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The problem of the year 2006

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The problem of the year 2006

PROBLEM

M/s. Fix Jinx Pvt. Ltd. (herein after referred to as “Fix Jinx”) is internet based company located in India, catering both to Indian and US companies specializing in providing call center services and incidental software programming and bug fixing. M/s. Problematic Solutions Plc. UK (herein after referred to as “Problematic”) is a multinational company with an annual turnover of 100 billion dollars. Problematic is the pioneer developer of the software called Office Tool and is the owner of the source code for the product and is the market leader in the field. Every year Problematic as a matter of company policy re-invests 15% of their annual turnover into research and development. Office Tools is the culmination of eight years of research and software development by Problematic at an estimated expenditure of more than UK £ 7,00,000/- to create the source code for the Office Tools software.

In 1997 Fix Jinx and Problematic entered into an Agreement for helping and advising call center users of Office Tools who experienced difficulty/problems in using the software. Apart from this Fix Jinx was to keep a watch and report cases of piracy of Office Tools and also to rectify errors in Office Tools being reported. Under the terms of the said agreement Fix Jinx was provided with the Office Tools source code, subject to the condition that any addition/alteration/reduction/modification(s) done by Fix Jinx to the Office Tools source code would be exclusively owned by Problematic Pvt. and further Fix Jinx had to treat all information provided as confidential and take all reasonable precautions to guard the same.

As per the work structure prevalent in M/s. Fix Jinx Pvt. Ltd., every project was worked upon by a previously approved team, which comprised of 15 employees of different ranks of Fix Jinx. One of the preconditions for working on the Problematic Project was that each of the 15 team members had to sign a detailed confidentiality agreement with both Fix Jinx and Problematic. Under the terms of the said confidentiality agreement inter-alia ownership all addition/alteration/reduction/modification(s) done to 

the source code would vest exclusively Fix Jinx, which in turn would vest in Problematic and all information received during the course of the project would be kept confidential. Further the Board of Fix Jinx had also signed a master confidentiality agreement with Problematic providing for damages in the event of breach of the confidentiality agreement by Fix Jinx or it’s employees.

On 01.02.2004 Mr. Rajnath Kumar (Herein after referred to as Mr. Kumar) joined Fix Jinx as a software engineer and was assigned to the team handling the Office Tools bug-fixing project. Consequently Mr. Kumar while working on the bug fixing project of the Office Tools source code, had access to the source code of Office Tools. A non disclosure agreement was executed between Mr. Kumar and Problematic on 13.2.2004 .

On 18.03.2004 Mr. Kumar had a heated argument with his project leader, as a consequence of which he temporarily stopped working on the Problematic project but was allowed access to his work station. For the next three days Mr. Kumar would come to office and during lunch break would remain back at his work station or at times when nobody was there, he would download files onto his laptop (as per office policy no employee was permitted to carry a laptop/portable hard drive etc to office). Mr. Kumar 

also frequently started to access his email from office, again an activity not permitted as per company policy. If someone would happen to see him and inquire what he was doing, he would casually reply that he was downloading some of his personal work or emailing some personal files to himself. Not thinking much of it, nobody reported the same to the higher authorities.

Mr. Kumar (intending to start his own software programming company, namely “Dhamaka.com”) resigned from Fix Jinx on 31.07.2004. On 01.05.2004 a call was received by the Managing Director of Problematic from the President of M/s. Computer Wares Pvt. Ltd. USA (competitor of M/s. Problematic Pvt Ltd) informing him that an individual by the name of Mr. Anderson had contacted the latter and stated that he was in possession of a software exactly similar to Office Tools and was willing to sell it to them. On receipt of the said information Fix Jinx on the instructions of Problematic filed a complaint on 20.05.2004 with the Economic Offences Wing (EOW) informing them that somebody maybe trying to illegally solicit their product/software and that the same should be investigated.

