IT Act 2000 – Penalties, Offences With Case Studies

Objectives of IT legislation in India

The Government of India enacted its Information Technology Act 2000 with the objectives stating officially as:

“to provide legal recognition for transactions carried out by means of electronic data interchange and other means of electronic communication, commonly referred to as “electronic commerce”, which involve the use of alternatives to paper-based methods of communication and storage of information, to facilitate electronic filing of documents with the Government agencies and further to amend the Indian Penal Code, the Indian Evidence Act, 1872, the Bankers’ Books Evidence Act, 1891 and the Reserve Bank of India Act, 1934 and for matters connected therewith or incidental thereto.”

What does IT Act 2000 legislation deals with?
The Act essentially deals with the following issues:

• Legal Recognition of Electronic Documents
• Legal Recognition of Digital Signatures
• Offenses and Contraventions
• Justice Dispensation Systems for cyber crimes.

Why did the need for IT Amendment Act 2008 (ITAA) arise?
The IT Act 2000, being the first legislation on technology, computers, e-commerce and e-communication, the was the subject of extensive debates, elaborate reviews with one arm of the industry criticizing some sections of the Act to be draconian and other stating it is too diluted and lenient. There were some obvious omissions too resulting in the investigators relying more and more on the time-tested (one and half century-old) Indian Penal Code even in technology based cases with the IT Act also being referred in the process with the reliance more on IPC rather on the ITA.

Thus the need for an amendment – a detailed one – was felt for the I.T. Act. Major industry bodies were consulted and advisory groups were formed to go into the perceived lacunae in the I.T. Act and comparing it with similar legislations in other nations and to suggest recommendations. Such recommendations were analyzed and subsequently taken up as a comprehensive Amendment Act and after considerable administrative procedures, the consolidated amendment called the Information Technology Amendment Act 2008 was placed in the Parliament and passed at the end of 2008 (just after Mumbai terrorist attack of 26 November 2008 had taken place). The IT Amendment Act 2008 got the President assent on 5 Feb 2009 and was made effective from 27 October 2009.

Notable features of the ITAA 2008 are:

• Focusing on data privacy
• Focusing on Information Security
• Defining cyber café
• Making digital signature technology neutral
• Defining reasonable security practices to be followed by corporate
• Redefining the role of intermediaries
• Recognizing the role of Indian Computer Emergency Response Team
• Inclusion of some additional cyber crimes like child pornography and cyber terrorism
• Authorizing an Inspector to investigate cyber offenses (as against the DSP earlier)

Structure of IT Act

• How is IT Act structured?
  The Act totally has 13 chapters and 90 sections. Sections 91 to 94 deal with the amendments to the four Acts namely Indian Penal Code 1860, The Indian Evidence Act 1872, The Bankers’ Books Evidence Act 1891 and the Reserve Bank of India Act 1934. The Act has chapters that deal with authentication of electronic records, electronic signatures etc.
  Elaborate procedures for certifying authorities and electronic signatures have been spelt out. The civil offence of data theft and the process of adjudication and appellate procedures have been described. Then the Act goes on to define and describe some of the well-known cyber crimes and lays down the punishments therefore. Then the concept of due diligence, role of intermediaries and some miscellaneous provisions have been described.
• What is the applicability of IT Act?
  The Act extends to the whole of India and except as otherwise provided, it also applies to any offence or contravention there under committed outside India by any person.
  Rules and procedures mentioned in the Act have also been laid down in a phased manner, defined as recently as April 2011.
  For the sake of simplicity, here we will be only discussing the various penalty and offences defined as per provisions of ITA 2000 and ITAA 2008. Please note that wherever the terms IT Act 2000 or 2008 are used, they refer to same act because the IT Act now includes amendments as per IT 2008 Amendment Act.
  Specific exclusion(s) to the Act where it is not applicable are:
  • Negotiable instrument (other than a cheque) as defined in section 13 of the Negotiable Instruments Act, 1881;
  • A power-of-attorney as defined in section 1A of the Powers-of-Attorney Act, 1882;
  • A trust as defined in section 3 of the Indian Trusts Act, 1882
  • A will as defined in clause (h) of section 2 of the Indian Succession Act, 1925 including any other testamentary disposition

What is a cyber crime?

Cyber Crime is not defined officially in IT Act or in any other legislation. In fact, it cannot be too. Offence or crime has been dealt with elaborately listing various acts and the punishments for each, under the Indian Penal Code, 1860 and related legislations. Hence, the concept of cyber crime is just a “combination of crime and computer”.

Cybercrime in a narrow sense (computer crime): Any illegal behavior directed by means of electronic operations that targets the security of computer systems and the data processed by them.

