Mr. Michael Patrick Hayes Vs The State of Goa

@JUDGMENTTAG-ORDER

N.A. Britto, J.@mdashThe applicant herein is an accused in C. C. No.151/S/2007/E. In this petition filed u/s 482 of the Code(Code of Criminal Procedure, 1973) the applicant takes exception to the Order dated 5-12-2008 of the learned Additional Sessions Judge, Panaji, by which the Order dated 17-4-2008 of the learned J.M.F.C. has been upheld, directing the framing of charge against the Applicant u/s 379 r/w 34 IPC.

2. The applicant/accused is one of the Directors of RGHR(Royal Goan Holiday Resort Private Limited) and the said company is involved in rental and re-sale of time share apartments for members of various time share schemes floated by various companies in India. The stated facts show that on 25-4-2006 the applicant along with one of their employees was called at the Police Station when the applicant came to know that a complaint was filed against him by RGBC(Royal Goan Beach Club). On 3-5-2006 an attempt was made to take data stored in the computers of the accused but as there was no search warrant that attempt had to be postponed till 11-5-2006 when some print outs of data stored in the computers of the accused was taken on a pen-drive and two C.P.U''s (Central Processing Units), from the applicant''s office to the Police Station. The said C.P.U''s were subsequently sent to C.F.S.L. at Hyderabad and the report dated 15-2-2007 shows that the C.F.S.L. has opined that it is not possible to say the source of database.

3. The complaint(FIR) dated 10-5-2006 filed by Shri Dattatraya K. Patil on behalf of Prestige Holiday Resort Pvt. Ltd. of which RGBC is a subsidiary shows that the allegation against the applicant and another Gordon Redfern was that they had committed theft of their database and were using the stolen database sending the same to their clients thereby causing immense loss to them. The said Gordon Redfern is not prosecuted. The complaint also states that:

When we contacted Mike Hayes as well as Gordon Redfern, both admitted to having our database as well as having database of other reputed companies such as HDFC Bank, Sterling Holidays, Club Mahindra, which have been obtained by them by illegal means.

4. Was the database which the applicant and the said Gordon Redfern had stolen from Prestige Holiday Resort Pvt. Ltd?

5. The applicant wrote a letter to the Police Inspector dated 20-5-2006 setting out as to how the database had come into their possession. All that the Police Inspector did, was to forward the said letter to the complainant who replied to the same by reply dated 21-8-2006. In the letter dated 20-5-2006 written by the applicant on behalf of RGHR(Royal Goa Holiday Resort Pvt. Ltd.) the applicant stated that the claim of RGBC(Royal Goan Beach Club) was baseless and a cooked up story and was not supported by any evidence inasmuch as the said RGBC(Royal Goan Beach Club) had not disclosed as to how they could have possibly stolen their database when they did not have any access to their records or to their systems.

