BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION AT BANGALORE (URBAN)

DATED 28^th DAY OF JUNE 2024

ORDER

SMT. SUMA ANILKUMAR, MEMBER

The complaint filed U/S 35 of Consumer Protection Act 2019, complainant seeking direction towards OP for the following reliefs:-

a) Direct the OPs to refund the amount of Rs.10,127/-.

b) Direct the OPs to pay an amount of Rs.50,000/- as compensation for the inordinate delay, harassment and mental agony.

c) Direct the OPs to pay Rs.20,000/- litigation expenses incurred in filing the present complaint and pursuing the proceedings before this Hon’ble Commission.

d) Direct the OPs to stop forthwith the unfair trade practice and deficiency being resorted to the detriment of the bonafide customers.

e) Any other or further orders that this Hon’ble Commission may deem fit to pass in the light and circumstances of the case.

2. Brief facts of this case are as follows:-

Complainant states that on 13.11.2023, he placed an order from the website “amazon.in” for the product “Royal Canin Baby Maxi Starter Pellet Dog Food, Chicken, 15 Kg” with order ID:406-6368623-1190765 by online payment. The amount paid is Rs.10,127/-. Regrettably, subsequent to the receipt of the product delivery on 14.11.2023, it has come to the complainant’s attention that the merchandise contained within the Amazon outer packaging was found to be damaged and had spilled. Given that the product in question is a food item, concerns about hygiene have arisen. In response to this issue, the complainant has reached out to the other party, providing photographic evidence of the damage, and is seeking either a refund or a replacement.

3. The OPs communicated to the complainant, instructing them to await to an update for a duration of five days. Subsequent to this period, the complainant initiated contact with the OPs, who refused to grant a refund or replacement on the grounds that the dispatched product was in satisfactory condition. The complainant emphasized the significance of the matter, citing hygiene concerns related to the well- being of their pets and requested the retrieval of the delivered product. Exploiting their non-returnable policy, the OPs declined to collect the product from the complainant, thereby refusing to facilitate a refund or replacement. Following this, the complainant lodged a complaint on consumerhelpline.gov.in regarding theafore mentioned issue on 18.11.2023. The OPs rejected the request for a refund or replacement, asserting that the product was delivered in satisfactory condition. The complaint was officially closed on 22.12.2023.

4. That even after providing the relevant proofs by the complainant, the OPs mechanically arbitrarily rejected the claim of the complainant without going into the merit. That the complainant being aggrieved by the continuous arbitrary rejection of claim by the OPs, the complainant wrote a complaint via E-mail dated 12.08.2023 to the Amazon CEO’s E-mail address attaching the damaged product photos. Following a 10-day inquiry by the leadership team of the amazon support, the claim was once more denied in contradiction to earlier affirmations made to the complainant, as conveyed through a telephone conversation on 15.12.2023.

5. It is imperative to mention that the OPs have deliberately with malafide intention of evading their obligation, disregarded the images depict the extent of damage suffered to the product delivered. That the complainant being deeply aggrieved by such an unjust action, complainant sent a detailed E-mail with the primary aim of expeditiously redressing the genuine concerns and rights of complainant. It is pertinent to mention that in the afore mentioned E-mail, our client diligently highlighted the issues and earnestly implored a reconsideration of the claims in question. However, despite complaint’s constant and unwavering efforts, the OPs have failed to provide any form of response or acknowledgement to our client’s legitimate claim.

7. That as per S.2 (11) of the Consumer Protection Act 2019, which is being reproduced as hereunder:

2(11) “deficiency” means any fault, imperfection, shortcoming, or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in purusuance of a contract or otherwise in relation to any service and includes:-

(i) any act of negligence or omission or commission by such person which causes loss or injury to the consumer; and (ii) deliberate with holding of relevant information by such person to the consumer;

6. OPs have been continuously rejecting the complainant’s claim without any reasonable grounds. The deficiency in service caused by the Ops, has put the complainant under huge financial strain, thereby, immensely affecting the complainant, in addition to causing mental agony and trauma. Hence this complaint.

