CCPA imposes ₹10 lakh penalty on Dial4Trade Technologies
The Central Consumer Protection Authority (CCPA) has imposed a penalty of ₹10 lakh on Dial4Trade Technologies Private Limited for facilitating the online listing, hosting, advertising and sale of ammonium nitrate on its e-commerce platform without the mandatory regulatory safeguards required under law.
The final order was passed by the CCPA, headed by Chief Commissioner Nidhi Khare and Commissioner Anupam Mishra, under Sections 10, 20 and 21 of the Consumer Protection Act, 2019.
The authority has directed Dial4Trade to immediately discontinue the listing, hosting, advertising or facilitation of sale of ammonium nitrate, or any other substance classified as an explosive under the Explosives Act, 1884, on its platform.
What the CCPA found
During its examination of the platform, the CCPA found that ammonium nitrate was listed and made available for purchase without adequate safeguards, including disclosure of valid Petroleum and Explosives Safety Organisation (PESO) licence details of the seller, verification of the identity and licensed status of the buyer before purchase, and mechanisms to ensure traceability of transactions, as required under the Ammonium Nitrate Rules, 2012.
The listings also did not adequately warn users about restrictions on the possession and use of the substance or the consequences of unauthorised possession, the authority said. The CCPA also took note of imagery depicting explosions and blast effects accompanying the listings, saying this was more likely to draw attention to the product than communicate its hazardous and regulated nature.
The authority held that a product listing hosted on a digital marketplace and communicated to the public over the internet falls within the definition of an "advertisement" under the Consumer Protection Act. It said presenting a "regulated explosive substance for sale in the manner of an ordinary consumer product", without informing users that its lawful purchase requires the prescribed licence, constitutes a misleading advertisement and unfair trade practice.
Dial4Trade's arguments and the CCPA's response
Dial4Trade argued that it operates as a business-to-business marketplace intermediary and should not be held responsible for third-party listings. The CCPA rejected this argument, noting that the platform allowed purchase in quantities as low as a single unit without minimum-order requirements or institutional buyer verification.
The authority also held that the Consumer Protection (E-Commerce) Rules, 2020 apply regardless of business model description. When Dial4Trade sought safe harbour protection under Section 79 of the Information Technology Act, 2000, the CCPA said such protection is conditional on compliance with prescribed due-diligence requirements.
The CCPA said verification was required at the point of listing, not merely removing listings after detection, and that the platform's failure to implement mandatory regulatory safeguards exposed it to liability.
Scrutiny of other platforms
The CCPA said this action is part of its ongoing examination of e-commerce platforms for unauthorised sales of hazardous chemicals including ammonium nitrate, gun powder, picric acid and pentaerythritol tetranitrate (PETN). It added that the matter is currently under examination in respect of other platforms, including IndiaMART, Justdial, Sigma-Aldrich India, ExportersIndia, Ibuychemikals, Alpha Chemika and TradeIndia.
The regulator's statement noted that ammonium nitrate is a regulated substance whose unauthorised sale or possession without prescribed safeguards can pose risks to public safety.