6. The applicant explained that his company was involved in rental and re-sale of timeshare apartments for members of various timeshare schemes floated by various companies in India and that they had obtained their prospective client database principally from Directlink Holidays Pvt. Ltd. having their office at Nagoa, Arpora, Bardez, Goa, and that they had contacted the prospective clients provided in the database and sought details as regards their timeshare scheme and in case the clients were willing to do business with them, provided them with details as regards which company they own the timeshare with their membership numbers, etc., and the said customers were required to fill in a form provided by them which contained all the relevant details, and along with the said form the clients sent to them a copy of their timeshare agreement with the respective company for their reference. It was also stated that there was no clause contained in any of the agreements signed by Royal Goan Beach Club(RGBC) with their clients prohibiting them from selling or leasing their timeshare to any other person or company either directly or through an agent such as their company. It was stated that they had informed the Police Inspector earlier that the database with which they operate was provided to them by M/s. Directlink Holidays Pvt. Ltd. having their office at Nagoa, Arpora, Bardez, Goa, as their company had a tie-up with the said company with regard to servicing of customers, and one of their Directors Mr. Gordon Redfern is also the Director of Directlink Holidays Pvt. Ltd. and he used to run the company i.e. Directlink Holidays Pvt. Ltd. It was also stated that the Directlink Holidays Pvt. Ltd. had entered into an agreement dated 3-3-2005 with Prestige Holiday Resorts Pvt. Ltd.(PHRP), the parent company of Royal Goan Beach Club(RGBC) whereby Directlink Holidays Pvt. Ltd. was appointed as the agent by Prestige Holiday Resorts Pvt. Ltd.(PHRP) for distribution of its Goan Gold Package, which is a timeshare scheme to its clients, and in the said agreement it had been clearly mentioned that Directlink Holidays Pvt. Ltd. is an established rental and re-sale company with a large client base of timeshare owners from resorts all over India. The fact that Directlink Holidays Pvt. Ltd. has Royal Goan Beach Club members on its database has been admitted by Royal Goan Beach Club(RGBC) in a memorandum dated 23-2-2004 signed by the Applicant, Mr. Gordon Redfern and Mr. Mark Attwood, the Sales Director of the Royal Goan Beach Club, and as the said Directlink Holidays Pvt. Ltd. was winding up its business in Goa, they had entered into an agreement dated 21-4-2006 with Directlink Holidays Pvt. Ltd. whereby two telephones, two computers, certain staff members of Directlink Holidays Pvt. Ltd. were transferred to their company, and all existing client database and prospect list of Directlink Holidays Pvt. Ltd. was transferred to their company with effect from 1-4-2006 and that was in line with the existing arrangement they had with Directlink Holidays Pvt. Ltd., with regard to servicing of their customers and as per the said agreement, their company was entitled to speak to the customers of Directlink Holidays Pvt. Ltd. directly and deal with them as regards renting of their timeshare and whatever E-mails and other correspondence sent by them to various customers including those owning timeshare in Royal Goan Beach Club was sent in the normal course of business and the names and contact details of those customers were existing in the database provided to them by Directlink Holidays Pvt. Ltd., and, therefore there was absolutely no basis in the allegations made by Royal Goan Beach Club as regards stealing of their database or so called "criminal passing of". It was also stated that Royal Goan Beach Club was now not comfortable with the fact that most of its clients who are dis-satisfied with its services are looking to other companies such as Directlink Holidays Pvt. Ltd. and their company for services and returns on their investments, leasing/selling their timeshare, etc., and as Royal Goan Beach Club was unable to prevent Directlink Holidays Pvt. Ltd. from accessing/servicing its clients due to the agreement they had with Directlink Holidays Pvt. Ltd. it has filed this false complaint against their company in order to forcibly prevent them from doing business.

7. The Investigating Officer instead of trying to find out the truth of the information provided for by the accused in his letter dated 20-5-2006, sent the said letter for the comments of the Complainant, and the Complainant in his letter dated 21-8-2006 admitted that they(Prestige Holiday Resorts Pvt. Ltd.) had an agreement with M/s. Directlink Holidays Pvt. Ltd. for distribution of its Goan Gold Package to the Directlink and the applicant had signed as authorized representative of the said Directlink. It was stated that this agreement with Directlink was for all clients except for clients who owned timeshare with RGBC(Royal Goan Beach Club). It was further stated that under the agreement, Directlink had to generate marketing leads through its own database. There was no exchange of Prestige Database to Directlink. Under the agreement Prestige Database was never disclosed nor made available to Direct link.

8. There is no dispute that the agreement dated 3-3-2005 between Prestige Holiday Resorts Pvt. Ltd. and the said Direct link Holidays Pvt. Ltd. was signed by the applicant as well as the said Datta Patil on behalf of the respective companies. Clause 2 of the said agreement deals with marketing and states that:

Directlink shall market the Goan Gold package to all its clients except, it shall not offer the same to any client who owns any timeshare at RGBC.

