Chandigarh

StateCommission

A/92/2015

Flipkart India Private Limited - Complainant(s)

Versus

Atul Malhotra - Opp.Party(s)

Sandeep Suri Adv.

16 Jun 2015

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

UNION TERRITORY, CHANDIGARH

First Appeal No.	92 of 2015
Date of Institution	24.04.2015
Date of Decision	16.06.2015

Flipkart India Private Limited Company duly incorporated under Companies Act, 1956 having its Registered Office at : Vaishnavi Summit No.6/B, 7^th Main, 80 feet road, 3^rd Block, Koramangala, Bangalore – 560034, India and having office at :- NH8, Mahipalpur, New Delhi.

…..Appellant/Opposite Party.

Versus

Atul Malhotra resident of #1279, Ground Floor, Sector 41-B, Chandigarh – 160036, India.

…..Respondent/Complainant.

BEFORE: JUSTICE SHAM SUNDER (RETD.), PRESIDENT

SH. DEV RAJ, MEMBER

MRS. PADMA PANDEY, MEMBER

Argued by:

Er.Sandeep Suri, Advocate alongwith Sh.Kunal Tandon, Advocate for the appellant.

Sh.Vinay Malhotra, father and authorised representative of the respondent, in person.

PER PADMA PANDEY, MEMBER

This appeal is directed against the order dated 10.03.2015, rendered by District Consumer Disputes Redressal Forum-I, UT, Chandigarh (hereinafter to be called as the District Forum only), vide which, it allowed Consumer Complaint bearing No.682 of 2014, filed by the complainant, with the following directions:-

“8. For the reasons recorded above, we find merit in the Complaint and the same is allowed against Opposite Party. Opposite Party is directed:-

[a] To make payment of compensation to the tune of Rs.3,000/- to the Complainant for mental agony, harassment and financial loss;

[b] To make payment of an amount of Rs.2,500/- to the Complainant towards litigation expenses.

9. This order shall be complied with by the Opposite Party within one month from the date of receipt of its certified copy, failing which, Opposite Party shall be liable to pay Rs.3,000/- to the Complainant along with interest @12% p.a. from the date of filing of the Complaint, till its realization, besides costs of litigation, as mentioned above. “

2. The facts, in brief, are that on noticing the discount of 94% on LAVA mobiles on Flipkart India, on 13.09.2014, the complainant ordered one LAVA Iris XI mobile phone for a sum of Rs.400/- through net-banking and the said product was to be delivered on 22.09.2014. It was stated that on 15.09.2014, the complainant was informed through an email that due to high demand for the aforesaid item and in order to provide all customers an equal opportunity to avail of the said deal, the Opposite Party had to cancel the order and the amount of Rs.400/- would be refunded back to him in his bank account. It was further stated that the said amount was credited to the account of the complainant, yet he wanted the product ordered by him on 13.09.2014. It was further stated that the Opposite Party was deficient, in rendering service, as also indulged into unfair trade practice. When the grievance of the complainant was not redressed, left with no alternative, a complaint under the Consumer Protection Act, 1986 (hereinafter to be called as the “Act” only), was filed.

3. In its written statement, Opposite Party, admitted the factual matrix of the case and stated that the complaint was not maintainable as there was no privity of contract between the complainant and the Opposite Party. It was further stated that the replying Opposite Party did not sell any products to the end consumers. It was further stated that the Opposite Party is a wholesaler and involved in B2B sales. It was further stated that the complainant had purchased the product from one online seller and the contract of sale was only between the seller and the complainant and, as such, the replying Opposite Party could not be held liable for any liability owing to such contract. It was further stated that the replying Opposite Party was neither deficient, in rendering service nor indulged into unfair trade practice.

4. The parties led evidence, in support of their case.

5. After hearing the authroised agent for the complainant, Counsel for the Opposite Party, and, on going through the evidence, and record of the case, the District Forum, allowed the complaint, as stated above.

6. Feeling aggrieved, the instant appeal, has been filed by the appellant/Opposite Party.

7. We have heard the Counsel for the appellant/Opposite Party, authorised representative of the respondent/complainant, and have gone through the evidence and record of the case, carefully.

