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Amazon/Flipkart Online Cash On Delivery Not Legal In India – But Not Illegal Either

Something worth reminding ourselves of – colonialism has very long term effects. Here the point being that, by and large at least, India’s law is still based upon civil and criminal codes deriving from English Common Law – much more so than from Roman or Scottish law. Further, what Moghul and earlier law there is around still is limited to a minority of civil law procedures concerning family life and so on. And much of that has been codified into English style legislation as well.

It’s this which makes Cash on Delivery payment systems for Amazon, Flipkart and the like internet sales less of a worry:

Basically, RBI has given no clarity on this issue. The act has no explicit mention of CoD which creates the confusion on whether the payment mode is legal or illegal. There are many online shoppers in India who depend solely on the CoD for purchases made from Flipkart or Amazon.

Hmm, to take a step back up here:

Cash-on delivery (CoD) is the most popularly used payment method on e-commerce service providers like Amazon and Flipkart. It accounts for almost half of the purchases on these platforms in the country. However, now a new report suggests that the CoD payment method was not authorized by Reserve Bank of India (RBI) for the e-commerce sector.

In more detail:

In the words of RBI, “Aggregators/payment intermediaries like Amazon and Flipkart are not authorised under Section 8 of the PSS (Payments and Settlements Systems) Act, 2007”.

As it happens with every Act of Law, there are different interpretations to the wording in the 2007 Act. Some lawyers say that the Act itself does not contain a specific mention of cash payment against which delivery is effected and those in agreement with this reasoning claim that there is nothing illegal about the CoD mode of payment for online purchases.

The argument is that there’s no specific law or ruling which allows or approves of Cash on Delivery terms. It’s possible thus to say that such payment terms are illegal simply because they’re not approved. But to do so is to misunderstand the basic system of law in operation here.

Not being approved, specifically, would mean that under a Roman Law system then the method was illegal. But we’re working here with something derived from English Common Law. The basic underlying idea of which is that anything not expressly banned is legal. The law tells you what you may not do and what you may not do only. Sure, there’s far too much gubbins piled up on top of that these days but the basic idea does still operate. If it’s not mentioned nor banned then it’s legal. That the specific act doesn’t mention CoD means it’s allowed.

Odd that Clive at Plassey leads to Amazon being legal but there it is, colonialism has long term effects.

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5 years ago

Under Roman Law, COD would be illegal? Sometimes Tim the far-fetched flights of fancy you come up with hyper-boggle the imagination.

5 years ago
Reply to  Southerner

If the French had run the Raj, yes.

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