INTRODUCTION

'Intermediary liability' means that the intermediary, a service that acts as

'intermediate' conduit for the transmission or publication of information, is held
liable or legally responsible for everything its users do.
-Rebecca MacKinnon
Intermediaries are widely recognized 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.
An intermediary represents nuts-and-bolts of an interactive network service. It
may provide access to the Internet (network of networks) only or offer a range of
additional resources or services.
An intermediary is an important link to the World Wide Web as it not only
transmits, distributes or publishes but also help in creating an interactive wired
world. It is thus necessary that the liability, if any, of the intermediaries be seen
by understanding their nature of work and the degree of limitation on account of
technological advancement.
In India the Information Technology Act (the "Act" or "IT Act") was enacted in
the year 2000. The Act lays down the laws concerning intermediaries and other
issues concerning information technology. The law relating to intermediaries has
seen gradual development through judicial pronouncements, including an
amendment of the Act in 2008.
There have not been many rulings concerning intermediary liability in recent
times. However, the judiciary has analysed the provisions of the Act and have
opined on several defences and exemptions available to intermediaries. This
survey discusses the relevant provisions of the Act and related judicial provisions.

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OLD AND NEW PROVISION REGARDING LIABILTIES OF
INTERMEDIARIES IN IT ACT

"There is only one boss. The customer. And he can fire everybody in the
company from the chairman on down. Simply by spending his money
somewhere else"
– Sam Walton.

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 current 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 of Avnish Bajaj v.
State1 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.
Before the Information Technology Amendment Act 2008 came into force, the
scenario in India was worse for intermediaries. Intermediaries were liable for
their users’ content. This led to the arrest of Bazee.com chief Avinash Bajaj in
connection with the sale of the infamous DPS Noida MMS clip CD on the
website. Post the Bazee.com fiasco the Information Technology Laws have been
amended. According to section 79 of the IT Amendment Act 2008 an Internet
service provider shall not be liable under any law for the time being in force for
any third party information, data or communication link made available by him
except when the intermediary has conspired or abetted in the commission of the
unlawful act or 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.
The provision states that an intermediary need 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
1
150 (2008) DLT 769

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the Information Technology (Intermediaries Guidelines) Rules, 2011 framed in
the exercise of powers conferred by Section 87 read with subsection (2) of Section
79 of the Information Technology Act, 2000. The Rules were notified on April
11, 2011.
According to Section 79 of Information and Technology Act, 2000, for the
removal of doubts, any person who is providing any service as a network service
provider shall not be liable under this act for certain cases, rules or regulations
made there under for any third-party information or data made available by him.
Even if proves 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. For the purposes of is section,
● "Network service provider" means an intermediary;
● "Third party information" means any information dealt with by a network
service provider in his capacity as an intermediary;
An intermediary would be liable and lose the immunity, if the intermediary has
conspired or abetted or aided or induced whether by threats or promise or
otherwise in the commission of the unlawful act. Sections 79 also introduced the
concept of “notice and take down” provision as prevalent in many foreign
jurisdictions. It provides that an intermediary would lose its immunity if upon
receiving actual knowledge or on being notified that any information, data or
communication link residing in or connected to a computer resource controlled
by it is being used to commit an unlawful act and it fails to expeditiously remove
or disable access to that material. On the other hand, another interpretation can
be drawn where section 79 of the IT Act, 2000 absolves ISPs (the internet service
providers), who work as intermediaries, of its liability if it can prove its ignorance
and due diligence, it does not specify who would be held liable for such
contravention in such an event. Therefore, this provision will cause problems
when an offence regarding third party information or provision of data is
committed.

Current provision
Chapter XII (containing Sec. 79) substituted by Act 10 of 2009, sec.40, for
Chapter XII. Earlier the name of Chapter XII was ‘Network service providers not
be liable in certain cases’ which was very narrow in approach as it only take
network service providers as intermediaries’ current provision is:
Chapter XII: Intermediaries Not to Be Liable in Certain Cases-

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Sec. 79: 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 information dealt with by an intermediary in his capacity
as an intermediary.

