The Bombay High Court has ruled that a Vice-President or individual Director cannot lodge a complaint on behalf of the company without a Board resolution, and that an employee acting on the directions of his employer on ready material cannot be indicted for copyright infringement. The Court clarified that an employee cannot be made vicariously liable in criminal law for acts of the company or its directors, since criminal liability requires sufficient evidence of an active role coupled with criminal intent.
The Court held that mere presence of allegedly infringing content in a public folder of an employee is insufficient to infer involvement in the commission of the offence, particularly where the employee was working on ready material provided by the employer. Thus, where a complaint under the Copyrights Act is filed by an unauthorised person and the employee has no privity of contract with the complainant company, the proceedings against the employee are liable to be quashed under Section 482 of the Code of Criminal Procedure.
Long-pending criminal proceedings with no progress and no material on record to connect the accused to the offence constitute valid grounds for quashing, especially where charges have not even been framed after nearly two decades, added the Court.
A Single Judge Bench of Justice Milind N. Jadhav noted that the Applicant was an ex-employee of the Complainant’s company and observed that the JMFC, Pune had taken cognizance of the complaint without establishing the existence of any agreement between the Complainant’s company and the Applicant that could hold him liable for copyright infringement. The Court further observed that the complaint was filed by Mr. Agarwal claiming to be the Vice-President of Brainvisa, but no authorisation or board resolution was produced to show that the complaint was filed on behalf of the company.
The Court recorded that the source codes alleged to have been infringed were registered in the name of Brainvisa company, and that under settled law, unless there is a resolution by the Board of Directors, the Complainant as Vice-President or individual Director has no power to lodge a complaint on behalf of the company. It was further observed that no cognizance could have been taken on a complaint filed by the Vice-President without such a resolution, and the accused could not have been indicted on that basis.
On the Applicant’s role, the Court observed that he was an employee of Accused No. 1 and had merely followed the directions of his master while working on ready material made available by Accused No. 1, including assistance in setting up the domain server. The Court held that merely finding the alleged content in a public folder of the Applicant does not amount to his involvement in the commission of the crime. The Court also recorded that the matter had been pending since 2009 and charges were not yet framed, and that there was no material on record to even suggest that the Applicant had committed any of the alleged offences.
Briefly, an FIR was registered under Sections 420 and 406 of the Indian Penal Code, 1860, read with Sections 63 and 63B of the Copyrights Act, 1957 and Section 66 of the Information Technology Act, 2000.
The Applicant was arrayed as Accused No. 4. He had joined Enthuse Technologies Pvt Ltd. (Accused No. 1’s company) as a design manager in January 2008 and continued until October 2009. Accused No. 1 had left the employment of the Complainant (Brainvisa Technologies Ltd.) in 2006 and was alleged to have reproduced and used certain source codes belonging to Brainvisa on his business website, which the Complainant allegedly discovered in 2008. The Complainant claimed a loss of USD 95,00,000 (approximately Rs. 50 Crore) on account of the alleged infringement and theft of data, primarily by Accused No. 1 and his unnamed associates. A chargesheet was filed on 29 July 2009 against five accused persons.
The Applicant was partially discharged of the offence under Section 66 of the IT Act by an order dated 29 November 2010 passed by the JMFC, Pune. His Criminal Revision Application challenging that order was dismissed by the Additional Sessions Judge, Pune, by order dated 18 March 2019, which led to the present application.
