[Commons-Law] Fwd: [technologylawforum] Are employers liable for the acts of their employees under section 79 of the IT Act?

[Vicky Shah]

---------- Forwarded message ----------
From: Nandkumar Saravade <nsaravade at gmail.com>
Date: May 30, 2006 10:15 AM
Subject: [technologylawforum] Are employers liable for the acts of their
employees under section 79 of the IT Act?
To: CLAW <cyberlaw-india at yahoogroups.com>, india-infosec at yahoogroups.com,
technologylawforum at yahoogroups.com

  Ticking quietly: a liability bomb
  IN CONVERSATION
  Vandana Gombar / New Delhi May 30, 2006


    India's cyber laws were put in place six years ago when the Information
Technology Act was passed. Most companies are still unaware of the strict
provisions of the law as the bazee.com case showed — the CEO of the company
was held responsible for, and arrested, for explicit content put up for
auction on his portal — and are thus exposed to serious liabilities, Pavan
Duggal, cyber laws expert and supreme court advocate, tells *Business
Standard*.     *What are the provisions of the Act that "all" companies — IT
and non-IT — need to comply with?*     The law mandates all companies to
have an information technology security policy. This documents the
architecture of the network, the roles and responsibility of employees,
security parameters and authorisation required for data access, among other
things. Only a handful of companies have such a policy in place.     Other
compliances that are required include relate to retention and authentication
of electronic records and security of data.     *Why are companies, large
and small, violating the law by non-compliance?*     They are ignorant about
the liabilities under the law. It takes a case like bazee to wake up people.
    *Apparently, even the bazee case has not woken up people?*     Seems so.
Almost 95 per cent of Indian firms are not storing electronic records as per
requirement of the IT law.     Further, any company providing a (computer)
network is liable for acts of omission and commission on the network, in its
capacity as a network service provider. All outsourcing (ITES) and IT
companies are network service providers too.     *If the breadth of the law
is so vast, how come there aren't many cases being filed?*     Numerous
cases are coming up but companies are settling them out of court. I have
personally advised many of them. The industry is yet to mature on
cyber-compliance. It is sitting on a liability bomb.     *Liability bomb?
Isn't that alarmist?*     This is not alarmist. This is objective reality.
Let me give you the example of a case. Personal enmity pushed a lady to send
malicious mail from an IP (Internet protocol) address which was traced to
HDFC Bank. The bank became part of the case simply because its network was
used to send mails.     *Can't HDFC Bank claim ignorance of what happened
and escape its liabilities (as allowed under Section 79)?*     It has to
either prove that it had no knowledge of any contravention or demonstrate
that it had exercised all due-diligence to prevent the commission of such an
offence.     Proving of non-knowledge is a very difficult challenge for any
company and since the law does not define what due-diligence is, this course
of action also has its own challenges. The onus is on the network service
provider to prove his innocence.     The case was ultimately settled out of
court.

http://www.business-standard.com/common/storypage.php?autono=92876&leftnm=5&subLeft=0&chkFlg=



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Warm Regards,

Vicky D. Shah
(+91) 9820105011
"Human Behavior is the Biggest Risk in Security"
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