SELLERS ACTION IN ONLINE MARKET WILL NOT MAKE INTERMEDIARY LIABLE

The technological advancements in this virtual era have encouraged new businesses to prosper and as a consequence their implementations have increased in the society. In the year 2000, to enhance business through technology a new legislation was enacted namely- Information Technology Act, 2000 (IT Act). Section 2(1)(w) of the Act defines “intermediary” as, “with respect to any particular electronic message means any person who on behalf of another person receives, stores or transmits that message or provides any service with respect to that message.”

The liability of the intermediaries is briefly explained in Section 79 of the Act. As per Section 79(1), “an intermediary shall not be liable for any third party information, data, or communication link made available or hosted by him.”

Recently, the Karnataka High Court in the case of Snapdeal v. State of Karnataka by ruling that Intermediary under IT Act is not liable for actions of vendors in online marketplace, quashed the case against Snapdeal. In this case, in 2014, a Drug Inspector had filed a complaint against Snapdeal after receiving intimation from the Deputy Drugs Controller, Mysore. M/s Adcept Biocare, a seller account on Snapdeal listed its products named SUHAGRA-100 Tablets (Sildenafil Citrate Tablets 100 mg). Even after getting repeated warnings from Snapdeal, the Drug Company did not take down the tablets.

A person named Manjunath ordered the tablets and it was delivered to him in presence of Investigation Officer and Panch witnesses. It was alleged that Snapdeal violated Section 18(c) of the Drugs and Cosmetics Act. This is punishable under Section 27 of the said Act. As per the provision of Section 18(c) of the Drugs and Cosmetics Act 1940, any person who sells drugs without a valid license is said to be acting against the law.

While arguing on the case, the concept of vicarious liability was put forward. The advocate from the respondents said that “Irrespective of whether Snapdeal is an intermediary or not, there could be no product which could have been advertised for sale contrary to the prohibitions under the Drugs and Cosmetics Act”. To all these contentions, the single Judge Bench of Justice Suraj Govindaraj stated that neither Snapdeal nor its Directors can be prosecuted for the offence.

It has been observed from the past judgments and the statutory provisions that the rights, duties, immunities and liabilities of the intermediaries in India are evolving and are subject to much more changes. As of now, Section 79 of the IT Act, the Intermediary Guidelines as well as the Shreya Singhal Judgement, is the authoritative law of the land governing the liability of the Intermediaries. The Intermediaries cannot be held liable unless there is a proper order by a requisite authority. But a question arises that when such harmful products are being sold on the online market and the intermediary here Snapdeal is aware of it, whether then, on its own, it should have applied the concept of “Notice and taken down” so as to prevent an unlawful act.

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