8. The Counsel for the appellant/Opposite Party, submitted that the impugned order is erroneous and incorrect in recording that the appellant is a necessary and a proper party, in view of the fact that flipkart.com, which is owned and operated by Flipkart Internet Pvt. Ltd. is a separate and distinct entity from the appellant. He further submitted that the District Forum failed to appreciate that the complainant did not deal with or trade with or enter into any contract or Agreement or undertaking with the appellant therein. He further submitted that the appellant is not an online portal and it did not deal with any end consumer online or even otherwise. He further submitted that the appellant is a Company duly incorporated under the Companies Act, 1956 and has no common shareholders and/or directors with Flipkart Internet Pvt. Ltd., which owns and operates flipkart.com. He further submitted that the entire complaint of the complainant is against the online portal ‘flipkart.com’, owned and operated by Flipkart Internet Pvt. Ltd., which is a separate and distinct entity from the appellant. He further submitted that the District Forum had ignored the fact that the appellant was neither the seller nor the service provider qua the respondent and the respondent placed an order at flipkart.com for the purchase of LAVA Iris during the scheme, had entered into contract with flipkart.com as per the ‘Terms of Use’ as provided on flipkart.com. He further submitted that the complainant placed the order on 13.09.2014 and thereafter, he was informed through email on 15.09.2014 that the order could not be processed and was cancelled and the said amount was refunded to him. He further submitted that the complainant did not raise any objection in respect of the same and duly accepted the said amount. He prayed for allowing the appeal and setting aside the impugned order.

9. The authorised representative of the appellant/complainant submitted that the complainant ordered one LAVA Iris XI mobile phone on 13.09.2014 for Rs.400/- through net-banking, after noticing the discount of 94% on Lava Mobiles and the said product was to be delivered on 22.09.2014. He further submitted that the complainant was informed through email on 15.09.2014 that due to high demand for the aforesaid item and in order to provide all customers an equal opportunity to avail of the said deal, the Opposite Party cancelled the order and the amount of Rs.400/- was refunded back to him in his bank account. He further submitted that flipkart.com is the email address of Flipkart India Pvt. Ltd. and, as such, both are the same entities and the complainant did not deal with Flipkart Internet Pvt. Ltd. He further submitted that after the passing of the impugned order, on 19.03.2015, a voucher of Rs.500/- was given by Flipkart India Pvt. Ltd. as a token of apology and was accepted by the complainant. He further submitted that there was no cancellation of the order on the side of complainant, so the appellant/Opposite Party could not cancel the order and credit the amount to his account, without his consent. He prayed for dismissal of the appeal, filed by the Opposite Party.

10. After giving our thoughtful consideration, to the submissions, raised by the Counsel for the appellant/Opposite Party, authorised representative of the respondent/complainant, and the evidence, on record, we are of the considered opinion, that the appeal is liable to be allowed, for the reasons to be recorded, hereinafter.

11. The core question, that falls for consideration, is, as to whether, the flipkart.com and the appellant i.e. Flipkart India Private Limited are the same entities and whether the appellant was liable to pay compensation and litigation expenses, as awarded by the District Forum to the complainant. The answer, to this, question is in the negative. Admittedly, the respondent/complainant booked Lava Iris X1 mobile phone from flipkart.com, which was to be delivered on 22.09.2014, as is evident from a copy of the email dated 13.09.2014 (at page No.3 of the District Forum file). A bare perusal of the email dated 15.09.2014 (at page No.4 of the District Forum file) clearly reveals that the same was sent by flipkart.com to the complainant, wherein, it was stated that order OD000745689120861700, placed by the complainant, was cancelled, due to high demand for the said item and in order to provide all customers an equal opportunity, to avail of the great deal. Thereafter, flipkart.com again sent an email dated 15.09.2014 (at page No.5 of the District Forum file) to the complainant that the amount of Rs.400/- towards the order/item would be refunded to his bank account by 20.09.2014. It is also the admitted fact that the said amount of Rs.400/- was received by the complainant. It is pertinent to note that all the emails (at page No.3 to 5 of the District Forum file), placed on record by the complainant alongwith the complaint, were sent by flipkart.com and not by Flipkart India Private Limited. The complainant filed the complaint against Flipkart India and not against Flipkart.com. As per the respondent/complainant, flipkart.com is the email address of Flipkart India Pvt. Ltd. and flipkart.com and Flipkart India Pvt. Ltd. are the same entities. As per the appellant/Opposite Party, flipkart.com and Flipkart India Pvt. Ltd. are separate and distinct entities because flipkart.com, is owned and operated by Flipkart Internet Pvt. Ltd. and not the appellant i.e. Flipkart India Pvt. Ltd. and the appellant Company is duly incorporated under the Companies Act, 1956 and has no common shareholding and/or directors with Flipkart Internet Pvt. Ltd. which owns and operates “flipkart.com”, the online portal. The appellant/Opposite Party stated that this fact is evident from various documents available in public domain namely the details available with the Registrar Companies, showing that the two Companies i.e. Flipkart India Pvt. Ltd. and Flipkart Internet Pvt. Ltd. are two separate legal entities with different and distinct directors and shareholding. To prove this, the appellant/Opposite Party has placed on record the relevant documents (Annexure A-1 to A-5), which is now marked as Annexure A-8 to A-12. Annexure A-1/A-8 is the copy of Flipkart Terms of Use, which reads as under :-

“Flipkart Terms of Use

This document is an electronic record in terms of Information Technology Act, 2000 and rules there under as applicable and the amended provisions pertaining to electronic records in various statues as amended by the Information Technology Act, 2000. This electronic record is generated by a computer system and does not require any physical or digital signatures.

