TERRITORIAL JURISDICTION NUANCES IN E-COMMERCE TRANSACTIONS
E-commerce has made major progress in India during the past decade or so. The majority of products sold in markets are now available online and this has led to a major rise in the need for online sales as a mode of transactions. However, with every introduction or invention, new legal complications are bound to arise. It becomes imperative to understand how e-commerce plays out
Going by (Section 19 and 20) of the CPC, an E-commerce transaction and any disputes that arise subsequently shall be looked at from the perspective of the individual contentions laid down before the court. A movable property contention gives the plaintiff the advantage of filing the suit where the wrong was committed or where the defendant resides. Suits for the immovable property have specific local jurisdiction to try the matter at hand and if there is a dispute that arises of immovable property situated in more than one territorial jurisdiction, the plaintiff has the ability to decide which court to approach. The different permutations and combinations have all been done keeping in mind the grievances of the individual’s concerned and territorial convenience and appropriateness of courts.
Subject matter competency is crucial in identifying the applicability and competence of courts to adjudicate over the matter before them. The cause of action and the territorial jurisdiction are interrelated as per the subject matter that is to be decided upon. Courts must understand the interests of the parties that are at hand and must delve into the issue at hand keeping in mind the facts surrounding the grievance filed as has been mentioned in the form of the different types of jurisdiction. The first being pecuniary jurisdiction which essentially allows district courts to deliberate over cases that are being contested based on specific monetary valuations. This is mostly done before civil courts and the High Courts are the courts of appeal.
The other type of jurisdiction is territorial and under this ambit, e-commerce companies and courts have to essentially come to a consensus regarding the dispute over the property The division is done under movable and immovable properties but the place of suing is always crucial when it comes to ascertaining the rights of the plaintiff or aggrieved individual.
If there is even a part of the cause of action that arises, the jurisdiction can be conferred upon a court with relevance. This is with reference to the case of Dhodha House & Patel Field Marshal Industries v. S.J. Maingi & P.M. Diesel Ltd. where the court emphasized that there must never be any presumption of a court’s jurisdiction over a case. Moreover, 2 causes of action cannot be enjoined together and presented before a court merely because the court could try only one cause of action before due to its jurisdiction. The cause of action co-exists with respect to the territorial jurisdiction and is one of the essential components of the subject matter at hand. The ambit of the E-commerce legal contentions under territorial jurisdiction expands to the Information Technology Act and the Indian Contract Act owing to the relevance of contracts and technology usage in the scenarios. Every consumer and seller online give their indication and approval of monetary and material transactions for movable and immovable objects. However, if there is a discrepancy in any of the steps right from the placement of the order to the delivery and product quality, either party can be held liable for a plethora of issues ranging from misrepresentation, breach of data and privacy and monetary problems that are unspecified in the original transaction. It is here that the CPC lays down the laws of territorial jurisdiction and cause of action. Another domain that can be looked at from the purview of the Trademark Act 1999 and the Copy Right Act 1957 which have an express relation as well with territorial jurisdiction. As has been laid down in the case of Indian Performing Rights Society v Sanjay Dalia, the court stated that a company can institute a suit where its principal place of business is or wherever the cause of action arose. The Court also reiterated that the sole aim of Section 134 of the Trademark Act is the convenience factor of the aggrieved party.
This case encompasses the entire purview behind relating Section 20 to the plethora of issues that have always been looked at from the convenience point of view of the plaintiff when suing under different territorial jurisdictions.
Apart from the relevant sections that pertain to territorial jurisdiction, there are specific tests that courts apply about solving the issues that are presented before them.
Purposefully Availment Test and the Forums Conveniens are two such tests used specifically to ascertain a party’s appropriateness and convenience when deliberating over territorial jurisdiction.
The Forums Conveniens Test is applicable when either party has a problem with the jurisdiction of the external factors regarding convenience arise that could be due to personal issues or prewritten contractual stipulations. The Courts will look at the appropriate forums that are relevant and keeping the interests of the parties in mind, will decipher the relevant
The court must take up the issue at hand. The doctrine was emphasized in the case of Krishna Nigam v Harish Nigam wherein the court stated there would be a stay on the proceedings if there was no convenient forum that was found and the interests of the parties would be deliberated before an appropriate forum if any were to be considered necessary and convenient for that matter to be heard. The test is critical for courts to investigate the interests of the parties especially if the matter involves transferring the case to jurisdictions due to personal reasons that have been brought up by the parties.
The courts have done justice to catering and evolving the law with technology and modernity coming into the picture. However, there is a lot left in the domain of public grievances and laws that can specify clarity for all those involved in the e-commerce sector. Nevertheless, the question of where the cause of action may have arisen in the case of e-commerce transactions with parties spread across borders has also been regulated and formulated into tests to allow judicial pronouncements to be relevant given the nature of the transactions taking place.
Author(s) Name: C.C. Chengappa (OP Jindal Global University, Sonipat)
Civil Appeal 6248 of 1997
Civil Appeal No. 10644 of 2010
Transfer Petition no. 1912 of 2014