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THE LEGAL PROTECTION FOR CONSUMERS IN CONDUCTING E-COMMERCE ACTIVITIES IN INDIA

Section: C

Category: Legal Essay

Paper Code: LE-DN-10

Page Number: 398 - 403

Date of Publication: February 10, 2021

Citation: Dikshita Nanda, The Legal Protection for Consumers in Conducting E-Commerce Activities in India, 1, AIJACLA, 398, 389-403, (2021).

Details Of Author(s):

Dikshita Nanda, Advocate, Gauhati High Court


ABSTRACT It has only been a few years since e-commerce has started gaining popularity in India. With technological advancement, the entire country started getting advanced gradually. E-commerce is one of such advancements where technology joins hands with commerce and develop concomitantly. E-commerce involves business transactions through electronic medium. It is like the conventional way of buying and selling process but through smartphones and computers. It is way easier than the actual way of shopping that is to say, physically going to the market and buying goods. Moreover, online shopping is less time-consuming. Therefore, it has got all the popularity lately across the globe. It is no less like magic that one can get what they like just with some clicks. But amidst all the advantages it is not free from pitfalls. During online commercial transactions, consumers are more likely to fall prey to unfair trade practices and get deceived horrendously. That is why, to protect the consumers from such blows from the dark, a legal shield is very much required. The Consumer Protection Act, 2019 which has been recently enacted replacing the Act of 1986, has provided many provisions especially dealing with e-commerce. Which were absent in the previous Act because at the time when it was enacted e-commerce was not in practice in India. Although there is no Act enacted wholly dedicated to this subject but as of now the provisions of the Act of 2019 seem to suffice to deal with the issues relating to e-commerce. Petty issues are mostly solved by the respective e-commerce company’s customer care service. For more serious problems, complaints can be filed on social media platforms too. However major grievances relating to e-commerce activities are still dealt with by the consumer forums established by the Government of India to provide redressal to the aggrieved parties. But it is also true, that to stay away from online frauds during online commercial transactions consumers themselves should also be very careful. E-commerce is a gateway for development so it must be regulated properly to not get exploited in the hands of fraudsters and imposters. The Government has to take care of it as it opens up the door for many international dealings too and which will ultimately bring prosperity to the country’s economy. KEYWORDS consumer, consumer protection, e-commerce, grievance redressal, unfair trade practices


INTRODUCTION

The creation of cyberspace has proved to be a blessing for the entire humankind. It has bred enormous opportunities for people to develop their skills beyond limit. However, the creation of cyberspace would have been incomplete without getting allied with commerce. The alliance of cyberspace and commerce has given birth to another concept called e-commerce. E-commerce refers to the practice of buying and selling of goods and services through internet service. E-commerce is a boon to the modernization. People can make business transactions with just some clicks on their smartphones and computers without even stepping out of their homes. We can have things ordered to be delivered right to our place. Till some decade ago it was a concept beyond dreams. Now we are experiencing it and taking the utmost benefit out of it.

But as it is said no good thing comes without a risk. Behind the hues of the advantages of e-commerce, there are various cons that the customers have to face. Some of the common issues that the consumers go through are selling of defective products, replacement problems, not getting the delivery of the product after making payment, not getting refunds of returned goods, selling of fake products etc. because of these problems consumers start doubting the authenticity of online transactions.


BASIC LEGAL PROTECTION FOR THE CONSUMERS IN INDIA

Although for the protection of consumers in India the Consumer Protection Act,1986 was enacted which provides for various rights as a shield to consumers against unfair trade practices by the corporate bodies so that they can get what they pay for without facing any trouble. But the problem with the Act is that this Act was enacted during the 80s and back then the practice of e-commerce had not reached India. It is a new concept to India. Therefore, it will require some time for the lawmakers to fully understand the concept and formulate a law for this whole new subject. So it is to say that as of now there is no specific enactment dedicated to e-commerce. [1]

During the period when e-commerce activities started to leap, some international organizations established and gave certain guidelines to the member countries to maintain while formulating new laws domestically. Organization for economic corporation and development (OECD) and World Trade Organization (WTO) are two of such established Government forums that started to look after issues relating to e-commerce. These organizations prescribe many principles that every member state requires to follow while making any policies or legislations dedicating trade, business, and e-commerce. Therefore, India has been building its policy for meeting the requirements of the present scenario at the national level and as well as to cope at the global level.[2] Though at the international level many common model laws have been introduced but until and unless these model laws are brought into work through some legislations, policies at the national level by individual country those would be worthless.

