The Bazee.Com Saga Unravelled; Supreme Court Gives Welcome Relief To Intermediaries  

The Supreme Court recently held that in case of obscene material circulated over the internet, the Information Technology Act, 2000 (IT Act), which is a special law, would prevail over the general law i.e. the Indian Penal Code (IPC).

Sharat Babu Digumatri’s Case

• An obscene MMS video was listed for sale on the website www.bazeee.com (now www.ebay.in). Though bazeee.com had requisite filters to detect such listings, this listing was not tracked.
• The item was first listed on the evening of November 27, 2004 on bazeee.com and deactivated only two days later, that is on 29 November, 2004 after a complaint was lodged. In the meantime, a few sales took place through the website.
• Upon investigation by the Crime Branch of Delhi, Ravi Raj, Avnish Bajaj, the managing director of the website, and Sharat Digumarti, the manager of the website, were held responsible for handling the content. They were listed as the accused in the chargesheet.

Relevant Provisions Of The IPC And IT Act

• Section 292 of the IPC deals with obscenity, and states that a figure or any object shall be deemed to be obscene if it is lascivious or appeals to the prurient interests such as to tend to deprave and corrupt a person. Further, the section makes it an offence to distribute, import, export, exhibit, advertise, etc. obscene content by means of traditional print media
• Section 294 of the IPC makes it an offence to commit any obscene acts, or utter obscene words or songs in public places to the annoyance of others.
• Section 67 of the IT Act makes it an offence to publish or transmit obscene content in an electronic form.

Court Proceedings In The Avnish Bajaj Case

Avnish Bajaj filed a petition for quashing of the criminal proceedings against him. He contended, among other grounds, that the MMS was transferred directly between the seller and buyer without the intervention of the website. Hence, he could not be held responsible for a mere listing which was not obscene and in no way attracted either Section 292 or 294 of the IPC or Section 67 of the IT Act.

In 2005, the Delhi High Court observed that:

• There was a prima facie case against the website in respect of the listing of the video clip and its contents and an offence, under certain sub- sections of Section 292 of the IPC was made out.
• Avnish Bajaj could not be held liable as the company was not arraigned as a plaintiff.
• The IPC did not recognise the concept of automatic criminal liability of a director of a company, when the company itself was not a party to the suit.
• A prima facie case was made out against Avnish Bajaj for an offence under Section 67 of the IT Act, since the law recognises the deemed criminal liability of the directors even where the company is not arraigned as an accused. This is because Section 85 of the IT Act provides that, when a company commits an offence under the IT Act, every person who was in charge of the company at the time may be proceeded against.

However, the Supreme Court, in 2012, overturned this finding while holding that, vicarious liability cannot be fastened to Avnish Bajaj and he could not be held guilty under the IT Act provisions as the company was not arraigned as an accused. In this respect, the court drew a parallel between Section 141 of the Negotiable Instruments Act, 1881 (NI Act), and Section 85 of the IT Act. Section 141 of the NI Act is of the same substance as Section 85 of the IT Act, in the context of certain offences by companies under the NI Act. In interpreting Section 141 of the NI Act, the apex court held that the commission of an offence by the company was an express condition precedent to attract the liability of others in charge of the company, hence, since there was no case made against the company, Avnish Bajaj was acquitted.

Post this case, the IT Act was amended to introduce, amongst other amendments, an amendment to Section 79(1). This section, subject to certain conditions, provides immunity/safe harbour to intermediaries (such as bazee.com) from the penalties under the IT Act for content made available on its platform by third parties.

Court Proceedings In Sharat Digumatri Case

Following the judgment of the Supreme Court quashing all proceedings against Avnish Bajaj, Sharat Digumatri, the other manager of the website, filed an application before the trial court to drop proceedings against him as well. The trial court dropped the proceedings against Sharat for offences under Section 294 of the IPC and Section 67 of the IT Act. However it framed the charge in terms of Section 292 of the IPC . This order framing the charge was upheld by the Delhi High Court which stated that liability could attach to Sharat in his individual capacity. Sharat appealed against this order before the Supreme Court.

The two judge bench of the apex court had to consider that whether Sharat, who had been discharged under Section 67, could be proceeded under Section 292?

