Case Law Details
In the matter of Oriens Global Marketing Pvt Ltd. (CCPA Delhi)
The matter concerns a suo motu proceeding initiated by the Central Consumer Protection Authority (CCPA) against Oriens Global Marketing Pvt. Ltd. for alleged violations of the Consumer Protection (Direct Selling) Rules, 2021. The proceedings arose from the company’s alleged failure to comply with mandatory disclosure and record-keeping obligations on its website.
During the preliminary inquiry conducted under Sections 18 and 19 of the Consumer Protection Act, 2019, the CCPA found that the company had failed to disclose or publish essential information on its website and had not updated mandatory documents, including the self-declaration, balance sheet, and audit report. The inquiry further found that the company did not maintain a register of direct sellers on its website, failed to provide complete product information, did not ensure that website information was certified by the Company Secretary, failed to maintain records identifying delisted direct sellers, and displayed an FSSAI licence number that could not be verified.
A show cause notice dated 18 June 2024 was issued requiring the company to explain the alleged violations. The company replied that it had corrected and modified its website following the notice. However, after examining the response, the CCPA concluded that further investigation was necessary and referred the matter to the Director General (Investigation) on 8 August 2024.
The Director General’s investigation revealed that the company did not respond to requests seeking relevant documents. Based on the available information, the investigation concluded that the company had failed to maintain and disclose the register of direct sellers as required under Rule 4(h), failed to provide complete product information to enable informed consumer decisions, and did not publicly display details of delisted direct sellers as required under Rule 5(16). It also found that mandatory documents required under Rule 4 were not duly signed by the Company Secretary. Verification of the FSSAI licence numbers displayed on the website and product packaging revealed that no such records existed in the FSSAI database. Further, a certificate relating to an approved drug list issued by the Government of Telangana contained objections regarding certain products and could not be treated as a final approval certificate.
The investigation concluded that the company had failed to disclose critical information necessary for transparency, including details of direct sellers, delisted sellers, and complete product information. It also observed that several documents were outdated or not properly authenticated. Consequently, the investigation found apparent violations of Rule 4(h), Rule 5(1)(g), Rule 5(10), Rule 5(16) of the Consumer Protection (Direct Selling) Rules, 2021, and Rule 5(3)(a) of the Consumer Protection (E-Commerce) Rules, 2020.
The investigation report was shared with the company for comments, but no response was initially received. The CCPA repeatedly granted opportunities for personal hearings. The company failed to appear on several scheduled dates before eventually participating through video conferencing on 29 April 2025. During that hearing, company representatives stated that they had overlooked the email containing the investigation report. The CCPA demonstrated, through screen-sharing of the company’s website, that mandatory disclosures and required documents remained absent. The company acknowledged its non-compliance with the Consumer Protection (Direct Selling) Rules, 2021, and sought fifteen days to rectify the deficiencies.
An interim order dated 2 May 2025 directed the company to submit its response to the Director General’s report within fifteen days, update its website with accurate product information and mandatory disclosures, and furnish a Company Secretary-certified statement confirming the authenticity of all website information. Subsequent hearings were delayed due to the non-availability of the Central Authority. During later proceedings, the company stated that it had already emailed its response, but the Authority informed it that the communication had not been received and directed it to resubmit the documents through email and post.
After receiving the documents by post, the CCPA examined the updated website and found that although corrective measures had been undertaken, deficiencies continued to exist. The Authority observed repeated and duplicate entries in the lists of active and delisted direct sellers, with some individuals appearing under multiple identification numbers. The company explained that certain direct sellers had allegedly created multiple IDs and assured the Authority that the issue would be corrected.
The Authority also examined certifications displayed on the company’s website, including Halal certification and other association certifications. The company submitted that the Halal certification had been obtained primarily for export purposes and stated that representatives of the certifying body had inspected the manufacturing premises before issuing the certificate. The Authority directed the company to furnish complete details regarding the certification process, fee structure, supporting documents, and related communications. Although the company subsequently submitted documents regarding the Halal certification through email, those documents were inaccessible at the Authority’s end.