 EOW in cooperation with officials of Fix Jinx, Problematic, M/s. Computer Wares Pvt. Ltd. initiated a sting operation against Mr. Anderson, whereby an inspector of the EOW, representing himself to be the head of the software development at M/s. Computer Wares Pvt. Ltd., set up a meeting with Mr. Anderson, to purchase theOffice Tools source code. After elaborate negotiations/correspondence via email between the inspector and Mr. Anderson, on 13.04.2005 a meeting at the behest of Mr. Anderson was set up in Room No. 420 at the Blossom Hotel, Bikaner. Prior to the said meeting cameras and tape recorders were set up at strategic places in the room to record the entire sting operation. However no independent witnesses were summoned by the investigating agency, i.e EOW to witness the sting operation, the reason being that they tried but nobody was forthcoming.


The inspector was provided with a copy of the Office Tools source code with the instructions to compare the product being solicited by Mr. Anderson, with the Officials Tools software (if the two would match it would clearly amount to an offence of theft). Pursuant to the receipt of the software from Mr. Anderson and upon its comparison with the Office Tools source code they were found to be identical.

Mr. Anderson, upon being arrested disclosed his true identity as Mr. Kumar and was subsequently arrested for the commission of the Offences under Sections 379/406 IPC read with Section 66 of the Information Technology Act. Pursuant to his arrest Mr. Kumar whilst in police custody made a complete disclosure of his modus operandi, i.e. how he copied the Office Tools source code on to CD’s and thereafter wrote to many computer firms in America with an intent to sell the said source code to the highest bidder. However Mr. Kumar upon being released on bail (after a period of 60 days) immediately retracted his confession stating it to have been made under coercion and duress.

Vide order dated 31.06.2005 charges under Sections 379/406 IPC and Section 66 of the Information Technology Act (I.T. Act) the were framed against Mr. Kumar by the Ld. Metropolitan Magistrate. Immediately thereafter Fix Jinx (Original Complainant) moved an application under Section 216 Cr.P.C. seeking amendment of the charge, i.e addition of Section 63 of the Copyright Act, 1957 and the same was allowed.

Vide Judgment and Order on Sentence dated 28.12.2005 Mr. Kumar was convicted for the following

  1. For the commission of the offences under Sections 379 and 406 IPC Mr. Kumar was sentenced to undergo simple imprisonment for a period of 2 years respectively, 

  1. For the commission of the offence under Section 66 of the I.T. Act Mr. Kumar was sentenced to undergo simple imprisonment for a period of two years and directed to pay a fine of Rs. 1,50,000/- to Fix Jinx.
  2. For the commission of the offence under Section 63 of the Copyright Act Mr. Kumar was sentenced to undergo simple imprisonment for a period of one year and also directed to pay a fine of Rs. 1,50,000/- to Fix Jinx. 

(All three sentences were to run concurrently and in case of failure to pay the fine, Mr. Kumar would have to undergo simple imprisonment for 6 months.) 
Aggrieved by the Judgment and Order on Sentence dated 28.12.2005, Mr. Kumar preferred an appeal against the same before the Hon’ble High Court on the following grounds.

Grounds of Appeal

  1. Whether confidential information allegedly stolen by Mr. Kumar constitutes ‘moveable property’ and thereby falls within the ambit of Section 379 IPC to constitute theft?
  2. Whether in the absence of any independent witness(es) can the video and audio recording have any evidentiary value? 
  3. Whether the charge could be amended in view of the fact that the Complaint was not filed under Section 63 of the Copyright Act? Further whether the Original complainant has any locus to file an application seeking amendment of the charge. 
  4. Whether the judicial confession of Mr. Kumar is binding upon him? What is the evidentiary value of such a statement? 
  5. Whether the defence that the said product/software was a creation of his own ingenuity and labor, being a defence of civil law be applicable in a criminal prosecution?

* * * * * * Extract of Confidentiality Agreement: a) consultant shall use the information solely for the purpose  of providing consulting services (b) consultant shall hold the information in confidence and shall not sell, assign, transfer or otherwise disclose the information or materials derived therefrom, to any third party without the prior written consent of Problematic Pvt Ltd  shall employ at least the same degree of care to protect the secrecy and confidentiality of the information as it uses to protect its own confidentiality and proprietary information and materials, c) consultant shall not commercially exploit the information, or any information or materials derived  there from, without  the prior written consent of M/s. Problematic Pvt Ltd  d)  Consultant shall make  no public announcement  or disclosure concerning  the information or this agreement  beyond the disclosures authorized  hereunder without the prior written consent of Problematic Pvt Ltd.