Intermediaries Liability in India

I
INTERMEDIARIES NOT BE LIABLE IN CERTAIN CASES
Project Report
On
Intermediaries not be Liable in certain
cases
Submitted in partial fulfillment of the requirement of Semester 10, B.A.Ll.B (H)
Submitted to- Submitted by-
Dr. amita verma Ishita chadha
Faculty, UILS 51/12
Semester x
B.A.Ll.B (h)
II
ACKNOWLEDGEMENT
To be able to get an in depth analysis of some topic leaves a different kind of confidence into
anyones mind. Similar is this topic, such that after a thorough reading of this topic it builds a
kind of familiarity and better understanding for applying the same to the practical legal
problems.
I want to thank my teacher, Dr. Amita Verma for guiding me through this project topic and
explaining it so well such that the efforts divided to half due to the concept clarity. I also want to
thank all my friends without whose cooperation this project might not have been possible.
At finally yet importantly I would like to thank my parents for all the support.
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RESEARCH METHODOLOGY
Research Methodology
The project is basically based on the doctrinal method of research as no field work is done on this topic.
The latest case-laws are presented.
Aims & Objectives
To do an in depth analysis of the Intermediaries liability in India. The main objective of this project is to
ascertain the ingredients of the provision in IT law regarding the same.
Sources of Data
The whole project is made with the use of secondary source. The following secondary sources of data
have been used in the project-
1 . Books
2. Websites
Mode of Citation
The researcher has followed a uniform mode of citation following the Bluebook legal citation
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Index
1. Introduction1
2. Intermediaries..3
I. Definition of Parameters3
II. Types of Intermediaries.....5
III. Types of liability...7
IV. Intermediaries Liability in Various Countries..9
3. The Safe Harbour Provision- Section 79...15
A. What is safe harbour protection? 15
B. Explanation of the
section.....16
4. Intermediary Guidelines Rules..21
I. Comment on the Rules, 2011..22
5. Relevant Case Law29
I. Shreya Singhal v Union of India.29
II. Google India Pvt. Ltd. vs. Visaka Industries Limited31
6. Conclusion.36
1
Introduction
Section 79 of the Information Technology Act, 2000 exempts intermediaries from liability in
certain instances. It states that intermediaries will not be liable for any third party information,
data or communication link made available by them. The Act extends safe harbor protection
only to those instances where the intermediary merely acts a facilitator and does not play any
part in creation or modification of the data or information. The provision also makes the safe-
harbor protection contingent on the intermediary removing any unlawful content on its computer
resource on being notified by the appropriate Government or its agency or upon receiving actual
knowledge.
This provision was added to the Act by the Information Technology (Amendment) Act, 2008 on
the demand of the software industry and industry bodies to have protection from liability that
could arise because of user generated content. This was mainly prompted by the controversial
case in which Avnish Bajaj, the CEO of Baazee.com, an auction portal, was arrested for an
obscene MMS clip that was put up for sale on the site by a user. The provision states that an
intermediary needs to observe due diligence while discharging its duties under the Act and
observe such other guidelines as prescribed by the Central Government. These other guidelines
were laid down in the Information Technology (Intermediaries Guidelines) Rules, 2011.
Intermediaries are widely recognised as essential cogs in the wheel of exercising the right to
freedom of expression on the Internet. Most major jurisdictions around the world have
introduced legislations for limiting intermediary liability in order to ensure that this wheel does
not stop spinning. With the 2008 amendment of the Information Technology Act 2000, India
joined the bandwagon and established a notice and takedown regime for limiting intermediary
liability.
The Project consists of four parts as firstly to define the Intermediary and types of liability;
secondly the safe harbor provision exempting them from liability in the form of section 79 of the
2
IT Act, 2000; thirdly the rules framed by the Central Government1 and finally the important
decided case laws in this regard.
1
Information Technology (Intermediaries Guidelines) Rules, 2011
3
Chapter I
Intermediaries
I. Definition of Parameters
1. Intermediary Definition-
The IT Act regulates internet intermediaries using the defined term intermediaries, which
means,
with respect to any particular electronic records, [] any person who on behalf of
another person receives, stores or transmits that record or provides any service with
respect to that record and includes telecom service providers, network service providers,
internet service providers, web hosting service providers, search engines, online payment
sites, online-auction sites, online market places and cyber cafes.2
An intermediary is a link between an originator and an aggressive. Internet service provider is

one such intermediary. It is like a virtual post office it receives stores and transmits electronic
messages through its mail service on behalf of another person originator and/or adressee. Other
examples may include website hosting company, Internet telephony service provider, Webmail
service provider (for example Yahoo Hotmail Rediff etc), bandwidth service provider, data
centres, customer access service (call centre), cell phone service providers etc. An intermediary",
with respect to any particular electronic records, means any person who on behalf of another
person receives, stores or transmits that record or provides any service with respect to that
record. The term network service provider is ever expanding one. It is now being seen as
synonymous to the term intermediary and includes telecom service providers, network service
providers, Internet service providers, web-hosting service providers, search engines, online
payment sites, online auction sites, online market places and cyber cafes. Basically,
intermediaries are kind of service providers providing services online. The function of an
intermediary has to be understood in the terms of its role as a facilitator with respect to any
particular electronic message between an "originator" and an "addressee".3
Originator Intermediary Addressee
2
Section 2(1)(w), IT Act, 2000
3
Vakul Sharma, Information Technology Law and Practice (4 th edn), Lexis Nexis, 21
4
i. Internet Service Providers (ISP) ISPs like Airtel and MTNL help users to get
connected to the internet by means of wired or wireless connections.
ii. Search engines These are web sites like Google and Bing that help users to search for
specific information on the web and provide links to web-sites having content relevant to
the search terms given by the user. Keyword entered by the user is the electronic message
but the question is whether the search engine has been receiving storing for translating
the keyword search results on behalf of other persons the search results are in the form of
website link / web pages which the search engine has provided against the keyboard
service. A search engine is just a service provider which provides a directory services to
originator and hence may be called an intermediary.
iii. DNS providers These service providers translate the domain names (eg. www.sflc.in)
to addresses (eg. 64.202.189.170) that can be understood by computers.
iv. Web hosts These are service providers like Godaddy.com that provide space on server
computers to place files for various web sites so that these sites can be accessed by users
v. Interactive websites: This includes social media sites like Facebook and Twitter that act
as platforms to store and retrieve content, blogging platforms like Blogspot and
Wordpress, auction sites like eBay, and payment gateways like PayPal. The pictorial
representation gives an overview of the intermediaries involved in a common internet
transaction.
vi. Cyber Cafes It means any facility from where access to the internet is offered by any
person in the ordinary course of business to the members of the public. The Information
Technology Act, 2000 includes cyber cafes also under the ambit of the definition of
intermediaries.4
4
Intermediaries, users and the law Analysing intermediary liability and the IT Rules (March 29,2017),
http://sflc.in/wp-content/uploads/2012/07/eBook-IT-Rules.pdf
5
II. Types of Intermediaries
The architecture of the internet aids the dissemination of content inherently promoting the role of
intermediaries as the distributors of content. At a basic level, the Internets technology requires
the insertion of intermediaries between interacting parties in two ways. First, for all interactions
over the Internet, the communication necessarily involves the Internet itself, as well as the parties
necessary to facilitate the particular communication, with the exception of few entities involved
in direct Internet transmissions, secondly commercial transactions on the Internet require the use
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of other intermediaries. It is stated that four broad categories based on functionalities, in which
present as well future intermediaries may be pigeonholed are as follows. It is to be stated at the
very outset that a single entity may fall into two or more categories dependent on activities,
which it undertakes.
(a) COMMUNICATIONS GATEWAY PROVIDER

The nomenclature herein will include any service provider that acts as a gatekeeper allowing
primary access to data over the internet. Though the term is inclusive of the Internet Service
Providers (ISP) it is not synonymous with it and includes Network Service Providers (NSP) and
Wi-Fi hotspots providers. Courts have taken the position that ISPs are companies or
corporations that enable clients to connect to the Internet12 the equivalent of a traditional
telecommunications carrier5
(b) PERMANENT DATA HOSTS

