Andhra Pradesh High Court - Amravati
V Narendra Babu vs The State Of Andhra Pradesh on 31 January, 2022
Bench: Cheekati Manavendranath Roy
HONOURABLE SRI JUSTICE CHEEKATI MANAVENDRANATH ROY
Writ Petition No.10882 of 2021
Order:
This writ petition under Article 226 of the Constitution
of India is filed seeking a mandamus declaring the action of
the 3rd respondent-Station House Officer of Kankipadu Police
Station, Vijayawada City, in registering the FIR in Crime
No.239/2021 for the offences punishable under Sections
120B, 403, 408, 420 and 477A of IPC and under Section 66C
read with Section 43 of the Information Technology Act, 2008,
against the petitioners on the basis of the report lodged
by the de facto complainant, who is the 4th respondent,
as unconstitutional and consequently to set aside the same.
2. Facts of the prosecution case, germane to dispose of
this writ petition, as set out in the FIR, may be stated as
follows:
(a) Varsity Education Management Private Limited
(VEMPL, for brevity) is a company registered under the
Companies Act, 1956. It has been doing business in
providing education and coaching for competitive
examinations to the students and also rendering educational
services to various institutions under the name and style
"Sri Chaitanya" through its various branches. The de facto
complainant is one of the directors of the said VEMPL. It is
stated that VEMPL over the past 10 years and Sri Chaitanya
over the past 35 years developed intellectual property which
2
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includes academic curriculum, study material, teaching
methods, teaching points, pupil‟s activity, teacher‟s activity,
questioning hypothesis, evaluation, teacher‟s ability,
programmes, question bank, academic knowledge, experience
driven programmes by utilizing faculty and resources
throughout the country by spending several crores of rupees
and stored and saved the said intellectual property for
exclusive use of the said educational institutions in the hard
disks of the computer systems in an encrypted storage by
installing the best antivirus software with a strong password
to prevent hacking or gaining access to the outsiders.
(b) Except the Executive Dean, Dean or Data Analyst of
the branches of VEMPL, the said data stored in the computer
system is not accessible to any other person.
(c) The said VEMPL, in the brand name of
Sri Chaitanya, has established Gosala branches at Gosala
campus of Vijayawada in the year 2014 and has been
imparting education and giving coaching etc., to the students.
The management of VEMPL, Sri Chaitanya group appointed
accused 1 to 3 i.e. Mr. V.Narendra Babu (accused No.1) as an
Executive Dean, Sri N.Srinivasa Rao (accused No.2) as a Dean
and Sri G.Balakrishna Prasad (accused No.3) as a Data
Analyst in the year 2014. They have entered into
Employment Agreements with VEMPL which are being
renewed from time to time and it is stated that they are still in
force. Therefore, they have domain over the entire
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infrastructure including the computers, hardware and
software and they got exclusive access to them. The accused
1 to 3 have agreed in their Employment Agreements that they
shall not use the confidential information entrusted to them
by the employer at any time directly or indirectly to have
personal commercial advantage or to do anything which is
detrimental to the business or activities of the employer in
any manner and that the said concepts, ideas etc., written or
electronically developed by the employee during the course of
his employment, exclusively belong to the company and also
gave an undertaking to keep confidentiality of the same.
Therefore, reposing confidence in the accused 1 to 3, the
company has entrusted the said confidential and valuable
computer data and details of the students in good faith to the
accused 1 to 3 by providing passwords of the computer
systems to them for the purpose of using the said data
exclusively for the purpose of running the educational
institutions, establishments and schools belonging to the
employer and for using the same to impart education to the
students studying in Gosala branches of Sri Chaitanya group.
(d) It is stated that while so, accused 1 to 3 stopped
attending duties from 16-5-2021 abruptly and as such
suspicion arose and when the computer infrastructure and
software particulars were checked, it is noticed that accused
1 to 3 have misused and abused their position as employees
of the said educational institutions and their access to the
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computer systems which were entrusted to them and
dishonestly and mala fidely entered into a conspiracy to steal
the entire data to use it for their personal gain. Therefore,
in pursuance of their common intention, they in collusion
with each other, to have wrongful gain for themselves and to
cause wrongful loss to the company and its institutions have
misused the passwords of the computer systems of the
institutions and gained access to the exclusive data of the
educational institutions of the company and have stolen the
entire data stored in the computer systems i.e. curriculum,
study material, teaching methods, teaching points, teacher‟s
activity, questioning hypothesis, evaluation, question bank,
programmes, academic knowledge experience, driven
programmes, devised by the company worth of Rs.100 Crores.
They have also stolen the complete student data relating to
the students of the educational institutions of the company.
(e) It is stated that the educational institutions of the
company have completed 90% of the syllabus by 15 th May,
2021 and only revision syllabus remained uncompleted.
So, after stealing the data of the company, accused 1 to 3
have floated a fictitious institution by imitating the name of
Gosala branches of the company deceptively similar to the
same under the name and style "Gosalites Medical Academy"
at Poranki Village. Accused 1 to 3 started using the said
stolen data in the said Medical Academy in criminal breach of
trust and they started luring the lecturers of the VEMPL
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company by offering bribes and they also induced the
students to join their institution by giving advertisements
stating that the students need not pay the balance fee
payable to the educational institutions of the VEMPL
company and that the entire balance 10% of syllabus revision
will be completed on payment of Rs.6,000/- per month to the
company floated by accused 1 to 3. Accused 1 to 3 started
using the same study material, curriculum, question bank,
programmes etc., for completion of the said 10% revision by
conducting zoom classes to the students by misusing the
software data stolen from the educational institutions of the
company. It is stated that they have also sent Short Message
Services (SMSs) to several students through the mobile phone
numbers which are listed in para-10 of the FIR informing the
students that they need not pay the balance fee to the
educational institutions of the company and they should
remit a sum of Rs.6,000/- per month towards fee to the
account of Gosalites Medical Academy and accordingly some
of the innocent students remitted the said sum of Rs.6,000/-
per month to the said account.