The CCPA referred to the statutory definition of “misleading advertisement” under Section 2(28) of the Consumer Protection Act, 2019. It observed that advertisements and representations made to consumers must be truthful, accurate, substantiated, and should not create false or misleading impressions regarding products, certifications, approvals, regulatory compliance, or material information necessary for informed consumer decisions. Claims and certifications displayed in relation to products must be genuine, verifiable, and supported by documentary evidence.
The Authority also examined the obligations imposed by Rule 4 and Rule 5 of the Consumer Protection (Direct Selling) Rules, 2021. It observed that every direct selling entity must maintain prescribed statutory records, ensure that website information is certified by the Company Secretary, prominently display mandatory information, provide self-declarations regarding compliance, maintain adequate grievance redressal mechanisms, and publicly disclose details of active and delisted direct sellers. Additionally, the Authority noted that entities operating as e-commerce platforms must comply with the Consumer Protection (E-Commerce) Rules, 2020 by establishing grievance redressal mechanisms, appointing grievance officers, displaying accurate seller information, and ensuring that consumers receive complete and accurate product descriptions.
The CCPA noted that, following the show cause notice and subsequent directions, the company eventually updated the required documents and disclosures on its website, including mandatory compliances under the Consumer Protection (Direct Selling) Rules, 2021 and lists of active and delisted direct sellers. Nevertheless, the Authority held that the obligations under Rule 5 are substantive and intended to ensure that consumers receive complete, accurate, and verifiable information. The investigation established that the company had failed to provide complete product information, had omitted mandatory disclosures, and had displayed regulatory documents and certifications that were either unauthenticated or incapable of verification. The company itself admitted non-compliance during the hearings and undertook corrective measures thereafter.
The Authority further observed that consumers purchasing products based on website information are entitled to receive information that is complete, accurate, and verifiable. Failure to disclose material information or displaying incomplete or unverified regulatory credentials creates a misleading impression regarding the products and the entity’s regulatory compliance, thereby impairing consumers’ ability to make informed choices. The CCPA also relied upon the Director General’s findings that the displayed FSSAI licence numbers could not be verified and that the documents relied upon by the company were not duly authenticated. The certificate relating to the approved drug list was also found not to constitute a final approval document. The Authority held that subsequent explanations and corrective actions did not alter the fact that consumers had not been provided with clear, accurate, and verifiable information at the relevant time.
Accordingly, the CCPA concluded that the acts and omissions of the company amounted to dissemination of misleading information to consumers and constituted a misleading advertisement and an unfair trade practice under the Consumer Protection Act, 2019.
In its final order, the Authority directed the company to submit certification documents through post, ensure that information appearing on product packaging—including ingredients and licence numbers—is also displayed on the website, maintain continuous compliance with the Consumer Protection (Direct Selling) Rules, 2021 and the Consumer Protection Act, 2019, regularly update registers of active and delisted direct sellers, maintain a proper and updated website containing all mandatory documents and information, and establish an adequate grievance redressal mechanism. Considering the company’s conduct, the CCPA imposed a penalty of ₹1,00,000 under Section 21(2) of the Consumer Protection Act, 2019 for publishing false and misleading advertisements affecting consumers as a class. The company was also directed to deposit the penalty and submit a compliance report within fifteen days.
FULL TEXT OF THE JUDGMENT/ORDER OF CENTRAL CONSUMER PROTECTION AUTHORITY
1. This is a case taken up by the Central Consumer Prbtection Authority (hereinafter referred to as ‘CCPA’) suo moto against Oriens Global Marketing Pvt Ltd. (hereinafter referred as opposite party) regarding alleged non-adherence to Rule 4 and 5 of the Consumer Protection (Direct Selling) Rules, 2021 wherein, the opposite party had failed to:
i. disclose/publish essential information on their website.
