Karnataka High Court
Sri. Kunal Bahl vs State Of Karnataka on 24 February, 2022
Bench: M.Nagaprasannapresided Bymnpj
1
IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
DATED THIS THE 24TH DAY OF FEBRUARY, 2022
BEFORE
THE HON'BLE MR. JUSTICE M.NAGAPRASANNA
CRIMINAL PETITION NO.100653 OF 2021
C/W
CRIMINAL PETITION NO.100652 OF 2021
IN CRIMINAL PETITION NO.100653 OF 2021
BETWEEN:
1. SRI KUNAL BAHL
AGE. 37 YEARS,
DIRECTOR OF M/S. JASPER
INFOTECH PRIVATE LIMITED
238, 1ST FLOOR, OKHLA INDUSTRIAL
ESTATE, NEW DELHI - 110 020.
2. SRI ROHIT KUMAR BANSAL
DIRECTOR OF M/S. JASPER
INFOTECH PRIVATE LIMITED
238, 1ST FLOOR, OKHLA INDUSTRIAL
ESTATE, NEW DELHI-110020
... PETITIONERS
(BY SRI C.V.NAGESH, SR.COUNSEL FOR
SRI MRUTYUNJAYA S.HALLIKERI, ADVOCATE
(VIDEO CONFERENCING))
AND:
STATE OF KARNATAKA
REPRESENTED BY
2
ASSISTANT DRUGS CONTROLLER
BELGAUM CIRCLE,
REGIONAL OFFICE OF THE
ASSISTANT DRUGS INSPECTOR
BESIDES AYUSH HOSPITAL,
VACCINE DEPOT, MANDOLI ROAD,
BELAGAVI - 590 001
REPRESENTED BY
STATE PUBLIC PROSECUTOR
HIGH COURT OF KARNATAKA
DHARWAD BENCH - 580 011.
... RESPONDENT
(SRI RAMESH CHIGARI, HCGP)
THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF
CR.P.C., PRAYING TO CALL FOR RECORDS IN C.C.NO.2/2019
PENDING BEFORE THE COURT OF THE SECOND JMFC, BELAGAVI
AND QUASH THE COMPLAINT DATED 03/01/2019 IN
C.C.NO.2/2019 PENDING BEFORE THE COURT OF SECOND JMFC,
BELAGAVI (ANNEXURE-A) AND QUASH THE ORDER DATED
09/01/2019 TAKING COGNIZANCE (ANNEXURE-B) AND FURTHER
PROCEEDINGS PENDING IN P.C.R.NO.3/2019 PENDING BEFORE
THE COURT OF THE SECOND JMFC, BELAGAVI AND QUASH THE
ORDERS DATED 04/12/2020, 29/12/2020 AND 15/01/2021
(ANNEXURE-C) AND FURTHER PROCEEDINGS PENDING IN
C.C.NO.2/2019 PENDING BEFORE THE COURT OF THE SECOND
JMFC, BELAGAVI.
IN CRIMINAL PETITION NO.100652 OF 2021
BETWEEN:
SANPDEAL PRIVATE LIMITED
(FORMERLY KNOWN AS
JASPER INFOTECH PRIVATE LIMITED)
ASF CENTRE, UDYOG VIHAR
PHASE IV, GURGAON, HARYANA
HAVING ITS REGISTERED OFFICE AT:
SPROUTBOX SURYAVILLAS
3
SUITE #181 TR-4, FIRST FLOOR
D-181, OKHLA INDUSTRIAL AREA
PHASE I, NEW DELHI,
SOUTH DELHI - 110 020
REPRESENTED BY ITS
AUTHORIZED SIGNATORY
MR.VIJAY KUMAR SRIVASTAVA
AGE 40 YEARS. ... PETITIONER
(BY SRI C.V.NAGESH, SR.COUNSEL FOR
SRI MRUTYUNJAYA S.HALLIKERI, ADVOCATE
(VIDEO CONFERENCING))
AND:
STATE OF KARNATAKA
REPRESENTED BY
ASSISTANT DRUGS CONTROLLER
BELGAUM CIRCLE
REGIONAL OFFICE OF THE
ASSISTANT DRUGS INSPECTOR
BESIDES AYUSH HOSPITAL
VACCINE DEPOT, MANDOLI ROAD,
BELGAUM - 590 001
NOW REPRESENTED BY
SPECIAL PUBLIC PROSECUTOR
HIGH COURT OF KARNATAKA
DHARWAD BENCH - 580 011. ... RESPONDENT
(BY SRI RAMESH CHIGARI, HCGP)
THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF
CR.P.C., PRAYING TO CALL FOR RECORDS IN C.C.NO.2/2019
PENDING BEFORE THE COURT OF THE SECOND JMFC, BELAGAVI
AND QUASH THE COMPLAINT DATED 03/01/2019 IN
C.C.NO.2/2019 PENDING BEFORE THE COURT OF SECOND JMFC,
BELAGAVI (ANNEXURE-A) AND QUASH THE ORDER DATED
09/01/2019 (ANNEXURE-B) AND FURTHER PROCEEDINGS
PENDING IN P.C.R.NO.3/2019 PENDING BEFORE THE COURT OF
THE SECOND JMFC, BELAGAVI AND QUASH THE ORDERS DATED
4
04/12/2020, 29/12/2020 AND 15/01/2021 (ANNEXURE-C) AND
FURTHER PROCEEDINGS PENDING IN C.C.NO.2/2019 PENDING
BEFORE THE COURT OF THE SECOND JMFC, BELAGAVI.
