The Visakha Industries judgement on Section 79 of ITA 2000

On December 10, 2019, an important judgement of the Supreme Court was published in the case of Google India Vs Visakha Industries Ltd. The judgement was delivered by Justices K.M.Joseph and Ashok Bhushan.

The most important take from the judgement is that Section 79 of ITA 2000 protects a category of IT service companies from liabilities arising out of action of third parties. But for incidents prior to 27th October 2009, protection is available only for offences under ITA2000, while protection after 27th October 2009 is for offences under any law. Hence in case of “Defamation” which is an offence under Section 499 of IPC, protection would be available only if the incident is after 27th October 2009.The instant case involved an act of publishing of some information in a google group which the petitioner (Visakha Industries) alleged was “defamatory” and it occurred prior to 27th October 2009. Therefore the owner of “google group” was not eligible for protection.

The petitioner had preferred a criminal defamation complaint in a magistrate’s court in Secunderabad based on which a summons had been issued to Google India. Google India refused to accept the summons and went on appeal to the High Court. The High Court rejected the appeal and hence Google India approached Supreme Court resulting in the judgement on December 10, 2019 again rejecting the appeal and ordering Google to attend the trial back in the Magistrate’s court.

The entire journey commenced with an article dated 21st November 2008 titled “poisoning the system: Hindustan Times” and after 11 years the case goes back to trial. During this time the entire environment has changed. There was an amendment to the ITA 2000 passed in 2008 and notified with effect from 27th October 2009. In this amendment, Section 79 of ITA 2000 addressing the vicarious liability of a Network Service Provider/intermediary was amended and Section 66A was introduced. Then on 24th March 2015, Section 66A was held “Unconstitutional” in the Shreya Singhal case and scrapped. In December 14, 2016, the Sharat Babu Digumarti Vs Union of India judgement from Supreme Court made some observations on the overlapping provisions of IPC and ITA 2000. Additionally Section 65B of Indian Evidence Act which was present since 17th October 2000 got a renewed support with the Supreme Court judgement on PV Anvar Vs P K Basheer. All these make our vision of the case blurred unless we carefully sift through the changes the law has undergone.

When the Supreme Court gave its judgement in the Visakha case, it had to decide whether it should apply the law as was prevailing on the date of the incident or take into account any of the developments that occurred subsequently.

The judgement is noteworthy since it discussed many issues of law in detail including international jurisdiction, the role of a parent company and the subsidiary, the concept of due diligence etc. There are several points of learning about the thinking of the Supreme Court on some of these issues which will be coming into discussion in the lower Courts.

However, we need to point out two specific observations while analysing the judgement which point to the shortfalls that can be attributed to a judgement of this nature.

One observation is that,

if the dispute could have been resolved by reverting the trial back to the magistrate’s court because the higher court opined that protection under Section 79 was not applicable to the appellant,

-it  would  have been sufficient if the judgement had confined itself to this point alone.

In that case, the trial Court could have examined the case in its own wisdom free from the influence of the views of the higher court as expressed in the judgement. By expressing its views on issues other than the core issue, the higher court has now placed a restraint on the lower court from taking independent view on the several collateral issues that are involved in the case.

The higher court was always capable of visiting such issues after the trial was completed in the lower court.

Hence the judgement appears to have needlessly interfered with a fair trial in the lower court.

Second observation is that the judgement missed an opportunity to suggest a solution to an allied problem of the need for an interim judgement in such cases. For example, when a take down request is made by a victim of a defamatory publication directly to the publisher, it may be refused and a Court order would be demanded by the intermediary as per the Shreya Singhal judgement.

But if the Court order takes 10+years with appeals and more appeals, the defamation continues and any relief granted thereafter could only be of no use. If however an interim stay is granted to remove the content, the publication or the author of the content may feel aggrieved that action has been taken without a proper trial. In many cases the interim stay becomes a permanent stay particularly if the respondent does not chose to contest defeating the intention of the Court to uphold freedom of speech.

Confining to the main point of dispute which is identifying the applicable law as of 21st November 2008, at that time, the amendments to ITA 2000 were already under consideration and the recommendations had been submitted by the expert committee and the draft of the Information Technology Amendment Act 2006 (ITAA 2006) was already in the public domain. This represented the legislative intent though the final approval was pending.

