MB0051 Legal Aspects of Business Assignment Set- 1

Q.1 Distinguish between fraud and misrepresentation. Ans) Although most individuals use the terms fraud and misrepresentation synonymously, the two are far from being same. In fact they can be looked upon as complete opposites. In a case involving civil wrong, the representing party can claim monetary compensation for the fraud/misrepresentation (whichever the case may be) as well as terminate the terms and conditions of the liaison. When the representing party knows that his or her plea is baseless and untrue, then this individual is committing fraud. However, there are many individuals who are convinced wrongly of a situation by a third party. In such a case, it is one of misrepresentation because the defendant actually believes the basis of his or her plea. Fraud is a crime punishable by the law because it is an intentional wrong committed by the party. In misrepresentation there are no such consequences, generally speaking. If a fraud is to proven, then each of the following parameters need to be proven in a court of law: The physical proof presented by the defendant The proof thus presented is incorrect The defendant purposely made false representations (was aware of the falsehood) The false proofs were made with the intention of duping the plaintiff The defendant succeeded in duping the plaintiff The plaintiff suffered loses due to the fraud If you are a plaintiff involved in committing a misrepresentation then you must prove the following parameters: Validity of the evidence presented by the plaintiff The claims were with regard to some legal agreement between the defending and the pleading party False representation of facts at the time of entering into the agreement The plaintiff was induced into entering the agreement by the defendant The agreement resulted in loss for the plaintiff This loss was a gain for the defendant Although it may not be possible for the plaintiff to prove the defendant as a fraudster, it is still possible for the former to validate his situation as that of a misrepresentation. Difference between fraud and misinterpretation:1. In misrepresentation the person making the false statement believes it to be true. In fraud the false statement is person who knows that it is false or he does not care to know whether it is true or false. 2. There is no intention to deceive the other party when there is misrepresentation of fact. The very purpose of the fraud is to deceive the other party to the contract. 3. Misrepresentation renders the contract voidable at the option of the party whose consent was obtained by misrepresentation. In the case of fraud the contract is voidable It also gives rise to an independent action in tort for damages. 4. Misrepresentation is not an offence under Indian penal code and hence not punishable. Fraud, In certain cases is a punishable offence under Indian penal code. 5. Generally, silence is not fraud except where there is a duty to speak or the relations between parties is fiduciary. Under no circumstances can silence be considered as misrepresentation

6. The party complaining of misrepresentation cant avoid the contract if he had the means to discover the truth with ordinary deligance. But in the case of fraud, the party making a false statement cannot say that the other party had the means to discover the truth with ordinary deligance. Q.2 What are the remedies for breach of contract. Ans) Remedies for breach of contract being a fountainhead of a correlative set of rights and obligations for the parties, would be of no value, if there were no remedies to enforce the rights arising there under. The party committing breach of contract is called the guilt party and the other party is called the injured or aggrieved party. In case of breach of contract, the aggrieved party would have one or more, but not all, of the following remedies against the guilty party. The remedies are: 1. Suit for rescission, 2. Suit for damages, 3. Suit for quantum meruit, 4. Suit for specific performance, 5. Suit for injunction, Suit for rescission : The breach of contract no doubt discharges the contract, but the aggrieved party may sometimes need to approach the court to grant him a formal rescission, i.e. cancellation, of the contract. This will enable him to be free from his own obligations under the contract. Suit for damages : The word damages means monetary compensation for loss suffered. Whenever a breach of contract takes place, the remedy of damages is the one that comes to mind immediately as the consequence of breach. A breach of contract may put the aggrieved party to some disadvantage or inconvenience or may cause a loss to him. The court would desire the guilty part to accept responsibility for any such loss of the aggrieved party and compensate him adequately. The quantum of damages is determined by the magnitude of loss caused by breach. Suit for quantum meruit : The term quantum meruit means as much as earned. It implies a payment deserved by a person for the reason of actual work done. When a party has done some work under a contract, and the other party repudiates the contract or somehow the full performance of the contract becomes impossible, then the party who has done the work can claim remuneration for the work under a suit for quantum meruit. Likewise, where one party has expressly or impliedly requested another to render him a service without specifying any remuneration, but the circumstances of the request imply that the service is to be paid for, there is implied a promise to pay quantum meruit. Even in the case of where the person who has done the work is the one who is guilty of breach of contract, he too is entitled to be paid quantum meruit. But there is an exception such a contract must have involved work that was indivisible and it must not have been a contract for lumpsum remuneration. 4. Suit for specific performance: In certain cases of breach of a contract, damages may not be an adequate remedy. Then the Court may direct the party in breach to carry out his promise according to the terms of the contract. This is a direction by the Court for specific performance of the contract at the suit of the party not in breach. But in general, Courts do not wish to compel a party to do that which he has already refused to do.