A permanent data host is a much broader category and refers to any permanent web address for
data uploaded by a user that is accessed by connecting to the internet. The Internet is an open
network of interconnected computers. The architecture of the internet requires that for every
website whose domain is registered, an assigned web host should be present, which contains the
data stored on a server, kept continually online. It is important to differentiate this from file
linking where merely a link of file is provided, as opposed to the file itself. The nature of data
hosted maybe of any kind ranging from a few lines of text posted in an online forum or web blog
to a photograph or a music file uploaded by a user on a server.
(c) TRANSITORY DATA HOSTS

As opposed to a permanent data host a transitory data host is an intermediary which acts, as a
passive conduit for data as it moves from one point on a network to another, thus enabling
users to post content on the Internet acting as a mere conduit for information being shared
between users. A service provider is covered under this category for it
transmitting, routing or providing connections for content through its system or for transient
storage of content in the course of transmitting, routing or providing connections. This would
include a POP3 email host which stores messages on its servers till they are downloaded on the
5
Martin J. Hayes, Internet Service Provider Liability Information (June 10, 2003), available at http:/
/www.jisc.ac.uk/legal/index.cfm?name=lis_isp (last visited March 19, 2017).
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users computers when he accesses his email through an email client as well as caching of Web
Pages by ISPs.
(d) LINKING AND REFERRING INTERMEDIARIES
Referring or linking intermediaries refer or link users to an online location by using information
location tools, including hyperlinks and directories. Conceptually, a link is comprised of three
parts, a source anchor, a destination anchor, and a direction. The document containing the link is
the links source anchor (source page); the link targets or points the user to the destination
anchor (target page). The target page can be any kind of resource available on the Web. A
referring entity would include an auction intermediary, which matches buyers and sellers through
a website that acts as a mediating device to facilitate sales between remote parties. This would
also include Information Location Tools, such as search engines since they carry out indexing
and searching functions.6
III. Types of liability
Liability is dependent on the capacity of the actor against whom the liability is sought to be
imputed. The Internet can potentially impose all three types of liability on an intermediary,
which include, (1) direct; (2) vicarious; and (3) contributory liability.
(a) DIRECT LIABILITY

A message posted on a Usenet group is copied by the thousands of servers owned by different
parties who participate in distributing such messages automatically. If a Usenet message includes
copyrightable material without the permission of the copyright owner, the owner of servers
might be liable for direct copyright infringement by permitting a copy of the message to be
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copied on their servers. In the Netcom Case it was stated that direct liability should require
some additional act by the alleged infringer that is absent when copies are made automatically by
a server. The court stated that direct infringement is ordinarily inappropriate because designing
or implementing a system that automatically and uniformly creates temporary copies of all data
sent through it is not unlike that of the owner of a copying machine who lets the public make
6
Apar Gupta, Liability Of Intermediaries In India From Troubled Waters To Safe Harbors (March 28, 2017),
http://www.supremecourtcases.com/index2.php?option=com_content&itemid=65&do_pdf=1&id=6648
7
Religious Tech. Ctr. v. Netcom On-Line Communication Servs., Inc., 907 F. Supp. 1361 (N.D. Cal. 1995)
8
copies with it. In Ellison v. Robertson,8 the court rejected the plaintiffs demand to impose
direct liability on America Online, an ISP, for copyright infringement by a fan, who uploaded his
favorite authors novel to a newsgroup on the Internet. Accordingly, direct liability is seldom
alleged against intermediaries since the very architecture of the internet involves them de
minimis.
(b) VICARIOUS LIABILITY

Indirect liability consists of two branches, vicarious liability and contributory infringement.
Vicarious copyright infringement initially was conceived as an outgrowth of the agency
principles of respondeat superior. Vicarious liability constitutes a form of enterprise liability that
holds the defendant liable for the behavior of another. Vicarious liability would require that the
defendant and the infringer have an apparent or actual partnership, having authority to bind one
another in transactions with third parties or exercise joint ownership or control over the
infringing product. Vicarious liability is imposed even if the entity is unaware of the infringing
activities. With regard to copyright infringement, vicarious liability arises when the defendant
possesses the right and ability to supervise the infringing conduct and has an obvious and
direct financial interest in the exploitation of copyrighted materials. In Playboy Enterprises,
Inc. v. Frena,9 the court found a Bulletin Board Service (BBS) operator vicariously liability for
permitting the unauthorized uploading of images from the plaintiffs magazine to the Internet for
commercial gain. Under the Fonovisa test10, the first prong of vicarious liability, namely
financial interest, can be satisfied by showing that the infringing uses of a technology act as a
draw for customers, or in other words, enhance the attractiveness of a venue.
The second prong, the right and ability to supervise direct infringers, can be established by
relying on findings that the defendant reserved its right to block its service to any consumer at
will. Thus, vicarious liability was enforced against a Web site owner and operator where he
owned the Web site, held a position of supervisory authority over the Web site operations, had
the right and the ability to exercise control over the Web sites infringing activities, and received
a direct financial benefit from the Web site business.
8
189 F. Supp. 2d 1051 (C.D. Cal. 2002).
9
Playboy Enters., Inc. v. Frena, 839 F. Supp. 1552 (M.D. Fla. 1993).
10
Fonovisa Inc. v. Cherry Auction Inc., 847 F.Supp. 1492 (E.D. Cal. 1994)
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(c) CONTRIBUTORY LIABILITY

Specifically, the doctrine of contributory infringement arises out of the theory of enterprise
liability. It states that liability should attach whenever a person knowingly contributes to the
illegal conduct of another. In the Internet world, contributory liability will attach if a party
knows, or reasonably should know, of infringing activities occurring on the partys website, and
the party materially contributes to the infringement.
Contributory liability with regard copyright infringement over the internet maybe used here as
laying down the parameters for contributory liability where it is found that an intermediary,
[1] with knowledge of the infringing activity,
[2] induces, causes or materially contributes to the infringing conduct of another.
The second prong of contributory infringement is sometimes analyzed as substantial
participation. Courts have found the required level of contributory infringement knowledge
satisfied in a variety of different ways, including: specific notice of infringement; the abnormally
low price of the infringing goods; the recent release or popularity of the work copied; unusual
business arrangements with the direct infringer; physical control over the copying process;
advertising or solicitation of infringement; the ability to track infringement; a previous pattern of
infringement; and the specific nature of the goods or products involved. In addition to the
requisite knowledge of direct infringement, contributory liability requires that there be a
material contribution to the direct infringement. The amount of the necessary contribution is
not objectively quantifiable, but is based on an overall assessment of the quality of the
contribution. For example, liability was imposed on a concert promoter for the unauthorized
performance of copyrighted works at a concert, which among other things, he had promoted
extensively. Courts also apply contributory liability to those who provide the materials or
equipment utilized by the direct infringer.11
IV. Intermediaries Liability in Various Countries
A) INTERMEDIARIES LIABILITY IN THE US
It is important to know that as the Internet and related technologies are spreading, the
intermediary liability is decreasing the world over. The statutory emphasis has been to protect
11
Supra 6
10
and strengthen the intermediaries business models For example, the US Congress enacted
Communications Decency Act in 1996 not to treat providers of interactive computer services like
other information such as newspapers, magazines or television and radio stations, of providers
which may be held liable for publishing or distributing obscene or defamatory written or
prepared by others. It opted not to hold interactive computer services liable for their failure to
edit, withhold or restrict access to offensive material disseminated through their medium.
Title II of the Communications Act of 1934 (47 USC 201 et seq) is amended by adding at the
end the a new section:
Section 230(c)(1) of the Communications Decency Act of 1996 provides:
No provider or user of an interactive computer service shall be treated as the publisher or speaker
of any information provided by another information content provider.
The term "interactive computer service means any information service, system, or access
software provider that provides or enables computer access by multiple users to a computer
server, including specifically a service or system that provides access to and such systems
operated or services offered by libraries or educational institutions". [Section 230(e)(2)l The term
"information content provider" as "any person or entity that is responsible Internet or in part, for
the creation or development of information provided through the or other interactive computer
service". [Section 230(e)(3)l Act was first applied in Zeran v. America Online Inc. where the
court held
"Congress enacted s to remove disincentives to self-regulation fearing that the specter of

