WINDING UP COMPANY AND CYBER LAW (APPELETE TRIBUNAL & OFFENCES) Submitted By: Vikas Rajput Gautam Dua Amisha Patel Rinku Kasundara Taruna Dalwala Submitted.

WINDING UP COMPANYAND

CYBER LAW(APPELETE TRIBUNAL & OFFENCES)

Submitted By:

Vikas Rajput

Gautam Dua

Amisha Patel

Rinku Kasundara

Taruna Dalwala

Submitted To: Mr. Varun Dhingra

According to Prof. Gower, winding up of a company is a process whereby its life is ended and its property administered for the benefit of its creditors and members an administrators, called a liquidator, is appointed and he takes control of the company, collects its assets, pays its debts and finally distributed any surplus among the members in accordance with their rights.

There are 3 modes of winding up of a company

1.Winding up by the court, i.e. Compulsory winding up (secs. 433 to 483)2. Voluntary winding up (secs 484 to 521) (a) members’ voluntary winding up (b) creditors’ voluntary winding up

3. Winding up subject to supervision of court

Winding up the company under the order of a Court is known as compulsory winding up

Grounds for compulsory winding up (433)

1.Special resolution of the company (sec. 433 [a] ) :- Winding up order under this head is not common because normally the members of a company prefer to windup the company voluntary for in such a case they shall have a voice in its winding up.

2. Default in delivering the statutory report to the registrar or in holding statutory meeting (secs. 433 [b]) :-

A petition on this ground can be made either by the registrar or by a contributory. In the latter case the petition for winding up can be filed only after the expiry of 14 days from the day on which the statutory meeting ought to have been held

the court may, instead of making a winding up order, direct that the statutory report be delivered or that a statutory meeting be held. The court may order the costs to be paid by any persons who are responsible for the default

3. Failure to commerce, or suspension of, business (sec. 433 [c]) :-

The court exercises Power in this case the only if the company has no intention of carrying on its business or If it is not possible for it to carry on its business.

if a company has not begun to carry on business within a year from its incorporation or suspend its business for a whole year, the court will not wind up if

(1). There are reasonable prospects of the company starting business within a reasonable Time .

(2). There are good reasons for the delay, i.e. the suspension of business is satisfactorily accounted for and appears to be temporary causes.

4. Reduction in membership (sec. 433 [d]) :-

if at any time the number of members of a company is reduced in the case of a public company, below 7 or in the case of a private company below 2, the company may be ordered to be wound up by the court.

5. Inability to pay its debts (secs 433 [e]) :-

a company may be wound up by the court if it is unable to pay its debts. The test is whether the company has reached a stage where it is commercially insolvent that is existing and probable assets would be insufficient to meet the existing liabilities.

commercially insolvent means that the company is unable to pay debts or liabilities as they arise in the ordinary course of business.

6. Just and equitable (sec. 433 [f]):-

the words just and equitable are of the widest significance and do not limit the jurisdiction of the court to any particular case. the principle of just and equitable clause baffles a precise definition. It must rest with the judicial discretion of the court depending upon the facts and circumstances of each case.

What is just and equitable clause? It depends upon the facts of each case. The court may order winding up under the just and equitable clause in the following case.

1.When the substratum of a company is gone:- the substratum of a company can be said to have disappeared only when the object for which was incorporated has substantially failed, or when it is impossible to carry on the business of the company except at a loss, or the existing and possible assets are insufficient to meet the existing liabilities. 2.When the management is carried on in such a way that the minority is disregarded or oppressed

3. Where there is a dead lock in the management of the company. when shareholding is more or less equal and there is a case of complete deadlock in the company account of lack of probity in the management of the company and there is no hope or possibility of smooth and efficient continuance of the company as a commercial concern, there may arise a case for winding up on the just and equitable ground

4. Where public interest is likely to be prejudiced having regard to the provisions of secs. 397 and 398 where the concept of prejudice to public interest is introduced, it would appear that the court winding up a company will have to take into consideration not only the interest of shareholders and creditors but also public interest in the shape of need of the community, interest of the employees, etc.