The Specific Relief Act,1963 lays down detailed rules on the specific performance of Contracts. Cases where specific performance may be ordered: (i) Where there exists no standard for ascertaining the actual damage caused to the aggrieved party by the non- performance (ii)Where monetary compensation will not be adequate relief. Example a contract for sale of a rare antique (iii) Where plaintiffs property is held by the defendant in the capacity of his agent or trustee (iv) Where the act to be done is in performance of trust Cases where specific performance will not be ordered: (i)Where monetary compensation is adequate relief (ii)Where contract is made by the agent or trustee in violation of his powers (iii)Where the contract is of a personal nature, such as a contract to marry or a contract of service (iv)Where the court cannot supervise the performance of promise as it involves performance of a continuous duty (v)Where the contract is in its nature revocable (vi)Where the contract is made by a company in excess of its powers as laid down in its Memorandum of Association Suit for injunction : Injunction is a court order or decree to a person asking him to refrain from doing a contemplated act or from continuing an ongoing act. Such an order of injunction becomes a remedy for the aggrieved party when the court orders the guilty party to refrain from doing precisely that which is causing the breach of contract. In a way, injunction is a mode of securing the specific performance of the negative terms of a contract. But for the performance of the positive terms of the contract, the aggrieved party may seek other remedies like damages. Q.3 Distinguish between indemnity and guarantee. Ans) Introduction Guarantees and indemnities are both long established forms of what the law terms suretyship. There are important legal distinctions between them. What is what? A guarantee is

Example of Guarantee An indemnity

Example of Indemnity

For a promise to someone that a third party will meet its obligations to them if they dont pay you, I will if they dont pay you, I will Is a promise to be responsible for anothers loss, and to compensate them for that loss on an agreed basis if it costs you more than 250 to fix that, I will reimburse you the difference.

Section 4 of the venerable Statute of Frauds Act 1677 requires guarantees to be in writing if they are to be enforceable. There is no such requirement in the case of an indemnity, although of course written agreement is always best as a matter of practice and for proof.Further, a guarantee provides for a liability co-extensive with that of the principal. In other words, the guarantor cannot be liable for anything more than the client. The document will be construed as a guarantee if, on its true construction, the obligations of the surety are to stand behind

