The Delhi High Court on Monday sought a response from the Central government 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 and Justice Prateek Jalan, while issues notice to the respondent Union of India, refused to issue a stay on the notification and slated the matter for further hearing on December 21.
The petition, filed by one Dhruv Sethi through senior advocate 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 claimed 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 plea stated 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 and 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.