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The Role of Adjudicators in ITA 2008

One of the strengths of ITA 2000 was the introduction of a system of adjudication where a victim of a Cyber Crime could seek compensation by way of damages through a system outside the usual civil court system. This could help the system in three specific ways.

Firstly, the adjudicator could be a person who could be better informed on technology issues than the traditional civil judge and hence could respond better to the complications of technology.

Secondly, the system could be made quicker than the traditional system by adopting a more consumer friendly process than the strict adherence of the Civil Procedure Code.

Thirdly, the cost of litigation could be reduced from the current levels.

These objectives were sought to be achieved by ITA 2000 and the related notification which came on 25th March 2003.

Accordingly, the system of adjudication before the current amendments became effective was

a) An adjudicator had the powers to adjudicate on any contraventions under the ITA 2000 and provide compensation to a person who has suffered a loss.

b) The powers of the adjudicator was the same as a "Civil Judge" but he was not bound by the Civil Procedure Code.

c) The procedure was simple and the complainant could make an application with a fee which was roughly around 2.5% of the amount of compensation claimed.

d) The complaint could be made even when the complainant was perhaps not fully aware of the details of the accused and the adjudicator could ask the Police to investigate and report to him if required.

e) The adjudication proceedings were expected to be normally completed in 4 months or an extended period of another 2 months.

f) Compounding could be permitted any time during the process

g) Appeal was permitted to the Cyber Regulations Appellate Tribunal.

h) Powers of the adjudicator was "Exclusive" in the sense that no other "Civil Court" had jurisdiction on the matter which an adjudicator was entitled to hear.

i) Adjudicator had the powers to enforce payment of penalty imposed like a "Revenue Recovery".

As a result of the above provisions, the "Adjudicator" was an important part of the implementation of the ITA 2000 and its effectiveness to provide remedy to the victims of Cyber Crimes in India.

Though ITA 2000 became effective from 17th October 2000, no adjudicator was appointed until 25th March 2003 when the Government of India notified that  "IT Secretary of a State or Union Territory" would be the "Adjudicator of that state or Union Territory". Since then the IT secretaries who have been administering the IT development programmes in a State also became the key judicial authority for the State.

Even after the adjudicators were appointed it took several years for complaints to be formally made to the adjudicators and adjudicators also took it up seriously.

Under ITA 2000, the maximum compensation that could be claimed under Section 43 which was the main cause of action for the adjudicator was Rs 1 crore. Now under ITA 2008, this limit has been removed and hence the compensation upto any amount can be claimed if the complainant can justify the claim.

However, ITA 2008 now limits the powers of the adjudicator to Rs 5 Crores and leaves higher claims to go to the Civil Judiciary system.

Further since Section 43 has been strengthened further with the addition of sub sections (i) and (j) which bring in "deletion of information", "diminishing the value or utility of information" etc within the section.

The powers of the adjudicator has therefore widened under ITA 2008. Virtually any offence with the use of a Computer or a Mobile which can cause wrongful harm or loss to any person can be subject to adjudication either on the basis of a complaint or Suo-moto.

Additionally, the section 43A, which is a "Data Protection" measure where a "Body Corporate" failing to maintain "Reasonable Security Practices" to protect "sensitive personal information" also comes under "Adjudication".

In view of the above there is a need for State Governments to effectively train the IT Secretaries and provide them with suitable support staff so that they can discharge this additional responsibility effectively.

If necessary, the Central Government may also consider if it is time to appoint an exclusive "Adjudicator" for each state and not burden the IT Secretary with this responsibility which may try to take more and more of the time of the IT secretary away from his developmental functions.

With the expansion of the powers of the adjudicators, it is also necessary for adjudicators being ready to face the challenges to their powers conferred by the Act for the benefit of the society.

Adjudicators should not in their anxiety to avoid the responsibilities cast on them from the Act avoid taking up adjudication on one pretext or the other. Such an attitude if it develops will seriously hurt the law and order in the Digital Society and undermine the potential of the State to attract investments from IT sector.

Some of the points that an adjudicator may be forced to consider during any adjudication is a challenge to his jurisdiction. As is the practice in most litigation, the strategy of some defense counsel is always to challenge the jurisdiction of the authority so that the dispute is pushed into the traditional Courts where the inherent delays can give a relief to the accused.

Hence every effort has to be made to strengthen the conviction of the Adjudicators so that they can effectively ward off a high profile advocate challenging the jurisdiction of the adjudicator on some technical grounds.

