Avnish Bajaj v. State

It is the case that shows why safe harbour is drafted as it is. Everything the platform did after it learned of the listing — the delay before removal, the payment released to the seller afterwards, the adequacy of its filters — became the substance of the case. That is exactly the enquiry s. 79(3)(b) of the Act now codifies. It also separates two questions that answers routinely run together: the liability of a platform and the liability of its officers.

Baazee.com was a customer-to-customer auction website which took a commission on sales and carried advertising. On 27 November 2004 an obscene video clip filmed on a mobile phone, showing two school children, was listed for sale on it under the description "DPS Girl having fun". Copies were sold through the site and the seller was paid.

Avnish Bajaj, the Managing Director of the Indian company that owned the website, was arrested under s. 67 of the Act. The trial court refused bail and he moved the Delhi High Court.

The prosecution's case was that he had not stopped payment through the banking channels after learning of the illegal nature of the transaction, and that the item description should itself have raised an alarm. The defence answered that s. 67 relates to the publication of obscene material and not to its transmission, and that once the character of the sale was known remedial steps were taken within thirty-eight hours, the intervening period being a weekend.

Bail was granted. These are findings on an application for bail, and they are prima facie findings — say so whenever you use them. Among them the court recorded that it had not been established that publication took place by the accused directly or indirectly; that the obscene clip itself could not be viewed on the portal; that the sale consideration was not routed through the accused; that prima facie the website had endeavoured to plug the loophole; and that the evidence indicated the material may have been unwittingly offered for sale and that the heinous nature of the alleged crime may be attributable to some other person. Bail was on two sureties of one lakh rupees each, with an order to surrender his passport and to assist the investigation.

The prosecution went on. In its 2008 judgment the Delhi High Court recorded that a prima facie case under s. 292 of the Penal Code and s. 67 of the Act was made out as far as the owner of the website — the company — was concerned, while the offence under s. 294 was not attracted on those facts. The question that then divided the parties was whether the Managing Director could be prosecuted when the company itself had not been arraigned as an accused — a question which, for this Act, turns on s. 85.

Take two lessons, and state them as lessons rather than as holdings, because nothing here was decided finally.

1. After knowledge, conduct is everything. The arguments on both sides were about what happened once the listing was known: how long removal took, whether the weekend excused it, whether the description should have triggered a filter earlier, whether the money should have been stopped. Section 79(3)(b) now makes that the statutory test — safe harbour is lost where, on actual knowledge or notification by the appropriate Government or its agency, the intermediary fails to expeditiously remove or disable access to the material "without vitiating the evidence in any manner". The Act fixes no number of hours; what is expeditious is a question of fact, which is precisely why the argument in this case took the shape it did. Read s. 79(3)(b) with s. 67C, which obliges the intermediary to preserve and retain information as prescribed: take down from public view, retain for the investigation.
2. A platform and its officers are governed by different provisions. Whether the company is liable is a s. 79 question, and if immunity is lost, a question under the charging section. Whether a director is liable is a s. 85 question: an officer who "was in charge of, and was responsible to, the company for the conduct of business of the company" is guilty along with the company, with a defence if he proves he had no knowledge or that he exercised all due diligence to prevent the contravention. Conflating the two is the commonest error in answers on this topic.

• On safe harbour. Use it as the illustration of the enquiry s. 79(3)(b) codifies — never as a holding on s. 79, which was not the basis of the order.
• On directors. Use it to introduce s. 85 and to make the point that an officer's liability is a separate statutory question from the company's.
• On s. 67. Note the defence argument distinguishing publication from transmission, and answer it from the words of the section as it now stands.
• Always attach the caution. The findings recited above were made at the bail stage and are prima facie; the 2008 record is of a prima facie case against the company. An answer that reports either as a settled statement of the law is overstating it.

What it does not decide: it does not finally determine anybody's guilt, it lays down no test of "expeditious" removal, and it does not construe s. 79 — which, with the due-diligence guidelines that condition it, is the provision your answer must actually argue from. The Penal Code sections named have since been replaced by the corresponding provisions of the Bharatiya Nyaya Sanhita, 2023; cite the case with the sections under which it was decided and note the replacement.