(f) Therefore, it is stated that accused 1 to 3 dishonestly
and fraudulently committed theft of the data including the
hard copies of study material, question banks etc., and
misappropriated the same and converted the same for their
use by using the same in their fictitious educational
institution floated in the name of Gosalites Medical Academy.
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(g) It is stated in the descriptive particulars of the
accused in the F.I.R. that A4 is the Vice-Principal and Partner
and A5 is the Admin Officer and Partner of the said Gosalites
Medical Academy.
(h) The aforesaid report was registered as a case in
Crime No.239/2021 by the Sub Inspector of Police,
Kankipadu Police Station, for the offences punishable under
Sections 120B, 403, 408, 420 and 477A of IPC and under
Section 66 read with Section 43 and Section 66C of the
Information Technology Act, 2008 (the I.T. Act, for brevity).
(i) It is the said FIR which is now sought to be set
aside/quashed in this writ petition.
3. The 3rd respondent-Station House Officer of
Kankipadu Police Station, who registered the FIR, filed
counter affidavit stating that the 4th respondent, by name
M.Murali Krishna, lodged a report with him stating that he is
the director of VEMPL, which is doing business in providing
classes and coaching for competitive examinations to the
students and educational services to various institutions
under its branch "Sri Chaitanya" and other branches and
Sri Chaitanya College established Gosala branches at Gosala
campus in 2014 and that they have developed data relating to
academic curriculum, study material, teaching methods,
question bank etc., by spending crores of rupees and stored
the same in their hard disk of their computer and that the
petitioners, who are accused 1 to 3 who are the employees of
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the said Sri Chaitanya group who got domain over the said
data and both the computer hardware and software and that
they all conspired together and stolen the aforesaid data of
VEMPL and started making use of the said data in their
educational institution to have wrongful gain for them and
wrongful loss to VEMPL. It is stated that he has registered
the said report as a case in Crime No.239/2021 for the
offences punishable under Sections 120B, 403, 408, 420 and
477A of IPC and under Section 66 read with Section 43 and
under Section 66C of the Information Technology Act, 2008
and has been investigating the same and that about four
witnesses were examined and their statements were recorded.
It is stated that it is mandatory on the part of the
Investigating Agency to register the FIR when the report
discloses commission of a cognizable offence as held by the
Apex Court in the case of Lalita Kumar v. State of U. P.1
and as per the ratio of the said judgment, preliminary enquiry
is required to be conducted only in (a) matrimonial, family
disputes, (b) commercial offences, (c) medical negligence cases
and (d) corruption cases, and the present case is not falling in
the category of above cases and as such he has registered the
FIR and investigating the same. It is stated that the
investigation is at preliminary stage and if the Police are
allowed to continue the investigation that they would be able
to file final report under Section 173 of Cr.P.C after collecting
1 (2014) 2 SCC 1
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evidence and that the petitioners cannot maintain the writ
petition to quash the proceedings at the initial stage of the
investigation as the case is not falling within the parameters
laid down by the Apex Court in State of Haryana v. Bhajan
Lal2 to quash the FIR. Therefore, it is prayed to vacate the
interim order and allow him to proceed with the investigation.
4. The 4th respondent-de facto complainant filed his
counter stating that there is no necessity to conduct any
preliminary investigation in cases of like nature. It is stated
that when the FIR discloses commission of a cognizable
offence, the Police has to register an FIR and investigate the
same as has been held by the Apex Court in Lalita Kumar„s
case (1 supra). It is pleaded that the petitioners did not make
out any case to warrant interference of this Court to quash
the FIR. Further pleaded that the petitioners have admitted
that they have sent messages to the students of the
complainant-institution and it clearly reveals theft of data
from the complainant-institution and that the petitioners
have also admitted in the Writ Affidavit that the laptops were
given to them by the management of the complainant-
institution VEMPL for conducting online classes. It is stated
that the said laptops were fraudulently used and operated in
the educational institution set up by them and the same were
seized by the Police in the said educational institution of the
petitioners. So, these acts committed by the petitioners in
2 1992 Supp (1) SCC 335
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using the software of the complainant-company, which are
loaded in the laptops given to them in the educational
institution set up by them, constitute an offence of criminal
breach of trust. Finally pleaded that as the petitioners have
established a fictitious institution in the name and style
"Gosalites Medical Academy" and after receiving salaries from
the complainant-institution for the month of April, 2021,
as they stopped attending the duties from 15-5-2021 and as
they are using the data that was created by the complainant-
company in their fictitious educational institution which
exclusively belongs to the complainant-company VEMPL and
collecting money from the students at the rate of Rs.6,000/-
per month, the said acts committed by the petitioners clearly
constitute the offences for which the FIR was registered.
Therefore, it is prayed to dismiss the writ petition and to
vacate the interim order dated 04-6-2021.