ii. update their website with required mandatory documents like Self Declaration, Balance Sheet, and audit Report
2. Accordingly, in the exercise of the powers under Sections 18 and 19 of the Consumer Protection Act, 2019 (hereinafter referred to as Act), CCPA conducted a preliminary inquiry to examine whether the opposite party was in violation of the Consumer Protection (Direct Selling) Rules, 2021. As per the preliminary inquiry, it was found that the opposite party:
i. Did not maintain a register of direct sellers as provided by Rule 4 on its website
ii. Did not furnish proper product information as per Rule 5 sub-rule (d) on its website.
iii. All the information provided by the entity on its website was not duly certified by the Company Secretary.
iv. Did not maintain a record of relevant information allowing for the identification of all the direct sellers who had been delisted by the direct selling entity.
v. The FSSAI license number provided on the website of the opposite party could not be verified.
3. Thereafter, the CCPA issued a show cause notice dated 18th June 2024 to the opposite party for alleged violation of Rule 4 and 5 of the Consumer Protection (Direct Selling) Rules, 2021. CCPA directed the opposite party to substantiate a response within 15 days of receipt of the above-mentioned show cause notice.
4. In response to the Notice, a reply dated 28th June 2024 was received wherein the opposite party stated that the website has been corrected and modified after the issuance of the Show Cause Notice.
5. The response of the opposite party was examined. CCPA observed that the response of the opposite party needs further examination.
6. As per sub-section (1) of Section 19 of the Act, “The Central Authority may, after receiving any information or complaint or directions from the Central Government or of its own motion, conduct or cause to be conducted a preliminary inquiry as to whether there exists a prima facie case of violation of consumer rights or any unfair trade practice or any false or misleading advertisement, by any person, which is prejudicial to the public interest or to the interests of consumers and if it is satisfied that there exists a prima facie case, it shall cause investigation to be made by the Director General or by the District Collector’. The matter was referred to DG investigation by CCPA’s order dated August 8, 2024 for detailed investigation.
7. The Director General (Investigation) in its investigation report dated 13.12.2024 submitted that Oriens Global Marketing Private Limited via e-mail dated 22.11.2024 sent on customersupport@oriensworld.in was asked to submit relevant documents. However, no response was received. Therefore, after careful examination of the documents & information available, it has been observed that:
i. As per Rule 4(h) of Consumer Protection (Direct Selling) Rules, 2021, a direct selling entity is bound to maintain the register of direct sellers including their identity proof, address proof, e-mail and such other contact information on its website in order to monitor and create safeguards for ensuring the methods adopted by the direct sellers are in compliance with direct selling rules by means of legally binding contract. Besides the entity must ensure that all its direct sellers have verified identities and physical addresses and issue identity cards and documents only to such direct sellers. In this case, the entity has failed to disclose the register of direct sellers which is a clear violation of the above mentioned rule.
ii. While displaying the product to be sold, it is mandatory to furnish the accurate and complete information of the product to enable the potential buyers to make informed decision as per their need which has not been done in the case as the entity has not provided the complete information in some of its products.
iii. The entity has failed to display the list of those sellers that have been delisted by the entity for various reasons such as selling spurious goods, or not fulfilling the quality of goods or service as promised to the customers which is in violation of the Rule 5(16) which states that every direct selling entity shall maintain a record of relevant information allowing for the identification of all direct sellers who have repeatedly offered defective or spurious goods or deficient services and shall publicly display the details of such direct sellers on their website and office premises.
iv. As per Rule 4 of Consumer Protection (Direct Selling) Rules, 2021, certain documents such as certificate of incorporation, MoA and AoA, PAN, TAN, GST returns, ITR, Balance sheet, Audit Report, Register of direct sellers, Certificate of registration of trademark, FSSAI License, Certificate of Importer-Exporter code (if applicable), License under Drugs and Cosmetics Act must be maintained by the entity in their updated form duly signed by the Company Secretary. In the present case, the entity has failed to do the same as none of the documents has been duly signed by the company secretary.
v. While verifying the FSSAI License Number provided by the entity i.e. 10020042007440 and another one being displayed in packaging labels of its products on its website i.e. 12421999000928, it has been found that no such records exist in FSSAI database which raises concern about authenticity of the document provided by the entity besides it lacks the signature of the designated officer. (Screenshot attached)
vi. The certificate of the approved drug list by the Government of Telangana provided by the entity contains certain objections raised by the concerned authority regarding certain products for which approval was sought. Thus, it can’t be treated as a final certificate as mandated by the prescribed norms.
vii. These findings are based on the information provided in the previous responses and documents.
