Court quashes FIR against e-commerce platform for alleged sale of fake cosmetics

The Delhi High Court on Wednesday quashed an FIR registered against an ecommerce platform for allegedly conniving with certain unauthorized sellers to sell fake cosmetic products of an international brandJustice Asha Menon said that the registration of an FIR against the petitioner platform Flipkart would lead to a miscarriage of justice while clarifying that the investigating agency was free to carry out a further probe to ascertain the identity of the unauthorized sellers of the products in questionThe FIR was registered against Flipkart in August 2020 by Delhi Police under Section 63 Offence of infringement of copyright of the Copyright Act and Sections 103 Penalty for applying false trade marks trade descriptions etc 104 Penalty for selling goods or providing services to which false trade mark or false trade description is applied of the Trade Marks Act based on a complaint made by an entity which claimed to have the absolute and exclusive right to sell the cosmetic products in IndiaAlso Read ED to name Jacqueline Fernandez as accused in Rs 200crore moneylaundering caseThe petitioner sought quashing of FIR on the ground that it was an intermediary and the Information Technology IT Act provided a safe harbour to it concerning liabilities arising for posting of material by third parties on their platformsThe judge stated that unless an active role is disclosed in the commission of the offences an ecommerce platform can claim protection as an intermediary under Section 79 Exemption from liability of intermediary of the IT Act and when compliance with the due diligence requirement under Rule 3 Due diligence to be observed by an intermediary of the IT Guidelines is evident the exclusion of liability under Section 79 would ex facie include exclusion from criminal prosecution as wellIn the present case the court said the petitioner complied with the applicable guidelines by issuing the Terms of Use against the illegal and unauthorised sale of productsUnless an active role is disclosed in the commission of the offences complained of the intermediary such as the present petitioner would be entitled to claim protection under Section 79 of the IT Act In other words the question must be answered in the affirmative that when compliance with the due diligence requirement under Rule 3 of the IT Guidelines is evident ex facie the exclusion of liability under Section 79 of the IT Act would include exclusion from criminal prosecution said the courtThis is one such case where the registration of an FIR against an intermediary would lead to miscarriage of justice Therefore this Court finds itself justified in allowing the present petition and quashing the FIR qua the petitioner the court addedThe court upheld the petitioners contention that the obligation to take down the offending material from a platform arises only after a court order and remarkedIf a complaint per se was sufficient to take down the infringing material etc the havoc that can be caused to ecommerce is beyond imaginationThe court noted that in the present case the FIR was lodged only against the petitioner and another platform and none of the other sites allegedly selling the alleged fake products were even namedIt added that without determining the rights of those other sites to sell the products prima facie the petitioner cannot be said to have committed any offence and the noncompliance with IT guidelines or rules has not been declared to be an offence under the IT Act