What is Due Diligence?..1

(Effect of Section 79 of ITA-2000)

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The recent developments in the Cyber Law interpretation has brought us to the doorsteps of an important discussion on "What is Due Diligence" according to ITA-2000?.

Regular visitors of this site may be familiar with the sub site www.cylawcom.org which discusses certain aspects of the issue. The recently published set of articles "Bloggers Beware" also discussed the issue in great detail. This article further discusses the issue to clarify the risks involved in web publishing in India given the current law enforcement scenario.

In the context of the Information Technology Act 2000 (ITA-2000), it is relevant to consider the references made to the  "Due Diligence" can be seen in the sections 79 and 85.

Section 79 which is meant to provide protection to Network Service Providers states as under:

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 thereunder 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.

Further, according to Section 2(w), "Intermediary" is defined as under

"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;

Section 85 of the ITA-2000 talks about the offences of Companies and states:

Offences by Companies

(1) Where a person committing a contravention of any of the provisions of this Act or of any rule, direction or order made thereunder is a Company, every person who, at the time the contravention was committed, was in charge of, and was responsible to, the company for the conduct of business of the company as well as the company, shall be guilty of the contravention and shall be liable to be proceeded against and punished accordingly:

Provided that

nothing contained in this sub-section shall render any such person liable to punishment if he proves that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention.

(2) Notwithstanding anything contained in sub-section (1), where a contravention of any of the provisions of this Act or of any rule, direction or order made thereunder has been committed by a company and it is proved that the contravention has taken place with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly.

Explanation-

For the purposes of this section
(i) "Company" means any Body Corporate and includes a Firm or other  Association of individuals; and
(ii) "Director", in relation to a firm, means a partner in the firm

The two sections make it amply clear that the legislation does recognize the possibility of Cyber Crimes being committed in such a manner where vicarious liability can be implied on the "Intermediary" and "Company" and exhibits a desire to give them certain protection.

We need to note the words " For the removal of doubts..". This indicates that the legislative intention is obviously not to make the intermediaries liable for the information that merely flows through them. The introduction of the section is only as a means of abundant caution for the removal of doubts. This implies that the legislative intention is wider than what this specific words mean. It is therefore open to a competent court to extend the scope of protection indicated in this section based on the context.

If the intention was to provide restrictive protection to any particular issue, there would have been no need to indicate as if the need for protection is obvious.

The definition of the word "Intermediary" uses the words "Electronic Message" and "Any service with respect to such message". This definition covers not only the e-mail service providers such as yahoo and hotmail but also other service providers who deal with the storing, forwarding or providing any service regarding an "Electronic Message".

The word "Message" used in the definition of an "Intermediary" should not be restricted to "E-mails" since a typical website is a collection of "Content" which is requested for and delivered as a http message in electronic form. Any information provided there in is therefore an "Electronic Message" to the visitors. The words "..third party information or data made available by him " further corroborates this intention since "provision of data or information" is typically the nature of a website.

By definition, an auction site is different from a mere E-Commerce site since in a normal E-Commerce site, the goods of the site owner is put to sale while in the case of an auction site it is the third party goods that are sold.

In an auction site, the intention of the information provider is therefore  clear that the "Content" is a message to a prospective buyer. It is third party information since the prospective seller offers to sell a product or service to a prospective buyer. The role of the auction site is only to facilitate the interaction and exchange of payment for which he receives his remuneration either directly as commission or as "Advertising Revenue" accruing due to visitors coming to his auction website.

Protection under Section 79 of the ITA-2000 is therefore clearly implied in the case of an auction site where a prospective buyer offers an obscene material for sale.

If any  view that an "Auction Website is not an Intermediary under Section 2(w) of ITA-2000" is to be accepted, it would mean that Section 79 of ITA-2000 has to be discarded lock stock and barrel.

....To Be Continued

Naavi

December 19,2004

Also See

Bloggers Beware..Set of 10 articles

Advertising Code?..or Section 67 of ITA 2000?

Related Articles:

At Sify.com

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At Naavi.org:

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Bazee.Com CEO Arrested

Wise Techies realize that Law Can Bite

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