5. When the company was formed to carry out fraudulent or illegal business or when the business of the company becomes illegal

6. When the company is a mere bubble and does not carry on any business or does not have any property.

An application to the court for the winding up of a company is made by a petition. A petition for the winding up of a company may be presented, subject to the provisions of this section, in the following cases:

1.Petition by the company :- A company may itself present a petition to the court for winding up after it has passed a special resolution. A company does not often present a petition to have itself wound up by the court as it can achieve this object more conveniently y passing a special resolution to wind up voluntary.

2. petition by any creditor or creditors :- A petition to the court for the winding up of a company may be filed by any creditor or creditors. The term creditor is not limited to one to whom a debt is due of the date of the petition and who can demand immediate payment . Every having a pecuniary claim against the company whether actual contingent is a creditor and such a person is competent to file a petition for the winding up of the company.

3. Petition any contributory or contributories :- A contributory means a person liable to contribute to the assets of the company on the event of its being wound up a and includes the holder of shares which are fully paid up. He can present a petition for winding up a company. Even though hem may be the holder of fully paid up shares or the company may have no assets at all, or may have no surplus assets left for distribution among the shareholders, after the satisfaction of its liabilities.

4. Petition by all or any of the prior whether together or separately

5. Petition by the registrar :- The registrar can present a petition for winding up a company

6. Petition by the central government :- The central government may cause to be presented to the court a petition to the winding up of the company where it appears from the report of inspectors appointed to investigate the affairs of the company under sec. 235 that

1 the business of the company is being conducted with intent to (a) defraud its creditors, members or any other persons, or (b) otherwise for a fraud or unlawful purpose, or(c) In a manner oppressive of any of its members, or(d) That the company was formed for any fraudulent or unlawful purpose2 persons concerned in the formulation of the company or the management of its affair have been guilty of fraud, misfeasance or other misconduct towards the company or towards any of its members.

POC on hearing petition (Sec. 443)a) Dismiss it, with or without costsb)Adjourn the hearing conditionally or un

conditionallyc) Make any interim order that it thinks fitd)Make an order for winding up the

company with or without cost or any other order as it thinks fit

1. Intimation to official Liquidator and Registrar

2. Copy of winding up order to be filled with the Registrar

3. Order for winding up deemed to be notice of Discharge

4. Suits stayed5. Effect of winding up order6. Official Liquidator to be liquidator

7. Power of the courta) Any suit or proceeding by or against the

company b) Any claim made by or against the

companyc) Any application made under the sec. 391

for the compromise with creditors and / or members

d) Any question of priorities or any other question whatsoever, whether of law or fact which may relate to or arise in course of the winding up of the company.

• Official Liquidator ( Sec. 448)a) Official Liquidatorb)Official Gazette declare by District

court• Liquidator ( Sec. 449)• Provisional liquidator (sec. 450)• Notice to company before appointment

of provisional liquidator

• Proceedings in winding up {Secs. 451 (1) & (3)}• Report {Sec. 455 (1)} Preliminary reportA) As to the amount of the capital issued,

subscribed, and paid-up, and the estimated amount of assets and liabilities

B) If the company has failed, as to the cause of the failure: and

C) Whether, in his condition, further inquiry is desirable as to any matter relating to the promotion, formation, or failure of the company, or the conduct of business thereof.

(2) Additional Report.

3. Custody of company’s property (Sec. 456)4. Excise and control of liquidator powers

(Sec.460) (1)5. Meeting of creditors and contributors6. Directions from the court7. Proper Books (sec. 461)8. Audit of accounts9. Appointment of committee of inspection

(Sec. 464)10. Pending liquidation(Sec. 551)

A) Powers exercisable with the sanction of the court (sec. 457 (1))

1. To institute or defend suits and other legal proceedings, civil or criminal, in the name and on behalf of the company.

2. To carry on the business of the company so far as may be necessary for the beneficial winding up of the company.

3. To sell the immovable and movable property and its actionable with power to transfer the whole or sell the same in parcels.

4. To do all such other things as may be necessary for winding up the affairs of the company and distributing its assets.

To do all acts and to execute documents and deeds on behalf of the company under its seal

To inspect the records and returns of the company or the files of the registrar without payments of any fee

To prove, rank and claim in the insolvency of any contributory for any balance against his estate and to receive dividends.

