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This communication highlights plights of online shopping consumers and requests your support and initiative to safeguard rights of those million of innocent customers as a PUBLIC INTEREST LITIGATION highlighting the issues was dismissed on grounds that Law Making is function of Legislatures and Judiciary is not supposed to encroach on same.

Everyone is aware about new communication systems and digital technologies and dramatic changes made by them in the way we live. A revolution is occurring in the way people transact business. There is increasing use of online technologies these days in practically all walks of life. Be it online shopping or online ticket booking for train or cinema or ordering of food through online services available or online payment of various bills or recharge of mobile phones and so on and so forth.

There is unprecedented growth in online shopping activities or what is best understood as e-commerce activities in India, of late, due to increased use of technology. E-commerce activities mostly consists of buying or selling of goods and services, or transmitting the funds or data over an electronic platform mainly internet. Millions of people shop online everyday, spending hundreds of thousands of rupees. Simultaneously the number of online retailers is equally impressive; this means that you get a wide range of shops to choose from, but also with the probability that you may fall a victim of fraud through these online shops.

It has been observed that persons carrying out Online shopping activities are deprived protections of law as there is total absence of suitable legislation for protecting the online shoppers. Online shopping victims are facing discrimination in various ways when they go for registration of FIR or reporting in matters of frauds to local police station. There is complete absence of regulatory mechanism for registration, monitoring and controlling the online shopping portals unlike regulatory mechanism available for physical shops. When it comes to reporting regarding frauds or cheating through online shopping or related activities general public is finding it very difficult to report the same with local police. Many fraudulent online shopping websites and online payment gateways have come up currently and many people are being duped while carrying out online activities.

As per available statistics of 2014, online shopping base in India is about 40 million and it is expected to touch 100 million in near future. The volume of amount transacted is about to touch 60,000 crore approximately. The average annual spending of Indians on online purchases is expected to rise 67 percent to Rs. 10,000   next year, according to Assocham-PwC study. About 40 million consumers purchased something online in year 2014 and the number is expected to grow to 65 million by 2015 with better infrastructure in terms of logistics, broadband  and Internet-ready devices.

The overall e-commerce industry, valued at $17 billion (Roughly Rs. 1, 08,167 crores), has been growing at a compounded annual growth rate of about 35 percent each year, the study said, adding that it is expected to cross the $100 Billion (roughly Rs. 6, 36,281crores) mark in five years.

So if proper regulations are not framed immediately to monitor and regulate this huge amount of transaction which is being carried out through online mediums and more specifically through online shopping portals and online payment gateways anticipating the safety and security of the people, there would be immense monetary loss of people and also loss of faith in these mediums.

Many online shopping companies does not have any physical location or contact address or point of contact displayed and customers are left to the mercy of online shopping website owner in case of return or exchange of goods. It has also been observed that many online shopping portals have either published the address which is not traceable prima facie or not at all published any physical address, and there are no regulatory guidelines which mandates for verification of the address of such online shopping sites prior to uploading it on website by any government machinery. Though there is provision under Information technology (Intermediary Guidelines) Rules 2011 clause 11 for publication of name of grievance officer and his contact details as well as contact mechanism for contacting them. Under Article 302 government can impose reasonable restrictions for protecting public interest on trade and commerce activities and online shopping is also covered under the same.

Also other problem is regarding jurisdiction. Even if some victim tries to lodge complaint against such online shopping portal or payment gateway then police are not entertaining such complaints either on the ground that transaction occurred in some different jurisdiction and hence crime did not happen in their jurisdiction or the type of matter falls under Tort, i.e. civil wrong and hence no police complaint is required. This attitude of police also defeats fundamental right under article 14 of equal protection of law. There seems to be different attitudes of law enforcing agencies towards tackling of crimes through normal physical shops/stores and online shopping portals.

As per information received under Right to Information it is not specified by Government that to which department these online shopping portals or online recharge portals are answerable or reportable and hence no specific government department is proactive towards curbing malpractices in online shopping and online payment gateways activities.

The magnitude of cyber crimes being committed is unimaginable. The investigation is not properly carried out in most of the cases due to lack of proper training to law enforcing agencies. General public at large, is falling prey to many such fraudulent online shopping and payment gateways due to lack of awareness and as there is no mechanism of registration of such websites as well as payment gateways by government. This is certainly not a healthy trend as online activities are growing every passing day and people are losing huge amounts in through the same. Rather this situation of lawlessness and anarchy in cyberspace is encouraging criminals to Rule the Cyber Space for their benefit.

This can also be a serious threat to National economy. As by “following the money” many facets’ of the criminals who are perpetrating such crimes can be uncovered and that can have huge impact on national economy as well as national security.

These incidents of crimes are mostly linked with transfer of money may be small or large. In this era of globalization cross border transactions are accomplished without any control over the same and the money derived out of these fraudulent transactions can be used to finance illegal as well as terrorist activities to destabilize the state. And hence this issue needs to be addressed as utmost priority

Hence it is requested to frame rules for registration and regulation of the online shopping portals and online payment gateways, immediately, so that general public at large will not be defrauded by such fraudulent online shopping websites or online recharge portals;

Further government is requested to issue instructions to all online shopping portals and payment gateways to upload the name of grievance officer with full contact details on their website and preserve and retain the information of all the transactions carried through them for at least a period of one year.

Public Interest Litigation was filed to highlight all the above issues before Hon’ble Nagpur Bench of High Court by the undersigned but the Hon’ble court observed very rightly that Law making is essential and exclusive function of Government and hence undersigned petitioner was advised to move to respective governments and hence this representation/appeal in the public interest.

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Category Corporate Law, Other Articles by - mahendra limaye