Conclusion:
i. The rapid growth of direct selling entities and e-commerce platforms has played a crucial role in pushing the idea of a digital economy while making convenient purchasing experience for the consumers. However, these entities are bound to follow certain guidelines and regulations formulated in Consumer Protection (Direct Selling) Rules, 2021 for safeguarding consumer’s interests along with fostering accountability within the industry.
ii. In the present case, it has been observed that the entity failed to disclose critical information required for maintaining transparency such as the details of the direct sellers along with those who have been delisted by the company, complete and accurate information of the products to be sold thus violating the rights of a consumer so that it could make well informed decision while purchasing. Besides some of the documents provided by the entity are not in its updated form as well
iii. Thus, it can be concluded that Oriens Global Marketing Pvt. Ltd has evidently not followed the required norms as mentioned above therefore it appears to be in potential violation of Rule- 4(h), Rule- 5 sub rule 1(g), Rule 5(16), Rule 5(10), of the Consumer Protection (Direct Selling) Rules, 2021 & Rule 5 sub rule 3(a) of Consumer Protection (E-Commerce) Rules, 2020.
8. The report for the Director General (Investigation) was shared with the opposite party via email dated 9th January, 2025, for their comments within 15 days. However, the company failed to share its comments with the Authority.
9. The opposite party vide letter dated 13.01.2025, was provided an opportunity for hearing as per section 21(8) of the Act on 27.01.2025, through video conferencing mode to further substantiate their response in the above-stated matter. However, the hearing could not be held since the party did not appear. Another opportunity of hearing as per section 21(8) of the Act was provided on 20.03.2025. However, the company again failed to appear for the hearing. The next opportunity of hearing was provided on 01.04.2025 and the same could not be held on account of non-appearance of the opposite party. Subsequently, the next date of hearing was provided on 29.04.2025.
10. The hearing was held on 29th April, 2025. Shri Mouli Shankar, COO, Oriens Global Marketing Pvt Ltd. and Shri Puneet Jadwani, Compliance Officer, Oriens Global Marketing Pvt Ltd. appeared through video conferencing during the hearing on behalf of the opposite party. During the hearing, the opposite party made the following submissions:
i. The company missed out on the email dated January 9, 2025 wherein the DG Investigation Report was shared with them to furnish their written comments.
ii. During the hearing, the company’s website was opened in screen-sharing mode, and the Central Authority demonstrated that the required details and documents had not been updated by the opposite party, thereby constituting a violation of the Consumer Protection (Direct Selling) Rules, 2021.
iii. The company accepted that there was non-compliance of the Consumer Protection (Direct Selling) Rules, 2021 on their behalf and sought time of 15 days to comply to all the obligations laid down in the said Rules and update the website with all the relevant information the company is obligate to provide.
11. In furtherance of the hearing, an interim order dated 02.05.2025 was passed by the Central Authority, wherein the following directions were given to the opposite party :
i. The opposite party shall furnish a response to the report of the the DG Investigation shared with the company on January 9, 2025 within 15 days.
ii. The opposite party shall update their website with clear and accurate product information and other mandatory disclosures under the Consumer Protection (Direct Selling) Rules, 2021 within 15 days.
iii. The opposite party shall furnish a certified statement from the Company Secretary, confirming the accuracy and authenticity of all information provided on the company’s website.
12. Subsequent opportunity for hearings under section 21(8) of the Act were provided to the opposite party on 15.05. 2025, 04.06.2025 and 12.06.2025. However, the hearing could not be conducted due to non-availability of the Central Authority. Thereafter, the next hearing was scheduled on 30.06.2025.
