State Consumer Disputes Redressal Commission
Amazon Seller Services ... vs Surendra Anil Pawar And Anr on 9 August, 2024
A/21/427
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
MAHARASHTRA, MUMBAI
Appeal No.A/21/427
Arising out of order dated 10/12/2020 in Complaint No.104 of 2018 passed by Additional
District Commission, Mumbai Suburban)
Amazon Seller Services Private Limited,
Represented through its authorized signatory,
Mr.Rahul Sundaram, Senior Corporate Counsel,
Having its registered office at:
Brigade Gateway, 8th Floor,
26/1, Dr.Raj Kumar, Malleshwaran (W),
Bangalore, Karnataka - 560 055, India. ......... Appellant
Versus
1. Surendra Anil,
Resident of:
204, Heena Plaza CHS Ltd.,
Opp.Adarsh School,
Rajaji Path, Dombivali (East),
Thane - 421 201.
2. UBS Publishers & amp,
#39, Distributors Pvt. Ltd.,
5, Ansari Road, Daryaganj,
New Delhi - 110 002. ........Respondents
BEFORE:
Mukesh V. Sharma - Presiding Member
Poonam V. Maharshi - Member
For the Appellant(s) : Advocate Aamir Sopariwala a/w Advocate Jehan
Fulwaliwala and Advocate Santosh Sawant i/b Saikrishna
& Associates
For the Respondent(s) : Respondent no.1 in person.
A/21/427
ORDER
(09/08/2024) Per Mr.Mukesh V. Sharma - Presiding Member:
1. The present appeal has been filed by the Appellant, Amazon Seller Services Pvt. Ltd., through it's representative challenging the order dated 10/12/2020 passed by the District Consumer Disputes Redressal Commission, Mumbai Suburban, in Consumer Complaint No. 104/2018.
The District Commission found Appellant and Respondent no. 2 guilty of engaging in unfair trade practices by advertising a book at an inflated price, falsely indicating a significant discount, and continuing this practice despite being notified by the present Respondent No. 1 who was the Original Complainant.
2. Factual Background of the case is that the Original Complainant, Mr. Surendra Anil Pawar, purchased a book titled "Legal Drafting - Do It Yourself" from Amazon's platform. The book was advertised with a 69% discount on its Maximum Retail Price (MRP) of Rs. 1,595/-, leading to a sale price of Rs. 502/-. Upon receiving the book, the Original Complainant discovered that the MRP printed on the book was only Rs. 525/-, revealing a clear misrepresentation by the Respondent no. 2 and present Appellant.
3. The Respondent No. 1 / Org. Complainant promptly notified Amazon on October 22, 2016, yet the misleading advertisement remained on Amazon's platform until November 17, 2017 over a year later. This blatant disregard for consumer rights prompted the Respondent No. 1 / Org. Complainant to file a complaint.
A/21/427
4. The District Commission heard the complaint and partly allowed it, declaring that the Appellant and Respondent No. 2, engaged in unfair trade practices. The Commission ordered both parties, jointly and severally, to pay Rs. 10,000/- for mental agony and Rs. 5,000/- for litigation costs to the complainant, with interest at the rate of 6% per annum until the full amount is paid. Being aggrieved by this order present appeal has been preferred.
5. Appellant claimed their role is limited to providing a marketplace, and any pricing discrepancies are the responsibility of the sellers (here respondent no. 2), and not Appellant.
6. The Appellant also contended that the compensation awarded was excessive and unjustified, and that the District Commission's order was erroneous, warranting the appeal to set aside the adverse findings and liabilities imposed on them.
7. Appellant has referred and relied upon Section 79 of the Information Technology Act, 2000, to argue that it is merely an intermediary and therefore not liable for the actions of third-party sellers on its platform. Additionally, the Appellant cited the judgment in Amazon Seller Services Pvt. Ltd. v. Amway India Enterprises Pvt. Ltd., specifically referring to paragraphs 146 and 147 of the judgment in support of its position.
8. We have heard both parties at length and carefully considered their submissions. The Appellant has heavily relied on Section 79 of the IT Act, 2000, which is reproduced as follows :
A/21/427 "79. Exemption from liability of intermediary in certain cases.--(1) Notwithstanding anything contained in any law for the time being in force but subject to the provisions of sub-sections (2) and (3), an intermediary shall not be liable for any third party information, data, or communication link made available or hosted by him.
(2) The provisions of sub-section (1) shall apply if--
(a) the function of the intermediary is limited to providing access to a communication system over which information made available by third parties is transmitted or temporarily stored or hosted; or
(b) the intermediary does not--
(i) initiate the transmission,
(ii) select the receiver of the transmission, and
(iii) select or modify the information contained in the transmission;
(c) the intermediary observes due diligence while discharging his duties under this Act and also observes such other guidelines as the Central Government may prescribe in this behalf. (3) The provisions of sub-section (1) shall not apply if--
(a) the intermediary has conspired or abetted or aided or induced, whether by threats or promise or otherwise in the commission of the unlawful act;
(b) upon receiving actual knowledge, or on being notified by the appropriate Government or its agency that any information, data or communication link residing in or connected to a computer resource controlled by the intermediary is being used to commit the unlawful act, the intermediary fails to expeditiously remove or disable access to that material on that resource without vitiating the evidence in any manner.