liability would deter service providers from blocking and screening offensive material....S
230 forbids the imposition of publisher liability on a service provider for the exercise of
its editorial and self-regulatory functions. In Doe v. America Online, Inc., plaintiff sued
AOL for allowing a subscriber, one Russell, to use its chat rooms for marketing
videotapes and photographs consisting of child pornography in which plaintiffs minor
son appear. The complaint alleged that AOL was negligent per se in allowing Russell to
use its facilities for criminal distribution of obscene materials, and that it was likewise on
common-law principles. Plaintiff alleged that AOL had received complaints about
Russell's use of its facilities for unlawful purposes, but that AOL neither warned Russell
to stop nor suspended his service." The Florida Supreme Court held that section 230
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immunized AOL from negligence liability based on a subscriber's use of its facilities to
distribute child pornography.
By its plain language, section 230 creates a federal immunity to any cause of action that would
make service providers liable for information originating with the third-party user of the service.
It was the Digital Millennium Copyright Act (DMCA) of 1998, which laid down the immunity
clauses for the intermediaries. It grants immunity to the intermediaries, if and only i the
intermediary upon receiving actual knowledge that it is copyright infringing material remove or
blocks access to the infringing information when it knew it to exist or appropriately responded to
a statutory compliant notice regarding that infringing material. This is being referred to as notice
and take down.
Under DMCA, the intermediaries on liability for mere condu operations is subject to the
following conditions
(a) the transmission of the infringing material must be initiated by or at the direction of
any third party or the infringer
(b) the mere conduit operations must be carried out through automatic technical processes
without selection of the infringing material by the intermediary;
(c) the intermediary does not select the recipient of the infringing material;
(d) no copy of the stored infringing material can be kept in a manner ordinarily accessible
to anyone other than the anticipated recipients, or for longer than is reasonably necessary
for the mere conduit operations, and
(e) the infringing material must be transmitted without substantive modification of its
content.
In net it really makes sense for an intermediary to enjoy unqualified immunity from liability
based on material created by third parties, and made ough its service. But this it provides
proprietary content or knowingly transmits the infringing content or selects the infringer.
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B) INTERMEDIARIES LIABILITY IN THE UK
In the United Kingdom the, High Court held an ISP liable for third- party content In Godfrey v.
Demon Internet Ltd12 , the defendant ISP carried the group 'soc.culture.thai' and stored postings
within that hierarchy for news about a fortnight during which the posting was available to be
read by US customers. On January, 1997 someone unknown made in the in the newsgroup. This
posting was squalid, obscene and defamatory of plaintiff who was resident in England. On 17
January, 1997 the plaintiff sent letter by fax to the defendants, requesting them to remove the
posting from their Use net news server. The defendants could have obliterated the posting after
receiving the plaintiff's request, but it remained available until its expiry on or about 27 January,
1997. The plaintiff claimed damages for libel in respect of the posting after 17 January, 1997.
The U.K. Defamation Act, 1996 contains an "innocent dissemination" defense which is available
only if the defendant took "reasonable care and "did not know, and had no reason to believe,"
that he was publishing a defamatory statement. The court held that, since Demon was informed
of the posting, it did not satisfy those two requirements, and was not entitled to the defence.
Morland J. held:
In my judgment , the defendant, whenever transmits and whenever there is transmitted

from the storage news server a posting, publish that posting to any subscriber to its ISP
who the newsgroup containing that posting. every time one of the defendant's customers
accesses 'soc.culture.thai' and sees that posting defamatory of the plaintiff, there is a
publication to that customer.
"The situation is analogous to that of the who sells a book defamatory of the plaintiff, to
that of the circulating library who provided books to subscribers and to that of
distributors. I do not accept the argument that the defendant was merely the owner of an
electronic device through which postings were transmitted.
However, in Bunt v. Tilley,13 the question was whether an ISP could be held liable for having
'published' a defamatory statement where the extent of its involvement in the publication was
that others had published the words complained of via the services provided' by the ISP. The
ISPs sued in this case did not, unlike in Godfrey v. Demon Internet Ltd., host the websites
12
4 All ER 342 High Court
13
(2006) 3 All ER 336
13
complained merely provided the means by which the messages were conveyed between the
author and the websites.
It was held by Eady J., that an Internet service provider which perform no more than a passive
role in facilitating postings on the internet could not oe deemed to be a publisher at common law.
It was essential to demonstrate a degree of awareness or at least an assumption of general
responsibility, such as had long been recognised in the context of editorial responsibility, in order
to impose legal responsibility under the common law for the publication of words Although it
was not always necessary to be aware of defamatory content to be liable for defamatory
publication, there had to be knowing involvement in the process of publication of the relevant
words. It was not enough that a person had played merely a passive instrumental role in the
process. On the evidence in the instant case the claimant had no realistic prospect of being able
to establish that any of the internet service provider defendants had, in meaningful sense
knowingly participated in the relevant publications.
Publication is a question of fact, and it must depend on the circumstance each case whether or
not publication has taken place. The analogies that were held to inappropriate in Godfrey's case
might be the facts do not disclose on transmission with knowledge of the defamatory content.
C) INTERMEDIARIES LIABILITY IN INDIA
Intermediaries are considered as spokes of the Internet wheel. Without these spokes, Internet as
medium will simply collapse. Intermediaries represent technological innovation, which can be
used in a lawful or unlawful manner. Hence, the idea is to balance the rights of intermediaries
within the legal framework, without disturbing the benefits society at from technological
innovations. In other words, regulation comes understanding It was thus felt by lawmakers that
any after which would limit the role of intermediaries might affect the growth of Internet therefor
a balance is needed. Section 79 provides that balance between 'technology necessity" and "legal
necessity".
Generally speaking, intermediaries being facilitator of third party information, data, or

communication link may be held liable for copyright infringement trademark
infringement/dilution, privacy violations, obscenity, defamation, child pornography, spamming,
etc. The offended parties may not only seek injunctions against such intermediaries to
block/remove the offending content ut may also initiate civil and criminal proceedings against
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them. For example Gremiach Infrastructure Equipments and Projects Ltd. v. Google India 14, the
Bombay High Court held:
prima facie, at present stage, there is merit in the contention of the Plaintiffs that the article
[Toxic Fumes] put up by the defendant on defendant to disclose particulars, names the blog site
is defamatory and the address of the person who is author of the article.15
14
Notice of Motion No. 668 of 2008 in Suit No, 506 of 2008
15
Supra 3, 284-289
15
Chapter II
The Safe Harbour Provision- Section 79
A. What is safe harbour protection?

The intermediaries like ISPs, web hosts, social networking sites and blogging platforms play an
important role in dissemination of information by providing tools and platforms that allow users
to access the Internet, host content, share files and transact business. Websites like Blogspot,
Youtube and Facebook only provide a platform for users to post their content, and do not have
any editorial control over this content.
Governments across the world realized that these intermediaries must be given protection from
legal liability that could arise out of illegal content posted by users, considering the importance
of these intermediaries in the online space and the fact that their mode of operation was quite
different from the traditional brick-and-mortar business. Countries like the US and members of
the European Union, and India now provide protection to intermediaries from such user
generated content. Such protection is often termed as a 'safe harbour' protection.
Legal Provision:
Section 79 of the Information Technology Act, 2000: Exemption from liability of intermediary in
certain cases.
(1) Notwithstanding anything contained in any law for the time being in force but subject to the provisions
of sub-section (2) and (3), an intermediary shall not be liable for any third party information, data, or
communication link made available or hosted by him.
(2) The provisions of sub-section (1) shall apply if
(a) the function of the intermediary is limited to providing access to a communication
system over which information made available by third parties is transmitted or temporarily stored or
hosted; or
(b) the intermediary does not
(i) initiate the transmission,
(ii) select the receiver of the transmission, and
(iii) select or modify the information contained in the transmission;
(c) the intermediary observes due diligence while discharging his duties under this Act
and also observes such other guidelines as the Central Government may prescribe in this behalf
(3) The provisions of sub-section (1) shall not apply if
(a) the intermediary has conspired or abetted or aided or induced, whether by threats or
promise or otherwise in the commission of the unlawful act;
(b) upon receiving actual knowledge, or on being notified by the appropriate
Government or its agency that any information, data or communication link residing in or connected to a
computer resource controlled by the intermediary is being used to commit the unlawful act, the intermediary
fails to expeditiously remove or disable access to that material on that resource without vitiating the
evidence in any manner.
Explanation.For the purpose of this section, the expression third party information means any
Safe Harbour protection in India
information dealt with by an intermediary in his capacity as an intermediary.
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The amended Section 79 of the Information Technology Act, 2000 gives the intermediaries
protection from liabilities that could arise out of any legal action initiated on the basis of user
generated content. The intermediaries get protection from legal liability that could arise from any
action of users that is considered illegal as per the IT Act, 2000 or any other legislation.
The safe harbour protection available to intermediaries is conditional upon their observing due
diligence while discharging their duties and observing guidelines issued by the Government in
this regard. These guidelines have now been issued in the form of the Information Technology
(Intermediary Guidelines) Rules, 2011. Hence these rules are very important from the standpoint
of liability of intermediaries.
B. Explanation of the section

