Allahabad High Court quashes FIR registered against Flipkart for delivery of laptop with a different processor

The Allahabad High Court recently allowed a writ petition moved by Flipkart Internet Private Limited for quashing an FIR registered against it in 2019 for delivering a laptop not as per the specifications for which the order was placed.

The bench of Justice Sumit Kumar and Justice Syed Waiz Mian granted relief to Flipkart taking into account the mandate of Section 79 of the Information Technology Act, 2000 (IT Act, 2000) which exempts the liability of intermediaries (like online marketplaces) in certain cases.

Court observed that the only liability of an intermediary under Section 79(3)(b) of the IT Act, 2000, is to take down third-party content upon receipt of either a court order or a notice by an appropriate government authority and not otherwise. Court pointed out that the complaint filed in the present matter indicated that Flipkart, raised the grievance of the complainant with the seller after receiving the replacement/refund request.

Therefore, while stressing that the fact that the petitioner-company is an intermediary providing merely access to sellers/buyers was not under challenge or dispute, the court held that ingredients of the offence under Section 406, 467, 468, 471, 474 and 474-A IPC as alleged against the petitioner-company were not made out taking on face value.

Court said, "It cannot be expected that the provider or enabler of the online marketplace is aware of all the products sold on its Website/marketplace. It is only required that such provider or enabler put in place a robust system to inform all Sellers on its platform of their responsibilities and obligations under applicable laws in order to discharge its role and obligation as an intermediary. If the same is violated by the Seller of goods or service such Seller can be proceeded against but not the intermediary".

Court highlighted that in the present case, the petitioner company had complied with the requirements of sub-sections (2) and (3) of Section 79 of the IT Act, as well as, the Information Technology (Intermediaries Guidelines) Rules, 2011, and held that, therefore, the company will be exempted from any liability under Section 79 of the IT Act, 2000.

"....no violation can ever be attributed or made out against the directors or officers of the intermediary, as the same would be only vicarious, and such proceedings as initiated against them would be unjust and bad in law," opined the court.

On 12 October 2018, a lawyer from Ghaziabad, Uttar Pradesh, placed an order on Flipkart for the purchase of a Laptop of HP company having an 'intel' processor and made a payment of Rs. 17,990. However, the laptop delivered to him on 22 October was having processor of the brand ‘A.M.D’ instead of the brand ‘Intel'.

Aggrieved by the fact that the product delivered was not as per the specifications for which the order was placed, the lawyer filed for replacement of the product but the seller declined to replace or refund the consideration of the product, stating that the product was dispatched as per specifications purchased by the lawyer.

Thereafter, the lawyer lodged a criminal complaint against Flipkart directly with the Senior Superintendent of Police, Ghaziabad and when no action was taken upon it, he moved an application under Section 156(3) before the concerned Magistrate who ordered registration of an FIR against Flipkart under Sections 406, 420, 467, 468, 471, 474 and 474-A of IPC.

In its plea before the high court, Flipkart submitted that it is merely an e-commerce Marketplace/Platform that provides access to buyers and sellers through its website where they meet and interact to execute purchase and sale transactions, subject to terms and conditions as set out in the Buyers/Sellers Terms of Use (Flipkart Terms of Use).

It contended that since it is not a party to or in control of any such transaction between its users, therefore, it will fall under the definition of an ‘intermediary’ as defined under Section 2(1)(w) of The Information Technology Act, 2000. Accordingly, it sought protection under Section 79 of the IT Act.

Case Title: Flipkart Internet Private Limited v. State Of U.P. And 3 Others