A recent enactment, is the Consumer Protection Act,2019 which came into force on 20 July of 2020 replacing the previous enactment of 1986. This Act brought provisions specifically covering e-commerce. E-commerce companies are now brought under the purview of consumer redressal mechanism. E-commerce companies are now bound to disclose their information to the consumers. Now they cannot charge cancellation fees. Even electronic complaints can also be filed without any fee. The companies are bound to have a consumer redressal office to deal with customers’ grievances. A grievance redressal officer shall be appointed by the seller companies to take the complaints from the consumers within 48 hours and resolve them within one month from the date of receiving the complaint. The complaint can also be resolved through video conferencing.[3] These are some of the important provisions among others provided by the Act of 2019.

But it is advised that any e-commerce consumer when face with any problem, at first they should try to contact the e-commerce entity’s customer care service. If they neglect to solve the problem they should write on social media platforms like Twitter tagging the company handles. There is a particular hashtag for consumer redressal service in India for resolving online disputes on Twitter under Twitter Seva adopted by the Ministry of Communication of India. This service is a result of deliberate discussions among various bodies including Confederation of All India Traders, Enforcement Directorate, Niti Aayog, Consumer Affairs, and the Department of Industrial Policy and Promotion. This service can be availed by tweeting #mociseva on the platform of Twitter along with the problem. Then after receiving such tweets concerned official of the Twitter cell shall reach the aggrieved person immediately through online medium and will respond to the queries within 48-72 hours.[4] In the age of technology, such a service can be proved to be the best mechanism for online grievance redressal if it is executed properly under the fine guidelines of legal experts who also have fine hands-on technological knowledge.

If that also does not seem to work then one should go for Online Dispute Resolution (ODR) for resolving issues created by online transactions. It is the same as that of the Alternative Dispute Resolution mechanism where the issues are solved by arbitration, conciliation, mediation but in the case of ODR instead of sitting face to face parties can resolve their dispute online themselves. It is a system where ADR meets technology. The ODR system was first introduced in 2004 by Chittu Nagarajan, the Co-founder of Modria, the renowned ODR Platform in the world. Under the Consumer Act of 2019, a strong mediation cell has also been provided to be established for quick disposal of complaints.[5]

If after all these trials the grievance does not get resolved, one should knock on the door of consumer forums established in India at different levels starting from district forum to National forum. The matters are required to be taken to a particular forum according to the claim amount of the complaint as prescribed by the Consumer Protection Act,1968. The Act has prescribed as below[6]:-

1. If the claim is less than Rs. 20 Lakh it has to be taken to District Consumer Forum.

2. If the amount claim is more than 20 Lakh and up to Rs One crore the it has to be taken to the Consumer Disputes Redressal Commission of the concerned State.

3. If the claim amount is more than Rs. One crore to be taken to National Consumer Disputes Redressal Commission, New Delhi.

The places of jurisdiction to file a complaint are prescribed by the Act as follows:-

1. The place of residence of either of the parties

2. The place of business of either of the party.

3. The place where the cause of action arises.

But a major positive change that has been incorporated by this new is that the jurisdiction to file complaints has been enlarged. Now an aggrieved party can file a complaint from anywhere in the country. Consumers shall also be able to file complaints online totally free of cost. A grievance redressal mechanism shall also have to be established for redressing the grievance of consumers. They shall have to return to the complainant within 48 hours after receiving the complaint. They have to make sure that the complaint is resolved within one month of receiving the complaint.[7]

The Ministry of Consumer Affairs, Food and Public Distribution has also introduced Consumer Protection (Ecommerce) rules,2020. The CPA 2019 focuses on the issues created in the field of commerce due to digitization and Rule 2020 emphasizes mainly the framework to regulate the marketing, sale, and purchases of goods and services online.[8] The rules mainly applies to:-

1) Sale and purchases of goods and services over an electronic medium.

2) Market place e-commerce entities and inventory entities

3) All e-commerce retail

4) All types of unfair trade practices

The Rules of 2020 mainly governs the offshore online market place, entities which are not originated or established in India but provides goods and services to India. The Rules require the entities to[9] :-

1) disclose information regarding their names, contact details, addresses.

