Supreme Court Stays HC Directions Against OLX India In A Case Of Seller Duping Through Impersonation

The Supreme Court has stayed the directions issued by Punjab and Haryana High Court to OLX India to adopt a screening mechanism with respect to the sellers who could post an advertisement on its Platform.

The bench of Justices UU Lalit, S Ravindra Bhat and Bela M Trivedi was considering a SLP assailing Punjab and Haryana High Court's order dated December 12, 2021.

"Pending further consideration, the effect and operation of the order under challenge to the extent it issued certain directions against and in relation to the petitioner shall remain stayed," the bench ordered while issuing notice.

The High Court had passed the directions against OLX while considering a case of a person impersonating another to upload a sale advertisement in the online platform.

Senior Advocate Mr. Siddharth Luthra appeared on behalf of the Petitioner i.e., OLX India B.V, and apprised the Supreme Court regarding the adverse order passed by the Punjab and Haryana High Court. Mr. Luthra pointed out that the order passed by the Punjab and Haryana High Court is contrary to the scheme of "Safe Harbour" provided to the intermediaries under Section 79 of the Information Technology Act, 2000

It was argued further that such directions were contrary to the Top Court's judgment in Anu Kumar v State (UT Administration), which stated that a High Court in the exercise of its powers u/s 482 cannot make observations or issue directions to a third party who is neither before it nor has been granted an opportunity of being heard.

"OLX Platform being an online marketplace, essentially connects sellers with potential buyers and is nothing more than a passive conduit between a buyer and a seller similar to the classifieds column of a newspaper. It is for the passive role played by the Platform that it qualifies as an "intermediary" as defined under Section 2(1)(w) of the Information Technology Act 2000," the petition stated.

Case Before Punjab and Haryana High Court

On January 22, 2021, a police official came to the petitioner's house and gave him a notice that Umar Ali who had used petitioner's Aadhaar Card had put up an AD on OLX platform regarding sale of motorcycle and in that process cheated the buyer who had come to purchase the same. The official further told the petitioner that a FIR was registered against the petitioner in this regard. When the petitioner tried to inquire about facts of the case through his counsel in District Courts, Yamuna Nagar, he came to know that FIR had been registered against one Umar Ali, who had committed the fraud regarding sale of motorcycle.

The petitioner had thus approached the High Court praying for issuance of directions for conducting fair and impartial investigation in the FIR dated June 23, 2020 u/s 420 IPC.

Observing that since the court was dealing with similar type of cases every day wherein the accused(s) were using OLX platform for cheating innocent people, bench of Justice Arvind Singh Sangwan issued notice to Home Secretary, Govt. of Haryana as well as Director-General of Police, Haryana to inform this Court whether any guidelines have been issued with regard to giving an advertisement on a platform like OLX or any other similar agency.

The bench also directed for filing affidavits explaining whether it is feasible to lay guidelines.

Directions was also issued to OLX to delete and re list all the advertisements on the platform only after attaching an open PDF file along with each advertisement, containing the following:-

(a) At least 02 ID proofs of the person, who is proposing to sell a property (moveable or immoveable) or asking any professional service;

(b) Two mobile numbers with a screen shot/photocopy of message sent by the server, who issued the SIM verifying name of owner as per their record;

(c) Details of the property to be sold whether moveable or immoveable and a document of title like Registration Certificate or insurance paper for vehicles or sale deed etc. for property.

(d) In aforesaid five Districts, in case the proposed seller is residing in a village or in the area of Municipal Corporation/Municipal Council, a certificate of Member of the Panchayat or Municipal Councillor certifying that the proposed seller is not involved in any such or similar criminal case and is a genuine owner of property.

(e) Only by putting this information in a PDF file, the advertisements will be accepted by OLX or any other such agency and will be floated for the general public.

Case Title: OLX India BV v. The State Of Haryana and Ors| SLP 70 of 2022

Coram: Justices UU Lalit, S Ravindra Bhat and Bela M Trivedi

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