Cyber Laws for CxO, an e News letter from Naavi, February 2010

Taking into account the rapid developments in technology, techies often say that one year in the Internet is equal to at least 4 years in the physical space. This was perhaps under the consideration of those who drafted Information Technology Bill 1999 when they wanted a new Cyber Crime related justice dispensation system to replace the current system where Cases typically drag on for years. “Adjudication” supported by “Cyber Regulations Appellate Tribunal” was an outcome of this effort.

The IT Bill 1999 did undergo some significant changes before being passed on May 17^th in the Loksabha as the now famous Information Technology Act 2000 (ITA 2000). After the major amendments to ITA 2000 passed with effect from October 27, 2009, we now have ITA 2008 in place as the foundation of Cyber Laws in India and contains the current provisions of Adjudication applicable to Contraventions of the Act.

The essential part of Adjudication system is the reduction of time in completing the process of awarding compensation to a victim of an ITA 2008 contravention to around 4 months . It also aims at brining in IT savvy persons to sit in judgment of the complicated Cyber Crimes. In order to understand how these objectives have been achieved so far and how they are expected to be achieved in future, we need to analyse the relevant provisions of the Act .

The foundation for “Adjudication” in ITA 2008 stems from the definition of the term “Adjudicating Officer” as per Section 2.1 (c) of the Act which states,

"Adjudicating Officer" means adjudicating officer appointed under subsection (1) of section 46;

Section 46 of the Act states as follows:

Sec 46: Power to Adjudicate

(1) For the purpose of adjudging under this Chapter whether any person has committed a contravention of any of the provisions of this Act or of any rule, regulation, direction or order made thereunder which renders him liable to pay penalty or compensation, the Central Government shall, subject to the provisions of sub-section(3), appoint any officer not below the rank of a Director to the Government of India or an equivalent officer of a State Government to be an adjudicating officer for holding an inquiry in the manner prescribed by the Central Government.

(1A) The adjudicating officer appointed under sub-section (1) shall exercise jurisdiction to adjudicate matters in which the claim for injury or damage does not exceed rupees five crore

Provided that the jurisdiction in respect of claim for injury or damage exceeding rupees five crore shall vest with the competent court.

(2) The adjudicating officer shall, after giving the person referred to in sub-section (1) a reasonable opportunity for making representation in the matter and if, on such inquiry, he is satisfied that the person has committed the contravention, he may impose such penalty as he thinks fit in accordance with the provisions of that section.

(3) No person shall be appointed as an adjudicating officer unless he possesses such experience in the field of Information Technology and Legal or Judicial experience as may be prescribed by the Central Government.

(4) Where more than one adjudicating officers are appointed, the Central Government shall specify by order the matters and places with respect to which such officers shall exercise their jurisdiction.

(5) Every adjudicating officer shall have the powers of a civil court which are conferred on the Cyber Appellate Tribunal under sub-section (2) of section 58, and -

(a) all proceedings before it shall be deemed to be judicial proceedings within the meaning of sections 193 and 228 of the Indian Penal Code;

(b) shall be deemed to be a civil court for the purposes of sections 345 and 346 of the Code of Criminal Procedure, 1973.

(c) shall be deemed to be a Civil Court for purposes of order XXI of the Civil Procedure Code, 1908

This section not only defines who is an “Adjudicator” but also defines his role, jurisdiction and powers.

The powers under this section are meant to adjudge “Whether any person has committed a contravention of such of the provisions of the Act which renders him liable to pay penalty or compensation under this Act”.

The word “Penalty” has been used in ITA 2008 mainly in Chapter IX under sections 43, 44, 45 as well as under Chapter XI under sections 71, and 73. The word “Compensation” has been used in Section 43 and 43A. One interpretation therefore is to consider that “Adjudication” can be used only for contravention of these sections and not for others.

Yet another possible interpretation is that the word “Penalty” is used in this section in generic sense and hence it also covers all sections under Chapter XI where penalties are prescribed in the form of “imprisonment” or “fine”.

A third and a more acceptable interpretation is that the Adjudicator can take on trial any contravention under Chapter IX or any Offence under XI. However, since his powers are only to award “compensation”, he can only award compensation to the victim but may not be empowered to award a sentence or impose a fine as is normally done in criminal courts. This defines a mutually exclusive and distinctive roles for the Adjudicator and Criminal Courts in respect of offences under Chapter XI of ITA 2008. Courts will determine the imprisonment and fine while the Adjudicator will estimate the extent of civil liabilities.

Thus the “Adjudicator” becomes the main arbitrator whenever the claim for compensation arises on account of a Cyber Crime and the amount of the claim is upto Rs 5 crores.

