Will Section 66A finally be laid to rest?

Last Monday, the Supreme Court of India said it was “shocked” that police across the country continue to charge people under Section 66A of the Information Technology Act, a law it struck down as unconstitutional in March 2015. “You file a counter as it is a shocking state of affairs,” Justice Rohinton Fali Nariman told Attorney General KK Venogopal, who sought two weeks to reply.

supreme court

Will 2021 be the year that Indians are finally freed from the clutches of this atrocious “zombie law”?

The life, death and rebirth of one of India’s worst laws

On November 18, the police registered a first information report against two young women from Palghar, a town near Mumbai, over a Facebook post criticising the forced shutdown of Mumbai owing to Shiv Sena founder Bal Thackeray’s death.

One of the women, 21-year-old Shaheen Dhada, had written the post while her friend, 20-year-old Rinu Srinivasan, had simply ‘liked’ it. The case was registered on a complaint filed by Bhushan Sankhe, the Shiv Sena’s president in Palghar.

Later that day, a mob of 30 to 40 people vandalised a hospital in Palghar owned by Dhada’s uncle. Dhada was called to the police station for questioning and kept there overnight.

The next morning, she and her friend were arrested.

The police initially charged them under Section 295A of the Indian Penal Code (deliberate and malicious acts intended to outrage feelings of any class by insulting its religion or religious beliefs).

However, they were later also booked under Section 66A of the IT Act.

This law, introduced via an amendment in 2009, penalised the sending, through a computer or any other communication device, content that is:

  • grossly offensive;
  • false in the knowledge of the sender but deliberately sent to cause annoyance, inconvenience, danger, obstruction, insult, injury, criminal intimidation, enmity, hatred or ill will;
  • sent to deceive or mislead the recipient about the origin of the message.

The ambiguous wording allowed for changeable interpretation by law enforcement, and with a maximum sentence of three years in prison, the law quickly became a handy tool of harassment.

A few days after Dhada and Srinivasan were arrested, about 1,400 km away in Delhi, senior lawyer Manali Singhal sat down to dinner with her 24-year-old daughter Shreya, who was studying law. The two discussed the arrest of the two women and the charges against them.

Manali Singhal later recounted to The Times of India: “As it often happens at home, a discussion turned into a debate and an argument. I asked her: if you are so concerned, why don’t you file a PIL? Two days later she had the first draft ready. She had worked on it with a lawyer.”

Shreya Singhal filed her petition in the Supreme Court that month. It was followed by similar challenges to the law from non-governmental organisations (NGOs) such as the People’s Union for Civil Liberties and Common Cause, and companies such as Mouthshut.com.

A month later, as Members of Parliament voiced concern over the spate of arrests over social media posts, the government said it would issue an advisory to prevent the law from being misused.

The government’s advisory, issued on January 9, 2013, said nobody could be arrested under Section 66A without the approval of senior police officers. The Supreme Court directed all states and union territories to comply with it.

It was, in retrospect, a sign of things to come.

Just over two years later, on March 24, 2015, the Supreme Court struck down Section 66A as unconstitutional in what has been termed one of the most important judgements on free speech not just in India but anywhere in the world: Shreya Singhal vs Union of India.

Her name was to go down in the history books, but Singhal didn’t forget the reason why she had taken on the might of the state—and won.

“I spoke to Singhal in the morning before the verdict was to be announced. It was a happy moment for us when the court scrapped the provision,” Srinivasan, then a freshly minted audio engineer, told reporters on the day of the verdict.

Back from the dead

backfromthedead

In an ideal world, this would have been the death of Section 66A. But like the villain in a C-grade flick, it has not just survived a hail of bullets to the chest but now has its hands around the hero’s neck.

PUCL’s petition—the one that shocked the Supreme Court on Monday—said police across the country had registered 1,307 cases under Section 66A after the Shreya Singhal judgment. As of March 2021, 745 cases were still pending before district courts in 11 states, it said.

  • Police in Maharashtra had filed 349 cases under Section 66A before it was scrapped. They have filed another 381 since.
  • The Uttar Pradesh police, which had filed just 22 such cases before March 2015, filed 245 after the law was scrapped.
  • In Jharkhand, 43 cases were filed before the judgement and 291 after, and in Rajasthan, 75 and 192.

