IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, KOTTAYAM

Dated, the 10^th day of  November 2022.

Present:  Sri. Manulal V.S. President

Sri. K.M. Anto, Member

C C No. 42/2020 (Filed on 26-02-2020)

Petitioner                                    :      Anila,

                                                          W/o George K. Joseph,

                                                          Residing at Koodapuzha House,

                                                          Ponkunnam P.O.,

                                                          Kottayam District-686006.  

                                                          (Adv. K.K. Indira)                                                                                            Vs.     

Opposite parties                         :  1) M/s Asus, Technology (P)Ltd.

402, 4^th Floor, Supreme Chambers, 17/17,    Shah Industrial Estate, Veeradesai Road, Andheri west, Mumbai-400058, Maharashtra represented by its Managing Director

 2)  Computer Forest, G-1, Saroj Park Apartment, Opposite GAIL Tower, Anand Mahal Road, Surat, Gujarat-395009 represented by its Manager.

(3)   Asus Authorised Service Centre, Near Compuage infocom Ltd., C-5, 2^nd Floor, Kandathil Shopping Complex, Kottayam Kumily Road, Collectorate, Kottaym-686002 represented by its Manager.

(4)     Amazon,

                                                           26/1 Brigade Gateway,

                                                           Dr. Rajkumar Road,

 Malleshwaram West,

                                                           Bangalore, Karnataka-560055                                                                      Rep. by its Chief Officer.

                                                          (Adv. Milad M. Adv. Seethal Susan

                                                              Thomas and Adv. Shyni Gopi)

O  R  D  E  R

Sri. Manulal V.S. President

The complainant purchased Asus 203 NAH – FD 053T (Intel Celeron Dual core N 3350/2GB/500GB11.6” HD LED/WIN 10/Whiwte/B0791 GWL 65 (PO-95 Ax-43 PS laptop from the 2^nd opposite party manufactured by the 1^st opposite party on 04-06-2019.  She paid Rs.23,999/- only for the lap top which was having one year warranty. The 3^rd opposite party is the authorised service centre of the 1^st opposite party on 06-06-2019.  The said laptop was delivered as per invoice bill dated 06-06-2019.  After one month, the display of the computer got shutdown and on 25-07-2019, the same was entrusted to the 3^rd opposite party service centre.  Thereafter though the complainant contacted the 3^rd opposite party several times, the laptop was not returned after rectifying the defect.  On                               16-09-2019, the complainant received an e-mail from the 3^rd opposite party stating that they were following up the issue and would contact the complainant soon.  On 20-09-2019, another e-mail was received from the 3^rd opposite party stating that the defunct laptop had been handed over to their investigation team and it would take 5 to 7 business days to be completed.  The 3^rd opposite party requested some more time for rectifying the laptop.  But the laptop was not returned even after repeated request.  Thereafter, the 3^rd opposite party informed the complainant over phone that laptop could not be repaired since the laptop was not shown in the invoice.    The complainant was also informed by the customer care of the 1^st opposite party also that she would not get the warranty if the laptop number was not produced.  As the website of the 4^th opposite party clearly shows that the product purchased by the complainant was having one year warranty and in the terms and conditions, there is no such stipulation that the warranty would be available only on production of laptop number.  The act of the customer care centre to insist for the laptop number which is not shown in the invoice is only to cause difficulties to customers.  The said act on the part of the opposite parties in supplying the defective laptop and not providing due warranty service to the complainant during the warranty period amounts to deficiency of service and unfair trade practice.  The 4^th opposite party is duty bound to observe whether the replacement policy of the 2^nd opposite party is fair and reasonable.  Due to the act of the opposite parties, the complainant had to suffer much mental agony, pain and hardship and the opposite parties are jointly and severally liable to compensate the complainant for the same. Hence the complaint is filed for a direction to the opposite parties to refund the amount of Rs.23,999/- with 12% interest, Rs.25,000/- as compensation and Rs.10,000/- towards litigation cost.