However when we consider the concept of “Due Diligence”, we must recognize that “Due Diligence” is not restricted to following the law as enacted. It refers to a responsibility and duty to prevent an adverse incident and hence the “intended law” is as much relevant as “Best Practice” when it comes to exercising due diligence.

Considering that a law need to be complied with only after it is notified and not any time before, even if it appears reasonable, will amount to supporting evasion of law.

In the instant case, the purpose of Section 79 is to provide exemption from liability for an intermediary if it follows certain best practices and this intention was expressed in the ITAA 2006 (which at the time of passage was renamed as ITAA 2008). If this amendment had not been passed, the earlier version of Section 79 would have prevailed. If it was passed, it would expand the applicability of protection from ITA 2000 offences to offences under other statutes.

If a decision had to be taken by an organization in this uncertain scenario when the amendment was in a state where it could either be passed or rejected in the end, a prudent organization would like to follow the principle of “Erring on the safer side”. Due diligence at such a stage with a higher degree of certainty is to consider that present law will prevail and amendment may not fructify.

In such a case the protection should have been considered as restricted only to ITA 2000 offences. It would however be a logical and reasonable decision if the company considers that the proposed amendment which has gone through the Cabinet Committee and is ready to be passed, will be passed as intended. In such case Section 79 as amended would be the “Due diligence target” of the organization. Any other decision would be arbitrary.

Hence the organization should try to be compliant first to the un-amended Section 79 and then to the amended Section 79 and be prepared to justify its decision if challenged in the Court.

The two versions of the section 79 are presented below for easy comparison.

Section 79 under ITA 2000 Section 79 under ITA 2008

Network Service Providers not to be liable in certain cases     

For the removal of doubts, it is hereby declared that no person providing any service as a Network Service Provider shall be liable under this Act, rules or regulations made there under for any third party information or data made available by him if he proves that the offence or contravention was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence or contravention.

     Explanation.  – For the purposes of this section –

 (a)   “Network Service Provider” means an intermediary;

(b) “Third Party Information” means any information dealt with by a network   service provider in his capacity as an intermediary.

P.S: “Intermediary” with respect to any particular electronic message means any  person who on behalf of another person receives, stores or transmits that message or provides any service with respect to that message

Exemption from liability of intermediary in certain cases  

(1)    Notwithstanding anything contained in any  law for the time being in force but subject to the provisions of sub-sections (2) and (3), an intermediary shall not be liable for any third party information, data, or communication link  hosted by him.
(2)    The provisions of sub-section (1) shall apply if-
(a) the function of the intermediary is limited to providing access to a communication system over which information made available by third parties  is transmitted or temporarily stored; or
(b) the intermediary does not-
(i) initiate the transmission,
(ii) select the receiver of the transmission, and
(iii) select or modify the information contained in the transmission
(c) the intermediary observes due diligence while discharging his duties under this Act and also observes such other guidelines as the Central Government may prescribe in this behalf
(3) The provisions of sub-section (1) shall not apply if-
(a) the intermediary has conspired or abetted  or aided or induced whether by threats or promise or otherwise in the commission of the unlawful act
(b) upon receiving actual knowledge, or on being notified by the appropriate Government or its agency that any information, data or communication link residing in or connected to a computer resource controlled by the intermediary is being used to commit the unlawful act, the intermediary fails to expeditiously remove or disable access to that material on that resource without vitiating the evidence in any manner.
Explanation:- For the purpose of this section, the expression  “third party information” means any information dealt with by an intermediary in his capacity as an intermediary.

P.S: “Intermediary” with respect to any particular electronic records, means any person who on behalf of another person receives, stores or transmits that record or provides any service with respect to that record and includes telecom service providers, network service providers, internet service providers, web hosting service providers, search engines, online payment sites, online-auction sites, online market places and cyber cafes

When this case goes back to trial, the first thing that the court would be looking for, is to decide whether it should apply the un-amended section 79 which was the law prevailing on the date of the incident or to apply the intended amendment which was available in the public domain using the concept of due diligence.