The data was from the Internet Freedom Foundation, which has been campaigning against Section 66A and other such “legal zombies”—laws have been declared invalid but are still being used by the police.

If that’s not dystopian enough for you, consider what Attorney General KK Venugopal said when the Supreme Court asked him why the police continue to charge people under Section 66A. “If your lordships see the IT Act book, there is only a small asterisk and a footnote that says ‘deleted by order of the Supreme court’. No one reads the footnote,” he said.

Or the news, apparently.

For as recently as January 2019, the Supreme Court had threatened to jail any official who continued to prosecute and harass people using Section 66A. The court issued a notice to the union government after the petitioner—PUCL once again—alleged that at least 22 fresh cases had been registered under Section 66A in various states since the law was junked, and that old cases had not been scrapped either.

So what now?

The world has changed a lot in the past six years. For one, India’s ranking on the World Press Freedom Index fell six places from an already abysmal 136 (out of 180) in 2015 to a truly tragic 142 this year. That’s two places below Myanmar, a country in the grip of a genocidal junta.

But on Monday, the Supreme Court of India offered an increasingly rare glimmer of hope.

“We will do something,” Justice Rohinton Fali Nariman assured PUCL, before giving the union government two weeks to respond.

Let’s move on to the other big developments of the week.


IPOs, IPOs, IPOs

Zomato: Zomato Ltd. will launch its three-day initial public offering (IPO) on July 14, making the online food aggregator one of the first Indian startup unicorns to list on the national stock exchanges.

Zomato IPO

The Gurugram-headquartered company is looking to raise as much as Rs 9,375 crore by issuing fresh stock and via an offer for sale at Rs 72-76 per share. It is likely to be valued at nearly $9 billion at the upper end of this price band. For more details, click here.

  • Zomato’s revenue fell by nearly a quarter year-on-year to Rs 1,994 crore in FY21, according to the company’s red herring prospectus. Losses, however, narrowed from Rs 2,363 crore in FY20 to Rs 812 crore in FY21.

But “if you take out the impact of the first one or two quarters, our businesses are growing now, and are healthy from an economic standpoint… and that will reflect in upcoming quarters”, CFO Akshant Goyal said while announcing the Zomato IPO on Thursday.

Also Read: ETtech IPO Watch | How Zomato’s cap table has evolved

Paytm: Senior Paytm executives have resigned from the digital payments company ahead of its highly anticipated initial public offering (IPO), a draft red herring prospectus for which is likely to be filed in the coming week.

Paytm

Those who are exiting the fintech startup are:

  • President Amit Nayyar
  • Chief HR officer Rohit Thakur

According to a source, three other vice presidents at Paytm have also put in their papers. ET could not independently verify the names of these executives.

The move comes days after the company reshuffled its board.

At $2.3 billion, Paytm’s IPO would be India’s third largest in dollar terms after Coal India Ltd. in 2010 and Reliance Power in 2008. The Noida-based firm is bullish on investor demand for its shares, which is why it has retained an oversubscription option worth $400 million.

Also Read: Paytm and the art of going public

Ola: Ride-hailing firm Ola has brought on board a new investor and seen an existing one increase its stake ahead of the company’s potential IPO. Ola did not disclose its latest valuation.

Ola founder Bhavish Aggarwal

Ola founder Bhavish Aggarwal

Temasek Holdings, the Singapore government’s investment fund, Warburg Pincus bought have bought shares in a $500 million secondary round from early backers Tiger Global and Matrix Partners India, which together held 13-15% in the ride-hailing firm.

  • Bhavish Aggarwal, founder of Uber’s homegrown rival, also participated in the round.
  • Singapore-based Fort Canning Investments is also joining the company’s cap table.

Temasek has been an investor in Ola since 2018 while Warburg Pincus is a new investor. The mobility firm’s other investors include SoftBank (22% stake) and China’s Tencent (9% stake), according to Tracxn data.

Mobikwik: The digital payments company is planning to raise $250-$300 million through an initial public offering (IPO) and is set to file a Draft Red Herring Prospectus (DRHP) with the capital markets regulator within a week, sources said.

Mobikwik completed the paperwork on Thursday and could file it with the Securities and Exchange Board of India (Sebi) soon, a person aware of the matter said.

“It’s a matter of days,” the person said.

