Punjab

StateCommission

A/680/2017

Amazon Seller Services Private Ltd. - Complainant(s)

Versus

Rahul Popal - Opp.Party(s)

Vishal Khattar

20 May 2019

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB, CHANDIGARH.

 

  First Appeal No.680 of 2017                                                    

Date of institution  :    22.09.2017

Reserved On           :   13.05.2019

Date of decision     :    20.05.2019

 

Amazon Seller Services Private Limited, having Registered Office at Brigade Gateway, 8^th Floor, 26/1, Dr. Rajkumar Road, Malleshwaram (W), Bangalore-560055, India, through its Authorized Signatory Sh. Rahul Sundaram.

….Appellant/Opposite Party No.4

Versus

1.      Rahul Popal S/o Sh. Ashok Kumar Popal, R/o Kothi No.415-   A Block, G.T. Road, New Amritsar, Punjab.

                                                              ….Respondent/Complainant

2.      Cloudtail India Pvt. Ltd., Anjaneya Infrastructure Project No.38 & 39, Souka Road, Kacherakanahalli, Haskote Taluka, Bangalore, Karnataka-560067.

3.      Cloudtail India Pvt. Ltd., S-405, L Ground Floor, Greater           Kailash, New Delhi-110048.

4.      Oneplus Mobile Service Centre, 7^th Block, Koramangala,         Bangalore, Karnataka-560095.

5.      AHD Communications Service Centre, 1^st Floor, Bhai      Ghaniyan Market, near Bus Stand, G.T. Road, Amritsar.

                               ….Respondents/Opposite Parties No.1, 2, 3 & 5

First Appeal against the order dated 17.08.2017 of the District Consumer Disputes Redressal Forum, Amritsar.

Quorum:- 

          Hon’ble Mr. Justice Paramjeet Singh Dhaliwal, President

                        Mrs. Kiran Sibal, Member

Present:-

          For the appellant             :    Sh. Inderjit Singh, Advocate

          For respondent          No.1       :    None

         For respondents No.2&3:    Sh. J.S. Mann, Advocate

          For respondents No.4&5:    Ex parte.  

 

JUSTICE PARAMJEET SINGH DHALIWAL,  PRESIDENT  

 

                    The instant appeal has been filed by the appellant/opposite party No.4 against the order dated 17.08.2017 passed by District Consumer Disputes Redressal Forum, Amritsar (in short, “the District Forum”), whereby the complaint filed by respondent No.1/complainant, under Section 12 of the Consumer Protection Act, 1986, was disposed of and the opposite parties were directed, jointly and severally, to refund the price of the handset, in question, amounting to ₹24,999/- to the complainant within 30 days of the receipt of copy of the order, failing which the said amount was to carry interest at the rate of 6% per annum from the date of the order till realization. They were further directed, jointly and severally, to pay ₹2,000/- to him towards litigation expenses.

2.           It would be apposite to mention that hereinafter the parties will be referred, as have been arrayed before the District Forum.

Facts of the Complaint

3.           Brief facts, as averred in the complaint, are that the complainant purchased one mobile phone make OnePlus 2 (Sandstone Black 64 GB) manufactured by OnePlus Company through an order, which was placed online through opposite party No.4 in October, 2015. Opposite parties No.1 to 3 are the authorized representatives of opposite party No.4, who booked the parcel of OnePlus 2 mobile and the payment was to be made in cash on delivery thereof. There was an express assured online warranty/guarantee of one year for the said mobile set; which was having IMEI No.867290027275535 and the payment of ₹24,999/- was made in pursuance of invoice No.KA-BLR6-144105041 4834468. The delivery of the handset was made by opposite party No.4, appellant before us.  It was averred that the handset was having problems in MIC, overheating and it was not being charged properly.  It did not catch any SIM signal properly. Therefore, on 08.09.2016, the complainant complained to opposite party No.5, Authorized Service Centre of opposite party No.3-Company; where only the software was reinstalled in the handset. However, problems in the handset were still subsisting. He again approached opposite party No.5, whose technician opened the handset and changed the battery part No.04080000401. The complainant again approached opposite party No.5 on 19.09.2016, with a request to remove the problems from the handset or to replace it with a new one, but it refused to do so. However, the complainant was told by the Authorized Dealer that there was problem in the motherboard chip of the handset; which was replaced with small PCBA (China) part No.409000406. In-spite of that, the handset did not work properly. Therefore, the complainant again made a complaint to Oneplus India Customer Service No.1800-102-8411 and his complaint was registered at Diary No.394362 and it was assured to remove the problems in the handset. However, the handset was not properly repaired.  Alleging deficiency in service and unfair trade practice on the part of the opposite parties, the complainant approached the District Forum, seeking following directions to them:

a)      to return the amount paid by the complainant towards the        price of the handset, along with interest;

b)      to pay ₹50,000/- as compensation for the mental agony and   harassment suffered by him at their hands;

c)      to pay ₹10,000/- as litigation expenses.

d)      It was also prayed that a direction be also issued to Telecom Regulatory Authority of India, New Delhi, for cancellation of     licence of the opposite parties, due to the unfair trade        practice committed by them.

Defence of the Opposite Parties

4.           Upon notice opposite parties No.1, 2 & 4 appeared before the District, whereas opposite parties No.3 & 5 did not appear before it, despite their service, and as such they were proceeded against ex parte. Opposite parties No.1 & 2 filed their joint reply to the complaint, whereas opposite party No.4 filed its independent reply.
5.           Opposite parties No.1 & 2, in their reply, raised preliminary submissions that the grievances of the complainant are limited to manufacturing defects in the product manufactured by OnePlus Company and deficiency in service on the part of opposite parties No.3 and 5, on which opposite parties No.1 & 2 have no control.  Opposite parties No.1 & 2 are only resellers of different products on the website. Neither they provide any warranty/representation on the project, nor they provide after sale services. As per the settled law, the dealer cannot be held liable for any defects therein. Thus, the complaint is bad for mis-joinder of answering opposite parties and non-joinder of necessary parties. It was pleaded that the answering opposite parties are an independent entity, which are carrying on the business of sale of goods as a retailer and as a registered seller on the Website operated and managed by Amazon Seller Services Pvt. Ltd (ASSPL). The relationship between the answering opposite parties and ASSPL is on a ‘principal to principal basis’, and they have no responsibility with regard to warranties, liabilities etc. It was denied that the answering opposite parties are the authorized representative of opposite party No.4. The product was received by the complainant on 12.10.2016, without any demur. The said product was provided to Manufacturer's warranty by the manufacturer of the product i.e. OnePlus. The liability to provide after sale services is not of opposite parties No.1 & 2. The electronic devises come in a sealed box, so opposite parties No.1 & 2 have neither any control over the quality of the product, nor is it possible for them to detect the defect, if any. Therefore, they have no liability to repair or replace the product manufactured by the manufacturer. All other allegations levelled in the complaint were denied and it was prayed that the complaint be dismissed.
6.           Opposite party No.4, in its reply, raised preliminary submissions that the answering opposite party is a well reputed company and has a very large customer base and it manages and operates the website www.amazon.in. The answering opposite party neither sells nor offers to sell any products and merely provides an online marketplace, where independent third party sellers can list their products for sale. The respective sellers themselves are responsible for their respective listings and products on the Website. The answering opposite party does not intervene or influence any customers in any manner, nor it is involved in the sale transaction between the customer and seller. As per the conditions relating to the customers use of the Website (as expressly available on the Website), which have been specifically agreed by the customer, the answering opposite party is only a facilitator and it has no control in any manner over any sale transaction on the Website. The contract of sale of products on the Website is strictly a bipartite contract between the customer and the seller. Opposite party No.4 also raised preliminary objections that the complainant does not fall under the definition of ‘consumer’, as defined in the Act, as he has not bought any goods from ASSPL nor has paid any amount/consideration to ASSPL. He purchased the product from a third party seller, selling the products on the website operated by opposite party No.4. Thus, the complainant had no cause of action to file complaint against opposite party No.4, as the said product was neither manufactured nor sold by it. The seller in this case is Cloudtail India Private Limited and opposite party No.4 is not involved in the contract of sale of the product. The District Forum lacked territorial jurisdiction, as opposite party No.4 is neither having its registered office nor corporate office, or Branch office within the jurisdiction of the District Forum.  In Parawise Reply, it was pleaded that the product was received by the complainant on 12.10.2015 without any demur in a good usable free from any defect condition. The complaint alleging manufacturing defects in the Product was made only on 08.09.2016, i.e. after using the product for more than 11 months. Opposite party No.4 does not undertake any trading activity.  The complainant is only insisting for repairs in the product under warranty after using the same for more than 11 months. However, opposite party No.4 has no liability in respect thereof and there is no deficiency in service on its part. All other allegations levelled in the complaint were denied and it was prayed that the complaint be dismissed.

