U.S.-based Amazon Tuesday approached the Delhi High Court challenging an order of the Central Consumer Protection Authority (CCPA) imposing a penalty of ₹1 lakh on the e-commerce giant for selling domestic pressure cookers that did not meet quality standards.
The plea came up before Justice Yashwant Varma who was told by CCPA counsel that she needs time to take instructions from the department on the matter.
The Delhi High Court listed the matter for further hearing on September 19 to enable the counsel to get instructions.
In August, CCPA imposed a ₹1 lakh penalty on Amazon for selling pressure cookers that did not meet quality standards and also directed 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 Department of Consumer Affairs, in its statement, 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.
During the hearing, Amazon's counsel 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 said.
Giving an example, the lawyer said, “Supposing there is a mall and somebody is selling spurious apples, are you going to haul up the landlord?”
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 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.