27 August, 2019
Rajya Sabha passes the Consumer Protection Bill, 2019
On August 6, 2019, the Rajya Sabha passed the Consumer Protection Bill, 2019 which was earlier passed by the Lok Sabha on July 30, 2019 wherein a Central Consumer Protection Authority (CCPA) will be set up to investigate, recall, refund and impose penalties. It will regulate matters related to violation of consumer rights, unfair trade practices, and misleading advertisements. There is also a provision for class action law suit for ensuring that rights of consumers are not infringed upon, product liability provision to deter manufacturers and service providers from delivering defective products or deficient services and provides for early disposal of cases through mediation. Presently, consumers only have a single point of access to justice, which is time consuming. Additional swift executive remedies are proposed in the bill through the CCPA. Further, the key points that have been proposed through this Bill are:
-
Deterrent punishment to check misleading advertisements and adulteration of products is proposed.
-
Product liability provision to deter manufacturers and service providers from delivering defective products or deficient services.
-
Ease of approaching Consumer Commission and simplification of the adjudication process.
-
Scopeforearlydisposalofcasesthroughmediation.
-
Provision for rules for new age consumer issues such as e-commerce and direct selling.
Rajya Sabha passes the Motor Vehicles (Amendment) Bill 2019
On July 31, 2019, the Rajya Sabha passed the Motor Vehicles (Amendment) Bill 2019 (“Bill”). The Bill has been passed by the Rajya Sabha with three Government amendments and will need to go back to Lok Sabha. The Lok Sabha already passed the Bill on July 23, 2019. The amendments in the Bill mainly focus on issues relating to improving road safety, citizens' facilitation while dealing with the transport department, strengthening rural transport, last mile connectivity and public transport, automation and computerization and enabling online services. Some of the important areas of amendment are as follows:
- The Bill proposes to increase penalties to act as deterrentagainsttrafficviolations. Stricterprovisions are being proposed in respect of offences like juvenile driving, drunken driving, driving without license, dangerous driving, over-speeding, overloading etc. Stricter provisions for helmets have been introduced along with provisions for electronic detection of violations. Penalty regarding motor vehicles is to be increased by 10 per cent every year.
- The Bill mandates automated fitness testing for vehicles. This would reduce corruption in the transport department while improving the road worthinessofthevehicle. Penaltyhasbeenprovided for deliberate violation of safety/environmental regulations as well as body builders and spare part suppliers. The process for testing and certification for automobiles is proposed to be regulated more effectively. The Bill also provides for compulsory recall of defective vehicles and power to examine irregularities of vehicle companies.
- The Bill allows the central government to order for recall of motor vehicles if a defect in the vehicle may cause damage to the environment, or the driver, or other road users. The manufacturer of the recalled vehicle will be required to: (i) reimburse the buyers for the full cost of the vehicle, or (ii) replace the defective vehicle with another vehicle with similar or better specifications.
- The Bill provides for a National Road Safety Board, to be created by the central government through a notification. The Board will advise the central and state governments on all aspects of road safety and traffic management including standards of motor vehicles, registration and licensing of vehicles, standards for road safety, and promotion of new vehicle technology.
- The Bill provides for a scheme for cashless treatment of road accident victims during golden hour.
Companies (Significant Beneficial Owners) Second Amendment Rules, 2019
The Ministry of Corporate Affairs (“MCA”) vide its circular issued on July 29, 2019 with regard to the Companies (Significant Beneficial Owners) second Amendment Rules,2019 thereby extended the last date for filing of e- form BEN-2 (form to be submitted with the MCA regarding declaration of significant beneficial ownership). The e-form BEN-2 can now be submitted by companies with the MCA upto September 30, 2019 without payment of any additional fee.
Rationalization of end-use provisions in the ECB Framework
On July 30, 2019, the Reserve Bank of India issued a notification in respect of the External Commercial Borrowings (“ECB”) framework to relax the end-use restrictions relating to ECB for working capital requirements, general corporate purposes and repayment of rupee loans. Accordingly, eligible borrowers will now be allowed to raise following ECBs from recognised lenders, except foreign branches/ overseas subsidiaries of Indian banks:
(a) ECBs with a minimum average maturity period of 10 years for working capital purposes and general corporate purposes. Borrowing for on-lending by Non-Banking Financial Companies (NBFCs) for the above maturity and end-uses is also permitted.
(b) ECBs with a minimum average maturity period of 7 years for repayment of Rupee loans availed domestically for capital expenditure. The borrowings for on-lending by NBFCs for the repayment of rupee loans would also be permitted. For repayment of Rupee loans availed domestically for purposes other than capital expenditure and for on-lending by NBFCs for the same, the minimum average maturity period of the ECB would have to be 10 years.
(c) Ithasfurtherbeendecidedtopermiteligiblecorporate borrowers to avail ECB for repayment of Rupee loans availed domestically for capital expenditure in manufacturing and infrastructure sector and classified as SMA-2 or NPA, under any one-time settlement arrangement with lenders. Lender banks are also permitted to sell, through assignment, such loans to
eligible ECB lenders, except foreign branches/ overseas subsidiaries of Indian banks, provided, the resultant external commercial borrowing complies with all-in-cost, minimum average maturity period and other relevant norms of the ECB framework.
Companies (Appointment and Qualification of Directors) Third Amendment Rules, 2019
The Ministry of Corporate Affairs (“MCA”) vide its notification dated 25 July, 2019 amended the Companies (Appointment and Qualification of Directors) Rules, 2014. The amended rules inter alia provide that a person who holds a Director Identification Number (“DIN”) shall complete his KYC by submitting an e-form DIR-3 KYC with the MCA. Further, a person who has already submitted DIR-3 KYC in the previous year is required to complete the KYC through the newly introduced web service “form DIR- 3 KYC WEB” available on the MCA portal. The due date of completing the KYC has been extended from June 30 to be September 30.
New Delhi International Arbitration Centre Act, 2019 receives the assent of the President
On July 26, 2019, the New Delhi International Arbitration Centre Act, 2019 received the assent of the President of India and has been enforced retrospectively from March 2, 2019. The objective is to establish the New Delhi International Arbitration Centre to conduct arbitration, mediation, and conciliation proceedings, promote research, provide training and organize conferences and seminars in alternative dispute resolution matters.
Securities Exchange Board of India modifies the format for compliance report on Corporate Governance
On July 16, 2019, the Securities Exchange Board of India (“SEBI”) issued a circular modifying the format for the quarterly compliance report on corporate governance to be submitted to the Stock Exchange (s) by Listed Entities within fifteen days from the end of each quarter. The format specified in the Annexure to this circular will replace the format specified in the Annexure to the circular dated September 24, 2015 and it shall come into force with effect from the quarter ending on September 30, 2019.
For further information, please contact:
Vineet Aneja, Partner, Clasis Law
vineet.aneja@clasislaw.com
