On Monday, the High Court of Delhi sought a response from the Central Govt on a plea challenging Rule 4(1)(a) of the Consumer Protection (E-Commerce) Rules, 2020 notified on July 23, 2020.
A division bench of Chief Justice DN Patel & Justice Prateek Jalan, while issues notice to the respondent Union of India, refused to issue a stay on the notification & slated the matter for further hearing on Dec 21.
The plea, filed by one Dhruv Sethi through Senior Lawyer Anand Grover, has challenged the section of the Consumer Protection (E-Commerce) Rules, 2020 which mandates all e-commerce entities to incorporate as a company under the Companies Act, 2013.
The rule has been challenged under sub-clause (zg) of sub-section (2) of Section 101 of the Consumer Protection Act, 2019.
The petitioner alleged that he is personally affected by the impugned rule as he is an entrepreneur, who, through his sole proprietorship, 'Where Next Daily', sells custom merchandise online. The petition said that the impugned rule violates Article 19(1)(g) of the Constitution of India as it restricts the petitioner's right to carry out trade through the medium of the internet.
The plea further said that the obligation to incorporate as a company & the consequent exclusion of sole proprietorship, limited liability partnerships, from the e-commerce space, is neither reasonable nor in the interests of the General Public.
It was also argued that the impugned rule is violative of Article 14 of the Constitution as it discriminates against all forms of legitimate business organisations.
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