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K & A Newsletter

NEWS ALERTS

The Union Cabinet has approved the proposal for Agreement on Science and Technology Cooperation between India and the United States of America. The Agreement will open a new chapter in bilateral relations as both sides will leverage complementary strengths spurred by a significant convergence of mutual interests in science and technology. The Agreement would provide an opportunity to promote 'high quality' and 'high impact' research and innovation partnerships as well as broadening and expanding relationships between the extensive scientific and technological communities. The salient features of the Agreement would include: (a) Exchanges of scientific & technical information and experts; (b) Convening of seminars and meetings; (c) Training of scientists and technical experts; (d) Conduct of cooperative research projects; (e) Establishment of science & innovation-based public-private partnerships; and (f) Use of advance research facilities.

The Supreme Court observed that a person committing offences under the Motor Vehicles Act (MV Act) like over-speeding and rash driving can also be booked under the Indian Penal Code as both the statutes operate in their own independent spheres. The Supreme Court set aside an order of the Gauhati High Court which held that a person booked for over speeding, dangerously driving and other related offences under the MV Act cannot be prosecuted under the Indian Penal Code (IPC). The Court observed that there is no bar under the MV Act or otherwise, to try and prosecute offences under the IPC for an offence relating to motor vehicle accidents. The Court said the ingredients of offences under the both statutes are different, and an offender can be tried and punished independently under both of them. The Court further observed that the principle that the special law should prevail over the general law, has no application in cases

CORPORATE, CAPITAL MARKET, ECONOMY & FOREIGN TRADE

JUDGMENTS

Cabinet approves proposal for Agreement on Science and Technology Cooperation between India and the United States of America

No bar under Motor Vehicles Act to prosecute offenders under IPC:SC

CONTENTS

— News AlertsCorporate, Capital Market, Economy & Foreign Trade 1Judgments 1

— Article 3The Consumer Protection Act, 2019: An Overview By Divjot Singh Bhatia, Associate, Kanth & Associates

of prosecution of offenders in road accidents under the IPC and the MV Act. Dealing with the offences, the Court said there are no provisions under the MV Act which separately deal with offences causing death, or grievous hurt, or hurt by a motor vehicle in cases of motor vehicle accidents, however the same are covered under the IPC. Accordingly, the Court held that, "the finding of the High Court that the prosecution of offenders under two statutes i.e. the MV Act and the IPC, is unsustainable and contrary to law, is therefore, set aside".

The Supreme Court has reiterated the settled position of law that the power of review can be exercised only when the statute provides for the same. The Court has clarified that in the absence of any such provision in the concerned statute, such power of review cannot be exercised by the concerned authority. The question involved in these appeals was, as to whether, under the Land Acquisition Act, 1894 after the passing of the Award under section 11 of the Act, the Award could be reviewed under any of the provisions of the Act, especially under section 13A of the Act .The land of the appellants was sought to be acquired under section 4 of the Act, followed by a declaration under section 6 of the Act. An Award was passed by the Land Acquisition Officer awarding compensation in favour of the appellants. Thereafter, a Review Award was passed by the Land Acquisition Officer, reducing the amount of compensation on the ground that the compensation ought not to have been awarded in respect of alleged illegal structures on the land, which had been wrongly awarded by the Award. Such amount was thus deducted by the Review Award. The Appellants filed writ petition challenging the Review Award which was dismissed by

Statutory authorities can review orders only if statute provides such power: SC

1

the Delhi High Division Bench, which is under challenge through these appeals.

The Supreme Court has pointed out that there is no provision under the Land Acquisition Act, 1894 for review of the Award once passed under section 11 of the Act and had attained finality. The only provision is for correction of clerical errors in the Award which is provided for under section 13A of the Act, which was inserted with effect from September 24, 1984.A bare reading of the section 13A of the Act would make it clear that the same is not a provision for Review of the Award but only for correction of clerical or arithmetical mistakes in the Award. It has been further provided in sub-section (1) of section 13A that the said correction can be made at any time, but not later than six months from the date of Award. In this case, the Land Acquisition Collector has actually not made any correction of clerical or arithmetical mistake, but in fact has reviewed the Award by its Review Award, which was clearly passed beyond such period of six months. In the considered view of the Supreme Court, the Review Award could not have been passed under section 13A of the Act, which is meant only for correction of any clerical or arithmetical mistake. There is no other provision in the Act under which the said Review Award could have been passed.