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WHO ARE INTERMEDIARIES?
An understanding of this term is important as it is used extensively in the
Information Technology Act, 2000, the legislation that governs the field in India.
Intermediaries are entities that provide services enabling the delivery of online
content to the end user. Let us look at the players involved in this chain:
Internet Service Providers (ISP) – ISPs like Airtel and MTNL help users to get
connected to the internet by means of wired or wireless connections.
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.
DNS providers – These service providers translate the domain names (e.g.
www.sflc.in) to addresses (e.g. 64.202.189.170) that can be understood by
computers.
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.
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.
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.
The legal provision: Section 2 (w) of the Information Technology Act,2000 (IT
Act, 2000) defines Intermediaries as - “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 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.
On the next page the is a pictorial description for who are intermediaries.

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This diagram perfectly depicts who are intermediaries in simple and
understandable way.

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Intermediary Liability and Defences:

The aforesaid sec. laid down the set of specific rules governing intermediaries. If
sub section (1) provides for an all-encompassing exemption rule for the
intermediaries, the sub-section (2) and (3) refer to the applicability or non-
applicability of the said exemption rule, respectively.
Applicability of exemption rule
Exemption rule, i.e. sub-section (1) states that “notwithstanding anything
…………………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, sec. 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-section (2) & (3), an intermediary is not liable for third party information,
data, or communication link made available or hosted by him. In other word, the
exemption rule, identifies intermediaries as primarily “storage-and-transmission-
medium.”
Thus, it would be imperative that the courts’ while addressing the question
whether sub-section (1) is applicable or not have to perform the test of
applicability. It has three distinct components. Presence of any one of these
components would grant exemption from liability to intermediaries. These
components 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
include:
i) Storage for the purpose of carrying out transmission (mere conduit), or
ii) Storage for the purpose of making more efficient the information’s
onward transmission (proxy caching), or
iii) Storage of information provided by a subscriber (hosting).
Or

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Component 2:
b) The intermediary being a facilitator only plays passive roles 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 the other words, it was other than 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.
In fact, “due diligence” is about “self-regulation”. However, the lawmakers felt
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 mat prescribe. The Central
Government has notified the Information Technology (Intermediary
Guidelines) Rules, 2011.
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 conspired or abetted or aided or induced, whether by
threats or promise or otherwise in the commission of the unlawful act;
In Sanjay Kedia v. Narcotics Control Bureau,2 wherein the company (Xponse
tech. ltd. & Xpose IT Services Pvt. Ltd.) headed by one Sanjay Kedia who had
designed, developed, hosted various pharmaceutical websites, which were found
to be used to sell and distribute huge quantity of psychotropic substances in USA.
In this SC held appellant and his associate liable and not as innocent
intermediaries or network service provider under Sec. 79 of IT Act.
Further clause(b) of sub-section (3) of Sec.79 restrict its liability to the
intermediaries on the premise that:

2
SLP (Crl.) No. 3892 of 2007

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 i) the intermediary has the actual knowledge (here refers to constructive
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,
ii) Or, the intermediary has been notified by the appropriate Government
or by any of its agency that 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.
This clause is somewhat similar to the Sec.69A, which grants power to the Central
Government to issue direction for blocking for public access of any information
through any computer resource. Interestingly, clause (b) of sub-section (3) is our
legislative response on the lines of ‘notice and take down’3 provision of USA.
Explanation clause
In this “third party information” means any information dealt with by an
intermediary in his capacity as an intermediary. The literal meaning of “third
party” means a group besides the two primarily involved in a situation. In terms
of “third party information” it would mean information generated by a person or
group besides the two primarily involved in information generation. It implies the
information resources generated by an independent person or group. In the
context of the section “third party information” would mean the information
received, stored or transmitted by the intermediary as an intermediary from
independent person or group.
In a way the aforesaid section of the Act is consistent with the statutory provisions
prevailing in other countries. This section should not be view and applied in
isolation but always in reference to the offence or contravention committed.
Furthermore, it calls for adoption of flexible approach on the path of judges to
address the legislative intent behind the provision rather than to make the network
service provider liable on non-existent issues.

