The Delhi High Court has directed online Pharma platform and app 1MG.com to not offer for sale any product of Amway India, a wholly owned subsidiary of USA-based Amway Corporation which works on direct selling business model.
Justice Pratibha M Singh restrained 1MG and another independent seller selling products through the online platform from selling any Amway product either through the website or the mobile App and approach Amway India to seek written permission to sell its products as per the Direct Selling Guidelines, 2016.
In this case, Amway India moved court after finding that its products are being sold on the online platform and after the defendant replied to a legal notice saying it is not liable in any manner for the sale made by defendant no, 2 (M/s Ghantakarn International), who is an independent seller of Amway products.
The plaintiff also said that the unique code imprinted on the lid of Amway products is erased which shows the products have been tampered with.
Amway India Enterprises Pvt. Ltd., represented by senior advocate Sudhir Chandra Agarwala, and S.S. Rana & Co. Founding Partner Sohan Singh Rana along with Priya Adlakha, Managing Associate; Tulip De, Associate and Ashish Sharma, Junior Associate, told the court that such sale is an infringement of the Direct Selling Guidelines, 2016 issued by the Government of India.
The court was shown two products procured from the defendants’ platform which showed the unique code was missing from the lid of the products.
The court noted that a comparison of the refund policies of the plaintiff and the defendant shows that consumers who buy the products from defendant’s platform could be subjected to adverse refund conditions.
It also said a perusal of the direct selling guidelines shows that Clause 7 requires prior written consent of the direct selling entity for any sale to be effected.
“…the plaintiff has made out a prima facie case. The irreparable injury would be caused to the end consumers, as all products are in the nature of nutrition and healthcare products, the quality of which is paramount,” said Justice Singh.
The court has directed defendants not to offer any Amway product for sale through the website or the mobile application till the next date.
If the same are genuine products, the defendant has been allowed to approach the plaintiff to prove the same and obtain the written permission to sell.
Prior to this, in probably the first Joh Doe injunction in a non-IPR matter, the Delhi High Court restrained shops at Bhagirath Palace, Chandni Chowk, Old Delhi, from selling Amway products.