CONSUMER APPEAL NO. 7 OF 2007
1. The Managing Director
Air Deccan, 35/2, Cunningham Road
Opposite Canara Bank,
Bangalore 560052, Karnataka.
2. The Local Manager
Air Deccan
Sanganer Airport, Jaipur, Rajasthan
3. The Local Manager
Air Deccan
Lokapriya Gopinath Bordoloi Airport,
Borjhar, Assam APPELLANTS / OPPOSITE PARTIES
-Versus-
Shri Ram Gopal Agarwal
C/o Hotel Alpine Arcade
Thana Road, Police Bazar, RESPONDENT / COMPLAINANT
Date of Hearing 16.11.2013
Date of Judgment 07.12.2013
Whether to be reported Yes
ORDER
Per Shri Ramesh Bawri, Senior Member The brief facts of the case, according to the Complainant/Respondent, are that on 24.03.2006 he booked two Air tickets from the Appellant Airlines over the internet from Shillong and made payment through credit card for himself and his wife for a journey from Delhi to Jaipur on 04/04/2006 in Flight No. DN/511. Before boarding the aforesaid flight at Delhi domestic Airport, the Respondent along with his wife booked their personal baggage with Tag No. 114185 & 114184. But on reaching Jaipur, to the Respondent's utter dismay, it was found that the booked baggage was missing and the Respondent immediately brought the matter to the notice of the Opposite Party No.2 who was least bothered to help the Respondent, completely ignoring the fact that the passengers were an aged couple. The Respondent, frustrated by the arrogance of the Appellant No. 2, filed an FIR on 06/04/2006with the Sanganer Airport Police Station stating the loss of baggage and only after much persuasion and personal request the Appellant No. 2 assured to look into the matter and issued a letter regarding the mishandled baggage.
2. It is also the Complainants case that on account of negligence on the part of the Appellant No.2 he and his wife had to suffer both monetarily and physically as they were compelled to buy new clothes and other necessities worth Rs.25,000 for their immediate use, apart from undergoing physical strain and mental trauma. Due to the negligence of Appellant No.2 the Respondent had to change his business and travel schedule and had to run from pillar to post to get his grievance heard. Finally the baggage was partly traced on 23/04/2006 and the rest on 03/06/2006, after two months. However the Appellant No.3 treated the matter very lightly and only as a case of Mishandled Baggage. When the Respondent requested the Appellant No. 3 to deliver the baggage at his address. Hotel Alpine Arcade, Thana Road, Police Bazar, Shillong 793001, he did not do so, compelling the Respondent to personally go down to Guwahati twice and spend an avoidable expenditure of Rs.2,400 to collect the baggage from the Appellant No.3 at Guwahati, thereby also wasting his two full days on 23/04/2006and on 03/06/2006. Further, the Respondent received the baggage in a dilapidated condition and the weight of the baggage was 13 Kgs lesser than the weight originally booked, the loss on account of which was Rs. 20,000. The Respondent suffered immense physical hardships apart from mental trauma, inconvenience and disruption of his scheduled business programmes at Jaipur and other places owing to recklessness and gross negligent attitude of the Appellants who failed to provide satisfactory service to their customers. He ultimately filed a complaint with the learned District Forum at Shillong claiming compensation.
3. On the other hand, the Appellants case is that the Airlines officials took prompt action on the Respondents complaint and immediately an All India Tracer was sent to all airports. The Appellants finally retrieved the baggages and delivered the same to the Respondent at Guwahati. When receiving his lost baggage the Respondent had no grievance but suddenly on 28/8/2006the Respondent filed the Complaint before the Learned District Forum. As such, there was no deficiency in service on their part as was held by the District Forum and the impugned order is liable to be set aside.
4. The findings of the learned District Forum confirm the facts narrated by the Complainant. Based on these facts, while allowing the Complaint (although not the full claimed quantum) the learned District Forum awarded the following amounts as compensation to the Complainant
(i) Cost of necessities and new clothes purchased Rs.13208
(ii) Cost of fare to and fro Guwahati to collect the Rs.2400
baggage
(iii) Compensation for loss of 13 Kgs baggage @ Rs.3900
Rs.300 per Kg.
(iv) Lawyers fee Rs. 6450
(v) Compensation for mental agony and harassment Rs.45000
(vi) Costs Rs. 600
Total Rs.71558
Further, interest @12% on the said amount was allowed w.e.f. 28.08.2006, the date of filing of the complaint, upto the date of payment.
5. The learned District Forum also over-ruled the objections raised by the Appellants to its territorial jurisdiction, although in a cursory manner, in the following words That the Claimant had purchased the air tickets through the internet and made the payment through the credit card. The amount was deducted from the bank account of the Complainant at Vijaya Bank, Shillong which is within the territorial jurisdiction of this Forum.
