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SC relieves Indiamart in FIR accusing the marketplace of cheating

In a response to B2B marketplace Indiamart‘s Special Leave Petition, the Supreme Court has ordered that “no coercive steps shall be taken against the e-commerce website [Indiamart] and its officials in connection with the investigation in FIR, reports LiveLaw.

A complaint was lodged by a buyer who had reportedly deposited Rs 15,000 for a ‘speaking parrot’ and did not receive it (We tried searching for a parrot, but all we found was a toy version of talking parrot).

Indiamart had filed a Special Leave Petition seeking to quash complaint against it for cheating the buyer. Earlier, Indiamart has reached out to Patna High Court for the same on account of the fact that it is an intermediary and is not liable what sellers are selling on its platform. However, Patna HC rejected the contention and said that “the exemption from liability has been granted to intermediaries in certain cases but such exemptions are subject to the condition that intermediaries observe due diligence while discharging his duty and also observe such other guidelines as the Central Government prescribes on this behalf.” HC also added that before allowing the seller to sell his product, Indiamart was obliged to observe due diligence.

Intermediary Liability

Since Indiamart is a marketplace (intermediary), it is somewhat protected by Section 79 of the IT Act, 2008. It offers safe harbor to intermediaries, as long as they act on complaints and do not knowingly allow the usage of their platform to break the law.

There are a number of incidents where e-commerce players should be liable for whats going on their platforms/ marketplaces. Note that Ola and Uber are also intermediaries. There have been multiple instances of cab drivers misbehaving or molesting female passengers or riders. This is a list of Ola and Uber drivers sexually harassing, assaulting, raping or molesting a female passenger ever since the Uber rape of 2014 in New Delhi. In a horrific incident in June, an Ola driver molested and stripped a woman passenger in Bangalore, who was hailing a ride to the airport. The driver took pictures of her and threatened to call his friends and gang-rape her. Bangalore police has arrested the driver and a case has been registered against him.

Also, weapons used in Aurangabad riots in May were allegedly brought through Flipkart. There have been trademark infringement issues as against Flipkart and Bigbasket. So, as we have pointed out several times earlier that there is a need for better understanding of the responsibility, accountability and liability of platforms, marketplaces and aggregators.

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