Lakshmi Narayan v. State of Karnataka
In the High Court of Karnataka
Criminal Petition 6828/2016
Before Justice John Michael Cunha
Decided on August 28, 2019

Relevancy of the case:  Quashing an FIR filed by a company for corporate data theft after relieving an employee

Statutes & Provisions Involved

• The Information Technology Act, 2000 (Section 43, 65, 66B, 72A)
• The Indian Penal Code, 1860 (Section 408, 420)

Relevant Facts of the Case

• The petitioner was the director of Lead Consultancy and Engineering Services [India] Pvt. Ltd.
• He tendered resignation on 01.08.2016 and the same was accepted by the Board on 30.08.2016. He was relieved on 31.08.2016.
• The relieving letter produced by the petitioner indicates that he was relieved subject to the realization of two post-dated cheques and it was specifically observed that no other payments were due from both sides and the said cheques were issued in a full settlement in all respects.
• The relieving letter on the face of it indicates that it was satisfied that no dues were pending against the company, the petitioner was relieved as the director of the second respondent company.
• Petitioner has also produced an acknowledgement for having returned the articles taken by him from the second respondent company which is counter-signed by the concerned representative of the company.
• The said document is not disputed by the second respondent, which indicates that the articles namely Mack book Air 1 number, peripherals 1 set, Mack book Air case 1 number, HP inkjet printer 1 number, stapler 1, punching machine 1 and calculator 1 were handed over by him before being relieved from the company.
• If the petitioner had retained any laptop or any other articles belonging to the company, the same could have been mentioned in the said letter and full settlement would not have been recorded in the relieving letter issued to the petitioner.

Prominent Arguments

The respondent’s counsel:

• It has been submitted by the second respondent company in their complaint that the misappropriation was done by the petitioner while he was handing over the charges on 31.08.2016. The laptop issued to the petitioner is used by him exclusively, and no other employee was authorized to use/operate for any purpose as it was under his custody. Also, data was illegally stolen by him or deleted by him with the intention to cause huge loss to the company. The company was unable to continue the seamless service to the customers due to the loss of data. This has resulted in the company to become a handicap and which has immediate business loss over 5 crores.

Opinion of the Bench

• The manner in which these allegations are levelled against the petitioner indicates that solely out of spite and vindictiveness, the criminal process is set in with malafide motive. In the circumstances of the case, even assuming that the petitioner has caused any loss to the company, the same could be recovered by the company by filing a civil suit. The same does not furnish a cause of action to initiate criminal action against the petitioner.
• The allegations made in the complaint, even if accepted as true, do not prima facie make out the ingredients of a criminal offence, much less under Sections 65, 43, 66B, and 72A of the Information Technology Act, 2000 and under Sections 420 and 408 of the Indian Penal Code, 1860.
• In that view of the matter, the criminal process initiated against the petitioner being illegal and abuse of process of Court, cannot be sustained.

Final Decision

• The FIR against the petitioner and the consequent investigation are quashed.

This case summary has been prepared by Mansi Vats, an undergraduate student at UPES School of Law, Dehradun, during her internship with The Cyber Blog India in June/July 2020.