In re Dial4Trade Technologies Private Limited (CCPA Delhi)
Summary: The Central Consumer Protection Authority (CCPA), by order dated 1 September 2026, examined the listing, hosting, advertising and facilitation of sale of Ammonium Nitrate on the e-commerce platform operated by Dial4Trade Technologies Private Limited. The proceedings concerned alleged misleading advertisement, unfair trade practice and violation of consumer rights under the Consumer Protection Act, 2019 the Explosives Act, 1884 and the Ammonium Nitrate Rules, 2012.
The CCPA stated that it had undertaken a sector-wide examination of e-commerce platforms to ascertain whether hazardous chemicals and explosive substances, including Ammonium Nitrate, were being listed, hosted, advertised or made available for sale online. In relation to Dial4Trade’s platform, the Authority found that Ammonium Nitrate, which had been declared an explosive by the Central Government through Notification No. S.O. 1678(E) dated 21 July 2011 under Section 17 of the Explosives Act, 1884, appeared to be available for purchase. The listing was accompanied by imagery depicting explosions and blast-effects.
According to the CCPA’s preliminary examination, the listing did not disclose material information including valid PESO licence details of the seller, the identity and licensed status of the buyer before completion of the transaction, mechanisms for transaction traceability mandated under the Ammonium Nitrate Rules, 2012, and appropriate cautions or regulatory notices concerning restrictions on possession and use and the penal consequences of unauthorised possession.
The Authority considered that possession and use of Ammonium Nitrate without a valid PESO licence was a penal offence and that presenting the product on a commercial listing without disclosing this position appeared prima facie to fall within the definition of unfair trade practice under Section 2(47) of the Consumer Protection Act, 2019. It further considered that concealment of mandatory licensing information and the legal restrictions applicable to the product appeared prima facie to constitute a misleading advertisement under Section 2(28).
The CCPA issued a Show Cause Notice dated 1 April 2026 alleging violations of Sections 2(28), 2(47) and 2(9) of the Consumer Protection Act, 2019 and Rules 4(3) and 5 of the Consumer Protection (E-Commerce) Rules, 2020. Dial4Trade responded that it operated a Business-to-Business marketplace and merely facilitated interaction between independent third-party sellers and buyers. It contended that it neither manufactured, stored, distributed, supplied nor sold goods, and that the Ammonium Nitrate listing had been uploaded by an independent third-party seller without its prior knowledge or approval. It also stated that the listing was old, that the seller and listing were blocked after the issue was identified, and that the product was added to a Banned Product List.
Dial4Trade further submitted that it undertook seller verification through Aadhaar OTP, email OTP, mobile OTP and registration-related documentation, and that it had strengthened its compliance framework through seller declarations, automated keyword and product flagging, enhanced KYC requirements and regulatory disclaimers. It furnished seller details, KYC records and screenshots and submitted that no direct or indirect transaction had been undertaken by it and that the listing was free of charge.
The CCPA thereafter directed the matter to the Director General (Investigation) under Section 19(1) of the Act. The Investigation Report dated 22 June 2026 recorded, among other matters, that the company had not furnished information sought by the Investigation Wing despite a final reminder; that the platform had hosted and facilitated the sale of Ammonium Nitrate without ensuring regulatory safeguards; that the listings did not disclose or verify the seller’s PESO licence, buyer eligibility or transaction traceability; and that adequate warnings concerning legal restrictions and penal consequences had not been provided.
The Investigation Report further found that subsequent removal of the listings and addition of the product to the Banned Product List did not absolve the company of liability for the period during which the product remained available. It also considered the company’s intermediary status insufficient to avoid responsibility and found deficiencies in seller onboarding, product verification and content moderation. The report concluded that Dial4Trade was in violation of Sections 2(9), 2(28) and 2(47) of the Consumer Protection Act, 2019, Section 6A read with Sections 9B and 9C of the Explosives Act, 1884, Rules 4 and 6(6) of the Ammonium Nitrate Rules, 2012, and Rules 4(3) and 5 of the Consumer Protection (E-Commerce) Rules, 2020.
Dial4Trade subsequently filed written comments and made further submissions denying that it manufactured or sold illegal products. It reiterated that it operated only a B2B portal, that clients could add or delete their own listings, that the impugned listing had been deleted after information was received, and that it had no transaction records relating to Ammonium Nitrate. It also furnished an undertaking dated 19 July 2026 stating that Ammonium Nitrate and other hazardous substances had been removed from its website and that the platform had been restricted to prevent future uploads or listings of such substances.
The CCPA considered the requirements of natural justice and held that they had been complied with, noting the Show Cause Notice, the opportunity to participate in the investigation, sharing of the Investigation Report, written comments and two hearings.
On the substantive issue, the CCPA held that the definition of “advertisement” under Section 2(1) of the Consumer Protection Act, 2019 was sufficiently wide to encompass a product listing hosted on a digital marketplace. It found that the Ammonium Nitrate listing, containing the product description, price, packaging details, explosive imagery and a “Contact Supplier”/purchase option, constituted visual publicity and representation through electronic media, internet or website.
The Authority rejected the contention that the B2B character of the platform removed it from the regulatory framework. It relied upon its examination of the platform, under which products could be purchased in quantities as low as a single unit without minimum-order or institutional-buyer verification. The CCPA therefore found that members of the general public could access and seek to purchase the product. It further held that even if the platform were treated as a B2B marketplace, the Consumer Protection Act, 2019 and Consumer Protection (E-Commerce) Rules, 2020 were not thereby rendered inapplicable.
The CCPA also rejected the contention that responsibility rested exclusively with the third-party seller. The Authority noted that Dial4Trade itself had admitted that it could block the seller, block the listing and add the product to a Banned Product List, demonstrating technical and administrative control over content hosted on the platform.