6. The Appellants have vehemently argued before us that the learned District Forum failed to consider the preliminary objection raised by the Appellants on the point of territorial jurisdiction as provided under section 11 (2) of the Consumer Protection Act, 1986. According to them, from the above provisions of law, it is crystal clear the learned Forum below lacked territorial jurisdiction as none of the Appellants resided or personally worked for gain within the jurisdiction of the learned Forum below nor cause of action, wholly or in part, arose within the local limits of the learned Forum below. The cause of action arose in this case at Delhi, Jaipur and Guwahati but the learned Forum below wrongly held that as the air tickets were purchased through internet and payment was made through credit card and debited in his account with Vijaya Bank, Shillong the Forum has got territorial jurisdiction. The Appellants counsel admits that the air tickets were booked through internet at Shillong and payment too was made from there but says that this was not good enough to give the Complainant a right to file a Consumer Complaint at Shillong as the actual travel was from Delhi to Jaipur and the luggage was booked there. Hence, Consumer jurisdiction lay either at Delhi, Jaipur or Guwahati but not at Shillong.
7. With regard to the quantum of compensation, the learned counsel for the Appellants further submits that the learned Forum by awarding compensation for purchase on account of personal effects of the Respondent to the tune of Rs.13, 208 as well as Rs.3, 900 for the cost of short delivery travelled beyond the parameters in awarding double compensation, besides another amount of Rs. 45,000 on account of mental agony. According to him the compensation awarded by the learned Forum under different heads is without any basis and is exorbitant. The interest of 12% awarded by the Forum too is against the prevailing norms of the commercial world. On the other hand, learned counsel for the Respondent obviously supports the findings and order passed by the learned District Forum vehemently and assiduously and prays that the Appeal be dismissed as one without merit.
8. Thus, the two real issues raised before us by the learned counsel for the Appellants are that (a) Inasmuch as the air tickets were booked online, the learned District Forum at Shillong had no territorial jurisdiction over the complaint in terms of the Consumer Protection Act, 1986 and that the learned District Forum did not address itself adequately to their objection on this count. (b) That the compensation awarded by the learned District Forum was excessive, if not totally uncalled for. It is these two issues that we shall examine, taking the second issue first, for the sake of convenience.
9. Having perused the impugned order and all materials on record thoroughly and having applied our minds properly, we have reached the conclusion that the findings with regard to deficiency in service on the part of the Appellants, as arrived at by the learned District Forum, are fully justified. It must be remembered that there is no controversy over the facts as stated in the complaint and delivery of passengers’ booked luggage after a delay of two months, that too in a dilapidated condition, cannot but be a serious deficiency in service.
10. In respect of the quantum of compensation awarded by the learned District Forum under various heads too, we find that the impugned order is well reasoned and calls for no interference on our part. The compensation is also in broad conformity with the judgment of the Honble National Commission in Col. D.K. Kapoor vs K.L.M. Northwest Airlines 2010 (4) CPR 179 (NC) which has been placed before us by the learned counsel for the Respondent/ Complainant. Here we also recall the observations of the Honble Supreme Court in Charan Singh vs Healing Touch Hospital (AIR 2000 SC 3138) Para 12 where it said While quantifying damages, consumer forums are required to make an attempt to serve ends of justice so that compensation is awarded, in an established case, which not only serves the purpose of recompensing the individual, but which also at the same time, aims to bring about a qualitative change in the attitude of the service provider. In our opinion this is one such fit case.
11. The issue about the territorial jurisdiction of the learned District Forum over the complaint calls for an in depth consideration by us mainly for the reason that the airline tickets were purchased over the internet. We therefore propose to deal with this aspect at length, not only to adjudicate this appeal but also to lay the path in case similar issues arise in future, which we believe is quite likely.
12. With the widespread access to personal computers and the internet, e commerce has been growing at a phenomenal pace. Many service providers and retailers taking advantage of this are offering their wares to the general public through their web sites, enabling their customers to do business/shopping from the comfort of their homes and offices. With the growth of e commerce and commercial activity over the internet, it has become possible for business to be conducted across the globe without actual physical presence in every place. Widespread usage of plastic money (Credit and Debit Cards) has facilitated these operations in a big way. But at times the consumer gets a raw deal as internet dealings are done with unknown parties, operating from far off places.