13. Shri Mouli Shankar, COO, Oriens Global Marketing Pvt Ltd., Sh. Karuna Murthi, and Shri Puneet Jadwani, Compliance Officer, Oriens Global Marketing Pvt Ltd., appeared during the hearing on behalf of the opposite party. During the hearing, the opposite party submitted that it had already furnished its response to the DG (Investigation) Report through email dated 15.05.2025. However, the Central Authority informed the opposite party that the said email and accompanying documents had not been received. Accordingly, the opposite party was directed to re-send/forward the same communication to all concerned email addresses. Since the documents were still not traceable, the opposite party was further advised to submit the reply along with supporting documents through post to ensure proper receipt and consideration of the same by the Central Authority.
14. Consequently, the documents were received via post and the next date of hearing was scheduled for 28.04.26. During the proceedings, the opposite party was apprised of the observations recorded in the DG (Investigation) Report, wherein it was noted that the entity had failed to disclose critical information mandated under the Consumer Protection (Direct Selling) Rules, 2021, including details of direct sellers and delisted direct sellers, as well as complete and accurate information relating to the products offered for sale, thereby adversely affecting consumer rights and transparency obligations. The Central Authority further observed that despite the submissions made by the opposite party and subsequent updates carried out on the website, certain deficiencies still persisted. In particular, concerns were raised regarding repeated entries and duplication in the lists of active and delisted direct sellers, and regarding such repeated entries appearing against multiple identification numbers. Upon being questioned, the opposite party submitted that certain direct sellers had allegedly created multiple IDs, and assured the Central Authority that the matter would be examined and rectified.
15. The Central Authority also examined the claims and certifications displayed on the website of the opposite party, including the display of Halal certification and other association certifications. The opposite party submitted that the Halal certification had been obtained primarily for export purposes, particularly in relation to markets such as Malaysia and Dubai, and further stated that representatives of the certifying body had inspected the manufacturing premises before issuance of the certification. The opposite party was directed to furnish details regarding the certification process, fee structure, supporting documents, and related communications for examination by the Central Authority.
16. Further, the Central Authority expressed concern regarding the noncompliance with the Consumer Protection (Direct Selling) Rules, 2021 despite sufficient opportunities having been granted to the opposite party. The opposite party, while acknowledging certain shortcomings, submitted that it had undertaken corrective measures after receipt of communication from the Department and assured that the remaining deficiencies on the website and seller disclosures would be rectified within a week. Accordingly, the matter was reserved for final order.
17. In furtherance of the hearing, the opposite party submitted its documents regarding the Halal certification via email. However, the same are inaccessible at the Central Authority’s end.
18. It may be mentioned that Section- 2(28) of the Act defines “misleading advertisement” in relation to any product or service means an advertisement, which—
i. describes such product or service; or
ii. gives a false guarantee to, or is likely to mislead the consumers as to the nature, substance, quantity or quality of such product or service; or
iii. conveys an express or implied representation which, if made by the manufacturer or seller or service provider thereof, would constitute an unfair trade practice; or
iv. deliberately conceals important information.
19. From a plain reading of the above provision, it is evident that any advertisement or representation made to consumers must adhere to the following principles:
i. The information disseminated to consumers must be truthful, accurate and capable of substantiation;
ii. The advertisement must not create a false or misleading impression regarding the nature, quality, characteristics, approval status, certification, composition or regulatory compliance of the product or service;
iii. The representations made by the advertiser must not have the effect of inducing consumers to make a transactional decision on the basis of incomplete, inaccurate or unverified information;
iv. Material information necessary for consumers to make an informed choice must be disclosed in a clear and transparent manner and must not be concealed, omitted or presented in a manner likely to mislead consumers; and
v. Any claim, certification, approval, endorsement or regulatory credential displayed in relation to a product or service must be genuine, verifiable and supported by appropriate documentary evidence.