5. Heard Sri Dammalapati Srinivas, learned Senior
Counsel appearing for the petitioners; Sri V.Maheswar Reddy,
learned Government Pleader for Home appearing for
respondents 1 to 3; and Sri B.Adinarayana Rao, learned
Senior Counsel appearing for the 4th respondent-de facto
complainant.
6. Learned Senior Counsel for the petitioners would
contend that at best the acts complained against the
petitioners would amount to only breach of agreement which
is a dispute of civil nature and the same cannot be converted
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into a criminal liability and the petitioners are not liable for
any prosecution. He would further contend that Section 2(o)
of the I.T. Act defines "Data" and the same cannot be termed
as "property" as required under Sections 408 and 420 of IPC
and the facts of the case do not constitute any offence
punishable under Sections 403, 408, 420 and 477A of IPC.
It is then contended that when Special Act i.e., the
Information Technology Act, 2008 covers the offence, the
provisions of IPC are not applicable and the registration of
FIR for the offences under Sections 120B, 403, 408, 420 and
477A of IPC is legally unsustainable. Learned Senior Counsel
for the petitioners also contends that Section 81 of the I.T. Act
gives overriding effect over the provisions of the IPC and on
the said ground, the FIR registered for the IPC offences is not
maintainable under law. Learned Senior Counsel for the
petitioners finally contends that under Section 78 of the I.T.
Act, officer not below the rank of Inspector of Police shall
investigate the offence and as the FIR was registered by the
Sub Inspector of Police and as he has been investigating the
crime that the investigation is vitiated for contravening the
mandate under Section 79 of the I.T. Act.
7. Per contra, learned Government Pleader for Home
would contend that the Data is also to be considered as
property for the purpose of IPC offences. He would submit
that even though the FIR was registered by the Sub Inspector
of Police, who was the Station House Officer at that time, the
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crime is being investigated by the Inspector of Police and as
such the mandate of Section 78 of the I.T. Act is complied
with and the investigation is not vitiated as contended by the
learned Senior Counsel for the petitioners. He would submit
that the allegations ascribed in the FIR clearly constitute the
offences punishable under Section 66 read with Section 43
and under Section 66C of the I.T. Act. He would also submit
that the allegations set out in the FIR also constitute the
offences punishable under Sections 403 and 408 of IPC
relating to criminal breach of trust and criminal
misappropriation and also as there is conspiracy among
accused 1 to 3 and other accused A4 & A5 to commit the said
offences that an offence under Section 120B of IPC is also
constituted. Therefore, he would submit that the matter
requires investigation to find out the truth or otherwise of the
said allegations and as the investigation is at nascent stage,
the same cannot be interdicted and the FIR cannot be
quashed. He would submit that no legal grounds are existing
to quash the FIR.
8. Learned Senior Counsel appearing for the
4th respondent would submit that the mere existence of
an arbitration clause or facts giving rise to a civil liability to
claim damages cannot be a ground to quash the FIR when the
facts of the case also constitute offences punishable under
the I.T. Act and under the IPC. He then contends that when
the acts committed by the accused constitute offences both
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under the Special Enactment i.e., the I.T. Act and also the IPC
and when the said offences are distinct and separate, there is
no bar to prosecute the accused for the offences under the
IPC also albeit they are also liable for prosecution under the
I.T. Act. He would also contend that there is no conflict
between the offences under the I.T. Act and the offences
under the IPC and as such the bar under Section 81 of the
I.T. Act has no application to the present facts of the case.
He would contend that stealing data is an offence under the
I.T. Act whereas misappropriating data and committing
criminal breach of trust is an offence under the IPC and as
such when the facts of the case constitute two separate and
distinct offences, the accused are liable to be prosecuted
for the offences both under the I.T. Act and the IPC.
So, he would submit that the facts of the case in the
judgment relied on by the petitioners reported in Sharat
Babu Digumarti v. Govt. of NCT of Delhi3 are
distinguishable and they are not applicable to the present
facts of the case. He would contend that the petitioners, who
are admittedly employees of the company and who undertook
to maintain confidentiality of the data developed by the
company and its educational institutions in their
Employment Agreement, committed breach of trust and have
stolen the entire data of the company and its educational
institutions and misappropriated the same for their use by
3 (2017) 2 SCC 18
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floating another educational institution, which is run by them
along with accused Nos.4 and 5 and used the same in the
said institution with a dishonest intention to have wrongful
gain to them and to cause wrongful loss to the company and
its educational institutions have committed the offences
which are punishable under I.T. Act and IPC. Therefore,
he submits that these facts clearly constitute the offences
punishable under Section 66 read with Section 43 and under
Section 66C of the I.T. Act and also the offences punishable
under Sections 403, 408 and 420 of IPC. So, he would finally
contend that when the facts of the case clearly constitute the
aforesaid offences, the FIR cannot be quashed and the
investigation shall be allowed to go on and the petitioners are
liable for prosecution for the said offences. Therefore,
he would pray for dismissal of the writ petition.
9. I have given my anxious and thoughtful consideration
to the aforesaid rival submissions made by the learned Senior
Counsel for the petitioners, learned Government Pleader for
Home and the learned Senior Counsel for the 4th respondent.