Upon receipt of notice, though opposite parties 1 to 4 appeared through their counsel, opposite parties 1 to 3 did not care to file version or appear further. Hence opposite parties 1 to 3 were set exparte.  Opposite party 4 filed written version.

1. In their version the 4^th opposite party contended that the Amazon, represented by its chief operating officer cannot be made party to the complaint as the entity operating www.amazon.in is Amazon Seller Services Limited. No person in individual capacity can be prosecuted on behalf of a company. The opposite party no 4 is only an online platform connecting buyers and sellers where the buyers pay directly to the sellers. The 4^th opposite party expressly disclaim any warranties or representations in respect of quality, suitability, accuracy, reliability etc. As per the RBI directions dated 24.11.2019 transactions between a buyer and an independent third party seller are executed through an independent nodal account maintained by the banks which is separate and free from the internal accounts of the concerned intermediary. The purpose of the said nodal account is to hold funds on behalf of the buyers who make purchases from independent third party sellers who transact on the e commerce marketplace operated by ASSPL/the 4^th opposite party. The 4^th opposite party is not charging the complainant for the services provided either directly or indirectly. All the liability towards product, quality, safety, price, delivery/non-delivery are clearly fastened on the independent third party sellers by contract. Vide Press note 3 issued by the department of Industrial policy and Promotion signed on 29.03.2016, a clear distinction has been made between market place based model of e commerce and inventory based model of e commerce. The opposite party is marketplace based e commerce entity who is required to act as a facilitator between the buyer and the seller. Based on the RBI directions, the opposite party does not charge the buyers for the services provided on the ecommerce marketplace. The payments from the buyers go directly into the nodal account set up by the opposite party in favour of the independent third party seller. The opposite party is not the account holder or owner of the nodal account. As per the IT Act also the opposite party is only an intermediary. As per S.79 of the It Act, the opposite party being an intermediary is not liable for any information/material/warranties/representations made by the independent third party sellers on the e- commerce marketplace. Thus the opposite party is entitled for the exemption from liability for the information/material hosted on its marketplace.

2. Computer Forest, the opposite party no 2 herein is one of the independent sellers which has listed its products for sale on the e commerce platform.                           The complainant has purchased the product namely Asus 203 NAH- FD 053T (Intel Celeron Dual Core N 3350/2GB/500GB/11.6” HD LED/WIN 10 White/B071 GWL 65 (PO-95 Ax-43 PS laptop from the independent 3^rd party seller namely M/s computer forest, the 2^nd opposite party herein on the                               e-commerce marketplace operated by the 4^th opposite party. Against the order placed by the complainant , an invoice no In 80 dated 4.6.2019 was issued by the independent third party seller for an amount of Rs.23,999/- with the PAN and GSTN of the independent third party seller. It clearly evidences that the contract of sale was executed by and between the complainant and the independent third party seller. The complainant thereafter made the payment directly to the independent third party seller in the nodal account set up pursuant to the RBI directions dated 24.11.2009. The complaint of the product was to be reported to the independent seller but instead the complainant contacted the 4^th opposite party. The grievances regarding manufacturing defects can only be resolved by the manufacturer, the 1^st opposite party herein. The complainant has wrongly impleaded the 4^th opposite party which is not the manufacturer, seller or the service provider in relation to the product. Being an intermediary and E- commerce marketplace, ASSPL/answering respondent is not liable for any claims arising out of the products sold on the E-commerce marketplace by independent third party sellers. As per the FDI policy ASSPL is an e commerce marketplace and only provides services to independent third party sellers by providing an information technology platform on a digital and electronic network and as per notification no FEMA 387/2017-RB dated 9.3.2017 the 4^th opposite party is an FDI driven e-commerce entity, were there are clear restrictions on retailing and it cannot hold an inventory of goods and products to be sold by the independent third party sellers. The 4^th opposite party cannot be held liable for contract of sale executed by and between the complainant ie. the buyer and the independent third party seller. The complainant is not a consumer of the 4^th  opposite party and thus does not have locus standi to file the present complaint against the 4^th opposite party. The complainant is trying to confuse the Commission and hence the complaint is liable to be dismissed.