The Supreme Court has held that a Magistrate has power to order further investigation into an offence under Section 156 (3) of the Code of Criminal Procedure, 1973 (Cr.P.C.), in post cognizance stage, until the trial commences. The has set aside a Gujarat High Court order which had held that post-cognizance a Magistrate would have no power to order further investigation into an offence. The issue before the Court was whether after a charge-sheet is filed by the police, the Magistrate has the power to order further investigation, and if so, up to what stage of a criminal proceeding. After examining the provisions of Cr.P.C., the Court observed that,“the Magistrate's power under Section 156(3) of the Cr.P.C. is very wide, for it is this judicial authority that must be satisfied that a proper investigation by the police takes place. To ensure that a "proper investigation" takes place in the sense of a fair and just investigation by the police which such Magistrate is to supervise. Article 21 of the Constitution of India mandates that all powers necessary, which may also be incidental or implied, are available to the

Magistrate has power to order further investigation even in post cognizance stage until trial commences: SC

Magistrate to ensure a proper investigation which, without doubt, would include the ordering of further investigation after a report is received by him under Section 173(2) Cr.P.C.; and which power would continue to enure in such Magistrate at all stages of the criminal proceedings until the trial itself commences. Indeed, even textually, the "investigation" referred to in Section 156(1) of the CrPC would, as per the definition of "investigation" under Section 2(h), include all proceedings for collection of evidence conducted by a police officer; which would undoubtedly include proceedings by way of further investigation under Section 173(8) of the Cr.P.C.”. With the present judgment, the Court overruled the case of Devarapalli Lakshminarayana Reddy &Ors. v. V. Narayana Reddy, wherein it was held that the power to order police investigation under Section 156(3) is different from the power to direct investigation conferred by Section 202(1). The two operate in distinct spheres at different stages. The first is exercisable at the pre-cognizance stage, the second at the post cognizance stage when the Magistrate is in seisin of the case.

The Supreme Court, in exercise of power under Article 226 of the Constitution of India, has observed that a High Court has no power to relax the terms and conditions of a tender notice. The Apex Court upheld the Allahabad High Court order that dismissed a challenge against the rejection of candidature of a person who had applied for dealership LPG. The Court observed after duly noticing all the facts, "Such relaxation would be patently discriminatory, for it would then be open for other applicants ineligible on the last date for submission of applications to contend that, they could have acquired eligibility subsequently”. The Supreme Court observed that, "It is well-settled that the execution of a sale agreement does not transfer ownership/title. Ownership can only be acquired by a registered deed of conveyance. The petitioner was not eligible as on the last date for the submission of applications."The Court thus upheld the High Court's order and concluded, the High Court cannot, and rightly did not, in the exercise of power under Article 226 of the Constitution of India, relax the terms and conditions of a tender notice as such relaxation would be patently discriminatory, for it would then be open for other applicants ineligible on the last date for submission of applications to contend that, they could have acquired eligibility subsequently.

High Court cannot relax terms & conditions of a tender notice: SC


not be treated as professional advice or legal opinion. Kanth and Associates also disclaim any responsibility and hereby accept no liability for consequences of any person acting or refraining to act on the basis of any information contained herein. 2


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FIR against doctor for negligence cannot be registered unless the police authorities obtain an expert opinion: Delhi HC