The Supreme Court has not provided the clarity in this regard by referring to the judgement of Shreya Singhal and repeatedly to the “amended” and “Unamended” section 79.  If the Court had laid down the principle that law as applicable on the date of an offence will prevail at the trial stage, it would have helped to simplify trial proceedings in such cases where the law has undergone a change in the interim period.

Even in the case of scrapping of Section 66A, the Supreme Court did not specifically mention whether the change will have a retrospective effect or not. This led to Police some times invoking Section 66A because  it was the law on the date of the incident.

In a recent order, Karnataka High Court imposed costs on some police officers for invoking Section 66A, since in this case Section 66A was not applicable on the date of the alleged offence.

It may be observed that the two versions of Section 79 differ in many respects. Firstly the applicability of old Section is for a “Network Service Provider” who is an intermediary, defined as a person who receives, stores or transmits a message or provides any service with respect to a message. On the other hand under the new definition, an intermediary is defined with reference to an “Electronic record” and not a “message” and includes the erstwhile network service providers as well as search engines, online market places etc. 

The replacement of the word “message” with an “electronic record” and expansion of the different types of service providers is a significant change to the law.

In the Shreya Singhal case, one of the most glaring mistake the Supreme Court did was to equate a “Message sent to an addressee through a Communication device” with a “Publication available for view by the public in a Facebook or Twitter platform”.

The current judgement could have clarified on this aspect of what is a “Message” and what is a “Publication” while discussing the term “publication”. Obviously the Court did not identify the distinction between the two terms strong enough to provide a clarification.

Another distinction between the two versions of Section 79 is that the protection is available only if the service of the intermediary is limited to certain functions. Accordingly, it would not be available if the intermediary does not initiate the transmission (only provides a platform for sending it through), select the receiver of the transmission and select or modify the information contained in the transmission. If the intermediary “Pushes” the information to “Members of a group” it appears that it has to “Initiate the transmission” and on this ground Google groups may lose protection. This was not explored.

The new section 79 includes “communication link hosted by him” to data hosted by the third party for the purpose of providing protection. This goes with the expansion of the term “intermediaries” to service providers of all kinds.

Additionally the new section introduced an obligation for removal of the content without vitiating the evidence expeditiously.

In the Shreya Singhal judgement this was read down to mean that “the time for expeditious removal” would commence after receipt of a Court order.

Given the delays of our Judicial system the need to wait for a Court order is not a fair relief to the victim. The bench which heard the Shreya Singhal case failed to recognize the relevance of this provision in the Act and gave a judgement without recognizing that a defamatory case to come to a decision on whether it should be tried under the old section or new section itself takes 11 years. If therefore the process of determining whether a defamation has occurred or not, whether Google India is liable or Google LLC is liable etc will take much longer. Hence the entire process of judicial relief is a farce as far as the victim is concerned. While Google can pursue the case at High Court and Supreme Court, the victim many times an individual is denied justice merely because he has no capacity to continue this litigation for such a long period in multiple Courts.

The bench in the current case therefore failed to find a solution which was essential.

Naavi.org had way back on December  2000 under the article “How to Counter Rogue Sites” suggested that the offensive content could be “Flagged” as “Objected by …..” with a link to the notice of objection received by the hosting body. In the current context, a similar procedure can be followed by the intermediary when a notice is received directly from the victim and the legal process is pending. If required a time limit of around 90 days or 180 days may be provided within which if the Court order does not come through, the flagging can be removed or populated with the information that no court order has been received.

This procedure could have been endorsed by the Supreme Court either in the Shreya Singhal case or in this Visakha Case. Unfortunately, the Supreme court missed an opportunity for this clarification for the second time.

I appears that there is a need for the Courts to “Finding ways and means to resolve the disputes” while drafting the judgement. Then the years of wait would atleast bring some lasting improvements to the system. On the other hand, if the Supreme Court only restricts itself to the role of finding fault with the law and notification of the Government and expects the Government to come up with revisions which are again subjected to another round of critical evaluation, the legislative process would be seriously hampered.

I wish that there is a serious introspection  by the Judiciary in this respect of how to make the judgement solution oriented.

Naavi

Reference Articles

Defamation: Sections 499 to 502 of IPC

Copy of the Judgement

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