Flipkart and its sellers are jointly and severally liable for MRP billing: District Consumer Forum

A consumer dispute resolution commission in Telangana’s Nalgonda district ruled that Flipkart could not escape liability for selling products through its platform above the maximum retail price (MRP).

It held the e-commerce platform and the seller jointly and severally liable for this “unfair commercial practice” and ordered the payment of compensation to the consumer. The Commission held that a “tripartite contract” exists between the consumer, the seller and the service provider (i.e. Flipkart and its seller here).

The Commission chaired by the President, Mamidi Christophe, and Sandhya Rani members and K.Venkateshwarluobserved that the Opposed Parties (Flipkart and the seller) would be liable for any defects, failure of service and unfair trade practice on the services provided or the good/product sold by them.

It was also retained with this in mind that the e-commerce platform “have failed to fulfill their obligations as marketplace sellers as set out in the e-Commerce Consumer Protection Rules, 2020”.

The plaintiff was charged Rs. 70 more than the MRP of each sachet of refined sunflower oil. He claimed that the original MRP had been destroyed by opposing parties.

In its written version, Flipkart denied the allegations and said it was wrongfully implicated in the complaint. He pointed out that under the Amended Legal Metrology (Packaged Goods) Rules 2017, an e-commerce entity must ensure that all monetary declarations specified in the said rules are displayed on the digital and electronic network used for transactions of e-commerce. . However, the responsibility for assuring the accuracy of the declarations rested with the manufacturer, seller or importer.

It was further stated that the function of an e-commerce entity is limited to providing access to a communication system over which information made available by the manufacturer, seller, dealer or importer is transmitted or temporarily stored or displayed. Since Flipkart does not directly or indirectly sell any products on its platform and all products are sold by third-party sellers who use the online marketplace services provided by it and have also decided the terms themselves, it has It was argued that only a two-party contract existed between seller and buyer, and therefore only the seller could be held liable.

It was further argued that the Department of Industrial Policy and Promotion, Ministry of Trade and Industry, Govt. of India clarified that in an e-commerce marketplace model, any warranties, warranties of goods and services sold are the responsibility of the seller. Therefore, it was argued that in the absence of a contractual relationship between the plaintiff and Flipkart, the latter could not be held liable and that the complaint should therefore be dismissed with costs.

In addition, on its part, the service provider had also claimed that following an internal investigation and after concluding that the seller had violated the policies of the platform, it had also blacklisted the seller and banned him from selling products on the platform. , above.

The Commission took note of the definitions of ‘unfair trading practice’, ‘service failure’ and ‘electronic service provider’ in the Consumer Protection Act 2019 to assert that opposing parties did fall within those definitions.

“Opposing parties 1 and 2 are in contract and agreement with the manufacturer and are service providers through an e-commerce entity and are bound by the contract between the manufacturer product seller, that is i.e. opposing parties No. 1 and 2 and the consumer and are required to provide information and product details to sellers offering goods”.

Section 4(11)(a) which prohibits e-commerce entities from manipulating the price of goods or services on its platform in order to obtain unreasonable profit, and Section 6 which stipulates the “duties of sellers in the marketplace” of the Consumer Protection (E-Commerce) Rules, 2020 were also consulted to determine that the opposing parties had failed to fulfill their obligations as sellers in the marketplace.

As a result, the two opposing parties were ordered jointly and severally to reimburse the additional extra charge of Rs.140/- (i.e. Rs.70/- more than the MRP on each packet of Freedom refined sunflower oil) and to pay an amount of Rs.50,000/- towards compensation and Rs.3,000/- towards costs, to the Complainant. Flipkart was also ordered to replace the two packages with two others to the complainant. A period of 30 days was granted to comply with the Commission’s order.

Case title: Shaik Umar Farooq v Flipkart Internet Pvt Ltd & Anr.

Click here to read/download the order

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