To draw, accept, make and endorse any bill of exchange, hundi or Pro note on behalf of the company in the course of its business

To appoint an agent to do any business which he is unable to do himself.

C) Power exercisable in case of onerous contracts

The term “onerous” means a right to property, e.g. a lease, in which the obligations attaching to it exceed the advantages to be derived from it. The liquidator may, with the leave of the court, disclaim onerous contracts, and properties. This shall be done within 12 months after the commencement of the winding up, unless the court extends time.

Content of statement: within 21 days of relevant date the co. shall submit a statement to the official liquidator as to the affairs of the company.

The court may in its discretion direct that the company need not submit this statement.

The statement can be in a prescribed form, verified by affidavit. The statement contain are:1) Asset of the co showing separately cash in hand and bank and negotiable

securities.2) Its debt and liabilities.3) name, resident, occupations of its creditors, stating separately the amount of

secured or un secured debts.4) The debt due to the company and names and the addresses of persona from

whom they are due and the amount likely to be realized.5) Such further information as may be required by the official liquidator.

Who is submit the statement?1) Present or past officer of the company2) Person who have taken part in the formation of

the company at any time within 1 year before the relevant date

3) Present employees or employees within 1 year before the relevant date, and who are capable for given information required

4) Employees and officer of another company which is or was within 1 year before the relevant date, an officer of the company to which the statement relates.

Appointment and composition of committee:

The court may , at the time of making an order for the winding up of a company or at any time there after, direct that there shall be appointed a committee of inspection to act with the liquidator

Constitution and proceedings of the committee:

The committee of inspection shall not have more then 20 members. The members shall be creditors and contributories of the company.

1) stay of winding up proceedings2) a) Settlement of list of contributories b) payment of debts due by contributory c) power to make calls d) adjustment of rights of contributories3) Delivery of property4) Exclusion of creditors5) Order as to cost6) Summoning of persons suspected of having property of the

company 7) Public examination8) Arrest of absconding contributory9) Meeting of creditors or contributories

The court shall make an order for the Dissolution of company:

1) When the affairs of the company have been completely wound up, or

2) 2) when the court is of opinion that the liquidator can not proceed with the winding up for want of founds and assets, or

3) For any other reason.

every person liable to contribute to the assets of a company in the event of its benign wound up and includes the holder of any shares which are fully paid up.

List of contributories: shall be prepared in 2 part. List A and list B.

List A includes the present member of the company, List B shall includes the past members of the

company.

Liability of contributors: every present or past member shall be liable to contribute to the assets of the company to an amount sufficient

a) For payment of (i) its debts and liabilities (ii) costs, charges and expenses of the winding up.

b) for the adjustment of the rights of the contributories among them selves.

Liability of present member:1) In case of company limited by share, to the amount

remaining unpaid on the share,2) limited by guarantee, to the amount undertaken to be

contributed by him to the assets of the co. in the events of its being wound up.

Liability of past member:1) If he has ceased to be a member for 1 year or more

before the commencement of the winding up2) In respect of any debt or liability of the company

contracted after he ceased to be a member3) If it appears to the court that the present member will be

able to satisfy the contributions required to be made by them.

Winding up by members or coeditors of a company without interference by the court.

Circumstances in which a company may be wound up voluntarily. A company may be wound up voluntarily-

1) By passing an ordinary resolution: When the period , if any, fixed for the duration of a

company by the articles has expired, the company in general meeting may pass an ordinary resolution for its voluntary winding up.

1) By passing a special resolution: a company may at any time pass a special

resolution that it be wound up voluntary.

1.Members voluntary winding up

1.Creditors voluntary winding up

DECLARATION OF SOLVENCY ( SEC. 488 )

It shall be made by majority of the directors at a meeting of the board that the

company has no debts or that it will be able to pay its debts in full within 3 years

from the commencement of the winding up. The declaration shall be verified by an affidavit.

The declaration shall have effect only when it is :

(A) Made within five weeks immediately before the date of the resolution and delivered to the registrar for registration before that date ; and

(B) Accompanied by a copy of the report of the auditors of the company on

(1) The profit & loss account of the company from the date of thee last profit and loss account to the latest practicable date immediately before the declaration of solvency,

(2) The balance sheet of the company,

(3) A statement of the company’s assets and liabilities as on the last mentioned date.