Sharat’s Arguments

It was submitted before the Supreme Court that:

• Sharat could not be proceeded under Section 292 after having been discharged under Section 67. It was argued that, Section 67 was a special provision and it would override Section 292. There was a distinction drawn between offences in relation to the internet under Section 67 and offences in relation to conventional media under Section 292.
• Even if all the allegations against Sharat were accepted, he would be protected under Section 79 since it was established that the offending material was an electronic record under the IT Act and hence Section 79 would have to apply.
• Section 81 of the IT Act provided that the provisions of the IT Act had overriding effect on any other law in force. Hence, by virtue of Section 81, Section 79 would get automatically attracted to electronic forms of publication and transmission of obscene material by intermediaries. The horizon of Section 79 had been expanded to extend its protection to individuals as well. For this argument, reliance was placed on the landmark case of Shreya Singhal v Union of India in which the Supreme Court read down Section 79 to hold that an intermediary would have to receive actual knowledge by means of a court order or a government notification prior to taking down offensive content on the internet. .

Arguments of the State

The state government of Delhi contended that:

• publishing any obscene material under Section 67 could not be confused or equated with the sale of obscene material under Section 292, for the two offences were distinct. There was no bar in law to charge and be tried for an offence under Section 292 after being discharged under Section 67; and
• the role of the person in charge of the intermediary, such as Sharat, was extremely vital as it pertained to the sale of obscene material, which was punishable under Section 292 and not under Section 67 .

Judgment

The Supreme Court reasoned that it was beyond dispute that the alleged possession of the MMS clip by Sharat constituted an electronic record under the IT Act.

It referred to the Shreya Singhal ruling in which the court had at the time of striking down section 66 A of the IT Act, held that the provision did not contain the word ‘obscene.’ It criminalized what was ‘grossly offensive’ or ‘annoying,’ and hence, it could not be said to create an offence pertaining to decency or morality. The apex court further reasoned that what could be grossly offensive or annoying under the Section needn’t have been obscene at all. In the instant case, the Supreme Court was required to adjudicate upon which of the provisions and statutes i.e. Section 292 or Section 67, or both, the accused were required to be tried under.

The apex court looked at the nomenclature of certain provisions of the IT Act:

• Section 67 provided for punishment for publishing or transmitting obscene material in electronic form.
• Section 67A of the IT Act stipulated punishment for publishing or transmitting of material containing sexually explicit acts, etc. in electronic form.
• Section 67B of the IT Act, too, provided for publishing or transmitting material depicting children in sexually explicit acts, etc., in electronic form.

The court referred to these provisions to emphasize on the fact that the legislature had deliberately used the words ‘electronic form’ in all places. Relying on this, the court reasoned that Section 67, read with section 67A and 67B, was a complete code relating to offences under the IT Act. Section 79 was an exemption provision providing protection to individuals, which protection had been expanded by virtue of the ruling in Shreya Singhal.

The Supreme Court, while quashing the criminal proceedings against Sharat, held that:

• Obscenity pertaining to electronic records fell under the scheme of the IT Act.
• Electronic forms of transmission were covered by the IT Act, which was a special law and if the alleged offender has been acquitted under the relevant provisions of the IT Act, he could not have been proceeded against under the IPC for the same offence.
• The Delhi High Court had erred in holding that Sharat could be proceeded under Section 292 despite the charges against him under Section 67 being dismissed.

A Welcome Precedent

The courts have, in the past, in cases of obscenity over the internet, considered the provisions of both the IPC as well as the IT Act. For instance, in Maqbool Fida Husain v Raj Kumar Pandey, in which an allegedly obscene painting was offered for sale over the internet, the Delhi High Court reasoned that since the test to determine obscenity under both the IT Act as well as the IPC was similar, it was ‘necessary to understand the broad parameters of the law laid down by the courts in India, in order to determine obscenity.

This judgment of the Supreme Court gives welcome relief to intermediaries. The apex court, in reaffirming the principle of generalia specialibus non derogant, held that in cases of obscenity appearing on the web, once the criminal act had a nexus with the electronic record, the provisions of the IT Act, particularly the safe harbor principle under Section 79, could not be ignored. Further, it ruled that if the alleged offender had been acquitted under the relevant provisions of the IT Act he would have escaped from the “net” of the IPC.

This judgment solidifies the view that no enactment can be viewed in isolation. The offence under Section 292 of the IPC was read holistically with Sections 67, 79 and 81 of the IT Act. In reading the aforesaid provisions of the IPC and the IT Act together, the Supreme Court construed them harmoniously to give effect to the legislative intent. The IT Act provides for offences that were not within the contemplation of the legislature at the time the IPC was enacted.

As technology continues to evolve, the interpretation of the Supreme Court in this case is a welcome precedent on the interpretation of special laws enacted to address specific offences that arise out of technological advancement.

Nishith Desai Associates is a research-based Indian law firm with particular focus on legal and tax services in sectors like intellectual property, pharma and life-sciences, corporate, technology and media.

The views expressed here are those of the authors’ and do not necessarily represent the views of Bloomberg Quint or its editorial team.