Question

Malti, a small business owner, runs an online clothing store. Recently, she noticed that her website had been hacked, and her customers' personal information, including names, addresses, and payment details, was stolen. Shortly after, some of her customers reported unauthorized transactions on their accounts. Malti wishes to file a complaint against the incident. On the basis of the above problem, select the correct option:

• A. It is punishable under Section 66 of the Information Technology Act, 2000 and the customers can also claim compensation under certain circumstances.
• B. The customers do not have any legal remedy under the Information Technology Act, 2000.
• C. It is punishable under Section 66 of the Information Technology Act, 2000.
• D. It is punishable only under the criminal laws.

Hint:

Under the IT Act, 2000, both data theft (Section 66) and failure to protect personal data (Section 43A) are punishable and compensable offences.

Answer 1

The Correct Option is A

Step 1: Understanding Section 66 of the IT Act, 2000.
Section 66 of the Information Technology Act, 2000 deals with computer-related offences such as hacking, unauthorized access, or data theft. Any person who dishonestly or fraudulently gains access to a computer system or steals personal information is punishable under this section.
Step 2: Compensation under the Act.
Under Section 43A and Section 66, if a company handling sensitive personal data fails to protect it due to negligence, it can be held liable to pay compensation to affected individuals.
Step 3: Application to the case.
Since Malti’s website was hacked and customer data was stolen, the act falls under Section 66. Moreover, affected customers can claim compensation for financial loss under Section 43A.
Step 4: Conclusion.
Hence, the correct answer is (A). Both punishment for hacking and compensation rights for victims are covered under the IT Act, 2000.