The Karnataka High Court has recently held that an intermediary or its directors/officers as mentioned under the Information Technology Act would not be accountable for any omission or commission on the part of the vendor/seller making use of facilities provided through the intermediary on an online marketing platform.
Background of the Case
The Drug Inspector filed a complaint against Snapdeal on the account of information allegedly received by the Deputy Drugs Controller, Mysore on November 20, 2014. It was alleged that in October 2014, M/s Adept Biocare, a proprietary concern of one Amandeep Chawla, created a seller account on Snapdeal’s online market place for selling its own products namely SUHAGRA- 100 Tablets.
Amid the period from October 2014 to December 2014, Snapdeal had warned Adept Biocare for selling their tablets on their website. Thereafter, one Manjunath placed an order online and the same was delivered to him. It is alleged that Snapdeal has exhibited SUHAGRA-100mg tablets for sale and provided platform to the Seller and purchaser. The delivery was made in the presence of Investigation Officer and Panch witnesses.
On the basis of the above, it was alleged that there was a violation under Section 18(c) of the Drugs and Cosmetics Act, which is punishable under Section 27(b)(ii) of the Act. Six years later, a case was registered before the Court of the Principal Senior Civil Judge and CJM, Mysuru and on June 8, 2020, it issued summons to Snapdeal and its directors.
Aggrieved by this, the director moved the court seeking to quash the order dated June 8 and further proceedings pending before the Pricipal Senior Civil Judge and CMM, Mysuru.
Observation of the Court
The Court took into consideration the usage of word “executed” between Snapdeal and its users to infer that Snapdeal had implied due diligence and being an intermediary, it can be protected under Section 79 of the IT Act. Therefore it cannot be prosecuted for transactions conducted on its platform.
In the words of the Court:
“In my considered opinion Snapdeal has exercised due diligence under Section 79(2) (c)of the Information Technology Act, 200, read in conjunction with the Information Technology (Intermediary guidelines) Rules, 2011 (…) Neither Snapdeal nor its directors can be prosecuted for the offence under Section 27(b) (ii) of the Act."
Regarding the order passed by the Special Court on June 8, 2020, the Court held that “it is not
in compliance with the requirement of Section 19(1)(a) of the Cr.PC. and further does not indicate the procedure under Section 204 of Cr.P.C. having been followed.”
It further added that:
“At the time of taking cognizance and issuance of process, the court taking cognizance is required to pass a sufficiently detailed order to support the conclusion to take cognizance and issue process. The judicious application of mind to the law and facts of the matter should be apparent on the ex-facie reading of the order of cognizance.”
Notably, the Court observed that when the accused is having office, branch office, corporate office, sales office or the like within jurisdiction of the Magistrate where the offence has been committed, there would be no need for any inquiry under Section 202 of CrPC. On these rulings, the Bench proceeded to allow the petitions and quash the proceedings pending before the Court of the Principal Senior Civil Judge and CJM Mysuru.
Case Details
Before: Karnataka High Court
Case Title: Snapdeal v. State of Karnataka
Coram: Hon’ble Mr, Juctice Suraj Govindraj
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