MMPC 013 solved Free Assignment 2023
MMPC 013 Solved Free Assignment January 2023
IGNOU MBA Assignment 2023
Q 1. Discuss the modes of dissolution of a partnership and explain the grounds on which a court can order dissolution of a firm.
Ans. Partnership dissolution refers to the termination of a partnership, which is a legal relationship between two or more persons who carry on a business with the aim of making a profit.
Like any other business entity, partnerships can dissolve for various reasons, including voluntary dissolution by the partners, expiration of the partnership term, or dissolution ordered by a court.
Partnerships can dissolve in different ways, and the mode of dissolution depends on the circumstances surrounding the partnership. The various modes of dissolution of a partnership are as follows: MMPC 013 Solved Free Assignment 2023
Dissolution by Mutual Consent: Partnerships can be dissolved by mutual consent, whereby all partners agree to dissolve the partnership.
This typically requires a written agreement signed by all partners, and it may also involve the distribution of partnership assets and settlement of liabilities.
In some cases, partners may choose to dissolve a partnership due to a change in business goals, retirement, or other personal reasons.
Dissolution by Expiry of Term: If a partnership is formed for a specific term or purpose and that term expires, the partnership is dissolved automatically without the need for any formal action.
For example, if partners agree to form a partnership for a period of five years, the partnership will dissolve automatically after the completion of five years.
Dissolution by Notice: In some cases, a partner may dissolve a partnership by giving notice to other partners. MMPC 013 Solved Free Assignment 2023
The partnership agreement may specify the notice period required for dissolution, and partners may have to follow the procedure mentioned in the agreement.
If the partnership agreement does not specify any notice period, partners may have to provide a “reasonable” notice period, which varies depending on the circumstances and the nature of the partnership.
Dissolution by the Death or Insanity of a Partner: The death or insanity of a partner can lead to the dissolution of a partnership.
If a partner dies or becomes legally insane, their interest in the partnership may pass to their heirs or legal representatives, and the partnership may dissolve, unless otherwise stated in the partnership agreement.
Dissolution by Bankruptcy: If a partner becomes bankrupt, it may result in the dissolution of the partnership. MMPC 013 Solved Free Assignment 2023
Bankruptcy may affect the partner’s ability to contribute to the partnership, and it may also affect the partnership’s ability to continue its operations.
In such cases, the partnership may be dissolved, and the assets may be liquidated to satisfy the partner’s creditors.
Dissolution by Court Order: A court can order the dissolution of a partnership on various grounds, which may include:
a. Breach of Partnership Agreement: If one or more partners violate the terms of the partnership agreement, it may be considered a breach of contract, and the court may order dissolution of the partnership.
For example, if a partner embezzles partnership funds or engages in activities prohibited by the partnership agreement, it may constitute a breach of the agreement and lead to dissolution.
b. Misconduct or Mismanagement: If partners engage in misconduct or mismanagement of partnership affairs, it may adversely affect the partnership’s operations and lead to dissolution.
Misconduct or mismanagement may include fraud, misrepresentation, gross negligence, or willful violation of partnership duties.
c. Incapacity or Unwillingness to Perform Partnership Duties: If a partner becomes incapacitated or unwilling to perform their partnership duties, it may disrupt the partnership’s operations and lead to dissolution.
For example, if a partner becomes permanently disabled or refuses to contribute their share of capital or effort to the partnership, it may constitute grounds for dissolution.MMPC 013 Solved Free Assignment 2023
d. Partnership Becomes Illegal: If the partnership’s business becomes illegal due to changes in law or regulations, the court may order dissolution of the partnership.
For example, if the partnership engages in illegal activities or the business becomes prohibited by law, the court may order dissolution to prevent further illegal activities.
e. Loss of Partnership Purpose: If the partnership’s purpose becomes impossible or impractical to achieve, the court may order dissolution.
For example, if the partnership was formed to carry out a specific project that is no longer feasible, the court may order dissolution as continuing the partnership would be futile.MMPC 013 Solved Free Assignment 2023
f. Just and Equitable Grounds: In some jurisdictions, the court may order dissolution of a partnership on “just and equitable” grounds, even if there are no specific grounds mentioned in the partnership agreement or under the law.