The aforesaid section lays down the set of specific rules governing the intermediaries. If sub
section 1 provide for an all-encompassing exemption rules for the intermediaries, then sub-
sections (2) and (3) refer to the applicability or non-applicability of the said exemption rule,
respectively.
B.1. APPLICABILITY OF EXEMPTION RULE
Exemption rule, i.e. sub-section (1) states that notwithstanding anything contained in any law
for the time being in force but subject to the provisions of sub-sections (2) and (3), an
intermediary shall not be liable for any third party information, data, or communication link
made available or hosted by him.
Significantly, in this amended section, the burden of proof is no longer with the intermediaries. It
is for the prosecution to establish the liability of an intermediary. Earlier, under the previous Act,
section 79 provided that no person providing any service as a network service provider shall be
liable if he proves placing the burden of proof on the intermediary to preclude liability.
Interestingly, the exemption rule has provided that subject to the provisions of sub-sections (2)
and (3), an intermediary shall not be liable for any third party information, data, or
communication link made available or hosted by him. In other words, the exemption rule,
identifies intermediaries as primarily "storage-and-transmission-medium".
Thus, it would be imperative that the courts' while addressing the question mixer sub-section (1)
of section 79 is applicable or not have to perform the test of applicability. It has three distinct
17
components. Presence of any one of the components would grant exemption to any such
concerned intermediary from liabilities in certain cases. Three distinct components of test of
applicability providing exemption under sub-section (2) are:
Component 1:
(a) the intermediary merely provides access to third-party information, which is transmitted or
temporarily stored or hosted by such intermediary and includes:
(i) storage for the purpose of carrying out transmissions (mere conduit), or
(ii) storage for the purpose of making more efficient the informations onward
transmission (proxy caching), or (iii) storage of information provided by a subscriber
(hosting).
Or
Component 2:
(b) the intermediary being a facilitator only plays a passive role in the sense that it does not:
(i) initiate the transmission,
(ii) select the receiver of the transmission, and
(iii) select or modify the information contained in the transmission;
In other words, it was other than the intermediary, who initiated the transmission, selected the
receiver of the transmission and selected or modified the information contained in the
transmission.
Or
Component 3:
(c) the intermediary observes due diligence while discharging his duties under this Act and also
observes such other guidelines as the Central Government may prescribe in this behalf.
Due diligence means reasonable steps taken by a person in order in avoid commission of
offence or contravention, i.e., adopting reasonable steps to determine if the information content it
transmits is unlawful. It is defined as such a measure of prudence, activity or assiduity, as is
18
properly to be expected from, and ordinarily exercised by, a reasonable and prudent man under
the particular circumstances; not measured by any absolute standard, but depending on the
relative facts of the special case. A due diligence exercise is a statutory duty on the part of the
intermediary to observe regulatory practices/guidelines as may be prescribed by the Central
Government to prevent transmission or publication of the unlawful content. However, it is
imperative to know that in JM Mutual Fund and IM Capital Management Pvt. Ltd. v. Securities
and Exchange Board of India16, it was held by the Securities Appellate Tribunal (SAT),
Mumbai:
In our view no hard and fast rule or straightjacket me applied with regard to the principles of
due diligence. Due diligence is nothing but a watchful caution and foresight as the
circumstances of the particular case demands. The due diligence is an obligation to exercise
reasonable care.
Further, the Supreme Court in Chander Kanta Bansal v. Rajinder Singh Anand17 Arijit Pasayat
and P. Sathasivam, JJ Observed:
The words due diligence has not been defined in the Code. According to Oxford Dictionary
(Edn. 2006), the word diligence means careful and persistent application or effort. Diligent
means careful and steady in application to ones work and duties, showing care and effort. As
per Blacks Law Dictionary (8th Edn.), diligence means a continual effort to accomplish
something, care; caution; the attention and care required from a person in a given situation.
Due diligence means the diligence reasonably expected from, and ordinarily exercised by, a
person who seeks to satisfy a legal requirement or to discharge an obligation. According to
Words and Phrases by Drain-Dyspnea (Permanent Edition 13A)due diligence, in law, means
doing everything reasonable, not everything possible. Due diligence means reasonable
diligence, it means such diligence as a prudent man would exercise in the conduct of his own
affairs.....
In fact due diligence is about self-regulation. However, the lawmakers felt that the role of
intermediaries being so crucial in the Internet value chain, it would only be prudent if apart from
self-regulation there were also scope for such other guidelines as the Central Government may
prescribe. It is thus evident from above that the test of applicability vis-a-vis exemption rule
16
(2005) 57 SCL 262 (SAT)
17
AIR 2008 SC 2234
19
requires presence of any one of the components. It is important to note that the Central
Government has notified the Information Technology (Intermediary Guidelines) Rules, 2011.
B.2.) APPLICABILITY OF NON-EXEMPTION RULE
Further, sub-section (3) of section 79. provides that the aforesaid exemption rule, i.e., sub-section
(2) shall not be applicable, if:
(a) the intermediary has been involved in criminal acts, i.e., if he has conspired or abetted or
aided or induced whether by threats or promise or otherwise in the commission of the unlawful
act.
In Sonjay Kumar Kedia v. Narcotics Control Bureau18 wherein the company (Xponse
Technologies Ltd. And Xpose IT Services Pvt. Ltd.) headed by one Sanjay Kedia), who had
designed, developed, hosted the pharmaceutical websites, like: ALADIESPHARMACY.COM,
EXPRESSPHENTERMINE.COM,FAMILYYONLINEPHARMACY.COM,ONLINE
EXPRESSPHARMACY.COM,SHIPPEDLIPITOR.COM,DELIVEREDMEDICINE.COM,
TRUEVALUEPRESCRIPTIONS.COM etc. was found to use these websites to sell and
distribute huge quantity of psychotropic substances (Phentermine and Butalbital) in USA with
the help of his associates. On investigation, it was also found that all these websites were having
a common IP Address: 203.86.100.76.
The question before the Supreme Court was whether the company selling huge quantities of
prescription drugs on Internet could be granted immunity, being a network service provider?
It was held by S.B. Sinha and Harjit Singh Bedi, JJ:
...... That the Xponse Technologies Ltd. and Xponse IT Services Pvt. Ltd. were not acting
merely as a network service provider but were actually running internet pharmacy and dealing
with prescription drugs like Phentermine and Butalbital.. ...... We thus find that the appellant
and his associates were not innocent intermediaries or network service , providers as defined
under section 79 of the Technology Act but the said business was only a facade and camouflage
.for more sinister activity. In this situation, section 79 will not grant immunity to an accused who
has violated the provisions of the Act as this provision gives immunity from prosecution for an
offence only under Technology Act itself.
18
Criminal Appeal No. 1659 of 2007, SLP (Crl.) No. 3892 of 2007
20
Further, clause (b) of sub-section (3) of section 79 restricts immunity to the intermediaries on the
premise that:
(i) the intermediary has the actual knowledge of the fact that any information, data or
communication link residing in or connected to a computer resource controlled by the
intermediary is being used to commit the unlawful act and the intermediary fails to expeditiously
remove or disable access to that material on that resource Without vitiating the evidence in any
manner.
'Actual knowledge here means constructive knowledge i.e., a person is deemed to have
constructive knowledge of the contents of material which would put a reasonable and prudent
person on notice as to the suspect nature 0f the material. In other words, the intermediary knows,
or has reason to believe that the information content it is transmitting is unlawful. The sources of
actual knowledge may include, use of appropriate filters (filtering software), moderators, receipt
of notices from offended parties or any user etc.19
19
Supra 3, 291-292
21
Chapter III
Intermediary Guidelines Rules
On the 11th of April 2011, the Government of India, in exercise of its powers under Section
79(2) read with Section 87(2)(zg) of the Act, notified the Information Technology
(Intermediaries Guidelines) Rules 2011 (hereinafter referred to as the Rules). In essence, the
Rules (read with the Act) prescribe a privately administered notice and takedown regime for
limiting intermediary liability in India. The important provision of the same reads as under-
Due diligence to be observed by intermediary
The intermediary shall observe following due diligence while discharging his duties, namely:
(1) The intermediary shall publish the rules and regulations, privacy policy and user agreement for access-or usage
of the intermediary's computer resource by any person.
(2) Such rules and regulations, terms and conditions or user agreement shall inform the users of computer resource
not to host, display, upload, modify, publish, transmit, update or share any information that
(a) belongs to another person and to which the user does not have any right to;