The Delhi High Court has set aside the order of the Medical Council of India (MCI) which has given clean chit to a doctor who was alleged to have committed death due to negligence while performing some medical procedure and directed the MCI to pass fresh order. The controversy in the present case arises out of the treatment afforded by a doctor to the wife of the petitioner. According to the petitioner, the doctor was criminally negligent in performing a surgical procedure on his wife and the said procedure resulted in her demise. The High Court observed, "Concededly, by virtue of the decision of the Hon'ble Supreme Court in Jacob Matthew v. State of Punjab and Ors. [AIR (2005) SC 3180], an FIR for negligence cannot be registered unless the police authorities obtain an expert opinion. It is stated that the police authorities are following a procedure, whereby they seek such opinion from the Delhi Medical Council/MCI before proceeding to register any FIR against a doctor for criminal negligence". The High Court further observed in Jacob Matthew (supra), the Supreme Court had directed that before registering an FIR, the opinion of an expert and a competent doctor, preferably one who is in Government service, be obtained. The High Court, in view of the above, set aside the order passed by the MCI and remanded the matter for fresh consideration. Both the parties would be afforded full opportunity to present their submissions; MCI is also at liberty to seek an expert opinion in this regard. It has further been directed that after evaluating all relevant material and contentions, MCI shall pass a speaking order clearly indicating the reasons for its view.

ARTICLE

The Parliament passed the Consumer Protection Bill, 2019 on 06.08.2019 to replace the Consumer Protection Act, 1986 (“1986 Act”). The President of India gave its assent to the Consumer Protection Act, 2019 (“2019 Act”) on 09.08.2019 and the same will come into force on the date it is notified by the Central Government. The 2019 Act has been enacted for the purpose of providing timely and effective administration and settlement of consumer disputes and related matters.

The Consumer Protection Act, 2019: An Overview

By Divjot Singh Bhatia, Associate, Kanth & Associates

The Government instead of bringing an amendment in the 1986 Act, enacted a new Act altogether so as to provide enhanced protection to the consumers taking into consideration the booming e-commerce industry and the modern methods of providing goods and services such as online sales, tele-shopping, direct selling and multi-level marketing in addition to the traditional methods.

The 2019 Act has brought in some major changes and provides for more protection to the consumers in pari-materia to the earlier 1986 Act which can be seen from the comprehensive definition provided for the term 'Consumer' and 'Unfair Trade Practice'. The 2019 Act expands the scope of the definition of Consumer so as to include the consumers involved in online transactions and it now squarely covers the E-commerce businesses within its ambit. The 2019 Act has also widened the definition of Unfair Trade Practices as compared to the 1986 Act which now includes within its ambit online misleading advertisements; the practice of not issuing bill/memo for the goods and services; failing to take back defective goods or deactivate defective services and refund the amount within the stipulated time mentioned in the bill or memo or within 30 days in the absence of such stipulation; and disclosing personal information of a consumer unless such disclosure is in accordance with law.

The 2019 Act has also introduced the concept of 'unfair contract' which includes those contracts, which favor the manufacturers or service providers and are against the interest of the consumers such as contracts requiring manifestly excessive security deposits to be given by a consumer for the performance of contractual obligations; imposing any penalty on the consumer for a breach of the contract, which is wholly disproportionate to the loss occurred due to such breach to the other party to the contract; refusing to accept early repayment of debts on payment of applicable penalty; entitlement of a party to the contract to terminate such contract unilaterally, without reasonable cause; permitting or has the effect of permitting one party to assign the contract to the detriment of the other party who is a consumer, without his consent; and imposing on the consumer any unreasonable charge, obligation or condition which puts such a consumer to any disadvantage. Such unfair consumer contracts are now covered under the 2019 Act and a complaint in this regard can now be filed by a consumer. This would help to keep a check on businesses including banks and e-commerce sites that




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take advantage of their dominance in the market and mandatorily require the helpless consumers to sign such unfair contracts and accept their standard terms before selling them goods or providing services.

One of the most significant additions to the 2019 Act is the proposal to establish Central Consumer Protection Authority (“CCPA”) so as to regulate, protect and enforce the interest of the consumers and matters related to unfair trade practices. The CCPA has been provided with vast powers to inquire, investigate and take action against violations of the 2019 Act. Another significant power the CCPA has been showered with, is the power to take action and impose penalty against misleading and false advertisement as well as against any endorser of such advertisement, which means the CCPA can now initiate action against the celebrities who have endorsed such misleading and false advertisement provided such celebrities failed to carry out any due diligence before participating in such advertisements. The CCPA may impose a penalty of up to Rs.10 Lakhs for first violation and up to Rs.50 Lakhs on every subsequent violation on a manufacturer or an endorser, for a false or misleading advertisement. In addition to this, such manufacturer or endorser may be sentenced to imprisonment for upto two years. The CCPA has also been granted the authority to initiate suo-moto proceedings against violators; pass directions to recall products or discontinue services and provide refund to consumers; and file class action suits on behalf of multiple consumers which makes it an effective tool to curb mass violation of consumer interest.

