Supreme Court strikes down Section 66A of IT Act
In an historic decision, the Supreme Court struck down the 'draconian' Section 66A of the IT Act, thus guaranteeing citizens fundamental right to freedom of speech and expression 
 
The Supreme Court on Tuesday struck down Section 66A of the Information Technology (IT) Act holding it violative of Article 19(1)a of the Constitution, which guarantees freedom of speech.
 
Section 66A of the IT Act has been repeatedly abused by powerful politicians, political parties and their followers to silence critics and violate human rights through the abuse of the draconian power to arrest and jail those who speak their minds, especially on social media. 
 
Consumer review social media company Mouthshut.com had filed the petition before the apex court. The case was clubbed along with a petition filed by Shreya Singhal, a law student, challenging India's IT Act's section 66A. Because the hearing for 66A and the IT rules were clubbed together by a Supreme Court order, the matter is sometimes referred as Shreya Singhal cases
 
In a message, Faisal Farooqui, the Founder and Chief Executive of MouthShut.com, said, "....(the) Verdict in our favour. No content take down without Court order. No arrests for posting online. Current law unconstitutional. India is free and so is the internet. Thank you to all of you."
 
Section 66A provides the power to arrest a person for sending grossly offensive or menacing messages, or causing annoyance and inconvenience through electronic communication service. It prescribes a three-year jail term, if found guilty. The wording of the Section has been liberally misinterpreted to harass and intimidate people by arresting them.
 
While the Act has been repeatedly challenged, the Supreme Court, in 2013, diluted the power of arrest by ruling that no person can be arrested for social media posts without prior approval from an officer of the rank of an inspector general of police. This case, too, was in connection with comments posted on social media about a member of the legislative assembly (MLA) of Tamil Nadu.  
 
MouthShut.com approached the Supreme Court to nullify Information Technology Rules 2011, which are a part of the IT Act on April 2013. Writ petition was filed by MouthShut.com under Article 32 of the Constitution for quashing the IT Intermediaries Guidelines) Rules, 2011 as it claimed are violative of Articles 14, 19 and 21 of the Constitution of India.
 
According to the petition, the Rules impose a significant burden on the petitioners, forcing them to screen content and exercise on-line censorship. While a private party may allege that certain content is defamatory or infringes copyright, such determinations are usually made by judges and involve factual inquiry and careful balancing of competing interests and factors, which the petitioners are not equipped to make. The petitioners receive notices and phone calls from cyber cells and police stations asking them to delete content and provide information of users, which makes the running of their business difficult.
 
The examples of misuse of Section 66A by politicians are many. In 2012, two young girls were arrested and terrorised by a mob for a harmless Facebook post criticising the shutdown of Mumbai for the funeral of Shiv Sena supremo Balasaheb Thackeray. One of them had merely ‘liked’ the post.

The two girls were first booked under Indian Penal Code (IPC) sections 295A (hurting religious sentiments). When it was realised the Shiv Sena is not a religious group the girls section 295A was dropped and section 505(2) (promoting enmity or ill-will between classes) and section 66A were applied.
 
Karti Chidambaram, son of former Union minister P Chidambaram, had a Puducherry businessman arrested at night for some posts on Twitter. This case, too, had sparked outrage on social media. Section 66A has even been applied with other provisions of the Indian Penal Code for cases involving cyber-squatting and impersonation.
 
Few days ago, the Calcutta High Court penalised the West Bengal government and ordered action against police officials who had arrested professor Ambikesh Mahapatra of Jadavpur University in 2012 for forwarding an email joke about Mamata Banerjee, chief minister of West Bengal. The state has been ordered to pay Rs50,000 in compensation and another Rs50,000 in costs to the professor.
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    COMMENTS

    Divya & Bapoo Malcolm

    5 years ago

    Unfortunately, in an adversarial system, there will always be losers. Most of them genuinely think they are in the right; but unfortunately, the law is NOT in their favour, for various reasons. The main one is delay.

    Most people hate to visit a lawyer at the first sign of trouble. The one thought that comes to mind is the matter of cost. But being penny-wise may amount to being pound-foolish.

