E-Commerce Sellers: Fraud, Duties and Legal Remedies

By Advocate Panchanand Shaw, Bar Council of West Bengal · Published 3 Nov 2026 · Cyber law

If you sell goods or services on an online marketplace in India, fraud is not a hypothetical risk; it is a recurring line item. The patterns repeat: "empty box" returns where the buyer claims an empty parcel arrived, chargeback fraud where a genuine delivery is disputed months later, cash-on-delivery refusals, buyer accounts taken over and used to place high-value orders, and listing hijack where a rival copies your catalogue or diverts your traffic. Which law answers each pattern depends on who acted dishonestly. A dishonest buyer is answered by the cheating provisions of the Bharatiya Nyaya Sanhita, 2023. A platform's own failures - vague verification, a complaint window that never closes, a refund released without hearing you - are answered by the Consumer Protection (E-Commerce) Rules, 2020 and, in defined circumstances, by the intermediary safe-harbour under section 79 of the Information Technology Act, 2000.

The practical point is that a seller who understands both sets of rules is far harder to defraud. Duties and remedies are two halves of one system. This guide explains the statutory duties that bind an e-commerce seller, the criminal provisions that catch the fraudster, the complaint route in the order you should follow it, and the evidence that decides whether a case stands or collapses.

What duties does the law place on an e-commerce seller?

An e-commerce seller's duties arise from consumer law, tax law and the platform contract. Under the Consumer Protection Act, 2019 and the Consumer Protection (E-Commerce) Rules, 2020, a seller listing goods on a marketplace must display information honestly and completely. The Consumer Protection (Direct Selling) Rules, 2021 add duties for direct sellers. In practice, the core duties are:

• Display the legal name, address, contact details and website of the seller, together with the details of the grievance officer.
• Provide accurate country of origin, price, shipping charges, return and refund policy, and warranty or guarantee terms before purchase.
• Do not misrepresent goods or services, and do not publish false or misleading reviews.
• Do not refuse to take back goods or deny refunds contrary to the stated policy.
• Honour the stated return, refund and warranty obligations, and respond to consumer grievances within the prescribed period.
• Keep proper records - invoices, tax records and the platform's transaction logs - because in a dispute the seller usually bears the burden of proving delivery.

These are not marketing suggestions. A breach of the e-commerce rules can amount to an unfair trade practice within the meaning of the Consumer Protection Act, 2019, exposing the seller to a consumer complaint before the District, State or National Commission depending on the value of the goods or services. The same duties cut the other way too: a seller who complied is well placed to show that a buyer's "faulty product" claim is dishonest.

The offences that cover fraud against sellers

When a buyer, a rival seller or an organised group acts dishonestly, the primary provisions are in the Bharatiya Nyaya Sanhita, 2023, read with the Information Technology Act, 2000 where a computer resource is used. Section 318 of the BNS defines and punishes cheating - inducing a person, by deception, to deliver property or to do something they would not otherwise do. Section 319 punishes cheating by personation, which covers a fraudster who places orders under a false identity. Section 316 covers criminal breach of trust where goods or funds entrusted to a partner or agent are misappropriated. Sections 336, 338 and 340 deal with forgery, forgery of a valuable security, and the use of a forged document or electronic record as genuine - relevant where invoices, courier proofs or delivery receipts are fabricated.

Two clarifications matter. First, the Information Technology Act provisions do not replace the BNS; they apply in addition when a computer resource is involved, and the police routinely register both. Second, the old section 66A of the IT Act, once used against objectionable online messages, was struck down by the Supreme Court in 2015 and is not available to any complainant today.

How to file a complaint, step by step

1. Report to the marketplace first, in writing. Use the seller panel's grievance channel and keep the ticket number. This creates a dated record and often triggers a chargeback defence.
2. Preserve the evidence immediately. Download the order details, chat transcripts, courier proof of delivery, photographs of the packed shipment, return photographs, and the buyer's return declaration. Screenshots alone are weaker than the platform's own transaction records.
3. File a complaint on the cyber crime portal or dial 1930. The National Cyber Crime Reporting Portal and the 1930 helpline are the standard first stops for financial cyber fraud, including online cheating. Report the transaction reference, the amount, and the beneficiary details if known.
4. Give a written complaint at the police station. Information about a cognizable offence must be recorded under section 173 of the Bharatiya Nagarik Suraksha Sanhita, 2023, which corresponds to the former section 154 of the Code of Criminal Procedure. Take the FIR copy, or a receipt if registration is refused.
5. Escalate a refusal. If the police decline to register, you may approach the Superintendent of Police under section 173 of the BNSS, or the Magistrate under section 175, which correspond broadly to the former sections 154(3) and 156(3) of the CrPC.
6. Pursue the money separately. Where the loss runs through a payment gateway, raise it with the bank's nodal officer and invoke the RBI directions on unauthorised electronic transactions; unresolved complaints can go to the RBI Integrated Ombudsman Scheme.