13. This advance in technology has brought to light the missing links in the law relating to jurisdiction that can be exercised by a court of law or quasi judicial tribunals in areas where internet activity plays a significant role. Internet or e commerce matters are considered to be unconventional when they involve the key question of jurisdiction. The world of global connectivity on the worldwide web has posed several problems and the common concern is whether jurisdiction in matters should remain confined to the territorial limits of the place of business or residence of the defendant, as territorial boundaries become porous. Thus, the challenge faced by parties to an online transaction is which forum should be used to adjudicate conflicts. This is particularly an issue when a buyer seeks redressal in his local jurisdiction on the basis that the sellers goods or services are made available to consumers in all parts of the country through the Suppliers / Service providers web presence.
14. The Consumer Protection Act, 1986 was enacted with the purpose of empowering consumers to take on the might of large corporations and preventing unscrupulous businessmen from taking undue advantage of the weak position which consumers are inherently placed in under the archaic Indian judicial system. It set up special tribunals, simpler procedures and enacted special provisions to help consumers get a better bargaining position vis a vis goods suppliers and service providers. However, since this law was enacted more than a quarter of a century ago, it is not entirely geared towards protecting consumer rights in the digital era. However, that does not mean it is entirely toothless in the online environment although it certainly needs some clear pronouncements on the part of the Consumer Tribunals to come to grasp with the special circumstances and practices of the online marketplace, as the rest of the discussion will reveal.
15. The C.P. Act was enacted a long time back and contemporary Information and Communication Technology related disputes and dispute resolution mechanisms were well beyond Parliaments contemplation at that time. Keeping in mind that the issue of territorial jurisdiction has been a recurring source of trouble in online shopping related complaints, amendment of the Consumer Protection Act, 1986 is called for to clear the air in respect of complaints, where the financial transactions take place over internet from a consumers location. It would, therefore, perhaps be a step in the right direction if our Parliament steps in to bring suitable amendments in the Act in this regard. This would also lessen the burden on consumer forums, besides resolving an issue that is a major problem for consumers making online purchases. However, till such time as the legislators step in, consumers of course need judicial and quasi judicial clarity to clear the ambiguity with respect to territorial jurisdiction in complaints arising from online transactions. Providing this clarify will therefore also be one of our objectives while deciding this Appeal.
16. Perhaps having waxed a wee bit over eloquent, but consciously so because of the importance of the matter which could impact a very large number of consumers and because of the need of clarity in the absence of any detailed and definitive ruling on territorial jurisdiction in cases of internet transactions such as the one with which we are dealing, we now get down to brass tacks.
17. Before delving deeper into the issue, we first propose to mention below the various landmark judgments of the Honble Supreme Court, the spirit and letter of which shall be at the back of our minds and guide us throughout our discussions. We shall quote excerpts from the cited judgments and shall highlight the relevant and necessary words, trusting that this will be sufficiently self explanatory, without any need of elaboration. Besides the judgments having a direct bearing on the matter, which we shall refer to later, it is in the light of all these that we will reach our logical conclusions. We shall then also bring out the international context of the C. P. Act, 1986 and further lay down the provisions of law relevant for the purpose of determining whether in the facts and circumstances of the case the learned District Forum at Shillong could exercise valid territorial jurisdiction over the complaint.
(a) Lucknow Development Authority v. M.K. Gupta (AIR 1994 SC 787) (Para 2)
The provisions of the Act thus have to be construed in favour of the consumer to achieve the purpose of enactment as it is a social benefit oriented legislation.
(b) Laxmi Engineering Works v. P.S.G. Industrial Institute (AIR 1995 SC 1428) (Para 6)
(Quoting Guideline E.28 of theUnited Nations Guidelines for Consumer Protection, 1985) Government should establish or maintain legal and/or administrative measures to enable consumers or, as appropriate, relevant organizations to obtain redress through formal or informal procedures that are expeditious, fair, inexpensive and accessible. Such procedures should take particular account of the needs of low income consumers.
(c) State vs S.J. Choudhary (AIR 1996 SC 1491) (Para 9)
(Quoting from Statutory Interpretation by Francis Bennion, Second Edition, Section 288)
(2) It is presumed that Parliament intends the court to apply to an ongoing Act a construction that continuously updates its wording to allow for changes since the Act was initially framed (an updating construction). While it remains law, it is to be treated as always speaking. This means that in its application on any date, the language of the Act, though necessarily embedded in its own time, is nevertheless to be construed in accordance with the need to treat it as current law.
In construing an ongoing Act, the interpreter is to presume that Parliament intended the Act to be applied at any future time in such a way as to give effect to the true original intention. Accordingly the interpreter is to make allowances for any relevant changes that have occurred, since the Act's passing, in law, social conditions, technology, the meaning of words, and other matters.
(d) M/s India Photographic Co. Ltd vs H.D. Shourie (AIR 1999 SC 2453) (Para 4)
provision has been made herein (C.P.Act,1986) with the object of interpreting the relevant law in a rational manner and for achieving the objective set forth in the Act. Rational approach and not a technical approach is the mandate of law.
