In the case of Avnish Bajaj v. State, Mr. Avnish Bajaj filed a petition under Section 482 before the Delhi High Court seeking the quashing of the summoning order. A summoning order was issued by the competent Court against the accused, after the prosecution filed a charge-sheet against the then Managing Director of Bazee, which was later taken over by E-Bay, accusing 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). The court observed a prima facie case for the offence under Section 292 (2) (a) and 292 (2) (d) IPC is made out against the website both in respect of the listing and the video clip respectively, and held that since the Indian Penal Code does not recognize the concept of an automatic criminal liability attaching to the director where the company is an accused, the petitioner can be acquitted under Sections 292 and 294 of IPC.
|In the High Court of Delhi|
|Name of The Case|
Avnish Bajaj v. State (NCT) of Delhi
(2008) 105 DRJ 721: (2008) 150 DLT 769
| Year of the Case |
| Appellant |
State of Delhi
S Muralidhar J.
|Important Sections |
Section 292 and 294 of IPC, 1860, Section 67 and 85 of IT Act, 2000
|Acts Involved |
Indian Penal Code, 1860 Information Technology Act, 2000
The Petitioner Avnish Bajaj, was the Managing Director of Bazee, a company which provided an online platform and marketplace where sellers could list their goods and services, and buyers could choose whether they were interested in buying any services. 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 obscene advertisement for a pornographic video was listed on the website of Bazee, the video titled as “DPS Girls having fun”; and the safety filters of Bazee failed to detect this listing. The manual inspection revealed the possibility of pornographic material being listed, and the listing was removed from the website by Bazee, within the period of a couple of days. However, within the short time period on which the listing was available for sale, a number of buyers purchased the videos. The prosecution filed a Charge sheet against the then Managing Director of Bazee, which was later taken over by E-Bay, accusing 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.
Background of the Case
- An obscene MMS video titled “DPS Girls having fun” was listed for sale on the website www.bazeee.com (now www.ebay.in), though the website had pre-requisites safety filters to detect such kind of listings, but this listing was not tracked.
- The item was first listed on the evening of November 27, 2004 on the Website and deactivated only two days later i.e. on 29 November 2004 after a complaint was registered against the company. In the meantime, a few sales took place through the Website.
- Upon investigation by the Crime Branch of Delhi, Sharat Digumarti, the manager of the Website, and Ravi Raj, Avnish Bajaj, the managing director of the Website, were held responsible for mishandling the content on the Website. They were termed as the accused on the charge sheet.
Facts of the Case
- The case started with a student of IIT Kharagpur – Ravi Raj, who on 27th November, 2004, placed on the baazee.com a listing offering an obscene pornographic video clip titled “DPS Girls having fun!” for sale with the username ‘Alice-elec’.
- The listing offered the video in the form of MMS for Rs. 125 each and was made under the section of “e-books” because of the certainty that the website, has a requisite safety filter for the putting up of objectionable content for sale.
- On 29th November 2004, the objectionable obscene item listed was deactivated and removed. The Delhi Police Crime Branch took cognizance of the matter and registered a FIR. After investigation, a charge sheet was filed showing Ravi Raj, Avnish Bajaj, MD of Baaze.com website and Sharat Digumarti, the person responsible for handling such content, as accused.
- The Metropolitan Magistrate, On February 14th, 2006, took cognizance of the matter and filed charges against Ravi Raj, the seller, Avnish Bajaj; MD of BIPL and Sharat Digumarti; Senior Manager, Trust and Safety, BIPL under Section 292 and 294 of the IPC and Section 67 of the IT Act, 2000
- After the abscondment of Ravi Raj, Avnish Bajaj filed a petition for the quashing of the criminal proceedings against him. He contended, that the MMS was transferred directly between the seller and buyer without the intervention of the Website because it is wholly a buyer-to-customer website, which ease the online sale of a property. The website receives a commission from such sales and also makes profits and generates revenue from advertisements displayed on its web pages.
- Avnish Bajaj was arrested under section 67 of the IT Act, 2000, and his bail application was rejected by the trial court. After then he filed petition in Delhi High Court for bail and to have his charges squashed.
- Whether the arguments for the offense under Section 292 (2) (a) and (d) of IPC is made against the website are objectionable or not?
The petitioner argued that due diligence was taken by the website to deactivate the sale of the video clip immediately once it was brought to its cognition that it was objectionable. But Offence under Section 292 of Indian Penal Code includes not only overt acts but illegal omissions within the meaning of Sections 32, 35 and 36 IPC. The issue arises that whether an online marketplace website, Bazee (now E-bay) and its MD could be held to have committed any offence because a pornographic video was listed on the website maintained by the company.
- Are the offences under Section 292 and 294 of IPC and Section 67 of IT Act attracted?