Finding of the District Forum

7.           The contesting parties produced evidence in support of their respective averments before the District Forum, which after going through the same and hearing learned counsel on their behalf, disposed of the complaint in above terms, vide impugned order. Hence, this appeal by appellant/opposite party No.4.

 

Contentions of the Parties

8.           We have heard learned counsel for the appellant and respondents No.2 & 3, as respondents No.4 & 5 have not appeared despite their service and were proceeded against ex parte.  None appeared on behalf of respondent No.1 at the time of arguments. However, written arguments have been submitted on his behalf, which we have perused. We have also carefully gone through the records of the case.
9.           Learned counsel for the appellant/opposite party No.4

had reiterated the stand as mentioned in the reply and argued that opposite party No.4 is only an intermediary and is not responsible for the defects in the said mobile phone. It is only a market platform.  It was further argued that the product, in question, was ordered by the complainant using the interface of the website of opposite party No.4 from opposite parties No.1 & 2, which was manufactured by opposite party No.3.  The District Forum has failed to interpret and consider the role of opposite party No.4 in the transaction in question.  Opposite party No.4 does not and cannot have any control over the delivery of a product and further it never maintains its own inventory and the products sold on the website are owned as well as sold by third party sellers.  Opposite party No.4, as such, has a limited role to play while operating its website wherein independent third party sellers only sell their products to online users.  It is neither seller nor manufacturer.  Opposite party No.1, 2 & 5 are the sellers and opposite party No.3 is the manufacturer. So opposite parties Nos.1, 2, 3 & 5 are responsible for the defects, if any, in the mobile phone. The complaint is maintainable only against the supplier and manufacturer not against opposite party No.4. Opposite parties Nos.1, 2, 3 & 5 are responsible for replacement of the mobile phone.  It was further contended that the District Forum had no territorial jurisdiction, as opposite party No.4 is neither having its registered office nor corporate office or branch office within its jurisdiction.  It was, thus, contended that this appeal deserves to be allowed and the impugned order needs to be set aside qua it.

10.           In the written arguments submitted on behalf of respondent No.1/complainant, it has been contended that since the date of purchase of the handset, it has been continuously giving problems; which have not been rectified by the opposite parties, despite requests of the complainant. The appellant/ opposite party No.4 acts as a facilitator and provide marketplace to manufacturers, as an agent/seller thereof. On the bill, Ex.C-1, it has been clearly mentioned that the purchase was made on Amazon.in. Opposite party No.3 and 4 are also business partners since the year 2014 on online market place and, as such, it is strange that opposite party No.4 does not know the address of opposite party No.3. The appellant has not come in appeal with clean hands and, as such, the appeal is liable to be dismissed. 
11.           Learned counsel for respondents No.2 & 3/opposite parties No.1 & 2 vehemently contended that opposite Parties No.1 & 2 are an independent entity, which is carrying on the business of sale of goods as a retailer and as a registered seller on the Website operated and managed by Amazon Seller Services Pvt. Ltd (ASSPL). As per the settled law, the dealer cannot be held liable for any defects. The relationship between the answering opposite parties and ASSPL is on a ‘principal to principal basis’, and they have no responsibility with regard to warranties, liabilities etc. They are only reseller of different products on the website and they do not provide any warranty/representation on the project or after sale services. The said product had been provided to Manufacturer's warranty by the manufacturer of the product i.e. OnePlus. The electronic devises come in a sealed box and as such, opposite parties No.1 & 2 have neither any control over the quality of the product, nor is it possible for them to detect the defect, if any. Therefore, they have no liability to repair or replace the product manufactured by the manufacturer. The District Forum has wrongly passed the impugned order and the same is liable to be set aside. 

