In some circumstances, the provision exempts the intermediary from obligation. It indicates that an intermediary is not responsible for any data, information, or communication links provided by a third party or hosted by the intermediary.
In the case of Flipkart Internet Private Ltd. Vs. State of NCT of Delhi and Anr. The comments were made while a FIR against e-commerce site Flipkart was being dismissed. In the FIR, the complainant claimed that unlicensed individuals were peddling counterfeit DC DERMACOL items on the Flipkart and Amazon India platforms.
In the lawsuit, it was claimed that Flipkart was defrauding customers and selling DC DERMACOL cosmetics items illegally by doing the same thing with the help of bogus and unlicensed re-sellers.
Section 63 of The Copyright Act of 1957 and Sections 103 and 104 of The Trade Marks Act 1999 were both used to register the FIR. In accordance with section 2(1)(w) of the IT Act, Flipkart is a middleman.
According to the Court, the intermediary has a duty to use reasonable care and to abide by any laws and regulations that may be established by the Government. Rule 3(1) of the IT Rules was mentioned, which specifies that an intermediary must exercise due diligence in performing its obligations.
The Court did point out that the I.T. Act has not yet stated that failure to comply with the Guidelines or Rules constitutes an offense.
The Court's concern was whether the intermediary would qualify for immunity from prosecution if Rule 3 of the I.T. Guidelines/Rules' "due diligence" criterion was met.
The Court believed that the bar for determining criminal responsibility was much greater than that under civil law, which only required proof beyond a reasonable doubt.
The Court believed that Flipkart met with Rule 3(2) requirement for due diligence in this particular circumstance.
Additionally, it stated that the current case had advanced just because Flipkart and another platform were listed in the FIR, leaving out any other websites or organizations that may have been involved in the sale of allegedly false or illegal goods.
The court allowed the petition and hence held that "This is one such case where the registration of an FIR against an intermediary would lead to miscarriage of justice. Therefore, this Court finds itself justified in allowing the present petition and quashing the FIR qua the petitioner. However, further investigations are not barred in order to ascertain the identity of those who are infringers and/or unauthorized sellers of the products of the Czech company."