Liability of Intermediaries — Judicially Defined and Explained

In the case of Sanjay Kumar Kedia v. Narcotics Control Bureau, the Supreme Court deciding a special leave petition touched on Section 79 of the Information Technology Act, 2000. The Petitioner (Sanjay Kumar Kedia) was ostensibly running an online pharmacy which was allegedly used to sell psychotropic substances to customers without prescriptions. He was subsequently issued a notice Section 67 of the Narcotic Drugs and Psychotropic Substances Act, 1985. Thereafter the petitioner filed an application for bail several times which was rejected by the courts and hence preferred the special leave petition to appeal against the orders for refusal of bail. The counsel for the petitioner cited section 79 as a defense stating that it granted immunity from prosecution. He stated that the companies of the petitioner only provided third party data and information without any knowledge as to the commission of an offence under the Act. The respondents (Narcotics Control Bureau) rebutted this by stating that the petitioner and its associates are not an intermediary as defined under section 79 of the said Act as their acts and deeds was not simply restricted to provision of third party data or information without having knowledge as to commission of offence under the NDPS Act. The company (Xponse Technologies Ltd. And Xpose IT Services Pvt. Ltd headed by Sanjay Kedia) has designed, developed, hosted the pharmaceutical websites and was using these websites, huge quantity of psychotropic substances (Phentermine and Butalbital) have been distributed in USA with the help of his associates. The Supreme Court quite correctly applying the law as it stands held that (a) the petitioner was not an innocent intermediary as defined under section 79 of the Technology Act according to the investigating agencies, they were the owners and were responsible for the contents therein; and (b) Section 79 will grant immunity to an accused who has violated the provisions of the Information Technology Act, 2000 and not grant an immunity under the Narcotic Drugs and Psychotropic Substances Act, 1985.

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