Consideration of Contentions

12.           We have given thoughtful consideration to the contentions raised by the learned counsel for the parties.
13.           The question arises for determination in this appeal is, who is responsible for making good the loss suffered by the complainant?  It was argued by the learned counsel for opposite party No.4 that opposite party No.4 is a third party and it is only providing a platform for market and sale of products by the sellers.  It has no liability as per the “conditions of use”, which can be read by the Customers while placing order online.  It is an intermediary as defined in Section 79 of the Information Technology Act, 2000 and is exempted from liability for third party information, data or communication link made available or hosted by it. Section 79 is reproduced below:-

“Section 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 –

1. The function of the intermediary is limited to provide access to a communication system over which information made available by third parties is transmitted or temporarily stored or hosted; or
2. The intermediary does not-

1.      Initiate the transmission,
2.      Select the receiver of the transmission, and
3.      Select or modify the information contained in the transmission;

3. 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-

1. The intermediary has conspired or abetted or aided or induced, whether by threats or promise or authorize in the commission of the unlawful act;
2. 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.

Explanation- for the purpose of this section, the expression “third party information” means any information dealt with by an intermediary in his capacity as an intermediary.  As stated above, being an intermediary.”

 

In view of the above, it was contended that the appellant/opposite party No.4 herein cannot be held liable for the act of seller-merchant/manufacturer i.e. opposite parties No.1, 2, 3 & 5, who are responsible for the defects, if any, in the said mobile phone.

14.           No doubt, the role of appellant/opposite party No.4 is that of intermediary, yet in the present case, it cannot be said that it has no role in the harassment and loss caused to the complainant due to supply of mobile phone to the complainant, in which problem occurred later on.  Online market place Company earns revenue each time a consumer clicks and visits on its website.  Moreover, the same is being done as per the terms and conditions between the online portal company and the sellers for a consideration. Therefore, the complainant was its consumer also.  It is the duty of the intermediary that it should verify the bona fides 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. 
15.           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.
16.            Admittedly, users carry out activities on market place platform of the portal.  Thus, they play an active role in facilitating the infringement conduct. Apparently, online marketplace operator portals appear to be responsible for infringements carried out by the users on their platform.  It is a very crucial and debatable issue. The  liability and exemption of the e-commerce portal acting as hosting service provider, in relation to posting of information provided by the recipients of its services, needs to be examined in the light of statutory provisions and  the facts of present appeal arising from the consumer complaint. The following point arises for consideration:-

Whether online marketplace operator/portal can be held liable for the infringement that occurred on its platform, if so, then to what extent?

17.           In the present case the complainant placed the order through Amazon for purchase of the said mobile phone from opposite party No.1 & 2, manufactured by opposite party No.3, in which problem occurred relating to MIC problem, not hearing properly and charging issue.  In the bottom of the receipt, Ex.C-1, issued by opposite parties No.1 & 2 the name of Amazon-opposite party No.4 also figures.  So, it is held that Amazon is a co-seller.  
18.           Opposite parties Nos.3 and 5 chose not to appear either before the District Forum or before this Commission despite their service and were proceeded against ex parte, therefore, the averments made in the complaint deemed to have been admitted by them. Opposite party No.4 has produced on record “Conditions to Use”, Ex.OP-4/3, but the same are for the users of Amazon website. However, the Amazon-opposite party No.4 has not placed on record the terms and conditions or any Agreement, which must have been executed between it and opposite parties Nos.1, 2, 3 & 5 for allowing its marketplace/portal to them for selling the products and in the absence of the same, an adverse inference is to be drawn against opposite party No.4 and the benefit of safe harbour protection subject to restrictions as provided under Sub-Sections (2) and (3) of Section 79 of the Information and Technology Act, 2000 cannot be given to opposite party No.4. 
19.           A close scrutiny of the evidence on record clearly establishes that opposite party No.4 is not a mere broker or intermediary as considered in the commercial world.  We have no doubt, whatsoever, that it was acting as a representative or agent of opposite parties Nos.1, 2, 3 & 5 during the negotiation.  All transactions routed through opposite parties No.4 and contract also concluded between the complainant and opposite parties No.1, 2, 3 and 5, through it. The delivery of product to the complainant was also made through it.  It is also relevant to mention that opposite party No.3-OnePlus and opposite party No.4-Amazon are business partners, as is clear from Annexure P-2 produced along with written arguments of the complainant and they announced 4^th Anniversary Celebrations rewards. In view of this, opposite party No.4 is also answerable for the defects occurred in the mobile phone purchased by the complainant from opposite party No.1 and 2, manufactured by opposite party No.3 through its portal.  
20.            In identical circumstance State Consumer Disputes Redressal Commission, U.T., Chandigarh in First Appeal No.27 of 2017 (Amazon Sellers Service Private Limited v. Gopal Krishan and others) decided on 17.2.2017 while holding Amazon Sellers Service Private Limited liable has held as under:-