20. It may also be mentioned that Rule 4 of the Consumer Protection (Direct Selling) Rules, 2021 provides for the mandatory maintenance of records and states that:
4. Mandatory maintenance of records.— Every direct selling entity shall maintain at its registered office, either manually or electronically, all such documents as are required under any law for the time being in force, including the following documents or records, as may be applicable, namely:—
(a) Certificate of Incorporation;
(b) Memorandum of Association and Articles of Association;
(c) Permanent Account Number and Tax Deduction and Collection Account Number;
(d) Goods and Services Tax registration; (e) Goods and Services Tax Returns;
(f) Income Tax Returns;
(g) Balance Sheet, Audit Report and such other relevant reports;
(h) Register of direct sellers;
(i) Certificate of Importer-Exporter code (in case of imported goods)
(j) License issued under the Food Safety and Standards Authority of India Act, 2006 (34 of 2006) for the purposes of manufacture or sale of food items;
(k) License and Registration Certificate issued under the Drugs and Cosmetics Act, 1940 (23 of 1940) for the purposes of manufacture or sale of drugs, including Ayurvedic, Siddha and Unani drugs and Homoeopathic Medicines;
(I) Certificate of Registration of Trademark.
Further, Rule 5 of the Consumer Protection (Direct Selling) Rules, 2021 provides for the obligation of the direct selling entities and states that:
5. Obligations of direct selling entity.— (1) Every direct selling entity shall—
(c) make self-declaration to the effect that it has complied with the provisions of these rules and is not involved in any Pyramid Scheme or money circulation scheme;
(d) maintain proper and updated website with all relevant details of that entity, including the documents or records specified in rule 4, the self-declaration specified in clause (c), contact information which is current and updated, details of its nodal officer, grievance redressal officer, its management, products, product information, price and grievance redressal mechanism for consumers;
(g) get all information provided by it on its website duly certified by a Company Secretary.
(2) Every direct selling entity shall provide the following information on its website in a clear and accessible manner, which shall be displayed prominently to its users, namely:—
(a) registered name of the direct selling entity;
(b) registered address of the direct selling entity and of its branches;
(c) contact details, including e-mail address, fax, land line and mobile numbers of its customer care and grievance redressal officers;
(d) a ticket number for each complaint lodged through which the complainant can track the status of the complaint;
(e) information relating to return, refund, exchange, warranty and guarantee, delivery and shipment, modes of payment, grievance redressal mechanism and such other information which may be required by the consumers to make informed decisions;
(f) information on available payment methods, the security of those payment methods, the fees or charges payable by users, the procedure to cancel regular payments under those methods, charge-back options, if any, and the contact information of the relevant payment service provider;
(g) total price of any goods or service in single figure, along with its break-up price showing all compulsory and voluntary charges, including delivery charges, postage and handling charges, conveyance charges and the applicable tax;
(h) provide correct and complete information at pre-purchase stage to enable buyers to make informed purchase decisions, and such information shall, in addition to the mandatory declarations to be provided under the Legal Metrology (Packaged Commodities) Rules, 2011, contain the following information, namely:—
(i) the name of purchaser and seller;
(ii) description of goods or services;
(iii) quantity of goods or services;
(iv) the estimated delivery date of goods or services;
(v) the process of refund;
(vi) warranty of the goods;
(vii) exchange or replacement of goods in case of it being defective;
(viii) all contractual information required to be disclosed by or under any law for the time being in force.
(3) No direct selling entity shall adopt any unfair trade practice in the course of its business or otherwise, and shall abide by the requirements specified in any law for the time being in force.
(6) Every direct selling entity shall, having regard to the number of grievances ordinarily received by such entity from persons in India, establish an adequate grievance redressal mechanism and appoint one or more grievance redressal officers for redressal of consumers’ grievances and display the current and updated name, contact details including telephone number, email address and designation of such officer on its website, and the details of its website shall also be prominently printed on the product information sheet or pamphlet
(16) Every direct selling entity shall maintain a record of relevant information allowing for the identification of all direct sellers who have been delisted by the direct selling entity and such list shall be publicly shared on its website.
