E-commerce, or the online marketplace, is now preferred in India for a variety of reasons that include affordability, range of products and services and convenience involved in the transaction. At the same time, there are concerns like delivery of wrong products or services, data privacy and identity theft. Until now, the consumer was often left without legal remedy because of jurisdictional issues in cyberspace. A recent decision of National Consumer Dispute Redressal Commission (NCDRC), further upheld by the Supreme Court of India (SC), has changed it all.
In general, consumer rights, protected by provisions like Section 6 of the Consumer Protection Act, 1986 (CPA), also apply to electronic consumers. The rights of physical and online consumers, although equal in notion, differ in operation. The online space had a few unique practical problems like place of business, jurisdictional issues, non-availability of common dispute resolution system, etc. These require special measures that were not provided in the existing laws.
To cope with technological advancements, we need the help of technology; as Charles Clark once remarked: ‘The answer to the machine is in the machine.’ I believe that online dispute resolution (ODR) is the need of the hour and government should make it mandatory, after formulating rules and an appropriate policy framework for it.
A recent landmark decision in the case of Ranju Aery Vs SpiceJet Ltd (not yet reported) is a game-changer. Case law deduced from this decision will allow e-commerce consumers to sue the seller (who has sold online) at any place.
In my opinion, this will provide much needed relief to all e-commerce consumers and free them from the bounds of local jurisdiction. But it will simultaneously increase the sellers’ overheads, since they will need lawyers across all consumer forum jurisdictions where they may have customers.
A bare reading of the CPA shows that, in regular transactions, a consumer can file a complaint in the consumer court within the local limits where the company or consumer, carries on business or where the transaction has taken place. The SC ruling now allows online consumers to sue an e-commerce company for deficiency in services at any consumer court of their choice.
In Ranju Aery Vs SpiceJet Ltd, the SC held that reading the provisions of CPA and the IT Act, 2000, with the help of the ratio of the judgement in ABC Laminart Pvt Ltd, we can safely hold that, where contracts for services and/or goods are entered into over the Internet (commonly referred to as online transactions), for the purposes of consumer complaints, part of the cause of action arises inter alia, at the complainant’s place of business, if acceptance of the contract is communicated to her through the Internet, including the medium of email. Further, irrespective of whether or not the contract is one made over the Internet, cause of action would also continue to arise at any of the places:
(a) where the contract is performed or is to be performed, or
(b) where money under the contract is either payable or paid, or
(c) where repudiation of the contract is received, if any.
As such, a consumer forum can admit a consumer complaint, even if an infinitesimal part of the cause of action arises within its territorial jurisdiction and which could be at any place where the causes of action mentioned above arise. This is in addition to all other places where a consumer may choose to file a complaint in accordance with the other provisions of Section 11 (2) of the CPA, 1986. This was reiterated in the case of MD Air Deccan Vs Shri Ram Gopal Agarwal where the state consumer disputes redressal forum interpreted Section 13 of the IT Act along with Section 11 of the CPA.
To conclude, I would say that what is a boon to online consumers will become a bane of e-commerce vendors who will need lawyers across the country. This will also hurt small e-commerce players with little or no legal muscle. But, for now, the dust is settled about the issue of e-commerce jurisdiction and online consumers should use consumer courts to effectively get a legal remedy.