Supreme Court stays HC directions against OLX in cheating case regarding motorcycle

New Delhi: The Supreme Court has stayed the Punjab and Haryana High Court direction to OLX India to adopt a screening mechanism in connection with sellers, who could post an advertisement on the online platform.

A bench of Justices U.U. Lalit, S. Ravindra Bhat, and Bela. M. Trivedi said: "Liberty to serve the learned standing counsel for the State. Pending further consideration, the effect and operation of the order under challenge to the extent it issued certain directions against and in relation to the petitioner shall remain stayed."

Senior advocate Siddharth Luthra represented OLX India B.V. in the top court.

The top court was hearing a plea by OLX India B.V. challenging the high court order, which was passed in December last year.

The high court had passed a slew of directions to OLX, in a matter where a person had used another person's identity to post an advertisement on the online platform.

The plea, against the high court order, contended that OLX is an online marketplace, which connects sellers with potential buyers and is nothing more than a passive conduit between a buyer and a seller similar to the classifieds column in a newspaper. The plea added that the platform qualifies as an "intermediary" as defined under Section 2(1)(w) of the Information Technology Act, 2000.

The matter before the high court was that a police official had gone to the petitioner's house and handed him a notice that a person identified as Umar Ali, had used the petitioner's Aadhaar card to post an advertisement for sale of a motorcycle. The petitioner was informed that the impersonator had cheated a person in connection with sale of the motorcycle, and an FIR has been registered against the petitioner.

The petitioner then moved the high court urging it to issue directions for conducting fair and impartial investigation in the FIR.

"Since this court is dealing with such or similar type of cases every day, wherein by using OLX platform, the accused persons are cheating the innocent people, it would be necessary to issue notice to the Home Secretary, Govt of Haryana as well as Director General of Police, Haryana to inform this Court whether any guidelines have been issued with regard to giving an advertisement on a platform like OLX or any other similar agency," said the high court in its order.

The high court directed for filing affidavits explaining whether it is feasible to lay guidelines. It also directed that all the advertisements on OLX platform be deleted and be re-listed only after attaching an open PDF file along with each advertisement, and passed a slew of directions on the nature of documents required.