(17) Every direct selling entity shall become a partner in the convergence process of the National Consumer Helpline of the Central Government
21. From a bare reading of the above provisions of the Rules, it is clear that every direct selling entity has certain mandatory obligations in order to ensure that it is in complete compliance of the law and the interests of consumers is protected against any unfair trade practice. Every direct selling entity should maintain the above-mentioned documents and information on their company website in a clear and accessible manner. The direct selling entities shall:
i. Maintain all the documents and records enlisted in Rule 4 of the Consumer Protection (Direct Selling) Rules, 2021 properly on their website and update the same from time to time.
ii. Get all such information to be provided on the website, verified by the Company Secretary.
iii. Information enlisted in Rule 5(2) of the Consumer Protection (Direct Selling) Rules, 2021 should be prominently displayed on the website in a clear and accessible manner.
iv. Entities must declare compliance with rules and confirm they are not involved in pyramid or money circulation schemes.
v. Maintain adequate redressal mechanisms with designated nodal officer and grievance redressal, and provide clear information regarding active and delisted direct sellers on their website.
22. It may further be mentioned that Rule 4 of The Consumer Protection (E- Commerce) Rules, 2020 provides for duties of e-commerce entities and states that:
4. Duties of e-commerce entities. —
Every e-commerce entity shall establish an adequate grievance redressal mechanism having regard to the number of grievances ordinarily received by such entity from India, and shall appoint a grievance officer for consumer grievance redressal, and shall display the name, contact details, and designation of such officer on its platform.
5. Liabilities of marketplace e-commerce entities. —
(2) Every marketplace e-commerce entity shall require sellers through an undertaking to ensure that descriptions, images, and other content pertaining to goods or services on their platform is accurate and corresponds directly with the appearance, nature, quality, purpose and other general features of such good or service.
(3) Every marketplace e-commerce entity shall provide the following information in a clear and accessible manner, displayed prominently to its users at the appropriate place on its platform:
(a) details about the sellers offering goods and services, including the name of their business, whether registered or not, their geographic address, customer care number, any rating or other aggregated feedback about such seller, and any other information necessary for enabling consumers to make informed decisions at the pre-purchase stage:
Provided that a marketplace e-commerce entity shall, on a request in writing made by a consumer after the purchase of any goods or services on its platform by such consumer, provide him with information regarding the seller from which such consumer has made such purchase, including the principal geographic address of its headquarters and all branches, name and details of its website, its email address and any other information necessary for communication with the seller for effective dispute resolution;
(b) a ticket number for each complaint lodged through which the consumer can track the status of the complaint;
6. Duties of sellers on marketplace. —
(4) Any seller offering goods or services through a marketplace e-commerce entity shall:
(b) appoint a grievance officer for consumer grievance redressal and ensure that the grievance officer acknowledges the receipt of any consumer complaint within forty-eight hours and redresses the complaint within one month from the date of receipt of the complaint;
(5) Any seller offering goods or services through a marketplace e-commerce entity shall provide the following information to the e-commerce entity to be displayed on its platform or website:
(d) all relevant details about the goods and services offered for sale by the seller including country of origin which are necessary for enabling the consumer to make an informed decision at the prepurchase stage;
(e) the name and contact numbers, and designation of the grievance officer for consumer grievance redressal or for reporting any other matter;
23. From a bare reading of the above provisions of the Rules, it is clear that every direct selling entity which is an e-commerce entity or a marketplace e-commerce entity shall comply with the duties and liabilities prescribed under the Consumer Protection (E-Commerce) Rules, 2020. This includes establishing an adequate grievance redressal mechanism, appointing a grievance officer whose name, contact details, and designation shall be displayed on its platform, and ensuring that all sellers affiliated with the platform provide accurate descriptions and relevant details of goods or services, including the country of origin. Such entities must also require their sellers to appoint grievance officers, acknowledge consumer complaints within forty-eight hours, and resolve them within one month. Further, they shall ensure that seller information- such as business name, registration status, address, contact details, and feedback- is prominently disclosed to enable informed consumer decisions, along with the provision of a trackable ticket number for each complaint.