10. At the outset, it is relevant to note that the fact that
accused 1 to 3 are the employees of the company i.e. VEMPL
is absolutely not in dispute. Admittedly, accused 1 to 3 have
entered into separate Agreements with the said company
which is styled as Employment Agreement. They are working
as Executive Dean, Dean and Data Analyst. The fact that A4
is the Vice-Principal and Partner of Gosalites Medical
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Academy and A5 is the Admin Officer and Partner of Gosalites
Medical Academy is also not in dispute. Similarly, the fact
that Sri Chaitanya Educational Institutions are the
institutions relating to the aforesaid company is also not in
controversy. It is significant to note that the petitioners have
themselves unequivocally admitted in the writ petition that
they worked in VEMPL, Sri Chaitanya group in various
capacities for the last several years. Therefore, the fact that
the petitioners have worked in various capacities in VEMPL is
now an incontrovertible fact.
11. It is the specific version of the prosecution as per
the allegations set out in the FIR that the data was prepared
by VEMPL worth of Rs.100 Crores for its exclusive use to
impart education to the students of its educational
institutions and the same has been stored in the computer
systems of the said educational institutions and that they are
entrusted to accused 1 to 3 to use the said data exclusively
for the purpose of teaching the students and that necessary
passwords of the computer systems to have access to the said
data are also given to accused 1 to 3 and that they have
misused their position as employees of VEMPL and
unauthorisedly, without consent of the management of
VEMPL, have stolen the said data and other information
relating to the students and thereafter established another
educational institution along with A4 and A5 in the name and
style "Gosalites Medical Academy" deceptively similar to the
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name of the educational institutions of Sri Chaitanya, Gosala
branch and started using the said data which was stolen by
them in the said Gosalites Medical Academy by inducing the
students to pay only Rs.6,000/- per month stating that they
need not pay the balance amount to VEMPL.
12. Now, the crucial question for adjudication is -
whether these acts said to have been committed by accused
would constitute any offence as contemplated under the I.T.
Act or not?
13. In this context, it is relevant to consider Section 43
of the I.T. Act. Chapter IX of the I.T. Act deals with penalties,
compensation and adjudication. Section 43 enumerates
certain acts committed relating to illegal access to computer
system, downloading copies or extracts of any data from
computer system, causing damage to the computers,
introducing any virus into the computer and computer
network etc., in Clauses (a) to (j) of Section 43 of the I.T. Act.
Person who commits any one or all of these acts is liable to
pay compensation to the person affected by way of damages.
For the purpose of deciding the present dispute, Clauses (a)
and (b) of Section 43 are relevant in the context and for better
appreciation, they are extracted hereunder:
"43. Penalty and Compensation for damage to computer,
computer system, etc.- If any person without permission of the
owner or any other person who is in charge of a computer,
computer system or computer network, -
(a) accesses or secures access to such computer,
computer system or computer network or computer resource;
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(b) downloads, copies or extracts any data, computer data
base or information from such computer, computer system or
computer network including information or data held or stored
in any removable storage medium;
(c) ...................................................
(d) ...................................................
(e) ...................................................
(f) ...................................................
(g) ...................................................
(h) ...................................................
(i) ....................................................
(j) ...................................................."
shall be liable to pay damages by way of compensation to the
person so affected.
14. Although this Section 43 contemplates that a person
committing any such act or acts is liable to pay damages by
way of compensation to the person affected, it is significant to
note that Section 66 of the I.T. Act ordains that if any person,
dishonestly or fraudulently does any act referred to in
Section 43, he shall be punishable with imprisonment for
a term which may extend to three years or with fine which
may extend to five lakh rupees or with both. As per the
explanation appended to Section 66, the words "dishonestly"
and "fraudulently" used therein shall have the same meaning
assigned to the said expression in Sections 24 and 25
respectively of IPC.
15. Section 66 of the I.T. Act reads as follows:
"66. Computer Related Offences.-- If any person,
dishonestly, or fraudulently, does any act referred to in
section 43, he shall be punishable with imprisonment for
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a term which may extend to three years or with fine which
may extend to five lakh rupees or with both.
Explanation: For the purposes of this section, --
a) the word "dishonestly" shall have the meaning
assigned to it in section 24 of the Indian Penal Code;
b) the word "fraudulently" shall have the meaning
assigned to it in section 25 of the Indian Penal Code."
16. Therefore, a combined reading of Sections 43(a) and
(b) and 66 of the I.T. Act makes it manifest that if any person,
without the permission of the owner of the computer,
computer system or computer network (a) accesses or secures
access to the computer, computer system or computer
network and (b) downloads, copies or extracts any data,
computer data base or information from such computer,
computer system or computer network including information
or data held or stored in any removable storage medium,
dishonestly or fraudulently, he is liable for prosecution under
Section 66 of the I.T. Act as the said acts are also made an
offence under Section 43(a) and (b) of the I.T. Act.
17. Section 24 of IPC defines the term "dishonestly" as
anything done with intention to have wrongful gain to one
person or causing wrongful loss to another person. Section
23 of IPC defines the term "wrongful gain" and it is said that
a gain by unlawful means of property to which the person
gaining is not legally entitled is a "wrongful gain". Section 23
of IPC further defines "wrongful loss" stating that the loss
caused by unlawful means of property to which the person
losing it is legally entitled is a "wrongful loss". Similarly,
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under Section 25 of IPC, "fraudulently" is defined as doing
a thing fraudulently if he does it with intent to defraud
a person.
18. It is specifically stated in the FIR that accused 1 to 3
have stolen the entire data stored in the computer system of
VEMPL and its educational institutions and used the same
for teaching the students in another company floated by
accused 1 to 3 along with accused 4 and 5. So, it is a clear
case where the said act of extracting or stealing the data from
the computer systems of VEMPL is done to have wrongful
gain to accused 1 to 3 and to cause wrongful loss to VEMPL.