The Authority further considered the company’s reliance on intermediary safe harbour under Section 79 of the Information Technology Act, 2000. It held that the benefit of safe harbour was conditional upon compliance with due diligence requirements under Section 79(2), and found that the company had not established that adequate due diligence mechanisms were implemented. The CCPA also referred to Rule 3(1)(b) of the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021.
The Authority found that the explosive imagery accompanying the listing was not merely passive hosting and could induce or encourage consumer interest in purchasing the product. It also noted that no material had been placed on record showing legal or regulatory action against the concerned seller, such as lodging a police complaint or reporting the matter to PESO or other statutory authorities.
In relation to consumer rights, the CCPA held that Section 2(9) of the Consumer Protection Act, 2019, including the right to be protected against marketing of goods, products or services hazardous to life and property, was attracted. It held that listing and openly marketing Ammonium Nitrate without verifying the seller’s licence or buyer eligibility exposed consumers to a hazardous product without safeguards required by law.
The Authority also examined Section 2(28), which defines “misleading advertisement”, including an advertisement that is likely to mislead consumers as to the nature, substance, quantity or quality of a product, conveys a representation which would constitute an unfair trade practice, or deliberately conceals important information. It held that the listing presented Ammonium Nitrate like an ordinary and unregulated product, while not disclosing the licensing requirements or penal consequences associated with unauthorised possession. The CCPA concluded that the listing constituted a misleading advertisement.
On Section 2(47), the Authority held that presenting the product as freely purchasable while withholding material information concerning lawful acquisition and possession amounted to an unfair and deceptive practice. It also held that Rules 4(3) and 5 of the Consumer Protection (E-Commerce) Rules, 2020 applied notwithstanding the B2B characterisation of the platform and the third-party origin of the listing.
The CCPA clarified that the licensing, enforcement and penal provisions under the Explosives Act, 1884 and rules made thereunder fell within the jurisdiction of PESO and other competent authorities. The present Order, it expressly stated, did not record or determine criminal liability under the Explosives Act, 1884 or the Ammonium Nitrate Rules, 2012. Those provisions were considered relevant to establish the legal restrictions applicable to Ammonium Nitrate and the materiality of the information that ought to have been disclosed to consumers.
The Authority found violations of Section 2(9), Section 2(28), Section 2(47), Rule 4(3) and Rule 5 of the Consumer Protection (E-Commerce) Rules, 2020, read with the relevant provisions of the Explosives Act, 1884 and Ammonium Nitrate Rules, 2012 insofar as those latter provisions bore upon the materiality of the concealed information and adequacy of safeguards.
While determining the penalty, the CCPA referred to Section 21 of the Consumer Protection Act, 2019 and the factors specified in Section 21(7), including the population and area affected, frequency and duration of the offence and vulnerability of the affected class. It treated the proceeding as the first proceeding of its kind against the opposite party before the Authority but identified aggravating factors including the nature of Ammonium Nitrate as a statutorily classified explosive, the explosive imagery accompanying the listing, non-cooperation with the Investigation Wing, failure to furnish information concerning quantities sold and licences verified, inconsistent explanations regarding removal of the listing, and failure to act until regulatory intervention.
As a mitigating factor, the CCPA considered that Dial4Trade had blocked the concerned seller’s account, added the product to its Banned Product List, strengthened seller-onboarding and content-moderation mechanisms, and that the platform presently blocked searches for “Ammonium Nitrate”.
Having regard to the nature and gravity of the violations, vulnerability of consumers and the public at large, the pan-India reach of the platform, the duration for which the listing remained available and the company’s failure to cooperate with the investigation, the CCPA held that a penalty at the higher end of the range available under Section 21 was warranted.
The CCPA consequently directed Dial4Trade to immediately discontinue listing, hosting, advertising or facilitation of sale of Ammonium Nitrate or any other substance classified as an explosive under the Explosives Act, 1884 or otherwise regulated under applicable law. It imposed a penalty of Rs. 10,00,000/- and directed submission of a compliance report concerning the directions within 15 days of receipt of the Order.
FULL TEXT OF THE JUDGMENT/ORDER OF CENTRAL CONSUMER PROTECTION AUTHORITY
1. The Central Consumer Protection Authority (hereinafter referred to as ‘CCPA’ or ‘the Authority’) has been established under Section 10 of the Consumer Protection Act, 2019 (hereinafter referred to as ‘the Act’) to regulate matters relating to violation of consumer rights, unfair trade practices and false or misleading advertisements prejudicial to the interest of the public and consumers and to promote, protect and enforce the rights of consumers as a class. Section 18(1) of the Act provides that the Central Authority shall ensure that no false or misleading advertisement is made of any goods or services, prevent unfair trade practices and ensure that no person engages in unfair trade practices. Section 2(9) of the Act further recognises the right of consumers to be protected against the marketing of goods, products, or services which are hazardous to life and property.
2. In exercise of its powers under Sections 18 and 19 of the Act, the CCPA undertook a sector-wide examination of the various e-commerce platforms, with a view to ascertaining whether hazardous chemicals, explosive substances and related precursors including Ammonium Nitrate, Gun Powder, Picric Acid and Pentaerythritol Tetranitrate (PETN) which are regulated, restricted or prohibited under the Explosives Act, 1884, the rules framed thereunder and other applicable law were being listed, hosted, advertised or made available for sale online.
3. During such preliminary inquiry, the CCPA observed that several e-commerce entities and online platforms permitted the listing, advertisement and facilitation of sale of such regulated and hazardous substances thereby enabling access to highly sensitive materials without appropriate regulatory disclosures, warnings or traceability mechanisms, and exposing consumers and the public at large to serious safety and security risks.