THESE CRIMINAL PETITIONS COMING ON FOR ADMISSION
THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER
The petitioners are before this Court calling in question
proceedings in C.C.No.2 of 2019 pending before the JMFC-II
Court, Belagavi registered for offences punishable under
Sections 18(c) and 27(b)(ii), 18A and 28 of the Drugs and
Cosmetics Act, 1940 ('the Act' for short).
2. Heard the learned senior counsel Sri C.V.Nagesh
representing the petitioners and the learned High Court
Government Pleader representing the respondent-State.
3. Brief facts leading to the filing of the present petition, as
borne out from the pleadings are as follows:-
The petitioners are Directors of Jasper Infotech Private
Limited now known as Snapdeal Private Limited. The petitioners
are on the Board of Snapdeal since incorporation of the
company. On 02-12-2014 claiming to be on credible information
the drug Suhagra-100 mg. was exhibited on the company's
website, the respondent claims to have placed an order for the
said tablet on the petitioners company's website through his e-
mail ID. On 10-12-2014 in furtherance of the order, the tablets
were delivered to the respondent and on receipt, in the presence
of two witnesses, panchanama was drawn on the spot. The
allegation is that petitioners company's website exhibited
Suhagra 100 mg. tablet for sale and provided a platform to the
seller and purchaser without possessing valid retail drug licence.
It was further alleged that displaying and exhibiting the said
drug for sale without licence was in contravention of the
provisions of the Act.
4. Based upon the said incident which happened on
10.12.2014, a complaint came to be registered on 03-01-2019,
five years thereafter, alleging that the petitioners were involved
in the commission of offences punishable under Sections 18(c),
27(b)(ii), 18A and 28 of the Act. On 07-01-2019, the learned
Magistrate takes cognizance for offences punishable under
Sections 18(c), 27(b)(ii), 18A and 28 of the Act and directs
registration of a case against the petitioners. On issuance of
summons pursuant to taking of such cognizance, the petitioners
are before this Court in the subject petitions.
5. The learned senior counsel Sri.C.V.Nagesh representing
the petitioners would vehemently argue and contend that the
petitioners are only intermediaries and would not become liable
for prosecution particularly under the Act. The Company of the
petitioners is only a platform through which sale happens on its
website. He would further submit that for an incident or a
panchanama that was drawn in the year 2014, complaint is
registered after five years. The learned Magistrate ought not to
have taken cognizance is his emphatic submission.
6. On the other hand, the learned High Court Government
Pleader would however, contend that the petitioners are guilty of
providing such platform for sale of medicine without there being
a valid drug licence or a retail drug licence for such sale.
7. I have given my anxious consideration to the
submissions made by the learned senior counsel and the
learned High Court Government Pleader and perused the
material on record.
8. The petitioners are Directors of Snapdeal Private
Limited. It is not in dispute that the petitioners are
intermediaries or a platform that would enable sale or purchase
of any goods. Whether an intermediary like the Snapdeal Private
Limited can be hauled into these proceedings need not detain
this Court for long or delve deep into the matter, as this Court in
Criminal Petition No.4676 of 2020 and connected matter
decided on 7th January 2021 between the same parties and on
identical allegations has held that the petitioners being
intermediaries cannot be seen to be hauled up in criminal
proceedings. Points No.(vi) and (vii) in the aforesaid judgment is
what covers the present case on all its fours and are therefore
relied on for the purpose of ready reference. They read as under:
"12. Point No. (vi): Whether an intermediary as defined under
Section 2(w) of the Information Technology Act would be
liable for any action or inaction on party of a
vendor/seller making use of the facilities provided by
the intermediary in terms of a website or a market
place?
