P.R. Transport Agency v. Union of India

This is the model answer on jurisdiction under the Act in a civil dispute over an electronic record. A contract made by e-mail has no obvious place: there is no fixed point of transmission and none of receipt, and the machine that carried the message may stand anywhere. The case shows a court doing what the Act tells it to do — using a deeming provision to convert an unlocatable event into a located one, and choosing the party's place of business as the location.

A coal company held an e-auction. The agency's bid for four thousand metric tons was accepted and the acceptance was sent by e-mail. The agency paid the full price, about ₹81 lakh, by cheque, which was encashed. The coal was not delivered; the company then e-mailed to say that the sale and the auction stood cancelled.

The agency challenged that in the High Court of Allahabad. The company objected that no part of the cause of action had arisen in Uttar Pradesh, so the court had no territorial jurisdiction. The addressee's places of business were Varanasi and Chandauli.

Acceptance was deemed received at the addressee's places of business, Varanasi and Chandauli; the contract was therefore complete there; part of the cause of action had accordingly arisen within the court's territory, and the High Court of Allahabad had jurisdiction.

The steps are worth reproducing exactly, because they are reusable on any facts.

1. Identify the ordinary rule and why it fails. For contracts made by telephone, telex or fax, the contract is complete when and where the acceptance is received. That rule can only work where the transmitting and receiving terminals are at fixed points.
2. Show that e-mail has no fixed point. With e-mail there is no fixed point either of transmission or of receipt. The rule therefore has nothing to fasten on.
3. Find the provision enacted for that difficulty. Section 13(3) of the Act was enacted to cover exactly this. Save as otherwise agreed, "an electronic record is deemed to be despatched 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".
4. Apply the deeming provision to the facts. The addressee's places of business being Varanasi and Chandauli, the acceptance was deemed received there.

Two companion sub-sections complete the scheme and should be cited with it. Section 13(4) provides that this holds notwithstanding that the place where the computer resource is located may be different from the place where the record is deemed to have been received — which is the provision that removes the server from the enquiry altogether. Section 13(5) resolves the ambiguities: with more than one place of business, the principal place of business governs; with none, the usual place of residence; and for a body corporate, the usual place of residence means the place where it is registered.

• Any problem asking which court may hear a civil dispute arising out of an e-mail exchange. Recite the four steps above, then apply s. 13(3) to the parties' places of business. The examiner is looking for the sentence that the Act does not ask where the machine was; it asks where the parties do business.
• Pair it correctly. For civil jurisdiction over an electronic record, s. 13(3) and this case. For criminal jurisdiction, do not cite a case at all — cite s. 75(2) with s. 1(2): the Act applies to an offence committed outside India irrespective of the offender's nationality where the conduct involves a computer, computer system or computer network located in India. The machine's location is the test there, and the two tests must not be swapped.
• Read it with Kedia. Kedia classifies the communication; s. 13 supplies the statutory rule for electronic records; this case shows the rule applied.

What it does not decide: it settles no question on the merits of the auction or the cancellation, it lays down no rule about where a server may be sited, and it says nothing about criminal jurisdiction. Nor does it dispense with any agreement between the parties — s. 13(3) applies "save as otherwise agreed", so a contractual choice of place or forum comes first.