Pharmeasy: The country’s largest online pharmacy is in talks with Japan’s SoftBank to lead its $500 million funding round at a valuation of at least $5.6 billion, Bloomberg reported. The Masayoshi Son-led company may pitch in $150-200 million.

The company is targeting a listing in the next 12 to 18 months.

The move comes days after Pharmeasy sealed a deal to acquire diagnostics firm Thyrocare Technologies Ltd.—the first takeover of a listed Indian firm by an Indian unicorn—and then raised $300 million in a Series F round.


New IT minister, old rhetoric

Ashwini Vaishnaw

IT Minister Ashwini Vaishnaw with PM Narendra Modi

Ashwini Vaishnaw is picking up from where Ravi Shankar Prasad left off, as far as taking on Twitter is concerned.

The newly appointed union minister for electronics and information technology, telecom and railways shot off a warning to the company soon after taking charge.

“Law of land is supreme, Twitter must follow the rules,” he said.

A graduate of IIT Kanpur and Wharton School, Pennsylvania, Vaishnaw was a 1994 batch IAS officer of the Odisha cadre who served in the government until 2008. A native of Jodhpur, Rajasthan, he is currently a Rajya Sabha MP from Odisha.


India IT rules: What’s the latest on social media?

WhatsApp Facebook

WhatsApp, the world’s largest messaging service, will put on hold implementation of its updated privacy policy in India until the country’s data privacy laws come into effect.

It’s a voluntary move, WhatsApp counsel Harish Salve told the Delhi High Court on Friday.

  • “In our case there is no statutory regulator, it’s the government who administers the rules. The government looked at this (privacy policy) and said ‘sorry, you can’t do this’, and we said ‘very well, we will wait for the private data (protection) bill’,” the senior advocate told the court.

Twitter told the Delhi High Court it plans to release its first monthly compliance report—for May 26 to June 25—on or before July 11, in accordance with India’s revised IT rules.

As far as appointments of key personnel are concerned, Twitter said:

  • An offer is in the works for an interim resident grievance officer.
  • An interim chief compliance officer was appointed on July 6.
  • An interim nodal contact person will be appointed in the next two weeks.

The company will endeavour to formally fill all three positions with its own employees within the next eight weeks, it told the court.

Also Read: Facebook taking significant steps to comply with IT rules: Ajit Mohan


Startups raise the roof in 2021

Indian startups raised $12.1 billion from venture capitalists and private equity firms in the first half of 2021, data compiled by Venture Intelligence showed.

That’s $1 billion more than they raised in all of 2020.

  • 2018: 747 VC deals totalling $10.8 billion
  • 2019: 873 deals totalling $13 billion
  • 2020: 764 deals totalling $11.1 billion
  • Jan-June 2021: 382 deals totalling $12.1 billion

More funds have lined up to back startups owing to the increased adoption of digital across businesses following the pandemic, venture capitalists, entrepreneurs and industry insiders said.

Also Read: Unicorns, soonicorns on a hiring spree as Covid-19 accelerates digital adoption


Other Top Stories

More time for deliberation: Following concerns raised by top etailers, the government has extended the deadline to July 21 for feedback on proposed changes for ecommerce in India. The original deadline was July 6 and the draft was made public on June 21.

TCS’ Q1 performance: Tata Consultancy Services (TCS) reported a 28.5% increase in first quarter profit to Rs 9,008 crore while revenue rose by 18.5% to Rs 45,411 crore even as the virulent second wave of the pandemic hammered the growth of its business in the domestic market.

Trillion-dollar SaaS: India’s software-as-a-service (SaaS) industry has the potential to be valued at $1 trillion and employ 500,000 people by 2030, rivalling the country’s large IT services industry, according to a report by SaaSBoomi, a collective of SaaS and product company founders.

Banks & Crypto: Many cryptocurrency traders, shut out of the Indian crypto market by local banks, are now being restrained from buying virtual currencies from overseas markets. ICICI Bank is telling customers remitting funds to invest abroad to give a declaration that the money will not be used to buy Bitcoin or other cryptocurrencies.

Reprieve for Oyo: In a major setback to scores of hoteliers who had filed claims, the National Company Law Appellate Tribunal (NCLAT) has allowed Oyo’s application to withdraw insolvency proceedings against its subsidiary, Oyo Hotels & Homes Pvt. Ltd.

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