7. On the issue of notice to OPs, OP No.1 appears before this commission and files its version. OP No.2&3 remain absent, hence placed Ex-parte.

8. In the version of OP, OP No.1 submits that complainant  had placed an order on 13.11.2023 for a ‘Royal Canin Baby Maxi Pellet Dog Food, Chicken 15 Kg’ (“Product”) vide order ID No:406-6368623-1190765 (“Order”) with an independent third party seller i.e., Etrade Marketing Private Limited having its place of business at Building 2 (Wh 2) Plot No.12/P2 (IT Sector), Hitech, Defence and Aerospace Park, Devanahalli Bengaluru, Karnataka, 562149 IN (“Seller”). Seller is an independent third party seller on the online marketplace of the OPs/ASSPL from whom the complainant had purchased the product. It is further submitted that the complainant has failed to implead the seller to the present complaint who is a proper and necessary party to the present complaint. That against the aforesaid Product, as invoice dated 13.11.2023 bearing number BLR8-2214949 (“Invoice”) for a total amount of INR Rs.10,127/- was issued by the seller duly indicating its Income Tax Permanent Account Number i.e., AADCV4254H and goods and service tax registration number i.e. 29AADCV4254H1Z4 against the order. It is emphasized that the tax invoice was issued by the seller and not by the OPs/ASSPL, clearly indicating that the transaction of sale was executed by and between the complainant and the seller.

9. The payment of consideration towards the product was made by the complainant to the OPs/ASSPL in the nodal account set up in accordance with the Reserve Bank of India (“RBI”) guidelines bearing No. RBI/2009-10/231 dated 24.11.2009 (“RBI direction”). This notification of the RBI contains directions mandating opening and operation of nodal accounts, not maintained or operated by intermediaries for facilitating collection of payments from the customers on behalf of the merchant/seller. It is hence clarified that the payment made into the nodal account is not a payment made to the OPs/ASSPL herein. Further, it is pertinent to point out by the RBI, and not by the OPs/ASSPL. In addition to the afore stated, the OPs/ASSPL herein is not the account holder or owner of the nodal account and cannot transact at will without restriction on the said nodal account.

10. As per the directions from the RBI, any transaction betweena buyer and an independent third party seller, such as the seller is executed through an independent nodal account maintained by the banks which is separate and free from the internal accounts of the OPs/ASSPL. The relevant extract from the RBI direction is produced herein below for this Commission’s reference:

“2.1 Intermediaries: intermediaries would include all entities that collect monies received from customers for payment to merchants using any electronic/online payment mode, for goods and services availed by them and subsequently facilitate the transfer of these monies to the merchants in final settlement of the obligations of the paying customers…”

3. Maintaining of accounts for the collection of payments

3.1 all accounts opened and maintained by the banks for facilitating collection of payment by the intermediaries from customers of merchants, shall be treated as internal accounts of the banks. While it is left to the banks to decide on the exact nomenclature of such accounts it shall be ensured that such accounts are not maintained or operated by the intermediaries.

4. Settlement

4.1 The final settlements of funds to the merchants… In order to increase the efficiency of the payment process, it is necessary that banks transfer funds to the ultimate beneficiaries with minimum time delay. It is therefore mandated that banks shall implement the following settlement cycle for all final settlement to merchants. This settlement arrangement shall be implemented within three months of issuance of this circular…”

Therefore, based on the give RBI direction, the OPs/ASSPL does not charge the buyers on the E-commerce marketplace and consideration paid by the buyer towards purchase on the E-commerce marketplace is paid directly to the independent third party seller from whom the purchase is made through the nodal account. The OPs/ASSPL provides a “free for all” marketplace to buyer who have access to the internet, hence providing a communication and hosting network to buyer to purchase products for sale and to conduct a transaction.

