CRL.M.C. 3066/2006 Page 1 of 53 IN THE HIGH COURT OF DELHI AT NEW DELHI Reserved on: 28th February 2008 Date of judgment: 29th May 2008 CRL.M.C. 3066 of 2006 AVNISH BAJAJ ..... Petitioner Through Mr. Arun Jaitley, Senior Advocate and Mr. Sidharth Luthra, Senior Advocate with Mr. Vijay Sondhi, Mr. Rajat Bali, Mr. Saleem Hassain and Mr. Shri Singh, Advocates. versus STATE ..... Respondent Through Ms. Mukta Gupta, Senior Standing Counsel for the State. CORAM: HON'BLE DR. JUSTICE S. MURALIDHAR 1. Whether Reporters of local papers may be allowed to see the judgment? Yes 2. To be referred to the Reporter or not? Yes 3. Whether the judgment should be reported Yes in Digest? JUDGMENT Dr. S. Muralidhar, J. Introduction 1.1 Over three and a half years ago, an internet website carried a listing which offered for sale a video clip, shot on a mobile phone, of two children of a school in Delhi indulging in an explicitly sexual act. The petitioner, who was the Managing Director (MD) of the company that owned the website at the relevant point in time, asks this Court to annul his criminal prosecution for the offences of making available for sale and causing to be published an obscene product within the meaning of Section 292 Indian Penal Code (IPC) CRL.M.C. 3066/2006 Page 2 of 53 and Section 67 of the Information Technology Act 2000 (IT Act). This petition under Section 482 of the Code of Criminal Procedure 1973 (‗CrPC‘) also raises questions concerning the criminal liability of directors for the offences attributable to a company, both under the IPC as well as the IT Act, particularly when such company is not arraigned as an accused. 1.2 Before discussing the background and the sequence of events leading to the filing of this petition, it is necessary to understand the context in which the issues arise for determination. The regulation of pornography on the internet has posed a serious challenge to governments and legislatures primarily on account of the nature of the medium. The easy availability, even to children, of pornographic material in digital form including video clips, its rapid transmission across the world wide web, and the absence of effective filters to screen out objectionable material from being accessed are factors that compound the challenge. It is said that ―controlling pornography on the internet is problematic because we may not know from whom or from where the material originates, how many people are receiving the information, or if the material is crossing international boundaries.‖ [See Robyn Forman Pollack, ―Creating the Standards of a Global Community: Regulating Pornography on the Internet- an International Concern‖ 10 Temple International and Comparative Law Journal, (Fall, 1996) 467]. 1.3 It is acknowledged that ―the main concern of the legislators and parents in relation to the internet is child pornography, rather than other forms of sexually explicit content. This has been the case ever since paedophiles started to use the internet for circulating pornographic materials related to CRL.M.C. 3066/2006 Page 3 of 53 children.‖ [See Yaman Akdeniz, ―Cyber Rights, Protection and Markets: Article Governing Pornography and Child Pornography on the Internet: The UK Approach” 32 University of West Los Angeles Law Review 247 (2001)] Akdeniz points out that although in some countries there are arguments against proscription of pornography based on freedom of speech concerns, ―there is general consensus that the line should be drawn with child pornography.‖ These factors need to be borne in mind while examining the irreversible harm that can be caused by making available on the internet sexually explicit material that answers the description of child pornography. Background facts 2.1 Baazee.com India Private Limited (‗BIPL‘), a wholly owned subsidiary of Ebay Inc. USA, and the owner of the website http://www.baazee.com, was during the relevant period in the process of being acquired by and consequently renamed as Ebay India Private Limited (EIPL). BIPL had its main office at Mumbai and another office in Delhi. During November to December 2004 the petitioner Avnish Bajaj was the MD of BIPL (which later was renamed as EIPL). 