Avnish Bajaj v state (The MMS Case)

Introduction

Avnish Bajaj, the petitioner, was the Managing Director of Bazee, a firm that provided an online platform and marketplace where vendors could display their goods and services and customers could select whether or not to acquire any of them. An inappropriate advertisement for a pornographic film named "DPS Girls having fun" was discovered on the Bazee website, and the company's safety filters failed to identify this item. The manual examination showed the possibility of pornographic content being listed, which was deleted from the website by Bazee within a few days. However, despite the brief time the item was available for sale, a number of people acquired the films. The prosecution filed a charge sheet against Bazee's then-Managing Director, alleging that he violated Section 292 of the Indian Penal Code (advertisement/sale of obscene objects) and Section 67 of the Information Technology Act (causing the publication of obscene objects on the internet). The competent Court issued a summons order against the accused, and the accused filed a case under Section 482 with the Delhi High Court seeking the quashing of the summon.

In the Delhi High Court
Case Name: Avnish Bajaj v. State (NCT) of Delhi
Citation: (2008) 105 DRJ 721; (2008) 150 DLT 769
Appellant: Avnish Bajaj
Respondent: State of Delhi
Bench/Judges: S Muralidhar J.
Relevant Sections: Section 292 and 294 of Indian Penal Code, 1860, Section 67 and 85 of Information Technology Act, 2000
Acts Involved: Indian Penal Code, 1860 Information Technology Act, 2000

Background to the Case

An pornographic MMS video named "Item 27877408 - DPS Girls having fun!!! full video + Baazee points." was advertised for sale on www.bazeee.com (now www.ebay.in). Despite the website's precautions, this advertisement was not traced.
The item in question was placed on the website on November 27, 2004 and deleted two days afterwards on November 29, 2004 due to a complaint against the firm. Meanwhile, a few purchase were made through the website.
The Crime Branch of Delhi found Sharat Digumarti, the Website's manager, and Ravi Raj, Avnish Bajaj, the managing director, liable for mishandling the website's material. They were referred to as the accused in the charge sheet.

Facts about the Case

On November 27, 2004, Ravi Raj, an IIT Kharagpur student, listed an obscene pornographic video clip named "DPS Girls having fun!" for sale on baazee.com under the username 'Alice-elec'. The movie was advertised as an MMS costing Rs. 125 in the "e-books" category to guarantee that inappropriate content was not sold.
On November 29, 2004, the indecent item posted was disabled and deleted. The Delhi Police Crime Branch took note of the situation and filed a FIR. Following an inquiry, a charge sheet was filed against Ravi Raj, Avnish Bajaj, MD of Baaze.com, and Sharat Digumarti, the person in charge of processing such information.
On February 14, 2006, the Metropolitan Magistrate filed charges against Ravi Raj, the seller, Avnish Bajaj, MD of BIPL, and Sharat Digumarti, Senior Manager, Trust and Safety, BIPL, under Sections 292 and 294 of the IPC and Section 67 of the IT Act, 2000.
After Ravi Raj escaped, Avnish Bajaj petitioned to have the criminal proceedings against him quashed. He maintained that the MMS was transferred directly between the seller and buyer without the involvement of the platform because it is entirely a buyer-to-customer platform that facilitates the online sale of a property. The website earns a percentage on such sales, as well as earnings and revenue from adverts placed on its web pages.
Avnish Bajaj was charged under section 67 of the IT Act, 2000. His bail motion was denied by the trial court. After that, he petitioned the Delhi High Court for bail and to have his charges dropped.

Issues

Are the justifications for the offence under Section 292 ( 2 ) ( a ) and ( d ) of IPC against the website inappropriate or not?
Do offences under Sections 292 and 294 of IPC and Section 67 of IT Act apply?
Can the firm's MD be held accountable if the company has not been charged as a principal under Section 67 of the IT Act?

Important Provisions

The Indian Penal Code's Section 292 addresses obscenity and stipulates that anything or anybody that arouses lust or appeals to lascivious desires, such as depraving, tending, or corrupting someone, is considered obscene. As a result, the clause makes it illegal to distribute, show, market, import, export, or otherwise deal with obscene information through traditional print media.
It is illegal to do any obscene activities or to sing or say offensive words or music in public to the annoyance of others, according to Section 294 of the IPC.
The IT Act's Section 67 declares it unlawful to post or send pornographic material electronically.

Therefore, Section 292 of the IPC and Section 67 of the IT Act differ primarily in that the former makes it illegal to distribute offensive material via traditional print media, while the latter makes it illegal to transmit offensive material electronically, including through writings, drawings, books, or pamphlets.

