Kiran Raj

The Madras High Court has dismissed a petition seeking the quashing of criminal proceedings against a technology company and its key executives. The case pertains to allegations of unauthorized access and software disabling of drones supplied to a complainant company, allegedly causing financial losses and disruption of government projects. The court found sufficient grounds to allow the trial to proceed and held that the allegations raised require adjudication before the trial court.

The petition was filed by M/s. Ideaforge Technology Limited (petitioner-company), a manufacturer of unmanned aerial vehicles (UAVs), along with its Director and CEO, Director and Vice President (Engineering), Chief Financial Officer, and General Manager (Sales & Business Development). The petition sought to quash the proceedings in C.C.No.6907 of 2023, pending before the Additional Chief Metropolitan Magistrate for C.C.B. Cases, Egmore, Chennai.

According to the complaint, the petitioner-company had approached Garuda Aerospace Pvt. Ltd. (complainant-company) in March 2021 to sell its RYNO (Q4i-Micro) UAVs/Drones. The complainant-company expressed interest in purchasing 15 units and placed an order, making a full payment of Rs. 2,20,67,050/- including GST. The drones were subsequently deployed in government projects, including the Swamitva Project for SOI-Lucknow and another project in Odisha valued at Rs. 70 crores.

On June 10, 2023, the complainant-company alleged that the petitioner-company, without prior notice, disabled the essential software of the drones, rendering them non-functional. This act allegedly disrupted operations and led to additional expenses incurred by the Government of Odisha, as well as the blacklisting of the complainant-company from future tenders. A legal notice was issued to the petitioner-company on June 20, 2023, seeking redress, to which the petitioner-company responded on July 5, 2023, allegedly admitting to the software disabling while also threatening legal action against the complainant-company.

Based on the complaint, the Cyber Crime Police, Greater Chennai, registered an FIR in Crime No.235 of 2023. Following an investigation, a charge sheet was filed against the petitioners for offenses under Sections 409 and 420 of the Indian Penal Code (IPC) and Sections 43, 65, and 66 of the Information Technology Act, 2008. The case was subsequently taken on file by the Additional Chief Metropolitan Magistrate, Egmore, Chennai.

The petitioners, through their counsel, contended that the charge sheet failed to make out a prima facie case against them. They argued that no specific allegations were directed at individuals other than the petitioner-company, and that the dispute was contractual and civil in nature, warranting no criminal liability. They further argued that Section 409 IPC, which pertains to criminal breach of trust by a public servant or agent, was wrongly applied, as the petitioners did not hold any such status. Regarding Section 420 IPC, they contended that no deception or inducement to deliver property was alleged against them.

The petitioners also asserted that Section 43 of the Information Technology Act, which deals with unauthorized access to computer systems, was inapplicable, as the petitioner-company owned the drone software and retained rights over its licensing. They claimed that the software deactivation was within their legal rights under the terms of purchase.

The complainant-company, however, argued that the petitioners’ actions amounted to cheating and illegal denial of access, constituting criminal offenses. The prosecution maintained that the investigation had gathered sufficient material evidence, including witness statements, to sustain the charges.

The court observed: "A reading of the complaint, FIR, charge sheet, and statements of witnesses shows that there are sufficient materials to proceed against the petitioners. The grounds taken by the petitioners are matters of defense, which can only be adjudicated after a full trial." The court further noted that the presence of prima facie allegations in the charge sheet warranted continuation of proceedings rather than pre-trial quashing.

After reviewing the materials, the court declined to interfere with the trial proceedings, stating that the petitioners’ contentions could be raised as part of their defense during trial. The court ruled: "This Criminal Original Petition is dismissed. Consequently, connected miscellaneous petitions are closed. However, the petitioners are at liberty to take all their defense before the trial court."

Case Title: M/s. Ideaforge Technology Limited & Others v. The State of Tamil Nadu & Another
Case Number: Crl.O.P.No.7091 of 2024
Bench: Justice P. Velmurugan

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