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1. Introduction:

The World Consumer Rights Day is celebrated, on March 15th of every year to create awareness about consumer's rights with a view to promote and protect such rights. In India, Department of Consumer Affairs, a nodal organization of Ministry of Consumer Affairs, Food and Public Distribution, is also creating awareness about consumers' rights and available disputes redressal Forums. Thus Consumer rights awareness is on the rise in India but still a lot is to be done to strengthen the rights of consumers in the Digital era. In this article, efforts are made to examine whether existing law protects consumer rights in the digital era especially in E-commerce or online contracts.

2. Increased internet users and E-commerce

A world survey in 2016 reveals that about 40% of world population has access to internet. About 10% of population in underdeveloped nations have access to internet. It is expected that by 2020, 52% of population will have access to internet.

In India 34% of total population have access to internet. In terms of penetration of internet, China, USA and India are occupying 1st 2nd 3rd Places respectively. As regards percentage of online payments in India, it is estimated at 15.5% of total transactions. The present Government, post demonetization, has been trying to push digital payments in order to encourage less cash transactions. In this increased E-commerce scenario, let us examine the existing CPA and consumer rights and whether such rights are available in the case of online or E- commerce transactions.

3. Consumer Protection Act, 1986:

Consumer protection Act came into force w.e.f 24th December, 1986.As deficiencies were noticed, amendments were made in subsequent years (1991,1993 and 2002) to further strengthen the CPA provisions. The Consumer Protection (Amendment) Act, 2002, made significant amendments effective from 15.03.2003). These are as follows:-

- Power of a Judicial Magistrate of First class is vested in the District forum, State forum and National forum for trying offences under CPA. Now consumer forums can enforce their orders and attach property to recover dues as arrears of land revenue.(Section 25 and 27(2))

- In case of death of complainant or opposite party, legal heirs of parties are permitted to substitute their names. Section 13(7).

- Pecuniary jurisdiction limit for filing complaints is raised from 5lacs to 20 lakhs in the case of District Consumer Forum. State forum to deal with complaints valued above Rs.20 lakhs but up to 1 crore and National Forum to deal with complaints above 1 crore rupees.(Section 11 and 17)

- For ensuring expeditious disposal of complaints, it is now mandated that notice must be served on the Opposite party within 21 days of admission and reply to be filed within 30 days or 45 days, if extension is granted as the case may be.

- Endeavour should be made to dispose of Complaints within 3 months and within 5 months in case analysis or testing of sample is required. (Section 13).

- Any person aggrieved by the order of District Forum may prefer an appeal to State Forum within 30 days from the date of order and similarly for an appeal before National forum within 30 days from the date of order with a power to condone delay in justified cases. Admission of appeal is subject to payment of 50% of the amount awarded by District Forum or 20,000 whichever is less. An appeal in state forum is admitted on payment of 50% of awarded sum or 35,000 whichever is less.( Section 15 and 19)

- Now coverage of services is expanded to include medical services, postal services, insurance, housing, Advocate services, Communication, transport, electricity, banking, etc., any service done for consideration by the service provider, come under the scope of the Act.

Undoubtedly with the above 2002 amendments, the consumer is better placed as provisions exist for expeditious disposal of complaints and recovery of ordered sum /penalty.

Let us briefly refer to some of the important definitions and legal framework for redressal of consumer complaints.

4. Who is a Consumer?

In simple terms, consumer is a person who buys goods or services for a price (paid or promised to pay) and uses them for his own. If one minutely analyses definition of consumer underSection 2 (d) of CPA, it reveals that a person who buys goods or services for a commercial purpose will not be treated as a consumer unless such goods or services are used for earning a lively hood by means of self-employment. Going by the above definition, an online customer who clicks and accepts the offer of terms of sale will also fall under the definition though not specifically defined in the CPA.

5. What are defective goods or deficiency of Service?

Understanding these definitions is very important to claim rights under Act. As per Section 2 (f) and (g) 'Defect/deficiency means any fault, imperfection or shortcoming in the quality, quantity, potency, purity or standard which is required to be maintained by or under any law or any contract express or implied for the time being in force under any contract, express or implied or as is claimed by the trader in any manner whatsoever in relation to any goods or service.

'Deficiency' means any fault, imperfection, shortcoming or inade­quacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service;

Even the above definitions equally apply to purchase of goods in E-commerce or online also can be used to check and allege whether there is any defect in goods or deficiency of service

6. What is a complaint?

As per Section 2 (c) 'Complaint' means any allegation in writing made by a complain­ant about defects in goods or deficiency in service, unfair trade practice, excess price than what is permissible as per law or declared price, goods offered are hazardous

7. Options available to consumers

An aggrieved consumer can file a complaint for relief under the CPA. It may be noted that Section 3, of CPA states that provisions of CPA are in addition to not in derogation of provisions of any other laws. It means there are other Acts such as Indian contract Act also gives certain rights to consumers to Claim compensation or damages for breach of contract. Similarly under Sale of Goods Act,1930,if goods sold do not correspond to description and goods are not fit for consumption, the buyer can return the goods and claim refund of money or difference price or interest on sum paid(Section 55-61)

8. Whether E consumers get protection under CPA?

Going by the above-discussed definitions in CPA, online customers fit into the definition of the consumer as online customer pays or agrees to pay in any one of the modes of payment offered by Seller. The Act does not define a trader to include online sellers and also no specific mention about E-commerce or online transactions in the Consumer protection Act. However, logically definitions of consumer/ defective goods/ deficiency service equally apply for seeking redressal from Fora under the Act.