(b) is grossly harmful, harassing, blasphemous defamatory, obscene, pornographic, paedophilic, libellous,
invasive of another's privacy, hateful, or racially, ethnically objectionable, disparaging, relating or
encouraging money laundering or gambling, or otherwise unlawful in any manner whatever;
(c) harm minors in any way;
(d) infringes any patent, trademark, copyright or other proprietary rights;
(e) violates any law for the time being in force;
(f) deceives or misleads the addressee about the origin of such messages or communicates any information
which is grossly offensive or menacing in nature;
(g) impersonate another person;
(h) contains software viruses or any other computer code, files or programs designed to interrupt, destroy
or limit the functionality of any computer resource;
(i) threatens the unity, integrity, defence, security or sovereignty of India, friendly relations with foreign
states, or public order or causes incitement to the commission of any cognisable offence or prevents
investigation of any offence or is insulting any other nation
(3) The intermediary shall not knowingly host or publish any information or shall not initiate the transmission,
select the receiver of transmission, and select or modify the information contained in the transmission as specified in
sub-rule (2): provided that the following actions by an intermediary shall not amount to hosing, publishing, editing
or storing of any such information as specified in sub-rule: (2)
(a) temporary or transient or intermediate storage of information automatically within the computer
resource as an intrinsic feature of such computer resource, involving no exercise of any human editorial
control, for onward transmission or communication to another computer resource;
22
(b) removal of access to any information, data or communication link by an intermediary after such
information, data or communication link comes to the actual knowledge of a person authorized by the
intermediary pursuant to any order or direction as per the provisions of the Act;
(4) The intermediary, on whose computer system the information is stored or hosted or published, upon obtaining
knowledge by itself or been brought to actual knowledge by an affected person in writing or through email signed
with electronic signature about any such information as mentioned in sub-rule (2) above, shall act within thirty six
hours and where applicable, work with user or owner of such information to disable such information that is in
contravention of sub-rule (2). Further the intermediary shall preserve such information and associated records for
at least ninety days for investigation purposes,
(5) The Intermediary shall inform its users that in case of non-compliance with rules and regulations, user
agreement and privacy policy for access or usage of intermediary computer resource, the Intermediary has the right
to immediately terminate the access or usage lights of the users to the computer resource of Intermediary and
remove noncompliant information..
(6) The intermediary shall strictly follow the provisions of the Act or any other laws for the time being in force.
(7) When required by lawful order, the intermediary shall provide information or any such assistance to
Government Agencies who are lawfully authorised for investigative, protective, cyber security activity. The
information or any such assistance shall be provided for the purpose of verification of identity, or for prevention,
detection, investigation, prosecution, cyber security incidents and punishment of offences under any law for the time
being in force, on a request in writing stating clearly the purpose of seeking such information or any such
assistance.
(8) The intermediary shall take all reasonable measures to secure its computer resource and information contained
therein following the reasonable security practices and procedures as prescribed in the Information Technology
(Reasonable security practices and procedures and sensitive personal Information) Rules, 2011.
(9) The intermediary shall report cyber security incidents and also share cyber security incidents related
information with the Indian Computer Emergency Response Team.
(10) The intermediary shall not knowingly deploy or install or modify the technical configuration of computer
resource or become party to any such act which may change or has the potential to change the normal course of
operation of the computer resource than what it is supposed to "perform thereby circumventing any law for the time
being in force: provided that the intermediary may develop, produce, distribute or employ technological means for
the sole purpose of performing the acts of securing the computer resource and information contained therein.
(11) The intermediary shall publish on its website the name of the Grievance Officer and his contact details as well
as mechanism by which users or any victim who suffers as a result of access or usage of computer resource by any
person in violation of rule 3 can notify their complaints against such access or usage of computer resource of the
intermediary or other matters pertaining to the computer resources made available by it. The Grievance Officer
shall redress the complaints within one month from the date of receipt of complaint.
Explanation
Section 79 does provide immunity but it is not absolute immunity. It clearly states that an intermediary shall not be
liable for any third party information, data or communication link made available or hosted by him. Under the IT
Act, an intermediary in order to qualify for 'immunity needs to observe Intermediary guidelines as notified by the
Central Government.
Comment on the Rules, 2011
The Information Technology (Intermediaries Guidelines) Rules, 2009 provide a due diligence
framework in the form of rule 3 to be observed by the intermediaries. Within rule 3 there are
23
eleven sub-rules, however, from the point of View of removing infringing materials, it is
important to understand the following sub-rules, namely: Rules 3(1), 3(2), 3(4) and 3(11).
Rule 3(1) refers to publication of privacy policy and user agreement for access or usage of
intermediary computer resources.
Rule 3(2) provides information to the user by means of terms and conditions or user agreement
not to host, display, upload, modify, publish, transmit, update or share any Maturation that (a)
infringes any other persons patent, trademark, copyright or other proprietary rights, (b) is grossly
harmful, harassing, blasphemous, defamatory, libellous, invasive of anothers privacy, hateful or
racially, ethnically objectionable, ......... relating or encouraging money laundering or gambling
......... , (c) threatens the unity, integrity, defence, security or sovereignity of India..
Rule 3(4) provides that the intermediary on whose computer system the information is stored or
hosted or published, upon obtaining knowledge by itself or been brought to actual knowledge by
an affected person in writing or through e-mail signed with electronic signatures about any such
information [Rule 3(2)] to act within thirty-six hours and where applicable, work with user or
owner of such information to disable such information.
Subsequently, the Central Government has clarified that the intended meaning of the .....shall
act within thirty-six hours... is that the intermediary shall respond or acknowledge to the
complainant within thirty six hours of receiving the complaint/ , grievances about any such
information. It further articulated that the Grievance Officer of the intermediary shall redress
such complaints promptly but in any case within one month from the date of receipt of complaint
in accordance with rule 3(11). The intermediary should have a publicly accessible and published
grievance redressal process by which complaints can be lodged.
The law related to intermediaries is still at a nascent stage in India and in fact not only the IT
Act, but the provisions of Copyright Act, 1957 and Trade Marks Act, 1999 have also been
pleaded before the courts. However, of late, the High Courts in India have been passing orders in
those cases, wherein intermediaries are claiming that they cannot be subject to the jurisdiction of
Indian courts. In one of the significant orders in K.N. Govindacharaya v. Union of India20, a
double bench headed by Acting Chief Justice of High Court of Delhi has directed the
Intermediaries like Facebook Inc. and Google Inc. to appoint Grievance Officer as provided in
20
CS (OS) 3672 Of 2012
24
the Guidelines. Both Facebook Inc. and Google Inc. have complied with such directions. Also, in
GHS K12 Education Pvt. Ltd v. Google Inc.21 the Honble High Court of Delhi has specifically
directed Google Inc. to remove the defamatory blog postings and which was subsequently
removed by it. There are other numerous instances, wherein intermediaries have been directed to
remove} block to remove the defamatory postings, pornographic material, infringing materials,
etc. from websites, blogs, search engines etc. 22
A. DUE DILIGENCE
The due diligence obligations of intermediaries under the Intermediary Guidelines[84] include
three broad categories of requirements that are relevant:
(a) the publication of certain rules, policies and user agreements;
(b) the obligation not to knowingly host, publish, or transmit infringing information; and
(c) the obligation to take down infringing information upon receiving actual knowledge
of it.
B. PUBLICATION OF RULES, POLICIES, AND TERMS AND CONDITIONS
Intermediaries are required to publish rules and regulations, privacy policies, and user
agreements, which appears to be enforced through self-regulation. The Intermediary Guidelines
do, however, set out fairly detailed broad terms that need to be a part of the intermediaries
private agreement with users. The user agreements, rules, and policies must forbid the user from
hosting, publishing, displaying, transmitting, or sharing any information.
C. HOSTING, PUBLISHING, TRANSMITTING, OR MODIFYING INFRINGING