the principal and only come to the fore once an obligation has been breached as between the principal and the financier. The obligation is a secondary one, reflexive in character. An indemnity however, provides for concurrent liability with the principal throughout and there is no need to look first to the principal. In essence it is an agreement that the surety will hold the financier harmless against all losses arising from the contract between the principal and the financier. It is not always obvious whether a clause or agreement is a guarantee or an indemnity. And an example... Some of the differences were highlighted by the Court of Appeal in the 2007 case Pitts and Ors v Jones. The appellants bringing the claim were minority shareholders in a company of which the other party was managing director and majority shareholder. The majority shareholder had negotiated the sale of the company to a purchaser who had agreed to buy the shares of the minority at the same price. The appellants were summoned to the sale completion meeting and were told that as part of the terms agreed their shares would be purchased after a delay of six months.On being made aware of the risk of the purchaser becoming insolvent within this period they declined to sign the documents but relented when the majority shareholder undertook verbally to pay if the purchaser failed to do so. The purchaser did subsequently become insolvent and could not pay for the minority shareholders shares, so they sued the majority shareholder on his undertaking to pay them.The Court of Appeal found that, while all the other necessary elements of a legally binding contract were present (offer, acceptance, consideration and the intention to create legal relations), the undertaking given to the minority shareholders was unenforceable since it was a guarantee and was not in writing.The minority shareholders lost the value of their shares and were left with no recourse. How to tell which is which Whether the security document is a guarantee or an indemnity (or both) is a matter of construction. There is a mass of case law on the distinction, but ultimately it comes down to the document in question. Considerations are as follows: The words used; the fact that one label or another is used is not determinative but it may demonstrate what the parties were attempting to achieve; Whether the document purports to make the surety liable for a greater sum than could be demanded under the principal contract, in which case the inference is that he is undertaking an obligation to indemnify; Whether a demand upon the principal debtor is defined as a condition precedent to proceeding against the surety in which case the document may well best be read as a guarantee; An indemnity comprises only two parties- the indemnifier and the indemnity holder. A guarantee is a contract between three parties namely the surety, principal debtor and the creditor. Summary Case law iterates the need to seek proper legal advice and at bare minimum, use a written agreement clearly stating the parties intentions. Append below some salient points pertaining to the difference/distinction between Indemnity and Guarantee: Indemnity Guarantee Comprise only two parties- the There are three parties namely the surety, indemnifier and the indemnity holder. principal debtor and the creditor Liability of the indemnifier is primary The liability of the surety is secondary. The surety is liable only if the principal debtor makes a default. The primary

The indemnifier need not necessarily act at the request of the indemnified. The possibility of any loss happening is the only contingency against which the indemnifier undertakes to indemnify.

liability being that of the principal debtor. The surety give guarantee only at the request of the principal debtor. There is an existing debt or duty, the performance of which is guarantee by the surety.

Q4. What is the distinction between cheque and bill of exchange. Ans) Checks and bills of exchange are negotiable instruments and have been used by many people worldwide for many decades. Understanding these two instruments would be a fundamental task for any person who wishes to undertake banking as a career or even a past time activity. What is a negotiable instrument? The term negotiable instrument literally means a written document transferable by delivery. It can be a promissory note, bill of exchange or check payable either to order or to a bearer What is bill of exchange? Many statutes have defined the bill of exchange as an instrument in writing containing an unconditional order , signed by the marker ,directing a certain person to pay a certain sum of money only to ,or to the order of , a certain person or to the bearer of the instrument. But, what is a check? In general, Negotiable instrument Act usually brings the definition for the check as follows; A Check is bills of exchange drawn on specified banker and not expressed to be payable otherwise than on demand and it includes the electronic image of a truncated check and a check in the electronic form By looking at these definitions it is possible to understand that the check being a species of the bill of exchange, it must satisfy almost all the essential features of a bill. Thus, it is clear that both instruments must be signed by the drawer and those contain an unconditional order to pay certain sum of money to the order of a specified person or the bearer. However, there are some significant differences between a check and a bill of exchange. These are, Cheque It is drawn on a banker It has three parties - the drawer, the drawee, and payee. It is seldom drawn in sets It does not require acceptance by the drawee. Days of grace are not allowed to a banker No stamp duty is payable on checks It is usually drawn on the printed form. Bill of Exchange It may be drawn on any party or individual. There are three parties - the drawer, the drawee, and the payee. Foreign bills are drawn in sets It must be accepted by the drawee before he can be made liable to pay the bill. Three days of grace are always allowed to the drawee. Stamp duty has to be paid on bill of exchange. It may be drawn in any paper and need not necessarily be printed.

