A nita (name changed), who lives in Bengaluru, had ordered a mobile phone from online electronics retailer, Timtara, but it was never delivered despite the full payment being made.

She, then, filed a complaint at the local consumer forum in Bengaluru, which, however, refused to admit it. Instead, she was asked to file it in Noida, Uttar Pradesh, where Timtara’s registered office is located. Anita had to forego the idea, not only of filing the complaint (there was no way she could have gone to Noida for that), but also recovering the money she had paid to Timtara.

The rise and fall of Timtara, culminating in the arrest of its founder and CEO just over a month ago, has opened a can of worms as far as the e-commerce sector is concerned. It has even generated a debate on all what is wrong with this ecosystem.

However, amidst all this, there is one major concern that has been overlooked — the application of the Consumer Protection Act with respect to e-commerce transactions, especially pertaining to the jurisdiction clause.

The case illustrated above is just one of the hundreds of complaints against Timtara that were filed with Akosha alone. In all such cases, whenever buyers approached the concerned local consumer forum, they were more often than not told to file their complaint in Noida, which is where Timtara’s registered office happened to be located.

The story does not differ drastically in cases involving other e-commerce players either. Whenever a consumer faces an issue with an e-commerce company and wishes to file a complaint at a consumer forum, she/he very often ends up confronting this dilemma of jurisdiction: Where to file the complaint?

Virtual jurisdiction

With e-commerce in India growing annually by over 57 per cent and expected to touch $8.8 billion by 2016 — as per projections by Forrester Research Inc, a leading global research and advisory firm — one should not be surprised to find the growth rate of complaints also keeping pace. From our own analysis of e-commerce complaints received on the Akosha platform, these are growing by 19 per cent quarter on quarter.

Out of the 11,980 complaints received by Akosha for the e-commerce sector in the January-March 2013 quarter, about 58 per cent related to deficiency in delivery, while 29 per cent had to do with refunds, the balance 13 per cent concerning other issues.

The bulk of these were registered by consumers in the metros, with Delhi topping the list. However, despite the urban tilt, the geographical distribution of the complaints is diverse enough to validate concerns regarding the misapplication of the jurisdiction clause.

The Consumer Protection Act, by itself, is not very ambiguous, though. It clearly lays down that a consumer has to file a complaint in the place where the company resides or carries on business.

Alternatively, she/he can also file it in the place where the cause of action arose, that is, where the issue or grievance arose.

However, “cause of action” is a complicated legal concept — something that is difficult to understand, or simply inconvenient to grapple with, for the consumer forum registrars and judges.

In the case of the e-commerce sector, which caters to consumers across the country irrespective of an online retailer’s geographical location, this becomes hugely problematic. A lot of consumers are told by the relevant registrar or the judges that their complaints cannot be accepted because the company’s office does not lie within the said jurisdiction. That is quite similar to the police refusing to register an FIR because it falls outside their “jurisdiction”.

One practical expedient that some consumers use is to make a local branch, service centre or even a warehouse (in the case of an e-commerce company) party to the complaint and, then, get it admitted at the local consumer forum.

When the legislature drafted the jurisdiction clause in the Consumer Protection Act, they tried to balance the burden on the companies with that on the consumers.

While it would be unaffordable for a company to represent itself everywhere – thereby justifying the customer having to file the complaint in the place where it did business – the “cause of action” concept, at the same time, allowed wriggle room for consumers.

It is this wriggle room that is now squeezed by non-application of mind by consumer forums.

Lost opportunity

The Consumer Protection Amendment Bill, 2011, which was introduced in the Lok Sabha last December, could have proposed an amendment to Section 11 of the Act that deals with jurisdiction.

This would have incorporated a separate jurisdiction clause directed at the e-commerce sector, taking into consideration its unique non-territorial nature.

Such a clause should have clearly laid down that in e-commerce cases, a complaint should be filed where the cause of action arises, irrespective of the physical location of the company concerned. This would have been a perfect, even though overly legislative, redressal of an issue that is already a major problem for Indian consumers making online purchases.

Unfortunately, the Bill has already been tabled and referred to the Standing Committee – and it looks as though e-commerce consumer hopes have been dashed.

Another way out could be to have the National Consumer Disputes Redressal Commission lay down clear directives in this regard, clarifying that “cause of action” be given precedence when dealing with jurisdiction issues specific to e-commerce complaints.

In the absence of these, Indian e-commerce consumers will have little to look forward to in terms of redressal of their complaints.

(The author is founder of www.akosha.com , an online consumer complaints resolution platform).

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