This document is published in accordance with the provisions of Rule 3(1) of the Information Technology (Intermediaries guidelines) Rules, 2011 that require publishing the rules and regulations, privacy policy and Terms of Use for access or usage of www.flipkart.com website.

The domain name www.flipkart.com (hereinafter to as “Website”) is owned by Flipkart Internet Private Limited a company incorporated under the Companies Act, 1956 with its registered office at Vaishnavi Summit, Ground Floor, 7^th Main, 80 feet Road, 3^rd Block, Koramangala Industrial Layout, Next to Wipro office, Corporation Ward No.68, Koramangala, Bangalore – 560 034, Karnataka, India (hereinafter referred to as “Flipkart”).”

From the afore-extracted document, it is clear that portal flipkart.com is owned and controlled by Flipkart Internet Pvt. Ltd. and the appellant i.e. Flipkart India Pvt. Ltd. has nothing whatsoever to do with the same. It is also pertinent to note that as per the rules framed under the Information Technology Act, 2000, all ‘Intermediaries’, as it is defined in the said Act and as Flipkart Internet is considered, are required to disclose the name of the Grievance Officer (at page No.21 of the file), which is disclosed in the following terms :-

“Grievance Officer

In accordance with Information Technology Act 2000 and the rules made there under, the name and contact details of the Grievance Officer are provided below :

Mr.Chinnappa Karumbaiah Kuppanda

Flipkart Internet Private Limited

Ozone Manay Tech Park, #56/18 & 55/09, 7^th floor,

Garvebhavipalya, Hosur Road, Bangalore – 560068

Karnataka, India

Phone +91 – 080-49083910

Email : Time : Mon – Sat (9:00 – 18:00)

From the afore-extracted document, it is clearly revealed that the entire website is being managed and controlled by Flipkart Internet Pvt. Ltd. The appellant/Opposite Party has also placed on record Annexure A-4/A-11 i.e. Form 1 Certificate of Incorporation, wherein, it was certified that Flipkart India Private Limited is incorporated under the Companies Act, 1956. The appellant/Opposite Party has also placed on record Annexure A-5/A-12 Form 1 Certificate of Incorporation, wherein, it was certified that Flipkart Marketplace Private Limited is incorporated under the Companies Act, 1956. Alongwith the said document (Annexure A-5/A-12), the appellant/Opposite Party also placed on record Fresh Certificate of Incorporation Consequent upon Change of Name, which was issued by Government of India – Ministry of Corporate Affairs, Registrar of Companies, Karnataka, the relevant portion of which reads as under :-

“I hereby certify that Flipkart Marketplace Private Limited which was originally incorporated on First day of October Two Thousand Twelve under the Companies Act, 1956 (No.1 of 1956) as Flipkart Marketplace Private Limited having duly passed the necessary resolution in terms of Section 21 of the Companies Act, 1956 and the approval of the Central Government signified in writing having been accorded thereto under Section 21 of the Companies Act, 1956, read with Government of India, Department of Company Affairs, New Delhi, Notification No.G.S.R 507(E) dated 24/06/1985 vide SRN B61920625 dated 27/11/2012 the name of the said company is this day changed to Flipkart Internet Private Limited and this Certificate is issued pursuant to Section 23(1) of the said Act. “

From the afore-extracted document, it is clearly proved that the name of the said Company i.e. M/s Flipkart Marketplace Private Limited was changed to Flipkart Internet Private Limited. It is clearly proved from the record that the complainant placed the order at flipkart.com on 13.09.2014 and all the emails were sent by flipkart.com to the complainant. It is also clearly proved that the appellant and Flipkart Internet Private Ltd. are separate entity. The submission of the Counsel for the appellant, in this regard, being correct is accepted.

12. It is not the case of the complainant that the amount of the product was not refunded to him. Even the Flipkart.com, after placing the order by the complainant on 13.09.2014, cancelled the same within two days of placing the same i.e. on 15.09.2014 and this fact was duly intimated to him through email and the said amount was also refunded to him before the filing of complaint. Not only this, a voucher of Rs.500/- was given by the appellant, to the complainant, which was accepted by him. So, we are of the considered opinion that there was no deficiency in service on the part of the appellant/Opposite Party, and the District Forum erred in allowing the complaint and granting compensation and litigation expenses, to the complainant, as such, the impugned order is liable to be set aside.

13. For the reasons recorded above, the appeal filed by the appellant/Opposite Party is allowed, with no order as to costs. The impugned order, passed by the District Forum, is set aside. Consequently, the complaint filed by the complainant, before the District Forum, is dismissed with no order as to costs.