Q5. Distinguish between companies limited by shares and companies limited by guarantee. Ans) A company limited by guarantee is a lesser known type of business entity which is generally formed by non-profit purposes and has members instead of shareholders. There are both some similarities and differences between the two groups. Members and shareholders enjoy limited liability, however in cases where a share based company is liquidated; the latter might be required to pay all amounts of unpaid monies relating to the shares they hold. For example, if an individual shareholder holds 100 shares of 1 each, all of which remains unpaid at the time of dissolution, then they would be required to pay 100 to the company. Most companies limited by guarantee have a constitution which states that each member is only required to pay 1 should it be dissolved. Assuming that an average shareholder holds more than one share in a company, members in a business limited by guarantee do appear to have less risk attached to their positions. Profit Making Status Perhaps the most fundamental difference between the two types of limited companies is that those with shares generally exist for profit making purposes. Companies limited by guarantee however, are non-profit making organisations and are usually registered to provide a specified service to the public or a particular segment of the population. The memorandum and articles of association of each would also differ as companies limited by shares usually have very general objects clauses which allow them to pursue any legal trade or activity. Objects of companies limited by guarantee Companies limited by guarantee however, often have very specific objects and detailed rules pertaining to which areas they can engage in. Charities, which are often of this type, might have restrictions imposed on them by their major donors who wish to ensure that their donations will be spent according to their wishes and not in a manner which they would not approve. By having a defined set of objects, companies limited by guarantee which are seeking to raise funds might find it easier to do so because they would be able to demonstrate that sufficient restrictions exist to protect the donors intentions. Removing the Word Limited Companies limited by guarantee can have the word limited removed from their name under section 30 of the Companies Act. Company directors, secretary and declarant Both types of companies are bound by the same requirements to have at least one director, a secretary and a declarant at the time of incorporation and throughout any period of its existence. Q6. What is the definition of cyber crime. Ans) INTRODUCTION: The term cyber crime is a misnomer. This term has nowhere been defined in any statute /Act passed or enacted by the Indian Parliament. The concept of cyber crime is not radically different from the concept of conventional crime. Both include conduct whether act or omission, which cause breach of rules of law and counterbalanced by the sanction of the state.Before evaluating the concept of cyber crime it is obvious that the concept of conventional crime be discussed and the points of similarity and deviance between both these forms may be discussed.

CONVENTIONAL CRIMECrime is a social and economic phenomenon and is as old as the human society. Crime is a legal concept and has the sanction of the law. Crime or an offence is a legal wrong that can be followed by criminal proceedings which may result into punishment. The hallmark of criminality is that, it is breach of the criminal law. Per Lord Atkin the criminal quality of an act cannot be discovered by reference to any standard but one: is the act prohibited with penal consequences. A crime may be said to be any conduct accompanied by act or omission prohibited by law and consequential breach of which is visited by penal consequences. CYBER CRIME Cyber crime is the latest and perhaps the most complicated problem in the cyber world. Cyber crime may be said to be those species, of which, genus is the conventional crime, and where either the computer is an object or subject of the conduct constituting crime Any criminal activity that uses a computer either as an instrumentality, target or a means for perpetuating further crimes comes within the ambit of cyber crime A generalized definition of cyber crime may be unlawful acts wherein the computer is either a tool or target or both The computer may be used as a tool in the following kinds of activity- financial crimes, sale of illegal articles, pornography, online gambling, intellectual property crime, e-mail spoofing, forgery, cyber defamation, cyber stalking. The computer may however be target for unlawful acts in the following cases- unauthorized access to computer/ computer system/ computer networks, theft of information contained in the electronic form, e-mail bombing, data didling, salami attacks, logic bombs, Trojan attacks, internet time thefts, web jacking, theft of computer system, physically damaging the computer system. REASONS FOR CYBER CRIME: Hart in his work The Concept of Law has said human beings are vulnerable so rule of law is required to protect them. Applying this to the cyberspace we may say that computers are vulnerable so rule of law is required to protect and safeguard them against cyber crime. The reasons for the vulnerability of computers may be said to be: Capacity to store data in comparatively small spaceThe computer has unique characteristic of storing data in a very small space. This affords to remove or derive information either through physical or virtual medium makes it much more easier. 1.Easy to access- The problem encountered in guarding a computer system from unauthorised access is that there is every possibility of breach not due to human error but due to the complex technology. By secretly implanted logic bomb, key loggers that can steal access codes, advanced voice recorders; retina imagers etc. that can fool biometric systems and bypass firewalls can be utilized to get past many a security system. 2.Complex- The computers work on operating systems and these operating systems in turn are composed of millions of codes. Human mind is fallible and it is not possible that there might not be a lapse at any stage. The cyber criminals take advantage of these lacunas and penetrate into the computer system. 3.Negligence- Negligence is very closely connected with human conduct. It is therefore very probable that while protecting the computer system there might be any negligence, which in turn provides a cyber criminal to gain access and control over the computer system. 4. Loss of evidence- Loss of evidence is a very common & obvious problem as all the data are routinely destroyed. Further collection of data outside the territorial extent also paralyses this system of crime investigation.

