TMI Blog2007 (12) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under the Indian Companies Act, 1956. On 1.2.2007 officers of the Narcotics Control Bureau (NCB) conducted a search at the residence and office premises of the appellant but found nothing incriminating. He was also called upon to appear before the NCB on a number of occasions pursuant to a notice issued to him under Section 67 of the Narcotic Drugs and Psychotropic Substances Act, 1985 (hereinafter referred to as the "Act") and was ultimately arrested and the bank accounts and premises of the two companies were also seized or sealed. On 13.3.2007 the appellant filed an application for bail in the High Court which was dismissed on the ground that a prima facie case under Sections 24 and 29 of the Act had been made out and that the inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... psychotropic substances on line but there was no evidence to suggest that the appellant had been involved in dealing with psychotropic substances or engaged in or controlled any trade whereby such a substance obtained outside India had been supplied to persons outside India and as such no case under section 24 of the Act had been made out against the appellant. Elaborating this argument, he has submitted that the two drugs which the appellant had allegedly arranged for supply were phentermine and butalbital and as these drugs were not included in Schedule-I of the Narcotic Drugs or Psychotropic Substances Rules 1987 in terms of the notification dated 21.2.2003 and were also recognized by the Control Substances Act, a law applicable in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Section 8 thereof. The appellant has been charged for offences punishable under Sections 24 and 29 of the Act. These Sections are re-produced below: 24. " Punishment for external dealings in narcotic drugs and psychotropic substances in contravention of section 12.- Whoever engages in or controls any trade whereby a narcotic drug or a psychotropic substance is obtained outside India and supplied to any person outside India without the previous authorization of the Central Government or otherwise than in accordance with the conditions (if any) of such authorization granted under section 12, shall be punishable with rigorous imprisonment for a term which shall not be less than ten years but which may extend to twenty years and shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 29 provides for the penalty arising out of an abetment or criminal conspiracy to commit an offence under Chapter IV which includes Section 24. We have accordingly examined the facts of the case in the light of the argument of Mr. Tulsi that the companies only provided third party data and information without any knowledge as to the commission of an offence under the Act. We have gone through the affidavit of Shri A.P. Siddiqui Deputy Director, NCB and reproduce the conclusions drawn on the investigation, in his words. "(i) The accused and its associates are not intermediary as defined under section 79 of the said Act as their acts and deeds was not simply restricted to provision of third party data or information without ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the hosting work to Palcom at VSNL, Delhi. These servers have been seized. Voluntary statement of Shri Ashish Chaudhary, Prop. Of Palcom Web Pvt Ltd.indicates that He maintained the websites on behal of Xponse. According to the bank records, funds have been wired from Brothers pharmacy, Inc's Washington Mutual Bank Account #0971709674 to Xponse IT services Pvt Ltd, ABN AMRO bank account No.1029985, Kolkata. (2) Deliveredmedicine.com : A review of the Xponse's website-XPONSEIT.com was conducted and observed and advertisement for XPONSERX. That XPONSERX was described as a software platform developed for the purpose of powering online pharmacies. Xponserx was designed to process internet pharmacy orders by allowing customers to order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LUEPRESCRIPTIONS.COM at domaintools.com and revealed that IP address was 203.86.100.76 and the server that hosts the website was located at Palcom, Delhi which also belongs to Xponse. From the above facts it is clear that the Xponse Technologies Ltd and Xponse IT Services Pvt. Ltd were not acting merely as a network service provider but were actually running internet pharmacy and dealing with prescription drugs like Phentermine and Butalbital." 9. We thus find that the appellant and his associates were not innocent intermediaries or network service providers as defined under section 79 of the Technology Act but the said business was only a fagade and camouflage for more sinister activity. In this situation, Section 79 will not grant i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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