Just and equitable grounds may include situations where the partnership’s operations are being conducted in an unfair or oppressive manner, where there is a breakdown of trust and confidence among the partners, or where the partnership is unable to achieve its objectives due to irreconcilable differences among the partners.
It’s important to note that the grounds for court-ordered dissolution may vary depending on the jurisdiction and the applicable partnership laws.
It’s advisable to seek legal advice from a qualified attorney familiar with partnership law in your specific jurisdiction.MMPC 013 Solved Free Assignment 2023
In addition to the grounds mentioned above, a court may also consider other factors when ordering dissolution of a partnership, such as the interests of the partners, the protection of creditors’ rights, and the equitable distribution of partnership assets and liabilities.
The court may also appoint a receiver to wind up the partnership affairs, settle the partnership’s debts and obligations, and distribute the remaining assets among the partners in accordance with the partnership agreement or applicable laws.
Q 2. What is the objective of the Foreign Exchange Management Act? Discuss the mechanism for acquiring property in India by a non-resident and outside India by a resident.
Ans. The Foreign Exchange Management Act (FEMA) is a crucial legislation in India that regulates foreign exchange transactions, transactions involving capital account convertibility, and matters related to foreign investments, among other aspects.
The objective of FEMA is to facilitate external trade and payments, promote orderly development and maintenance of the foreign exchange market in India, and conserve and manage foreign exchange resources in the country.
FEMA is enforced by the Reserve Bank of India (RBI) in coordination with the Central Government.MMPC 013 Solved Free Assignment 2023
One significant aspect of FEMA is the regulation of acquisition of property in India by non-residents and acquisition of property outside India by residents.
Let’s discuss the mechanism for acquiring property in India by a non-resident and outside India by a resident.
Acquisition of Property in India by Non-Residents:
Under FEMA, non-residents are allowed to acquire property in India subject to certain conditions and restrictions. MMPC 013 Solved Free Assignment 2023
The definition of non-resident is provided in the Foreign Exchange Management (FEMA) Act, 1999, and includes individuals who are not residents in India, foreign companies, and other entities that are not incorporated or registered in India.
Non-residents can acquire property in India through the following modes:
Purchase: Non-residents can purchase immovable property in India, which includes land, residential property, and commercial property, subject to certain conditions.
Non-residents can acquire immovable property in India by way of purchase from a resident or another non-resident, as well as by way of inheritance or gift.
Inheritance or Gift: Non-residents can also acquire immovable property in India by way of inheritance or gift from a resident or another non-resident, subject to certain conditions and restrictions.MMPC 013 Solved Free Assignment 2023
Conditions and Restrictions for Acquisition of Property in India by Non-Residents:
There are certain conditions and restrictions that non-residents need to comply with while acquiring property in India under FEMA. These include:
Type of Property: Non-residents can acquire both residential and commercial properties in India.
However, there are certain restrictions on the acquisition of agricultural land, plantation property, and farmhouses in India by non-residents.
Payment: Non-residents can acquire property in India by making the payment in foreign exchange through normal banking channels or from funds held in Non-Resident External (NRE) or Foreign Currency Non-Resident (FCNR) accounts.
Repatriation: Non-residents are allowed to repatriate the proceeds from the sale of immovable property in India, subject to certain conditions and restrictions.
The repatriation of sale proceeds is generally allowed up to the amount of the original investment made in foreign exchange.
Holding Period: Non-residents are required to hold the acquired property for a certain period of time, known as the lock-in period, before they can sell or transfer the property. MMPC 013 Solved Free Assignment 2023
The lock-in period is generally three years from the date of acquisition of the property or from the date of payment of the final installment of consideration, whichever is later.
Compliance: Non-residents are required to comply with the reporting and documentation requirements under FEMA, including filing of prescribed forms with the authorized dealers and obtaining necessary approvals, if any.
Acquisition of Property Outside India by Residents:
Under FEMA, residents in India are allowed to acquire and hold immovable property outside India, subject to certain conditions and restrictions.