12.1 It is stated that Snapdeal has established a a
Marketplace on the World Wide Web, more popularly
known as the internet, enabling a Seller to upload, sell
or even 'offer for sale' any product on Snapdeal. For this
purpose, a seller h as to create an account with
Snapdeal and contractually agree to Snapdeal's Terms
of Use, Snapdeal's Terms of Offer for Sale,
Snapdeal's Policies, Seller Agreement: which contains
the basic terms and conditions of selling products over
Snapdeal which every Seller has to agree with.
12.2 Snapdeal's business as per its 'Terms of Offer for
Sale', is "a platform that facilitates the online sale and
purchases of branded merchandise and services
("Services") offered by Snapdeal's various affiliate/
registered merchants/ vendors/ service providers
("Vendor/s").
12.3 Snapdeal being an intermediary can not be disputed,
it comes with the meaning and definition of
Intermediary under Section 2(1)(w) of the Information
Technology Act, 2000, as amended by the
Information Technology (Amendment) Act, 2008.
Snapdeal would be entitled to the exemption from
liability in terms of Section 79 Information Technology
Act, 2000 if the requirements thereof are met.
12.4 Snapdeal is not the Seller, it is the Vendors
registered with Snapdeal who are the Sellers of
products and services on its platform, it is the
Vendors who are solely responsible to the
purchaser/customer.
12.5 For its part Snapdeal has entered into seller
agreements with various sellers, the seller
agreements are accompanied by a Schedule of
banned products, which categorically includes "21.
Prescription Medicines and Drugs".
12.6 The Seller Agreement, details out the terms and
conditions relevant to the transaction, which are
extracted hereinabove.
12.7 Snapdeal has also published a document titled
'Prohibited Seller Activities and consequences Policy
Document', where one of the Prohibited seller activities
is clearly specified to be the sale of the drug subject
matter of the present criminal proceedings.
12.8 It cannot be expected that the provider or enabler
of the online marketplace is aware of all the
products sold on its Website. It is only required
that such provider or enabler put in place a robust
system to inform all sellers on its platform of their
responsibilities and obligations under applicable
laws in order to discharge its role and obligation
as an intermediary. If the same is violated by the
Seller of goods or service such seller can be
proceeded with but not the intermediary.
12.9 The manner in which the above documents have
been executed, contents thereof as also the obligation
of the parties stated therein establishes the due
diligence exercised by Snapdeal t o be in
accordance with and compliance of Section 79(2)(c) of
the Information Technology Act, 2000, read in
conjunction with the Information Technology
(Intermediaries Guidelines) Rules, 2011, in ensuring
that Vendors/Sellers who register on its Website
conduct themselves in accordance with and in
compliance with the applicable laws.
12.10 The Consumer Protection (E-Commerce) Rules, 2020,
makes a distinction between marketplace e-
commerce websites and inventory e-commerce
websites. As such Snapdeal would come within the
meaning of a marketplace e-commerce website,
thereby affording the above exemption to Snapdeal
so long as the requirements under section 79 are
followed by Snapdeal.
12.11 In the present case as detailed above Snapdeal has
complied with the requirements of sub-sections (2) and (3)
of Section 79, as well as the Information Technology
(Intermediaries Guidelines) Rules, 2011.
12.12 In my considered opinion Snapdeal has exercised
'due diligence' under Section 79(2)(c) of the
Information Technology Act, 2000, read in
conjunction with the Information Technology
(Intermediaries Guidelines) Rules, 2011.
12.13 When Snapdeal/Accused to. 2 Company is exempted
from any liability under Section 79 of the Information
Technology Act, 2000, no violation can ever be
attributed or made out against the directors or
officers of the intermediary, as the same would be
only vicarious, and such proceedings as initiated
against them would be unjust and bad in law.
12.14 The only liability of an intermediary under Section
79(3)(b) of the IT Act is to take down third-party
content upon receipt of either a court order or a notice
by an appropriate government authority and not
otherwise, which as per the Complaint filed indicates
has been complied with by Snapdeal, by removing
the information regarding the sale of the offending
item.
12.15 I answer Point No. (vi) by holding that an
intermediary as defined under Section 2(w) of the
Information Technology Act or its
directors/officers would not be liable for any
action or inaction on part of a vendor/seller
making use of the facilities provided by the
intermediary in terms of a website or a market
place.
