Blog Details

Introduction:

Earlier, if you were an e-commerce customer, and the website fell within the jurisdiction of the city of Hyderabad because the company has a registered office in Hyderabad, and you were a resident of Delhi, and had received a defective product, you had only one option i.e. to file a case in Hyderabad. This caused more inconvenience for you had to travel all the way to Hyderabad to attend the sessions.

However, in another scenario, if the seller in Marketplace websites (e.g. Flipkart, Amazon, etc.), as 'Sellers' have not submitted the correct data on about the business, but display their products online without providing the correct information about their real address, you as a customer will not be able to file any case against them for their conduct since the marketplace companies are not responsible, as they only maintain data as a "Third Party" and do not own those products. They may claim that they have no binding liability. But your woes as a consumer are now a past issue. After the commencement of Consumer Protection (E-Commerce) Rules, 2020 [1], which is in force from 23rd July 2020 and consumers will get more benefits and will get a solution for their grievances. 

2. Highlights of the Consumer Protection (E-Commerce) Rules, 2020:

Applicable to E-commerce Organizations: u/s 2 of these rules, this applies to All goods and services through the digital network, all types of e-commerce such as A) inventory based B) Marketplace model and retail services by any single brand, etc. These rules also cover Unfair Trade Practices (UTP). These rules also define, Inventory based e-commerce and marketplace e-commerce as under 3 (f) “inventory e-commerce entity” means an e-commerce entity which owns the inventory of goods or services and sells such goods or services directly to the consumers and shall include single-brand retailers and multi-channel single-brand retailers; and 3 (g) “marketplace e-commerce entity” means an e-commerce entity which provides an information technology platform on a digital or electronic network to facilitate transactions between buyers and sellers;

Duties of Ecommerce Organisations: Section 4 provides Duties of e-commerce entities. As per this, every organization,

• Shall be registered as a Company and appoint a nodal person to ensure compliance with the provisions of the Act.

• Shall provide the details of company information such as company name and address in a clear and accessible manner on its platform.

• Every e-commerce entity shall establish an adequate Grievance Redressal mechanism

• e-commerce entity shall NOT adopt any unfair trade practice

• Acknowledges the receipt of any consumer complaint within forty-eight hours and redresses the complaint within one month from the date of receipt of the complaint.

• No e-commerce entity shall impose cancellation charges on consumers cancelling after confirming purchase unless similar charges are also borne by the e-commerce entity if they cancel the purchase order unilaterally for any reason.

• Record of the consent of consumers by explicitly.

• Shall refund money, to consumers, as per RBI guidelines

Liabilities of e-commerce entities: u/s  5(2),  Every marketplace e-commerce entity shall require sellers through an undertaking to ensure that descriptions, images, and other content about goods or services on their platform is accurate and corresponds directly with the appearance, nature, quality, purpose and other general features of such good or service. Under 5 (3) (b)  a ticket number for each complaint lodged through which the consumer can track the status of the complaint, and u/s 7 (5) Any inventory e-commerce entity which explicitly or implicitly vouches for the authenticity of the goods or services sold by it, or guarantees that such goods or services are authentic, shall bear appropriate liability in any action related to the authenticity of such good or service.

Duties of sellers:

• u/s 6(2), No such seller shall falsely represent itself as a consumer and post reviews about goods or services or misrepresent the quality or the features of any goods or services.

• No seller offering goods or services through a marketplace e-commerce entity shall refuse to take back goods if paid, if such goods or services are defective, deficient or spurious, or if the goods or services are not of the characteristics or features as advertised or as agreed to, or if such goods or services are delivered late from the stated delivery schedule:

• Every seller have a prior written contract with the respective e-commerce entity in order to undertake or solicit such sale or offer;
  
  

3. Case Laws which helped to create new E-commerce rules for benefit of Consumer:

Spicejet Ltd. vs Sanyam Aggarwal on 14 March 2017 [2], Spice jet has a principal office at Gurgaon, U.P whereas Consumer resides in Ropar, Punjab, and purchased air-ticket from online. Spice jet claims that Ropar District court does not have any jurisdiction. The court observed that As per complainant Section 11(2) of the C.P. Act – 1986 [5] envisages that a consumer has to file a complaint in the place, where the company resides or carries on business or where the cause of action wholly or partly arise. Court rules that as per 11(2)C, a part or fraction of cause of action arose within the jurisdiction of the Chamkaur Sahib, where complainant received an email of rescheduling flights and also received e-ticket through email. The payment was also made at Chamkaur Sahib within the territorial jurisdiction of the Ropar District Forum. This means, a consumer can file a case at his district, where he resides. This E-commerce transaction is similar to E-contract.

Yatra Online Pvt. Ltd. vs Vikramjeet Aggarwal on 3 April 2017 [3]. Big business houses will have only one principal office and avoid jurisdiction in other states, this is troublesome and unreasonable to the consumer located at a distant place or in other jurisdictions who have much lesser bargaining power and resources to litigate with business houses. To achieve a balance between two diverse considerations, we would consider adaptations to e-contracts. As per the Information technology act, Contract Act, a consumer can file a case in a district, where he/she resides or Part of the cause of action is executed.

4. Summary:

Therefore the New Consumer Protection Act, 2019 [4] which comes into force from the 20th day of July 2020 in which, u/s 34 (2) (d) of this act, the complainant can file a case where he resides or personally works for gain or where the cause of action arises. There is no need to file a case at the e-commerce principal office. This act has also created the “Central Consumer Protection Authority (CCPA)”, which has the power to regulate matters relating to a violation of rights of consumers, unfair trade practices and false or misleading advertisements which are prejudicial to the interests of public and consumers and to promote, protect and enforce the rights of consumers as a class. There are specific duties and liabilities on the E-commerce entities and Sellers. If they do any unfair trade practices, seller defective products, or service, then they are liable for their fault. These rules provide effective consideration for Consumer grievances. Both Marketplace and Inventory model are liable for defective products. There should not be any cancellation charges. Every seller must have an agreement/contract with E-commerce entity and shall be responsible for defects, damages and late delivery of products or services since e-commerce entities are also liable along with the sellers.

Ref:

1. https://consumeraffairs.nic.in/sites/default/files/E%20commerce%20rules.pdf

2. https://indiankanoon.org/doc/169861168/

3. https://indiankanoon.org/doc/110648880/

4. https://consumeraffairs.nic.in/sites/default/files/CP%20Act%202019.pdf

5. http://legislative.gov.in/sites/default/files/A1986-68_0.pdf