New Delhi, Dec 4 (UNI) The Supreme Court, while denying bail to a highly qualified CEO, owner of two IT Service Provider companies, has made it clear that network service providers cannot use their network as a facade for more sinister activites like drug trafficking and immunity, granted under Section 79 of the Information Technology (IT) Act, is not available.
The accused Sanjay Kumar Kedia, who had set up two companies-- M/S Xponse Technolgies Ltd (XTL) and M/S Xponse IT Services Pvt Ltd and was arrested by the Narcotics Control Bureau for indulging in drug trafficking under the the Narcotics Drugs and Psychotropic Substances (NDPS) Act, was denied bail yesterday.
A bench comprising Justices S B Sinha and Harjeet Singh Bedi, while dismissing the bail application of Kedia, ruled, ''We thus find that the appellant and his associates were not innocent intermediaries or network service providers, as defined under Section 79 of the Information Technology Act but the said business was only a facade and camouflaged for more sinister activity.
''In this situation, Section 79 will not grant immunity to an accused who has violated the provisions of the Act, as this provision gives immunity from prosecution for an offence only under the Information Technology Act itself.'' The bench also noted, ''We are, therefore, of the opinion that in the face of overwhelming inculpatory evidence, it is not possible to give the finding, envisaged under Section 37 of the (NDPS) Act, for the grant of bail that there were reasonable grounds for believing that the appellant was not guilty of the offence alleged, or that he would not resume his activities, should bail be granted. We, accordingly dismiss this appeal.
''We, however, qualify that the observations made above are in the context of the arguments raised by the learned counsel on the bail matter, which obligated us to deal with them, and will not influence the proceedings or decision in the trial in any manner.'' Kedia was arrested under the NDPS Act, which involves a minimum sentaence of 10 years, along with a fine of Rs 1 lakh.
He contended before the court that the two substances, phentermine and butalbital were not included in Schedule 1 of the NDPS Rules, 1985.
Additional Solicitor General Vikas Singh, appearing for the Bureau, contended that both the drugs were included in Schedule 1 of the NDPS Rules and the petitioner has facilitated huge supply of the drugs in the US.
Senior counsel K T S Tulsi, however, contended before the court that the petitioner (and his associates) was only a service provider and his two companies were only intermediaries, supplying third-party data. Therefore, they were protected from prosecution under Section 79 of the IT Act, as they did not know anything about the online information passed on by the third party.