- Whether the MD of the company be held liable if the company has not been arraigned as a principle accused under Section 67 of the IT Act?
Since the MMS was exchanged directly from the seller to the buyer without the intervention of the website, they can at most be responsible for the listing placed on the website which by itself was not obscene and did not attract the offence under Section 67 of the Information Technology (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 lustful or appeals to the lascivious interests such as to deprave, to tend and to corrupt a person. Therefore, the section makes it an offence to distribute, exhibit, advertise, import, export, etc. any obscene content by means of traditional print media.
- Section 294 of the IPC makes it an offence to do any obscene acts, or utter obscene words or songs in public places to the vexation of others.
- Section 67 of the IT Act makes it an offence to transmit or to publish obscene content in electronic form.
Thus, the major difference between Section 292 of the IPC and Section 67 of the IT Act is the former criminalizes the dissemination of obscene content through conventional print media, while the latter criminalizes the transmission of obscene content by electronic means, such as through writings, drawings, books or pamphlets.
- The website Bazee could not be held liable for listing of the MMS because the transaction was never made directly available on the website, the transaction was directly between the seller and buyer without the involvement of the website. Only the listing of the video could not be concluded as sufficient grounds to sue the company under Section 67 of the IT Act or Section 292 and 294 of the IPC.
- Avnish Bajaj could not be termed as an accused because the share of revenues as mentioned in Section 292 of the IPC belonged to the Bazee company. He could not be charged in a case where the company itself had not been accused of the said charges.
- The petitioner further argued that with respect to the provisions of Section 85 of the IT Act, the Delhi police could not charge him under 67 of the IT Act since he had no direct and exact role in the entire listing procedure.
- The petitioner should be held liable as the company had transferred payments to the publisher on 27th December 2004, even after the listing had been removed. This shows that no effort was made to prevent or stop the employment of the illegality by the website.
- It was the petitioner’s duty to make sure that the requisites security procedures ensured by the website were effective. The failure of the system would attract legal consequences.
- The charges made against the petitioner under Sec 292 of the IPC not only hold for obvious acts but also for omissions made illegally as stated in Section 32, 35 and 36 of the IPC.
The court observed that a prima facie case for the offence was made under Section 292 (2) (a) and 292 (2) (d) of the IPC. The court stated in this regard that “by not having appropriate filters that could have detected the words in the listing or the pornographic content of what was being offered for sale, the website ran a risk of having imputed to it the knowledge that such an object was in fact obscene”, and thus it held that as per the strict liability imposed by Section 292, knowledge of the listing can be attributed to the company. The bench noted that it was misleading to state that the company played the role of a mere moderator whereas the function of the company was an integral part for the completion for the entire chain of events. Bazee.com, in this case, was essentially an agent in the entire transaction as it had generated revenue from the listing and also transferred the payment to the advertiser even after the deactivation of the objectionable listing. Hence it was an evident procedural error in not mentioning the company as a principle accused.
The Hon’ble High Court held that the charge-sheet did not make any prima facie case against the petitioner, It also held that the concept of automatic criminal liability on the MD of a company was not recognized in the Indian Penal Code and hence was not held liable under the provisions of Section 292 and 294 of the Indian Penal Code. However, Avnish Bajaj was held liable to the charges under section 85 of the IT Act as, together with Section 67 of the same Act, it argued that even if the company had not been arraigned as a principal accused, a director will be criminally liable.
- There was a prima facie case against the Website BIPL (now EIPL) in regard of the listing of the obscene video clip as an offence, under 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 recognize the concept of automatic criminal liability of a director of a company when the company itself was not mentioned in the charge-sheet and be held liable.
- A prima facie case was made out against Avnish Bajaj for an offence under section 67 of the IT Act since the law recognizes the criminal liability of the directors even where the company is not arraigned as an accused. This is because, according to Section 85 (1) of the IT Act, 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.
- Consequently, while the case against the petitioner of the offences under Sections 292 and 294 IPC is quashed, the prosecution of the petitioner for the offence under Section 67 read with Section 85 IT Act will continue.
- The Supreme Court, in 2012, overruled the findings while stating that, vicarious liability cannot be fastened to Avnish Bajaj and he could not be held liable under the IT Act provisions as the company was not arraigned as an accused. In this regard, the SC drew an alignment between Section 85 of the IT Act and Section 141 of the Negotiable Instruments Act, 1881. 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 SC 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 discharged.
- As result of this case, the IT Act was revised to introduce, an amendment to Section 79(1) of the IT Act. This section, subject to certain conditions, provides immunity and safe harbour to intermediaries (such as the Website) from the penalties under the IT Act for content made available on its platform by third parties.
 Criminal Appeal No. 1222 of 2016
 Section 79 of the IT Act: Intermediaries Not to Be Liable in Certain Cases