4. In the course of the said examination, the CCPA examined the e-commerce platform operated by Dial4Trade Technologies Private Limited (hereinafter ‘the opposite party’) and observed that Ammonium Nitrate, a substance declared to be an ‘explosive’ by the Central Government vide Notification No. S.O. 1678(E) dated 21st July, 2011, issued under Section 17 of the Explosives Act, 1884, appeared to be listed, hosted, advertised and made available for purchase on the said platform. It was also observed that the impugned listing was accompanied by photographic imagery depicting explosions and blast-effects, displayed alongside the product description. Upon such preliminary examination, it was observed that the impugned listing(s) did not appear to disclose the following material information to consumers:-
i. Valid PESO (Petroleum and Explosives Safety Organisation) licence details of the seller.
ii. Identity and licensed status of the buyer prior to completion of the transaction.
iii. Mechanisms for ensuring traceability of transactions, as mandated under the Ammonium Nitrate Rules, 2012.
iv. Appropriate disclosures, cautions, or regulatory notices regarding the legal restrictions on the possession and use of the said substance and the penal consequences of unauthorised possession under the Explosives Act, 1884.
5. It is relevant to note that the possession and use of Ammonium Nitrate without a valid licence from PESO is a penal offence under law. The representation of such a product on a commercial listing, without disclosure of this position, appears to fall prima facie within the definition of ‘unfair trade practice’ under Section 2(47) of the Act, inasmuch as it involves a representation likely to be deceptive as to the lawful uses, characteristics and legality of the product.
6. The listing, hosting, advertising and facilitation of sale of Ammonium Nitrate on the opposite party’s platform, without disclosure of material information relating to the mandatory licensing requirements under the Ammonium Nitrate Rules, 2012 and the penal consequences under the Explosives Act, 1884, appears, prima facie, to constitute a ‘misleading advertisement’ under Section 2(28) of the Act, in that it appears to conceal important information and convey an implied representation likely to mislead consumers as to the nature, legality and permissible use of the product, which, if made by the seller, would amount to an unfair trade practice.
7. Rule 4(3) of the Consumer Protection (E-Commerce) Rules, 2020 provides that no e-commerce entity shall adopt any unfair trade practice in the course of business on its platform or otherwise and Rule 5 of the said Rules requires marketplace e-commerce entities to ensure that sellers provide accurate descriptions of goods and all relevant information necessary for consumers to make informed decisions, including disclosures relating to the legal status of the goods offered. The alleged failure to ensure compliance with the aforesaid obligations, in respect of a regulated substance, appeared to attract contravention of the said Rules.
8. It may be noted that such impugned concealment of essential regulatory information deprives a consumer of any means of ascertaining, at the pre-purchase stage, that a restricted and hazardous product is being offered for sale on the platform and that the same cannot lawfully be sold, purchased or possessed without the requisite licence/certification. Under the Consumer Protection Act, 2019, the Consumer Protection (E-Commerce) Rules, 2020 and the applicable Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022, an e-commerce entity is obligated to place all such material information before the consumer in a clear and upfront manner at the pre-purchase stage, including whether the goods offered for sale and the manner of their sale, are compliant with applicable law.
9. The listing of Ammonium Nitrate for open and seemingly unrestricted commercial sale on an e-commerce platform, without such disclosures, appears to impinge upon the consumer’s right under Section 2(9) of the Act, namely, the right to be protected against the marketing of goods, products, or services which are hazardous to life and property.
10. From the preliminary inquiry and having regard to the examination recorded above, the CCPA was satisfied that the practices observed on the opposite party’s platform prima facie appeared to violate the rights of consumers and constituted misleading advertisement and unfair trade practice within the meaning of the Act impacting consumers as a class.
11. The availability of Ammonium Nitrate for listing and facilitation of sale on the platform raised concerns regarding the due diligence, monitoring and compliance mechanisms of the opposite party, having regard to the specific licensing, handling, delivery and traceability requirements prescribed under the Ammonium Nitrate Rules, 2012. In view of the potential implications for consumer safety and public security, it was considered necessary to ascertain the duration and extent of the alleged contravention.
12. The screenshots of the practice examined by the Authority are annexed herewith as Annexure-1. Taking cognizance of the above and in exercise of powers under the Act, the CCPA issued a Show Cause Notice dated 01st April 2026 to the opposite party calling upon it to furnish a response along with all necessary supporting documents regarding the alleged violations. The said notice alleged violation of the following provisions:
i. Section 2(28) of the Consumer Protection Act, 2019: Misleading advertisement
ii. Section 2(47) of the Consumer Protection Act, 2019: Unfair trade practice0
iii. Section 2(9) of the Consumer Protection Act, 2019: marketing of a good hazardous to life and property
iv. Rule 4(3) and Rule 5 of the Consumer Protection (E-Commerce) Rules, 2020
13. In response to the Show Cause Notice, the opposite party vide email dated 21 April, 2026 submitted the following:-
i. That it operates as a Business-to-Business (B2B) marketplace platform and acts merely as an intermediary facilitating interaction between independent third-party sellers and prospective buyers and that it neither manufactures, stores, distributes, supplies nor sells any goods through the platform.
ii. That the listing relating to Ammonium Nitrate had been uploaded by an independent third-party seller without the prior knowledge or approval of the platform, that the impugned listing was an old listing and that the platform does not promote, endorse or encourage the sale of regulated or hazardous substances.
iii. That upon identification of the issue, the concerned seller’s account was blocked, the product listing was blocked and the product was added to a ‘Banned Product List’ to prevent future listings of the same nature.
iv. That it undertakes seller verification through Aadhaar OTP, email OTP, mobile OTP and collection of registration-related documentation and that any omission in disclosures was attributable to information furnished by third-party sellers.
v. That it had strengthened its compliance framework by implementing mandatory seller declarations for regulated products, an automated keyword and product-flagging mechanism, enhanced KYC requirements for sensitive categories and regulatory disclaimers for restricted products.
vi. That it furnished seller details, KYC records and screenshots of the search page vide email dated 24.06.2026 and reiterated that no direct or indirect transaction was undertaken by it and that listing was free of charge.
vii. That there was no intention to facilitate unlawful trade in regulated substances, that corrective measures were undertaken in good faith and that the Authority may take a lenient view having regard to such corrective action.