2.2 The website baazee.com provided an online platform or market where a seller and a buyer could interact. To be either a seller or buyer a person had to first register himself with baazee.com by filling out an online form giving details including the name, email id, date of birth (the age had to be 18 and above). The person registering had to choose an appropriate ‗baazee ID‘ and a password which would be used every time the person logged on to the website baazee.com to transact either as a seller or a buyer. While CRL.M.C. 3066/2006 Page 4 of 53 registering, the applicant had to make a declaration to the following effect: ―I have read the User agreement carefully – I am above 18 years of age. I have read and agreed to abide by the baazee.com user agreement…‖ The next stage in the registering process was reached after the person clicked on ―Accept Terms & Submit‖. Thereafter an email was sent to the person by baazee.com in which a link was provided for activating the account. A person who registered following the above online procedure could either sell or buy products on the electronic market that baazee.com offered by using the baazee.com ID and password. 2.3 To be a seller a two-step process was envisaged. The first step was to get registered following the procedure described hereinbefore. The second step was to ―create a listing.‖ Again several steps were to be followed. First the seller would select a category and sub-category that broadly classified the product proposed to be sold. Then the item details had to be specified. The website advised: ―Enter the title that you would like to give your item in the text box provided. Give a title that describes your item best. Try to include specifications such as brand name, model number etc. The idea is to make your title most self explanatory and distinctive. Do not use web language (HTML).‖ The website also recommended that the seller should ―always include an image that depicts your item correctly.‖ The price and payment mode preferences were also to be indicated. Baazee.com also offered a mode of receiving payment under ‗paisapay‘. The user could also opt for other methods like cheques, demand drafts, cash on delivery etc. 2.4 When a user was listing an item for the first time on the site, a customer CRL.M.C. 3066/2006 Page 5 of 53 support representative had to verify his contact details (address and phone number) by calling up the user on the contact number given in the registration details. For an already registered user who wished to list some other item, there was an automated website filter which checked the item to identify whether it was a prohibited or restricted item. BIPL had a Safety and Trust Division which instituted word and text filters so that objectionable listings could be removed. A Community Watch Programme was also operational. If anyone brought to the notice of BIPL that any objectionable material was being listed, it would trigger a process by which the listing would be deactivated. Once the item was automatically screened by the filter, the listing was placed on the site with a unique computer generated item ID. 2.5 The buying process was fairly straightforward. The registered buyer had to find the item by using the Search box. He then had to browse the categories and sub-categories. After reading the item description, if the person intended to buy, he would click ―buy now‖, select the payment method, specify the delivery details and confirm the order. This resulted in a purchase order being generated. Then came the question of payment through either the credit card or online bank transfer. If the buyer opted for a ―paisapay‖ option and made an online payment, the normal banking payment gateway got attracted. Once the payment gateway confirmed the receipt of the payment then an automated payment confirmation was sent to the buyer. Thereafter the buyer received the item, depending on the product, through email, hand delivery, courier or post. CRL.M.C. 3066/2006 Page 6 of 53 2.6 When buyers opted for the ―paisapay‖ method, the system would once in a week calculate the amount payable to the listed user and send a file to the HDFC bank to issue a printed demand draft (DD) in the name of bank account number provided by the seller on www. baazee.com. The HDFC Bank would then dispatch the DD to the address provided by the seller. For facilitating this entire transaction BIPL received a commission which was usually a percentage of the selling price of the product. The sequence of events 3.1 The sequence of events relevant to the present case unfolded thus. Ravi Raj, a fourth year student of the Indian Institute of Technology (IIT) Kharagpur, was registered as a seller with baazee.com since 21st July 2004. He had already been using the site for listing products for sale. His email ID was psell@sify.com. 3.2 In the evening of Saturday 27th November 2004, Ravi Raj placed on the baazee.com website a listing offering an MMS video clip for sale at Rs.125 per piece. He adopted the seller‘s name as Alice Electronics and gave his address as 12-A/39, Roshpa Tower, Main Road, Malanche, Kharagpur. In order to avoid detection by the filters installed by baazee.com, Ravi Raj included the clip under the category Books and Magazines and sub-category ‗e-books‘. Although baazee.com did have a filter for some of the words which appear on the website, the listing nevertheless took place. For instance, the word ―sex‖ at serial No.23 of the list and word ―sexual‖ at serial No.70 of the list were definitely part of the suspected words. CRL.M.C. 3066/2006 Page 7 of 53 3.3 The electronic website baazee.com when visited had the following item description on its site: ―Item 27877408 - DPS Girls having fun!!! full video + Baazee points.