The challenges to the Jurisdiction can be mounted on many grounds and in particular on the following grounds.

a) Types of incidents

b) Vis--Vis the Consumer Forum

c) Vis--Vis arbitration clauses in agreements.

Some thoughts on these points are provided below

Types of Incidents

When ITA 2000 was originally notified the powers of the adjudicator under Section 46 could be interpreted as  restricted to contraventions under the Chapter IX. However, under ITA 2008, with the introduction of subsection (i) to the Section 43, which can be invoked if any person without the permission of the owner of a computer system "destroys, deletes or alters any information residing in a computer resource or diminishes its value or utility or affects it injuriously by any means", virtually any kind of adverse effect on a computer or information residing inside a computer or the functionality of either a computer or a software or the device itself, come within the jurisdiction of the adjudicator.

Further, under 43(g) any person providing "assistance" to another person to commit any contravention will also be liable under Section 43.

The words used in the section to describe the jurisdiction of the adjudicator are:

For the purpose of adjudging under this Chapter whether any person has committed a contravention of any of the provisions of this Act or of any rule, regulation, direction or order made thereunder which renders him liable to pay penalty or compensation,

Hence, the powers of the Adjudicator goes beyond Section 43 or 43A and into any contravention under the Act and there is every ground to believe that the scope of adjudication extends to all offences under Chapter XI also in case it results in a loss to any person.

Consumer Forum

In many cases of Cyber Crimes, there will be a "Service Provider" involved in the facilitation of the Crime. Under ITA 2000/8, the service provider comes under the definition of an "Intermediary" and hence he would need to satisfy certain "Due Diligence" requirements failing which he will be liable for the offence. By operation of Section 85, some of these liabilities may get transferred also to the executives.

However some times a doubt arises as to whether the dispute between the customer and the service provider needs to be taken to the Consumer forum instead of the Adjudicator.

Here it becomes necessary to interpret Section 61 of ITA 2000/8 which states as under:

Sec 61:

No court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which an adjudicating officer appointed under this Act or the Cyber Appellate Tribunal constituted under this Act is empowered by or under this Act to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act.

Provided that the court may exercise jurisdiction in cases where the claim for injury or damage suffered by any person exceeds the maximum amount which can be awarded under this Chapter.

It is clear from this section that the Adjudicator is given a prime of place against all Civil Courts when the claim is related to a contravention of ITA 2000.

Also, the Consumer Protection Act provides that remedies under that act is not in derogation of any other Act. Also ITA 2000 is an act which was subsequent to Consumer Protection Act.  Hence remedies under Consumer Protection Act are not interfering with the jurisdiction of the Adjudicator. Also since Cyber Crimes are high tech crimes, Consumer Forums may not be keen to take Cyber Crime related complaints under its forum.

It is also appropriate to consider that the jurisdiction of  the Consumer Forum arises out of "Deficiency" of service. Hence claims arising out of a "Crime" are not within the jurisdiction of the consumer forum.

For all these reasons, Adjudicator's jurisdiction scores over Consumer Forum even when there appears to be a dual jurisdiction. Hence in cases such as Phishing or Credit Card frauds, Adjudicator is the correct forum in preference to the Consumer Forum.

Arbitration

There have been a few instances where a service provider has invoked an "Arbitration" clause to say that a dispute with his customer cannot come in the jurisdiction of an Adjudicator. This is also a wrong contention since "Arbitration" in a service contract can be applied only to service related disputes where there is a overlapping jurisdiction with the Consumer forum.

But in cases where there is a prima-facie indication about a fraud or an offence which may come under ITA 2000/8, then the correct jurisdiction is with the Adjudicator and not the arbitration forum.

In one of the recent cases, a dispute arose between an online broking firm and his customer. The allegation was that an employee of the share broking firm had engaged in parallel trading in the name of the customer and caused a loss. The customer was kept in the dark since the firm's manager had created a false e-mail ID for the customer and registered it with the account so that all contract notes are dumped in this e-mail account and not be available to the customer. According to the customer this was a Cyber Crime since the correct e-mail address was tampered with and changed without authority. Such cases come under the jurisdiction of the Adjudicator.

In view of the importance of "Adjudication" to the community, it is necessary for all State Governments to take steps to equip their IT Secretaries with at least one Deputy Secretary with the sole responsibility of attending to Adjudication and create a secretariat to support the activity. IT Secretary should also devote one specific day every week to attend to Adjudications so that his other work does not cause delay in the proceedings.

Naavi

March 26, 2009

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