2) establish dispute resolving mechanism and customer care contact numbers and appoint an officer to address the grievances of customers.

3) participate in the NationalConsumer Helpline for speedy resolution of issues.

4) record and mention basic information of the importer for imported goods.

5) ensure consumers’ consent through an express manner, not through some automatic checkbox ticking method.

6) make the refunds according to RBI prescribed manner and within reasonable time.

As of now, whatever provisions have been provided by the latest Act of Consumer Protection,2019 and E-commerce Rule 2020 seem to suffice to deal with the issues raised by e-commerce activities in India. There is no much of a requirement as such to enact a whole Act dedicating to e-commerce activities. If in the coming future the matters get beyond control and it becomes highly necessary to enact any Act specifically for the given subject then the lawmakers will be looked to for the safety of the consumers.

But the bottom line is that not only the sellers who are to be disciplined but even consumers should be careful while dealing with the online sellers. They should buy from the trusted sellers or online sites. The privacy policy of the company should be thoroughly checked. Return policies should also be read carefully. If in doubt one must prefer the cash on delivery payment method so that they cannot be fooled by paying through the online method. These types of precautions will save them from greater harm.


CONCLUSION

In the age of digitization, e-commerce has brought a revolution in the Indian Market. Along with buying and selling e-commerce has increased employment too. E-commerce companies have been recruiting youths with a good amount of salaries in their companies in different posts. Many have even started their start-up companies to provide online services to the Indian customers and customers outside. Social media platforms are a great means for advertisements through which the business can grow and can reach millions of people. It has surely opened many livelihood opportunities for people of every age group. The Internet world is indeed powerful. It is the new phase of development. But it would remain so only if regulated properly. Among other things, the commercial activities all around the internet have to be looked after properly so that the commercial entities don’t violate any rule or involve in any unfair trade practices detrimental to the consumers. The laws and policies whichever are formulated by the Government such as the Consumer Protection Act,2019, E-commerce Rules 2020 for covering the issues arising out of online transactions along with the Companies Act,2013 and Information Technology (Amendment) Act,2020 are required to be properly followed to run the online marketplace without any hassle. Not only that, for creating some kind of deterrence in the online market place to follow the protocols strictly punishment should be inflicted for the violators of the rules. That way a discipline would be created and utmost benefits could be taken out of the various technological innovations even in the field of commerce.


[1] Aditi Lahiri, Consumer Protection in E-commerce in India, AMIE LEGAL (Sep. 2020, 20, 09:15 PM), https://amielegal.com/consumer-protection-in-e-commerce-in-india/#:~:text=Consumer%20protection%20in%20e-commerce%20The%20Indian%20Consumer%20Protection,the%20absence%20of%20explicit%20laws%20concerning%20online%20transactions. [2] OECD (2016), Consumer Protection in E-commerce: OECD Recommendation, OECD Publishing, Paris, (Sep. 2020, 20, 10:25 PM), http://dx.doi.org/10.1787/9789264255258-en -law/. [3] SmitaPaliwal& Richa K Gaurav, Impact of Consumer Protection Act, 2019 on E-commerce- the law, the rules and the road ahead, Mondaq, (Sep. 2020, 22, 11:00 AM), https://www.mondaq.com/india/dodd-frank-consumer-protection-act/973516/impact-of-consumer-protection-act-2019-on-e-commerce-the-law-the-rules-and-the-road-ahead. [4] PTI, Grievance redressal mechanism on complaints against e-tailers, FirstPost, (Sep. 2020, 24, 03:45 PM), https://www.firstpost.com/business/grievance-redressal-mechanism-on-complaints-against-e-tailers-2974686.html. [5] BLOG,Grievance Redressal Mechanism Against e-Commerce Companies, (Sep. 2020, 26, 08:15 PM), https://www.instaremedy.com/blog/grievance-redressal-mechanism-e-commerce-companies/. [6] Consumer Protection Act,1986. [7] Consumer Protection Act,2019. [8] Jaydeep Bhambhani and Pranav Shangari,India: The Consumer Protection (E-Commerce) Rules, 2020(October 19 ,2020), [9] Ibid.

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