Case Study: Avnish Bajaj v. State

By Kanchan Ghosh 9 Minutes Read

Citations: 2008 Indlaw DEL 763, 2008 (150) DLT 769, 2008 (3) JCC 1726, 2008 (Supp5)

Date of Judgement: 29th May, 2008

Bench: S. Muralidhar

Facts:  

The case involved an IIT Kharagpur student Ravi Raj, who placed on the baazee.com a list offering an obscene MMS video clip for sale with the username ‘alice-elec‘. Despite the fact that baazee.com has a filter for the posting of objectionable content, the listing nevertheless took place with the description, “Item 27877408 – DPS Girls having fun!!! full video + Baazee points.” The item was listed online around 8:30 PM on the evening of November 27th, 2004, and was deactivated, around 10 AM on 29th November 2004. The Crime Branch of Delhi police took cognizance of the matter and registered an FIR.

Upon investigation, a charge sheet was filed showing Ravi Raj, Avnish Bajaj, the owner of the website and Sharat Digumarti, the person responsible for handling the content, as accused. Since Ravi Raj absconded; the petition was filed by Avnish Bajaj, seeking the quashing of the criminal proceedings.

CONTENTIONS:

Petitioner: Since the MMS was transferred directly between the seller and buyer without the intervention of the website, they can at most be responsible for the listing placed on the website which by itself was not obscene and did not attract the offence under Sec 292/294 IPC or Sec 67 of the Information Technology (IT) Act, 2000.

Due diligence was taken by the website to immediately remove the video clip once it was brought to its knowledge that it was objectionable.

The scope of Sec 67 of the IT Act is only restricted to the publication of obscene material and does not cover the transmission of such material.

State: Offence under Sec 292 of IPC includes not only overt acts but illegal omissions within the meaning of Sections 32, 35, and 36 of IPC.

The failure to have an adequate filter in a system that is entirely automated entails serious consequences and a website cannot escape such legal consequences.

The fact that payment was made to the seller even as on 27th December 2004 shows that no attempt was made to prevent or stop the commission of the illegality by the website.

Issues:

• Could a case be established under Sec 292 of IPC against a company?
• Could the doctrine of illegal omission results in criminal liability in the present case?
• Whether the director of a website be held liable under Sec 67 of IT Act, 2000 when the website is not arraigned as an accused?

Decision:

The court observed that a prima facie case for the offence under Sec 292 (2) (a) and 292 (2) (d) of IPC is made out against the website both in respect of the listing and the video clip respectively. The court observed that,

“not having appropriate filters that could have detected the words in the listing or the pornographic content of what was being offered for sale, the website ran a risk of having imputed to it the knowledge that such an object was in fact obscene“

and thus it held that as per the strict liability imposed by Section 292, knowledge of the listing can be imputed to the company.

However, as far as Avnish Bajaj is concerned, the court held that since the Indian Penal Code does not recognize the concept of an automatic criminal liability attaching to the director where the company is an accused, the petitioner can be discharged under Sections 292 and 294 of IPC, but not the other accused.

As regards Sec 67, read with Sec 85 of the IT Act, the Court, however, observed that a prima facie case was made out against the petitioner Avnish Bajaj since the law recognizes the deemed criminal liability of the directors even when the company is not arraigned as an accused.

Key law points:

1. Could a case be established under Sec 292 of IPC against a company?

Yes,

The Court based its judgement and gave the reasoning that even though there was no legal bar in arraigning BIPL as an accused in the case. But it was not done and the prosecution’s explanation that there are no clear laws in corporate criminal liability in India could not be taken into consideration as section 11 of IPC within the definition of “Person” includes any “any company”. So, a case can be established under section 292 and 293 of IPC. The court reasoned this by saying that the position is settled by five judges of the supreme court in the case of Standard Chartered v. Directorate of Enforcement (2005) where the bench held that for an offence under IPC or any other penal statutes where the provision makes the offence punishable with imprisonment and fine, a company can be prosecuted.

2. Could the doctrine of illegal omission results in a criminal liability in the present case?

No,

In relation to the case the court is of the opinion that there must be a specific allegation in the charge-sheet that, despite knowing the failure of the filters, the director nevertheless did nothing about it. There is no such averment in the charge-sheet. In fact, the liability sought to be attached to the petitioner is only in his capacity as MD of the company and not in his individual capacity. Therefore, it is not possible to accept the argument of the prosecution that the doctrine of illegal omission results in a criminal liability being attached to the petitioner here. (i.e. the director of the Company)

3. Whether the director of a website be held liable under Sec 67 of IT Act, 2000 when the website is not arraigned as an accused?

Yes,

Now under Sec 67 of the IT Act, the court reasoned its judgment on the basis of the case of State of Madras v. CV Parekh (1970) where the director was the accused and the company was not arraigned.  As it attaches a deemed criminal liability on a person who at the “time of commission of the offence was in charge of and was responsible to the company”.

The Court also further based its judgment by putting the case of Anil Hada v. Indian Acrylic Ltd (2006) where the company was not arraigned but the directors were made the accused. So, the director can be held liable even when the website has not been arraigned as an accused.

And it is clearly evident here that the director of the company had a prima facie case against them as they were in charge at the time of the commission of the offence.  Hence a case is made out against the director under Sec 67 read with Sec 85 of the IT Act, 2000.

Kanchan Ghosh