(e) State Of Karnataka vs Vishwabarathi House Building (AIR 2003 SC 1043) (Para 48)
The provisions of the said Act (C.P. Act) are required to be interpreted as broadly as possible.
18. A brief reference to the background in which the C.P. Act, 1986 was enacted and the manner in which jurisdiction is determined in the European Union would also be apt here. The Economic and Social Council of the United Nations, recognizing the need for protection of the rights of consumers, drafted a set of model guidelines known as the United Nations Guidelines for Consumer Protection (UNGCP) which were adopted by the General Assembly in 1985 and India was a Signatory to the Resolution. (See M/S National Seeds Corpn. Ltd. vs M.Madhusudhan Reddy & Anr. (AIR 2012 SC 1160) (paras 18 & 19). These Guidelines act as an international reference point for the consumer movement as the Consumer Protection Act, 1986 was itself enacted in India, based on them. This also points to the fact that the spirit in which Consumer law in our country is to be interpreted ought not to be dissimilar to the spirit of its operation in the international arena.
19. It is for this reason that we also take notice of the following Article 14 of Section 4 of The Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, 1968, which relates to Jurisdiction over consumer contracts and has been adopted by the six Contracting States to the Treaty establishing the European Economic Community. This gives us an insight into international trends
A consumer may bring proceedings against the other party to a contract either in the courts of the Contracting State in which that party is domiciled or in the courts of the Contracting State in which he is himself domiciled. Proceedings may be brought against a consumer by the other party to the contract only in the courts of the Contracting State in which the consumer is domiciled. These provisions shall not affect the right to bring a counterclaim in the court in which, in accordance with this Section, the original claim is pending.
20. The stage is now set to reproduce section 11(2) of the Consumer Protection Act, 1986 (the Act) which deals with the territorial jurisdiction of the Consumer Fora constituted under the Act, over consumer complaints. Section 11(2) of the Consumer Protection Act, 1986 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 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 carries on business or has a branch office, or personally works for gain, provided that in such case the permission of the District Forum is given, or the opposite parties who do not reside, or 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 .
21. It can be seen at a glance that the C.P. Act specifies the norms for deciding the jurisdiction (a) where the seller / service provider resides or carries on business or has a branch office or (b) where the cause of action arises. But it is not specific in respect of transactions over the internet and it falls upon us to settle the issue. Let us proceed to examine separately under clauses (a), (b) & (c) of Section 11 (2) of the C.P. Act, 1986 whether the District Forum at Shillong had territorial jurisdiction over the Complaint in the instant case.
Clause (a) It is not the case of the Complainant that all of the Opposite Parties either actually and voluntarily reside or carry on business or have a branch office or personally work for gain within the limits of jurisdiction of the District Forum, Shillong where the complaint was instituted and as such the Appellant was indeed precluded from instituting the Complaint at Shillong under Clause (a) of Section 11(2), C.P. Act, 1986.
Clause (b) This Clause applies to a case where there are more Opposite Parties than one and postulates that at least any one of them should, at the time of the institution of the Complaint either actually and voluntarily reside, or carry on business, or have a branch office or personally work for gain, within the local limits of the jurisdiction of the Forum where the Complaint is instituted provided further that either permission of the District Forum is obtained with reference to the Opposite Parties who are not actually and voluntarily residing, or carrying on business or having a branch office or personally working for gain within the local limits of the jurisdiction of the Forum where the complaint is instituted or they acquiesce in the institution of the Complaint. This clause too does not give territorial jurisdiction to the learned District Forum at Shillong as neither do the Opposite Parties carry on business here or have a branch office nor did they acquiesce in such institution.
Clause (c) We shall, in due course, consider clause (c) of Section 11 (2) of the Act and also see whether the cause of action in the Complaint had arisen partly or wholly within the local limits of the territorial jurisdiction of the District Forum at Shillong. Since not all shopping or service portals will have offices or branches in all cities/towns, a customer can very rarely rely on clauses (a) and (b) above in case of a dispute. It is only Clause (c) that can perhaps assist him in filing a complaint in the District Forum that covers the area where cause of action arises.
22. Before that, with regard to the Appellant’s challenge to the territorial jurisdiction of the Forum at Shillong, the arguments for which we have already mentioned above, it is our duty to put on record the several authorities that learned counsel for the Respondent has placed before us to support the conclusion of the learned District Forum that it had adequate jurisdiction to decide the complaint. While some other judgments relied upon by him have little or no application to the facts and circumstances of the case, the following need to be noticed
1. National Aviation of Company Ltd. vs Col. (Retd) P.K Choudhury & M/s Make My Trip (India) (P) Ltd. (West Bengal SCDRC S.C. Case No. FA/288/20009).
