LexSANJAY KUMAR KEDIA versus NARCOTICS CONTROL BUREAU & ANR.
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A SANJA Y KUMAR KEDIA v. NARCOTICS CONTROL BUREAU & ANR. DECEMBER 3, 2007 B [S.B. SINHA AND HARJIT SINGH BEDI, JJ.] Narcotic Drugs and Psychotropic Substances Act: 1985: C s. 37-Applicationfor bail-Companies providing network facilities/or arranging supply of banned psychotropic substance on line-Owner arrested u/ss. 24 and 29-Plea of applicant that his companies were protected from prosecution by s. 79 of Information Technology Act-Held: Applicant and his associates were not innocent D intermediaries or network service providers as defined under s. 79 of 1. T. Act but the said business was only a facade and comoujlage for more sinister activity-In this situation, s. 79 will not grant immunity to an accused who has violated provisions of the Act as this provision gives immunity from prosecution for an offence only under I. T. Act itself-In the face of overwhelming inculpatory evidence it is not E possible to give finding envisaged under s. 3 7 of the Act for grant of bail that there were reasonable grounds for believing that applicant was not guilty of offence alleged, or that he would not resume his activities should bail be granted-Information Technology Act, 2000- s. 79. F G CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 1659 of2007. From the Judgment and final Order dated 07.06.2007 of the High Court at Calcutta in CRM No. 5124 of 2007. K.T.S. Tulsi and Uday Umesh Lalit, Arun Kumar Srivasma, Manoj Prasad, Amit Pawan and G. Bhargava for the Appellant. Vikas Singh, ASG., B.B. Singh, Binu Tamta and Sushma Suri for H the Respondents. 812 SANJA Y KUMAR KEDIA v: NARCOTICS CONTROL 813 BUREAU [HARflT SINGH BED I, J.] The following Order of the Court was delivered by A ORDER HARJIT SINGH BEDI, J. 1. Special Leave granted. 2. The appellant Sanjay Kumar, Kedia, a highly qualified individual, set up two companies Mis. Xponse Technologies Limited (XTL) and B Mis. Xponse IT Services Pvt. Ltd. (XIT) on 22.4.2002 and 8.9.2004 respectively which were duly incorporated under the Indian Companies Act, 1956. On 1.2.2007 officers of the Narcotics Control Bureau (NCB) conducted a search at the residence and office premises of the appellant but found nothing incriminating. He was also called upon to appear before C the NCB on a number of occasions pursuant to a notice issued to him under Section 67 of the Narcotic Drugs and Phychotropic Substances Act, 1985 (hereinafter referred to as the "Act") and was ultimately arrested and the bank accounts and premises of the two companies were also seiz.ed or sealed. On 13.3.2007 the appellant filed an application for D bail in the High Court which was dismissed on the ground that a prima facie case under Sections 24 and 29 of the Act had been made out and that the investigation was yet not complete. The appellant thereafter moved a second bail application. before the High Court on 16.4.2007 which too was dismissed with the observations that the enquiry was at a critical stage E and that the department should be afforded sufficeint time to conduct its enquiry and to bring it to its logical conclusion as the alleged offences had widespread ramifications for society. It appears that a bail application was thereafter filed by the appellant before the Special Judge which too was rejected on 28.5.2007 with the observations that the investigation was F still in progress. Aggrieved thereby, the appellant preferred yet another application for bail before the High Court on 4.6.2007 which too was dismissed on 7 .6.2007. The present appeal has been filed against this order. 3. Notice was issued on the Special Leave Petition on 30.7.2007 G by a Division Bench noticing a contention raised by Mr. Tulsi that service providers such as the two companies which were intermediaries were protected from prosecution by Section 79 of the Information Technology Act, 2000. An affidavit in reply has also been filed on behalf of the H 814 SUPREME COURT REPORTS [2007] 12 S.C.R. A respondent - NCB and a rejoinder affidavit in reply thereto by the appellant. 4. We have heard learned cotinsel for the parties at length. 5. Mr. Tulsi has first and foremost argued that the allegations against B the appellant were that he had used the network facilities provided by his companies for arranging the supply of banned psychotropic substances on line but there was no evidence to suggest that the appellant had been involved in dealing with psychotro
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