So, the dishonest and fraudulent intention is very much
apparent from the said acts. Therefore, the facts of the case,
prima facie, clearly constitute an offence punishable under
Section 66 read with Section 43(a) and (b) of the I.T. Act.
19. It is also specifically stated in the F.I.R. that the
computers and computer systems in the educational
institutions of Sri Chaitanya group of VEMPL were entrusted
to A1 to A3 only for the exclusive use of the data therein in
Gosala branches and other educational institutions of
VEMPL. As it is stated that they had unauthorized access to
the said data without the permission of the owners of the said
computers and computer systems i.e. management of the
VEMPL and used the same in their educational institutions
floated as Gosalites Medical Academy, established by A1 to A3
along with A4 and A5, a clear offence punishable under
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Sections 66 r/w.43(a) of the I.T. Act is made out. Similarly,
the exclusive data of VEMPL was also found in the desktop
computer and hard disk of Gosalites Medical Academy, which
are seized by the police under the cover of a mediators‟ report
during the course of investigation in the premises of the said
Gosalites Medical Academy. So, it is also prima facie evident
that A4 and A5, who are the Vice Principal and Admin. Officer
cum Partners of the said Gosalites Medical Academy, also had
unauthorized access to the said data of VEMPL without their
permission and copied the same and transferred the same
into the Desktop and hard disk of the "Gosalites Medical
Academy" and using the same in the Gosalites Medical
Academy, which is an educational institution established by
them along with A1 to A3. Therefore, these facts also
constitute an offence punishable under Sections 66 r/w.43(a)
and (b) of the I.T. Act against A4 and A5 also.
20. Eventhough the laptops which are found in the
Gosalites Medical Academy when the police searched the said
premises during the course of investigation were given to A1
to A3 for their use in the educational institutions of VEMPL,
as they have used the same in Gosalites Medical Academy
established by them and used the data in it belonging to
VEMPL and also got the data in it extracted, copied and
transferred into desktop and hard disk of Gosalites Medical
Academy, the unauthorized access and transfer of data
without the permission of the owner is apparent from it.
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As the details of the students of educational institutions of
VEMPL are also available with Gosalites Medical Academy, it
is also obvious that all the accused i.e. A1 to A5 had
unauthorized access to the data relating to the students also
of VEMPL and downloaded and copied the same into their
computer. So, all the accused 1 to 5 are liable for
prosecution for the offence punishable under Sections 66
r/w.43(a) and (b) of the I.T. Act.
21. Similarly, Section 66C of the I.T. Act makes use of
password or any other unique identification feature of
another person fraudulently or dishonestly, punishable with
imprisonment of either description for a term which may
extend to three years and fine which may extend to Rupees
One Lakh. Section 66C of the I.T. Act reads thus:
"66C. Punishment for identity theft.-- Whoever,
fraudulently or dishonestly make use of the electronic
signature, password or any other unique identification
feature of any other person, shall be punished with
imprisonment of either description for a term which may
extend to three years and shall also be liable to fine which
may extend to rupees one lakh."
22. A reading of the aforesaid Section makes it manifest
that mere user of the password of another person dishonestly
or fraudulently by itself is made an offence.
23. As can be seen from the contents of the FIR at
para-6, it is clearly stated that the management by reposing
confidence in accused 1 to 3 has entrusted and given access
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to them in good faith to the highly confidential and valuable
data by providing passwords of the computer systems to
them for using the data exclusively to run the educational
institutions belonging to the employer and for using the same
in Gosala branches of Sri Chaitanya group of VEMPL.
In para-7 of the FIR, it is stated that accused 1 to 3, who have
domain over the said computers, electronic gadgets, software,
computer data base of the institutions including customize
education software, have misused the passwords of the
computer system and gained access to the said data and have
stolen the same from the computer systems.
24. The petitioners did not dispute the fact that
Gosalites Medical Academy was established by them. They
themselves have filed a copy of Certificate of Registration of
"Sri Gosalites Educational Society" along with the Writ
Petition and also copy of declaration by the authorized agent
for delivering the electronic services. As can be seen from the
same, A-1 is the Secretary Correspondent and A2 is the
Member of the said Sri Gosalites Educational Society. Now,
it is significant to note that as can be seen from the Photostat
copy of the certified copy of the mediators report, dated
29.05.2021, produced by the 4th respondent-de facto
complainant, it shows that the police during the course of
investigation seized desktop, laptop and one external hard
disk containing the data relating to the VEMPL i.e. the
educational institution of the complainant company found in
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the premises of Gosalites Medical Academy. The contents of
the mediators report prima facie disclose that A1 and A3 were
found in the said Gosalites Medical Academy at the time
when the police searched the said premises and they found
on the table of A3 one computer i.e. desktop and it contains
study material, teaching methods, curriculum etc. belonging
to Sri Chaitanya Educational Institutions and they found one
laptop also containing the same study material, teaching
methods, lesson plans etc. of Sri Chaitanya Educational
Institutions and one external hard disk also containing the
same data relating to the Sri Chaitanya Educational
Institutions and that they were seized in the presence of the
mediators. Therefore, it is now prima facie evident that by
using the password that was furnished to A1 to A3
dishonestly to have access to the data of VEMPL educational
institutions, that A1 to A3 have transferred the said data in
the laptop that was given to them to conduct online classes in
the educational institutions of VEMPL into the desktop
computer of Gosalites Medical Academy and also into the
hard disk. The dishonest intention in using the said
password to have wrongful gain to the accused and to cause
wrongful loss to the VEMPL institutions is very much
apparent from it.