‖ The price was Rs.125. Under the column ―seller‘s details‖ the name indicated was: ―alice elec‖ and Location: ―Kharagpur‖. The seller was shown as a Member since 21st July 2004. Upon clicking on the item description, the listing read as under: “DPS Girls having fun!!! Do you want to see that video clip which has rocked the whole DELHI and now has become a hot point of discussion in the entire Nation? YES, Then what are you waiting for!!!! Just order for this product and it will be delivered to you within few hours. This video is of a girl of DPS RK PURAM which has been filmed by his boyfriend in very sexual explicit conditions. Please note: This video clip of around 2:30 Minutes and will be send to you as an email attachment.‖ 3.4 The buyer interested in getting a copy had to click on the ‗buy now‘ option, make a payment through credit card or ‗paisa pay‘ option. The buyer had to pay Rs.128 per clip which included a commission of Rs.3 that went to BIPL. This was deducted from the amount received from the buyer and the balance of Rs.125 per clip was remitted to the seller by the HDFC bank. The seller, on receiving confirmation that payment had been made, would send CRL.M.C. 3066/2006 Page 8 of 53 the video clip by an email attachment by a zip file with the description ‗dps_rkpuram-sex-scandle.zip‘. Between around 8.30 pm in the evening of November 27th 2004 when the listing went on line till around 10 am on 29th November 2004 when the listing was de-activated, eight transactions of sale of the said video clip took place to buyers located in various parts of the country. 3.5 At around 8.20 pm on Saturday 27th November 2004 information was received on email from Amit Vohra using emailed threadsincp@sify.com for Community Watch. The mail titled ―fraud report about item ID 27877408‖ read as under: ―User‘s Message The username of the party is alice-elec. This person is trying to sell a video which is illegal in India as it was shot on two people who are below the legal age of 18 & pornography is illegal in India. You need to sort this issue & you should even report it to the legal authorities as this can get your site in trouble.‖ 3.6. This email was assigned to Namrata of BIPL at around 8.25pm on 27th November 2004 itself. At around 6:25pm on the next date i.e. 28th November 2004, which happened to be a Sunday, it was assigned to Swapna Sawant of the BIPL and the priority was shifted to the ‗high alert‘ category. 3.7 On 29th November 2004 at 10:10am baazee.com wrote to Alice Electronics that it had noticed ―that the listings put up on site by you are either obscene or pornographic in nature‖ and that the Baazee User CRL.M.C. 3066/2006 Page 9 of 53 Agreement prohibits trade in such items. It accordingly informed the seller ―we have closed the item as it is against the User Agreement.‖ Soon thereafter Swapna Sawant of BIPL addressed a letter next morning i.e. on Monday 29th November at 10:38 am to Amit Vohra thanking him for ―spotting this and reporting to us at Community Watch that the Item ID: 27877408 is pornographic in nature. We have closed the items and have taken this issue up with the seller.‖ The video clip was removed on 29th November 2004 Monday at around 10:38 am. Meanwhile eight persons with distinct IDs located in different parts of the country including Calcutta, Nellore, Pune, Delhi, Banglore and Chennai had purchased it. 3.8 On 9th December 2004 two events took place. The Crime Branch of Delhi police, on receiving credible information that the said MMS clip was sold for Rs.125 by a website, registered FIR No. 645 of 2004. On the same day a news item appeared in a Delhi the newspaper ―Today‖ with the headlines ―DPS sex video at baazee.com‖. The news item by Anupam Thapa had the byline ―Outrage Exclusive‖ and stated ―online website goes ahead with the sale of the infamous clip‖. The news item stated: ―India‘s biggest online trading portal baazee.com had listed the said MMS clip under the title ‗DPS girls having fun‘ with the member ID of 27877408. The police upon investigation learnt that one Alice Electronics of Kharagpur West Bengal had since 27th November 2004 sold 8 copies of the said MMS clip.