CHENNAI: In what would have come as a relief to Chennai-based online pharmacy startup, Netmeds Marketplace, the National Company Law Tribunal (NCLT) has ruled that the company is exempt from paying Rs 28.09 lakh to mobile advertising company AdiQuity Technologies for the downloads that allegedly occurred outside of the Google Play store.
The two companies had entered into an agreement wherein AdiQuity Technologies (Operational Creditor) posted advertisements of Netmeds’ products and services to draw downloads as ‘Mobile App Install advertisements,’ which came under CPI (Cost per Installation) advertisement type provided by Netmeds (Corporate Debtor) on mobile sites and mobile applications across AdiQuity’s Network. The mobile advertising company then raised an invoice of Rs 62.55 lakh for the same, of which Netmeds paid Rs 38.23 lakh. Claiming that the online pharmacy startup had failed to pay Rs 28.09 lakh, AdiQuity approached NCLT.
“From the conditions contained in the release order, it is not clear that the payments are to be made based on the downloads from Google Play or from other sources,” the tribunal said. “However, from the email correspondences enclosed by the applicant, it is clear that there was a dispute regarding the amount claimed under the invoices and hence the tribunal is of the opinion that there was a pre-existing dispute between the parties and hence the petition is dismissed, in terms of Section 9 (5) (ii) d. In the circumstances of the case, there will be no order as to costs.”
The tribunal said the main point of dispute related to the installations of the app that were not downloaded through Google Play. It highlighted that there was no separate agreement and that the understandings were based on the release order signed by both the parties.
“As seen, the first release order dated September 15, 2015, wherein as per terms and conditions item no. 2 clearly states that MAT (Mobile App Tracking) report will be final for all billing purpose,” the tribunal presided over by judicial member, K Anantha Padmanabhaswamy observed on February 7. “As per the MAT tracking URL (downloads from the URL amount to Rs 39,01,954 has been paid to the Operational Creditor (AdiQuity) and the same was acknowledged and the present claim of Rs 28,09,344.80 is denied as this claim is for installs apart from the above stated MAT URL from Google Play Store.”
According to Netmeds, an email from MAT on February 18, 2016 and February 21, 2016 stated “lots of installs coming lacking Google Play install identifier.” In an email on March 16, 2016 too, it said, “there is no evidence of fraud ‘per se’ (bots, installs that did not occur on real devices, etc...) but it is beyond any doubt that huge amount of installs are coming from outside the Play Store.”