11. It is submitted that upon delivery of the product on 14.11.2023, the complainant claimed to have received the product with damaged outer packaging and spillage. It is submitted that subsequent to the receipt of the complainant’s grievance on 14.11.2023, the Customer Support team (“CS Team”) of the OPs/ASSPL team conducted an investigation based on which it is confirmed that the product was delivered in a satisfactory condition and that the item was from a fresh inventory and throughout shipping process, no deviation was found. Therefore, it is thus evident that the ASSPL/OPs ensured utmost care and responsibility towards delivering an untampered product to the complainant. The complainant through the present complaint, has alleged deficiency of service by the OPs/ASSPL for non-refund and replacement of the order, mental harassment, cheating, fraud, Unfair Trade Practice and breach of trust. It is reiterated that the product was delivered in a satisfactory and intact conditions. This eliminates any basis for the complainant’s requested resolution. Furthermore, it is understood that the OPs/ASSPL has no role in the sale or ownership of products available on its online marketplace platforms.

12. It is humbly submitted that the complainant is concealing the true facts of the case in order to mislead this Hon’ble Commission. It is evident that the present complaint has been filed by the complainant with unclean hands as he has failed to disclose the fact that he has failed to disclose the fact that he has an abusive history on the OPs/ASSPL’s platform. The complainant, by not disclosing the material facts of the case it is misguiding and wasting precious judicial time of this Hon’ble Commission. Therefore, the complaint is liable to be dismissed on the equitable ground that the complainant has not approached this Hon’ble Commission with clean hands. That is ParamanandaTripath vs. Bank of Baroda [(3) 1992 CPJ 231] the Hon’ble Odisha State Consumer Dispute Redressal Commission has held that the consumer must approach the commission with clean hands. The relevant extract of the same is reproduced herein below:

“Consumer must come with clean hands. Relief to be granted under the Consumer Protection Act is equitable based on rights of a consumer. Where Consumer does not disclose the background and makes an endeavor to suppress facts to get redressal under the Act, a redressal agency created under the Act should not extend its helping hand even in a benevolent statue and should leave the consumer to have his remedies in the conventional forums”.

No cause of action arises as against the OPs/ASSPL as there has been no violation of the Consumer Protection Act, 2019, as the OPs/ASSPL despite no role of it in the ownership or selling of products on its E-commerce marketplace offered its best to resolving the issues. In the absence of any cause of action that remains qua the OPs/ASSPL, it is submitted that the present complaint is liable to be dismissed in limine basis that neither any cause of action exists against the OPs, nor any relief can be claimed vis-à-vis the OPs, at this stage.

13. Complainant has approached the Hon’ble Commission with the present complaint, the complainant is required to prove deficiency of service against the OPs. Since, the complainant will not be able to prove that the deficiency of service lies against the OPs/ASSPL then the OPs cannot be held liable for the deficiency of service. In fact, the Ops has gone beyond its nature and scope to ensure the best services to users of the online marketplace. Thus, it is starkly evident that the present complaint is not maintainable qua the OPs in the absence of any relief against it. From a bare reading of the complaint, it is evident that the complainant being aware of the roles of the parties to the present complaint has deliberately not impleaded the seller of the product as a party. It is submitted that the present complaint is bad for misjoinder of parties as the complainant has improperly and unnecessarily impleaded the Ops/ASSPL to the present complaint. The present complaint qua ASSPL is nothing but a mischief played by the complainant who is trying to create confusion by mixing up causes and liabilities between the seller and the E-commerce marketplace operated by the OPs/ASSPL knowing very well that OPs/ASSPL is merely an intermediary.

14. The OPs/ASSPL operates and manages the E-commerce marketplace at www.amazon.in wherein lakhs of third party sellers and buyers interact and conduct their transactions and as such is an ‘intermediary’ in terms of Section 2(1) (w) of the Information Technology Act, 2000 (“IT Act”). That the OPs/ASSPL online marketplace provides users access to a range of approximately 170 million products listed/offered for sale by approximately Rs.5,00,000/- registered sellers across a broad range of categories. Any seller is free to list any product for sale and any buyer is free to choose and order any product from any independent third party seller selling that product on the E-commerce marketplace. The only role of the OPs/ASSPL is to make the E-commerce marketplace user friendly for the independent third party sellers to list necessary details of the products and for the buyer for searching and browsing through the said products.

