E-Commerce or Electronic Commerce is a term used for denoting business activities through electronic means, unlike the conventional physical means. E-Commerce is not only limited to buying and selling of goods, but also includes the delivery, supply chain, payment mechanism, feedback mechanism and service management. It is conducted with the use of computers and mobile/smart phones (M-Commerce).
Disputes are an inherent part of any transaction. They are usually resolved within the physical territory of one or both the parties However, the customers transacting with the online enterprise maybe located anywhere in the country or the world (depending upon the scale of business). The issue of ‘territorial’ jurisdiction gets complicated as the internet is borderless.
However, basic jurisdiction can be determined in accordance with the Indian statutes.
Information Technology Act, 2000 – Sec. 75 of this Act enables the Act to be applicable to the offences and contraventions which occur outside India if the offences or contraventions involve a computer, computer system or computer network located in India. Further, the provisions of this Act (Sec 5, Sec 10) talk about digital signatures and digital records, which have been given the status of legal and valid means of online transaction.
The Civil Procedural Code, 1908 – The Act doesn’t provide for a clear stance in disputes arising out of E-Commerce. However, Sec 19 provides for a discretionary power to the plaintiff in deciding the Court to approach for the suit, provided the wrong was done within the local limits of the jurisdiction of one Court and the defendant resides, or carries on business or personally works for gain, within the local limits of the jurisdiction of another Court.
There has been a certain amount of clarity after the Delhi High Court gave its judgement in the case of World Wrestling Entertainment, Inc. v. M/S Reshma Collection. The main issue before the court was that when a contract takes place over the internet, where the contract is said to be concluded. To answer the same the court had to interpret the term “carries on business” as provided by Section 134(2) of the Trademarks Act, 1999 and Section 62(2) of the Copyright Act, 1957. These sections further talk about filing of suit in case of violation of any provision of the respective Acts.
To examine the same the Divisional Bench of the High Court relied on the three tests laid down by the Supreme Court in Dhodha House v. S.K. Maingi, of which the third test is applicable in the present case as the plantiff had no agent in Delhi. The third test states that – to constitute “carrying on business” at a certain place, the essential part of the business must be performed at that place. Also, according to the case of Bhagwan Goverdhandas Kedia v. Girdharilal Parshottamdas & Co, a contract would be completed at the place where acceptance is communicated.
Based on these judgements the court held – “because of the advancements in technology and the rapid growth of new models of conducting business over the internet, it is possible for an entity to have a virtual presence in a place which is located at a distance from the place where it has a physical presence.” Thus, the plaintiff carried out business (even though to some extent) in Delhi.
In conclusion, our country needs a specific law dealing with the issue of jurisdiction with regard to E-Commerce disputes. This is so because websites can be accessed from anywhere and the concept of ‘place’ doesn’t exist in its conventional sense while entering into these transactions. The above mentioned case-law gave certain clarity on this regard. However, the issue of jurisdiction seems to be more tilted towards the plaintiff and thereby causing a plausible inconvenience to the defendants; thus, it is important to have laws directing the jurisdiction in E-Commerce disputes.