Ernakulam District Commission Holds Flipkart Liable For Non-disclosure Of Seller Information As Mandated By E-Commerce Rules 2020

Brief Facts:

The Complainant ordered a Vivo V15 mobile phone for his wife's birthday, priced at Rs. 23,900/- on EMI from Flipkart. The promised delivery date was August 27, 2019. However, despite several delays, the Complainant was informed that the order was cancelled. Despite not receiving the phone, the Complainant was still obligated to repay the total EMI amount of Rs. 25,122/- to Zest Money, the EMI facility provider, to maintain his CIBIL score. The refund provided by Flipkart was only Rs. 23,990/-. This situation caused significant mental distress to the Complainant, especially as he was unable to present the phone as a birthday gift. Despite numerous attempts to communicate with Flipkart, the Complainant did not receive any satisfactory response. Consequently, feeling aggrieved, the Complainant approached the District Consumer Disputes Redressal Commission, Ernakulam, Kerala (“District Commission”) and filed a consumer complaint against Flipkart and Zest Money.

In response, Flipkart denied liability and attributed the non-delivery of the phone to its delivery partner and product seller, without disclosing further details. It argued that its role is limited to that of an intermediary, which is distinct from sellers, and therefore, it does not bear liability for the actions of independent sellers on its platform.

Zest Money did not appear before the District Commission for the proceedings, leading to an ex-parte proceeding against it.

Observations by the District Commission:

The District Commission referred to the Consumer Protection Act, 2019, and the Consumer Protection (E-commerce) Rules, 2020, and determined that Flipkart operates as a marketplace e-commerce platform, distinct from individual sellers. It emphasized Flipkart's obligations under Rule 5 of the Rules, which include ensuring accurate product descriptions, disclosing seller information, facilitating complaint tracking, and maintaining records, among other responsibilities.

The District Commission found Flipkart in violation of Rule 5(3)(a) of the Consumer Protection (E-commerce) Rules, 2020, due to its failure to disclose seller information. This non-disclosure was deemed to undermine transparency and hinder consumers' ability to make informed decisions and seek redressal. Consequently, the District Commission concluded that Flipkart, as an e-commerce platform, breached these rules by withholding essential seller details.

Regarding Zest Money, the District Commission determined that its role was limited to providing a financial service without direct involvement in the transaction. Therefore, Zest Money could not be held accountable for the transaction or subsequent issues.

As a result, the District Commission held Flipkart liable for deficiency in service and unfair trade practices. It ordered Flipkart to compensate the Complainant ₹40,000/- for deficiency in service and unfair trade practice. Additionally, Flipkart was directed to refund the complainant ₹1,132/-, which was collected as service charges by Zest Money, and to pay ₹10,000/- for the litigation costs incurred by the Complainant.