Offences by Companies and Cognizance

In one line

When a company infringes, the people running it are guilty too unless they can show they knew nothing or took all due care, and only a first class magistrate may try any offence under the Act.

In the wording a student can write in an exam: section 69 of the Copyright Act, 1957 provides that where an offence under the Act has been committed by a company, every person who at the time the offence was committed was in charge of, and was responsible to the company for, the conduct of its business, as well as the company, shall be deemed to be guilty and liable to be proceeded against and punished, and section 70 provides that no court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence under the Act.

Why the law has this at all

Because a company cannot be imprisoned. A fine on a company that has already made its money from piracy is a cost of business.

Because the decision was taken by a person. Somebody decided to print, to sell, to run the unlicensed software, and the section reaches him.

And because a copyright offence is not trivial. Section 63 carries a minimum of six months and a maximum of three years, and section 70 keeps it out of the lowest courts.

Section 69, the two limbs

Section 69(1), the persons in charge. "Where any offence under this Act has been committed by a company, every person who at the time the offence was committed was in charge of, and was responsible to the company for, the conduct of the business of the company, as well as the company shall be deemed to be guilty of such offence and shall be liable to be proceeded against and punished accordingly."

The proviso, the defence. "Nothing contained in this sub-section shall render any person liable to any punishment, if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence."

Section 69(2), the officers. "Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company, and it is proved that the offence was committed with the consent or connivance of, or is attributable to any negligence on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly."

The Explanation. "Company" means any body corporate and includes a firm or other association of persons; and "director", in relation to a firm, means a partner in the firm.