25. Thus, these allegations in the FIR, when considered
in the light of the ingredients contemplated under Section 43
read with Sections 66 and 66C of the I.T. Act, clearly
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constitute the offences punishable under Section 66 read with
Section 43(a) & (b) of the I.T. Act and under Section 66C of
the I.T. Act.
26. Therefore, when it is found that the facts of the case
constitute an offence punishable under Section 66 read with
Section 43 and Section 66C of the I.T. Act, it cannot be said
under any stretch of reasoning that the very registration of
FIR in Crime No.239/2021 against accused is unsustainable
under law or that it is unconstitutional. The truth or
otherwise of the said allegations, which prima facie constitute
the aforesaid offences, has to be ascertained during the
course of investigation. Therefore, there is no merit in the
contention of the petitioners that the facts of the case do not
constitute any such offences punishable under Section 66
read with Section 43 and under Section 66C of the I.T. Act for
which the FIR was registered.
27. The next crucial question that arises for
consideration is - when the facts of the case constitute
various offences under the I.T. Act, whether the accused are
liable for prosecution for the offences punishable under IPC
or not?
28. Even though from the facts of the case it appears
that an offence of criminal misappropriation and criminal
breach of trust are made out, in as much as A1 to A3
dishonestly used the passwords furnished to them and
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W.P.No.10882 of 2021
extracted the data from the computer system entrusted to A1
to A3 by the VEMPL educational institutions and
misappropriated the said data for their use in the educational
institution i.e. Gosalites Medical Academy established by
them, as the said facts of the case also constitute an offence
punishable under Sections 66 r/w.43 of the I.T. Act and
under Section 66C of the I.T. Act as discussed above,
prosecuting the petitioners again for the offences punishable
under Sections 403 and 408 of IPC is not permissible under
law. The legal position in this regard is not res integra and
the same has been well settled by the Apex Court in the case
of Sharat Babu Digumarti3. The Supreme Court held that
the provisions of the I. T. Act are a complete code relating to
the offences that are covered under the I. T. Act. It is
a special enactment and it has special provisions and all its
provisions shall be allowed to have a full play.
29. Further held that Section 292 of IPC makes offence
sale of obscene books etc., and when the I. T. Act in its
various provisions deals with obscenity in electronic form,
it also covers the offence under Section 292 of IPC. So, as it
is a special enactment and has special provisions and when
the offence has nexus with electronic record, the protection
under Section 79 of the I.T. Act cannot be ignored and
negated and as it is a special provision for a specific purpose,
the I.T. Act has to be given effect to so as to make the
protection effective and true to the legislative intent. Also
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held that it is the specific mandate of Section 81 of the I.T.
Act that the provisions of the I.T. Act shall have effect
notwithstanding anything inconsistent therewith contained in
any other law for the time being in force and that all the
provisions in the I.T. Act will have their play and significance,
if they pertain to electronic record.
30. Finally held that electronic forms of transmission
are covered by I.T. Act which is a special law and that it is
well settled proposition of law that a special law shall prevail
over the general and prior laws like IPC and if the legislative
intendment is discernible that a latter enactment shall
prevail, the same is to be interpreted in accord with the said
intention and held that when once the special provisions
having the overriding effect do cover a criminal act and the
offender, he gets out of the net of IPC.
31. As per the facts of the case in the above reported
judgment of the Apex Court, the accused therein was sought
to be prosecuted for the offence punishable under Section 67
of the I.T. Act for publishing and transmitting obscene
material in electronic form, which is made an offence under
the aforesaid Section of law in the I.T. Act. He was also
sought to be prosecuted for the offence punishable under
Section 292 of IPC for sale and publication of obscene books
etc. As the publication and transmission of obscene material
is made in the electronic form, it is held that the offence is
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W.P.No.10882 of 2021
covered by the I.T. Act and as such, the accused therein is
not liable again for prosecution under Section 292 of IPC.
32. Following the law laid down by the Apex Court in
the above judgment, a Division Bench of the Bombay High
Court also in the case of Gagan Harsh Sharma v. The State
of Maharashtra4 held at para.7 that the provisions of the I.T.
Act would reveal that it provides complete mechanism for
protection of data in a computer system or a computer
network. The said enactment is a complete code which deals
with electronic governance and confers a legal recognition on
electronic records and the manner in which such records can
be secured. The I.T. Act makes certain acts punishable in
Chapter-IX and Chapter-XI of the Act which enumerates the
offences related to the computer including the source
documents. Thus, the said enactment is a complete Code in
itself and deals with various aspects of electronic data and
computer system.
33. Ultimately held that, once the acts of the accused
done with fraudulent or dishonest intention constitute an
offence under Sections 66 r/w.43 of the I.T. Act, they cannot
be again held liable for the offence punishable under the
Indian Penal Code.
34. As per the facts of the above reported case, that was
also a case where F.I.R. was registered for the offences
punishable under Sections 408 and 420 of IPC and under
Judgment of the Bombay High Court in Crl.W.P.No.4361 of 2018, dt.26.10.2018.