Let us now refer to other Acts which further support the above contention.

9. Indian Contract Act,1872

The same principles of invitation to offer, offer and acceptance are applicable for online offers and online acceptance of terms offered by online Sellers. For e.g.. When a seller displays product details on digital platform, it is an invitation to offer. When consumer visits a E-commerce website and reads the product details, he offers to buy as per terms and conditions of such sale. When online payment is made, the seller accepts customers offer simultaneously and communicates acceptance of the order. All this happens simultaneously on customer clicking the confirmation icon online. A contract comes into existence by a click on the website. Remedies for breach of contract or misrepresentation, fraud will be available to consumers to rescind the contract and claim refund of his money etc as per provisions of Contract Act.

10. Information Technology Act, 2000

Section 3 of IT act permits authentication of information submitted by Digital Signature. Section 4 and 5 give recognition to electronic records and records authenticated by digital signature. All electronic records such as exchange of mails are treated as evidence since consequential amendments were made in Indian Penal Code, Indian Evidence Act, Indian Stamp Act, Bankers books evidence Act. Thus a consumer should preserve trail of transactions such as offer, confirmation of order and payment records through internet banking can be used as evidence to establish existence of contract and other evidence for deficiency of service, when a dispute arises

11. Jurisdiction of courts:

This is an issue on which divergent views emerge in the absence of specific coverage of E- commerce transactions/online contracts in the CPA. Normally a complaint has to be filed in a place where the opposite party resides or carries on business or has a branch office. Further Section 11 (c) and 17(c) of CPA permit filing of a complaint in a place where the cause of action wholly or partly arises. This is also supported by Section 20 of Civil Procedure Code. In the case of online trade/ e-commerce transactions, sellers' may be from outside India or within India and it becomes difficult to define territorial jurisdiction as access to www net is pervasive in all places. Thus in E-commerce or online selling, the seller can be from anywhere in the world and so also the buyer.

12. Judicial precedents:

Very few Judgments are available covering disputes in E-commerce. In 2014 Division Bench of Delhi High court in an appeal in the case of World Wrestling Entertainment Inc. Vs M/s Reshma collection &Ors ruled that jurisdiction can be invoked at the buyer's place of residence in E-Commerce cases for the reason that contract comes into existence at the place of the buyer on his making payment. This interpretation suits the consumer. In this case the Plaintiff/Appellant (World wrestling Entertainment Inc.) is from USA and Defendant/Respondent is from Mumbai. Plaintiff /Appellant sells its merchandise through website to buyers all over the world. Case is filed by the Plaintiff /Appellant for seeking permanent injunction restraining Defendant in Mumbai from violating its copyright. Plaintiff/Appellant demonstrated that its customers place orders online and confirmation is sent by E-mail. Hence the court in India has jurisdiction.

Relying on the interpretation of the cause of action/ place of business/ Agent/ branch office in online transactions, even if seller is foreign company/resident, it can be argued that courts in India will have jurisdiction if the contract is brought into force in India. However an amendment in CPA clarifying jurisdiction issue in unambiguous terms in case of online transactions will put to rest controversy on jurisdiction.

13. Growing concern:

Many of the online buyers place orders/accept the terms without even reading the terms and conditions. Even if one reads, often miss the fine print. It is reported in the newspaper that almost 46popular E- commerce companies have not been responding even to the directions of the Ministry of commerce for redressal of E-commerce complaints. Most of the complaints relate to misleading pictures / inferior quality/ defective goods/ delay in refunding money.

14. Conclusion:

Creating consumer awareness about his rights is key to reap the benefits of good legislation. When new Consumer protection Bill 2015 becomes a law, consumers get protection in respect offline and online transactions and reference of IT Act is made and it also fixes responsibility on manufacturers for deficiency in product quality. Let us hope that the new Bill will regulate E-commerce transactions and protect consumers rights against misleading advertisements, defective goods or delayed refunds.

Source:

  • (1) Consumer Protection Act,1986/The Consumer Bill 2015
  • (2) Information Technology Act, 2000
  • (3) Indian contract Act 1872
  • (4) Sale of Goods Act 1930
  • (5) Judgments of High court/Supreme court

Tags: Consumer protection Act, Consumer rights

Disclaimer: This article contains interpretation of the Act and personal views of the author based on such interpretation. Readers are advised either to cross check the views of the author with the Act or seek the expert's views ,if they want to rely on contents of this article.


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