Towards the evidence part the complainant has filed proof affidavit along with documents which are marked as Exhibit A1 to A3. Opposite party 4 sought several adjournment for adducing evidence but did not adduce evidence or appear before this commission thereafter so the 4^th opposite party was set exparte.

   From the above pleadings and evidence on record, we frame the following issues.

1. Whether the intermediary platforms have any liability under the Consumer

Protection Act ?

2. Whether the deficiency of service and unfair trade practice attributed to

        the opposite parties is proved by the complainant?

3. If so what are the reliefs?

Points No1, 2 and 3

1. The complainant’s case is that the laptop purchased by him from the 2^nd opposite party through the 4^th opposite party got damaged after one month. The defective product was entrusted with the 3^rd opposite party who is the authorized service centre of the 1^st opposite party, the manufacturer. Even after repeated requests, they reply got was only that they were following up the issues. The laptop was not repaired or returned but they demanded for a laptop number. As there was no laptop number the laptop was not repaired which was not there in the warranty conditions. Hence this case.

2. The opposite parties 1 to 3 remained exparte without adducing evidence. The 4^th opposite party filed version but did not adduce evidence or appeared further. So they were also made exparte. The main contention of the 4^th opposite party is that as they were intermediary platform, they are not liable for any kind of defective products or services the consumers suffer from the sellers in the platform. But as per the Consumer Protection Act,2019, all the intermediary platforms and dealers also are included under the purview of the Act.

3. The first contention of the opposite party is that the complainant has made a mistake of misjoinder by arraying the answering opposite party in the party array instead of the necessary party for the alleged transaction  Amazon Seller Services Private Ltd. The address of the opposite party in the original complaint is “Amazone India Regd. 26/1, Office Brigade Gate way, Dr. Rajkumar Road, Malleswaram(W) Bangalore. The address of the 4^th opposite party is the same.

4. The major contention of the 4^th opposite party that it is only an online platform for the sellers and buyers and being such an intermediary, it is not liable for the product related complaints. Consumer Protection Act, 2019 S.2.16 defines                      “E-commerce means buying or selling of goods or services including digital products over digital or electronic network)” and S.2.17 defines “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 market place or online auction sites)”. It is contended that the opposite party is only a marketplace e commerce entity and hence not liable for any of the fault in the process of the selling and buying.  But The consumer Protection (E-commerce) Rules, 2020 says:

Scope and Applicability

1. Save as otherwise expressly provided by the Central Government by notification, these rules shall apply to:

1. all goods and services bought or sold over digital or electronic network including digital products.
2. all models of e-commerce, including marketplace and inventory models of e-commerce;
3. all e-commerce retails, including multi-channel single brand retailers and single brand retailers in single or multiple formats; and
4. all forms of unfair trade practices across all models of e-commerce:

2. Notwithstanding anything contained in sub-rule (1), these rules shall apply to a e-commerce entity which is not established in India, but systematically offers goods or services to consumers in India.
3. (b) “e-commerce entity” means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce, but does not include a seller offering his goods or services for sale on a marketplace e-commerce entity’
4. Duties of e-commerce entities.

(1) ****************************

 (3) No e-commerce entity shall adopt any unfair trade practice, whether in the course of business on its platform or otherwise.

(4) Every e-commerce entity shall establish an adequate grievance redressal mechanism having regard to the number of grievances ordinarily received by such entity from India, and shall appoint a grievance officer for consumer grievance redressal, and shall display the name, contact details, and designation  of such officer on its platform.

(5) Every e-commerce entity shall ensure that the grievance officer referred to in sub-rule (4) acknowledges the receipt of any consumer complaint within forty-eight hours and redresses the complaint within one month from the date of receipt of the complaint.

(11) No e-commerce entity shall-

Section 5. Liabilities of marketplace e-commerce entities

(1) A marketplace e-commerce entity which seeks to avail the exemption from liability under sub-section (1) of section 79 of the Information Technology Act, 2000 (21 of 2000) shall comply with sub-sections (2) and (3) of that section, including the provisions of the Information Technology (Intermediary Guidelines) Rules, 2011.