SEC. 490 to 498 shall apply in relation to a members’ voluntary winding up (sec. 489 ).

The provisions of these sections are as follows :

(1) Appointment and remuneration of liquidators ( sec. 490 )»» the company in general meeting shall appoint one or more liquidators for the

purpose of winding up its affairs and distributing its assets.

(2)Board’s Powers to create on appointment of a liquidator ( sec. 491 )»» on the appointment of a liquidator, all the powers of the board of directors, the

managing or whole time directors, manager shall cease except when the company in general meeting of the liquidator may sanction them to continue.

(3) Power to fill vacancy in office of liquidator ( Sec. 492 )»» if a vacancy occurs by death, resignation or otherwise in the office of any

liquidator appointed by the company the company in general meeting may fill the vacancy.

(4) Notice of appointment of liquidator to be given to Registrar ( Sec. 493 )

»» the company shall give notice to the registrar of the appointment of a liquidator or liquidators. It shall also give notice of every vacancy occurring in the office of liquidator and of the names of the liquidators appointed to fill every such vacancy.

(5) Power of liquidator to accept shares, etc. »» as the consideration for sale of property ( sec. 494 ).

(6) Duty of liquidator to call creditors’ meeting in case of insolvency ( sec. 495 )

»» if the liquidator is at any time of opinion that the company will not be able to pay its debts in full within the period stated in the declaration, he shall forthwith summon a meeting of the creditors. He shall lay before the meeting a statement of the assets and liabilities of the company. Thereafter the winding up shall become creditors’ voluntary winding up.

(7) Duty to call general meeting at the end of each year ( sec. 496 )»» in the event of the winding up continuing for more than one year, the liquidator

shall call a general meeting of the company at the end of the first year from the commencement of the winding up. Likewise, he shall call a general meeting at the end of each succeeding year. He shall lay before the meeting an account of his acts and dealings and of the conduct of the winding up during the year.

(8) Final meeting and dissolution ( Sec. 497 )»» as soon as the affairs of the company are fully wound up, the

liquidator shall make up an account of the winding up, showing how the winding up has been conducted and how the property of the company has been disposed of. He shall then call a general meeting of the company and lay before it the accounts showing how the winding uo has been conducted.

The meeting shall be called by advertisement :

(a) Specifying the time, place and object of the meeting ; and(b) Published not less that one month before the meeting in the

official gazette, and also in some newspaper circulating in the district of the registered office of the company.

(9) Provisions as to annual and final meeting in case of insolvency ( Sec. 498 )

»» if in the case of a members’ voluntary winding up, the liquidator finds that the company is insolvent.

A voluntary winding up of a company in which a declaration of its solvency is not made is referred to as a creditors’ voluntary winding up.

PROVISIONS APPLICABLE TO CREDITORS’ VOLUNTARY WINDING UP

Sec. 500 to 509 shall apply in relation to a creditors’ voluntary winding up ( Sec. 499 ).

The provisions of these sections are as follows :

(1) Meeting of creditors : ( Sec. 500 )(2) Notice of resolution to be given to registrar : ( Sec. 501 )(3) Appointment of Liquidator : ( Sec. 502 )(4) Appointment of committee of inspection : ( Sec. 503)(5) Liquidators’ Remuneration : ( Sec. 504 )(6) Board’s Powers to cease on Appointment of liquidator : ( Sec. 505 )(7) Power to fill vacancy in office of liquidator : ( Sec. 506 )(8) Power of liquidator to accept share etc., as consideration for sale of

property ( sec. 506)(9) Duty of liquidator to call meeting at the end of each year : ( Sec. 508 )(10)Final meeting and dissolution : ( Sec. 509 )

(1) Declaration of solvencyIn case of a members voluntary winding up, there is declaration of

solvency. In case of a creditors voluntary winding up, there is no such declaration.

(2) Control of winding upIn a members’ voluntary winding up, the members control the

winding up of the company and the creditors do not participate directly as the company makes a declaration of solvency. In a creditors’ voluntary winding up, the creditors control the winding up of the company as the company is deemed to be insolvent.

