Tribunal directs doctor and company to pay Rs 15 lakh to private firm for data theft

MUMBAI : The Telecom Disputes Settlement and Appellate Tribunal on Friday directed a doctor and a company he co-founded to pay Rs 15 lakh as compensation to a private company, Preventine Life Care Private Limited, over data theft.

Navi Mumbai-based Preventine had approached earlier the state IT secretary, who had in 2014 ordered the doctor to pay Rs 30 lakh as compensation in the matter. The doctor then appealed the order at the Telecom Disputes Settlement and Appellate Tribunal in Delhi.

Preventine, which provides diagnostic services related to genetic disorders for newborn babies, had in January 2013 filed a civil and criminal suit against Dr Rishi Dixit. Dixit was employed with them as a senior manager between 2010 and 2012. The complaint also named a company, Navigene Genetic Science Private Limited, as well as a senior research associate who worked with Preventine.

Navigene, engaged in diagnostic preventive services looking into potential disorders of newborn babies, was co-promoted by Dixit after he quit Preventine.

The company alleged that Dixit and the senior research associate “without authorisation and having malafide intention, dishonestly and secretly forwarded and stole some sensitive and confidential algorithm, formulae, process, client/customer list, project, research paper, diagnostic procedure and other important information and data, etc from the computer network of the respondent”.

The company alleged that Dixit had used Preventine’s resources and used it to forward their own business model.

While appearing before the tribunal, the complainant, represented by Dr Karnika Seth and two others, provided proof that official data was compromised. The judgment by the chairperson of the Tribunal, Justice S K Singh, and member AK Bhargava reads: “She substantiates these charges by showing transfer/copying of confidential and sensitive data, like master data of hospitals, business proposals… by way of certain e-mails from official ID to personal ID of A-1 (Dixit).”

The tribunal observed, “By transfer, such data does not become his property and on ceasing of employment, appellant was bound to return or delete such data so as to dispossess him from such data. A-1 (Dixit) has not only failed to do so, he has actively used his data to further the business interest of A-3 (Navigene) and as such is certainly without the permission of the respondent. Thus, we find that A-1 has without permission accessed or extracted data or information of the respondent and used it for the benefit of A-3 and is detriment to the interest of the respondent.”

The tribunal found Dixit and Navigene to be in violation of Section 43 (b) of the Information Technology Act, read with (i) and (j), and directed them to pay Rs 15 lakh by way of compensation along with simple interest of eight per cent.

Dr Seth said, “There are several cases over the past decade where there is unauthorised data transfer by employees from the database of their employers. This data is then used by them to set up a competing practice. This judgment should act as a deterrent for anyone thinking on similar lines.”

Advocate Devansh Mohta, who appeared for the defendants, said that they were considering appealing the tribunal’s order in the high court. “