15. All customers who visit the OPs/ASSPL online marketplace enter into a ‘Conditions of Use’ where there is a clear understanding of the role of OPs/ASSPL with respect to all sales transactions entered by and between the independent third party sellers and the customers. Clause 3 of the conditions of use categorically states the legal positions of the OP that it merely operates an E-commerce marketplace to facilitate sale transactions entered by and between the buyer and independent third party seller. It further clarifies that all the transactions of sale undertaken by the buyer and the seller listed on the marketplace of the OP/ASSPL. It is re-emphasized that the OP/ASSPL is not the seller or manufacturer of the products listed on its marketplace. Further, clause 13 of the Conditions of Use states that OP/ASSPL is not liable, in any manner whatsoever, for the performance of the sale agreement executed by and between the buyer and the seller on the E-commerce marketplace as the agreement of sale entered by and between the buyer and seller. It is submitted that the OP/ASSPL has no role to play in the same. Relevant extracts of the conditions of use are reproduced below for the kind perusal of this Hon’ble Commission.

“3. E-Platform for Communication

You Agree, understand and acknowledge that the website is an online platform that enables you to purchase products listed on the website at the price indicated therein at any time from any location. You further agree and acknowledge that Amazon is only a facilitator and is not and cannot be a party to or control in any manner any transactions on the website. Accordingly, the contract of sale of products on the website shall be a strictly bipartite contract between you and the sellers on Amazon.in.

13. Disclaimer– You acknowledge and undertake that you are accessing the services on the website and transacting at your own risk and are using your best and prudent judgement before entering into any transactions through the website. You further acknowledge and undertake that you will use the website to order products only for our personal use and not for business purposes. We shall neither be liable nor responsible for any actions or inactions of sellers nor any breach of conditions, representations or warranties by the sellers or manufacturers of the products and hereby expressly disclaim and any all responsibility and liability in that regard. We shall not mediate or resolve any dispute or disagreement between you and the sellers or manufacturers of the products.

We further expressly disclaim any warranties or representations (express or implied) in respect of quality, suitability, accuracy, reliability, completeness, timeliness, performance, safety, merchantability, fitness for a particular purpose, or legality of the products listed or displayed or transacted or the content (including product or pricing information and/or specifications) on the website. While we have taken precautions to avoid inaccuracies in content, this website, all content, information (including the price of products), software, products, services and related graphics are provided as is without warranty of any kind. We do not implicitly or explicitly support or endorse the sale or purchase of any products on the website. At no time shall any right, title or interest in the products sold through or displayed on the website vest with Amazon nor shall Amazon have any obligations or liabilities in respect of any transactions on the website.”

16. The OP/ASSPL is an ‘intermediary’ as defined under the IT Act and complies with all the obligations laid down for intermediaries in the Information Technology (Intermediaries Guidelines) Rules, 2011 (“IT Rules”). Section 2(w) of the IT Act defines an intermediary as the following: “intermediary”, with respect to any particular electronic records, means any person who on behalf of another person receives, stores or transmits that record or provides any service with respect to that record and includes telecom service providers, network service providers, internet service providers, web-hosting service providers, search engines, online payment sites, online-auction sites, online-market places and cyber cafes.”That as per Section 79(1) of the IT Act, the OP/ASSPL, being an intermediary, is not liable for any information/material/warranties/representations made by the sellers on the E-commerce marketplace. It is submitted that the OP/ASSPL is complaint with the pre-requisites of Section 79 of IT Act and the IT Rules and thus is entitled to an exemption from liability for the information/material hosted on its marketplace. Section 79(1) of the IT Act is reproduced below for kind perusal of this Hon’ble Commission:

“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”