CYBER CRIMINALS: The cyber criminals constitute of various groups/ category. This division may be justified on the basis of the object that they have in their mind. The following are the category of cyber criminals1. Children and adolescents between the age group of 6 18 years The simple reason for this type of delinquent behaviour pattern in children is seen mostly due to the inquisitiveness to know and explore the things. Other cognate reason may be to prove themselves to be outstanding amongst other children in their group. Further the reasons may be psychological even. E.g. the Bal Bharati (Delhi) case was the outcome of harassment of the delinquent by his friends. 2. Organised hackersThese kinds of hackers are mostly organised together to fulfil certain objective. The reason may be to fulfil their political bias, fundamentalism, etc. The Pakistanis are said to be one of the best quality hackers in the world. They mainly target the Indian government sites with the purpose to fulfil their political objectives. Further the NASA as well as the Microsoft sites is always under attack by the hackers. 3. Professional hackers / crackers Their work is motivated by the colour of money. These kinds of hackers are mostly employed to hack the site of the rivals and get credible, reliable and valuable information. Further they are ven employed to crack the system of the employer basically as a measure to make it safer by detecting the loopholes. 4. Discontented employeesThis group include those people who have been either sacked by their employer or are dissatisfied with their employer. To avenge they normally hack the system of their employee. MODE AND MANNER OF COMMITING CYBER CRIME: Unauthorized access to computer systems or networks / HackingThis kind of offence is normally referred as hacking in the generic sense. However the framers of the information technology act 2000 have no where used this term so to avoid any confusion we would not interchangeably use the word hacking for unauthorized access as the latter has wide connotation. Theft of information contained in electronic formThis includes information stored in computer hard disks, removable storage media etc. Theft may be either by appropriating the data physically or by tampering them through the virtual medium. Email bombingThis kind of activity refers to sending large numbers of mail to the victim, which may be an individual or a company or even mail servers there by ultimately resulting into crashing. Data diddlingThis kind of an attack involves altering raw data just before a computer processes it and then changing it back after the processing is completed. The electricity board faced similar problem of data diddling while the department was being computerised. Salami attacksThis kind of crime is normally prevalent in the financial institutions or for the purpose of committing financial crimes. An important feature of this type of offence is that the alteration is so small that it would normally go unnoticed. E.g. the Ziegler case wherein a logic bomb was introduced in the banks system, which deducted 10 cents from every account and deposited it in a particular account. Denial of Service attack- The computer of the victim is flooded with more requests than it can handle which cause it to crash. Distributed Denial of Service (DDoS) attack is also a type