Arguments Advanced

Petitioner's Arguments

Due to the fact that the transaction was conducted directly between the seller and the buyer, without the assistance of the website Bazee, the website could not be held accountable for advertising the MMS. Section 67 of the IT Act and Sections 292 and 294 of the IPC do not provide adequate justification for suing the corporation based only on the video's listing.
Since the Bazee firm owned the revenue share specified in Section 292 of the IPC, Avnish Bajaj could not be considered an accused. In a situation where the business had not been accused of the specific accusations, he could not be prosecuted.
The petitioner also contended that as he had no specific and direct involvement in the listing process, the Delhi police could not prosecute him under Section 67 of the IT Act in accordance with the requirements of Section 85 of the Act.
The website used due diligence in promptly removing the offending video clip as soon as it was brought to their attention.
Only the publication of pornographic content is covered by Section 67 of the IT Act; transfer of such material is not.

Respondent's Arguments

Even though the item was taken down, the corporation paid the publisher on December 27, 2004, thus the petitioner should be held accountable. This demonstrates that no attempt was taken to halt or prevent the website from using unauthorised content.
The petitioner was responsible for ensuring the effectiveness of the necessary security measures that the website guaranteed. Legal repercussions would follow the system's failure.
The petitioner is facing accusations under Section 292 of the IPC for not only evident crimes but also for illegal omissions as specified in Sections 32, 35, and 36 of the IPC.

Judgement

For the listing and the video clip, respectively, the court noted that a prima facie case for the violation under Sections 292 ( 2 ) ( a ) and 292 ( 2 ) ( d ) IPC is made out against the website. The court held that under the strict liability imposed by Section 292 knowledge of the listing can be imputed to the company because it "ran a risk of having imputed to it the knowledge that such an object was in fact obscene because "the listing's words or the pornographic content of what was being offered for sale could not have been detected by the website's appropriate filters."

Regarding Avnish Bajaj, however, the court determined that while the petitioner can be released under Sections 292 and 294 of the IPC, the other accused cannot be, as the Indian Penal Code does not acknowledge the idea of an automatic criminal liability attaching to the director when the company is an accused.

Regarding S. 67, as well as Section 85 of the IT Act, the Court noted that, notwithstanding the law's recognition of the directors' presumed criminal guilt in situations in which the corporation is not charged, a prima facie case had been established against the petitioner, Avnish Bajaj. Nonetheless, the verdict did not find Avnish Bajaj guilty.

Highlighted Concepts

A prima facie case was built against the Website BIPL (now EIPL) regarding the obscene video clip's designation as an offence under Section 292 of the IPC's subsections.
Since the business was not prosecuted as a plaintiff, Avnish Bajaj could not be held accountable.
The idea that a director of a corporation would automatically be responsible for criminal offences even if the firm was not named in the charge sheet was not recognised by the IPC.
As a result, even though the petitioner's case for the charges under Sections 292 and 294 IPC is dismissed, the petitioner would still be prosecuted for the offence under Section 67 r/w Section 85 IT Act.
The verdicts were overturned by the Supreme Court in 2012, which concluded that Avnish Bajaj could not be held accountable under the terms of the IT Act as the corporation had not been charged. The SC established a line of alignment between Section 141 of the Negotiable Instruments Act, 1881 and Section 85 of the IT Act in this respect. Regarding some offences committed by corporations under the NI Act, section 141 of the NI Act and section 85 of the IT Act are equivalent in content. As per the Supreme Court's interpretation of section 141 of the NI Act, the business's conduct of an infraction was a prerequisite for the culpability of other individuals in control of the company. Consequently, because the company was not sued, Avnish Bajaj was released from his duties.
In response to this lawsuit, Section 79( 1 ) of the IT Act was amended and included to the updated statute. Subject to specific restrictions, intermediaries (like the Website) are shielded from legal action under the IT Act for content that third parties post on their platform by this clause, which also offers safe harbour protection.

Conclusion

Regarding Avnish Bajaj, however, the court determined that while the petitioner can be released under Sections 292 and 294 of the Indian Penal Code, the other accused cannot be, as the IPC does not recognise the idea of an automatic criminal liability attaching to the director where the company is an accused. However, in order to be granted bail, two sureties, each worth Rs. 1 lakh, must be provided. In addition, the court mandated that Mr. Bajaj give up his passport and refrain from leaving India without the court's approval. The Court noted that a prima facie case was established against the petitioner Avnish Bajaj in relation to S. 67, read with Section 85 of the Information Technology Act, as the legislation acknowledges the directors' presumed criminal guilt even in situations in which the corporation is not charged. It was decided not to convict Avnish Bajaj.