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2016 (12) TMI 1821 - SC - Indian Laws


Issues Involved:
1. Prosecution of the appellant under Sections 292 and 294 of the Indian Penal Code (IPC) and Section 67 of the Information Technology Act, 2000 (IT Act).
2. Interpretation of Section 85 of the IT Act in relation to vicarious liability.
3. Applicability of Section 292 IPC after discharge under Section 67 of the IT Act.
4. Overriding effect of IT Act provisions over IPC provisions.

Issue-wise Detailed Analysis:

1. Prosecution under IPC and IT Act:
The appellant, along with others, was charged under Sections 292 and 294 IPC and Section 67 of the IT Act. The High Court discharged the appellant from Sections 292 and 294 IPC but found a prima facie case under Section 67 read with Section 85 of the IT Act. The trial court was directed to proceed accordingly.

2. Interpretation of Section 85 of IT Act:
The core issue was whether the company could be prosecuted without being impleaded as an accused and whether directors could be prosecuted without the company being arrayed as an accused. The court held that commission of an offence by the company is a condition precedent to vicarious liability of others. Thus, the director could not be held liable under Section 85 of the IT Act without the company being prosecuted.

3. Applicability of Section 292 IPC after discharge under Section 67 of IT Act:
The appellant argued that prosecution under Section 292 IPC was not maintainable after discharge under Section 67 of the IT Act. The Attorney General contended that Section 67 of the IT Act is a special provision that overrides Section 292 IPC. The court noted that Section 67 of the IT Act deals specifically with electronic records and is a special provision for a specific purpose. The IT Act, being a special enactment, has overriding provisions that cover offences related to electronic records.

4. Overriding effect of IT Act provisions:
The court emphasized that the IT Act's provisions, being special laws, prevail over the general provisions of the IPC. Section 81 of the IT Act explicitly states that its provisions shall have effect notwithstanding anything inconsistent with any other law. The court concluded that once the offence pertains to electronic records, the protection and effect of Section 79 of the IT Act cannot be ignored, and the special provisions of the IT Act would apply.

Conclusion:
The appeal was allowed, and the orders of the High Court and trial court were set aside. The criminal prosecution against the appellant was quashed, emphasizing the overriding effect of the IT Act's special provisions over the IPC in cases involving electronic records.

 

 

 

 

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