Cybercrime in a broader sense (computer-related crime): Any illegal behavior committed by means of, or in relation to, a computer system or network, including such crimes as illegal possession and offering or distributing information by means of a computer system or network.

• Any contract for the sale or conveyance of immovable property or any interest in such property;
• Any such class of documents or transactions as may be notified by the Central Government

Cases Studies as per selected IT Act Sections

Here are the case studies for selected IT Act sections.

For the sake of simplicity and maintaining clarity, details on the IT Act sections have been omitted. Kindly refer the Appendix at the last section for the detailed account of all the penalties and offences mentioned in IT Act.

• Section 43 – Penalty and Compensation for damage to computer, computer system, etc
  Related Case: Mphasis BPO Fraud: 2005In December 2004, four call centre employees, working at an outsourcing facility operated by MphasiS in India, obtained PIN codes from four customers of MphasiS’ client, Citi Group. These employees were not authorized to obtain the PINs. In association with others, the call centre employees opened new accounts at Indian banks using false identities. Within two months, they used the PINs and account information gleaned during their employment at MphasiS to transfer money from the bank accounts of CitiGroup customers to the new accounts at Indian banks.
  By April 2005, the Indian police had tipped off to the scam by a U.S. bank, and quickly identified the individuals involved in the scam. Arrests were made when those individuals attempted to withdraw cash from the falsified accounts, $426,000 was stolen; the amount recovered was $230,000.
  Verdict: Court held that Section 43(a) was applicable here due to the nature of unauthorized access involved to commit transactions.
• Section 65 – Tampering with Computer Source Documents
  Related Case: Syed Asifuddin and Ors. Vs. The State of Andhra PradeshIn this case, Tata Indicom employees were arrested for manipulation of the electronic 32- bit number (ESN) programmed into cell phones theft were exclusively franchised to Reliance Infocomm.
  Verdict: Court held that tampering with source code invokes Section 65 of the Information Technology Act.
• Section 66 – Computer Related offenses
  Related Case: Kumar v/s Whiteley In this case the accused gained unauthorized access to the Joint Academic Network (JANET) and deleted, added files and changed the passwords to deny access to the authorized users.Investigations had revealed that Kumar was logging on to the BSNL broadband Internet connection as if he was the authorized genuine user and ‘made alteration in the computer database pertaining to broadband Internet user accounts’ of the subscribers.The CBI had registered a cyber crime case against Kumar and carried out investigations on the basis of a complaint by the Press Information Bureau, Chennai, which detected the unauthorised use of broadband Internet. The complaint also stated that the subscribers had incurred a loss of Rs 38,248 due to Kumar’s wrongful act. He used to ‘hack’ sites from Bangalore, Chennai and other cities too, they said.
  Verdict: The Additional Chief Metropolitan Magistrate, Egmore, Chennai, sentenced N G Arun Kumar, the techie from Bangalore to undergo a rigorous imprisonment for one year with a fine of Rs 5,000 under section 420 IPC (cheating) and Section 66 of IT Act (Computer related Offense).
• Section 66A – Punishment for sending offensive messages through communication service
  • Relevant Case #1: Fake profile of President posted by imposter On September 9, 2010, the imposter made a fake profile in the name of the Hon’ble President Pratibha Devi Patil. A complaint was made from Additional Controller, President Household, President Secretariat regarding the four fake profiles created in the name of Hon’ble President on social networking website, Facebook.The said complaint stated that president house has nothing to do with the facebook and the fake profile is misleading the general public. The First Information Report Under Sections 469 IPC and 66A Information Technology Act, 2000 was registered based on the said complaint at the police station, Economic Offences Wing, the elite wing of Delhi Police which specializes in investigating economic crimes including cyber offences.
  • Relevant Case #2: Bomb Hoax mail In 2009, a 15-year-old Bangalore teenager was arrested by the cyber crime investigation cell (CCIC) of the city crime branch for allegedly sending a hoax e-mail to a private news channel. In the e-mail, he claimed to have planted five bombs in Mumbai, challenging the police to find them before it was too late. At around 1p.m. on May 25, the news channel received an e-mail that read: “I have planted five bombs in Mumbai; you have two hours to find it.” The police, who were alerted immediately, traced the Internet Protocol (IP) address to Vijay Nagar in Bangalore. The Internet service provider for the account was BSNL, said officials.
• Section 66C – Punishment for identity theft
  Relevant Cases:
  • The CEO of an identity theft protection company, Lifelock, Todd Davis’s social security number was exposed by Matt Lauer on NBC’s Today Show. Davis’ identity was used to obtain a $500 cash advance loan.