24. It needs to be noted that the opposite party updated all requisite documents, including mandatory compliances under the Consumer Protection (Direct Selling) Rules, 2021, as well as the list of active and delisted direct sellers, after the issuance of the show cause notice and in compliance with the order passed by the Central Authority.
25. The Central Authority further observes that the obligation cast upon a direct selling entity under Rule 5 of the Consumer Protection (Direct Selling) Rules, 2021 is not merely procedural in nature but is intended to ensure that consumers are provided with complete, accurate and verifiable information regarding the entity and the products offered for sale. The investigation conducted by the Director General revealed that the opposite party had failed to furnish complete product information on its website, had not maintained and displayed mandatory disclosures prescribed under the Rules, and had displayed regulatory documents and certifications which were either not duly authenticated or could not be verified at the relevant point of time. The opposite party has itself admitted during the hearing that there existed non-compliance on its part and has subsequently undertaken corrective measures.
26. The Authority is of the view that where a consumer is induced to purchase goods on the basis of information displayed on the website of a direct selling entity, such information must be complete, accurate and capable of verification. Failure to disclose material information and display of incomplete or unverified regulatory credentials creates a misleading impression regarding the nature, characteristics and regulatory compliance of the products and the entity. Such conduct has the effect of impairing the ability of consumers to make an informed choice and falls foul of the obligations prescribed under the Consumer Protection (Direct Selling) Rules, 2021.
27. The Authority also notes the findings of the Director General that the FSSAI licence numbers displayed by the opposite party could not be verified during investigation and that the documents relied upon by the opposite party were not duly authenticated. Further, the certificate relating to the approved drug list produced by the opposite party contained observations and objections of the concerned authority and could not be treated as a final approval document. The subsequent explanations furnished by the opposite party and the corrective measures undertaken thereafter do not detract from the fact that, at the relevant time, consumers were not provided with clear, accurate and readily verifiable information regarding the regulatory status of the products being offered for sale. Such conduct is contrary to the transparency obligations cast upon direct selling entities under Rule 5 of the Consumer Protection (Direct Selling) Rules, 2021.
28. Accordingly, the Central Authority holds that the aforesaid acts and omissions of the opposite party amount to dissemination of misleading information to consumers and constitute a misleading advertisement and unfair trade practice within the meaning of the Consumer Protection Act, 2019.
29. The CCPA has carefully considered the written submissions as well as submissions made by the opposite party during the hearings and investigation reports submitted by the Director General (Investigation) and hereby issues the following direction to the opposite party under Section 21 read with Section 20 of the Consumer Protection Act, 2019:
a) To submit the documents regarding requisite certifications via post.
b) To always mention the information given on the product packaging like list of ingredients, license number, etc. on the description provided in the website as well to ensure that the consumer is easily able to access it.
c) To always be in compliance of the Consumer Protection (Direct Selling) Rules, 2021 and the Consumer Protection Act, 2019 and update the register of active direct sellers and delisted direct sellers regularly.
d) To always, maintain a proper and updated website of the company where all the mandatory documents and relevant information is prominently displayed and readily available to the consumers.
e) To have an adequate grievance redressal mechanism
f) In light of the above discussions in foregoing paras, CCPA finds it necessary to impose a penalty on the opposite party. It has been adequately highlighted in para 21 above, the opposite party in its action of not uploading the documents and the unyielding approach adopted towards consumer rights falls in the scope for levy of penalty envisaged in Section 21(2) of Consumer Protection Act 2019. Considering the facts and circumstances of the case and having regard to the factors enumerated in section 21(7) of Act, the CCPA rules that opposite party shall pay a penalty of 1,00,000 for publishing false and misleading advertisement that affected the consumers as a class.
g) The opposite party shall submit the amount of penalty and a compliance report to CCPA on the above directions within 15 days from the date of this Order.
The above order and directions are passed in exercise of the powers conferred upon CCPA under section 10, 20, 21 of the Consumer Protection Act 2019.
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