Column: Legal

LEGAL
Going By The Book

Hacking is a crime punishable under the Information Technology Act, 2000, with imprisonment of up to three years or a fine of up to Rs 2 lakh, or both.

By Diljeet Titus, Titus & Co. Advocates

I work for a counselling centre and our organisation's e-mail account has been hacked into. This e-mail account contains confidential information on our patients. The hacker has threatened to forward the information to interested outsiders. What legal recourse does our centre have?

Hacking is a crime punishable under the Information Technology Act, 2000, which could result in imprisonment up to three years or fine up to Rs 2 lakh, or both. A person is said to have committed the offence of hacking when with intent to cause or knowing that he is likely to cause wrongful loss or damage to the public or any person, he destroys, deletes or alters any information in a computer resource or diminishes its value or utility or affects it injuriously by any means. Further, if the hacker has been threatening your centre so as to force it to provide him with any property or valuable security, he is also liable under the Indian Penal Code for extortion. Your counselling centre should file a complaint of the incident of hacking and the related threats with the Cyber Crime Wing/Deputy Superintendent of Police of the police station where your centre is located. You may also consider using the services of a cyber-detective to track the origin of the hacker on your system.

Our joint venture partner is misusing our trademarks in breach of the Trademark Licence Agreement that exists between us. We intend to obtain an injunction to restrain further misuse of our trademarks. The Licence Agreement provides for arbitration in India under Indian laws. Can the arbitrators pass an injunction in our favour?

The Arbitration and Conciliation Act, 1996, allows wide discretion to an arbitral tribunal to provide interim measures of protection as it may consider necessary. These interim measures include all those measures that the parties themselves could have achieved by agreement, including protection of trade secrets and proprietary information. In the case of Govind Prasad Agarwal Vs Bhurelalji Agarwal, 1994(2) Arb LR 103 (DB) (MP), a division bench of the Madhya Pradesh High Court has held that the arbitrators can injunct or restrain. As protection of your trademarks would be the focal point of your License Agreement, the arbitrators can pass an injunction in your favour restraining your joint venture partner from further misuse of your trademarks. However, as you could lose valuable time initiating arbitration getting the arbitral tribunal constituted, and hear your application for injunction, it may be worthwhile to invoke the court's jurisdiction and request an injunction pending arbitration.

As promoters of a private limited company, we wish to enter into an agreement in the company's name before its incorporation. What safeguards should be adopted to ensure enforceability of the agreement against and by the company after its incorporation?

Under Indian law, an agreement entered into by the promoters of a company before its incorporation can be specifically enforced by or against the company if the agreement is entered into for the purpose of the company and is warranted by the terms of its incorporation, for example, by inclusion in its memorandum or articles of association. The company should, on its incorporation, accept the agreement by a resolution of its shareholders and/or directors, assenting to be bound by the agreement and all actions taken by its promoters on its behalf prior to incorporation. Thereafter, the company should communicate such acceptance to the other contracting parties. Alternatively, as promoters, you can enter into the agreement as trustees for the proposed company on the condition that on incorporation of the company, you will cause the company to enter into an agreement on the same terms and conditions or assign the agreement to the company post incorporation, whereupon the original agreement would cease.

The view expressed here should not be construed as legal opinion and is for reference only. Business Today and/or the author will not be responsible for any decision taken by readers on the basis of these views. Please send in your queries to legal.bt@intoday.com or Going By The Book, c/o Business Today, F-26, Connaught Place, New Delhi-1

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