Section No

IX. PENALTIES , COMPENSATION AND ADJUDICATION  (Amended vide ITAA-2006/8)

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Penalty and Compensation for damage to computer, computer system, etc (Amended vide ITAA-2008)

If any person without permission of the owner or any other person who is in charge of a computer, computer system or computer network -  

(a) accesses or secures access to such computer, computer system or computer network or computer resource (ITAA2008)

(b) downloads, copies or extracts any data, computer data base or information  from such computer, computer system or computer network including information  or data held or stored in any removable storage medium;

(c) introduces or causes to be introduced any computer contaminant or computer  virus into any computer, computer system or computer network;

(d) damages or causes to be damaged any computer, computer system or computer  network, data, computer data base or any other programmes residing in such  computer, computer system or computer network;

(e) disrupts or causes disruption of any computer, computer system or computer  network;

(f) denies or causes the denial of access to any person authorised to access  any computer, computer system or computer network by any means;

(g) provides any assistance to any person to facilitate access to a computer,  computer system or computer network in contravention of the provisions of this  Act, rules or regulations made thereunder,

(h) charges the services availed of by a person to the account of another  person by tampering with or manipulating any computer, computer system, or   computer network,

(i) destroys, deletes or alters any information residing in a computer resource or diminishes its value or utility or affects it injuriously by any means (Inserted vide ITAA-2008)

(j) Steals, conceals, destroys or alters or causes any person to steal, conceal, destroy or alter any computer source code used for a computer resource with an intention to cause damage, (Inserted vide ITAA 2008)

he shall be liable to pay damages by way of compensation not exceeding one crore rupees to the person so affected. (change vide ITAA 2008)

Explanation - for the purposes of this section -

(i) "Computer Contaminant" means any set of computer instructions that are  designed -

(a) to modify, destroy, record, transmit data or programme residing within a  computer, computer system or computer network; or

(b) by any means to usurp the normal operation of the computer, computer  system, or computer network;

(ii) "Computer Database" means a representation of information, knowledge,   facts, concepts or instructions in text, image, audio, video that are being  prepared or have been prepared in a formalised manner or have been produced by   a computer, computer system or computer network and are intended for use in a   computer, computer system or computer network;

(iii) "Computer Virus" means any computer instruction, information, data or   programme that destroys, damages, degrades or adversely affects the performance  of a computer resource or attaches itself to another computer resource and   operates when a programme, data or instruction is executed or some other event   takes place in that computer resource;

(iv) "Damage" means to destroy, alter, delete, add, modify or re-arrange any  computer resource by any means.

(v) "Computer Source code" means the listing of programmes, computer commands, design and layout and programme analysis of computer resource in any form (Inserted vide ITAA 2008)

Compensation for failure to protect data (Inserted vide ITAA 2006)

Where a body corporate, possessing, dealing or handling any sensitive personal data or information in a computer resource which it owns, controls or operates, is negligent in implementing and maintaining reasonable security practices and procedures and thereby causes wrongful loss or wrongful gain to any person, such body corporate shall be liable to pay damages by way of compensation, not exceeding five crore rupees, to the person so affected. (Change vide ITAA 2008)

Explanation: For the purposes of this section

(i) "body corporate" means any company and includes a firm, sole proprietorship or other association of individuals engaged in commercial or professional activities

(ii) "reasonable security practices and procedures" means security practices and procedures designed to protect such information from unauthorised access, damage, use, modification, disclosure or impairment, as may be specified in an agreement between the parties or as may be specified in any law for the time being in force and in the absence of such agreement or any law, such reasonable security practices and procedures, as may be prescribed by the Central Government in consultation with such professional bodies or associations as it may deem fit.

(iii) "sensitive personal data or information" means such personal information as may be prescribed by the Central Government in consultation with such professional bodies or associations as it may deem fit.

Deleted vide passage of DPDPA 2023 on 11th August 2023

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Penalty for failure to furnish information, return, etc

If any person who is required under this Act or any rules or regulations made thereunder to - 
 

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Residuary Penalty

Whoever contravenes any rules or regulations made under this Act, for the contravention of which no penalty has been separately provided, shall be liable to pay a compensation not exceeding twenty-five thousand rupees to the person affected by such contravention or a penalty not exceeding twenty-five thousand rupees. penalty not exceeding one lakh rupees, in addition to compensation to the person affected by such contravention not exceeding—
(a) ten lakh rupees, by an intermediary, company or body corporate; or
(b) one lakh rupees, by any other person.". 

(substituted vide Janviswas Act 2022)

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Power to Adjudicate

(1)

For the purpose of adjudging under this Chapter Act (substituted vide Janviswas Act 2022) 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, the Central Government shall, subject to the provisions of sub-section(3), appoint any officer not below the rank of a Director to the Government of India or an equivalent officer of a State Government to be an adjudicating officer for holding an inquiry in the manner prescribed by the Central Government. ( amended vide ITAA 2008)

The adjudicating officer appointed under sub-section (1) shall exercise jurisdiction to adjudicate matters in which the claim for injury or damage does not exceed rupees five crore

Provided that the jurisdiction in respect of claim for injury or damage exceeding rupees five croore shall vest with the competent court. (Inserted Vide ITAA 2008)

(2)

The adjudicating officer shall, after giving the person referred to in sub-section (1) a reasonable opportunity for making representation in the matter and if, on such inquiry, he is satisfied that the person has committed the contravention, he may impose such penalty as he thinks fit in accordance with the provisions of that section.

(3)

No person shall be appointed as an adjudicating officer unless he possesses such experience in the field of Information Technology and Legal or Judicial experience as may be prescribed by the Central Government.

(4)

Where more than one adjudicating officers are appointed, the Central Government shall specify by order the matters and places with respect to which such officers shall exercise their jurisdiction.

(5)

Every adjudicating officer shall have the powers of a civil court which are conferred on the Cyber Appellate Tribunal under sub-section (2) of section 58, and - 
 

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Factors to be taken into account by the adjudicating officer

While adjudging the quantum of compensation under this Chapter the adjudicating officer shall have due regard to the following factors, namely -