B.N. Firos v. State of Kerala & Ors.
RANJAN GOGOI, J. 1. The appellant–B.N. Firos – proprietor
of Comtech IT Solutions, Thiruvananthapuram had filed a Writ Petition
challenging a Notification dated 27 th December, 2002 issued under Section
70(1) of the Information Technology Act, 2000 (hereinafter referred to
as “I.T. Act”) declaring the computer, computer system and computer
network specified in the Schedule to the Notification to be “protected
systems” under the I.T. Act. The vires of Section 70 of the I.T. Act
itself was also challenged. The Writ Petition was dismiss ed. The said
order of dismissal has been affirmed in writ appeal by a Division Bench
of the High Court and the review filed there against has a lso been
dismissed. Aggrieved, this appeal(s) has been filed.
2. The brief facts that will be required to be noticed are as follows:
In the writ/original petition filed by the appellant before the High
Court it is stated that the appellant is the proprietor of Comtech IT
Solutions, an Information Technology concern which is a member of
Microsoft Developer Forum, a professional group of d evelopers
technically supported and guided by the Microsoft Corporation (India)
Pvt. Ltd.
3. In the year 1999, the 1 st respondent – State of Kerala through
the 4 th respondent – Centre for Development of Imaging Technology
(C-DIT), Thiruvanthapuram, a Total Solution Provider (TSP), had
conceptualized a single window multiple agency bill collection system.
The project was called “FRIENDS” (i.e. Fast, Reliable Instant, Efficient,
Network for Disbursement of Services). According to the appel lant –
writ petitioner, Microsoft Corporation of India (Pvt.) ltd. (hereinafter
referred to as “Microsoft”) had offered to provide the Application
Software and System Software free of cost for the pilot pr oject. The
appellant – writ petitioner, being a member of the Microsoft Developer’s
Forum, was required by Microsoft to carry out the system study and to
develop the pilot project for the “FRIENDS” project.
B.N. FIROS v. STATE OF KERALA & ORS.
4. After completion of the preliminary work, Microsoft placed
orders with the appellant on 23 rd May, 2000 pursuant to which the
Software developed by the appellant was handed over to the 4 th
respondent and the Software was implemented as a pilot project at the
first FRIENDS Centre at Palayam, Thiruvanthapuram in June 2000. As
the said project was a success, the 1 st respondent decided to extend the
same to its 13 District Centres.
5. By a communication dated 31 st January, 2001, the 4 th respondent
informed the appellant that the FRIENDS project, for which the appellant
had developed the Application Software free of cost a s part of the
developers forum agreement with Microsoft, has been succes sful and
the Government has decided to establish FRIENDS Integrated Citizens
Service Centres in all the other 13 districts of the State f or which the
respondent No.4 would like to associate with the ap pellant for
customization of the FRIENDS application software. Pursuant thereto
an Agreement cum Memorandum of Understanding dated 19 th February,
2001 was entered into between the appellant and the 4 th respondent.
6. According to the appellant as the 4 th respondent was attempting
to transfer some of the essentials of the FRIENDS application software
to another concern, namely, M/s Stanhop Technology, a criminal
proceeding was instituted by the appellant against sai d M/s Stanhop
Technology. Apprehending further attempts, an application for registration
of his copyright in the FRIENDS application software was also filed by
the appellant before the Registrar of Copyrights, New Delhi.
7. On the other hand, the 4 th respondent had filed a suit i.e. O.S.
No.8 of 2002 before the District Court, Thiruvananthapuram seeking a
declaration that the 4 th respondent is the exclusive owner of the copyright
and the sole owner of the Intellectual Property Rights of the FRIENDS
application software. In view of the aforesaid suit for infringement filed
by the 4 th respondent, the Registrar of Copyright rejected the appellant’s
application for registration of copyright in the “FRIENDS” software
leaving the matter to be agitated after the decision in the civil suit.
8. The 4 th respondent had also instituted a criminal case against
the appellant for infringement of the application software.
9. While the said proceedings were pending, the State Government
had issued a Notification dated 27 th December, 2002 under Section 70(1)
of the I.T. Act leading to the writ proceedings in question whe rein the
impugned orders have been passed by the High Court.
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10. Before the High Court the appellant had founded his claim to
the reliefs sought primarily on the ground that the copyright in FRIENDS
application software had vested in the appellant under Section 17 of the
Copyright Act, 1957 and the Notification dated 27 th December, 2002
issued under Section 70(1) of the I.T. Act was an infringeme nt of the
said right. The challenge to the vires of Section 70 of the I.T. Act was
founded on the basis of excessive delegation of the legisla tive power
inasmuch as, according to the appellant, the power of declaratio n as a
“protected system” was unbridled, unguided and uncanalized.