Residents in India include individuals who are residents as per the FEMA definition, companies, firms, LLPs, and other entities that are incorporated or registered in India. MMPC 013 Solved Free Assignment 2023
Residents in India can acquire property outside India through the following modes:
Purchase: Residents in India can purchase immovable property outside India, subject to certain conditions and restrictions.
The purchase of property outside India by residents in India is subject to the approval of the RBI or authorized dealer, as applicable.
Gift: Residents in India can acquire immovable property outside India by way of gift, subject to certain conditions and restrictions.
The gift of property outside India by residents in India is subject to the approval of the RBI or authorized dealer, as applicable.
Conditions and Restrictions for Acquisition of Property Outside India by Residents:
There are certain conditions and restrictions that residents in India need to comply with while acquiring property outside India under FEMA. These include:
Approval: Residents in India are required to obtain prior approval from the RBI or authorized dealer, as applicable, for acquiring immovable property outside India.
The approval is generally required for the purchase or gift of property outside India.
Limit on Acquisition: Residents in India are subject to a limit on the acquisition of immovable property outside India. MMPC 013 Solved Free Assignment 2023
The limit is determined by the RBI and may vary depending on the purpose of acquisition, the country in which the property is located, and other relevant factors.
Reporting and Compliance: Residents in India are required to comply with the reporting and documentation requirements under FEMA, including filing of prescribed forms with the RBI or authorized dealer, as applicable, and maintaining necessary records and documents.
Financing of Acquisition: Residents in India are allowed to finance the acquisition of property outside India by way of remittance or loan, subject to certain conditions and restrictions.
The financing of acquisition is subject to the approval of the RBI or authorized dealer, as applicable.
Repatriation: Residents in India are allowed to repatriate the proceeds from the sale of immovable property outside India, subject to certain conditions and restrictions.
The repatriation of sale proceeds is generally allowed up to the amount of the original investment made in foreign exchange.
The mechanism for acquiring property in India by a non-resident and outside India by a resident is subject to certain conditions and restrictions, including approval from the RBI or authorized dealer, compliance with reporting and documentation requirements, limits on acquisition, repatriation of funds, and financing restrictions.
It is essential for non-residents and residents in India to comply with the provisions of FEMA and obtain necessary approvals, if applicable, while acquiring property to ensure compliance with the foreign exchange regulations in India.
It is advisable for non-residents and residents in India to seek professional advice and guidance from legal and financial experts to understand the provisions of FEMA and ensure compliance with the regulations while acquiring property in India or outside India. MMPC 013 Solved Free Assignment 2023
Any violation of FEMA provisions can result in penalties, fines, and other legal consequences, and it is crucial to ensure strict adherence to the regulations to avoid any legal complications in the future.
Q 3. Explain the necessity for the Insolvency and Bankruptcy Code 2016 (IBC-2016) and briefly discuss the four pillars of Institutional Infrastructure under IBC-2016.
Ans. The Insolvency and Bankruptcy Code, 2016 (IBC-2016) was enacted by the Government of India to address the long-standing issue of insolvency and bankruptcy in the country.
The IBC-2016 is a comprehensive legislation that provides for a time-bound and efficient resolution process for corporate entities, individuals, and partnerships facing financial distress. MMPC 013 Solved Free Assignment 2023
It aims to promote entrepreneurship, facilitate ease of doing business, protect the interests of creditors, and boost investor confidence in the Indian economy.
The necessity for the IBC-2016 arises from the need to reform the existing insolvency and bankruptcy framework in India, which was fragmented, slow, and ineffective.
Prior to the enactment of the IBC-2016, the insolvency and bankruptcy process in India was governed by multiple laws, including the Companies Act, 1956, the Sick Industrial Companies (Special Provisions) Act, 1985, and the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, among others.
These laws lacked a coherent and time-bound resolution process, leading to delays, inefficiencies, and loss of value in the resolution of distressed entities.