A/21/427 Explanation. -- For the purposes of this section, the expression "third party information" means any information dealt with by an intermediary in his capacity as an intermediary."
Reading this section provides certain exemptions from liability to intermediaries. However, this reliance is entirely misplaced and does not support the Appellant's present case. Section 79(2)(c) stipulates that an intermediary is exempt from liability only if it "observes due diligence while discharging its duties under this Act and also observes such other guidelines as the Central Government may prescribe in this behalf." Additionally, Section 79(3)(b) clearly states that the exemption does not apply if the intermediary, "upon receiving actual knowledge, or on being notified by the appropriate Government or its agency that any information, data, or communication link residing in or connected to a computer resource controlled by the intermediary is being used to commit the unlawful act, fails to expeditiously remove or disable access to that material."
9. In the present case, the Respondent notified Appellant on October 22, 2016, regarding the misleading advertisement. Respondent No. 1 / Org. Complainant alleged that despite this actual knowledge, Amazon failed to take corrective action to remove or rectify the false information until November 17, 2017 a full year later. This delay directly contravenes the requirements of Section 79(3)(b), thereby negating any immunity that Amazon might otherwise have claimed under Section 79. The Appellant's reliance on Section 79 is therefore entirely unfounded, as it fails to meet the conditions required to claim the protections offered by this section.
A/21/427
10.The Appellant has also referred to paragraphs 146 and 147 of the judgment in Amazon Seller Services Pvt. Ltd. v. Amway India Enterprises Pvt. Ltd., cited as 2020 SCC OnLine Del 454: (2020) 267 DLT 228 (DB): (2020) 81 PTC 399 (DB). The relevant paragraphs are reproduced as follows:
"146. Under Section 79(2)(c) of the IT Act, the obligation of the intermediary is that, in terms of the Intermediary Guidelines, it publishes its policies for the information and convenience of its users. The enforcement of such a policy is another matter. Clause 17 of Amazon's policy prohibits sale, on its platform, of 'unauthorised' products. This Clause 17 was put forth with the object of enabling Amazon to refuse listing of a product where, for instance, it originates from a country that does not follow international exhaustion. Amazon seeks to point out that this does not apply to India where the principle of international exhaustion is in fact followed. It is contended that Clause 17 cannot be interpreted to empower Amway to seek restrictions on the sale of its products on Amazon's online platform.
147. The Supreme Court in Shreya Singhal (supra) held, inter alia, that the obligation of an intermediary to remove content under Section 79(3)(b) of the IT Act arises only if there is a Court order or a notification from a government agency on the grounds mentioned under Article 19(2) of the Constitution. Amazon points out that it did not receive any such Court order from Amway in support of its allegations. The letter of the FSSAI dated 9th April, 2018 was not a notification by an appropriate government agency and did not conform to the grounds enumerated in Article 19(2) of the Constitution."
11.However, this argument is entirely irrelevant and unhelpful in the context of the present case for several reasons. Firstly, the facts of the case cited by A/21/427 the Appellant are fundamentally different from those in the present matter. In the Amway case, the issue revolved around the sale of unauthorized products and the interpretation of Amazon's internal policies. In contrast, the present case involves a clear instance where Amazon knowingly allowed the advertisement and sale of a product at a grossly inflated price, thereby misleading consumers. Secondly, the cited judgment does not support the Appellant's contention in any way.
12.After hearing both the parties at length and perusing the referred documents, we are of the opinion that allowing this appeal would definitely grant Amazon a license to continue engaging in such unfair trade practices of advertising products at inflated prices, misleading consumers with false discounts, and ignoring consumer complaints. This would set a dangerous precedent, encouraging other e-commerce platforms to disregard consumer protection laws for profit.
13.This appeal is nothing more than a frivolous attempt to evade accountability and delay justice. Appellant's actions have likely misled thousands of consumers through similar practices and adamant approach to rectify the same. The appeal is devoid of any merit and constitutes a waste of judicial resources.
14.We firmly believe that allowing such conduct would weaken the very foundation of consumer protection legislation and set a dangerous precedent for future cases. We find no infirmity or error in the order of the District Commission, and in fact, the compensation and the litigation costs awarded are quite minimal. We see no any reason to interfere with the judgment and order of the District Commission. However, we are inclined to impose costs on the Appellant for filing this frivolous appeal.
A/21/427 Accordingly, we award a cost of Rs. 25,000/- to Respondent No. 1 / Org. Complainant, and an additional Rs. 25,000/- to be paid by the Appellant to legal aid. Hence, we proceed to pass following order.
ORDER
a) The appeal is hereby dismissed with cost.
b) The order dated 10/12/2020 passed by the Additional District Consumer Disputes Redressal Commission, Mumbai Suburban, in Consumer Complaint No. 104/2018 is upheld.
c) The Appellant, Amazon Seller Services Pvt. Ltd., is directed to pay a cost of Rs. 25,000/- to Respondent No. 1 / Org. Complainant within 30 days from the date of this order. Additionally, the Appellant is ordered to pay Rs. 25,000/- to legal aid. Failing to make these payments within 30 days will attract interest at the rate of 12% per annum until full payment is made.
d) A copy of this order be supplied to all parties.
[Mukesh V. Sharma] Presiding Member [Poonam V. Maharshi] Member