11. The High Court negatived the challenge made by holding that
the provisions of Section 2(k) of the Copyright Act, 1957 which defines
“Government work” and Section 17(d) of the same Act on one hand and
Section 70 of the I.T. Act has to be construed harmoniously. According
to the High Court, if the said provisions are to be read and construed
harmoniously the power of declaration of a “protected system” would
be only in respect of “Government work”, the copyright in which of the
Government is acknowledged by Section 17(d) of the Copyright Act,
1957. It is on the aforesaid broad basis that the contention of the appellant
as regards invalidity of Section 70 of the I.T. Act was repelled.
12. Insofar as the challenge to the Notification dated 27/12/2002
under Section 70(1) of the I.T. Act, based on a claim of a copyright, is
concerned the High Court took into account the fact that the registration
of copyright sought by the appellant had been negatived by the Registrar
of Copyright and that the civil suit in this regard filed by the 4 th respondent
was pending. The High Court further took the view that if according to
the appellant he was the first owner of the copyright, as claimed, nothing
prevented him from instituting a suit for infringement under Sections 60
and 61 of the Copyright Act, 1957 or from resorting to arbitration which
is contemplated by clause 7 of the agreement dated 19 th February, 2001.
13. The High Court, however, went a little further and took into
account clause 10 (under the head “Role of Government of Kerala”) of
the Memorandum of Understanding between Total Solution Provider s
for E-Governance and Government of Kerala. The said clause 10 reads
as under:
“10. Departmental Task Force will monitor the actua l
implementation ofhte project vis a vis the milestones s et by the
TSP
B.N. FIROS v. STATE OF KERALA & ORS.
[RANJAN GOGOI, J.]
Intellectual Property Rights of the system developed by a ll the
TSPs and Departments shall vest in the Government of Kerala.
Government of Kerala will be free to deploy the same system or
with modification in any of the Government/Semi Government/
Quasi Government Department/ Organization.”
The High Court held that the 4 th respondent was a government
agency and the Government had created the above agency as a T otal
Solution provider for developing software for the Government. The High
Court further held that the 4 th respondent was bound by the above clause
and the appellant who undertook technical support by executi ng an
agreement with the 4 th respondent was also bound by the above clause
10. The IPR copyright in respect of “FRIENDS” software t herefore
vests in the government and there is no clause in the agreement between
the appellant and the 4 th respondent to show that the 4 th respondent has
assigned the IPR right to the appellant. The High Court, accor dingly,
held that the Intellectual Property Rights in the softwa re vested in the
Government so as to entitle it to declare the same as a “protected system”
under Section 70(1) of the I.T. Act.
14. We have heard the learned counsels for the parties.
15. Shri R. Basant, learned Senior Counsel appearing for the
appellant has basically reiterated the arguments advance d before the
High Court additionally reinforced by the amendments made to Section
70 of the I.T. Act which enables the exercise of the power to declare
any computer resource as a “protected system” only if the same directly
or indirectly affects the facility of Critical Informat ion Infrastructure
which has been defined by the Explanation to Section 70(1) of the I.T.
Act as:
“Explanation: For the purposes of this section , “Critical Information
Infrastructure” means the computer resource, the incapacitati on
or destruction of which, shall have debilitating impact on national
security, economy, public health or safety.”
16. Shri Basant has submitted that in clear distinction to what had
been introduced by the Amendment (Act No.10 of 2009) the powe r
under the erstwhile Section 70(1) of the I.T. Act to declare any computer,
computer system or computer network to be a protected sy stem was
uncanalized and unguided delegation of legislative power. The learned
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counsel has submitted that the Amendment brought in by Act No. 10 of
2009 reinforces the contention of the appellant and vindicate s the
constitutional fragility of Section 70(1) of the I.T. Act as it then existed.
17. Shri Basant has further submitted that from the materials on
record there is no manner of doubt that the appellant had on its/his own
developed the software and, therefore, under the provi sions of the
Copyright Act, 1957 the appellant must be acknowledged to be the first
owner of the copyright. Incidentally, the computer programmes, tables
and compilations including computer databases have been included in
the definition of “literary work” under Section 2(o) of the Copyright Act,
1957 with effect from 10 th May, 1995.
18. Shri Pallav Sisodia, learned Senior Counsel appearing for the
respondent – State has contested the arguments advanced a nd has
submitted that, as rightly held by the High Court, Section 70 of the I.T.
Act has to be read along with Section 2(k) and Section 17 of the Copyright
Act, 1957 in which event the power of declaration of “protected system”
would be available within clearly circumscribed limits and would not
suffer from any excessive delegation. So far as the claim of copyright is
concerned, Shri Sisodia has submitted that the appellant had developed
the software for Microsoft which had undertaken to make available the
same to the first respondent through the 4 th respondent free of cost.