Another major introduction in the 2019 Act is the concept of Product Liability which covers within its ambit the product manufacturer, product service provider and product seller, for any claim for compensation. The term 'product liability' is defined by the 2019 Act as the responsibility of a product manufacturer or product seller, of any product or service, related to the product to compensate for any harm caused to a consumer by such defective product manufactured or sold or by deficiency in services relating to the product. Also, since the product seller has now been defined to include a person who is involved in placing the product for a commercial purpose and as such would include e-commerce platforms as well. Therefore, the ground commonly taken by E-commerce websites that they merely act as 'platforms' or 'aggregators' will now not be tenable before the court anymore. There are increased liability

risks for manufacturers as compared to product service providers and product sellers, considering that under the 2019 Act, manufacturers will be liable in product liability action even where they successfully prove that they were not negligent or fraudulent in making the express warranty of a product. However, certain exceptions have been provided under the 2019 Act from liability claims, such as, that the product seller will not be liable where the product has been misused, altered or modified.

As far as the Consumer Redressal Forums are concerned, certain key changes have been brought by the 2019 Act such as:-

(I) Territorial Jurisdiction – The 2019 Act now provides an added advantage to the consumers by providing for filing of complaints where the complainant resides or personally works for gain as against the 1986 Act which only provides for filing of complaint where the opposite party resides or carry on business. This would help in removing the difficulties faced by the consumers in seeking redressal of their grievances against businesses who may not have an office or branch in their state.

(ii) Pecuniary Jurisdiction – The 2019 Act also changed the pecuniary jurisdiction for the District, State and National Commissions, respectively. The pecuniary limit for the District Commission has been increased to up to Rs.1 Crore from up to Rs.20 Lakhs; for State Commission it has been increased to up to Rs.10 Crores from up to Rs.1 Crore; and for National Commission the pecuniary jurisdiction has been increased to over and above Rs.10 Crores as against Rs.1 Crore in the 1986 Act. In addition to this, the 2019 Act has also changed the manner for determining the pecuniary jurisdiction for filing the Complaint. Now the pecuniary jurisdiction will be determined on the basis of the value of goods or services paid as consideration as against the 1986 Act wherein, the pecuniary jurisdiction was determined as per the value of goods and services as well as compensation claimed. This would help in doing away the practice of inflating the compensation claimed so as to bring the complaint within the jurisdiction of State or National Commission.




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(iii) Alternate Dispute Resolution – Another provision introduced by the 2019 Act to ensure speedy resolution of disputes is to provide for referring the disputes to mediation. As per the 2019 Act, the Consumer Forum shall refer the matter to mediation on written consent of both the parties. For this purpose, the 2019 Act also provides for establishment of a consumer mediation cell by the respective State Governments in each District Commission and State Commission as well as at the National Commission by the Central Government.

(iv) E-Complaints - The 2019 Act also provides for filing of Complaints before the District Forums electronically in accordance with the rules which are yet to be prescribed by the Government.

Conclusively, the Consumer Protection Act, 2019 when compared with the 1986 Act shows that it provides for greater protection of consumer interests taking into consideration the current age of digitization. The 2019 Act also deals with the technological advancements in the industry, provides for easier filing of complaints and also imposes strict liability on businesses including endorsers for violating the interest of the consumers. However, the test of time will prove the fate of the 2019 Act as and when it is notified by the Central Government, which, prima-facie, appears to be much more consumer-friendly than the 1986 Act and also includes the current industry trends of e-commerce.

1. http://egazette.nic.in/WriteReadData/2019/210422.pdf 2. https://economictimes.indiatimes.com/wealth/

spend/heres-how-consumers-will-benefit-under-the-new-consumer-protection-act/articleshow/ 70711304.cms

Reference:




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