For a Kolkata-based seller, the practical forums are the local police station where the offence or the loss occurred, the Bankshall Court for offences triable by a Magistrate, and the City Sessions Court or the Calcutta High Court for higher-value or appellate matters. Jurisdiction generally follows where the deception was practised or where the loss was suffered, and it is often contested. Where the loss is significant, a seller should consider a cyber crime lawyer in Kolkata early, so that the complaint is drafted with the elements of the offence in mind.

What evidence decides whether a seller's case stands

In online seller fraud, the case is usually won or lost on records, not on argument. Investigators and courts look for the following.

• The complete order record from the platform, with timestamps - not a screenshot the seller made later.
• Proof of what was actually shipped: the packing-slip scan, the invoice, the weight recorded by the courier, and photographs taken at dispatch.
• The buyer's own conduct after delivery - refusal to return the item for inspection, contradictory statements, or repeated claims across multiple orders.
• The money trail, where a payment or refund moved through bank accounts.
• Certification of any electronic record, because a printout or a copy must satisfy section 63 of the Bharatiya Sakshya Adhiniyam, 2023, including the certificate under section 63(4), if it is produced as secondary evidence.

This last point is the quiet killer of seller cases. A seller who emails a screenshot to a police station and keeps no certified copy of the platform's log may find, months later, that the very record the case depends on is challenged as unproved.

Where the platform's liability begins

A marketplace is not an insurer of every transaction. Section 79 of the IT Act gives an intermediary a safe harbour only if it observes the due-diligence duties in the IT Rules, 2021 - publishing its rules and privacy policy, appointing officers, and acting on notices. But the consumer law duties sit on the marketplace as well: the e-commerce rules make the marketplace responsible for displaying seller information and for grievance redressal. Where a platform released a refund without notifying the seller, or failed to verify a seller or buyer as the rules require, that failure is a separate grievance, and it can be pursued as a consumer complaint or, where dishonesty is involved, as a criminal complaint. The line between "platform did nothing wrong" and "platform facilitated the loss" is fact-dependent, so say so plainly rather than assuming either way.

Recovering the loss when the criminal case is slow

A criminal complaint punishes the offender; it does not automatically return your money. Recovery usually runs on a parallel track. Where the fraud moved through a bank account, the bank's nodal officer and the RBI framework on unauthorised electronic transactions govern prompt reporting and limited liability. Where the loss is contractual - a distributor who took stock and never paid, for example - a civil suit for recovery before the appropriate civil court, or a complaint to the Consumer Commission where the counterparty is a seller, may be the faster route. Where the fraudulent sale involved a registered company, a complaint under the Companies Act, 2013 for falsification of books can accompany the criminal case. Running the money-recovery track alongside the criminal track, rather than after it, is usually the difference between a paper victory and an actual refund.

Mistakes that weaken a seller's case

Some errors are fatal and avoidable.

• Waiting months to complain. Delay does not destroy the case by itself, but it weakens credibility and gives the money time to leave the account.
• Deleting the platform chat or the buyer's messages. Preserve originals; a screenshot is secondary evidence.
• Filing only a consumer complaint where the conduct is plainly dishonest. The consumer forum may award compensation, but it will not investigate the fraudster.
• Naming the wrong section in the complaint. A complaint that cites section 66A, or that treats a civil dispute as cheating without the element of deception, invites dismissal.
• Ignoring the platform's own grievance route, which the e-commerce rules expect a seller to use before escalation.

When to involve a lawyer

For a single low-value fake return, the marketplace's grievance channel and a 1930 report are usually enough. Instruct a lawyer when the loss is material, when a group is targeting your catalogue, when the police refuse to act, when a platform has suspended your seller account over a fraudulent buyer's complaint, or when you need the money recovered as well as the offender prosecuted. A lawyer's job at that stage is to shape the complaint around the actual ingredients of the offence, to file the right applications for records under the BNSS, and to keep the criminal and civil tracks moving together. For a Bengal-based seller, our cyber crime lawyer team handles exactly this kind of dual-track matter.

Keep every record from the moment an order is placed. In an online dispute, the party who can prove what happened, not the party who argues hardest, is the one the court believes.

Frequently asked questions

Information for general guidance only and not legal advice. Provisions cited follow the Information Technology Act 2000, the Bharatiya Nyaya Sanhita 2023 and the Bharatiya Nagarik Suraksha Sanhita 2023.

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