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As cited here in Do Indian companies need a written letter before registering a user? there seems to be a requirement for companies to appoint a grievance officer to handle grievances of users and answer within one month . What if a company faces so many grievance requests ( most of them being fake ) that it goes beyond their capacity to respond is there any statute to protect them ? Is there any law that governs what happens if it goes beyond a corporations financial capacity to respond ?

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There is no statutory "exception" in the IT rules in case a business gets swamped. However, there is also no penalty for violating these rules except for intention to cause wrongful loss or wrongful gain (see this analysis). The requirement is thus legally toothless at present. The underlying Information Technology act imposes penalties for certain willful acts, but the requirement for a grievance officer and response within 30 days is a ministerial rule lacking parliamentary authority to enforce in any punitive fashion.

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Hire more staff or go out of business

A company is obliged to comply with the law. Compliance has costs. The company must meet those costs. If the company is unable to remain viable with those costs then it should close.

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