The IBC-2016 was introduced with the objective of providing a streamlined, transparent, and robust framework for the resolution of insolvency and bankruptcy cases in India. MMPC 013 Solved Free Assignment 2023
It aims to balance the interests of all stakeholders, including creditors, debtors, employees, and investors, while promoting a culture of entrepreneurship and responsible business practices.
The IBC-2016 has been hailed as a landmark legislation that has significantly transformed the insolvency and bankruptcy landscape in India and has been recognized globally as a progressive and effective regime.
The four pillars of institutional infrastructure under the IBC-2016 are:
Insolvency and Bankruptcy Board of India (IBBI):
The IBBI is a regulatory body established under the IBC-2016, responsible for regulating the insolvency and bankruptcy processes in India.
It acts as the overall regulator and facilitator for the implementation of the IBC-2016 and its associated regulations.
The IBBI is responsible for granting licenses to insolvency professionals, setting standards for their conduct, and monitoring their performance.
It also maintains a registry of insolvency professionals, insolvency agencies, and information utilities. MMPC 013 Solved Free Assignment 2023
The IBBI plays a crucial role in ensuring the smooth functioning of the insolvency and bankruptcy process and maintaining transparency and accountability.
The IBC-2016 establishes various adjudicating authorities, including the National Company Law Tribunal (NCLT) for corporate entities and the Debt Recovery Tribunal (DRT) for individuals and partnerships, to hear and decide on insolvency and bankruptcy cases.
These adjudicating authorities have been given the power to adjudicate and pass orders on various matters, including initiation of insolvency resolution process, approval of resolution plans, and liquidation of assets.
The NCLT and DRT play a pivotal role in the timely and effective resolution of insolvency and bankruptcy cases and ensuring the protection of the rights of all stakeholders.MMPC 013 Solved Free Assignment 2023
The IBC-2016 introduces the concept of insolvency professionals, who are licensed professionals responsible for managing the affairs of the debtor during the insolvency resolution process.
Insolvency professionals are appointed by the creditors and are entrusted with the responsibility of preserving the value of the debtor’s assets, conducting the resolution process in a transparent and fair manner, and maximizing the recovery for the creditors.
Insolvency professionals play a critical role in the resolution process, and their competence, integrity, and independence are key to the success of the IBC-2016.
Information Utilities (IUs):
The IBC-2016 also provides for the establishment of information utilities (IUs), which are specialized entities responsible for maintaining a comprehensive database of financial information of borrowers, including their credit history, defaults, and outstanding debts. MMPC 013 Solved Free Assignment 2023
The IUs act as intermediaries that facilitate the exchange of information between creditors, debtors, and insolvency professionals, enabling a smooth and efficient resolution process.
The IUs play a crucial role in improving transparency, reducing information asymmetry, and ensuring that all stakeholders have access to accurate and up-to-date information during the insolvency and bankruptcy process.
These four pillars of institutional infrastructure under the IBC-2016 work in tandem to create a robust and efficient ecosystem for the resolution of insolvency and bankruptcy cases in India.
The IBBI ensures regulatory oversight and sets standards for the conduct of insolvency professionals, while the adjudicating authorities provide a platform for hearing and deciding on insolvency cases.
Insolvency professionals manage the affairs of the debtor and conduct the resolution process, while information utilities facilitate the exchange of relevant financial information among stakeholders.
The IBC-2016 has several key features that make it a comprehensive and effective framework for the resolution of insolvency and bankruptcy cases. These features include:MMPC 013 Solved Free Assignment 2023
Time-bound Resolution Process: The IBC-2016 mandates a time-bound resolution process, with strict timelines for the initiation and completion of insolvency resolution process (IRP) and liquidation proceedings.
The maximum time limit for completing the IRP is 180 days, extendable by 90 days, and the entire process of resolution or liquidation is expected to be completed within 330 days.
This time-bound approach ensures that the resolution process is efficient and minimizes delays, thereby maximizing the value of the distressed entity and protecting the interests of all stakeholders.
Creditor-in-Control: The IBC-2016 empowers creditors to be in control of the resolution process.
The creditors’ committee, comprising of financial and operational creditors, plays a crucial role in the decision-making process, including the approval of resolution plans.