    As for Mr. Warrier's comment, self regulation, more so self-restraint, is the need of the hour. One understands the build up of bile at being hurt, or mistreated. So, one attacks the keys. It's easy, fast and cheap. The audience is world-wide. It's a load off one's chest.

    But then there are other signposts that one needs to heed. Libel, defamation, slander are still on the books. The rule of thumb, to avoid trouble are these three points of reference. 1) What you write must be true and you must be able to prove it. 2)It must carry to a wide audience,3)It must cause harm, either tangible or not, suggested or direct.

    So, if you cannot prove what you say, on the internet, and the person harmed proves hurt; you have had it.

    The internet was invented for transmission of data. That it is now a tool for attacks is unfortunate. Maybe not as unfortunate as the clampdown that fascist politicians want to put on it. Let us make sure that they do not get the chance. They won's till the judiciary is free.

    MG Warrier

    5 years ago

    My personal view is that the Apex Court decision which is most welcome, will make people more responsible and groups sharing mails or 'information' will impose self-regulation to protect common/public interest. There are several punitive legislative provisions which are selectively 'used'. The judicial process itself is slow due to various constraints. While celebrating victories like this, we should not forget larger issues.

    SuchindranathAiyerS

    5 years ago

    This means nothing. Forget the administration and police, even High Court and Supreme Court Judges do not heed Supreme Court Judgements. How many victims of India can afford to wait six years to have their criminal cases quashed in favour of the wealthy and the influential by a High Court Judge who over rules the law of the land, the evidence and Supreme Court judgements to proclaim, in open, court, that "This is India, not UK or US" and then pay a fortune to be told that the Supreme Court declines to interfere?

    Divya & Bapoo Malcolm

    5 years ago

    God bless the Judiciary. The problem is that now Modi will go hell bent in devising a system to pack the courts, a-la Indira Gandhi and her sick concept of a 'committed judiciary'.
    And the next to fall by the wayside will be the Right To Information Act.

    Let's keep our fingers crossed.

    SEBI directs GSHP Realtech to refund money collected through secured non-convertible redeemable debentures

    The company was engaged in fund mobilising activity through issuance of Secured Non-Convertible Redeemable Debentures, to more than 49 persons, without complying with the relevant provisions of the Companies Act,1956 and provisions of the SEBI (issue and Listing of Debt Securities) Regulations, 2008

     

    SEBI passed an order on 18 March 2015, wherein GSHP Realtech Limited and its directors and promoters, have been directed to refund the money collected by the company through issuance of secured non-convertible redeemable debentures, with interest at the rate of 15% per annum at half yearly intervals and also not to access the capital market in any manner. They have also been restrained and prohibited from buying, selling or otherwise dealing in the securities market, from the date of this order till the expiry of four years from the date of completion of refunds to investors.
     
    The company was engaged in fund mobilising activity through issuance of secured non-convertible redeemable debentures, to more than 49 persons, without complying with the relevant provisions of the Companies Act, 1956 and provisions of the SEBI (issue and Listing of Debt Securities) Regulations, 2008.
     
    SEBI had passed an interim order on 15 May 2014 in the matter, whereby it directed the company and its promoters/directors not to collect any more money from investors through issuance of securities.
     
    An opportunity of personal hearing was afforded to the company on 22 August 2014, 26 September 2014 and 11 December 2014 by SEBI. 
     
    The SEBI member then pointed out, “I have considered the observations and allegations made in the SEBI Order, the submissions made by the company and other noticees who had filed replies and other material available on record. The allegation against the company and the directors is that the Company did not comply with the 'public issue' norms mandated under sections 56, 60, 73, 117B and 117C of the Companies Act, 1956 and the provisions of the ILDS Regulations in respect of its offer and issuance of NCDs. The SEBI  Order had, while considering the submissions made by the company, alleged that the company made a public issue of NCDs during the Financial Year 2012-2013 to a total of 535 persons for an amount of Rs2,63,94,200/-.”
     
    The SEBI member strictly observed, “The company has not substantiated with proof that it has made offer and allotted securities to 'friends, associates and well-wishers of the company' and that it knew them before hand and made specific offers. Further, SEBI is also in receipt of numerous complaints from investors of NCDs alleging that the company has not returned their investments, which proves that the offer made by the company was not in terms of section 67(3)(a) and (b) of the Companies Act. Further, by merely contending that the allotment was on 'private placement' would necessarily mean the same and the nature of the offer and issue - whether private or public, has to be decided on the basis of the terms and conditions and conduct of the company.”
     