3
Digital Millennium Copyright Act (DMCA), 1998

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The Rules
Section 85 of the IT Act authorizes the government to lay down the rules under
the Act. The government exercised its powers under section 85, read with section
79 of the Act, and promulgated the Information Technology Act Rules
(Intermediary Guidelines) in 2011 (the Rules).
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.
The Intermediaries Guidelines Rules lay down the procedures that an
intermediary has to follow to avail safe harbour. Rule 3(2) of the Intermediaries
Guidelines Rules lists the categories of information, if posted online, which could
be considered as illegal. According to Rule 3(4) an affected person could write to
the intermediary to remove any content which is listed as unlawful under Rule
3(2). The intermediary has to act within 36 hours to remove the content. If the
intermediary does not act within the stipulated time then the intermediary cannot
avail safe harbour. The intermediaries that do not comply with take-down notice
loses the protection from any legal liability that could arise over user content.
This provision was criticized by intermediary after, a clarification was issued by
the Government on March 18, 2013 stating that the intermediary shall respond or
acknowledge the complaint within 36 hours. Thereafter, the intermediary has 30
(thirty) days’ time to redress such complaints.
What constitutes redressal is unclear and no guidance has been provided by the
rules. The Information Technology (Intermediary Guidelines) Rules, 2011 make
it obligatory for intermediaries to appoint a grievance officer and provide the
name and contact details of such officer on their website. The grievance officer
shall redress the complaints within 30 days from the receipt of complaint.
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

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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.
The Delhi High Court in K.N. Govind Acharya v. Union of India4 observed that,
regarding Rule 3(4), the intermediary shall respond to or acknowledge the
complainant within thirty-six hours, and the complaint shall be redressed
promptly in no more than thirty days. From the clarification and the Delhi High
Court's opinion, it appears the intermediary can act both on a complaint in writing
from affected persons as well as upon obtaining the knowledge internally.
In Nirmaljit Singh Narula v. Indi jobs at Hubpages.com5 , certain defamatory
materials regarding a spiritual guru were posted on a website; the website failed
to remove the materials despite a request to do so. The Delhi High Court held that
the website was required to remove the objectionable content and by refusing or
failing to do so, it violated Rule 3(4) of the Rules. Therefore, the website was not
protected under Section 79 of the Act.
Copyright Violations
The most controversial portion of the IT Amendment Act 2008 is the proviso that
has been added to Section 81 which states that the provisions of the Act shall have
overriding effect. Section 81 of the Act stipulates that the Act may override any
other legislation - with the Indian Copyright Act 1957 (the "Copyright Act")
and the Patents Act 1970 (the "Patent Act") being exceptions. In other words,
the rights of the owners under the Copyright Act and Patents Act shall remain
unfettered by any provisions of the Act. Therefore, there is no impact of the
provisions of section 79 of the Act regarding online copyright infringement where
intermediaries are involved. With respect to the copyright violations, India
amended the provisions of the Copyright Act of 1957, creating an exception
which stipulates that transient or incidental storage in certain circumstances will
not be considered a violation of copyright. However, this amendment is still
awaiting judicial scrutiny.

4
WP(C) 3672/2012
5
(2012) 50 PTC 320 (Delhi High Court)

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CASES:
In Super Cassette Industries Ltd. v. Myspace Inc.6, Super Cassette Industries
filed a case against Myspace alleging infringement of its copyrights. Super
Cassette Industries alleged that Super Cassette's copyrighted materials were
uploaded onto My- Space. My Space argued that (a) My Space only provides a
platform to its users to upload content, (b) Myspace is not aware of the content
being uploaded and has no role in the selection of the content, and (c) My Space’s
role is of an intermediary and, as such, is protected under section 79 of the IT Act.
The Delhi High Court, however, negated this argument by stating that Myspace
has deployed various measures to screen the data. Therefore, Myspace has
knowledge and reasonable belief that infringing data may be posted on its web-
site. Further, Myspace has a limited license to amend the materials posted
pursuant to which it adds advertisements that are uploaded prior to posting.
Therefore, from the time of uploading to the time when the material is made
available to other users, there are a sufficient number of steps, including
modification, which suggests that Myspace is aware of the content its users
provide.
In a recent case Kent RO Systems Ltd. vs. Amit Kotak & eBay India Pvt. Ltd7,
the Delhi High Court reiterated the position that the intermediary is not required
to make a self-determination of infringing products sold on its website but is
required to take down the same only after receipt of complaint. The Court felt
that an intermediary will not be possessed with prowess to detect each case of
infringement unless their attention is drawn to a particular instance.
In the case of Sabu Mathew George Vs. Union of India8, before the Supreme
Court of India three intermediaries viz. Google, Yahoo and Microsoft agreed to
auto block advertisement with specific words which are in violation of The
Preconception and Pre-natal Diagnostic Techniques (Prohibition of Sex
Selection) Act, 1994 (PNDT Act) which prohibited detection of the gender of the
child during the conception stage. This interpretation could arise on account of
the great social problems for which this Act had been framed to address. The
Court also directed the Government to form a nodal agency which will alert the
intermediaries about any site so that the same could be blocked by the
intermediary and not be accessible. Repelling the contention of Intermediaries
that blocking of content which are not advertisement on pre-natal diagnosis would

