E-commerce buyers have been empowered to lodge a legal complaint for deficiency of services against sellers in their own city.
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 e-commerce 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 e-commerce industry will have to find ways to check the misuse as well.