the Indian Constitution be applicable in the state “at once”. Notably, the President’s Order will supersede the Constitution (Application to Jammu and Kashmir) Order, 1954.


Despite tension, fears, and huge anticipation of a big move in the valley, the BJP Government has finally dropped the big Kashmir bomb today. The Home Minister, Mr Amit Shah said in Parliament that Article 370 of the Constitution, which grants special status to Jammu and Kashmir, has been amended. The Home Minister added, Jammu and Kashmir will be a separate Union Territory with a legislative assembly and Ladakh will be a separate Union Territory (UT) without an assembly. Jammu and Kashmir being a UT with the assembly will have a partial statehood status with an elected assembly and LG whereas Ladakh will be ruled directly by the Union Government through LG. Article 370 of the Constitution was a ‘temporary provision’ which promised to grant autonomous status to Jammu and Kashmir and limit the Parliament’s powers to make laws for the State. Constitutional provisions that were applicable to other Indian states are not applicable to J&K. Under Part XXI of the Constitution titled “Temporary, transitional and special provisions”, Article 370 is categorised as a “temporary provision with respect to the State of Jammu and Kashmir”.


Before the amendment, the Centre needed the State Government’s concurrence to apply laws — except in defence, foreign affairs, finance and communications. It meant the State’s Residents lived under a separate set of laws, including those related to citizenship, ownership
of property, and fundamental rights, as compared to other Indians.

What will happen to J&K now?
After’s Kashmir special status is gone, people from anywhere in India will be able to buy land, property or permanently settle in the State.
The BJP has fulfilled their promise as quoted in their manifestos. The BJP manifesto stated:
“In the last five years, we have made all necessary efforts to ensure peace in Jammu and Kashmir through decisive actions and a firm policy. We are committed to overcoming all obstacles that come in the way of development and providing adequate financial resources to all the regions of the state. We reiterate our position since the time of the Jan Sangh to the abrogation of Article 370,”.
It is now left to see the real after-math of such a historical event.

President Ram Nath Kovind on Monday issued Constitution (Application to Jammu and Kashmir) Order, 2019, which called for provisions of the Indian Constitution be applicable in the state “at once”. Notably, the President’s order will supersede the Constitution (Application to Jammu and Kashmir) Order, 1954.

Amid tension, fears, and huge anticipation of a big movein the valley, BJP Government has finally dropped the big Kashmir bomb today, Home minister, Amit Shah said in Parliament today that Article 370 of the Constitution, which grants special status to Jammu and Kashmir, has been amended. The home minister added, Jammu and Kashmir will also be reorganised, Jammu and Kashmir being a separate Union territory with a Legislative assembly and Ladakh a separate Union territory without the assembly. Jammu and Kashmir being the UT with the assembly will have a partial statehood status with an elected assembly and LG whereas Ladakh will be ruled directly by Union Government through the LG.

Article 370 of the Constitution was a ‘temporary provision’ which promises to grant autonomous status to Jammu and Kashmir and limits parliament’s powers to make laws for the state. Constitutional provisions that are applicable to other Indian states are not applicable to J&K. Under Part XXI of the Constitution titled “Temporary, transitional and special provisions”, Article 370 is categorised as a “temporary provision with respect to the state of Jammu and Kashmir”.

Under this Article, the Centre needs the State Government’s concurrence to apply laws — except in defence, foreign affairs, finance and communications. It means the state’s residents live under a separate set of laws, including those related to citizenship, ownership of property, and fundamental rights, as compared to other Indians.

After being re-elected in national polls this year, BJP as quoted in their manifestos have tried to fulfil that promise, it is now left to seen the real after-math of such a historical event.”In the last five years, we have made all necessary efforts to ensure peace in Jammu and Kashmir through decisive actions and a firm policy. We are committed to overcoming all obstacles that come in the way of development and providing adequate financial resources to all the regions of the state. We reiterate our position since the time of the Jan Sangh to the abrogation of Article 370,” the BJP manifesto for the national polls read.

Saurabh Yadav

Intern, The Indian Lawyer

GOVERNMENT OF INDIA’S MOVE TO REMOVE SPECIAL STATUS OF JAMMU AND KASHMIR AND BIFURCATE IT INTO SEPARATE UNION TERRITORIES

In one of the historic and unprecedented moves, the Government of India has amended and revoked Article 370 and Article 35A of the Constitution of India 1950 as amended thereof (the Constitution) respectively, vide promulgation of the Constitution (Application to Jammu & Kashmir) Order, 2019 (the Order) on 05-08-2019, thereby removing the special autonomous status that was earlier granted to Jammu and Kashmir (J&K).

Reportedly, the special status was earlier granted to J&K in order to refrain influx or invasion of J&K by outsiders, especially, from Hindu community, so that the Muslim-majority population in Kashmir valley was not diluted. The said special status enabled J&K to have their own constitution, criminal laws, national flag, non-applicability of orders of the Supreme Court of India and Indian laws in J&K, non-acquisition of land and non-employment of Indians in J&K.