13. POINT NO. (vii): Whether Snapdeal/accused No.2 would
be responsible and/or liable for sale of any item not
complying with the requirements under the Drugs and
Cosmetics Act, 1949 on its platform accused No.2 being
an intermediary?
13.1 Section 18(1)(c) of the Drugs and Cosmetics Act,
1949 applies to a manufacturer of a drug or cosmetic,
coming within the perview and ambit of the Act. Such
manufacture is also required to be for sale or for
distribution of any drug or cosmetic.
13.2 The only allegation in the present matter is as
regards Snapdeal having made available its platform
for sale by Accused No.1 of a drug. There are no
allegation that Snapdeal has either manufactured for
sale or distributed or sold, or stocked or exhibited or
offered for sale, any drug or cosmetic.
13.3 Though the platform is owned and operated by
Snapdeal it is Accused No. 1, who has exhibited and
offered its products for sale on the Snapdeal's
platform. Snapdeal being an intermediary is exempt
from criminal prosecution as aforestated.
13.4 In this background neither Snapdeal nor its Directors
can be or made liable for alleged offences punishable
under Section 27(b)(ii) of the Drug and Cosmetics Act.
13.5 Hence I answer Point No. (vii) by holding that
Snapdeal/accused No.2 would not be responsible
and/or liable for sale of any item not complying
with the requirements under the Drugs and
Cosmetics Act, 1949 on its platform by accused
No.1 since the essential ingredients of Section
18 (1)(c) of the Act not having been fulfilled
neither Snapdeal nor its Directors can be
prosecuted for the offence under Section 27(b)(ii)
of the Act.
14. Point No. (viii): Effect of delay in filing a Criminal
Complaint?
14.1 The object and essence of prompt lodging of FIR had
been explained by the Hon'ble Apex Court in State of
Andhra Pradesh vs M. Madhusudhan Rao (2008)
15 SCC 582, observed as under:
14.1.1 That delay in lodging the FIR, more often than
not, results in embellishment and exaggeration,
which is a creature of an afterthought.
14.1.2 That a delayed report not only gets bereft of the
advantage of spontaneity, the danger of the
introduction of coloured version, exaggerated
account of the incident or a concocted story as a
result of deliberations and consultations, also
creeps in, casting a serious doubt on its veracity.
14.1.3 Therefore, it is essential that the delay in lodging
the report should be satisfactorily explained.
Resultantly, when the substratum of the evidence
given by the complainant is found to be
unreliable, the prosecution case has to be rejected
in its entirety.
14.2 It is in that background that there is required to be a
Prompt and early reporting of the incident by the
informant with all its vivid details gives an assurance
regarding its true version. In case, there is some delay
in filing the FIR, the complainant must give an
explanation for the same.
14.3 In Sahib Singh v. State of Haryana (AIR 1997 SC
3247) and Gorge Pentaiah v. State of A.P. & Ors.
(2008) 12 SCC 531 it has been held that delay in
lodging the FIR does not make the complainant's case
improbable when such delay is properly
explained. However, deliberate delay in lodging the
Complaint may prove to be fatal. In such cases the
Court has to carefully examine the facts before it, for the
reason, that the complainant party may initiate criminal
proceedings just to harass the other side with mala fide
intentions or with ulterior motive of wreaking
vengeance. The proceedings before a court ought not to
be permitted to degenerate into a weapon of
harassment and persecution. In cases, where an FIR is
lodged clearly with a view to spite the other party
because of a private and personal grudge and to
enmesh the other party in long and arduous criminal
proceedings, the Court may take a view that it amounts
to an abuse of the process of law.
14.4 In the present case the Complaint was filed with an
inordinate delay of nearly six years, though the
transaction is stated to have occurred in the year
2014.
14.5 In the Complaint filed there is no explanation or
justification w h i c h has been given for the
unreasonable delay caused by the Respondent,
more so when the Respondent/Complainant is a
government official.
14.6 Such a delay would result in arriving at a rebuttable
presumption that there was no offence committed.
14.7 Even if there may be no embellishments, criminal
proceedings cannot be initiated after a period of 6
years, irrespective of the applicability of limitation
period in terms of Section 468 of the Cr. P.C or not.
The only excuse for the delay provided is that the
complainant being a government employee the
process of obtaining permission to file the complaint
took some time. In my considered opinion a period of
6 years cannot be said to be some time. It is required
for the state to act with alacrity, the fact that there
was a delay of 6 years in filing would itself indicate
and/or establish that even the authorities might have
probably considered that there is no offence as such
made out.