of denial of service attack, in which the offenders are wide in number and widespread. E.g. Amazon, Yahoo. 7. Virus / worm attacksViruses are programs that attach themselves to a computer or a file and then circulate themselves to other files and to other computers on a network. They usually affect the data on a computer, either by altering or deleting it. Worms, unlike viruses do not need the host to attach themselves to. They merely make functional copies of themselves and do this repeatedly till they eat up all the available space on a computer's memory. E.g. love bug virus, which affected at least 5 % of the computers of the globe. The losses were accounted to be $ 10 million. The world's most famous worm was the Internet worm let loose on the Internet by Robert Morris sometime in 1988. Almost brought development of Internet to a complete halt. 8. Logic bombs- These are event dependent programs. This implies that these programs are created to do something only when a certain event (known as a trigger event) occurs. E.g. even some viruses may be termed logic bombs because they lie dormant all through the year and become active only on a particular date (like the Chernobyl virus). 9. Trojan attacks- This term has its origin in the word Trojan horse. In software field this means an unauthorized programme, which passively gains control over anothers system by representing itself as an authorised programme. The most common form of installing a Trojan is through e-mail. E.g. a Trojan was installed in the computer of a lady film director in the U.S. while chatting. The cyber criminal through the web cam installed in the computer obtained her nude photographs. He further harassed this lady. 10. Internet time thefts- Normally in these kinds of thefts the Internet surfing hours of the victim are used up by another person. This is done by gaining access to the login ID and the password. E.g. Colonel Bajwas case- the Internet hours were used up by any other person. This was perhaps one of the first reported cases related to cyber crime in India. However this case made the police infamous as to their lack of understanding of the nature of cyber crime. 11. Web jacking- This term is derived from the term hi jacking. In these kinds of offences the hacker gains access and control over the web site of another. He may even mutilate or change the information on the site. This may be done for fulfilling political objectives or for money. E.g. recently the site of MIT (Ministry of Information Technology) was hacked by the Pakistani hackers and some obscene matter was placed therein. Further the site of Bombay crime branch was also web jacked. Another case of web jacking is that of the gold fish case. In this case the site was hacked and the information pertaining to gold fish was changed. Further a ransom of US $ 1 million was demanded as ransom. Thus web jacking is a process where by control over the site of another is made backed by some consideration for it. CLASSIFICATION: The subject of cyber crime may be broadly classified under the following three groups. They are1. Against Individuals a. their person & b. their property of an individual 2. Against Organization a. Government c. Firm, Company, Group of Individuals. 3. Against Society at large

The following are the crimes, which can be committed against the followings group Against Individuals: i. Harassment via e-mails. ii. Cyber-stalking. iii. Dissemination of obscene material. iv. Defamation. v. Unauthorized control/access over computer system. vi. Indecent exposure vii. Email spoofing viii. Cheating & Fraud Against Individual Property: i. Computer vandalism. ii. Transmitting virus. iii. Netrespass iv. Unauthorized control/access over computer system. v. Intellectual Property crimes vi. Internet time thefts Against Organization: i. Unauthorized control/access over computer system ii. Possession of unauthorized information. iii. Cyber terrorism against the government organization. iv. Distribution of pirated software etc. Against Society at large: i. Pornography (basically child pornography). ii. Polluting the youth through indecent exposure. iii. Trafficking iv. Financial crimes v.Sale of illegal articles vi.Online gambling vii. Forgery The above mentioned offences may discussed in brief as follows: 1. Harassment via e-mailsHarassment through e-mails is not a new concept. It is very similar to harassing through letters. Recently I had received a mail from a lady wherein she complained about the same. Her former boy friend was sending her mails constantly sometimes emotionally blackmailing her and also threatening her. This is a very common type of harassment via e-mails. 2. Cyber-stalkingThe Oxford dictionary defines stalking as "pursuing stealthily". Cyber stalking involves following a person's movements across the Internet by posting messages (sometimes threatening) on the bulletin boards frequented by the victim, entering the chat-rooms frequented by the victim, constantly bombarding the victim with emails etc. 3. Dissemination of obscene material/ Indecent exposure/ Pornography (basically child pornography) / Polluting through indecent exposurePornography on the net may take various forms. It may include the hosting of web site containing these prohibited materials. Use of computers for producing these obscene materials. Downloading through the Internet, obscene materials. These obscene matters may cause harm to the mind of the adolescent and tend to deprave or corrupt their mind. Two