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Sections 43, 65 and 66 of the I.T. Act against the accused for
unauthorized use of data code by the employees of the
complainant company by accessing the code and stealing the
said data by using the computer source code without the
permission of the owner or a person in-charge of the said
computer or computer system. The Court held that when the
offences are covered by Section 66 of the I.T. Act that
prosecuting the accused under both the Indian Penal Code
and I.T. Act would be a brazen violation of protection against
double jeopardy and quashed the F.I.R. in so far as it relates
to offences punishable under the Indian Penal Code.
35. Thus, it is abundantly clear from the conspectus of
law laid down in the aforesaid judgments of the Apex Court
and the Bombay High Court that when the special enactment
i.e. I.T. Act covers the criminal act and the offender, that the
offender gets out of the net of the Indian Penal Code.
36. The analogy in the aforesaid judgments of the Apex
Court and the Bombay High Court applies to the facts of the
present case also. The acts committed by A1 to A3 and also
A4 and A5 in extracting the data surreptitiously with
a dishonest intention to use the same in their educational
institutions, which they have established separately, and also
the acts of A1 to A3 in using the password furnished to them
dishonestly for the said purpose were made offences under
Sections 66 r/w.43 of the I.T. Act and under Section 66C of
the I.T. Act. So, the said illegal acts said to have been
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W.P.No.10882 of 2021
committed by the accused are covered by the I.T. Act and they
are made punishable. Therefore, in view of the law laid down
in the aforesaid judgments of the Apex Court and the Bombay
High Court, they cannot be again prosecuted for the same
acts committed by them under Sections 403 and 408 of IPC.
Facts of the case also do not constitute any offences
punishable under Section 420 and Section 477A of IPC.
37. Therefore, the registration of the F.I.R. for the
offences punishable under Sections 403, 408, 420 and 477-A
of IPC is unsustainable under law. Ergo, the F.I.R. to that
extent is liable to be quashed.
38. Upon considering the facts and circumstances of the
case and the prima facie evidence that is collected during the
course of investigation, this Court found that the facts of the
case clearly constitute the offences punishable under
Sections 66 r/w.43(a) and (b) and under Section 66C of the
I.T. Act. It is well settled law that when the F.I.R. discloses
commission of a cognizable offence and when the facts of the
case constitute a particular offence, the investigation
cannot be interdicted and the F.I.R. cannot be quashed.
The investigation shall be allowed to go on to find out the
truth or otherwise of the said allegations. It is also settled
law that the power, under Section 482 Cr.P.C. or under
Article 226 of the Constitution of India, of the High Court to
thwart the investigation and to quash the F.I.R. is to be very
sparingly exercised with circumspection only in rare and
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W.P.No.10882 of 2021
exceptional cases. Only when it is found that the facts of the
case taken at its face value do not even constitute any
offence, then only the Court would be justified in quashing
the F.I.R. Truth of the matter as per the allegations set out in
the F.I.R. cannot be gone into in a petition filed under Section
482 Cr.P.C. or under Article 226 of the Constitution of India
seeking quash of the F.I.R. The same is to be only
ascertained during the course of investigation and if at all
charge-sheet is filed, by the trial Court in the final
adjudication of the case. The said legal position has been
fairly well settled by the Apex Court in plethora of judicial
pronouncements.
39. In the case of State of Haryana v. Bhajan Lal2, it is
held that the power to quash criminal proceedings should be
exercised sparingly and in rarest of rare cases and reliability
of allegations made in F.I.R. or complaint not to be examined.
40. The present case as regards the offences under the
I.T. Act is concerned, is not falling within the parameters laid
down in the above judgment for quash of F.I.R.
41. In the case of State of Orissa v. Ujjal Kumar
Burdhan5 also the Supreme Court held that the extraordinary
power of the High Court to quash the F.I.R. or to interfere
with the investigation has to be exercised sparingly with
circumspection where the allegations in the F.I.R. even on its
face value do not constitute any offence and that the High
(2012) 4 SCC 547
CMR, J.
W.P.No.10882 of 2021
Court should be loath to interfere at early/pre-mature stage
of investigation. Also held that investigation is necessary to
test the veracity of the alleged offence and interference
causing hindrance to investigation without any supervening
circumstances, in a casual manner, amounts to miscarriage
of justice, which is unsustainable.
42. In the judgment of Scoda Auto Volkswagen India
Pvt. Ltd. v. State of Uttar Pradesh6, relied on by the learned
Government Pleader for Home, the Three-Judge Bench of the
Apex Court held that the criminal proceedings ought not to be
scuttled at the initial stage and quashing of complaint should
rather be an exception and a rarity than an ordinary rule.
43. Learned Senior Counsel appearing for the
petitioners contended that as there is an employment
agreement between A1 to A3 being the employees and their
employer i.e. VEMPL that at best the alleged acts committed
by A1 to A3 amount to committing breach of agreement and it
gives rise to only a civil liability and criminal prosecution even
for extracting the data illegally in breach of confidentiality
as per the terms of the agreement is not maintainable.
Also contends that as there is a clause for arbitration in case
of any dispute arises out of the said agreement that the
parties have to work out their remedy by resorting to
arbitration and criminal prosecution is not an appropriate
remedy.
2020 SCC OnLine SC 958
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W.P.No.10882 of 2021
44. The said contention has no merit. Mere fact that
the alleged acts give rise to a civil liability cannot be a valid
ground to quash the criminal proceedings when the facts also
constitute offences under the I.T. Act and the accused are
fastened with criminal liability.