17. It is submitted that as per the provision of the Consumer Protection Act, 2019, the OP/ASSPL has been defined as an ‘electronic service provider’ which

From a reading of the above, it is evident provides and E-commerce marketplace wherein independent third party sellers list and sell their products to buyers. Section 2(17) of the Consumer Protection Act, 2019 defines the term electronic service provider as follows:-

2. Definitions

(17) “Electronic service provider” means a person who provides technologies or processes to enable a product seller to engage in advertising or selling goods or services to a consumer and includes any online marketplace or online auction sites.”

that the term electronic service provider includes an E-commerce marketplace like www.amazon.in operated by the OP/ASSPL. Further, the term the electronic services provider elucidates the role of an electronic service provider like the OP/ASSPL i.e., for providing:

(a) technologies or

(b) provesses to enable a “Product Seller” to engage in advertising or selling goods or services to a consumer.

It is submitted that from a bare reading of the term electronic service provider makes it clear that an online/e-commerce marketplace like the OP/ASSPL is not a “Product Seller” of a “Manufacturer” in fact, the OP/ASSPL being an E-commerce marketplace processes to enable a “Product Seller” to engage in advertising or selling goods or services to a consumer.

18. Being an intermediary and E-commerce marketplace, the OP/ASSPL is not liable for any claims arising out of the products sold on the E-commerce marketplace by independent third party sellers. It is pertinent to note that the vide consolidated FDI policy issued by the department for promotion of Industry and Internal Trade (DPIIT) (“the FDI Policy”), effective from October 15, 2020 a clear distinction has been made between “marketplace-based model of E-commerce” and “inventory-based mode of E-commerce”, which is as follows:-

i) Inventory based model of E-commerce is defined (U/c 5.2.15.2.2 (iii)) “an E-commerce activity where inventory of goods and services is owned by E-commerce entity and is sold to the consumer directly.

ii) ‘Marketplace based model of E-commerce’ is defined (U/c 5.2.15.2.2 (iv)) as “providing of an information technology platform by an E-commerce entity on a digital and electronic network to act as a facilitator between buyer and seller”.

To put in other words, it is stated that in accordance with the current FDI Policy issued by the Department for Promotion of Industry and Internal Trade (DPIIT) (“the FDI Policy”), effective from October 15, 2020, a marketplace is now a recognized concept wherein an E-commerce entity operating a marketplace is required provide a neutral marketplace to allow sellers to interact with their customers, without exercising ownership over any goods, or indulging in the manufacture or “dealing in” any goods.

19. The OP/ASSPL cannot be held liable for a contract of sale executed by and between the complainant, i.e. the buyer and seller and cannot issue a refund or re-deliver the product to the complainant. That the transactions of sale of the product and a valid contract of sale existed only between the seller and the complainant. The complainant has explicitly, by virtue of the use of the marketplace, agreed to be terms contained in the conditions of use and sale. That the complainant has filed the complaint without any application of mind and unnecessarily impleaded OP/ASSPL to the present complaint. From the perusal of the conditions of use and sale, it is abundantly clear that the contract of sale was exclusively entered between complainant and a third party seller, and no plausible cause of action accrued against OP/ASSPL.

20. It is submitted that for the reasons stated above the complainant does not fall within the definition of “consumer” vis-à-vis OP/ASSPL. A ‘consumer’ as defined under section 2(7) of the Consumer Protection Act, 2019. The Prima facie evident that the complainant herein has not purchased the product from the OP/ASSPL, availed any service from the OP/ASSPL or paid any amount of consideration to the OP/ASSPL to be a “Consumer” of the OP or for that matter entangle the OP/ASSPL in a consumer dispute. It is denied that the complainant is entitled to any relief from the OP/ASSPL, especially when no clause of action exists. It is further denied that the OP/ASSPL is liable to pay any amount towards damages caused due to mental harassment, unfair trade practice and deficiency of service. Hence to dismiss the plea of the complainant qua the OP/ASSPL.