‖ 3.9 The police sent notices under Section 91 CrPC to the petitioner and Sharat Digumarti, the Senior Manager, Trust and Safety, BIPL (who is Accused No.3) and obtained information on the working of the website. On CRL.M.C. 3066/2006 Page 10 of 53 10th December 2004 in response to a query addressed to baazee.com, Sharat Digumarti provided ―the details of the seller (alice_elec) and the buyers who purchased this item.‖ He stated that they had ―already disabled the ability of the seller and the buyers in modifying their contact details and the attached file contains the contact details of these users which was taking from our database (File Name ‗DPS Data‘) and also file (File Name: DPS Listing) which show the item that was listed on the site.‖ 3.10 On 11th December 2004 the police seized the printout of an email containing two pages regarding email ID vishwa777@yahoo.com dated 27th November 2004 with the time as 17:58:26 which was the placement of the order and an email of the same date received at that very address from Ravi Raj the seller at <psell@sify.com> with the time as 20:05:13 with the email attachment dps_rkpuram_sex_scandal.zip which is a zip file sent to the said email ID. The subject of the email was ‗DPS Sex Scandal‘. The third item seized was an Amkette floppy which had an email from the seller and confirmation email from baazee.com. Details of the email placement of the order and receipt of the product by each of the other buyers was also collected. 3.11 On 12 December 2004 Sharat Digumarti furnished the details of the payments received from the buyers and confirmed that a sum of Rs.17,787.87 was disbursed to the seller ‗alice_elec‘ through the HDFC Payment Services. 3.12 On 14th December 2004, the petitioner wrote to the police about his role CRL.M.C. 3066/2006 Page 11 of 53 and responsibility. Inter alia he stated that: ―I am responsible for the India operations of the Company and my charges, assigns, includes policy decisions, planning, control and overall supervision of day to day functioning of the organization.‖ 3.13 In his letter dated 14th December 2004 Sharat Digumarti explained the registration, buying and selling process and payment process at baazee.com. He enclosed a note on how the ―list of the suspected and banned words‖ worked and the process of detection of leakage. He also gave details of the working of Community Watch. Thereafter a list of 120 words as on 14th December was attached. Although in the said list at serial No. 106 the word ―dps‖ and at serial No. 110 the word ―RKP‖ were included, these were admittedly added after the sale of the objectionable video clip came to light. The contents of the clip itself were therefore not under screening in the automated process since the clip itself was not on the baazee.com. 3.14 The Manager, Finance and paisapay of baazee.com wrote a detailed letter to the police giving information on how the said system works and gave a complete list of the transactions involving the video clip. This letter confirmed that Rs.128 was charged per piece from each of the buyers. Rs.3 rupees were paisapay charges and Rs.125 went to the seller. 3.15 On 17th December 2004, Ravi Raj was arrested at Kharagpur and certain recoveries were effected from him including the CPU containing the hard disk of the computer from where the email attachments of the offending video clip were despatched. The petitioner Avnish Bajaj was arrested in CRL.M.C. 3066/2006 Page 12 of 53 Mumbai on the same day. He was later released on bail by this Court on 21st December 2004. At the conclusion of the investigations, a charge sheet was filed showing Ravi Raj, Avnish Bajaj and Sharat Digumarti as Accused Nos. 1,2 and 3 respectively. 3.16 The learned Metropolitan Magistrate (MM) by an order dated 14th February 2006 took cognizance of the offences under Sections 292 and 294 IPC and Section 67 IT Act. The three accused were summoned to face trial. Ravi Raj has since been absconding and his trial has been separated. 3.17 This petition was filed by Avnish Bajaj, the MD of BIPL (EIPL) seeking the quashing of the criminal proceedings on various grounds which will be discussed hereafter. During the pendency of this petition there has been a stay of the proceedings before the trial court. Submissions of Counsel 4.1 Arguments on behalf of the petitioner were addressed by Mr. Arun Jaitley and Mr. Sidharth Luthra, Senior Advocates. 