Special yet not special enough: Bombay High Court’s Full Bench on IT Act vs IPC offences

A Full Bench of the Bombay High Court recently answered a reference on the interplay between offences under the Information Technology Act, 2000 (IT Act) and the Indian Penal Code, 1860 (IPC).

Since December 2016, the Supreme Court’s decision in Sharad Babu Digumarthi v. State of NCT has held the field. Digumarthi has been used in several cases to argue that the IT Act is a special law, and because of Section 81 thereof, proceedings under provisions of the IPC are barred. However, the Full Bench held that Digumarthi applies only to offences where the ingredients under the general and special law are “exactly the same”. The Full Bench has further held that even if one ingredient under the IPC is missing under the special statute, the IPC will apply subject to Section 71 thereof, and to Section 26 of the General Clauses Act, 1897.

Context of the reference

The controversy is this: when an employee steals data/computer source code of the employer, can he be prosecuted under both Sections 66 and 72 of the IT Act as well as provisions of cheating and breach of trust under the IPC?

A division bench in Gagan Harsh Sharma v. State of Maharashtra had followed Digumarthi and held that the offence would fall within Section 66 of the IT Act. Sections 79 and 81 of the IT Act give it an overriding effect and for offences pertaining to an electronic record, Section 66 would take out the provisions of the IPC. A special leave petition against Gagan Harsh Sharma was dismissed in limine. However, a subsequent division bench in Awadhesh Kumar Parasnath Pathak v. State of Maharashtra expressed its disagreement with the order in Gagan Harsh Sharma and referred the matter to the Full Bench.

Section 43 of the IT Act provides for penalty and compensation when a person without permission of the “owner” or “person in charge” of the computer, computer system or computer network commits any of the acts in clauses (a) to (f). Any act contemplated by Section 43 done “dishonestly” or “fraudulently” constitutes an offence under Section 66 and is punishable with imprisonment for a term which may extend to three years or with fine which may extend to five lakh rupees or with both.

Section 72 of the IT Act provides for punishment for breach of confidentiality and privacy when any person who, in pursuance of any of the powers conferred under the IT Act, rules or regulations made thereunder, has secured access to information.

Full Bench's findings

In paragraphs 12 and 29, the Full Bench has analysed in a tabular format, the ingredients of the relevant sections of the IT Act and IPC. Thereafter, the Court has held:

a) Section 43 read with Section 66 of IT Act and Sections 415 and 420 of the IPC do not define “exactly the same offences” because of the additional requirement of “deception” under the IPC. The Court relied on State of Uttar Pradesh v. Aman Mittal in the context of the Legal Metrology Act, 2009, the IPC and Section 26 of the General Clauses Act, 1897.

b) Digumarthi applies only where the offence under the special act and the general act are exactly the same.

c) Section 72 and Sections 406, 408, 409 of the IPC constitute different offences because Section 72 only applies without the consent of the concerned person and does not require entrustment, dishonesty etc.

d) Following the decision of the Supreme Court in Aman Mittal, the Court held that acts performed by two or more persons with common intention and criminal conspiracy is not covered by the IT Act and, therefore, the prosecution for those offences can be maintained under the IPC.

Analysis

While one cannot find fault with the Full Bench’s conclusions above, respectfully, the interpretation of Digumarthi appears to be flawed because:

a) In Digumarthi, the Supreme Court considered provisions on obscenity: Section 67 of the IT Act and Section 292 of the IPC. According to the Court, Digumarthi held that the IT Act will prevail only when the ingredients are exactly the same. Though the respondent advanced arguments that Section 67 punishes publication while 292 punishes sale, the Supreme Court did not rule on this argument. In fact, it is arguable that the ingredients are not “exactly the same”, though definition of obscenity is the same. Section 67 requires “publication” or “transmission” of obscene material. Section 292 on the other hand, makes mere possession of the obscene material an offence. However, the Supreme Court in Digumarthi clarified that it was not entering into the controversy of whether possession is covered under Section 292.

b) The ratio in Digumarthi is that as soon as the material is in “electronic form” or pertains to an “electronic record”, the IT Act kicks in and is a complete code in view of Section 81. It also held that the protection and effect of Section 79 cannot be ignored.

c) In fact, the Supreme Court in Aman Mittal specifically interpreted Digumarthi, and held that Digumarthi ’s ratio is that “an offence pertaining to electronic record falls within Section 67 of the IT Act, whereas Section 292 IPC deals with an offence of obscenity in the printed format, therefore, two offences operate in different fields”.

Therefore, the basis of the Court distinguishing Digumarthi is not fully correct.

A better way to distinguish Digumarthi could be:

a) Digumarthi’s observations were made in the particular facts and circumstances of that case because the petitioner in Digumarthi had already been discharged of offences under Section 67 of the IT Act and 294 of the IPC. Only a charge under 292 IPC remained.

b) The petitioner was also claiming protection under Section 79 of the IT Act, available only to intermediaries, not to originators. The final finding in Digumarthi therefore also turned on the exemption from liability under Section 79.

c) Though an argument on sameness was made in Digumarthi, the Supreme Court did not deliver findings on it.

d) The Supreme Court did not consider Section 26 of the General Clauses Act.

Final thoughts

In principle, my view is that the decision of the Full Bench of the Bombay High Court is the correct view of the law, although its interpretation of Digumarthi is questionable. Offences involving electronic records are peculiar beasts and should be dealt with a wide net. The IT Act does provide a wider net than the IPC in most cases for two reasons: one, because the requirement of mens rea is lower for IT Act offences (for example, hacking without inducement or deceit is still punishable) and two, because the IT Act contains a vicarious liability provision which is missing in the IPC. In keeping with the principles of criminal law, what is prohibited by Section 26 of the General Clauses Act, 1897 [and Article 20(3) of the Constitution] is punishment twice for the same offence, not prosecution. Simply because an electronic record is involved, an offence should not be put out of the reach of the IPC.

I would expect that the Supreme Court will have the opportunity to put quietus to this issue, sooner or later. Until then, we as lawyers will find ways to reconcile these two decisions.

Shloka Narayanan is a Principal Associate at Poovayya & Co.