14. The material and data furnished by the opposite party prima facie indicated that a listing relating to a regulated and hazardous explosive substance was available on its platform. This raised serious concerns regarding compliance with the statutory framework governing the sale, listing, advertisement, disclosure and facilitation of access to regulated substances through digital platforms.
15. Having examined the aforesaid reply, CCPA found it necessary to have the matter investigated in detail by DG (Investigation). Accordingly, in exercise of powers under Section 19(1) of the Act, the CCPA vide letter dated 11th May, 2026 requested Director General (Investigation) for detailed investigation.
16. The DG (Investigation) submitted its Investigation Report on 22nd June, 2026. The key findings of the Investigation Report are summarized below:
i. The Investigation Wing sought information and relevant documents from the company regarding listing/hosting of the said products on its platform. However, the company did not furnish any response to the said communication despite final reminder.
ii. The company has not cooperated with the investigation proceedings. This reflects willful non-compliance and disregard towards regulatory authority.
iii. During the course of the investigation, it was observed that the company hosted and facilitated the sale of Ammonium Nitrate on its platform without ensuring mandatory regulatory safeguards. The listings did not disclose or verify the seller’s valid PESO licence, the buyer’s eligibility, or transaction traceability mechanisms. Further, no adequate warnings regarding legal restrictions and penal consequences associated with unauthorised possession and use were provided to consumers.
iv. The omission of such material information specifically regarding the licensing requirements, buyer’s eligibility and lawful usage conditions deprives consumers of essential information required to make informed purchasing decisions and exposes them to legal and safety risks.
v. Although the company subsequently removed the impugned listings and added in Banned Product List, such removal does not absolve it of liability for the period during which the products remained available for sale. Subsequent corrective measures cannot negate or cure the violation that had already occurred.
vi. It was further observed that the listings prominently displayed images depicting explosions and blast-related effects. Considering the highly regulated nature of Ammonium Nitrate, such imagery is inappropriate and capable of conveying misleading impressions regarding its explosive use. The presence of such content reflects a lack of effective review and monitoring of seller-uploaded material by the company.
vii. The company’s reliance on its status as an intermediary is not sufficient to avoid responsibility. As a marketplace e-commerce entity facilitating transactions between buyers and sellers, it is required to exercise reasonable due diligence and oversight over listings hosted on its platform. The company cannot disclaim responsibility solely because the products were uploaded by third-party sellers.
viii. The company’s contention that the impugned listings were uploaded by third-party sellers without its prior knowledge and were old in nature is not tenable. The ability of sellers to upload and maintain listings of a regulated substance without adequate scrutiny reflects gross negligence and deficiencies in the company’s seller onboarding, product verification and content moderation mechanisms.
ix. Such deficiencies reflect a failure on the part of the company to exercise the due diligence expected of a marketplace platform dealing with regulated products. This responsibility cannot be avoided or contractually delegated to third-party sellers.
x. Further, the company failed to furnish proper documentary evidence to the CCPA regarding the quantity of Ammonium Nitrate sold by each seller on its platform during the last two years, as well as copies of valid licences issued by the competent authority that were verified for each such seller.
xi. Dial4Trade Technologies Private Limited is in violation of Sections 2(9), 2(28) and 2(47) of the Consumer Protection Act, 2019, as it facilitated the listing and sale of Ammonium Nitrate without disclosing material information. Such concealment exposed consumers to legal and safety risks, constituted a misleading advertisement and amounted to an unfair trade practice.
xii. The company is further in violation of Section 6A read with Sections 9B and 9C of the Explosives Act, 1884, by facilitating the listing and sale of Ammonium Nitrate without ensuring that transactions were restricted to duly authorised and licensed persons as required under the applicable regulatory framework.
xiii. The company has failed to ensure compliance with Rule 4 and Rule 6(6) of the Ammonium Nitrate Rules, 2012, by hosting listings of a regulated substance without verifying the requisite PESO licence for lawful sale, distribution and possession and without implementing adequate mechanisms to ensure that Ammonium Nitrate is delivered only to eligible licence holders or procured from duly authorised persons.
xiv. The company’s conduct demonstrates a lack of due diligence expected from a marketplace e-commerce entity and is in violation of Rule 4(3) and Rule 5 of the Consumer Protection (E-Commerce) Rules, 2020, as it failed to ensure that no unfair trade practice was adopted on its platform and did not ensure provision of accurate and complete disclosures, thereby resulting in failure to enable informed consumer decision-making in respect of a regulated product.
xv. In view of the above, as per the investigation conducted, a case relating to the violations under the Consumer Protection Act, 2019 and abovementioned statutes stands established.
17. Thereafter, the investigation report was shared with the opposite party on 24th June, 2026 and afforded an opportunity to file written comments thereon, along with a hearing. The opposite party, however, failed to submit its comments within the stipulated time.
18. The CCPA conducted a hearing on 15th July 2026, wherein Mr. Hemant Verma, Advocate, appeared on behalf of the opposite party. During the course of the hearing, he submitted that the opposite party’s comments on the Investigation Report had been filed the same day vide email dated 15th July, 2026. The Authority took the said comments on record and granted the opposite party a further opportunity of hearing on 21st July, 2026.