The resolution plan is required to be approved by a minimum of 66% of the financial creditors, and once approved, it is binding on all stakeholders.
This creditor-in-control approach ensures that the interests of creditors are protected, and the resolution process is driven by commercial considerations.
Resolution as the First Priority: The IBC-2016 places a strong emphasis on resolution as the first priority, rather than liquidation.
The objective of the IBC-2016 is to rescue and revive the distressed entity as a going concern, and liquidation is seen as the last resort.
The IBC-2016 provides for a time-bound resolution process, where every effort is made to arrive at a resolution plan that maximizes the value of the distressed entity and preserves jobs and businesses.
This resolution-centric approach encourages the revival of viable businesses and promotes entrepreneurship.MMPC 013 Solved Free Assignment 2023
Protection of Stakeholder Rights: The IBC-2016 provides for a robust mechanism to protect the rights of all stakeholders, including creditors, debtors, employees, and investors.
The IBC-2016 ensures that the resolution process is transparent, fair, and equitable, and that the interests of all stakeholders are safeguarded.
It provides for a clear and predictable legal framework for the resolution of insolvency and bankruptcy cases, and promotes a culture of responsible business practices.
Q 4. Discuss the role of ‘Privacy’ in the context of Digital World. Discuss the personal Data Protection Bill, 2019.
Ans. Privacy in the context of the digital world has become a critical issue as the proliferation of technology and the internet has led to the collection, storage, and processing of vast amounts of personal data.
Personal data includes information such as name, address, phone number, email address, financial details, and browsing history, among others.
With the increasing use of online platforms, social media, e-commerce, and digital services, individuals’ personal data is being constantly generated, shared, and stored, raising concerns about its privacy and security.
The protection of privacy in the digital world is crucial as personal data can be used for various purposes, including targeted advertising, profiling, identity theft, fraud, and misuse. MMPC 013 Solved Free Assignment 2023
Therefore, it is essential to have robust legal frameworks that regulate the collection, storage, and processing of personal data and ensure that individuals’ privacy rights are safeguarded.
One such legal framework is the Personal Data Protection Bill, 2019 (PDPB), proposed in India to address the growing concerns around privacy in the digital world.
The PDPB is a comprehensive data protection legislation that aims to protect the privacy and personal data of individuals in India.
It is based on the principles of transparency, accountability, and consent, and seeks to regulate the collection, processing, storage, and sharing of personal data by various entities, including government agencies, businesses, and service providers.
The PDPB seeks to provide individuals with greater control over their personal data, establish rights and responsibilities for data fiduciaries (entities that collect and process personal data), and create a framework for the redressal of grievances related to data protection.MMPC 013 Solved Free Assignment 2023
One of the key aspects of the PDPB is the definition of personal data and sensitive personal data.
Personal data refers to data that can identify an individual, such as name, address, phone number, and email address, while sensitive personal data includes information related to health, sex life, sexual orientation, biometric data, financial data, and more.
The PDPB classifies sensitive personal data as critical data, and imposes stricter requirements on its collection, processing, and storage, to ensure greater protection.
The PDPB also emphasizes the importance of consent in the collection and processing of personal data.
It requires data fiduciaries to obtain explicit consent from individuals before collecting their personal data, and individuals have the right to withdraw their consent at any time.
The PDPB also mandates that the consent should be informed, specific, and clear, and individuals should be informed about the purpose and extent of data collection, processing, and sharing.
This empowers individuals to have greater control over their personal data and make informed decisions about how their data is used.
Another significant aspect of the PDPB is the obligation it imposes on data fiduciaries to protect personal data.
Data fiduciaries are required to implement reasonable security practices to protect personal data from unauthorized access, use, disclosure, alteration, or destruction.
They are also required to conduct data audits, maintain records, and comply with data protection obligations.
This ensures that entities collecting and processing personal data are accountable for its security and take necessary measures to protect individuals’ privacy.
The PDPB also introduces the concept of data localization, which mandates that certain categories of personal data must be stored within the territory of India.
