Gurugram, May 29, 2018: Snapdeal (Snapdeal.com) - the Jasper Infotech-operated e-Commerce portal, has been taken to court by two of their registered sellers, namely Veepee Electronics and Spacewood Furnishers. This was first reported by ET.
The two sellers, combined, are suing SnapDeal for damages amounting to Rs 38 Crores.
Spacewood Furnishers - a prominent Snapdeal seller, has filed a case in the New Delhi High Court, asking for the recovery of Rs 18 Crores ($2.6 million). On the other hand, Veepee Electronics has sued Snapdeal for damages arising out of non-payment of Rs 5 Crores ($738,000) and another Rs 5 Crores ($2.2 million) in product cost recovery.
The Times Blog did not receive a direct response from Snapdeal's corporate communications team. A spokesperson the SnapDeal team, however, spoke to ET (Economic Times).
“One of the claims made is pending arbitration, and the other represents an attempt by the claimant to misuse police machinery to address commercial disputes. Snapdeal will oppose the claims and defend itself in the appropriate forums.” - Snapdeal to ET
Recent legal troubles for Snapdeal
Snapdeal was earlier given a legal notice for damages worth Rs 300 Crores ($45.8 million) by Quickdel Logistics, the owners of the eCommerce logistics firm GoJavas. This happened in October, 2017. Quickdel had accused Snapdeal of 'criminal breach of trust' in its decision to discontinue the contract that drove growth for Vulcan Express.
At the time, Snapdeal rubbished these claims as 'baseless' and 'unfounded'.
In the financial year ending March 2017 (FY17), Snapdeal posted a 75% increase in its losses. Recently, they have also spun-off Unicommerce (their cloud-operated inventory management subsidiary) to Infibeam for Rs 120 Crores (approximately $17.8 million).
There is a demand to include marketplace policies that protect seller interests within the e-Commerce ecosystem.
The sheer volume of legal complaints issued by sellers against eCommerce portals in India, is mind-blowing.
While online consumer rights remain protected today, more than 50,000 legal complaints were filed against e-Commerce firms in FY17 (between April 2016 and March 2017). This is in huge contrast against FY16 figures (23,955 legal complaints filed between April 2015 and March 2016). The year before, there were 13,812 complaints.
Sellers remain worried
With the recent Flipkart-Walmart deal, trade bodies such as AIOVA, CAIT and Swadeshi Jagran Manch have expressed their disappointment that such deals promote a winning attitude for predatory pricing and underquoting tactics. The Indian government has issued regulations in place to protect the rights of online consumers, but various seller representative bodies have been very vocal in recent times, about the need for a regulatory body that will oversee and monitor activities within eCommerce marketplaces, to ensure that there are no policy violations against their own registered merchants.
Even with the formation of the Ecommerce committee under the 2016 NITI Aayog, sellers maintain that there has been no significant progress to this issue.
Meanwhile, Snapdeal fights it out in court.