"Safe Harbour" Protection Available To Intermediaries Qua Criminal Prosecution Unless 'Active Role' Is Disclosed In Commission Of Offence: Delhi HC

The Delhi High Court has observed that unless an active role is disclosed in the commission of the offences as complained of, an intermediary would be entitled to claim protection under Section 79 of the Information Technology Act, 2000. The provision exempts liability of intermediary in certain cases. It states that an intermediary shall not be liable for any third party information, data, or communication link made available or hosted by it. However, the provision will not apply if the intermediary has conspired or abetted or aided or induced, whether by threats or promise or otherwise in the commission of the unlawful act. Justice Asha Menon observed,"When the intermediaries have been granted the ―safe harbour qua civil liability, and when a higher standard of culpability is required for a criminal prosecution, such "safe harbour" should be available even in respect of criminal prosecution. Thus, unless an active role is disclosed in the commission of the offences complained of, the intermediary, such as the present petitioner, would be entitled to claim protection under Section 79 of the I.T. Act."The remarks were made while quashing an FIR against e-commerce website Flipkart wherein the complainant alleged that unauthorized persons were selling fake products by the name of DC DERMACOL on Flipkart as well as Amazon India portals.It was alleged in the complaint that the same was being done in connivance with the fake and unauthorized re-sellers, thereby accusing Flipkart of cheating and illegal selling of products of DC DERMACOL cosmetics.The FIR was registered under sec. 63 of the Copyright Act, 1957 and sec. 103 and 104 of the Trade Marks Act, 1999. Flipkart is an intermediary as per sec. 2(1)(w) of the IT Act. The Court was of the view that there is an obligation of the intermediary to observe due diligence and to follow the rules and guidelines that may be prescribed by the Government. Reference was made to Rule 3(1) of the IT Rules which states that an intermediary shall observe the due diligence while discharging its duties. However, the Court noted that the non-compliance of the Guidelines or Rules have not been declared to be an offence under the I.T. Act.The question before the Court was whether compliance with the "due diligence" requirement under Rule 3 of the I.T. Guidelines/Rules would render the intermediary eligible for exemption from criminal liability?The Court was of the view that the standard for fixing criminal liability is far higher than that under civil law, which is requiring proof beyond reasonable doubt and not just a balance of probabilities. "For instance, to establish criminal liability for negligence, the standard of proof is set much higher than for "civil liability" under the law of Torts for negligence. There is no reason why that higher standard should not be available to courts to determine whether an intermediary would be liable under the criminal law for action or inaction," the Court said. It added, "the question must be answered in the affirmative that when compliance with the "due diligence" requirement under Rule 3 of the I.T. Guidelines is evident, ex facie, the exclusion of liability under Section 79 of the I.T. Act would include exclusion from criminal prosecution."The Court was of the view that in the present case, due diligence under Rule 3(2) was complied with by Flipkart. It also added that the present case had gone a step ahead as the FIR was lodged only against Flipkart and another platform, and that none of the other sites or entities, allegedly selling the products which were either fake or unauthorized, were even named. "Without determining the rights of those other sites to sell the products, prima facie, the petitioner has not committed any offence, leave alone under the Copyright Act or the T.M. Act," the Court said. It added "This is one such case where the registration of an FIR against an intermediary would lead to miscarriage of justice. Therefore, this Court finds itself justified in allowing the present petition and quashing the FIR qua the petitioner. However, further investigations are not barred in order to ascertain the identity of those who are infringers and/or unauthorized sellers of the products of the Czech company."Quashing the FIR, the Court accordingly allowed the petition. Case Title: FLIPKART INTERNET PRIVATE LTD. v. STATE OF NCT OF DELHI & ANR.Citation: 2022 LiveLaw (Del) 783Click Here To Read Order

"Safe Harbour" Protection Available To Intermediaries Qua Criminal Prosecution Unless 'Active Role' Is Disclosed In Commission Of Offence: Delhi HC

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"Safe Harbour" Protection Available To Intermediaries Qua Criminal Prosecution Unless 'Active Role' Is Disclosed In Commission Of Offence: Delhi HC

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