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2019 Supreme(Kar) 1667
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
SREENIVAS HARISH KUMAR, J.
Amazon Seller Services Pvt. Ltd. - Appellant
Versus
M/s. Indusviva Health Sciences Pvt. Ltd. - Respondent
Miscellaneous First Appeal No.8411 of 2018 (CPC)
Decided On : 28-08-2019
For the Appellant :Sri. K. Arunkumar, Sr. Advocate, for Sri. M.V. Sundararaman, Advocate.
For the Respondent:Sri. Mohammed Mujassim, Advocate, for Sri. R. Vidyasagar, Advocate.
Headnote:
Information Technology Act, 2000 - Section 2 (1)(w) - Information Technology Rules, 2011 - Rule 3 – Constitution of India, 1950 - Article 19(2) - Application for temporary injunction - Order of injunction - Whether those transactions are legal or illegal - Whether court has exercised discretion properly or not either for granting or refusing to grant an order of temporary injunction - Whether they are performing an active role in same would have to be finally adjudicated at trial - Respondent being plaintiff in suit has pleaded that it is a direct selling entity - It is marketing four products by name I-Coffee I-Pulse, I-Slim and I-Charge manufactured by Olive Life Sciences Private Limited - It came to know that defendant without its consent was soliciting advertising exhibiting offering endorsing its products below maximum retail price and thus causing loss to it - Immediately plaintiff contacted defendant through E-mails and lodged complaints - It requested defendant to stop selling its products - Since defendant did not stop plaintiff caused a legal notice issued to defendant and sought removal of its products from defendant’s web site - Defendant did not stop and failed to comply with demand of plaintiff and hence plaintiff brought a suit against defendant seeking relief of permanent injunction restraining defendant from soliciting advertising exhibiting offering endorsing for sale or trade release of its products – Held, Court do not think that appellant can take shelter under this decision - Constitutional validity of Sections 66A and 79 of Act in touchstone or Article 19(2) of constitution was examined - While holding that Section 66A is violative of Article 19(2) Section 79 is held to be valid subject to Section 79(3)(b) which has been read down to mean actual knowledge attributable to an intermediary as upon a court order or issuance of notification by appropriate government or its agency - Hon’ble Supreme Court has taken this view in relation to transmission of matters that are being used for committing unlawful acts - Here is a case where plaintiff complains of its products being sold by defendant either directly or on its platform - Plaintiff’s case is that of infringement of its commercial right - Therefore appellant cannot remain oblivious to plaintiff’s requests - No sooner it received communication from plaintiff than it should have stopped trading plaintiff’s products or disclosed name of person or agency using its platform for trading plaintiff’s products – Probably plaintiff could have sued actual person using appellants’ platform had such person’s name been disclosed by appellant - It’s stand that it cannot filter contents of its users is difficult to be accepted when it is getting revenue by user of its platform - Appellant’s counsel has relied upon judgment of High Court in case - This judgment is of no avail to appellant - In this decision what is complained of is infringement of copy right by users of social media on platform of an intermediary namely My Space - In fact in Para of judgment it is observed by High Court that if host has specific knowledge that transmitted content is unlawful then no safe harbor can be urged - Therefore appellant’s contention that it can claim protection under Section 79 of Act cannot be accepted - Trial court has held that Rule 3 of Information Technology Rules and Clause 7(6) of model guidelines issued by Ministry of Consumer Affairs Government of India are applicable - It is argued by appellants counsel that so far guidelines issued by Ministry of Consumer Affairs are concerned they do not have force of law and they need not be followed and in this context he has placed reliance on two judgments of Supreme Court in case - These decisions in court opinion do not render any help to appellant to contend that it is not bound by guidelines - Appeal is dismissed
JUDGMENT :
The defendant in O.S.5291/2018 on the file of Additional City Civil and Sessions Judge (CH.12), Bengaluru, has filed this appeal aggrieved by the order passed on an application filed under Order 39 Rules 1 and 2 CPC by the plaintiff.
2. The respondent being the plaintiff in the suit has pleaded that it is a direct selling entity. It is marketing four products by name I-Coffee, I-Pulse, I-Slim and I-Charge manufactured by M/s Olive Life Sciences Private Limited. It came to know that the defendant without its consent was soliciting/advertising/exhibiting/offering/endorsing its products below maximum retail price and thus causing loss to it. Immediately the plaintiff contacted the defendant through E-mails and lodged complaints. It requested the defendant to stop selling its products. Since the defendant did not stop, the plaintiff caused a legal notice issued to the defendant on 19.6.2018 and sought removal of its products from the defendant’s web site. The defendant did not stop and failed to comply with the demand of the plaintiff and hence the plaintiff brought a suit against the defendant seeking the relief of permanent injunction restraining the defendant from soliciting/advertising/exhibiting/offering /endorsing for sale or trade, release of its products. Along with the plaint, the plaintiff also made an application for temporary injunction. The said application stood allowed on 15.9.2018. Hence, this appeal.
3. The stand of the defendant is that it is a intermediary as defined under section 2 (1)(w) of the Information Technology Act, 2000. It only provides a platform for the buyers and the sellers and it does not actively participate in the transactions that take place on its platform. It does not manufacture, procure, list, price or sell the products made available on its online market price. Section 79 of the Information Technology creates a safe harbour for intermediaries from liability for the illegal and/or infringing activities carried out by third parties on its websites. It is not aware that the products I-Coffee, I-Pulse, I-Slim or I-Charge belong to the plaintiff company. An intermediary is only obligated to act against illegal and/or infringing contents once it receives actual knowledge that such content is illegal or infringing. ‘Actual knowledge’ means knowledge by means of a court order and therefore it was not obligated to act on plaintiff’s e-mails and notices dated 19.6.2018. Thus, there cannot be an order of injunction against it.
4. For granting an order of temporary injunction against the defendant/appellant, the trial court has recorded the following findings :-
(a) It is admitted that the plaintiff’s products are registered in the defendant’s website for sale. The defendant has not obtained consent from the plaintiff.
(b) Despite request made by the plaintiff and even after issuance of legal notice, the defendant did not remove the plaintiff’s products from its website and it failed to take necessary action.
(c) The defendant has contended that it is an intermediary and section 79 of the Information Technology Act provides a safe harbour from liability arising due to illegal and infringing activities carried on by the third parties. This stand cannot be accepted because after coming to know about hosting of infringing information, the defendant should have removed it. It is held by the High Court of Delhi in the case of Kent RO Systems Limited and Another vs. Amit Kotak and Others [2017 SCC Online Delhi 7201] that the intermediaries have to be vigilant and should declare to all its users, its policies and advice them not to host any infringing information on the website of the intermediary. Therefore, the defendant should have been diligent before sale of the infringing products and only in that event protection under section 79 of the Act will be available. Even Rule 3 of the Information Technology (Intermediaries Guidelines) Rules, 2011 requires the intermediary to be diligent while discharging