In this case, where airline tickets were purchased over the internet from the Complainants residence and were physically received at his office, both within the jurisdiction of the concerned learned District Forum, its territorial jurisdiction over the complaint was upheld.
2. Vinod Kumar vs Shoeb Merchant & Ebay India (P) Ltd. (Kerala SCDRC Appeal No. 409/2006)
This case too was one of online purchase and the learned State Commission, Kerala allowed the claim of the Complainant filed within its territorial jurisdiction where the Complainant resided and placed his order for a mobile set through the Opposite Partys website.
3. Casio India Co. Ltd. vs Ashita Tele Systems Pvt. Ltd. 106 (2003) DLT 544 (Delhi High Court).
Although this was a Civil Suit and not a Consumer Complaint, this judgment is relevant as the parameters for territorial jurisdiction under Sec. 11 (2) of the Consumer Protection Act 1986 are similar to the parameters contained in Section 20 of the Civil Procedure Code. The Honble Delhi High Court has observed therein that once access to the Defendants website could be had from anywhere else, jurisdiction could not be confined to the territorial limits of the place where the Defendant resided and the fact that the Defendants website could be accessed from Delhi was sufficient to invoke the territorial jurisdiction of a court in Delhi.
4. (India TV) Independent News vs India Broadcast Live (2007 (35) PTC 177) (Delhi High Court)
Here the Delhi High Court differed with its earlier judgment in Casio India (supra) but yet held that if the Defendants website is interactive, permitting browsers not only to access the contents thereof but also to subscribe to the services provided by the owners/operators, then courts jurisdiction at the place where the website is accessed from is permissible.
5. Banyan Tree Holding (P) Ltd. vs A. Murali Krishna Reddy. (CS (OS) No.894/2008) (Delhi High Court)
In this reference arising from an action for passing off, a Division Bench examined both the Casio India case (supra) and India TV case (supra) which took divergent views. It did not agree with the dicta of the Casio case (supra) and even with regard to India TV (supra) held that the degree of interactivity apart, the nature of the activity permissible and also whether it resulted in a commercial transaction had to be examined.
6. SIL Imports, USA vs M/s Exim Aides Silk Exporters. (AIR 1999 SC 1609) (Hon’ble Supreme Court)
This judgment emphasized that Courts have the duty to use interpretative process to the fullest extent permissible by an enactment by giving allowances for any relevant changes that have occurred since the Acts passing, in law, social conditions, technology etc. It referred to its earlier judgment State vs S.J. Choudhary (AIR 1996 SC 1491) which we shall quote in detail later.
23. We shall also bear in mind that the Honble Supreme Court held in para 17 of Dr. V.N.Shrikhande vs Anita Sena Fernandes (AIR 2011 SC 212) that where the term cause of action has not been defined in an Act, the same has to be interpreted keeping in view the context in which it has been used and object of the legislation. Again, explaining the term cause of action it observed in paras 16 & 17 of Rajasthan High Court Advocates Assn. vs Union of India (AIR 2001 SC 416) that it would be open to a litigant who is the dominus litus to have his forum conveniens and he has the right to go to a court where part of his cause of action arises. Further that, it has to be left to be determined in each individual case as to where the cause of action arises.
24. To our mind the celebrated judgment of the Hon’ble Supreme Court viz ABC Laminart Pvt. Ltd. vs A.P. Agencies, Salem (AIR 1989 SC 1239), read along with the provisions of the Information Technology Act, 2000 which we shall discuss later, is of vital value and relevance to decide this matter which is not as complicated at it appears to be at first glance. What the Honble Apex Court held here in paras 13 to 15 is required to be quoted below expansively (underlining ours)
(13) Under Section 20(c) of the Code of Civil Procedure subject to the limitation stated theretofore, every suit shall be instituted in a court within the local limits of whose jurisdiction the cause of action, wholly or in part arises. It may be remembered that earlier section 7 of Act 7 of 1888 added Explanation III as under
Explanation III In suits arising out of contract the cause of action arises within the meaning of this section at any of the following places, namely
(1) the place where the contract was made
(2) the place where the contract was to be performed or performance thereof completed
(3) the place where in performance of the contract any money to which the suit relates was expressly or impliedly payable.
(14) The above Explanation III has now been omitted but nevertheless it may serve a guide. There must be a connecting factor.