(3) MeetingsIn a members’ voluntary winding up, there is no meeting of

creditors. In a creditors’ voluntary winding up, whenever there is a meeting of contributories, there is a corresponding meeting of creditors.

(4) Appointment of liquidatorIn a members’ voluntary winding up, the liquidator is appointed by the

company and his remuneration is fixed by the company. In a creditors voluntary winding up, he is appointed by the creditors and his remuneration is fixed by the committee of inspection.

(5) Committee of inspectionThere is no committee of inspection in a members’ voluntary winding up

; in a creditors voluntary winding up the creditors may appoint a committee of inspection

(6) powers of liquidatorIn a members’ voluntary winding up, the liquidator can exercise certain

powers with the sanction of a special resolution of the company; in a creditors’ voluntary winding up, he can do so the sanction of the court or the committee of inspection or of a meeting of the creditors.

(1) Consequences as to Shareholders / Members

In a company limited by shares, a shareholder is liable to pay the full amount up to the face value of the shares held by him. His liability continues even after the company goes into liquidation, but he is then described as a contributory. A contributory may be present or past. In a company limited by guarantee, the members are liable to contribute up to the amount guaranteed by them.

(2) Consequences as to Creditors

(1) Where the company is solvent ( sec. 528 ) Where a company is being wound up, all debts on a contingency and all claims against

the company, present or future, certain or contingent, ascertained or sounding only In damages, shall be made. Where a solvent company is wound up, all claims of creditors, when proved, are fully met.

(2) Where the company is insolvent (sec. 529 )Where a company is insolvent and is wound up, the same rules shall prevail as in the

case of insolvency with regard to

(1) Debts provable,(2) The valuation of annuities and future and contingent liabilities; and(3) The respective rights of secured and unsecured creditors.

(3) Consequences as to servants and officers

A winding up order shall be deemed to be a notice of discharge to the officers and employees of company except when the business of the company is continued. Such a discharge shall relieve them of all obligations under their contract of services. A voluntary winding up shall also operate as a notice of discharge to the company’s servants.

(4) Consequences as to proceedings against the company

When a winding up order has been made or the official liquidator has been appointed as provisional liquidator, no suit or other legal proceedings against the company at the date of the winding up order, it shall not be proceeded with against the company, except by leave of the court. In a voluntary winding up also

(5) Consequences as to costsIf assets are insufficient to satisfy liabilities, the court may order for payment of the

costs, charges and expenses of the winding up out of the assets of the company. The payment shall be made in such order of priority inter se as the court thinks just. Similarly all costs, charges and expenses properly in a voluntary winding up, including the remuneration of the liquidator shall be paid out of the assets of the company in priority to all other claims. The payment shall however be subject to the rights of secured creditors.

A company is said to be “ defunct ” when it is not carrying on business or when it is not in operation. Sec. 560 deals with defunct companies. If a company has ceased to carry on business, the registrar may strike it off the registrar as a defunct company in accordance with sec. 560.

PROCEDURE TO BE FOLLOWED BY THE REGISTRAR

1. Letter by registrar to inquire if company is in operation.

2. Registered letter if no reply received within one month.

3. Publication in the official Gazette to strike off name.4. Same procedure in winding up if no liquidator is acting

or no return is received.

(1) Letter by registrar to inquire if company is in operation:

where the registrar has reasonable cause to believe that a company is not carrying on business or is not in operation, he shall send to the company by post a letter inquiring whether the company is carrying on business or is in operation.

(2) Registered letter if no reply received within one month

If the registrar does not receive an answer within one month of the sending of the letter, he shall, within 14 days after the expiry of the month, send to thee company by post a registered letter referring to the first letter, and stating that no answer thereto has been received.

(3) Publication in the official Gazette to strike off name If the registrar either receives an answer that the

company is not carrying on business, or does not receive any answer within one month of the sending of the registered letter, he may publish in the Official Gazette and send to the company by registered post, a n notice that at the expiration of 3 months from the date of that notice, the name of the company will be struck off the register and the company will be dissolved.

