Business strategy

Delhi HC Puts in Abeyance CCPA Order Asking Amazon to Recall Cookers for Not Meeting Standards

The Delhi High Court Tuesday kept in abeyance an order of the Central Consumer Protection Authority (CCPA) asking US-based e-commerce giant Amazon to recall sold domestic pressure cookers that did not meet quality standards. The high court, however, asked Amazon to deposit within a week Rs one lakh penalty imposed on Amazon by CCPA for selling cookers, which violate mandatory standards, on its platform.

Justice Yashwant Varma said Amazon shall be liable to notify buyers of all these 2,265 pressure cookers that these items do not meet the required quality standards. The high court said the issues raised in the petition require consideration and till the next date of hearing, while the petitioner (Amazon) shall be liable to notify buyers of 2,265 pressure cookers, the CCPA order on recall of products and reimbursement of prices to buyers is placed in abeyance.

The high court, which listed the matter for further hearing on November 16, asked CCPA to file its response to Amazon’s petition. The high court was hearing a plea by Amazon challenging CCPA’s August order imposing a penalty of Rs one lakh on the e-commerce giant for selling domestic pressure cookers that did not meet quality standards and directing the company to notify the consumers of all these 2,265 pressure cookers sold through its platform, recall the products, and reimburse the prices to buyers.

The counsel for CCPA submitted that the investigation report has confirmed what the cooker manufacturers had said, that is, they do not have ISI marks on the products. CCPA’s counsel urged the court not to stay the order.

Amazon’s counsel said when the company came to know that the sellers were selling cookers without ISI mark, it offloaded them. He said the investigation report of CCPA has not been shared with the company and added that the authority has no power to levy a penalty on it.

During the hearing, the court asked CCPA’s counsel as to what action has been taken against the manufacturers of these pressure cookers. If not on Amazon, they must be selling it on other platforms now, the judge said.

The Department of Consumer Affairs, in its statement in August, had said that the authority passed the order against Amazon for allowing the sale of domestic pressure cookers, in violation of mandatory standards, on its platform. Earlier, Amazon’s counsel had submitted that as per the relevant provision under the Consumer Protection Act, the scheme is if there is a prima facie finding, the matter has to be referred for investigation, and based on the investigation, an order has to be passed.

In this case, it has been completely given a go-by apart from the fact that there is a penalty which is imposed and which is not warranted by any provision of the Act, the counsel had said. The CCPA had initiated suo-motu action against e-commerce platforms for the sale of domestic pressure cookers in violation of compulsory standards and it had issued notices to major e-commerce platforms, including Amazon, Flipkart, Paytm Mall, ShopClues, and Snapdeal as well as the sellers registered on these platforms, the statement had said.

“After examination of the response submitted by the company, it was observed that a total of 2,265 pressure cookers not conforming to mandatory standards were sold through Amazon after notification of the QCO (Quality Control Order). The total fee earned by Amazon on sale of such pressure cookers through its platform was Rs.6,14,825.41,” it had said. The statement said that Amazon admitted it earned a ‘sales commission’ fee for the pressure cookers sold on its platform. The CCPA had observed that when Amazon earns commercially from each sale of the product listed on its e-commerce platform, it cannot disassociate itself in case of issues arising from the sale of these items.

Amazon has been asked to submit a compliance report within 45 days. “The company was also directed to pay a penalty of Rs one lakh for allowing the sale of pressure cookers in violation to the QCO on its platform and violating rights of consumers, the statement had said.

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