19. The opposite party’s reply dated 15th July, 2026 in response to the Investigation Report as under:
i. The opposite party denied the finding that it manufactures or sells any illegal item/product on its B2B portal, a screenshot whereof was annexed as Annexure-1 to its reply.
ii. The opposite party reiterated that the Show Cause Notice dated 01st April, 2026 had already been replied to vide its email dated 21st April, 2026 and annexed a screenshot of the said forwarded email along with its attachments as Annexure-2 to its reply.
iii. The opposite party submitted that it follows the Consumer Protection Act, 2019, the Consumer Protection (E-Commerce) Rules, 2020, the Explosives Act, 1884, and the Ammonium Nitrate Rules, 2012, that it runs only a B2B portal to promote client business and does not itself list any product on behalf of any client. Further, opposite party submitted that a client/seller may add or delete its own product listings at its own discretion and that the opposite party does not place any product into a listed category. It further submitted that upon receiving information regarding the Ammonium Nitrate listing the same was deleted “on the spot,” and that no hazardous substance presently stands listed on its portal, annexing a screenshot in support as Annexure-3 to its reply.
iv. The opposite party denied having received any email dated 20th May, 2026 from the Investigation Wing calling upon it to furnish relevant documents/evidence before the Investigating Officer.
v. The opposite party submitted that it maintains internal policies and conditions requiring its sellers to comply with the Consumer Protection Act, 2019, the Consumer Protection (E-Commerce) Rules, 2020, the Explosives Act, 1884, the Ammonium Nitrate Rules, 2012, and other applicable laws as amended and notified from time to time and annexed a copy of such internal policy as Annexure-4.
vi. The opposite party admitted having received an email dated 24th June, 2026 from the CCPA directing submission of relevant documents or evidence and intimating a hearing scheduled for 15th July, 2026 at 4:00 PM through video-conferencing, the link for which was shared by the CCPA on 2nd July, 2026.
vii. The opposite party submits that it is the client’s own responsibility to upload products in accordance with the opposite party’s terms and conditions and applicable law and the company does not sell or manufacture any hazardous substance and is not required to hold any related licence.
viii. The opposite party further submitted that it has no knowledge of when the impugned hazardous substance was uploaded on its portal by the concerned client and that upon acquiring such knowledge, it deleted the listing. It submitted that Ammonium Nitrate was uploaded by its client and not by the opposite party itself and that the said client thereafter did not avail any further services and left the platform, becoming what the opposite party termed a “dead client” in consequence of which it was unable to ascertain what product had in fact been uploaded by that client.
ix. The opposite party submitted that, upon a review of its portal records, it found no transaction or dealing of any kind made with any client for the purchase of Ammonium Nitrate, or any other hazardous substance through its marketplace.
20. Subsequently, the opposite party furnished an Undertaking dated 19th July, 2026 wherein it was undertaken that the opposite party had already removed Ammonium Nitrate and other hazardous substances from its website www.dial4trade.com, including from all webpages, catalogue and product pages and had restricted its platform so as to prevent its clients/customers from uploading any Ammonium Nitrate or hazardous substance. The company had completely prohibited the listing, hosting, advertising, promotion, display, publication or facilitation of Ammonium Nitrate or any other regulated explosive substance on its platform. The Company would continuously monitor its platform to ensure that no such substance is uploaded or listed, in compliance with the Consumer Protection Act, 2019, the Consumer Protection (E-Commerce) Rules, 2020, the Explosives Act, 1884 and the Ammonium Nitrate Rules, 2012, or any other applicable law or direction of a competent authority; and the opposite party assured full cooperation to the Authority and undertook not to upload or permit the listing of any hazardous substance or Ammonium Nitrate on its platform in future.
21. Thereafter, pursuant to the adjournment granted on 15th July, 2026, the matter was listed for another hearing on 24th July, 2026 wherein Mr. Hemant Verma, Advocate, appeared on behalf of the opposite party. No fresh submissions, material or documents were placed on record. Mr. Hemant Verma reiterated the objections already considered above and no further explanation was offered to address the deficiencies and adverse findings recorded in the Investigation Report, including the failure to furnish details of quantities sold, licences verified, or any legal action taken against sellers.
22. The principles of natural justice require that the opposite party be informed of the allegations against it and be given a reasonable opportunity to respond before an order is passed.
23. In the present matter, these requirements have been duly complied with: the opposite party was served with a detailed Show Cause Notice dated 1st April, 2026 to which it replied on 21st April, 2026; it was given an opportunity to participate in the investigation; the Investigation Report was shared with it on 24th June, 2026, in response to which it filed written comments dated 15th July, 2026; and it was afforded two opportunities of hearing, on 15th July, 2026 and 24th July, 2026 and was represented by counsel on both occasions. The Authority is satisfied that the requirements of natural justice and due process have been duly complied with.
24. Section 2(1) of the Act defines “advertisement” to mean “any audio or visual publicity, representation, endorsement or pronouncement made by means of light, sound, smoke, gas, print, electronic media, internet or website and includes any notice, circular, label, wrapper, invoice or such other documents.” The definition is wide and technology-neutral and expressly extends to publicity or representation made through “electronic media, internet or website, without confining the term to conventional print or broadcast media. A product listing hosted on a digital marketplace, being a visual representation communicated to the public through the internet, therefore falls within Section 2(1) of the Act.
25. In the present case, the impugned listing of Ammonium Nitrate was hosted on the opposite party’s e-commerce platform, accessible over the internet and comprised a visual representation of the product including its description, price, packaging details, accompanying imagery depicting explosions and blast-effects and a “Contact Supplier’/purchase option inviting prospective buyers to transact. Such a listing constitutes a “visual publicity” and “representation” made by means of “electronic media, internet or website” within the meaning of Section 2(1) of the Act and accordingly qualifies as an “advertisement” thereunder. The opposite party, by hosting, displaying and disseminating such a listing on its platform, is accordingly the medium through which the advertisement was published and made available to consumers.