(15) In the matter of a contract there may arise causes of action of various kinds. In a suit for damages for breach of contract the cause of action consists of the making of the contract, and of its breach, so that the suit may be filed either at the place where the contract was made or at the place where it should have been performed and the breach occurred. The making of the contract is part of the cause of action. A suit on a contract, therefore, can be filed at the place where it was made. The determination of the place where the contract was made is part of the Law of Contract. But making of an offer on a particular place does not form cause of action in a suit for damages for breach of contract. Ordinarily, acceptance of an offer and its intimation result in a contract and hence a suit can be filed in a court within whose jurisdiction the acceptance was communicated. The performance of a contract is part of cause of action and a suit in respect of the breach can always be filed at the place where the contract should have (been) performed or its performance completed. If the contract is to be performed at the place where it is made, the suit on the contract is to be filed there and nowhere else. In suits for agency actions the cause of action arises at the place where the contract of agency was made or the place where actions are to be rendered and payment is to be made by the agent. Part of cause of action arises where money is expressly or impliedly payable under a contract. In cases of repudiation of a contract, the place where repudiation is received is the place where the suit would lie. If a contract is pleaded as part of the cause of action giving jurisdiction to the Court where the suit is filed and that contract is found to be invalid, such part of cause of the action disappears. The above are some of the connecting factors.
25. The ratio of this extremely relevant and landmark judgment of the Hon'ble Supreme Court, as we can understand, is that, in contractual matters, besides other places, cause of action arises at any of the places where (a) a contract is made or (b) where acceptance of a contract is communicated or (c) where a contract is performed or is to be performed or (d) where money under the contract is either payable or paid; or (e) where repudiation of a contract is received. Section 11 (2) of the C.P. Act being akin to Section 20 C.P.C., this clear pronouncement of the law relating to territorial jurisdiction would apply with full force to the Consumer Fora and is thus instrumental in helping us resolve the issue with which we are confronted.
26. Further, to clear any doubts that may arise about the applicability of the Contract Act to proceedings in the Consumer Fora, we wish to cite Marine Container Services South vs Go Go Garments (AIR 1999 SC 80) (Para 4) wherein the Hon’ble Apex Court stated We are not a little surprised to read that the Contract Act does not apply to complaints filed under the Consumer Protection Act. The Contract Act applies to all, litigants before the Commission under the Consumer Protection Act included. Equally appropriate it is to cite the decision of the Hon’ble National Commission in Indian Airlines vs S.N. Seth (First Appeal No. 495 OF 1997) where it ruled thatIssuing air ticket on behalf of the Indian Airlines a contract has been entered into between Seth and Indian Airlines.
27. In this view of the matter, we therefore hold that, for the purposes of Consumer Complaints relating to normal contracts for services and/or goods, cause of action arises inter alia at any of the places where (a) the contract is made; or (b) where acceptance of the contract is communicated or (c) where the contract is performed or is to be performed or (d) where money under the contract is either payable or paid or (e) where repudiation of the contract is received, if any. Consequently, territorial jurisdiction over a consumer complaint also lies with the Consumer Fora situated at any place where any of the aforementioned causes of action arises. Hence, besides other places where a consumer may choose to file a complaint in accordance with Section 11 (2) of the C.P. Act, a consumer will be legally entitled to pursue his remedy before any Consumer Fora with appropriate pecuniary powers, holding territorial jurisdiction over any of the aforementioned places.
28. So far so good. However we are still faced with the question as to how our aforementioned conclusions are to be applied to internet transactions. For this purpose we need to move on to the provisions of the Information Technology Act, 2000 which learned counsel for the Complainant has also relied on to buttress his support for the impugned order, in respect of territorial jurisdiction. In particular, he has relied upon the preamble of the I.T. Act, 2000 and sections 1, 11, 12 and 13 thereof, although the Appellants counsel has stoutly denied that the I.T. Act has any application to the issue, whatsoever.
29. The Preamble to the Information Technology Act, 2000 states that it is
An Act to provide legal recognition for the transactions carried out by means of electronic data interchange and other means of electronic communication, commonly referred to as Electronic Commerce, which involve the use of alternatives to paper based methods of communication and storage of information , to facilitate electronic filings of documents with the Government agencies and further to amend the Indian Penal Code, Indian Evidence Act, 1872, The Bankers Books Evidence Act, 1891, and the Reserve Bank of India Act, 1934 and for matters connected therewith or incidental thereto.
30. It may be noted that this Act too was enacted by our Parliament to give effect to the resolution passed by the General Assembly of the United Nations vide Resolution A/RES/51/162 dated 30.1.1997 adopting the Model Law on Electronic Commerce which had been adopted by the United Nations Commission on International Trade Law. The Information Technology Act, 2000, last amended in 2008, reflects the growing importance of the Internet in an average Indian's life. The main issues that are looked into include hacking, privacy, regulating authority and punishments for wrongdoers. Although this law does not focus on the interest of online shoppers, yet some of its provisions are of great significance to consumers who face problems while shopping online, Yet, significantly for our purposes, Section 13 (3) of the I.T. Act, 2000 provides that
Save as otherwise agreed between the originator and the addressee, an electronic record is deemed to be dispatched at the place where the originator has his place of business, and is deemed to be received at the place where the addressee has his place of business.
