Dhananjay Jog
Territorial jurisdiction is a crucial aspect not only in Consumer Commissions but in all courts. This is best understood through an example: Suppose you have a property dispute with a neighbour. The boundary lines between your plots are unclear, and each of you believes the other has encroached. If this dispute occurs in Goa and you travel to Shimla for a vacation, where your son is posted, you cannot file your case in a court there. The appropriate court for your dispute would be in Goa.
Even within Goa, a Consumer Commission would not be the right authority for a property dispute like this. These commissions handle only cases involving consumers—individuals who have paid for a product or service.
That said, territorial jurisdiction is just as important in Consumer Commissions. The good news is that the law is intentionally consumer-friendly, which is especially relevant in today’s world, where a significant portion of shopping happens online. You could be sitting at home in Goa, ordering a mobile phone, a purse, or a shirt without knowing exactly where it’s being shipped from—perhaps a manufacturer in Chennai or a warehouse in Faridabad. If a dispute arises, you can still file your consumer complaint in Goa because you, the buyer, are based there.
A few months ago, we read about the challenges faced by Harish Gupta, who was transferred from Bhopal to Goa (House Shifting Woes – 7th July 2024). Although he handed over his household goods to a transporter in Bhopal and made the payment there, when some items were damaged in transit, he was able to file his complaint in Goa. The convenience of the consumer is given due importance.
A recent case brought before us involved an appeal regarding Territorial Jurisdiction. Let’s examine what happened.
Avadhut Redkar, who ran a small-scale fabric business in an industrial estate in Goa, decided to purchase a specialised fabric printing machine. He intended to source it from ABC Machines, a Chennai-based company that was an importer, not a manufacturer. Avadhut communicated with ABC Machines over the phone and in person, both in Goa and Chennai. The company provided a quotation for the machine, pricing it at Rs. 3.6 lakh. It was agreed that Redkar would pay 50% upfront (Rs. 1.8 lakh) via NEFT from his bank in Ponda, with the balance due when the machine arrived in India, which was expected to take about 45 days.
However, after the machine arrived, Redkar faced a financial crunch. Since his business was a small-scale operation, he decided to take a loan. He requested ABC Machines to reissue the quotation so he could submit it to the bank. After securing the loan, he paid the remaining Rs.1.8 lakh. Yet, the machine was not delivered.
ABC Machines refused to dispatch the machine, citing Redkar’s delay in making the second payment. This delay, they claimed, resulted in detention charges imposed by Chennai Port Authorities. When an imported item arrives, the importer is expected to take prompt delivery. If there is a delay, the port imposes storage fees for the period the machine remains in its godown. ABC Machines insisted that Redkar bear these additional charges. However, Redkar maintained that he had paid the agreed-upon Rs. 3.6 lakh and was not responsible for any extra costs.
Redkar filed a complaint with the District Consumer Commission in Goa. When the Commission issued a notice to ABC Machines, the company responded by challenging the jurisdiction. They argued that their quotation explicitly stated: “Any legal dispute arising in this matter shall be subject to Chennai Jurisdiction only.”
They contended that Redkar had accepted this condition and proceeded with the purchase, meaning the case should be heard in Chennai.
The District Consumer Commission dismissed ABC Machines’ objection, affirming its jurisdiction in the matter. Dissatisfied with this decision, the company filed an appeal before us.
It is important to note that our role at the State Consumer Commission was not to evaluate the merits of the case—whether Redkar was liable for the port charges was irrelevant to us. Our task was solely to determine whether the District Commission was justified in rejecting ABC Machines’ jurisdictional objection.
Our judgment was based on the principle of ‘Cause of Action.’ This refers to the primary reason a complaint is filed. In this case, the Cause of Action partly arose in Goa because:
• Redkar was based in Goa and conducted his business there.
• The machine was to be delivered and installed in Goa.
• Both advance and final payments were made from a bank in Goa.
As for ABC Machines’ argument that their quotation limited jurisdiction to Chennai, we held that such a condition could not override the Consumer Protection Act. The Act’s primary objective is to protect and empower Consumers. It explicitly allows Complaints to be filed where the Complainant resides or conducts business.
We dismissed ABC Machines’ appeal, upholding the District Commission’s order. The case was remanded back to the District Commission, with instructions for both parties to appear on a specified date. No costs were imposed.
For those curious about what happened next: Since the machine remained at Chennai Port, continuing to accrue storage charges, we advised the parties—though it was beyond our legal scope—to reach a settlement. We later learned that Redkar and ABC Machines agreed to split the port storage fees, which led to the machine’s release.
(If you have any questions, comments, or if you are a consumer seeking assistance, please feel free to email me at danjog@yahoo.com)