This provision aims to ensure that personal data is not transferred outside the country in a manner that may compromise privacy and security.
However, this provision has also been a subject of debate, as it may pose challenges for businesses, especially those operating in a globalized digital environment.
The PDPB also establishes the office of the Data Protection Authority of India (DPA), which is entrusted with the responsibility of regulating and overseeing the implementation of the PDPB.
The DPA has powers to issue guidelines, conduct audits, impose penalties, and resolve disputes related to data protection.
The DPA acts as an independent regulatory body that ensures compliance with the PDPB and safeguards individuals’ privacy rights.
The PDPB also recognizes the importance of cross-border data transfers, which are essential for many businesses and service providers operating in a globalized digital economy.
It allows for the transfer of personal data outside of India under certain conditions, such as obtaining explicit consent from individuals, entering into contracts with recipients of personal data, or if the transfer is necessary for the performance of a contract between the data fiduciary and the individual.
This provision strikes a balance between privacy concerns and the needs of businesses and service providers for cross-border data transfers.
Another critical aspect of the PDPB is the provision for the right to be forgotten. It grants individuals the right to request the erasure of their personal data under certain circumstances, such as when the data is no longer necessary for the purpose it was collected, or when the individual withdraws consent.
This right empowers individuals to have control over their personal data and ensures that data fiduciaries do not retain personal data indefinitely, which can protect individuals’ privacy.
The PDPB also includes provisions for grievance redressal and dispute resolution. It establishes an adjudicating officer who has the power to investigate and resolve complaints related to data protection.
Appeals from the adjudicating officer’s decisions can be made to an appellate tribunal, and further appeals can be made to the courts.
This ensures that individuals have a robust mechanism to seek redressal in case of any violation of their privacy rights.
One of the significant strengths of the PDPB is its focus on accountability and penalties for non-compliance.
It imposes hefty penalties on data fiduciaries for violations of data protection obligations, including failure to obtain consent, failure to implement reasonable security practices, or failure to cooperate with the DPA.
The penalties can range from a percentage of the entity’s global turnover to a fixed amount, depending on the nature and severity of the violation.
This creates a strong incentive for entities to comply with the PDPB and ensures that data fiduciaries are held accountable for protecting individuals’ privacy.
In addition to the PDPB, the PDPB also recognizes the importance of privacy by design and privacy by default principles.
It requires data fiduciaries to incorporate privacy safeguards in the design of their products, services, and systems to ensure that privacy is considered at every stage of the data processing lifecycle.
It also requires data fiduciaries to ensure that default settings of their products and services are privacy-friendly, and individuals are given the option to opt-out or choose the level of privacy they desire.
These provisions aim to embed privacy as a fundamental principle in the development and deployment of technology and digital services.
However, it is worth mentioning that the PDPB has also faced some criticisms and concerns.
Some stakeholders have expressed concerns about the scope and complexity of the PDPB, which may pose challenges for businesses and service providers in terms of compliance.
There are also concerns about the provisions related to data localization, which may impact the ability of businesses to transfer data across borders and hinder the growth of the digital economy.
Additionally, some stakeholders have raised concerns about the enforcement mechanisms and the capacity of the DPA to effectively regulate and oversee data protection practices in the digital ecosystem.
Q 5. Explain the applicability of Consumer Protection (E-Commerce) Rules, 2020 and discuss the duties and liabilities of e-commerce entities under these rules.
Ans. The rapid growth of e-commerce has revolutionized the way consumers shop and interact with businesses.
With the increasing reliance on online platforms for buying goods and services, there is a need to regulate the e-commerce sector to ensure consumer protection.
In India, the Consumer Protection (E-Commerce) Rules, 2020 (hereinafter referred to as “the Rules”) were introduced to provide a framework for governing e-commerce entities and protect the interests of consumers engaging in online transactions.
Applicability of the Consumer Protection (E-Commerce) Rules, 2020:
The Rules are applicable to all e-commerce entities that conduct business in India or provide goods or services to consumers in India, regardless of their location.
This includes e-commerce marketplaces, online retailers, and service providers operating in India, irrespective of whether they are based in India or abroad.