The invoice raised by the appellant on Microsoft in this r egard shows
payment of remuneration by Microsoft to the appellant. Therefore, under
Section 17(a) of the Copyright Act, 1957 Microsoft is the first owner of
the copyright. In any event, according to Shri Sisodia under clause 10
(under the head “Role of Government of Kerala”) of the Memorandum
of Understanding between Total Solution Providers for E-Governance
and Government of Kerala, the intellectual property vests in the
Government. The claim of copyright by the appellant will, therefore, not
subsist.
19. The contention with regard to excessive delegation of legislative
power under Section 70(1) of the I.T. Act has been sought to be fortified
by Shri Basant by relying upon several pronouncements of this Court. It
will hardly be necessary to take specific notice of any of the said decisions
inasmuch as the proposition sought to be canvassed is too well established
to raise any dispute or doubt. However, while consider ing the said
question as raised before it the High Court in the impugned order had,
B.N. FIROS v. STATE OF KERALA & ORS.
[RANJAN GOGOI, J.]
and in our view correctly, held that the provisions of Section 70(1) of the
I.T. Act has to be read conjointly with Section 2(k) and Section 17 of the
Copyright Act, 1957 in order to give due effect to the related provisions
of two different enactments made by the legislature. Sectio n 70(1) of
the I.T. Act as in force at the relevant point of time (at the time when the
matter was under consideration in the High Court) or even aft er its
amendment in 2009 bars access to a person to the system declared as a
“protected system” without authorization from the A ppropriate
Government. Plainly read, the power of declaration of a “prot ected
system” may invade a copyright which may be vested in a private owner.
However, such a situation is taken care of by the provisions contained in
Section 2(k) of the Copyright Act, 1957 which defines “Government
work” and Section 17(d) of the Copyright Act, 1957 which vests in the
Government, copyright in a government work as defined by Section 2(k).
The balance is struck by Section 17 between copyright pertaining to any
other person and copyright vested in the Government in a “government
work”. Section 70 of the I.T. Act, therefore, cannot b e construed
independent of the provisions of the Copyright Act; if Section 70 of the
I.T. Act has to be read in conjunction with Section 2(k) and Section 17
of the Copyright Act 1957 the rigours that would control the operation of
Section 70(1) of the I.T. Act are clearly manifested.
20. The amendment to Section 70(1) of the I.T. Act brought in by
Act No. 10 of 2009, in our considered view, makes t he power of
declaration of protected system even more stringent by further
circumscribing the power of declaration of protected sys tem only in
respect of a computer resource which directly or indirectly aff ects the
facility of Critical Information Infrastructure, wh ich is a defined
expression in the I.T. Act (already extracted). The amendment , in our
considered view is not a first time introduction of parameters to govern
the exercise of power under Section 70(1) of the I.T. Act. Rather, it is
an attempt to circumscribe the power even further than what was
prevailing under the pre-amended law, by narrowing down the ambit of
“government work” so far as it is relatable to the facilit y of Critical
Information Infrastructure, as defined under the Act.
21. The challenge made by the appellant before the High Cour t
insofar as the Notification dated 27 th December, 2002 is concerned was
founded on a claim of copyright in the FRIENDS application software.
The said claim, ex facie , is not tenable in the light of the proviisons
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contained in Section 17(a) of the Copyright Act and the admitted/pleaded
case of the appellant in the writ petition to the effect that it was entrusted
by Microsoft to develop the software for which it r eceived due
consideration from Microsoft. If that be so, on the appel lant’s own
pleadings in the writ petition, it would not be entitled to claim copyright in
the FRIENDS application software under Section 17(a) of the Copyright
Act. Whether under clause 10 (under the head “Role of Government of
Kerala”) of the Memorandum of Understanding between Total Solution
Providers for E-Governance and Government of Kerala, the State would
have a claim of copyright in view of Section 17(a) of the Copyright Act
is altogether a different question which has no bearing on the cla im of
the appellant to copyright in the FRIENDS application software. In the
present proceedings, the issue of inter-parties rights between Microsoft
and 1 st respondent/4 th respondent is not in dispute to require any resolution.
The only point for adjudication is the claim of the appell ant, as the
developer of the application software, to be the first author of th e said
work so as to vest in him/it a copyright under the provisions of Section
17 of the Copyright Act, 1957, a claim which is palpably unfounded both
on the basis of the provisions of Section 17(a) of the Copyright Act and
under clause 10 (under the head “Role of Government of Kerala ”) of
the Memorandum of Understanding between Total Solution Provider s
for E-Governance and Government of Kerala.
22. For the aforesaid reasons, we do not find any ground for
interference with the orders passed by the High Court. Accordingly,
while affirming the said orders of the High Court we dismiss the appeal(s)
leaving the parties to bear their own costs.
Nidhi Jain Appeal dismissed.
B.N. FIROS v. STATE OF KERALA & ORS.
[RANJAN GOGOI, J.]