Sanjay Kumar Kedia v. Narcotics Control Bureau & Anr.
(2008) 2 SCC 294
In the Supreme Court of India
Crl. A. 1659/2007
Before Justice S B Sinha and Justice H S Bedi
Decided on December 03, 2007

Relevancy of the case: Liability of intermediaries in arranging the supply of banned psychotropic substances online

Statutes and Provisions Involved

• The Information Technology Act, 2000 (Section 79)
• The Narcotic Drugs and Psychotropic Substances Act, 1985 (Sections 8, 24, 29, 37, 67)

Relevant Facts of the Case

• The appellant set up two companies.
• The Narcotics Control Bureau (NCB) searched his residence and offices but found nothing incriminating.
• The court asked him to appear before the NCB several times pursuant to notice issued under Section 67 of the Narcotic Drugs and Psychotropic Substances (NDPS) Act, 1985.
• The police finally arrested the appellant. His bank accounts and the two companies were also seized or sealed.
• The appellant filed several applications for bail before the Special Judge and the High Court, which were dismissed.
• The present appeal is against the final order.
• The allegations were that he used his company’s network facilities for arranging the supply of banned psychotropic substances online and that the companies designed, developed, hosted pharmaceutical websites using huge quantities of Phentermine and Butalbital distributed in the United States.

Prominent Arguments by the Advocates

• The petitioner’s counsel submitted that the two drugs that the appellant had allegedly arranged for supply, phentermine and butalbital, are not in Schedule I of the Narcotic Drugs and Psychotropic Substances Rules, 1985. The United States’ Control Substances Act recognises them as having a low potential for misuse and it is possible to obtain them with a written or oral prescription. Therefore, the supply of these drugs does not fall under Section 24 of the NDPS Act, 1985. Further, the companies are intermediaries and would get protection under Section 79 of the Information Technology Act, 2000.
• The respondent’s counsel argued that the aforesaid drugs are in the Schedule of the list of psychotropic substances appended in the NDPS Act, 1985 (at Srl. Nos. 70 and 93). Further, the charges against the appellant were under Sections 24 and 29 of the NDPS Act, 1985, which states that a person can be guilty without personally handling a psychotropic substance. The evidence shows that the appellant was a facilitator between buyers and certain pharmacies owned or controlled by him. Thus, Section 79 of the Information Technology Act, 2000 cannot guarantee immunity for such actions.

Opinion of the Bench

• The court believed that the appellant and his associates are not innocent intermediaries or network service providers under Section 79. The said provision does not grant immunity to an accused who has violated the provisions of the NDPS Act, 1985. It only gives immunity from prosecution for offences under the Information Technology Act, 2000.
• In the face of inculpatory evidence, it is not possible to grant bail under Section 37 of the NDPS Act, 1985.

Final Decision

• Bail application rejected.
• Appeal dismissed.

This case summary has been prepared by Mehula Liza Pallathu, an undergraduate student at the National University of Advanced Legal Studies, Kochi, during her internship with The Cyber Blog India in May/June 2021.