21. The complainant has filed their affidavit evidence along with 11 documents marked as Ex.P.1 to Ex.P.11. The OP No.1 filed its affidavit evidence along with 7 documents. Complainant and OP No.1 filed their written arguments. Heard OP counsel.

22. On the basis of above pleadings for our consideration are as follows:-

i) Whether the complainant proves the deficiency of service on the part of OP’s?

ii) Whether complainant is entitled for the relief?

iii) What order?

23.  Our answers to the above points are as follows:-

Point No.1:-Affirmative.

Point No.2:-Partly Affirmative.

Point No.3:- As per the final order.

REASONS

24. Point No.1&2:-These points are inter-connected to each other and for the sake of convenience, to avoid repetition of facts, these points are taken up together for common discussion.

25. On perusal of the document submitted by the complainant, in the Ex.P.1, which is the invoice issued by the Amazon.in, it is true that the complainant has purchased Royal Canin Baby Maxi Starter Pellet Dog Food, Chicken from Etrade Marketing Private Limited through Amazon.in platform at a cost price of Rs.10,127/- including tax dated 13.11.2023. Looking into the Ex.P.2 and Ex.P.3, we see that the complainant has raised the complaint immediately to OP No.1 regarding the damage in the product delivered. The OP has replied to the complainant as “the correct and complete product ordered was delivered on 14.11.2023 in induct condition. Accordingly neither replacement order nor refund can be initiated. Further it is submitted that our loan is limited to that off intermediary and we are not seller/manufacturer, the product listed on E-commerce market place are sold by independent third party seller.  In view of the above, the issue stands closed.”

26. Looking into the Ex.P.4 of the photos of the product delivered to the complainant, it is clear that the complainant has received a damaged, torn packet. The OP No.1 in their contention have submitted 7 documents. On perusal of the Ex.R.2, which is the invoice copy, it is clear that the invoice is issued by the OP who play the role of the third party, who give services to the customers through their platforms. The seller registered with Amazon uses the services of the Amazon. The said service allows businesses to use the platform of the Amazon to store, pick, pack and ship customers orders. When a business entity becomes and Amazon seller, and use the afore said services, then the said entity only needs to send its products to the Amazon fulfillment centre, which are in turn delivered to consumers. Therefore in the said terms, Amazon cannot escape from its responsibilities under the grab of “intermediary” and safe harbor protection U/S 79 of IT Act 2000. Amazon being a platform for services to both buyers and sellers, and also enjoying charges for the said services given by Amazon, holds responsibility for the services it is providing to the buyers and the sellers. Amazon is a brand in itself which has made its name and created reputation for the services it is providing. Though the complainant raised the complaint with Amazon, immediately on the delivery of the product ordered by him, Amazon failed to replace or refund to the complainant. Amazon by rejecting to give its services to the complainant has shown deficiency in service and also Unfair Trade Practice. OPs No.2&3 being the directors have also shown deficiency in service. Therefore OP No.1, 2 and 3 are jointly and severally directed to repay Rs.10,127/- on recollection of the product delivered by them. Further is directed to pay a sum of Rs.10,000/- as compensation and Rs.5,000/- towards litigation.

27. Point No.3:-In view of the discussion referred above, we proceed to pass the following:-

ORDER

1. Complaint filed by the complainant U/S 35 of Consumer Protection Act, is hereby allowed in part.
2. OP No.1, 2 and 3 are jointly and severallydirected to repay Rs.10,127/- on recollection of the product delivered.
3. OP No.1, 2 and 3 are jointly and severally is further directed to pay a compensation of Rs.10,000/- and Rs.5,000/- towards litigation within 45 days from the date of order, failing which OP shall have to pay 8% p.a. on the entire Award amount.
4. Furnish the copies of the order and return the extra copies of pleadings and documents to the parties, with no cost.

(Dictated to the Stenographer, got it transcribed and corrected, pronounced in the Open Commission on this 28^th day of June 2024)

Documents produced by the Complainant-P.W.1 are as follows:

Documents produced by the representative of opposite party – R.W.1;