The Rules are designed to ensure that all e-commerce entities, regardless of their size or scale of operations, comply with the prescribed obligations to protect the interests of consumers.
Duties of E-commerce Entities:
The Rules outline several duties and responsibilities for e-commerce entities to ensure transparency, fairness, and accountability in their operations. Some of the key duties of e-commerce entities as per the Rules are:
Disclosure of Information: E-commerce entities are required to provide clear, accurate, and transparent information about their business, terms and conditions of sale, payment methods, delivery and shipment, refund and return policies, grievance redressal mechanism, and any other relevant information that consumers need to make informed decisions.
This includes disclosing details about the seller, their contact information, and any other relevant information that can affect the consumer’s decision to make a purchase.
Fair and Transparent Trade Practices: E-commerce entities are required to adopt fair and transparent trade practices and not engage in any unfair or misleading practices that may deceive or harm consumers.
This includes not falsely representing products or services, not engaging in unfair trade practices such as bait and switch, not manipulating prices, ratings, or reviews, and not imposing any hidden charges or additional costs.
Grievance Redressal Mechanism: E-commerce entities are required to establish a grievance redressal mechanism to address consumer complaints and grievances in a timely and effective manner.
This includes providing a dedicated helpline or customer care number, email address, or chat support for consumers to register their complaints and seek resolution.
E-commerce entities are also required to acknowledge the receipt of complaints within 48 hours and resolve them within a reasonable time frame.
Protection of Consumer Data: E-commerce entities are required to ensure the protection of consumer data and comply with the applicable data protection laws and regulations.
This includes obtaining explicit consent from consumers before collecting their personal data, using the data only for the purpose for which it was collected, maintaining data accuracy, and ensuring appropriate security measures to protect against unauthorized access, disclosure, or misuse of consumer data.
Compliance with Applicable Laws: E-commerce entities are required to comply with all applicable laws, rules, and regulations, including but not limited to, the Consumer Protection Act, 2019, the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, the Foreign Exchange Management (E-commerce) Rules, 2020, and any other relevant laws or regulations that may be applicable to their operations.
This includes compliance with tax laws, intellectual property laws, product safety standards, and any other legal requirements.
Liabilities of E-commerce Entities:
The Rules also outline the liabilities of e-commerce entities for non-compliance with the prescribed duties and responsibilities. Some of the key liabilities of e-commerce entities as per the Rules are:
Liability for False or Misleading Advertisements: E-commerce entities can be held liable for false or misleading advertisements displayed on their platforms.
If an e-commerce entity is found to be promoting false or misleading advertisements about products or services, it can be held liable for any loss or damage suffered by consumers as a result of such advertisements.
Liability for Counterfeit Products: E-commerce entities can be held liable for the sale of counterfeit products on their platforms.
If an e-commerce entity is found to be selling counterfeit products, it can be held liable for any loss or damage suffered by consumers as a result of purchasing such products.
Liability for Non-Compliance with Consumer Protection Laws: E-commerce entities can be held liable for non-compliance with the Consumer Protection Act, 2019, and other consumer protection laws.
If an e-commerce entity fails to comply with the prescribed duties and responsibilities, it can be held liable for any loss or damage suffered by consumers as a result of such non-compliance.
Liability for Violation of Data Protection Laws: E-commerce entities can be held liable for violation of data protection laws if they fail to protect consumer data or breach the provisions of the Personal Data Protection Bill, 2019 (hereinafter referred to as “the Bill”).
The Bill, which is currently under consideration by the Indian Parliament, aims to regulate the processing of personal data of individuals and establish the rights and responsibilities of data processors and data subjects.
If an e-commerce entity fails to comply with the provisions of the Bill, it can be held liable for any loss or damage suffered by consumers as a result of such non-compliance.
In addition to the above liabilities, e-commerce entities can also face penalties, fines, and other legal consequences for non-compliance with the Rules and other applicable laws.
It is essential for e-commerce entities to ensure strict compliance with the prescribed duties and responsibilities to avoid any legal liabilities and protect the interests of consumers.