(4) Same procedure in winding up if no liquidator is acting or no return is received

The above procedure is also followed where a company is being wound up and the register has reasonable cause to believe either that no liquidator is acting, or that the affairs of the company have been completely wound up, and returns required to be made by the liquidator have not been made for a period of 6 consecutive months.

Where the Register has struck the name of a company off the register as a defund company. The power of the court to order the name of the company to be restored to the register lasts for 20 years.

The procedure to be followed for the restoration of the name of the company to the register is as follows

1. application by aggrieved member or creditor within 20 days.

If the company or any member or creditor of the company, feels aggrieved by the name of the company having been struck off the register, he may within 20 years from the publication in the official gazette of the notice aforesaid, apply to the court.

2. Restoration of name by court on being satisfied.

The court may order that the name of the company be restored to the register if it is satisfied that the company was, at the time of striking off the name, carrying on business or was in operation or otherwise that it is just that the name of the company had not been, stuck off.

3. Directions by the court.

The court may on passing any such order give necessary directions for placing the company and all other persons in the same position as nearly as may be as if the name of the company had not been, stuck off.

4. Certified copy of order of court to be delivered to registrar.

Upon a certified copy of the order of the court being delivered to the registrar for registration, the company shall be deemed to have continued in existence as if its name had not been struck off.

Establishment of Cyber Appellate Tribunal(Sec.48)• The Central Government shall, by notification, establish one

or more appellate tribunals to be known as the cyber Regulation Appellate Tribunal.

Composition of Cyber Appellate Tribunal(Sec.49)• A Cyber Appellate Tribunal shall consist of one person only

to be appointed, by notification, by the central government.

Qualification for appointment as presiding officer of the cyber appellate tribunal(Sec.50)

• a) he is ,or has been of is qualified to be, a judge of a High court or

• b) he is , or has been , a member of the Indian Legal Service and is holding or has held a post in Grade 1 of that service for at least 3 yrs.

Term of Office(Sec.51)• The presiding Officer of CAT shall hold office for a term of

five years from the date on which he enters upon his office or until he attains the age of sixty-five years, whichever is earlier.

Filling up of vacancies(Sec.52)• Any vacancy occurs in the office of the Presiding Officer

of a CAT, the central government shall appoint another person in accordance with the provision of act.

Resignation(Sec.53)• the PO of a CAT may ,by notice in writing under his hand

addressed to the Govt. resign his office.

Removal: The PO of a CAT shall not be removed from his office except

by an order by the Central Govt. Regulation of procedure: the central Govt. may , by rules, regulate the procedure

for the investigation of misbehavior of the PO. Appeal to Cyber Appellate Tribunal(Sec.57) Any person aggrieved by an order made by an order made by

controller or an adjudicating officer under this Act may prefer an appeal to CAT.

Period allowed for appeal: Every appeal shall be filed within a period of 45 days from the date

on which a copy of the order made by the controller or the adjudicating officer is received by the person aggrieved.

Order by cyber Appellate Tribunal: the CAT may, after giving the parties to the appeal , an opportunity

of being heard, pass such orders thereon as it thinks fit, confirming, modifying .

Copy of the order: the CAT shall send a copy of every order made by it to the parties

to the appeal & Controller or adjudicating officer. Disposal of appeal: The appeal filed before the CAT shall be dealt with by it as

expeditiously as possible and Endeavour shall be made by it to dispose of the appeal finally within 6 months from the date of receipt of the appeal.

Power: the CAT shall have , for the purpose of

discharging its function under this act, while trying a suite, in respect of the following matters, namely-

a) Summoning & enforcing the attendance of any person and examining him on oath;

b) Requiring the discovery and production of documents or other electronic record;

c) Receiving evidence on affidavits;d) Issuing commission for the examination of

witness or documents;e) Reviewing its decision;f) Dismissing an application for default or deciding

it ex parte;g) Any other matter which may be prescribed.

Judicial proceeding :

every proceeding before he CAT shall be deemed to be a judicial proceeding within the secs, 193 and 228.

Right to legal representation(Sec.59)

The appellant may either appear in person or authorize one or more legal practitioners.

Limitation(Sec.60):

the provisions of the limitation act,1963 shall, as far as may be, apply to an appeal made to the cyber Appellate Tribunal.

