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Indian Cyberlaw: Liability of CIOs

Indian Cyberlaw: Liability of CIOs

Does the CIO really need to take into consideration the Information Technology Act, 2000 and rules made there under?

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Summary:

Does the CIO really need to take into consideration the Information Technology Act, 2000 and rules made there under?

Highlights:

  • Today’s CIOs have to ensure compliances with the parameters of the Information Technology Act, 2000.
  • Today’s CIOs need to be extremely alive and aware of the legalities impacting the use of computers, computer systems, computer networks, computer resources and communication devices.

Indian IT act: Cyber Law April 2012 is the first anniversary of the coming into force of extremely significant rules which impact the use of computers, computer systems, computer networks, computer resources and communication devices.

The Information Technology Rules, 2011 were enacted and implemented in April, 2011. Does the CIO really need to take into consideration the Information Technology Act, 2000 and rules made there under? Should CIOs be really concerned with legal aspects concerning use of computers, computer systems, computer networks, computer resources and communication devices? The answers to all these questions is a resounding yes.  Today’s CIOs need to be extremely alive and aware of the legalities impacting the use of computers, computer systems, computer networks, computer resources and communication devices.  CIOs today cannot say that the legalities concerning computers, computer systems, computer networks, computer resources and communication devices have to be looked after only by the company’s legal department.  On the contrary, a CIO is an integral element of the mindshare that has to be applied in the direction of ensuring compliances with the law. 

Today’s CIOs have to ensure compliances with the parameters of the Information Technology Act, 2000.  The Information Technology Act, 2000 as amended by the Information Technology (Amendment) Act, 2008 has put a tremendous focus on compliances. These compliances have become more critical and important in today’s context. Information Technology Rules, 2011 have further reinforced the need for consistent compliances by companies. 

The immediate downside of non-compliances is potential exposure for the company and its top management to two different kinds of liability for top management. The first exposure is liability of a civil nature which will expose a company’s top management to the liability of paying potential damages by way of compensation of up to Rs 5 crore per contravention. 

The second exposure that the company’s top management needs to be ready for is exposure to potential criminal consequences. The law of the land is very clear: If a contravention is committed by a company, then every person responsible for running its affairs shall be deemed to be guilty of the said offence and are liable for punishment accordingly.  Of course, it will still be up to the top management to escape liability if they are able to show that the said contravention happened without their knowledge or that despite the exercise of due diligence they still could not prevent the commission of any contravention under the law. The exposure to potential criminal consequences for the top management could include imprisonment ranging from three years to life imprisonment and a fine ranging from Rs 1 lakh to Rs 10 lakh under various provisions of Chapter XI of the amended Information Technology Act, 2000. 

Today, CIOs have to insist that their companies are compliant with the provisions of the Information Technology Act, 2000 and rules and regulations made there under.  Compliance, compliance and compliance is the only way forward for achieving CIO nirvana.  

Pavan Duggal is an expert on cyberlaw and is a practicing advocate, Supreme Court of India.

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