(2) Every marketplace e-commerce entity shall require sellers through an undertaking to ensure that descriptions, images, and other content pertaining to goods or services on their platform is accurate and corresponds directly with the appearance, nature, quality, purpose and other general features of such good or service.

(3) (b) a ticket number for each complaint lodged through which the consumer can track the status of the complaint.

5. The opposite party contends that it is not aware of such an unfair trade practice as the seller directly delivers the product to the customer. But as discussed above, as per the provisions of the Consumer Protection Act, 2019, the ecommerce platforms cannot evade from the responsibility of the deficiency of service, unfair

trade practice or restrictive trade practice done by the sellers on its platform, though the seller is not a party to the complaint. The complainant has received the product delivered from Amazon, paid to Amazon.in and if it had to be returned, that also to Amazon. Then the contentions of the opposite party are not

tenable .

6. It is the duty of the intermediary that it should verify the bonafides of the seller, who sells the articles and products. Intermediaries are entities and provide service enabling delivery of online contents to the end user. “Intermediary” has been defined in Section 2(w) of the Information Technology Act, 2000 and thereafter the guidelines have been issued in the form of the Information Technology (Intermediary Guidelines) Rules, 2011.

For providing protection to the intermediaries, general conditions have been framed as Safe Harbour Protection subject to restrictions mentioned in Sub-Sections (2) and (3) of Section 79 of the Information and Technology Act, 2000.

7. Section 79 of the Information and Technology Act, 2000, is a safe harbour provision subject to restrictions imposed in sub- sections (2) and (3) thereof. If an online intermediary has specific knowledge or has reasonable belief based on information supplied by the right holder about the contents and the intermediary fails to act despite such knowledge, online intermediary can be held liable for infringement. To prove actual knowledge obviously is very difficult. E-commerce portal is required to identify and report infringement. Suppose the HP informs an intermediary that it does not manufacture and sell mobile covers, thus, all products on its portal are counterfeit and must be removed. On that basis e-

commerce portal/intermediary can insist that it must provide specified URL to act upon the request. Internet Protocol (in short, “I.P.”) owner will need to put resources to constantly monitor online space and to report to the intermediary seeking its removal. Amazon has become a place where we can get everything quickly and have it delivered in 2 days. The products are coming from third-party sellers i.e. products sold on Amazon marketplace merchants. Amazon marketplace serves as a sort of newspaper classified advertisements section, connecting potential consumers with the sellers in an efficient, modern and in a

streamlined manner. Amazon places products on its shelves to the stream of commerce. Now a days, the brands are warning consumers against purchasing products online.

8. The definition of “delivery” has been given in Sub-Section (2) of Section 2 of the Sale of Goods Act, 1930, which means voluntary transfer of possession from one person to another. The liability of marketplace e-commerce Company arises from the concept of secondary/contributory infringement. In case in hand Amazon facilitated infringement by OP no 2-Seller and provided a space for sale of infringing product. Amazon had actual or constructive knowledge of such infringement and has reason to believe that an infringement had occurred at its place as the product was packed in its box and delivered by it to the complainant. As such, it is also personally and jointly liable.

9. Amazon is not neutral or passive, instead it optimizes, promotes and offers for sale and its duties are in the nature of pro-activeness. The opposite party has cited several decisions but we don’t think that all those decisions have any relevancy in deciding this case. The 4^th opposite party is found to be liable for the unfair trade practice and deficiency in service.

10. The complainant has produced Exhibits A1 to A3. A1 which is the invoice is issued by the 4^th opposite party named as Amazon.,in. The 4^th opposite party.A2 and A3 are the emails the 4^th opposite party has sent to the complainant. In A2 and A3 emails, the 4^th opposite party says that they had received the issue and were working on the issue. From these words itself we can assume that the 4^th opposite party has received the complaint of defect of the product delivered by them.

11. The complainant’s allegation is that the laptop was entrusted with the 3 rd opposite party but not yet rectified the defect for the reason that the complainant has not produced the laptop number in the invoice.

