Karnataka moves Supreme Court against Snapdeal over sale of erectile dysfunction tablets

The Supreme Court has sought Snapdeal's response to a plea filed by the Karnataka government challenging the quashing of criminal proceedings against the e-commerce platform and its directors over the sale of a prescription drug through its platform without a licence or prescription [State of Karnataka v. Kunal Bahl & Ors].

A Bench of Justices Ahsanuddin Amanullah and R Mahadevan on July 15 issued notice to Snapdeal on a plea filed by the Karnataka government challenging a Karnataka High Court judgment that had set aside the criminal proceedings against Snapdeal and its two directors, Kunal Bahl and Rohit Kumar Bansal.

"Issue notice both on the Special Leave Petition as well as on the application seeking condonation of delay," the Bench ordered.

A drug by the name Suhagra Tablet was being sold through Snapdeal, an online site that provides a platform for the online marketing and sale of consumer products.

Suhagra is a prescription medicine used to treat erectile dysfunction in men.

The case arose after an online order was placed through Snapdeal's website for Suhagra-100 Tablets.

The prosecution alleged that the medicine was sold by third-party seller M/s Herbal Healthcare, which did not possess a valid licence to sell the drug. It further alleged that the Schedule H medicine was supplied without requiring a doctor's prescription, in violation of the Drugs and Cosmetics Rules, 1945.

Following the transaction, a drugs inspector filed a criminal complaint before the judicial magistrate at Belagavi alleging violations of the Drugs and Cosmetics Act, 1940.

The magistrate subsequently took cognisance of the complaint and issued summons to Snapdeal, its directors and the other accused.

Snapdeal and its directors challenged the proceedings before the Karnataka High Court, which quashed the criminal case.

The High Court held that the magistrate's order taking cognisance did not adequately reflect application of mind.

It further held that Snapdeal, as an intermediary operating an online marketplace, was entitled to the safe harbour protection under Section 79 of the Information Technology Act, 2000, having exercised the due diligence required under the provision.

The Court added that the e-commerce platform could not be held liable for the acts or omissions of a third-party vendor using its platform.

Aggrieved by the ruling, the Karnataka government approached the Supreme Court.

Representing the State, Additional Advocate General (AAG) Aman Panwar contended that the High Court erred in extending the protection under Section 79 of the Information Technology Act to prosecutions under the Drugs and Cosmetics Act.

He argued that the safe harbour provision under the Information Technology Act cannot shield intermediaries from prosecution under other penal statutes enacted to protect public health and safety.

He further submitted that, even if Section 79 were held applicable, Snapdeal had failed to comply with the due diligence requirement under Section 79(2)(c) by permitting the online sale of a prescription drug.

After hearing the submissions, the Court issued notice to Snapdeal and the other respondents and listed the matter for further hearing on August 10.

AAG Aman Panwar with advocates Manav Kaushik and Sanchit Garga appeared for the State of Karnataka.

Senior Advocate Siddharth Aggarwal appeared for the respondents.

[Read Order]