45. The Apex Court in the case of Trisuns Chemical
Industry v. Rajesh Agarwal7 held that criminal prosecution
cannot be thwarted merely because civil proceedings are also
maintainable. Also held that existence of arbitration clause
in the contract for supply of goods held not sufficient for
quashing the complaint in a case registered under Sections
415 and 420 of IPC. It is held that arbitrator is not
competent to adjudge an offence. The same proposition is
also laid down by the Apex Court in the case of
S.W. Palanitkar v. State of Bihar8. Therefore, the said
contention holds no water.
46. Learned Senior Counsel appearing for the
petitioners would also contend that as per Section 78 of the
I.T. Act an officer not below the rank of Inspector of Police has
to investigate the case and as the Sub-Inspector of Police
registered the F.I.R. and has been investigating the case that
the investigation is vitiated.
47. Learned Government Pleader for Home would
submit that as the report was lodged with the Station House
(1999) 8 SCC 686
(2002) 1 SCC 241
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W.P.No.10882 of 2021
Officer of Kankipadu Police Station, Vijayawada City, that the
same was registered by the Sub-Inspector of Police, who was
the Station House Officer at that time. He submits that the
investigation is being done by the Inspector of Police in
compliance with Section 78 of the I.T. Act.
48. Registration of F.I.R. can be made by an officer, who
is the Station House Officer at the time when the report was
lodged with the Police. So, registration of the F.I.R. by the
Sub-Inspector of Police, who was the Station House Officer by
then, is perfectly valid under law. Section 78 of the I.T. Act
only ordains that the investigation shall be done by the officer
not below the rank of Inspector of Police. As it is stated by
the learned Government Pleader for Home on instructions
that the investigation is now being done by the Inspector of
Police, it is not contrary to the mandate of Section 78 of the
I.T. Act.
CONCLUSION:
49. To sum up, the facts of the case coupled with the
prima facie evidence that is available on record as discussed
supra, prima facie, constitute an offence punishable under
Sections 66 r/w.43(a) and (b) and Section 66C of the I.T. Act
against A1 to A3 and the facts also constitute an offence
punishable under Sections 66 r/w.43(a) of the I.T. Act against
A4 and A5. Therefore, the F.I.R. in respect of the said
offences is not liable to be quashed against the petitioners.
CMR, J.
W.P.No.10882 of 2021
However, as the petitioners are not found to be liable for
prosecution for the offences punishable under Sections
120-B, 403, 408, 420, 477A of IPC, the F.I.R. to that extent is
liable to be quashed.
50. Resultantly, the Writ Petition is partly allowed
quashing the F.I.R. registered for the offences punishable
under Sections 120-B, 403, 408, 420, 477A of IPC. The F.I.R.
in respect of the offences punishable under Sections 66 r/w
43 of the I.T. Act and Section 66C of the I.T. Act holds good.
The investigation in respect of the said offences shall go on.
51. The interim order earlier granted on 04.06.2021
staying the investigation stands vacated. No costs.
As a sequel, miscellaneous petitions, if any pending, in this
Writ Petition, shall stand closed.
_________________________________________
CHEEKATI MANAVENDRANATH ROY, J.
31 January, 2022.
st
Note:-
L.R. Copy to be marked.
(B/o)
Ak/cs
CMR, J.
W.P.No.10882 of 2021
HONOURABLE SRI JUSTICE CHEEKATI MANAVENDRANATH ROY
Writ Petition No.10882 of 2021
31st January, 2022.
(cs)
CMR, J.
W.P.No.10882 of 2021
* HON'BLE SRI JUSTICE CHEEKATI MANAVENDRANATH ROY
+ Writ Petition No.10882 of 2021
% Dated 31-01-2022.
# V.Narendra Babu and 4 others
..... Petitioners
Versus
$ 1. The State of A.P., rep. by its Principal Secretary, Home Department,
Secretariat, Velagapudi, Amaravati, Guntur & 3 others
..Respondents
! Counsel for the petitioners : Sri Dammalapati Srinivas,
Senior Counsel, representing
Sri P.Durga Prasad
^ Counsel for respondent Nos.1 to 3: Govt. Pleader for Home
^ Counsel for respondent No.4: Sri B.Adinarayana Rao,
Senior Counsel, representing
Sri K.Nithin Krishna
<GIST:
> HEAD NOTE:
? Cases referred:
1. (2014) 2 SCC 1
2. 1992 Supp (1) SCC 33
3. (2017) 2 SCC 18
4. Crl.W.P.No.4361/2018, dt.26-10-2018, of Bombay High Court
5. (2012) 4 SCC 47
6. 2020 SCC Online SC 98
7. (1999) 8 SCC 686
8. (2002) 1 SCC 241
CMR, J.
W.P.No.10882 of 2021
IN THE HIGH COURT OF THE STATE OF ANDHRA PRADESH
Writ Petition No.10882 of 2021
V.Narendra Babu and 4 others
..... Petitioners
Versus
1. The State of A.P., rep. by its Principal Secretary, Home Department,
Secretariat, Velagapudi, Amaravati, Guntur & 3 others
..Respondents
JUDGMENT PRONOUNCED ON: 31-01-2022
HON'BLE SRI JUSTICE CHEEKATI MANAVENDRANATH ROY
1. Whether Reporters of Local newspapers ---
may be allowed to see the Judgments?
2. Whether the copies of judgment may be marked -Yes-
to Law Reporters/Journals
3. Whether His Lordship wish to see the fair copy of -Yes-
the Judgment?
JUSTICE CHEEKATI MANAVENDRANATH ROY