    SEBI has insisted that the money collected by refunded, and the relevant portion of the SEBI Order says, “the natural consequence of not adhering to the norms governing the issue of securities to the public and making repayments as directed under section 73(2) of the Companies Act, 1956 is to direct the company, its former directors (who were the directors when the impugned offer and allotment of NCDs were done) and its present promoters/directors to refund the monies collected with interest to such investors.
     
    Accordingly, the company and its former directors (who were the directors during the period of violations committed by the Company as found in this Order) namely
    Dharampal Kumar Rawat and Sanjay Kumar Srivastava and its present directors, namely, Arun Kumar Singh, Mahesh Kumar Singh and Raj Kumar Mondal, shall be jointly and severally liable for making the refunds. Further, in view of the violations committed by the company and its former directors, to safeguard the interest of the investors who had subscribed to such NCDs issued by the company, to safeguard their investments, and also to ensure that the company does not collect any further monies pursuant to its offer of NCDs, it also becomes necessary for SEBI to issue appropriate directions against the company and the other noticees.”
     
    The repayments to investors shall be effected only in cash through bank demand draft or pay order. The company and its present management are permitted to sell the assets of the company only for the sole purpose of making the refunds as directed above and deposit the proceeds in an Escrow Account opened with a nationalised bank, according to the SEBI Order.
     
    To make sure that the investors come to know of the present position, the company, GSHP Realtech Limited shall issue public notice, in all editions of two National Dailies (one English and one Hindi) and in one local daily (in Bengali) with wide circulation, detailing the modalities for refund, including details of contact persons including names, addresses and contact details, within fifteen days of this Order coming into effect, said the SEBI Order.
     
    Also, the SEBI Order has curtailed the debenture trustee by saying, “GSHP Welfare and Development Trust, the entity who was engaged by the company as its debenture trustee in contravention of law, shall not offer itself to be engaged as a debenture trustees or in any capacity as an intermediary in the securities market, without obtaining a certificate of registration to undertake that assignment as required under law.”
     
    Finally, the SEBI Order says, “This Order is without prejudice to any action, including adjudication and prosecution proceedings that might be taken by SEBI in respect of the above violations committed by the company, its promoters, directors and other key persons.”
     
  • User 

    SEBI curtails URO group of companies from mobilising funds
    The URO group of companies were engaged in fund mobilising activity through issue of equity shares to more than 49 persons without complying with the provisions of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 ("ICDR Regulations") and the provisions of the Companies Act, 1956
     
    SEBI passed orders dated 19 March 2015 under sections 11, 11A, 11B and 11(4) of SEBI Act, 1992 in the matter of URO Infotech Limited, URO Infra Reality India Limited, URO Hygienic Foods Limited, URO Walkers Limited and URO Lifecare Limited directing the companies not to mobilise funds from investors. The companies and its directors are prohibited from issuing prospectus or any offer document or issue advertisement for soliciting money from the public for the issue of securities till further orders.
     
    The companies were engaged in fund mobilising activity through issue of equity shares to more than 49 persons without complying with the provisions of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 ("ICDR Regulations") and the provisions of the Companies Act, 1956.
     
    SEBI received a reference dated 30 December 2013 from the Ministry of Corporate Affairs (MCA) regarding the complaints received against 'chit fund companies operative in the State of West Bengal - in respect of URO Autotech Limited & its group companies' and for examining the same. The above reference enclosed a Report from the Office of Regional Director, Eastern Region, MCA, inter alia alleging violation of sections 60, 73 read with 67(3) of the Companies Act, 1956 by URO Autotech Limited and requesting for referring the matter to SEBI. SEBI initiated an inquiry and found that public issue of equity shares had been made without observing proper procedure laid down under the law.
     
    The SEBI Order concludes by saying, “This Order is without prejudice to the right of SEBI to take any other action including prosecution proceedings under section 24 of the SEBI Act and section 621 of the Companies Act, 1956 read with the relevant provisions of the Companies Act, 2013 and adjudication proceedings under the SEBI Act against the URO group of companies.”
     
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