New Consumer Protection Act, 2019

The Consumer Protection Act, 2019 has come into force from 20^th July, 2020. As provided in section 10 of the Act, the Central Consumer Protection Authority (CCPA) has been established w.e.f. 24^th July, 2020 as a good mesure to protect the interests of consumers.

The objective of the Central Consumer Protection Authority (CCPA) is to promote, protect and enforce the rights of consumers as a class. It will be empowered to conduct investigations into violation of consumer rights and institute complaints / prosecution, order recall of unsafe goods and services, order discontinuation of unfair trade practices and misleading advertisements, impose penalties on manufacturers/endorsers/publishers of misleading consumer advertisements.

For giving effect to the provisions of the Act, the following rules have also been notified and made effective from 20^th July, 2020:

1. The Consumer Protection (General) Rules, 2020

2. The Consumer Protection (Central Consumer Protection Council) Rules, 2020.

3. The Consumer Protection (Consumer Disputes Redressal Commissions) Rules, 2020.

4. The Consumer Protection (Mediation) Rules, 2020.

5. The Consumer Protection (Salary, allowances and conditions of service of President and Members of the State Commission and District Commission) Model Rules, 2020.

6. The Consumer Protection (Qualification for appointment, method of recruitment, procedure of appointment, term of office, resignation and removal of the President and members of the State Commission and District Commission) Rules, 2020.

7.The Consumer Protection (E-Commerce) Rules, 2020. [effective from 23 July, 2020].

 

Amendments in the FDI Policy

Cabinet approves amendments in FDI policy

10 January, 2017

Foreign Direct Investment (FDI) is a major driver of economic growth for all countries. It is a source of non-debt finance also. Government of India has put in place an investor friendly policy on FDI, under which FDI up to 100%, is permitted on the automatic route in most sectors/ activities.

highlights

• ​​​​​​​100% FDI under automatic route for Single Brand Retail Trading
• 100% FDI under automatic route in Construction Development
• Foreign airlines allowed to invest up to 49% under approval route in Air India
• FIIs/FPIs allowed to invest in Power Exchanges through primary market
• Definition of ‘medical devices’ amended in the FDI Policy

see the details

Disqualification of directors_Condonation of Delay Scheme 2018

Recently Ministry of Corporate Affairs had disqualified certain directors, who failed to file returns for consecutive financial years. This disqualification of directors raised concerns among the industry and a large number of affected people approached judiciary for relief. With a view to giving an opportunity for the non-compliant, defaulting companies to rectify the default, and an initial step to remove the disqualification of directors,  the Central Government has decided to introduce a Scheme namely "Condonation of Delay Scheme 2018" [CODS-2018]. This will help the affected companies to move for removing the disqualification of directors.

This scheme allows affected companies to file their pending documents with the Ministry. However, this scheme is restricted to the following forms:

i) Form Number 20B/MGT-7- Form for filing Annual return by a company having share capital.

ii) Form 21A/MGT-7- Particulars of Annual return for the company not having share capital.

iii) Form 23AC, 23ACA, 23AC-XBRL, 23ACA-XBRL, AOC-4, AOC-4(CFS), AOC (XBRL) and AOC-4(non-XBRL) - Forms for filing Balance Sheet/ Financial Statement and profit and loss account.

iv) Form 66 - Form for submission of Compliance Certificate with the Registrar.

v) Form 23B/ADT-1- Form for intimation for Appointment of Auditors.

• This scheme is not applicable to the companies which have been stuck off/whose names have been removed from the register of companies
• The scheme shall come into force with effect from 01.01.2018 and shall remain in force up to 31.03.2018

English rendering of text of PM’s speech at Golden Jubilee Year Celebrations of ICSI

English rendering of text of PM’s speech at Golden Jubilee Year Celebrations of ICSI

Insolvency and Bankruptcy code

Insolvency and Bankruptcy code was passed by Lok Sabha on 5 May 2016. The Code received the assent of the President of India on 28 May 2016. Insolvency and Bankruptcy code aimed to repeal the Presidency Towns Insolvency Act, 1909 and Sick Industrial Companies (Special Provisions) Repeal Act, 2003, among other related enactments. On implementation of the Insolvency and Bankruptcy code, it would seek to speed up debt recoveries and restructurings by setting a deadline of 180 days to decide the fate of a company that defaults. To resolve non-performing loans, the RBI has recently directed banks to refer  large NPA cases for resolution under the Insolvency and Bankruptcy Code. such companies being referred to NCLT under the RBI directive account for a combined debt of around Rs 2.5 lakh crore.

The Insolvency and Bankruptcy Board of India (IBBI) has amended the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 and Insolvency and Bankruptcy Board of India (Fast Track Insolvency Resolution Process for Corporate Persons) Regulations, 2017 on 05.10.2017. According to the Amended Regulations, a Resolution Plan shall include a statement as to how it has dealt with the interests of all stakeholders, including financial creditors and operational creditors, of the Corporate Debtor

The Amendments are available at www.mca.gov.in and www.ibbi.gov.in.

SHELL COMPANIES

Shell Companies as such not defined in the Companies Act, 2013. However, post demonetisation lead to evolvement of a buzz word "shell companies". Thirteen banks, recently submitted to government data on bank account operations and post-demonetisation transactions of some of the 209,032 companies that had been struck off the Registrar of Companies this year. The data received from these banks reveals that mere 5,800 companies have 13,140 accounts. It is interesting to note that a few of the companies have been found to have more than 100 bank accounts in their names. One company had as many as 2,134 accounts! All these reveal the existence of shell companies.

However, from 9th November, 2016 i.e. after the announcement of demonetization, till the date of their being struck off, shell companies have altogether deposited a huge amount of Rs 4,573.87 crore in their accounts and withdrawn an equally large amount of Rs 4,552 crore. Remember, only 13 banks submitted their initial report to government. Thus we can think about the impact of shell companies in our economy.

This data is only about 2.5% of the total number of suspected companies that have been struck off by the Government. The huge money game played by these companies may well be the tip of an iceberg of corruption. See the press release

Economic Survey 2016-17

Economic Survey 2016-17 Volume 2 was laid in the Parliament today. The Survey notices a rekindled optimism on structural reforms in Indian economy. Various factors such as launch of the GST; Positive impacts of demonetization; decision in principle to privatize Air India; further rationalization of energy subsidies and Actions to address the Twin Balance Sheet (TBS) challenge contribute to this optimism. The document also adds that a growing confidence that macro-economic stability has become entrenched is evident because of a series of government and RBI actions and because of structural changes in the oil market have reduced the risk of sustained price increases.

However the Survey cautions that anxiety reigns because a series of deflationary impulses are weighing on an economy, yet to gather its full momentum and still away from its potential. These include: stressed farm revenues, as non-cereal food prices have declined; farm loan waivers and the fiscal tightening they will entail; and declining profitability in the power and telecommunication sectors, further exacerbating the TBS problem.