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2019 Supreme(Del) 1775
IN THE HIGH COURT OF DELHI AT NEW DELHI
Rajiv Sahai Endlaw, J.
Vestige Marketing Private Limited – Appellant
Versus
Flipkart Internet Private Limited and Others – Respondents
Civil Suit (O S) No. 540 of 2019
Decided On : 22-10-2019
Rishi K Awasthi, Adv., Vikram Patralekh, Adv., Sidharth Chopra, Adv., Saurabh Srivastava, Adv., Shilpa Gupta, Adv., Ranjeet Singh Sidhu, Adv.
The judgment emphasizes that restrictions on fundamental rights must be imposed by law enacted by the Parliament or State Legislature, not by executive guidelines.
Headnote:
Direct Selling Entity - E-Marketing Platform - Consumer Protection Act, 1986, Article 19(1)(g) of the Constitution of India - Direct Selling Guidelines, 2016 - Public Premises (Eviction of Unauthorised Occupants) Act, 1971 - Food Safety and Standards Authority of India (FSSAI)
Fact of the Case:
The plaintiff, a Direct Selling Entity, filed a suit against an e-marketing platform to restrain them from selling goods directly sold by the plaintiff to consumers. The court considered the applicability of Direct Selling Guidelines, 2016, and the fundamental right to carry on trade or business under Article 19(1)(g) of the Constitution of India.
Finding of the Court:
The court raised concerns about the Direct Selling Guidelines, 2016, being issued without the exercise of power under any statute and emphasized that restrictions on fundamental rights must be imposed by law enacted by the Parliament or State Legislature, not by executive guidelines. The court also highlighted the plaintiff's lack of evidence regarding the alleged counterfeit goods and the right to control prices.
Issues: The issues revolved around the applicability and legal standing of the Direct Selling Guidelines, 2016, the fundamental right to carry on trade or business, and the plaintiff's claims of counterfeit goods and price control.
Ratio Decidendi: The court emphasized that restrictions on fundamental rights must be imposed by law enacted by the Parliament or State Legislature, not by executive guidelines. The court also highlighted the importance of evidence in claims of counterfeit goods and the right to control prices.
Final Decision: The court directed the defendant to provide details of sellers and maintain records of sales, while allowing for further filings and setting the next hearing date.
JUDGMENT :
Rajiv Sahai Endlaw, J.
Ia No.14730/2019 (for exemption)
1. Allowed, subject to just exceptions.
2. The application is disposed of.
CS(OS) 540/2019 & IAs No.14729/2019 (u/O XXXIX R-1&2 CPC) & 14731/2019 (u/S 151 CPC)
3. The plaintiff, claiming to be Direct Selling Entity, has instituted this suit against Flipkart Internet Private Limited operating an e-marketing platform in the name of Flipkart, and against the unknown defendants, to restrain the defendants from selling on the e-marketing platform of the defendant No.1, the goods which are directly sold by the plaintiff to the consumers.
4. Being conscious of the dicta of a Coordinate Bench of this Court in Amway India Enterprises Pvt. Ltd. Vs. 1MG Technologies Pvt. Ltd., (2019) 260 DLT 690, I have enquired from the counsel for the plaintiff, whether in the said judgment the aspect of the defendant No.1 as also the unknown defendants having a fundamental right to carry on any trade or business and which can be restricted only by law, has been considered.
5. The counsel for the plaintiff has drawn attention to paragraphs 164, 169 and 173 of the said judgment.
6. The counsel for the plaintiff has also handed over in the Court, copies of the orders dated 13th November, 2018 in CS(OS) No.571/2018 and 14th January, 2019 in CS(OS) No.8/2019, being suits filed by the plaintiff against other e-marketing platform i.e. Amazon and in which, orders of injunction restraining Amazon from allowing sale on its e-marketing platform of goods directly sold by the plaintiff was granted.
7. I have next enquired from the counsel for the plaintiff about the Direct Selling Guidelines, 2016 referred to in Amway India Enterprises Pvt. Ltd. supra and which have been held to be the law regulating the business of direct selling.
8. The counsel for the plaintiff has drawn attention to page 126 of Part III-A file, being the Notification dated 26th October, 2016 of the Department of Consumer Affairs, Ministry of Consumer Affairs, Food and Public Distribution, issuing the Guidelines aforesaid "as guiding principles for State Governments to consider regulating the business of Direct Selling and strengthen the existing regulatory mechanism on Direct Selling.., for preventing fraud and protecting the legitimate rights and interests of consumers".
9. I have enquired from the counsel for the plaintiff, whether in pursuance to the said Guidelines, any of the State Governments have brought out any laws for regulating the business of direct selling.
10. The counsel for the plaintiff states that he will have to check up.
11. The Notification aforesaid is silent with respect to the provision of any statute, in exercise of power whereunder the Guidelines have been issued. Though the counsel for the plaintiff has referred to Serial No.1 in Clause 1 titled "Definitions" of the Guidelines, defining "Act" as meaning the "Consumer Protection Act, 1986", but is unable to show any provision in the Guidelines showing the same to have been issued in exercise of any power vested in the Ministry of Consumer Affairs, Food and Public Distribution under the Consumer Protection Act.
12. It appears that without the Guidelines having been issued in exercise of power under any statute, the same are akin to the Guidelines issued by the Government for guidance of the Estate Officers under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 and which Guidelines, in Syndicate Bank Vs. Ramachandra Pillai, (2011) 15 SCC 398 were held to be merely directory and not regulating the procedure to be followed by the Estate Officer in exercise of powers under the Public Premises (Eviction of Unauthorised Occupants) Act.
13. Article 19(1)(g) of the Constitution of India confers in all citizens, the right to practise on any profession or to carry on any occupation, trade or business. Article 19(6) however empowers the State to make any law imposing, in the interest of general public, reasonable restrictions on the exercise of the right conferr