But there has been a need to remove the special status and move beyond the regressive idea of living solo at a place and allow people from other states and countries to settle and/or set up businesses in J&K, bring more global investments, allow students and professionals from outside J&K to study and work in J&K, improve the quality of faculty, education, etc in J&K, and develop J&K economically, politically and socially.

Thus, the Government of India has annulled the special status of State of J&K and further announced to bifurcate the State of J&K into two Union Territories (UTs), namely, Union Territory of Ladakh (without Legislature) and Union Territory of J&K (with Legislature) for better and proper administration. Ladakh is said to be a scarcely populated region with a difficult terrain, whereas, J&K is said to be vulnerable to internal security and cross-border terrorism issues.

As a result of the promulgation of Order dated 05-08-2019, J&K would now be treated at par with other states of India. Although there have been mixed reactions from various people and politicians across the country in response to this Government move, but the Government continues to remain positive about its decision, as it would help in growth and development of J&K.

It seems the present Government has finally found a solution to the beleaguered problem of Kashmir. This move will now make the netizens of J & K at par with the rest of India. Mr Modi’s Government may have with one fell stroke crushed the chronic problem of Kashmir that was bleeding the National Exchequer.

Though currently there is a mixed reaction it is hoped that all will settle down and India will send strong signals to all that dare to upset the peace of the country.

SUPREME COURT OF INDIA HAS UPHELD DEATH SENTENCE OF ACCUSED FOR COMMITTING RAPE AND MURDER OF MINOR CHILDREN

The Supreme Court has in a recent case of Manoharan vs. State by Inspector of Police, Variety Hall Police Station, Coimbatore, passed a judgment dated 01-08-2019 whereby the Court held the Appellant-Accused guilty of commission of offence of rape and murder of minor children and thus, confirmed the death sentence awarded to the Accused-Appellant.

The Appellant-Accused along with another person were accused of brutally raping a 10-year-old girl and thereafter, murdering the minor girl and her younger brother. The other accused person was later on shot dead in a police encounter, leaving only the Appellant to be tried as an accused. The Trial Court of Madras had held the Appellant guilty of criminal conspiracy, kidnapping, rape, murder, causing disappearance of evidence, etc, and awarded death sentence to him. The High Court of Madras also confirmed the death sentence awarded to the Appellant-Accused.

The Supreme Court upheld the death penalty awarded to the Appellant-Accused based on the following circumstances:

  1. As per the Apex Court’s judgment in Machhi Singh v. State of Punjab 1983, a death sentence may be awarded by a court when:
  • The murder is committed in an extremely brutal, barbaric or outrageous manner so as to shock the collective conscience of the community or arouse intense and extreme indignation amongst them.
  • The murder is committed for a motive which displays total immorality and meanness.
  • The murder is committed not for personal reasons but for political reasons or to terrorize the people living in a particular society, caste or community, etc.
  • When multiple murders are committed of a particular section of a society.
  • When the victim is an innocent child who could not have provoked the person to cause his/her murder.

Having regard to the nature and circumstances of the crime, if the court feels that the life imprisonment appears to be an inadequate punishment, and the aggravating circumstances weigh more than the mitigating circumstances, only then the court may award death penalty to an accused person.

2. In view of the significant amendments to the Protection of Children from Sexual Offences Act, 2012, vide the Protection of Children from Sexual Offences (Amendment) Bill, 2019 (the Law) that have been recently passed by the Parliament of India on 01-08-2019, the Supreme Court herein stated that the minimum punishment for commission of an offence of aggravated penetrative sexual assault, has been increased to imprisonment of 20 years, extendable to life imprisonment or death.

Applying the aforesaid principles and amendments, the Apex Court herein held that the Appellant-Accused along with the deceased person had committed aggravated penetrative sexual assault on the 10-year-old girl and cold-blooded murder of both the minor children in a most heinous manner possible. Thus, the Supreme Court upheld and confirmed the death penalty awarded to the Appellant-Accused.

Harini Daliparthy

Senior Legal Associate

The Indian Lawyer

THE SUPREME COURT OF INDIA RULES ON ISSUE OF RETROSPECITIVITY OF SECTION 143A AND SECTION 148 OF NEGOTIABLE INSTRUMENT ACT,1881

The Supreme Court of India in the matter of G.J.Raja vs. Tejraj Surana dated 30.07.2019, while deciding the retrospective applicability of the certain Sections of Negotiable Instrument Act, 1881 (Act), has ruled that Section 143A of the Act which basically states that the court can order interim compensation to the complainant during the pendency of the case, does not have retrospective application. However it held that Section 148 of the Act, shall apply retrospectively. Section 148 allows the Appellate Court to direct the Accused to deposit a minimum of twenty per cent of the awarded amount (of the fine or compensation) decided by the trial Court.

The Bench comprising of Justice Uday Umesh Lalit and Justice Vineet Saran pronounced the Judgment in an appeal against a decision of the Madras High Court. The Bench categorically held that Section 143A is prospective in operation and the provisions can be applied or invoked only in cases where the offence under Section 138 of the Act was committed after the amendment and introduction of the said Section in the statute book.

