Jurisdiction of the Virtual Market

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When the Consumer Act was brought in, everybody had given a standing ovation to the Government for the sheer brilliant move for public welfare. Unfortunately, the claps began to ebb soon. The online consumer market was taking hold of the society and the Consumer Act turned out to be a helpless archaic legislation. It couldn’t even say for sure which court would have the jurisdiction. This applied to other laws as well. E-commerce was generally a virtual world. Which court can take the jurisdiction in such kinds of transactions? Things get more complicated when the parties give exclusive jurisdiction to a totally unrelated court in online contracts and dispute about the validity of jurisdiction later.

The Supreme Court has allayed these fears of the people of this country through a recent decision. The verdict was given by a bench of Justice S Abdul Nazeer and Adarsh K Goel.

The facts of this case were that a Chandigarh- based woman, Rajni Arey, booked a ticket (Chandigarh to Delhi via Bagdogra and Kolkata) on yatra.com on 23rd July 2015 by paying  Rs. 70,900.[1] But, SpiceJet canceled her return booking. They didn’t provide her any reason, whatsoever. Also, they didn’t provide her any other alternatives. She filed a complaint against the SpiceJet in the Chandigarh Court.

The first issue that the airlines raised was regarding the jurisdiction of the court. They held that the place of business of the airlines is in Gurugram. Hence, the Chandigarh court does not have jurisdiction.

The airlines had based its argument on Section 11 of the Consumer Protection Act which provides that:-

“A complaint shall be instituted in a District Forum within the local limits of whose jurisdiction,—

(a) the opposite party or each of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or 2[carries on business or has a branch office or] personally works for gain, or

(b) any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides, or 3[carries on business or has a branch office], or personally works for gain, provided that in such case either the permission of the District Forum is given, or the opposite parties who do not reside, or 4[carry on business or have a branch office], or personally work for gain, as the case may be, acquiesce in such institution; or

(c) the cause of action, wholly or in part, arises.”[2]

The Supreme Court judged in accordance with the verdict of NCRDC. They held that in e-commerce transaction or online transactions, territorial jurisdiction over a consumer complaint would lie with the consumer for a situated at any place, where any of the aforementioned causes of action arises. The jurisdiction of the court cannot be vitiated by raising such trivial issues, in the end.

[1] http://lawrato.com/legal-news/1243/supreme-court-online-consumers-can-sue-online-sellers-from-anywhere

[2] Section 11(2), Consumer Protection Act.

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