9. There is no dispute that the said RGBC is a subsidiary of the said PHRP(Prestige Holiday Resorts Pvt. Ltd.). The said Gordon Redfern and the Applicant herein were the Directors of the said Directlink Holidays Pvt. Ltd. and no case has been filed against the said Gordon Redfern. The very complaint filed by the Complainant shows that both the Applicant and the said Gordon Redfern had Complainant''s database as well as of other reputed companies such as HDFC Bank, Sterling Holiday Club and Club Mahindra. As per clause 2 of the agreement dated 3-3-2005 Directlink Holidays Pvt. Ltd. was to market the Goan Gold package to all its clients except that it would not offer the same to any client who owns any timeshare at RGBC. How would the said Directlink Holidays Pvt. Ltd. know who are the clients who owned the timeshares at RGBC unless their names were provided by Prestige Holidays Pvt. Ltd. to Directlink Holidays Pvt. Ltd. so as not to deal with them? The Complainant nowhere stated as to when the database of their clients was stolen either by the present Applicant or for that matter by the said Directlink Holidays Pvt. Ltd. or by what method they were taken from their computers. Only because they had the database would not lead to the conclusion that it was stolen. The names of the two clients who had sent E-mails to the Complainant-Company, though their statements have not been recorded by the Investigating Officer, must have been there with the said Directlink Holidays Pvt. Ltd. which have now been passed on to the Applicant by the said Directlink Holidays Pvt. Ltd. Otherwise there is no other explanation how Directlink Holidays Pvt. Ltd. could get those names to be transferred to the Applicant. Under clause 2 of the agreement dated 3-3-2005 Directlink Holidays Pvt. Ltd. was not to offer the package to the existing clients of RGBC and in case they have offered it, it is nothing but a case of breach of the said agreement between Directlink Holidays Pvt. Ltd. and Prestige Holidays Pvt. Ltd. whose subsidiary is RGBC. This inference is fortified, as pointed out on behalf of the Applicant, from letter dated 23-2-2004 written by Mark Attwood who is said to be the Managing Director of the said Prestige Holiday Resorts Pvt. Ltd. written to the Applicant and the said Gordon Redfern in which, it is inter alia, stated, that Directlink has Royal Goan Beach Club members who wish to re-sell. In other words, it is quite clear that the said Directlink Holidays Pvt. Ltd., the predecessor of the Applicant had the names of owners of timeshare of RGBC to whom otherwise, they were not to market the shares of RGBC. Hence, this case is not one of theft but at the most of breach of agreement. Section 2(o) of the Information Technology Act, 2000 defines data to mean a representation of information, knowledge, facts, concepts or instructions which are being prepared or have been prepared in a formalised manner, and is intended to be processed, is being processed or has been processed in a computer system or computer network, and may be in any form(including computer printouts magnetic or optical storage media, punched cards, punched tapes) or stored internally in the memory of the computer. Section 2(a) defines access to mean with its grammatical variations and cognate expressions, means gaining entry into, instructing or communicating with the logical, arithmetical or memory function resources of a computer, computer system or computer network. The Indian Electricity Act, 2003, has brought electrical energy within the purview of theft but the Information Technology Act, 2000, has not brought database under the purview of theft. The penalty provided for hacking as it is commonly known i.e. for downloading, copying or extracting any data, computer database or information, etc. is by way of damages in terms of Section 43 thereof which are required to be adjudicated in the manner provided by Section 46. Complainant''s remedy therefore was elsewhere in case Complainant''s database was stolen by the accused.

10. That apart, even assuming that the Applicant was able to get the names of the clients of the Complainant from their database by accessing their computer, the case at hand cannot be considered to be a case of theft for want of the essential ingredients of theft. Theft is always in relation to movable property or immovable property when converted into movable. Database cannot be considered as movable property. One of the essential ingredients of theft is that movable property must be moved out of possession of any person, without his consent. The transfer of possession of the property, however transient is an essential ingredient of the offence of theft(See State of Maharashtra Vs. Vishwanath Tukaram Umale and Others, ). That is not the case at hand as the database also continues to be in possession of the Complainant and no wrongful loss has been caused to the Complainant by accessing to his database, assuming that the information was obtained by accessing the computers of the Complainant.

11. The Apex Court in Inder Mohan Goswami and Another Vs. State of Uttaranchal and Others, has stated that a criminal prosecution is not to be used as an instrument of harassment or for seeking private vendentta or with an ulterior motive to pressurize the accused. The Court has also stated that the power u/s 482 exists for advancement of justice and to prevent injustice. Considering the facts of the case and upon the failure of the Complainant to show in what manner the names of their clients were obtained by the accused, the only irresistible inference is that the Applicant had obtained the same through the said Directlink Holidays Pvt. Ltd. but used them if at all in breach of the said agreement and thus seen, the case at hand is not a case of theft at all. Consequently, the petition deserves to succeed and the impugned Orders are hereby set aside and the accused discharged u/s 379 IPC.