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What Is Section 43 of the IT Act?

Section 43 of the Information Technology Act, 2000 says that any person who causes loss or damage to any other person by compromising the security of a computer, computer system or computer network, or by tampering with computer contents, is liable to pay compensation for that loss or damage to the affected person. It is a civil liability, so the claimant does not need a criminal conviction first, and the compensation covers direct loss, including the cost of restoring the system and of the investigation.

Key takeaways

  • Section 43 is a civil compensation provision, so a company can sue for loss caused by an intrusion without waiting for a criminal case to end, and the standard of proof is civil rather than criminal.
  • The liability lies with the person who compromised the security or tampered with the contents, which means the defendant is the intruder, the negligent vendor or the insider, depending on the facts.
  • Documentary loss is the strongest claim: forensic and containment invoices, notification and credit-monitoring costs, downtime, and the cost of restoring or rebuilding a compromised system.
  • A section 43 claim can be pursued alongside a section 66 criminal complaint, and the two do not block each other, so a business with both a loss and a perpetrator can run both tracks.
  • If the intrusion involved the claimant's own negligence, the defendant's liability may be reduced, so an internal control review is a standard part of the defence in these cases.

As of 24 October 2026: the service descriptions, prices and turnaround figures on this page are current.

Who can sue under section 43, and against whom?

Any person who suffers loss from a compromised computer, system or network can sue under section 43, and that includes a company. The defendant is the person who caused the loss by compromising security or tampering with computer contents. In most Indian cases that is one of three: the external attacker, an insider with access, or a service provider whose negligence allowed the intrusion through. The third is the one businesses underestimate. If a vendor left a default credential, skipped a patch or exposed an admin panel to the internet, the contractual chain runs back to the vendor, and a good claim pleads the vendor, the contract and the technical failure together.

What losses can you actually claim under section 43?

The law says loss or damage suffered by reason of the compromise, and courts read that as compensatory. The realistic heads in an Indian breach are: forensic investigation and containment costs, the cost of restoring or rebuilding affected systems, business interruption loss during the outage, the cost of the breach notification and of the call centre handling customer queries, credit monitoring offered to affected individuals, legal and advisory costs, and in a well-evidenced case the cost of regulatory remediation. Pure lost profit is harder, and the courts want it proved rather than estimated. Keep every invoice and an internal note of the disruption timeline.

What evidence makes a section 43 claim succeed?

Four things, in this order. First, proof of the compromise itself: forensic reports, logs, and the intrusion timeline. Second, proof of the causal link between the compromise and the loss, which is why you need downtime and containment records rather than a general statement that business was affected. Third, proof of the quantum, which is the invoices and financial records itemised by head. Fourth, proof of who the defendant is, the hardest part in an anonymous intrusion, and it is where cooperation from a telecom, a bank or a law enforcement investigation often decides the case. Preserved tamper-evident logs are the evidence base, not just a compliance requirement.

How does a section 43 claim run alongside a criminal case?

They run in parallel, and most serious intrusions produce both. The criminal track, usually section 66, is run by the state and delivers a conviction and an order. The civil track delivers money, and filing a criminal complaint does not stop a civil suit, and a private investigator's report, an internal forensic report and even a complainant's statement can be tendered as evidence, subject to the rules on hearsay. Two practical warnings: keep the two narratives identical, because a mismatch on dates or the intrusion vector is the cheapest way to lose credibility. And remember that an award is not the only recovery route; an insurer's claim and a claim against a negligent vendor can each be pursued.

What a section 43 compensation claim can recover in an Indian breach, and the evidence each head of claim needs
Head of claimWhat it coversEvidence that supports it
Forensic and containmentIncident response, malware removal, forensic analysisEngagement letter, invoices, forensic report with findings
System restorationRebuilding, restoring from backup, replacing hardwareAsset list, restore logs, purchase and repair invoices
Business interruptionLost revenue and idle capacity during the outageDowntime timeline, payment gateway and billing records
Notification and supportBreach notice costs, call centre, customer helplineNotification copy, vendor invoice, ticket volumes
Identity protectionCredit monitoring or identity protection for affected customersOffer documentation, enrolment counts, invoice
Advisory costsLegal, forensic and notification advisory feesEngagement letters and itemised bills

What are the frequently asked questions?

What is section 43 of the IT Act?
Section 43 of the Information Technology Act, 2000 says that any person who causes loss or damage to any other person by compromising the security of a computer, computer system or computer network, or by tampering with computer contents, is liable to pay compensation for that loss or damage to the affected person. It is a civil liability, so the claimant does not need a criminal conviction first, and the compensation covers direct loss, including the cost of restoring the system and of the investigation.
Do I need a police case to claim under section 43?
No. Section 43 is a civil liability and does not depend on a criminal conviction. A criminal complaint under section 66 is often filed in parallel, but it is not a precondition to the compensation claim.
What losses can be claimed under section 43?
Realistic heads include forensic and containment costs, system restoration, business interruption, notification and customer-handling costs, credit monitoring for affected individuals, and legal fees. Lost profit is harder and must be proved rather than estimated.
Can I sue my own vendor under section 43?
Yes, where the vendor's negligence in securing the system is the cause of the loss. Vendor liability claims are usually brought alongside the contractual claim, and the contract is often the best evidence of the security obligation that was missed.
How long do I have to file a section 43 claim?
The limitation period under the general law applies, which is three years from the date the cause of action arises, and for a continuing intrusion the clock is treated differently. Practically, file early, because evidence degrades and the limitation argument is a common defence.

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Last reviewed: 24 October 2026. Information on this page is general guidance, not legal advice. Prices are indicative bands for a typical scope and are confirmed in a written quote before any work begins.