4.2 According to the petitioner, the case against BIPL is not, and cannot possibly be, in relation to the video clip since the clip itself was not made available on baazee.com. The video clip was transferred directly between the seller and buyer without the intervention of the website. While no submission was made in regard to the video clip being obscene, the submission of the petitioner was that at the highest BIPL was concerned only with the listing placed on the website which by itself was not obscene CRL.M.C. 3066/2006 Page 13 of 53 and did not attract the offence under Section 292/294 IPC or Section 67 IT Act. 4.3 It was then argued that in any event without BIPL (EIPL) being made an accused, no criminal liability attached to the petitioner for an IPC offence only because he happened to be the MD of BIPL (EIPL) at the relevant time. The revenue generated by the website was not profit as contemplated by Section 292 IPC and in any event such income was not generated by the petitioner but by BIPL which is not an accused in the case. Reasonable care was taken by the website to immediately remove the video clip once it was brought to its knowledge that it was objectionable. Therefore the website acted diligently and did not commit any illegality. The charge sheet when read as a whole does not make out even a prima facie case against the petitioner in his individual capacity for the offences under Sections 292/ 294 IPC. 4.4 In relation to Section 67 IT Act, it was argued that in the absence of the company BIPL (EIPL) itself being made an accused, no liability could attach to the petitioner with the aid of Section 85 IT Act. A reading of the charge sheet as a whole would show that although the petitioner as MD was in overall charge of the policy and planning of the business, he had no direct role in the placing of the listing or its filtering and subsequent removal. This was an automated process and the work of supervising the placing of listings on the website had been delegated to specific individuals like Accused No.3 Sharat Digumarti. Criminal liability cannot be fastened lightly in the absence of a specific case being made out against the petitioner in his individual CRL.M.C. 3066/2006 Page 14 of 53 capacity, particularly since the company of which he was MD is not arraigned as an accused. 5.1 Appearing for the State, Ms.Mukta Gupta, learned Senior Standing Counsel submitted that the sequence of events, the listing, video clip and the role attributed to the petitioner, fully make out a case against the petitioner for the offences under Section 292 IPC and Section 67 IT Act. The offence under Section 292 IPC includes not only overt acts but illegal omissions within the meaning of Sections 32, 35 and 36 IPC. The failure to have adequate filter in a system which is entirely automated, entails serious consequences and a website cannot escape such legal consequences. 5.2 It is further submitted by the learned counsel for the State that the fact that website earned profits through the sale is evident from the bank statements which show that for each video clip it did earn a commission of Rs.3. The chain of events show that the website had a role to play in several of the stages before the video clip was sent by the seller to the buyer by an email attachment. The fact that payment was made to the seller even as on 27th December 2004 shows that no attempt was made to prevent or stop the commission of the illegality by the website. 5.3 It was submitted by Ms.Gupta that the petitioner was the person in- charge of the affairs of the company that owned the website and was responsible for its policy and planning. There is adequate material set out in the charge sheet which shows that the petitioner had a direct role in the matter. Notwithstanding that the BIPL itself is not arraigned as an accused, CRL.M.C. 3066/2006 Page 15 of 53 the petitioner can nevertheless be proceeded against for the role played by him in the transaction. 5.4 For the offence under Section 67 IT Act, it is not necessary that the company BIPL itself should be an accused. As explained in the judgments of the Supreme Court, what is relevant is whether at the trial a case for convicting the company for the offences had been made out. The present stage was premature to come to a conclusion either way. Even at a subsequent stage in the proceedings, the court can summon the company if sufficient material emerges against it. 5.5 Finally it was submitted that the crime is of an extremely grave nature and cannot go unpunished on technicalities. Even if the charge sheet does not contain specific allegations, the matter can still proceed to the next stages. At this stage the court is only to examine if a prima facie case is made out and on that test no interference