26. Upon final consideration of the entirety of the proceedings, CCPA further finds that the opposite party’s characterisation of its platform as being exclusively a Business-to-Business marketplace does not eliminate its regulatory non-compliance, since the obligations in issue relate to due diligence, monitoring, verification and disclosure and are not contingent upon the platform itself effecting a sale.
27. In this regard, the CCPA’s own examination of the opposite party’s platform established that products, including the category under which the impugned listing appeared, could be purchased in quantities as low as a single unit, without any minimum order quantity, bulk-procurement condition, or institutional-buyer verification ordinarily associated with a genuine business-to-business model. This establishes that any individual member of the general public and not merely an institutional or business buyer, could access and seek to purchase the impugned product through the platform and undermines the opposite party’s characterisation of its platform as exclusively B2B in nature.
28. In any event, even if the platform were to be accepted as a B2B marketplace, this would not, by itself, take it outside the ambit of the Consumer Protection Act, 2019 and Consumer Protection (E-Commerce) Rules, 2020. The definition of ‘e-commerce entity’ under the said Rules is not confined to platforms dealing with retail consumers alone and Rule 4(3) and Rule 5 thereof cast obligations upon every marketplace e-commerce entity, without any exception carved out for platforms that self-designate their transactions as business-to-business, more so where, as in the present case, the goods concerned are statutorily regulated and hazardous.
29. CCPA also finds that the opposite party cannot absolve itself of responsibility merely on the ground that the impugned listing was uploaded by an independent third-party seller. This is reinforced by the opposite party’s own admission that, upon identification, it was able to block the seller’s account, block the impugned listing and add the product to a ‘Banned Product List’. This demonstrates that the opposite party possessed full technical and administrative control over the content hosted on its platform, including the ability to review, restrict and remove listings at will and it cannot, in the same breath, contend that the responsibility for ensuring licensing and regulatory compliance rests exclusively with third-party sellers and that it bears no independent responsibility in that behalf.
30. The opposite party’s reliance on the intermediary liability exemption under Section 79 of the Information Technology Act, 2000 is also misplaced, as the benefit of safe harbour thereunder is conditional upon compliance with the due diligence obligations prescribed under Section 79(2) and the opposite party has failed to establish, through any material on record that it had implemented adequate due diligence mechanisms to prevent the listing, promotion or facilitation of access to regulated and hazardous substances on its platform. Nor has the opposite party produced material demonstrating the actual functioning of its seller verification mechanisms, approval workflows, compliance checks, or other safeguards allegedly implemented; and its own admission that it became aware of the regulatory implications of the impugned listing only upon receipt of the Show Cause Notice further establishes the absence of adequate monitoring, compliance and regulatory review mechanisms in respect of products listed on its platform. This failure is compounded by the opposite party’s non-compliance with Rule 3(1)(b) of the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 which independently obligates every intermediary to exercise due diligence to ensure that unlawful information, including the sale of goods prohibited under applicable law, is not hosted, displayed, uploaded, published or transmitted on its platform.
31. CCPA further finds that the impugned listing was accompanied by imagery depicting explosions and blast-effects. Such imagery was calculated to visually depict the destructive/explosive potential of the product and had the effect of drawing consumer attention to a highly regulated and hazardous substance. The presence of such imagery, without any corresponding cautionary disclosure, establishes that the manner of listing was not a case of merely passive hosting but was of a nature that could induce or encourage consumer interest in purchasing the product; an e-commerce platform cannot claim to be a neutral, passive intermediary once it hosts such content and the plea of being a mere B2B facilitator cannot be availed to evade responsibility in this regard.
32. CCPA additionally notes that the opposite party has not placed any material on record to show that it took any legal or regulatory action, such as lodging a police complaint/FIR, or reporting the matter to PESO or other statutory authorities, against the concerned seller for listing a statutorily prohibited explosive substance; mere blocking of the seller’s account, without any further follow-up action, does not, by itself, demonstrate discharge of the due diligence expected of a marketplace e-commerce entity dealing, even inadvertently, in a regulated and hazardous substance.
33. Further, the impugned listing was removed/blocked only after initiation of regulatory proceedings, establishing that the product remained available and accessible on the platform for a period prior to intervention by the Authority. In this regard, the Authority holds that the Ammonium Nitrate Rules, 2012 have been in force for well over a decade and an e-commerce entity operating a digital marketplace in India is not entitled to await a notice or intervention from CCPA before ensuring that goods regulated and restricted under the law of the land are not offered, listed or made available for sale on its platform; the obligation to comply with such law is a continuing and independent one and does not arise only upon receipt of a regulatory communication.
34. CCPA further observes that the opposite party’s compliance framework, as described in its submissions namely, reliance on seller declarations, a ‘Banned Product List’ and removal of listings upon identification operates on a reactive, post-violation basis and presupposes that an unlawful listing must first appear and in some cases be transacted upon, before any corrective action is triggered. Such a framework is inherently insufficient for a marketplace dealing in statutorily regulated and hazardous substances.
35. A consumer browsing an e-commerce platform cannot reasonably be expected to independently verify complex regulatory requirements such as PESO licensing or traceability safeguards; the burden of ensuring that only lawful and compliant products are offered for sale rests upon the platform, not upon the consumer.
36. A compliance model that depends entirely on ex-post detection, complaint, or regulatory intervention, rather than ex-ante verification at the point of listing, impermissibly shifts the burden of legal compliance onto unsuspecting consumers and defeats the preventive object of the Consumer Protection Act, 2019. The continued appearance of the impugned listing, notwithstanding the opposite party’s stated safeguards, demonstrates that reliance on a reactive, strike-based mechanism is, by itself, wholly insufficient to meet the standard of due diligence expected of a marketplace e-commerce entity dealing in regulated and hazardous goods.