In this Judgment the Supreme Court of India upheld the Punjab and Haryana High Court’s view, wherein Justice Rajbir Sehrawat, previously, held that Section 143A of the Act has no retrospective effect whereas Section 148 of the Act will apply to the pending appeals on date of enforcement of this provision.

Negotiable Instrument Act, Amendment 2018

The amendment to the Act in year 2018 introduced two new Sections i.e. Section 143A and Section 148. Section 143A gives power to the Trial Court to direct the accused to ‘pay’ an interim compensation which cannot be more than 20% of the ‘cheque amount’. A period of sixty days, after the Order is passed, is given to pay the interim compensation. It can be recovered in the manner of recovery of fine as provided in Section 421 of the Code of Criminal Procedure. The provision also stated that the interim compensation so received has to be returned by the complainant along with interest at bank rates as prescribed by Reserve Bank of India, if the accused is acquitted after the trial. Section 148 of the Act empowers the Appellate Court to direct the accused /Appellant to deposit minimum of 20% of fine or compensation awarded by the Trial Court.

Sourabh Kumar Mishra

Senior Legal Associate

The Indian Lawyer

COMPETITION COMMISSION OF INDIA HAS HELD MULTIPLEX OWNERS NOT LIABLE FOR ANTI-COMPETITIVE PRACTICES

Recently, the Competition Commission of India (C.C.I) has dismissed a case filed in Unilazer Ventures Private Limited v. P.V.R. Ltd. and others 24-07-2019 in which the Informant made the following main allegations:

  1. That lavish multiplexes colluded charge higher virtual print fee (V.P.F) from Indian film producers/distributor than Hollywood producers/distributors
  2. That multiplexes play longer duration advertisements to make profits, as a result of which the efforts of the producer in curtailing the length of the film are disrupted
  3. That the multiplex owners being in a position of strength unilaterally prescribed terms of revenue sharing with the producers/distributors.

But the CCI dismissed the aforesaid allegations on the following grounds:

  1. That there was no evidence of any anti-competitive agreement amongst the multiplex owners leading to imposition of common V.P.F on Indian producers. 
  2. That the allegation pertaining to longer duration of advertisements does not fall under the ambit of the Competition Act 2002 as amended thereof (the Act).
  3. That the revenue sharing arrangement between producers and multiplex owners was made with mutual consent and due deliberations.

Thus, the C.C.I held that the multiplex owners were not liable for carrying out any anti-competitive practices in contravention of the provisions of the Act.

Govind Gupta

Associate

The Indian Lawyer

PARLIAMENT PASSES RIGHT TO INFORMATION (AMENDMENT) BILL, 2019

The Rajya Sabha on Thursday passed Right to Information (Amendment) Bill 2019, which was cleared by Lok Sabha on Monday. This caused a stir not only in the political houses but also across the nation, as the Amendment received mixed reactions.

The Bill has basically amended two sections i.e . Section 16 and Section 27 of the Right To Information Act 2005 (Act), but its implications are said to be highly political. Bill proposes to change the fixed term of the Information Commissioner, and make their pay and service conditions subject to the executive rules to be made by the Government.  As per the current Act the Chief Information Commissioner and Information Commissioners have fixed term of five years, but the new Bill changes that and instead, states “ for such term as may be prescribed by the Central Government”. Even the term of State Information Commissioner is curtailed by the Amendment.

Other Section, which has been amended i.e. Section 27, will now give rule-making power to the Central Government to determine the pay, allowances and service conditions of Information Commissioner. The present Act states that the salary and allowances of Chief Information Commissioner and Chief Election Commissioner will be same, which are fixed as per the provisions of the Constitution. It is assumed that the RTI Act has consciously given similar status to both in order to ensure that they function independently and autonomously.

Although while introducing the Bill, Jitendra Singh, Minister of State of Ministry of Personnel, Public Grievances and Pension, said that Information Commission was a statutory body and it was an anomaly to equate it to a constitutional body like Election Commission. Making Information Commissioners equal to the status of Election Commissioners means that they are at par with Supreme Court judges. However, the orders of Information Commissioners can be challenged in the High Court. Therefore, there is an apparent anomaly in the status of Information Commissioners, which needs to be rectified, explained the Minister. The attempt of the government is not to undermine the autonomy of Information Commissioners, but to bring in uniformity in services, said the Minister. He also pointed out that the Sections 12(4) of the Act, which ensures the autonomy of Information Commissioners, has been left untouched by the amendment. The process of appointment of Information Commissioners as specified in Section 12(3) has also been kept the same, the Minister added.

The political parties along with former Information Commissioner have assailed the Bill, as they said that this Bill will weaken the whole structure and will make them subservient to the political executive and will defy the whole purpose of the Act itself.

Sourabh Kumar Mishra

Senior Legal Associate

The Indian Lawyer