31. Taking the example of the case at hand, if an air ticket is booked by a Complainant over the internet which is also sent by an Airline Company to the Complainant through email, then these would be despatches of electronic records. The request for booking of the air ticket would be an offer and the emailing of the ticket to the consumer would be the acceptance. In terms of Sec. 13 (3) of the I.T. Act, the ticket or, in other words, the acceptance of the offer for its purchase, would be deemed to have been received at the Complainant's place of business. Resultantly, the contract for purchase of the air ticket would be taken to be have been made at the Complainant’s place of business. Acceptance of the contract would also be deemed to have been communicated there.
32. All that we now need to do is to juxtapose Section 11 (2) of the C. P. Act, 1986 with the Honble Supreme Court’s ruling in ABC Laminart (supra) and Section 13 (3) of the Information Technology Act, 2000 and voila we have the solution and the answer to our vexed question. We can now safely go ahead and hold that, where contracts for services and/or goods are entered into over the internet (or online as such transactions are commonly referred to), then, for the purposes of Consumer complaints, part of the cause of action arises inter alia at the Complainant’s place of business if acceptance of the contract is communicated to him through the internet, including the medium of email. Further, irrespective of the fact whether or not the contract is one made over the Internet, cause of action would also continue to arise at any of the places (a) where the contract is performed or is to be performed or (b) where money under the contract is either payable or paid or (c) where repudiation of the contract is received, if any. It cannot be disputed that a Consumer Disputes Redressal Forum is competent to entertain a consumer complaint even if only an infinitesimal part of the cause of action (which is a bundle of facts which taken with the law applicable to them gives the plaintiff a right to relief against the defendant) arises within its territorial jurisdiction. As a result, territorial jurisdiction over a consumer complaint would lie with the Consumer Fora situated at any place where any of the aforementioned causes of action arises. A consumer would be legally entitled to pursue his remedy within the territorial jurisdiction of the Consumer Fora having appropriate pecuniary powers at any of the aforementioned places. This, of course, is in addition to the other places where a consumer may choose to file a complaint in accordance with the other provisions of Section 11 (2) of the C.P. Act.
33. Having said that, we cannot forget that all consumers of our country do not necessarily have a place of business. Take the case of a student or a housewife or an employee who has no place of business and who places an order over the internet from his / her home. Can they be denied refuge under territorial jurisdiction of the local Consumer Fora? We think not. That would be discriminatory and unfair. In fact they are even more vulnerable and need even more protection as consumers.
The concept of place of residence is not new and already exists in Section 11 (2) of the C.P. Act, although in respect of a Defendant. But the point is that place of residence is not unknown to law for the purpose of territorial jurisdiction. We therefore further add an extension that, in case a consumer does not have a ‘place of business’ then the said term as stated in the paragraphs above is to be read as place of residence.
34. Our conclusions aforementioned might appear to be harsh on a goods supplier / service provider, as it may be argued that if a consumer complaint were to be filed at any of the places stated above, which could be places far away from the Defendant’s place of business or residence, then, it would be very burdensome for the Defendant. This is true yet, sadly, it cannot be helped. After all, it is inherent in the litigation system that one side or the other has to undergo some extra hardships in respect of the situs. We have to go by the law. Even otherwise, if were to weigh the difficulty faced by the consumer on the one hand and that faced by a Defendant on the other, and choose whose hardship needs to be mitigated first, the answer would clearly be in favour of the consumer inasmuch as, in almost all cases, the consumer would be the weaker party.
Besides, we must also bear in mind that the preamble to the Consumer Protection Act India, 1986 itself states that it is An Act to provide for better protection of the interests of consumers and for that purpose to make provision for the establishment of consumer councils and other authorities for the settlement of consumers disputes and for matters connected therewith. The Act is, therefore, a benevolent social welfare legislation, the main object of which is not only to protect the consumers but also to provide them a speedy and simple dispute redressal mechanism, free from hassle.
Further, it would be appropriate to recall here the mandate of the Honble Supreme Court contained in Lucknow Development Authority v. M.K. Gupta (AIR 1994 SC 787) where is said
The provisions of the Act thus have to be construed in favour of the consumer to achieve the purpose of enactment as it is a social benefit oriented legislation. The primary duty of the court while construing the provisions of such an Act is to adopt a constructive approach subject to that it should not do violence to the language of the provisions and is not contrary to the attempted objective of the enactment.