37. Section 2(9) of the Act defines ‘consumer rights’ to include, inter alia, the following right, which is squarely attracted in the facts of the present case:-
“(9) “consumer rights” includes,-
(i) the right to be protected against the marketing of goods, products or services which are hazardous to life and property;”
38. Ammonium Nitrate has been declared an explosive under Notification No. S.O. 1678(E) dated 21st July, 2011, issued under Section 17 of the Explosives Act, 1884 and its possession, transport and use are accordingly subject to statutory safeguards and restrictions. Listing and openly marketing such a substance on an e-commerce platform, without verifying the licence of the seller or the eligibility of the buyer, exposes consumers to a hazardous product without the safeguards required by law and violates the consumer right set out in Section 2(9) (i) of the Act extracted above, warranting exercise of the Authority’s powers under Section 18 of the Act in a matter affecting consumers as a class.
39. 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. falsely 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.
40. The impugned listing advertised Ammonium Nitrate for commercial purchase in the same manner as an ordinary and unregulated product, displaying its price, packaging details and a ‘Contact Supplier’ option, without disclosing that its lawful purchase is subject to the requirement of a valid PESO licence or that unauthorised possession may attract penal consequences. By presenting the product thus, the listing created an impression that Ammonium Nitrate was freely and lawfully available for purchase by any visitor to the platform, which is both false and likely to mislead consumers regarding the legal status and permissible use of the product, within sub-clause (ii) of Section 2(28).
41. The same conduct amounts to deliberate concealment of important information under sub-clause (iv) of the Section 2(28) particularly regarding licensing requirements, buyer eligibility, traceability and necessary safety disclosures; and, if such representation were made directly by a seller to a consumer, it would constitute an unfair trade practice, bringing the advertisement also within sub-clause (iii).
42. Further, as noted above, the listing was accompanied by imagery depicting explosions and blast-effects, which was apparently placed alongside the product description with a view to drawing consumer attention to and gaining interest in, the product; such use of imagery reinforces the misleading and inducing character of the advertisement and cannot be dissociated from the opposite party’s liability merely on the plea that it operates a B2B platform, more so where, as found above, the opposite party retained full control over the content on its platform and could and did, remove the listing once it chose to act. In view of the above, the impugned listing constitutes ‘misleading advertisement’ within the meaning of Section 2(28) of the Act.
43. Section 2(47) of the Act defines ‘unfair trade practice’ as a trade practice which, for the purpose of promoting the sale, use or supply of any goods, adopts any unfair method or unfair or deceptive practice. The hosting and facilitation, by the opposite party, of the availability of a substance whose sale is statutorily restricted to licensed and verified persons, on terms indistinguishable from the sale of an ordinary commercial good and without the verification, traceability or disclosure safeguards required by law, is precisely such an unfair and deceptive practice.
44. It promoted the ‘sale’ of the product by presenting it as though freely purchasable, while withholding the material information that its lawful acquisition requires a licence and that unlawful possession is a penal offence – information a reasonable consumer would regard as material to a decision to transact. As recorded in the Investigation Report, this misleading presentation was compounded by the use of imagery depicting explosions and blast-effects, which, rather than cautioning consumers, had the effect of drawing attention to the product. By presenting the product as freely available while concealing material information regarding its lawful purchase and possession, the conduct of the opposite party amounts to an ‘unfair trade practice’ within the meaning of Section 2(47) of the Act.
45. Rule 4(3) of the Consumer Protection (E-Commerce) Rules, 2020 provides that no e-commerce entity shall adopt any unfair trade practice in the course of its business, whether on its platform or otherwise; Rule 5 requires a marketplace e-commerce entity to ensure that sellers provide accurate descriptions of goods and all relevant information necessary for consumers to make informed decisions. As discussed above, the applicability of these Rules is not excluded merely because the opposite party characterises its platform as B2B in nature; nor is the opposite party absolved of responsibility on the ground that the listing was uploaded by a third-party seller, given that the opposite party retains and exercised, the ability to review, restrict and remove such listings.
46. The opposite party’s platform permitted a listing of Ammonium Nitrate which did not accurately disclose the legal restrictions applicable to the product and no material has been placed on record to show that an effective verification mechanism was applied to the listing before it was detected by the CCPA. Accordingly, the opposite party has failed to comply with Rule 4(3) and Rule 5 of the Consumer Protection (E-Commerce) Rules, 2020. The Authority further affirms that the safe harbour available to an intermediary under Section 79 of the Information Technology Act, 2000 is conditional upon fulfilment of the due diligence requirements under Section 79(2) thereof; the opposite party has failed to establish that it exercised such due diligence in relation to the impugned listing and its claim of being merely an intermediary does not, in the facts of the present case, afford it protection from the findings recorded above.
47. It is pertinent to note that Ammonium Nitrate is a highly reactive substance capable of being misused in the manufacture of improvised explosives. Any unauthorised sale, possession, transport, or use of the said substance without adequate safeguards poses a serious threat to public safety and national security, warranting strict regulatory oversight. Section 6A of the Explosives Act, 1884 prohibits the sale or delivery of explosives, including Ammonium Nitrate above the prescribed threshold, to a person not duly authorised or verified; Section 9B provides penal consequences for contravention; and Section 9C provides for liability of companies and persons responsible for the conduct of their business. Rule 4 of the Ammonium Nitrate Rules, 2012 prohibits possession of Ammonium Nitrate for sale without a valid PESO licence and Rule 6(6) prohibits delivery or dispatch of the substance to, or receipt from, any person other than a licence holder.