Appeal to High Court(Sec.62):

Any person hurt by any Decision of the CAT may file an appeal to the High Court within 60 days from the date of communication of the decision of the CAT.

Compounding of contravention(Sec.63): Any Compounding , either before or after the institution of

adjudication proceeding, be compounded by the controller of such other officer. subject to such condition as may be specified.

No proceeding: where any contravention has been compounded, no further

proceeding shall be taken against the person guilty of such contravention in respect of the contravention so compounded.

Recovery of penalty(Sec.64):A penalty imposed under this act, if it is not paid, shall be recovered as an arrear f land revenue and the license or the digital signature certificate, as the case may be, shall be suspended till the penalty is paid.

Tempering with computer source documents(Sec.65)if any person knowingly or intentionally conceals, destroys or alter or intentionally or knowingly causes another to conceal, destroy, or alter any computer source code used for a computer, computer programme, computer system or computer network, when the computer source code is required to be kept or maintained by law for the time being in force, he shall be punishable with imprisonment up to 3 years, or with fine which may extend to Rs.2,00,000 or with both.

Hacking with computer system(Sec.66)whoever with the intent to cause or knowing that he is likely to cause wrongful loss or damage to public or any person destroys or deletes or alter in computer resources or diminishes its value or utility or affects it injuriously by any means, commits hacking. Whoever commits hacking shall be punished with imprisonment up to 3 years, or with fine which may extend up to Rs. 2,00,000 or with both.

Publishing of information which is obscene in electronic form(Sec.67)Whoever publishes or transmits or causes to be published in the electronic form, any material which is lascivious or appeals to the deprave and corrupt person who are likely, having regard to all relevant circumstances, to read , see or hear the matter contained or embodied in it, shall be punished. On first assurance he shall be punishable with imprisonment of 5 years and with fine Rs. 1,00,000. in the event of a second or subsequent conviction, he shall be convicted with imprisonment of 10 years and also with fine Rs. 2,00,000.

Power of Controller to give directions(Sec.68)the controller may, by order direct employee to take such measures or cease carrying on such activities as specified in order . If any person fail to comply with any such order shall be guilty of an offence and shall be liable to imprisonment of 3 years or to a fine not exceeding Rs. 2,00,000 or both.

Assistance:The subscriber or any person incharge of computer resource shall, called upon by any agency which has been directed to intercept any information, extend all facilities and technical assistance to decrypt the information. If ha fail to assist the agency referred to above, he shall be punished with an imprisonment of 7 years.

Protected system(Sec.70):The appropriate Govt. may, by notification in the official gazette, declare that any computer, computer system or computer network to be a protected system.

Penalty:Any person who secures access or attempts to secure access to a protected system in contravention of this section shall be punished with imprisonment of either description for a term which may extend to 2 years, or with fine which may extend to Rs. 1,00,000 or both.

Penalty for imprisonment(Sec.71):whoever makes any misrepresentation shall be punished with imprisonment for term which may extend to 2 years, or fine Rs. 1,00,000 or both.

• Penalty for breach of confidentiality and privacy(Sec.72):

if any person who, secured access to any electronic record, book, register, correspondence, information, document or register or other material to any other person shall be punished with imprisonment for term which may extend to 2 years, or with fine which may extend to Rs. 1,00,000 or both.

• Penalty for publishing digital signature certificate false in certain particulars(Sec.73)

any person who contravenes the provisions shall be punished with imprisonment for 2 years, or fine which may extend to Rs. 1,00,000 or both.

Publication for fraudulent purpose(Sec.74)

whoever knowingly creates , publishes or otherwise makes available a Digital Signature certificate for any fraudulent or unlawful purpose shall be punished with imprisonment for term 2 years, or with fine which may extended to Rs. 1,00,000 or both.

Confiscation(Sec.76):Any computer , computer system , floppies, compact disks,

tape drives or any other accessories related thereto, in respect of which any provision of this Act, rules, orders or regulations made there under has been or is being contravened, shall be liable to confiscation.

Penalties or confiscation not to interfere with other punishments(Sec.77)

no penalty imposed or confiscation made under this act shall prevent the imposition of any other punishment to which the person affected thereby is liable under any other law for the time being in force.