Fundamentals of IT Law

Avinash Bajaj v. State

The decision of a Single Judge of the Delhi High Court in Avinash Bajaj v. State (decided on 29th May 2008) is one of the first decisions relating to the penal provisions of the Information Technology Act; and may be stated to be the only authority on the point of the criminal liability of online service providers. The issue before the Court was whether an online marketplace provider, Bazee/E-Bay (“the company”), and its Managing Director could be stated to have committed any offence because a pornographic video was listed / advertised on a website maintained by the company. The facts of the case as disclosed in the Chargesheet are straightforward, and (the case being a quashing petition under Section 482 of the Criminal Procedure Code) are relatively uncontested.

The Petitioner was the Managing Director of Bazee, a company which provided an online marketplace where sellers could list their goods, and buyers could decide whether they were interested in buying any goods. If a buyer wished to purchase a particular good, he could inform the seller of the same, and the seller would independently sell the goods to the buyer. An online payment facility was also provided by Bazee, where Bazee charged a commission of Rs. 3 per transaction (being charges involved in banking fees). It was found that an advertisement for a pornographic video was listed on the website of Bazee, with a listing titled “DPS Girls having fun”; and the safety filters of Bazee failed to detect this listing. However, manual checks revealed the possibility of pornographic material being listed, and within the period of a couple of days, the listing was removed from the website by Bazee. Nonetheless, within the time period on which the listing was available, a small number of buyers purchased the videos. Bazee was later taken over by E-Bay. The prosecution filed a Chargesheet against the then Managing Director of Bazee, alleging that he had committed offences under Section 292 of the Indian Penal Code (advertisement/sale of obscene objects) and Section 67 of the Information Technology Act (causing publication of obscene objects on the internet). A summoning order was issued by the competent Court against the accused; and the accused filed a petition under Section 482 before the Delhi High Court seeking the quashing of the summoning order.

It is interesting to note that the company itself was neither an accused not a party before the Court; yet, the Court (in dealing with the MD’s liability) reached important legal conclusions vis-à-vis the company. In the High Court, S. Murlidhar J. reached various findings on the issues before him, which may be summarized as follows:

– First, the listed video itself was ‘obscene’.

– Secondly, In view of the fact that an advertisement of obscene material was listed on its website, the company could be stated to have committed offences under Section 292 of the Indian Penal Code and under Section 67 of the Information Technology Act.

– Thirdly, No case was made out against the Managing Director of the Company under the Indian Penal Code, as there was no concept of vicarious liability under the Code. The Managing Director could, however, be proceeded against under the Information Technology Act in view of Section 85 (“Offences by Companies”) thereof; despite the fact that the company was not proceeded against.

The first conclusion was essentially one of fact. The third conclusion seems justified in view of the on Supreme Court’s decision in Anil Hada’s case. It is the second conclusion which might appear a bit problematic. The Court effectively stated that by allowing an online platform for dissemination of information of products, the company itself was actually advertising and causing the products to be sold.

This conclusion can have great impact on the nascent law dealing with criminal liability on the internet. In practical terms, the Court’s conclusion effectively means that every website which allows users to post online information about any content must ensure that transactions dealing with the content itself are not illegal. The sheer volume of line transactions, and the impossibility of checking every online post / listing, is not a defence. And failure to meet this stringent quality-control check can result in criminal liability on the company maintaining the website.

It is submitted that the Court may have imposed too strict a standard on online service providers; and the decision – although well-intentioned – may have undesirable consequences in the era of global transactions, where the internet is fast becoming a necessary tool for and of commerce. The Court may have failed to distinguish between primary offenders and unwitting facilitators; and has imposed too strict a burden on e-commerce and related activities.

Nonetheless, as the judgment itself point out, it is essential for an adequate regulatory framework to deal with such situations.

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