35. In the case at hand, the complainant who is a resident of Shillong booked his air tickets from his residence at Shillong over the internet. He made payment for the tickets by Credit Card over the internet from Shillong. The amount was debited in his bank account with Vijaya Bank at Shillong. The Appellant Airlines dispatched the air tickets by email through the internet which was received by the Complainant at Shillong. Now let us read these facts through the prism of the law laid down by the Hon’ble Supreme Court in ABC Laminart (supra), Section 13 (3) of the Information Technology Act, 2000 and what we have held above. (a) As the air tickets were received by the Respondent from the Appellants through email at his place of business at Shillong, vide Section 13 (3) of the Information Technology Act, 2000, these were deemed to have been received at his place of business at Shillong. (b) This receipt of the air tickets constituted acceptance of the contract for sale and purchase of the air tickets between the Appellant and the Respondent and, as such, it is clear that acceptance of the contract was communicated at Shillong. (c) A contract is concluded only upon acceptance of an offer and its due intimation and, as such, it can also be safely said that the contract between the parties was made at Shillong. (d) Payment for the air tickets, even though made through credit card, was made by the Respondent at Shillong. All these ingredients, jointly and severally, clearly fulfill all the parameters laid down above for constituting cause of action and giving territorial jurisdiction over the complaint to the learned District Forum at Shillong. In view of the above facts and legal position we have no hesitation in holding that part of the cause of action arose at Shillong within the territorial jurisdiction of the learned District Forum, Shillong.
36. We may incidentally point out here that the Honble National Commission has taken a dim view of large organizations raising technical objections, including that over territorial jurisdiction, in The Manager, Air India Ltd. vs A. Moideen Kutty (First Appeal No.239 of 1995) in the following words We think it is unfortunate that Air India should have raised such a technical objection to the jurisdiction of the State Commission when it has offices all over the country and resources to defend the case against it.
37. While we make it clear that our present conclusions are based purely on law, it must be mentioned that they also respond to the equally important requirements of equity, practicality and rationality. It would therefore be apt to set forth here these other equally important aspects too. With the growing grievance of consumers utilizing the telecom sector, it would not be in keeping with the objectives of the Act if grievances and disputes arising out of e commerce are, in practice, left out of the purview of C.P. Act. But this will surely be the result if the cause of action is held to arise at the Defendants place of business, for purchases made online, because of the impracticability of lodging complaints there. As it is, Consumers shy away from approaching Consumer Courts as they do not find it worth the while to file or pursue claims for meagre amounts because of the hassle (it is but human nature to want to avoid any form of court proceedings) as well as the expenditure involved. It is a stark fact that goods suppliers and service providers are bigger and more faceless entities than a common consumer and do invariably engage legal counsels to represent them. Although Consumer Fora encourage consumers to appear in person they are a very rare sight especially as they shrink from facing the complicated legal arguments of the other side. In cases where small amounts are involved it is only a valiant warrior, who does not really care about the expenses or the compensation but wants to correct the injustice meted out to him by the supplier/service provider, who ventures into litigation. Whatever be the compensation or costs awarded by the Consumer Fora, unless the amounts involved are high, the Consumer stands to get barely a pie as most of the award gets dissipated in legal fees and expenses. If one faces the facts and is not a prey to hypocrisy or living in denial, diseases by which our country is sadly becoming increasingly afflicted, then all this is nothing but common knowledge. If, on top of this, an online consumer is also called upon to file his complaint in the Defendant’s place of business which may sometimes be thousands of miles away, he would have neither the resource nor the resource to do so and then any online supplier could get away with any deficiency in service or supply of defective goods, safe in the knowledge that the hands of a Consumer Court would never touch him. Consumer rights will be real only if they are practicably accessible and enforceable. Else, they will simply remain a pleasant dream and the only joy to the consumer would perhaps be the colourful Jago Grahak Jago advertisements on which huge sums of public money are expended.
38. In conclusion, in view of the discussions above, we are of the firm view that the findings and conclusions of the learned District Forum regarding deficiency in service on the part of the Appellants as well as determination of the compensation payable by them have been arrived at judiciously. We are also of the equally firm view that the learned District Forum at Shillong had territorial jurisdiction over the Complaint in question for the reasons aforestated and we therefore unhesitatingly uphold the impugned order passed by the Forum below.
39. In the result, the Appeal has no merit and is disposed of as dismissed. No costs. Registry shall refund / return the statutory deposit made by the Appellants. Let the case records be returned to the learned District Forum, Shillong along with a copy of this order. Copies are also to be sent for information to all the learned District Fora in Meghalaya.