INFORMATION
The intermediary is also required to refrain from knowingly hosting, publishing, transmitting, or
modifying any information prohibited under Rule 3(2).
D.DISABLING PROHIBITED INFORMATION UPON ACTUAL

KNOWLEDGE
21
CS (OS) 1080 of 2010
22
Supra 3, 293-294
25
The intermediary, upon receiving actual knowledge, whether on its own or whether through a
written communication from an affected person that infringing information is being stored,
hosted, or published on its computer system, is obligated to disable such information within 36
hours of obtaining such knowledge. This last requirement effectively creates a notice and
takedown regime
E. NOTICE AND TAKEDOWN
The safe harbor protection under section 79 of the IT Act is subject to the intermediarys removal
of unlawful content immediately after receiving actual knowledge of it. The Intermediary
Guidelines attempt to clarify what this phrase means, explaining that the intermediary could
obtain such knowledge by itself or have such knowledge communicated to it by an affected
party in writing or through an email signed by an electronic signature. After this, the
intermediary is expected to act within thirty six hours to disable such information as it falls
within the list of (undefined) prohibited content given in the Intermediary Guidelines. This has
effectively created a notice and takedown regime for content.
The fact that intermediaries over comply, disabling legitimate and legal content under the
Intermediaries Guidelines is not surprising given the incentives created by the rules. Any failure
to take down content places the intermediary at the risk of expensive litigation, but the rules do
not require the intermediary to notify the author or user whose content has been taken down, or
offer this speaker the right to defend his/her content or modify it such that it may legitimately
stay online. The rules also do not contain any mechanism requiring intermediaries to make it
clear to the audience that content has been taken down, making the entire system very opaque.
Bringing all these elements together, it is clear that the system for taking down content under the
IT Act in India is very problematic because it (a) permits horizontal censorship by requiring
intermediaries to respond quickly to any private citizen who may care to send them notice
without any countervailing obligations towards authors or audiences; (b) obligates private
intermediaries to make decisions about speech even when they are not performing an editorial
function, and may lack the resources to make such determinations; and (c) ensures that there is
no transparency at all about decisions to take down content, leading to a lack of accountability of
private intermediaries for over-broad blocking and a lack of information based on which citizens
may challenge particular instances of blocking.
26
The notice and takedown system under the Copyright Act might be marginally better in terms of
transparency, since intermediaries are required to display a notice about why it was taken down.
The Blocking Rules permit government agencies to ask for content to be blocked. Although
these requests are most frequently directed at telecommunication companies and Internet service
providers, they are also sent to online intermediaries from time to time. For example, social
networking sites were asked to comply with court orders by blocking 8 URLS in 2010, 21 URLS
in 2011, 352 URLs in 2012, and 1299 URLS from January 2013-2014.
Since the system is opaque and does not require judicial or third party review or oversight at any
point, it is reasonable to deduce that this may lead to reduced accountability. Government
agencies ask for online content blocking through a process that is authorized, executed, and
reviewed by the executive. Information about this blocking is not proactively disclosed by the
government and cannot be disclosed by the intermediaries owing to Rule 16. The only
mechanism to obtain the figures appears to be if a Member of Parliament asks for them in
Question Hour. Even the author or creator of the content, who might in theory have contested a
blocking order on grounds of his/her constitutional free speech rights, has no way of contesting it
since no reasons or notifications about the blocking of content need to be given to the creators or
the audience of content.23
23
Chinmayi Arun, Online Intermediaries in India (March 29,2017), https://papers.ssrn.com/sol3/papers.cfm?Abstr
act_id=2566952
27
F. HOW DO THE INTERMEDIARY RULES OPERATE?
The new intermediary rules mandate the intermediaries to impose a set of rules and regulations
on users. The rules further specify the terms of such regulations and this includes a broad list of
categories of content which should not be posted by users.
The broad list of unlawful content includes information that is grossly harmful, harassing,
blasphemous, defamatory, obscene, pornographic, paedophilic, libellous, invasive of another's
privacy, hateful, or racially, ethnically objectionable, disparaging, relating or encouraging money
laundering or gambling, or otherwise unlawful in any manner whatever. These words are too
ambiguous and result in broad interpretation. Now, any person aggrieved by any content on the
internet can ask the intermediaries to take down such content. Intermediaries are obliged to
remove access to such content within a period of 36 hours from the time of receipt of the
complaint. The rules do not provide for the creator of the content to respond to this complaint. In
fact, the rules do not even provide for the intermediaries to inform the user who posted the
content regarding the complaint. The intermediaries that do not comply with take-down notice
lose the protection from any legal liability that could arise over user content.
28
The rules also deal with government's power to access user information from the intermediary
and the power of the intermediary to disconnect user access. The Rules mandate that
intermediaries have to co-operate with government agencies and provide information to them for
the purpose of verification of identity, or for prevention, detection, investigation, prosecution etc
when a request has been made by the agency in writing. The Intermediary also has to inform the
user that in case of violation of any rules and regulations, user agreement or privacy policy; the
intermediary shall terminate the access to its service.
These rules, although titled as guidelines for intermediaries, in effect result in restricting the
users by controlling their use of the services offered by intermediaries.24
24
Supra 15
29
Chapter IV
Relevant Case Law
I. Shreya Singhal v Union of India 25
The right to freedom of speech and expression on online forums has been recognized as a
fundamental right granted under the Constitution of India by the Supreme Court of India
(Supreme Court) in a beautifully elucidated judgement on March 24, 20151. In what has been
hailed as a progressive and landmark judgment, the Supreme Court has quashed the
controversial, and restrictive Section 66A of the Information Technology Act, 2000 (Act),
while also reading the right to freedom of speech and expression into those provisions of the Act
and rules that deal with intermediaries such as ISPs and search engines.
Addressing a number of writ petitions brought before it on the subject, the Supreme Court dealt
with three separate provisions of the Act:
Section 66A that made the sending or posting of communications that were allegedly
unacceptable (such as messages which were grossly offensive) punishable;
Section 69A and the related rules that permits the government to block for access by the
public any online information in the interest of sovereignty and integrity of India, defence
of India, security of the state, friendly relations with foreign states or public order or for
preventing incitement to the commission of any cognizable offence relating to the above
Section 79(3)(b) and Rules 3(2) and 3(4) of the Intermediary Rules (as defined below)
that dealt with the obligation of intermediary to remove / block access to any content that
was deemed unlawful, or violative of the restrictions described under Rule 3(2).
One of the earliest, and most widely cited example is the arrest of two young students, one of
whom made a post, the other liked the post on Facebook, questioning certain actions taken by
political parties upon the demise of a popular political leader in the State of Maharashtra. A
young law student filed a writ petition in the form of public interest litigation before the Supreme
Court of India, asserting the fundamental right of every citizen of India to the freedom of speech
and expression and questioning the constitutionality of Section 66A.
25
(2013) 12 SCC 73
30
Inter alia, Petitioners argued that Section 79 of the Act provides that intermediaries such as
internet service providers and search engines, are exempted from liability for content posted by
third parties using the intermediarys services. The exemption is subject to certain conditions,
including compliance by the intermediary with the rules notified under Section 79 in 2011
(Intermediary Rules). Among other things, Section 79 and the Intermediary Rules provide that
the intermediary may, upon receiving knowledge of commission of any unlawful acts or
publication / communication of certain types of content, remove access to the information, data /
communication link used to commit such unlawful acts / publish restricted content.
The petitioners have argued that Section 79, and the Intermediary Rules violate the Constitution
in that they (a) allow the intermediary (as opposed to a court / statute) the discretion to decide
upon whether an unlawful act is being committed, or restricted content is being published; and
(b) the restrictions under the Intermediary Rules go beyond the permitted restrictions under
Article 19(2).
The Honble Supreme Court held that Section 79 of the Act provides that intermediaries such
as internet service providers and search engines, are exempted from liability for content posted
by third parties using the intermediarys services subject to certain conditions being fulfilled
such as compliance by the intermediary with the Intermediary Rules.
Certain provisions of Section 79 and the Intermediary Rules are important to note while
analysing this judgement:
(i) The Intermediary Rules provide that the intermediary may upon receiving knowledge of
commission of any unlawful acts or publication / communication9 of certain types of content10,
remove access to the information, data / communication link used to commit such unlawful acts /
publish restricted content.
(ii) The exemption from liability for intermediaries provided by Section 79 is subject to Section
79(3)(b) which provides that the exemption from liability shall not apply if upon receiving
actual knowledge, or on being notified by the appropriate Government or its agency that any
information, data or communication link residing in or connected to a computer resource
controlled by the intermediary is being used to commit the unlawful act, the intermediary fails to
expeditiously remove or disable access to that material on that resource without vitiating the
evidence in any manner.
31
(iii) Rule 3(4) of the Intermediary Rules provides that an intermediary, upon obtaining
knowledge by itself, or from an affected person, in writing or through email, of commission of
unlawful acts or publication of restricted content, is required to act within 36 hours and work
with the user or owner of the information to disable the information that is in contravention of
the Intermediary Rules
The Supreme Court has held here that both Section 79(3)(b) and Rule 3(4) of the Intermediary
Rules are to be read down to mean that the intermediary must receive a court order / notification
from a government agency requiring the intermediary to remove specific information. Further,
the Supreme Court has also stated that any such court order or notification must necessarily fall
within the ambit of the restrictions under Article 19(2).26
II. Google India Pvt. Ltd. vs. Visaka Industries Limited 27
The complainant in this case was engaged in business of manufacturing and selling of Asbestos
cement sheets and allied products. It was alleged that one Gopala Krishna (A1) [Co-ordinator of
Ban Asbestos India, a group hosted by Google (A2)] published certain defamatory articles
aiming at a single manufacturer of Asbestos cement products viz., the complainant and renowned
politicians of the country, G. Venkata Swamy and Sonia Gandhi who had nothing to do with the
ownership or management of the complainant. These articles were available in the on the cyber
space for worldwide audience.
The offences were being perpetrated from 31.07.2009 onwards i.e., prior to the amendment to
the Section 79 of the Information Technology Act, 2000 which came into effect from
27.10.2009.
Contentions (Google):
Actions of intermediaries such as Google Inc., which is a service provider providing platform for
end users to upload content, does not amount to publication in law and consequently the question
26
FREEDOM OF ONLINE SPEECH ( March 29, 2017), http://www.nishithdesai.com/information/research-and-
articles/nda-hotline/nda-hotline-single-view/article/freedom-of-speech-online.html?no_cache=1&cHash=
535fc9875596c33b8be7ab7e3c8df661
27
Criminal Petition No. 7207 of 2009, Decided On: 19.04.2011
32
of holding such intermediaries liable for defamation does not arise. (Section 79 of the
Information Technology Act, 2000 relied upon)
Held:
Prior to Amendment
Section 79 of the Act as it stood enacted in the year 2000 exempted network service providers
from liability under the Act, rules or regulations made thereunder for any third party information
or data made available by him. However, it did not exempt a network service provider from
liability (much less criminal liability) for the offences under other laws or more particularly
under the Indian Penal Code. Furthermore, Section 79 exempted network service provider from
liability, only on the proof that the offence or contravention was committed without his
knowledge or that he had exercised all due diligence to prevent the commission of such offence
or contravention.
After Amendment
It is only after the amendment; non-obstante clause was added to Section 79 so as to keep the
application of other laws outside the purview in a fact situation covered by the said provision.
Now, intermediaries like network service providers can claim exemption from application of any
other law in respect of any third party information, data or communication link made available or
hosted by them; provided they fulfill the requirements under Section 79 (2) of the Act.
Furthermore, as per amended Sub-section (3) of Section 79, the exemption under Sub-section (1)
cannot be applied by any Court and cannot be claimed by any intermediary in case the,
intermediary entered into any conspiracy in respect thereof. Also, the intermediary cannot claim
exemption under Sub-section (1) in case they fail to expeditiously remove or disable access to
the objectionable material or unlawful activity even after receiving actual knowledge thereof.
Outcome of the Case:
In the present case, in spite of the 1st Respondent issuing notice to the Petitioner about
dissemination of defamatory material and unlawful activity on the part of A1 through the
medium provided by A2, A-2 did not make any effort to block the defamatory content or stop
dissemination of the unlawful and objectionable material. Therefore, the Andhra Pradesh High
33
Court held that the Petitioner, A2 (Google) cannot claim any exemption either under Section 79
of the Act (as it stood originally) or Section 79 of the Act (after the amendment).
Aftermath
Being aggrieved by the order of the High Court, Google India filed an appeal before the Supreme
Court of India in 2011. Since then, the matter has been adjourned on several instances and was
recently heard by a SC bench. The latest date of hearing being on November 24, 2016.
The hearing commenced with Mr. Tushar Mehta, Additional Solicitor General of India appearing
for the Union of India mentioning the matter before a two-judge bench of the Supreme Court
comprising of Justice Dipak Mishra and Justice Amitava Roy. Mr. Mehta mentioned that on the
last date of hearing i.e., November 10, 2016, the Court had passed an order seeking the Attorney
Generals assistance in the matter. However, since the Attorney General had a conflict of interest
in the matter having appeared for one of the parties previously, Mr. Mehta stated that he would
be appearing on behalf of the Attorney General.
Mr. C.A. Sundaram, Senior Advocate appearing on behalf of Google India commenced his
arguments by highlighting the following issues which he sought to address before the Court:
What is the scope and extent of Section 79 of the IT Act vis--vis defamation cases?
Is an intermediary a publisher for the purposes of Section 499 of IPC?
At what stage should an intermediary remove content hosted by it? Should it remove the
content pursuant to only a request made by a third party or should it take down content
pursuant to an executive order or a court order?
Justice Dipak Mishra while recapitulating the previous hearings stated that the Court was of the
view that an intermediary can be said to have knowledge of the objectionable content through an
order passed by a court or through a government notification. Keeping the above opinion in
mind, Justice Mishra reckoned that Google India should not be liable in the present case since it
had not received knowledge of the objectionable material since neither a court order nor a
government notification was passed in regard to the same.
Mr. Sundaram further contended that the knowledge of an intermediary should be considered
only in case of receipt of an order passed by a court of law and not in case of an executive order.
Justice Mishra expressed his reservations regarding this contention. To advance his argument,
34
Mr. Sundaram referred to Section 69A of the IT Act which confers powers on the Central
Government to issue directions to any Government agency or intermediary to block any
information for public access through any computer resource. As per the provision, the Central
Government can do so on the grounds that it is necessary or expedient so to do, in the interest of
sovereignty and integrity of India, defence of India, security of the State, friendly relations with
foreign States or public order or for preventing incitement to the commission of any cognizable
offence relating to above. Mr. Sundaram tried to draw a distinction between the grounds as
mentioned in Section 69A and Article 19(2) of the Constitution of India which specifically
provides for defamation as a reasonable restriction to freedom of speech and expression. He
contended that the executive does not have the power to issue orders for blocking of content
under Section 69A of the IT Act on the ground of defamation.
He further argued that before issuing an order for blocking of content on the ground that such
material is defamatory in nature, it is necessary to prove the same. According to him, such
determination can only be made by a court of law. Hence, he argued that knowledge should be
attributed to an intermediary only on the receipt of a judicial/court order and not a government
notification or executive order.
After hearing Mr. Sundarams submissions on this point, Justice Mishra opined that there seems
to be some substance in his contention. Justice Mishra inquired from Mr. K.V. Vishwanathan,
Senior Advocate appearing for the Company whether the government can decide if the content is
defamatory or not.
Mr. Vishwanathan submitted that the aspects of blocking, taking down of content and fixing
liability of the intermediaries have different connotations. He further countered the argument
previously made by Mr. Sundaram that Google Inc. and Google India are two separate entities.
He referred to the definition of intermediary as contained in Section 2(1)(w) of the IT Act
which includes search engines. Hence, he contended that there should be no difference in
treatment of Google Inc. and Google India for the purpose of the present case.
On the issue whether an intermediary can be treated as a publisher of the content, Mr Sundaram
argued that an intermediary cannot be held to be a publisher of the content. However, if such
intermediary fails to take any action despite having knowledge of such content through a
takedown order, then it can be held to be the publisher of such content.
35
Mr. Vishwanathan contended that it is an internationally accepted position that an intermediary