14.8 In the present case, I'am of the considered opinion
that there being no acceptable explanation for the
highly belated lodging of the Complaint, the delay
is fatal to these proceedings.
15. What Order:
16. The answers to the above points formulated are summarised
as under:
16.1 The order of Cognisance dated 8.6.2020 is not in
compliance with the requirement of Section
191(1)(a) of the Cr.P.C and further does not
indicate the procedure under Section 204 of
Cr.P.C having been followed. At the time of taking
Cognisance and issuance of process, the Court
taking Cognisance is required to pass a
sufficiently detailed order to support the
conclusion to take cognisance and issue process,
in terms of the discussion above. The judicious
application of mind to the law and facts of the
matter, should be apparent on the ex-facie
reading of the order of Cognisance.
16.2 When the accused is having an office, branch
office, corporate office, sales office or the like
within the Jurisdiction of the Magistrate where
the offence has been committed and or continues
to be committed, there would be no requirement
for any enquiry under Section 202 of Cr.P.C. It
would, however, be required for the Magistrate to
in the order of issuance of summons/process
record as to why the enquiry under Section 202 of
Cr.P.C is not being held.
16.3 In the event of accused being an individual, if the
said accused has a temporary residence within
the Jurisdiction of the Magistrate, again merely
because he does not have a permanent residence,
there is no enquiry which is required to be
conducted under Section 202 of Cr.P.C. It would,
however, be required for the Magistrate to in the
order of issuance of summons/process record as to
why the enquiry under Section 202 of Cr.P.C is not
being held.
16.4 When the accused has no presence within the
Jurisdiction of the Magistrate where the offence
has been committed, then it would be mandatory
for an enquiry under Section 202 of the Cr.P.C to
be held.
16.5 In the event of accused being aggrieved by the
issuance of Summons, the said accused
immediately on receipt of the Summons and/or on
appearance before the Magistrate is required to
make out his grievance before the Magistrate
Court and/or by petition under Section 482 Cr.P.C.
If there is any delay, in such challenge and/or if
challenge has not made within reasonable time,
the accused would not be entitled to raise the
grievance that the procedure under Section 202 of
Cr.P.C. has not been followed on account of delay
and latches.
16.6 Only a Court in which the accused has a presence,
like registered office, branch office, corporate
office or the like could exercise Jurisdiction as
regards an offence relating to an e-commerce
transaction.
16.7 This of course would not apply to a Cyber Crime,
which comes under global jurisdiction according
to the IT Act, 2000. This means that any cyber-
crime complaint can be registered with any of the
cyber cells in India, irrespective of where the
crime was originally committed.
16.8 An intermediary as defined under Section 2(w) of
the Information Technology Act or its
directors/officers would not be liable for any
action or inaction on part of a vendor/seller
making use of the facilities provided by the
intermediary in terms of a website or a market
place.
16.9 An intermediary would not be responsible and/or
liable for sale of any item not complying with the
requirements under the Drugs and Cosmetics Act,
1949 on its platform since the essential
ingredients of Section 18 (1)(c) of the Act not
having been fulfilled. Neither Snapdeal nor its
Directors can be prosecuted for the offence
under Section 27(b)(ii) of the Act.
16.10 There being no acceptable explanation for the
highly belated lodging of the Complaint, the delay
is fatal to these proceedings.
17. In the result, both the petitions are allowed. The
proceedings in C.C.No.156/2020 pending before the
Court of the Principal Senior Civil Judge and CJM,
Mysuru are quashed."
In the light of an identical issue being answered by a
Co-ordinate Bench of this Court holding that intermediaries
cannot be hauled into criminal proceedings for alleged violation
of the provisions of the Act, the subject petitions have to
succeed.
9. No document has been placed before this Court by the
respondent-State to demonstrate that the judgment of the
Co-ordinate Bench is taken to any higher forum and a stay of
the said judgment is operating. In the circumstances, I deem it
appropriate to obliterate the impugned proceedings following the
judgment rendered by the Co-ordinate Bench (supra).
10. For the aforesaid reasons, I pass the following;
ORDER
(i) The Criminal Petitions are allowed.
(ii) The proceedings in C.C. No.2 of 2019 pending before
the JMFC-II Court, Belagavi against the petitioners
stand quashed.
Sd/-
JUDGE
bkp
CT:MJ
