In off­line pur­chase, law in­sists, com­plaint must be filed at the place of trade

Financial Chronicle - - FRONT PAGE - SANGEETHA G

E-COM­MERCE buy­ers have been em­pow­ered to lodge a le­gal com­plaint for de­fi­ciency of ser­vices against sell­ers in their own city. They need not nec­es­sar­ily file their griev­ance in the city/town where the seller is lo­cated or reg­is­tered.

The Supreme Court in a land­mark de­ci­sion has said any per­son who has pur­chased goods or ser­vices through on­line chan­nel can ini­ti­ate le­gal pro­ceed­ings against the seller at the place from which the book­ing or pur­chase has been done on­line which would usu­ally be the place, where he re­sides.

The apex court de­ci­sion came on Au­gust 4 in a case per­tain­ing to a con­sumer com­plaint against pri­vate air­line SpiceJet Air­lines.

In case of off­line pur­chases, the cur­rent law in­sists that a com­plaint must be filed at the place where the trade or ser­vice provider is lo­cated or where the cause of ac­tion arises, re­gard­less of where the con­sumer re­sides.

In­dus­try ex­perts hailed the Supreme Court or­der. “To­day an e-com­merce cus­tomer can make a pur­chase sit­ting any­where and get the prod­uct de­liv­ered at doorsteps. The same fa­cil­ity is now avail­able in the case of law as well. He can file the case sit­ting any­where and get jus­tice de­liv­ered home. A change in the law was much re­quired to go along with the new busi­ness model the e-com­merce has brought in,” said Rahul Sethi, a vet­eran in the e-com­merce in­dus­try.

“This is a wel­come rul­ing from the cus­tomer point of view. A cus­tomer cannot go to the city of the seller and sue him. In case of off­line pur­chases the case is dif­fer­ent be­cause in most cases the cus­tomer buys the prod­uct from the same city,” said Har­ish H V, part­ner, Grant Thorn­ton In­dia.

How­ever, for sell­ers this is go­ing to be an ad­di­tional is­sue to han­dle as the lo­gis­tics and fi­nan­cial cost in­volved in fight­ing cases in dif­fer­ent cities is go­ing to be higher. The e-com­merce has opened up a large mar­ket for them and on the flipside they will have to deal with le­gal is­sues aris­ing any­where in this large mar­ket.

“The larger sell­ers like WS Re­tail of Flip­kart and Cloud­tail of Ama­zon will be well-equipped and have the le­gal mus­cle to fight such cases from any­where in the coun­try. In the ini­tial phase, there is a like­li­hood of such cases shoot­ing up and the big­ger play­ers will have to re­assess their le­gal strat­egy. The large e-com­merce com­pa­nies are do­ing mil­lions of trans­ac­tions a day and even a frac­tion of these move to­wards lit­i­ga­tion, it is go­ing to be a mat­ter of worry for them,” said Sethi.

The smaller sell­ers will find it dif­fi­cult to han­dle le­gal pro­ceed­ings in dif­fer­ent parts of the coun­try. How­ever, ex­perts find the e-com­merce play­ers, which have been pro­vid­ing them a plat­form, tech­ni­cal, lo­gis­ti­cal and pay­ment-re­lated as­sis­tance, will help them out in the le­gal mat­ters as well. In most of the cases, the ecom­merce com­pany will be party to the case. But the sell­ers will have to bear the fi­nan­cial cost in­volved in such cases.

Both Ama­zon and Flip­kart de­clined to com­ment on the de­vel­op­ment.

Anil Ku­mar, CEO, RedSeer Con­sult­ing, does not find an es­ca­la­tion of con­sumer cases due to the rul­ing. “We do not have the habit of get­ting le­gal re­dres­sal for con­sumer prob­lems. Even now, most of such cases are set­tled out of court. E-com­merce play­ers too would not want such is­sues to take a le­gal turn and af­fect their brand eq­uity,” he said.

How­ever, possibility of friv­o­lous cases be­ing filed too cannot be ruled out. There could be el­e­ments which want to take ad­van­tage of the fa­cil­ity as the cus­tomer now has an up­per hand in fight­ing it out. As the vol­umes grow, the ecom­merce in­dus­try will have to find ways to check the mis­use as well.

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