“8. Contention of Counsel for the appellant that as per terms and conditions of sale, no liability can be fastened upon the appellant, is liable to be rejected.  An agent, who sells a product, is duty bound to ensure its quality, and if the product is found defective, agent shall be vicariously liable for the loss caused to the purchaser, alongwith the manufacturer of the product. It was so held by the Hon’ble National Consumer Disputes Redressal Commission, New Delhi in the case titled as Emerging India Real Assets Pvt. Ltd. & Anr. Vs Kamer Chand & Anr. Revision Petition No.765 of 2016 decided on 30.3.2016.”

 

It has also been held in the above mentioned case that it was bounden duty of the facilitator to ensure that goods sold through any individual are manufactured as per quality standard. If the goods purchased through online are found not up to the mark, online portal, through which goods were purchased, cannot escape its liability.  

21.           Similar view was taken by this Commission in First Appeal No.869 of 2017 (Amazon Seller Services Private Limited v. Jaswinder Singh and another) decided on 11.6.2018 as well as in First Appeal No.625 of 2018 (Amazon Seller Services Private Limited v. Mohd. Ilyas. & Ors.) decided on 27.02.2019. The First Additional Bench of this Commission in FA No.252 of 2018 (Amazon Seller Services Private Limited v. Jatinder Pal and another) decided on 21.09.2018 has also taken similar view and held the Amazon Seller Services Private Limited jointly and severally liable. 
22.           Hon’ble National Commission also in Prabhat Kumar Sinha & Anr. v. Nitish Kumar 2016 (3) CPJ 239 (NC) declined the plea of the Petitioner Company that problem in the computer was relating to hardware, which was to be rectified by the manufacturing company only. It has held by the Hon’ble National Commission that petitioners, being seller of defective computer, were under obligation either to rectify the defects or to replace the computer or refund the consideration amount received. So far as the liability of the manufacturing Company is concerned, it is the issue between the manufacturing Company and the dealer, for which the respondent cannot be made to suffer.
23.           So far as the issue of territorial jurisdiction of the District Forum raised by opposite party No.4 is concerned, it is relevant to mention that the product, in question, which was booked by the complainant online on the website of Amazon, was delivered to him by Amazon at his address of Amritsar, as given in Invoice, Ex.C-1. Therefore, part of cause of action arose within the territorial jurisdiction of the District Forum and, as such, the plea of the opposite party No.4 in this regard is rejected.
24.           In the light of above discussion, we hold that opposite party No.4 was agent and co-seller of opposite parties Nos.1, 2, 3 and 5; not merely an intermediary.  So, opposite party No.4 has been rightly held jointly and severally liable for the deficiency in service and harassment caused to the complainant.
25.           In view of our above discussion, we do not find any merit in this appeal and the same is hereby dismissed; however, with no order as to costs. 
26.           The appellant had deposited a sum of ₹13,500/- at the time of filing of the appeal. It deposited another sum of ₹13,500/-, vide receipt dated 15.11.2017, in compliance of order dated 01.11.2017 passed by this Commission. Both these amounts, along with interest which has accrued thereon, if any, shall be remitted by the registry to the District Forum forthwith. Respondent No.1/complainant may approach the District Forum for the release of the above amount and the District Forum may pass the appropriate order in this regard after the expiry of limitation period in accordance with law. 
27.           The appeal could not be decided within the statutory period due to heavy pendency of court cases.  

 

                             (JUSTICE PARAMJEET SINGH DHALIWAL)

                                                           PRESIDENT     

 

 

                                                        (KIRAN SIBAL)

                                                             MEMBER

May 20, 2019.                                              

(Gurmeet S)