can be held to be liable as a publisher of defamatory material if it had the knowledge of such
material.
Mr. Tushar Mehta as a concluding remark stated that free speech is an absolute right with
reasonable restrictions contained under Article 19(2). However, situations such as the present
case merit judicial intervention to decide the contours of free speech.
The next date of hearing has been fixed for January 19, 201728
28
Intermediary Liability Again: Google India. vs. Visaka Industries, http://www.legallyindia.com /blogs/
intermediary -liability-again-google-india-vs-visaka-industries (March 30,2017)
36
Conclusion
The amended safe harbor provision under Section 79 allows a wide spectrum of intermediaries to
seek safe harbor protection from liability for any third party information, data, or communication
link hosted by the third party. Section 79 ensures that the intermediaries immunity from liability
prevails over all other laws in force, except for the Copyright Act and the Patents Act.
To be granted immunity under section 79, the intermediary must:
Merely provide access to a communication system over which information made

available by third parties is transmitted or temporarily stored or hosted; or not initiate the
transmission, select its receiver, or select or modify the information contained in the
transmission and
Observe due diligence as provided by rules promulgated by the government in 2011.
Some commentators suggest that section 79 uses both the mere conduit and the caching
principles, borrowed from the EU E-commerce Directive, whereas others point out that the
language explicitly only discusses the mere conduit principle. What is clear upon examination of
section 79 is that to be eligible for immunity, the intermediary has to confine itself to
transmission of information and not initiate transmission, select the receiver, or modify the
information. Services that would clearly be covered here because of their conduit function
include telecommunications carriers, ISPs, and other backbone services.
While intermediaries are required to take-down or disable access to content upon public
complaints, there is no mechanism to determine whether particular content is actually unlawful,
before the intermediary takes down such content. Absent such a mechanism, the safe course of
action for an intermediary under the IT Act and Intermediaries Guidelines would appear to be,
(a) to have agreements in place with users not to publish unlawful content, (b) to play nothing
more than a facilitatory role in the publication of content, and (c) to promptly work with the
owner of content disable access to the particular content upon becoming aware of it being
potentially unlawful. Because compliance with this scheme may impinge on free speech
concerns, the constitutionality of the Intermediaries Guidelines is currently under challenge
before the Supreme Court of India.29
29
Writ Petition (Civil) No. 217 of 2013
37
Bibliography
Books
1. Aparna Vishwanathan, Cyber Law: Indian and International Perspectives, LexisNexis
Butterworths Wadhwa Publications, 2012
2. Vakul Sharma, Information Technology Law and Practice (4th edn) , Lexis Nexis,
Haryana, 2016
Web Sources
1. Apar Gupta, Liability Of Intermediaries In India From Troubled Waters To Safe
Harbors (March 28, 2017), http://www.supremecourtcases.com
/index2.php?option=com_content&itemid=65&do_pdf=1&id=6648
2. Chinmayi Arun, Online Intermediaries in India (March 29,2017),

https://papers.ssrn.com/sol3/papers.cfm?Abstr act_id=2566952
3. Freedom of online speech ( March 29, 2017),

http://www.nishithdesai.com/information/research-and-articles/nda-hotline/nda-hotline-
single-view/article/freedom-of-speech-online.html?no_cache=1&cHash=
535fc9875596c33b8be7ab7e3c8df661
4. Intermediaries, users and the law Analysing intermediary liability and the IT Rules
(March 29,2017), http://sflc.in/wp-content/uploads/2012/07/eBook-IT-Rules.pdf
5. Intermediary Liability Again: Google India. vs. Visaka Industries, (March 30,2017),
http://www.legallyindia.com /blogs/ intermediary -liability-again-google-india-vs-visaka-
industries
6. Martin J. Hayes, Internet Service Provider Liability Information (March 19, 2017), http:/
/www.jisc.ac.uk/legal/index.cfm?name=lis_isp
38
7. Pavit Katoch, Liability of intermediaries under the IT amendment act, 2008 (March 30,
2017),http://www.vaishlaw.com/article/informationtechnology_laws/liability_of_
intermediaries_under_the_it_amendment_act_2008.pdf

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Intermediaries Liability in India

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I

INTERMEDIARIES NOT BE LIABLE IN CERTAIN CASES

Submitted in partial fulfillment of the requirement of Semester 10, B.A.Ll.B (H)

Submitted to- Submitted by-

Dr. amita verma Ishita chadha

Faculty, UILS 51/12

Aims & Objectives

II. Types of Intermediaries.....5

III. Types of liability...7

IV. Intermediaries Liability in Various Countries..9

3. The Safe Harbour Provision- Section 79...15

A. What is safe harbour protection? 15

4. Intermediary Guidelines Rules..21

I. Comment on the Rules, 2011..22

5. Relevant Case Law29

I. Shreya Singhal v Union of India.29

II. Google India Pvt. Ltd. vs. Visaka Industries Limited31

An intermediary is a link between an originator and an aggressive. Internet service provider is

Originator Intermediary Addressee

II. Types of Intermediaries

(a) COMMUNICATIONS GATEWAY PROVIDER

(b) PERMANENT DATA HOSTS

(c) TRANSITORY DATA HOSTS

III. Types of liability

(a) DIRECT LIABILITY

(b) VICARIOUS LIABILITY

(c) CONTRIBUTORY LIABILITY

IV. Intermediaries Liability in Various Countries

A) INTERMEDIARIES LIABILITY IN THE US

Section 230(c)(1) of the Communications Decency Act of 1996 provides:

"Congress enacted s to remove disincentives to self-regulation fearing that the specter of

B) INTERMEDIARIES LIABILITY IN THE UK

In my judgment , the defendant, whenever transmits and whenever there is transmitted

C) INTERMEDIARIES LIABILITY IN INDIA

Generally speaking, intermediaries being facilitator of third party information, data, or

A. What is safe harbour protection?

B. Explanation of the section

B.1. APPLICABILITY OF EXEMPTION RULE

(i) initiate the transmission,

(ii) select the receiver of the transmission, and

(iii) select or modify the information contained in the transmission;

B.2.) APPLICABILITY OF NON-EXEMPTION RULE

It was held by S.B. Sinha and Harjit Singh Bedi, JJ:

Intermediary Guidelines Rules

(c) harm minors in any way;

(d) infringes any patent, trademark, copyright or other proprietary rights;

(e) violates any law for the time being in force;

(g) impersonate another person;

Comment on the Rules, 2011

(a) the publication of certain rules, policies and user agreements;

B. PUBLICATION OF RULES, POLICIES, AND TERMS AND CONDITIONS

C. HOSTING, PUBLISHING, TRANSMITTING, OR MODIFYING INFRINGING

D.DISABLING PROHIBITED INFORMATION UPON ACTUAL

E. NOTICE AND TAKEDOWN

F. HOW DO THE INTERMEDIARY RULES OPERATE?

Relevant Case Law

I. Shreya Singhal v Union of India 25

II. Google India Pvt. Ltd. vs. Visaka Industries Limited 27

Outcome of the Case:

Is an intermediary a publisher for the purposes of Section 499 of IPC?

Mr. Vishwanathan contended that it is an internationally accepted position that an intermediary

To be granted immunity under section 79, the intermediary must:

Merely provide access to a communication system over which information made