Under powers indicated in the same section 46, the Government of India has appointed all IT Secretaries of a State or Union Territory as the Adjudicator for the respective State or Union Territory by means of a notification dated March 25, 2003.

The powers provided to the Adjudicator is “Exclusive” since under Section 61 of ITA 2008,

“No court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which an adjudicating officer appointed under this Act or the Cyber Appellate Tribunal constituted under this Act is empowered by or under this Act to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act”

It is therefore clear that if a claim for compensation arises on account of a contravention of any of the provisions of ITA 2008, the only Court of Jurisdiction is the office of the Adjudicator in one of the States where the contravention has been committed. Cyber Appellate Tribunal or CAT (Earlier called Cyber Regulations Appellate Tribunal or CRAT) is the appellate authority on the orders of the Adjudicator. Further appeal against the order of the CRAT will prevail with the High Court (probably of the State where the Adjudicator’s jurisdiction arose).

It is therefore clear that a Consumer Forum or even the High Court is not the designated forum of Trial in respect of claim for compensation arising out of any of the contraventions of the ITA 2008. High Court will however have the appeal jurisdiction.

The detailed procedure of how the Adjudicator has to accept an application and dispose it off is contained in the rules notified on March 17, 2003. (Available at naavi.org) (Please also refer to the Q&A section of this news letter for additional procedural information).

Any discussion on Adjudication is incomplete without a discussion on the CRAT and its powers. ITA 2008 has made extensive changes to the constitution of CRAT (now called CAT). In brief, CAT is a multimember body of which the Chairman is a judicial officer and one or two others may be technical members appointed in consultation with the Chief Justice of India. The Presiding officer of CAT may constitute one or more benches and assign a case for decisions.

Both the Adjudicator as well as the CAT shall have the powers of the Court but are not bound by the Civil Procedure Code. They can use the powers for summoning witnesses, receiving affidavits, ordering discovery of evidences etc but can conduct the proceedings as an enquiry, allow the person or his representative to be present and argue during the proceedings etc.

Under Section 47 of the Act, an adjudicating officer shall take the following factors in determining the amount of compensation.

(a) the amount of gain of unfair advantage, wherever quantifiable, made as a result of the default;

(b) the amount of loss caused to any person as a result of the default;

(c) the repetitive nature of the default

The Concept of Adjudication is still in its nascent state of development and hence there are certain practical problems in the system and they need to be sorted out.

For example, under the Adjudication rules notified on March 17, 2003, the adjudication process can be undertaken by the adjudicator on a “Suo Moto” basis if warranted. These will be required when there is any information available with the Adjudicator about a cyber incident having an adverse implication against common public. However, so far there has been no report of any Adjudicator having exercised this power.

There have been incidents where the respondent may be out of the country or unable to spend money for physical appearances. Though the rules provide for the use of “Online settlement of enquiry or disputes or for taking evidence” and such services being on offer by www.arbitration.in, so far no adjudicating officer has made use of such cost effective and time saving measures.

It is also envisaged under the rules that as far as possible, every application shall be heard and decided in four months and the whole matter in six months. However this is a rule which is not being adhered to and cases drag on for years even in the adjudication process.

Probably these are teething problems which the CAT in consultation with the Government may try to address.

I therefore suggest that as a first step, CAT should assume certain administrative measures for

a) Regular communication with the adjudicators through monthly or quarterly meetings in different locations to discuss the pending issues and take remedial measures.

b) Maintain a website and post information on applications received at various adjudicators and the status of the disposal.

c) Provide for periodical review of delayed applications and make suitable arrangements for quick disposal as may be required.

d) Organize trainings and workshops for adjudicators to enable clarity on various issues and uniformity in application across different states.

e) Encourage each adjudicator to set up “Online settlement facilities” .

f) Encourage each adjudicator to appoint atleast one assistant to exclusively take care of the administration of the Adjudicator’s office along with his other duties

g) When the jurisdiction in respect of a complaint overlaps between two states, encourage a formal or informal arrangement where by the two adjudicators can collaborate in the form of a multi member adjudication panel … etc.

Hopefully the CAT will initiate necessary steps to ensure that the institution of adjudication becomes a successful grievance redressal mechanism so that any victim whether he is a company or an individual would appreciate the quick and fair disposal of any dispute arising out of ITA 2008. This will go a long way in the society giving better respect to the legislation itself .

Naavi

A PDF Copy of the News Letter would be sent by e-mail to all persons who subscribe. Subscription is free.

For Subscription Click here