known cases of pornography are the Delhi Bal Bharati case and the Bombay case wherein two Swiss couple used to force the slum children for obscene photographs. The Mumbai police later arrested them. 4. Defamation It is an act of imputing any person with intent to lower the person in the estimation of the right-thinking members of society generally or to cause him to be shunned or avoided or to expose him to hatred, contempt or ridicule. Cyber defamation is not different from conventional defamation except the involvement of a virtual medium. E.g. the mail account of Rohit was hacked and some mails were sent from his account to some of his batch mates regarding his affair with a girl with intent to defame him. 5. Unauthorized control/access over computer systemThis activity is commonly referred to as hacking. The Indian law has however given a different connotation to the term hacking, so we will not use the term "unauthorized access" interchangeably with the term "hacking" to prevent confusion as the term used in the Act of 2000 is much wider than hacking. 6. E mail spoofingA spoofed e-mail may be said to be one, which misrepresents its origin. It shows it's origin to be different from which actually it originates. Recently spoofed mails were sent on the name of Mr. Na.Vijayashankar (naavi.org), which contained virus. Rajesh Manyar, a graduate student at Purdue University in Indiana, was arrested for threatening to detonate a nuclear device in the college campus. The alleged e- mail was sent from the account of another student to the vice president for student services. However the mail was traced to be sent from the account of Rajesh Manyar. 7. Computer vandalismVandalism means deliberately destroying or damaging property of another. Thus computer vandalism may include within its purview any kind of physical harm done to the computer of any person. These acts may take the form of the theft of a computer, some part of a computer or a peripheral attached to the computer or by physically damaging a computer or its peripherals. 8. Transmitting virus/wormsThis topic has been adequately dealt herein above. 9. Intellectual Property crimes / Distribution of pirated softwareIntellectual property consists of a bundle of rights. Any unlawful act by which the owner is deprived completely or partially of his rights is an offence. The common form of IPR violation may be said to be software piracy, copyright infringement, trademark and service mark violation, theft of computer source code, etc. The Hyderabad Court has in a land mark judgement has convicted three people and sentenced them to six months imprisonment and fine of 50,000 each for unauthorized copying and sell of pirated software. 10. Cyber terrorism against the government organization At this juncture a necessity may be felt that what is the need to distinguish between cyber terrorism and cyber crime. Both are criminal acts. However there is a compelling need to distinguish between both these crimes. A cyber crime is generally a domestic issue, which may have international consequences, however cyber terrorism is a global concern, which has domestic as well as international consequences. The common form of these terrorist attacks on the Internet is by distributed denial of service attacks, hate websites and hate emails, attacks on sensitive computer networks, etc. Technology savvy terrorists are using 512-bit encryption, which is next to impossible to decrypt. The recent example may be cited of Osama Bin Laden, the LTTE, attack on Americas army deployment system during Iraq war. Another definition may be attempted to cover within its ambit every act of cyber terrorism.

A terrorist means a person who indulges in wanton killing of persons or in violence or in disruption of services or means of communications essential to the community or in damaging property with the view to (1) putting the public or any section of the public in fear; or (2) affecting adversely the harmony between different religious, racial, language or regional groups or castes or communities; or (3) coercing or overawing the government established by law; or (4) endangering the sovereignty and integrity of the nation 11. Trafficking Trafficking may assume different forms. It may be trafficking in drugs, human beings, arms weapons etc. These forms of trafficking are going unchecked because they are carried on under pseudonyms. A racket was busted in Chennai where drugs were being sold under the pseudonym of honey. Fraud & Cheating Online fraud and cheating is one of the most lucrative businesses that are growing today in the cyber space. It may assume different forms. Some of the cases of online fraud and cheating that have come to light are those pertaining to credit card crimes, contractual crimes, offering jobs, etc