Ecommerce Online Consumers can file a case anywhere on Sellers in India

Landmark Decision for Online Marketplaces: Online buyers can register a case on sellers anywhere in India.

By Prashant Mali     

Spicejet Ltd Vs Ranju Aery      

The issue of jurisdiction has made a lot of people sweat in the recent past since the Internet has come into play. With the nation recognizing different forms of businesses that are Internet-dependent, the law has definitely had some catching up to do. I have personally utilized this independence day holiday to research all important legislation and case law in this matter and through this blog, I would like to make my research available for everyone to study.

As a practicing Ecommerce Lawyer and Cyber thought leader of the country, I feel that this recent decision of Supreme Court dated 4th August 2017 in the case of Spicejet Ltd is krantikari or as it is referred to in Law, a landmark decision. As per the case law deduced from this decision, it will be apt to say that an online buyer may sue a seller at any place. For the purpose of clarification, an online buyer here means any person who has purchased any goods via a seller online.

In my opinion, this will affect all ecommerce buyers like all of us and give them a much needed relief freeing them of the bounds of local jurisdictions but simultaneously, it will also increase the sellers’ overhead now as lawyers will need to appointed across all consumer forum jurisdictions that they have customers in. This observation lays emphasis on my earlier thoughts about ensuring Online Dispute Resolution (ODR) in cases involving Mobile wallets and E-Commerce.

In over-the-counter purchases, a consumer can file a complaint in the consumer court only within the local limits where the company/ opposite party resides, carries on business or where the transaction takes place (by the bare reading of the CPC). However, now the law says that online consumers can sue a company for deficiency in services at any consumer court of their choice. In these times, when E-Commerce trading is growing rapidly, this ruling from the Supreme Court has brought a big relief for consumers purchasing goods through websites and E-Commerce apps. 

A bench of Justices Adarsh K Goel and S Abdul Nazeer on 4^th August 2017 upheld a six month old ruling of the National Consumer Dispute Redressal Commission (NCDRC). The NCDRC had ordered Spicejet Ltd. to pay Rs 1.25 lakh compensation to Ms. Ranju Aery for cancellation of a flight. She had booked a ticket (Chandigarh to Delhi via Bagdodra and Kolkata) on yatra.com on June 23, 2015. The airline cancelled her return flight from Kolkata to Delhi without any reason and provided her no alternative. She approached the consumer court in Chandigarh and secured an order against Spicejet. In the appeal, the airline claimed that the Chandigarh court did not have jurisdiction to hear the case as the place of business of the company was at Gurugram. The airline relied on Section 11 of Consumer Protection Act which allows a complaint to be instituted by a consumer within the local limits of where the opposite party resides or carries on business or where cause of action arises.

Rejecting this argument, the NCDRC in its order of February 7, 2017 found the company guilty of cancelling her flight without reason when on that day 128 flights took off from Kolkata without any delay. The NCDRC noted that the airline gave no explanation for cancellation and failed to make any alternative arrangements. The consumer also stated her grief wherein she discloses that she purchased the ticket at a cost of Rs 80,855 after borrowing money from her relatives at Kolkata. Besides the compensation, the NCDRC directed the airline to refund the consumer Rs 80,855 with interest at the rate of nine per cent after deducting the airfare between Kolkata and Delhi. The company was also to compensate Rs 10,000 towards litigation cost. It has also been reported via news houses that the Supreme Court found no reasons to interfere with the National Commission’s order.

By reading the provisions of Consumers Protection Act, 1986 and I.T. Act, 2000 and with the help of the ratio of the judgement in A.B.C. Laminart Pvt. Ltd. and anr.'s case, we can safely hold that, where contracts for services and/or goods are entered into over the internet (or online as such transactions are commonly referred to), for the purposes of consumer complaints, part of the cause of action arises interalia, 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 the fact, 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, it cannot be disputed that a consumer forum is competent to entertain a consumer complaint, even if only an infinitesimal part of cause of action arises within its territorial jurisdiction. As a result, territorial jurisdiction over a consumer complaint would lie with the consumer forum situated at any place, where any of the aforementioned causes of action arises. This, of course, is in addition to the 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. It was reiterated in the case of M.D.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.

Conclusion:

To cope up with the technology law has to take the help of technology; as Charles Clark once remarked ‘The answer to the machine is in the machine’. Indeed, the perfect reply to the technological abuses is the application of technological innovation.

This is a landmark case in ecommerce dispute resolution and jurisdiction issues. This is a big relief for ecommerce buyers such as of Amazon, Flipkart, Naaptol, Myntra, online insurance providers, Travel portals etc. I feel online consumers have got clarity now that a case can be filed against online sellers sitting in their own homes as all consumer disputes also can be filed online with or without lawyers help. I feel the ratio held in the above case can safely be included in the next scheduled amendment of The IT Act, 2000 

The Court Orders for Download are available on following links below

District Forum  State Commission Order   National Commission Order  SC Order