6
(2011) 47 PTC 49 (Del.)
7
CS (COMM) 1655/2016 & IA No. 15914/2016
8
WRIT PETITION (CIVIL) NO. 341 OF 2008

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violate their freedom of speech, the Court reiterated that freedom of speech
cannot be in violation of law.
In the landmark decision of Shreya Singhal vs. Union of India9, the Supreme
Court of India while dealing with the case in the context of Article 19 (2) of the
Constitution of India viz. situation in which the right to Freedom of Speech could
be regulated, held that under Section 79 of the Information Technology Act,
intermediaries are exempt from liability if they fulfil conditions of the section.
The Court refrained from striking down Section 79 by reading down Section 79
(3) (b) and Rule 3 of the Information Technology (Intermediary Guidelines)
Rules, 2011 to hold that the knowledge referred to in this section must be only
through the medium of a court order or through an agency established by the
Government. The Court observed that it would be otherwise very difficult for
intermediaries to go through all the requests they receive and judge which
requests are legitimate and which are not.
In the case of Google India Pvt. Ltd. vs. Visaka Industries Limited10 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 Co-ordinator of “Ban Asbestos India”, a group hosted by Google
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.
In this case it was held that 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 fulfil the requirements under
Section 79 (2) of the Act.
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.

9
(2015) 5 SCC 1
10
Second appeal No. 505 of 2016

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SUGGESTIONS:
“I study how governments seek to stifle and control online dissent.”
-Rebecca MacKinnon

Hence under amended section 79 of the IT Act, the requirement of knowledge

has now been expressly changed to receipt of actual knowledge. This has been
combined with a notice and take down duty. There is a time limit of 36 hours to
respond to such a request. If an intermediary refuse to do so, it can be dragged to
the court as a co-accused. Under the Amendment Act the safe harbour provisions
is available only to an Internet service provider where the function of the
intermediary is limited to giving access to a communication network over which
information made available by the third party is transmitted or temporarily stored
or where the intermediary does not initiate the transmission, does not select the
receiver of the transmission and does not select or modify the information
contained in the transmission.
Section 79 of the IT (Amendment) Act 2008 thus deals with immunity of
intermediaries. It is purported to be a safe harbour provision modelled on EU
Directive 2000/31. The Safe Harbour provisions found in the IT Act are similar
to that found in the US Laws which essentially say that the intermediaries who
merely provide a forum weren't liable for what users did. The only condition
being that they respond promptly to a notice telling them about a violation. If the
website took that file off then they were in the clear.

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CONCLUSION
“Internet freedom is a bit of a Rorschach test: it means different things to
different people.”
-Rebecca MacKinnon

The law related to the intermediaries in India is awaiting certain changes pursuant
to a few pending judicial pronouncements. However, until the time when the
courts pronounce their judgments, intermediaries should consider adhering to the
Rules to negate any liability under the Act. The key to avoiding liabilities under
the laws of India will be to observe due diligence and to comply with the Rules,
including but not limited to removing data as soon as reported by a user or as the
intermediary becomes aware of it.
Also, the guidelines should be refined and advanced for not infringing the
essentials of Article 19 of Indian constitution and provide natural justice for better
functioning in the dynamic India which is becoming promoter of freedom of
speech and expression.
Indian Legislators need to plug in these gaps and provide indispensable immunity
to the ISPs to enable them to operate in India without any fear and inhibitions.

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BIBLIOGRAPHY:

BOOKS:
Vakul Sharma, Information Technology Law and Practice (LexisNexis,
Haryana, 4th edition, 2015)

WEBLINKS:
https://sflc.in/sites/default/files/wp-content/uploads/2012/07/eBook-IT-
Rules.pdf
http://www.rna-cs.com/liability-of-intermediaries-under-information-
technology-act-2000/
https://acadpubl.eu/hub/2018-119-17/2/133.com
https://cis-india.org/internet-governance/files/indian-intermediary-liability-
regime

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