The Hindu : National : Network firms can be punished: court

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Wednesday, Dec 05, 2007
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Network firms can be punished: court

J. Venkatesan

New Delhi: Facilitating online purchase of banned drugs or psychotropic substances by networking companies, including BPOs (business process outsourcing), is an offence punishable under the Narcotic Drugs and Psychotropic Substances Act, the Supreme Court has held.

A person could be held guilty under the NDPS Act even without personally handling a psychotropic substance by merely acting as a facilitator between the buyer and the seller, said a Bench of Justice S.B. Sinha and Justice H.S. Bedi.

The Bench rejected the contention that network facilities provided by such companies for arranging the supply of banned psychotropic substances online could not be put against them as they were not involved in dealing with psychotropic substances or engaged/controlled in any such trade.

In the instant case Sanjay Kumar Kedia, who was highly qualified, set up two network companies. He was arrested for facilitating the purchase and sale of narcotic drugs. His bail plea was rejected by the Calcutta High Court. The present appeal is directed against this order. Seeking to quash the impugned order, the appellant argued that the companies were mere network service providers and that they were protected under Section 79 of the Technology Act from any prosecution. He prayed for grant of bail.

Dismissing the appeal, the Bench said “it is clear from the Schedule of the NDPS Act that the two drugs ‘Phentermine’ and ‘Butalbital’ are psychotropic substances and therefore fall within the prohibition contained in the Act.”

Writing the judgment Justice Bedi said “we find that the appellant and his associates were not innocent intermediaries or network service providers as defined under Section 79 of the Technology Act but the said business was only a façade and camouflage for more sinister activity.

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