12. Indochem Electronic vs. Addl. Collector of Customs [(2006) 3SCC 721], wherein while considering the provisions of Sections 3 and 14 of the Consumer Protection Act, 1986, the Hon’ble Supreme Court  was of the view that when the deficiency began to manifest themselves it was the duty of the suppliers to attend to such deficiencies immediately and if the supplier was unable to attend to the deficiencies and malfunctioning of the system soon after  installation, it would amount to “deficiency of service”.

 13. Here in the case on hand, the impugned laptop got defective within one month itself from the date of purchase and was entrusted with the 3^rd opposite party. Admittedly the defective complaint was received by the 3^rd opposite party and no evidence is before us to show that there was no defect to the laptop or even the laptop was not received by the 3^rd opposite party. The 4^th opposite party has issued Exhibit A2 and A3 letters admitting that they had noted the issues and the 3^rd opposite party was working with it which itself admits that the defect was informed to the opposite parties in time. As the defective product was with the opposite parties the complainant is unable to get the same examined by an expert.

14. As the defect of the product and the possession of the same is admitted by the 4^th opposite party that too within one month from the date of purchase of the same, it can be found that the said laptop was defective in the warranty period itself. The complainant further alleges that the 3^rd opposite party informed her that she wont get the warranty of the product as she did not produce the laptop number. The 3^rd opposite party had the possession of the impugned laptop purchased by the complainant through the 4^th opposite party and the 4^th opposite party on receipt of the complaint and defective laptop, informed the complainant on 16-09-2019 that they “had noted the issue already but unfortunately it is taking longer than expected. Kindly allow us the maximum time line until TUE SEP 24within which the issue should be resolved.” Exhibit A3 also is a letter from the customer support team of the 4^th  opposite party stating “I am sorry for the inconvenience caused to you regarding the invoice for your order #407-0755231-8377921. As you have shared the necessary details and snap shot, here you do not need to send us any further information as we have all those documents regarding your Order.  These evidences are enough to complete the investigation as of now.

Upon checking I can see that the matter has handed over to the investigation team.  Generally, such process takes 5 to 7 business days to be completed as requested.  So, I would sincerely request you to allow our team some time till 24/09/2019 to complete all the process to locate the reason behind the issue and to revert with the correct and best possible resolution.

This is just a computer initiated automated time line, within which the process is to be completed, but in my experiences such process gets addressed on earlier basis after being reported.

Please be confirmed as we are here to prevent you from bearing any losses as it is our responsibility to protect our customer’s interest and money as well.  Your cooperation and little more patience will be highly appreciated to us in this regard.”

14. The complainant though allege that there was no such condition in the warranty conditions displayed in the opposite party’s website, she did not produce any warranty conditions. As there is no contrary evidence before us to prove that the laptop was not defective or it was not in the warranty period, we find that the

laptop got defective in the warranty period itself and the opposite parties have failed to extend the necessary after sale service to its consumer, the complainant.

15. Hence we are of the considered opinion to allow the complaint vide the following order.

1. The 1^st opposite party is directed to replace the lap top with a brand new one of the same specification failing which refund an amount of Rs.23,999/- with an interest @9% p a from 06-06-2019 till realization.

2. The opposite parties shall pay Rs.20,000/- towards compensation and                            Rs.2000/- towards litigation cost jointly and severally.

The Order shall be complied within 30 days from the date of receipt of the order, failing which the compensation amount will carry 9% interest from the date of Order till realization.

      Pronounced in the Open Commission on this the 10^th day of November, 2022

Sri. Manulal V.S. President             Sd/-

Sri. K.M. Anto, Member                  Sd/-

Appendix

Exhibits marked from the side of complainant

A1 – Copy of invoice dtd.04-06-19 by 4^th opposite party

A2 – Copy of e-mail dtd.16-09-19 by 4^th opposite party

A3 - Copy of e-mail dtd.20-09-19 by 4^th opposite party

Exhibits marked from the side of opposite party

Nil

                                                                                                          By Order

                                                                                                            Sd/-

                                                                                              Assistant Registrar