48. It is important to note that CCPA clarifies that the licensing, enforcement and penal provisions under the Explosives Act, 1884 and the rules made thereunder fall within the jurisdiction of PESO and other competent authorities and the present Order does not record or determine any criminal liability thereunder. These provisions are, however, relevant to the present proceedings inasmuch as they establish the legal restrictions applicable to Ammonium Nitrate and, consequently, the information material to consumers under Section 2(28) of the Act and the safeguards required to be considered by the opposite party while permitting the listing of such a regulated substance, in the context of Section 2(47) of the Act and Rules 4(3) and 5 of the Consumer Protection (E-Commerce) Rules, 2020.
49. The opposite party has admitted that it did not verify seller licences, buyer eligibility, or transaction traceability in relation to the impugned listing; this failure may be dealt with separately by the competent authorities under the regulatory framework governing explosives and independently supports the Authority’s finding that the conduct of the opposite party was misleading and constituted an unfair trade practice under the Consumer Protection Act, 2019.
50. In view of the foregoing analysis, the CCPA finds that the opposite party has violated the following provisions:
i. Section 2(9) of the Consumer Protection Act, 2019: by facilitating the marketing of a good hazardous to life and property.
ii. Section 2(28) of the Consumer Protection Act, 2019: misleading advertisement, inasmuch as the listing concealed material information regarding licensing, buyer eligibility and lawful usage conditions and was likely to mislead consumers as to the legality and permissible use of the product.
iii. Section 2(47) of the Consumer Protection Act, 2019: unfair trade practice, inasmuch as the opposite party adopted a deceptive practice by hosting and facilitating the availability of a regulated explosive substance without the regulatory safeguards mandated by law.
iv. Rule 4(3) and Rule 5 of the Consumer Protection (E-Commerce) Rules, 2020.
v. The aforesaid provisions of the Consumer Protection Act, 2019 and the Consumer Protection (E-Commerce) Rules, 2020, read with Section 6A read with Sections 9B and 9C of the Explosives Act, 1884 and Rule 4 and Rule 6(6) of the Ammonium Nitrate Rules, 2012, insofar as the latter provisions bear upon the materiality of the concealed information and the adequacy of the safeguards required, as discussed above; it is clarified that this Order does not record or determine any liability under the Explosives Act, 1884 or the Rules made thereunder, which falls within the jurisdiction of the competent authorities under that law.
51. The CCPA is empowered under Section 21 of the Consumer Protection Act, 2019 to issue directions to the advertiser of a false or misleading advertisement to discontinue or modify the advertisement and, if necessary, to impose by order a penalty which may extend to ten lakh rupees and for every subsequent contravention, to a penalty which may extend to fifty lakh rupees. Section 21(7) of the Act requires the Authority, while determining such penalty, to have regard to –
i. the population and the area impacted or affected by such offence;
ii. the frequency and duration of such offence;
iii. the vulnerability of the class of persons likely to be adversely affected by such offence.
52. The CCPA notes that this is the first proceeding of its kind against the opposite party before it within the meaning of Section 21 of the Act. At the same time, the Authority takes serious note of the following aggravating factors:
i. The substance in question is not an ordinary consumer good but a statutorily classified explosive, the unregulated availability of which carries grave implications for public safety and national security, placing the present violation, in terms of potential severity of harm, in a materially different category from an ordinary misleading advertisement;
ii. The opposite party’s own platform allowed the listing of the substance to be accompanied by imagery depicting explosions and blast-effects, reflecting not merely a passive lapse but content that could induce consumer interest and a serious failure of content moderation;
iii. The opposite party did not cooperate with the Investigation Wing’s communications dated 20th May, 2026 and 26th May, 2026;
iv. The opposite party failed to furnish material information, including data on quantities sold and licences verified, that lay within its own knowledge and control, despite specific directions to furnish the same and produced no evidence of any legal or regulatory action taken against the concerned seller;
v. The inconsistent explanations given by the opposite party regarding the time and circumstances of removal of the impugned listing raise doubts about the reliability of its account and indicate deficiencies in its record-keeping;
vi. The opposite party allowed the impugned listing to remain available and did not act until regulatory intervention, notwithstanding that the licensing and traceability requirements under the Ammonium Nitrate Rules, 2012 have been in force for well over a decade and it is not open to an e-commerce entity to await a notice from CCPA before ensuring that goods regulated and restricted under the law of the land are not offered for sale on its platform.
53. On the other hand, the CCPA also takes note, as a mitigating factor, that after the matter was brought to its notice, the opposite party blocked the concerned seller’s account and the impugned listing added the product to its Banned Product List and stated that it had strengthened its seller-onboarding and content-moderation mechanisms; it is also noted that, as verified, the platform presently blocks searches for the term ‘Ammonium Nitrate’.
54. Having regard to the nature and gravity of the violations, the vulnerability of consumers and the public at large to the risks arising from unregulated access to an explosive substance, the pan-India reach of the opposite party’s e-commerce platform, the duration for which the impugned listing remained available and the opposite party’s failure to cooperate with the investigation or to demonstrate any legal action against the concerned seller, the CCPA is of the view that a penalty at the higher end of the range available for a contravention under Section 21 of the Act is warranted.
55. In view of the above, in exercise of powers under Sections 20 and 21 read with Section 10 of the Consumer Protection Act, 2019, the CCPA hereby issues the following directions:
i. The opposite party shall immediately discontinue the listing, hosting, advertising, or facilitation of sale of Ammonium Nitrate, or of any other substance classified as an explosive under the Explosives Act, 1884, or otherwise regulated under any applicable law, on its platform.
ii. The opposite party is directed to pay a penalty of Rs. 10,00,000/- (Rupees Ten Lakh) for the violations detailed in the foregoing paragraphs.
iii. The opposite party shall submit a compliance report in respect of directions (i) to (ii) above within 15 days of receipt of this Order.