  • Li Ming, a graduate student at West Chester University of Pennsylvania faked his own death, complete with a forged obituary in his local paper. Nine months later, Li attempted to obtain a new driver’s license with the intention of applying for new credit cards eventually.
• Section 66D – Punishment for cheating by impersonation by using computer resource
  Relevant Case: Sandeep Vaghese v/s State of Kerala
  A complaint filed by the representative of a Company, which was engaged in the business of trading and distribution of petrochemicals in India and overseas, a crime was registered against nine persons, alleging offenses under Sections 65, 66, 66A, C and D of the Information Technology Act along with Sections 419 and 420 of the Indian Penal Code.
  The company has a web-site in the name and and style `www.jaypolychem.com’ but, another web site `www.jayplychem.org’ was set up in the internet by first accused Samdeep Varghese @ Sam, (who was dismissed from the company) in conspiracy with other accused, including Preeti and Charanjeet Singh, who are the sister and brother-in-law of `Sam’
  Defamatory and malicious matters about the company and its directors were made available in that website. The accused sister and brother-in-law were based in Cochin and they had been acting in collusion known and unknown persons, who have collectively cheated the company and committed acts of forgery, impersonation etc.
  Two of the accused, Amardeep Singh and Rahul had visited Delhi and Cochin. The first accused and others sent e-mails from fake e-mail accounts of many of the customers, suppliers, Bank etc. to malign the name and image of the Company and its Directors. The defamation campaign run by all the said persons named above has caused immense damage to the name and reputation of the Company.
  The Company suffered losses of several crores of Rupees from producers, suppliers and customers and were unable to do business.
• Section 66E – Punishment for violation of privacy
  Relevant Cases:
  1. Jawaharlal Nehru University MMS scandal In a severe shock to the prestigious and renowned institute – Jawaharlal Nehru University, a pornographic MMS clip was apparently made in the campus and transmitted outside the university.Some media reports claimed that the two accused students initially tried to extort money from the girl in the video but when they failed the culprits put the video out on mobile phones, on the internet and even sold it as a CD in the blue film market.
  2. Nagpur Congress leader’s son MMS scandal On January 05, 2012 Nagpur Police arrested two engineering students, one of them a son of a Congress leader, for harassing a 16-year-old girl by circulating an MMS clip of their sexual acts. According to the Nagpur (rural) police, the girl was in a relationship with Mithilesh Gajbhiye, 19, son of Yashodha Dhanraj Gajbhiye, a zila parishad member and an influential Congress leader of Saoner region in Nagpur district.
• Section-66F Cyber Terrorism
  Relevant Case: The Mumbai police have registered a case of ‘cyber terrorism’—the first in the state since an amendment to the Information Technology Act—where a threat email was sent to the BSE and NSE on Monday. The MRA Marg police and the Cyber Crime Investigation Cell are jointly probing the case. The suspect has been detained in this case.The police said an email challenging the security agencies to prevent a terror attack was sent by one Shahab Md with an ID sh.itaiyeb125@yahoo.in to BSE’s administrative email ID corp.relations@bseindia.com at around 10.44 am on Monday.The IP address of the sender has been traced to Patna in Bihar. The ISP is Sify. The email ID was created just four minutes before the email was sent. “The sender had, while creating the new ID, given two mobile numbers in the personal details column. Both the numbers belong to a photo frame-maker in Patna,’’ said an officer.
  Status: The MRA Marg police have registered forgery for purpose of cheating, criminal intimidation cases under the IPC and a cyber-terrorism case under the IT Act.
• Section 67 – Punishment for publishing or transmitting obscene material in electronic form
  Relevant Case:This case is about posting obscene, defamatory and annoying message about a divorcee woman in the Yahoo message group. E-mails were forwarded to the victim for information by the accused through a false e- mail account opened by him in the name of the victim. These postings resulted in annoying phone calls to the lady. Based on the lady’s complaint, the police nabbed the accused.Investigation revealed that he was a known family friend of the victim and was interested in marrying her. She was married to another person, but that marriage ended in divorce and the accused started contacting her once again. On her reluctance to marry him he started harassing her through internet.
  Verdict: The accused was found guilty of offences under section 469, 509 IPC and 67 of IT Act 2000. He is convicted and sentenced for the offence as follows:
  • As per 469 of IPC he has to undergo rigorous imprisonment for 2 years and to pay fine of Rs.500/-
  • As per 509 of IPC he is to undergo to undergo 1 year Simple imprisonment and to pay Rs 500/-
  • As per Section 67 of IT Act 2000, he has to undergo for 2 years and to pay fine of Rs.4000/-

  All sentences were to run concurrently.
  The accused paid fine amount and he was lodged at Central Prison, Chennai. This is considered the first case convicted under section 67 of Information Technology Act 2000 in India.

• Section 67B – Punishment for publishing or transmitting of material depicting children in sexually explicit act, etc. in electronic form
  Relevant Case: Janhit Manch & Ors. v. The Union of India 10.03.2010 Public Interest Litigation: The petition sought a blanket ban on pornographic websites. The NGO had argued that websites displaying sexually explicit content had an adverse influence, leading youth on a delinquent path.
• Section 69 – Powers to issue directions for interception or monitoring or decryption of any information through any computer resource
  Relevant Case: In August 2007, Lakshmana Kailash K., a techie from Bangalore was arrested on the suspicion of having posted insulting images of Chhatrapati Shivaji, a major historical figure in the state of Maharashtra, on the social-networking site Orkut.The police identified him based on IP address details obtained from Google and Airtel -Lakshmana’s ISP. He was brought to Pune and detained for 50 days before it was discovered that the IP address provided by Airtel was erroneous. The mistake was evidently due to the fact that while requesting information from Airtel, the police had not properly specified whether the suspect had posted the content at 1:15 p.m.
  Verdict: Taking cognizance of his plight from newspaper accounts, the State Human Rights Commission subsequently ordered the company to pay Rs 2 lakh to Lakshmana as damages. The incident highlights how minor privacy violations by ISPs and intermediaries could have impacts that gravely undermine other basic human rights.

Common Cyber-crime scenarios and Applicability of Legal Sections

Let us look into some common cyber-crime scenarios which can attract prosecution as per the penalties and offences prescribed in IT Act 2000 (amended via 2008) Act.

• Harassment via fake public profile on social networking site
  A fake profile of a person is created on a social networking site with the correct address, residential information or contact details but he/she is labelled as ‘prostitute’ or a person of ‘loose character’. This leads to harassment of the victim.Provisions Applicable:- Sections 66A, 67 of IT Act and Section 509 of the Indian Penal Code.
• Online Hate Community
  Online hate community is created inciting a religious group to act or pass objectionable remarks against a country, national figures etc.Provisions Applicable: Section 66A of IT Act and 153A & 153B of the Indian Penal Code.
• Email Account Hacking
  If victim’s email account is hacked and obscene emails are sent to people in victim’s address book.Provisions Applicable:- Sections 43, 66, 66A, 66C, 67, 67A and 67B of IT Act.
• Credit Card Fraud
  Unsuspecting victims would use infected computers to make online transactions.Provisions Applicable:- Sections 43, 66, 66C, 66D of IT Act and section 420 of the IPC.
• Web Defacement
  The homepage of a website is replaced with a pornographic or defamatory page. Government sites generally face the wrath of hackers on symbolic days.Provisions Applicable:- Sections 43 and 66 of IT Act and Sections 66F, 67 and 70 of IT Act also apply in some cases.
• Introducing Viruses, Worms, Backdoors, Rootkits, Trojans, Bugs
  All of the above are some sort of malicious programs which are used to destroy or gain access to some electronic information.Provisions Applicable:- Sections 43, 66, 66A of IT Act and Section 426 of Indian Penal Code.
• Cyber Terrorism
  Many terrorists are use virtual(GDrive, FTP sites) and physical storage media(USB’s, hard drives) for hiding information and records of their illicit business.Provisions Applicable: Conventional terrorism laws may apply along with Section 69 of IT Act.
• Online sale of illegal Articles
  Where sale of narcotics, drugs weapons and wildlife is facilitated by the InternetProvisions Applicable:- Generally conventional laws apply in these cases.
• Cyber Pornography
  Among the largest businesses on Internet. Pornography may not be illegal in many countries, but child pornography is.Provisions Applicable:- Sections 67, 67A and 67B of the IT Act.
• Phishing and Email Scams
  Phishing involves fraudulently acquiring sensitive information through masquerading a site as a trusted entity. (E.g. Passwords, credit card information)Provisions Applicable:- Section 66, 66A and 66D of IT Act and Section 420 of IPC
• Theft of Confidential Information
  Many business organizations store their confidential information in computer systems. This information is targeted by rivals, criminals and disgruntled employees.Provisions Applicable:- Sections 43, 66, 66B of IT Act and Section 426 of Indian Penal Code.
• Source Code Theft
  A Source code generally is the most coveted and important “crown jewel” asset of a company.Provisions applicable:- Sections 43, 66, 66B of IT Act and Section 63 of Copyright Act.
• Tax Evasion and Money Laundering
  Money launderers and people doing illegal business activities hide their information in virtual as well as physical activities.Provisions Applicable: Income Tax Act and Prevention of Money Laundering Act. IT Act may apply case-wise.
• Online Share Trading Fraud
  It has become mandatory for investors to have their demat accounts linked with their online banking accounts which are generally accessed unauthorized, thereby leading to share trading frauds.Provisions Applicable: Sections 43, 66, 66C, 66D of IT Act and Section 420 of IPC