NEW DELHI, INDIA: The Supreme Court on Monday stayed the proceedings against auction portal eBay India Pvt Ltd and its chairman Avinash Bajaj for permitting the auction of an MMS clip showing two school students from a Delhi school indulging in a sexual act.

A bench headed by Justice Altamas Kabir, which stayed the proceedings under Sections 67 and 85 of the Information Technology Act, 2000, also sent a notice to the Delhi government.

The scandal broke out in 2004 when the pornographic video clipping shot by two Delhi students became public, as it was circulated via Multimedia Messaging Service (MMS). It was also uploaded on baazee.com's (now Ebay India Pvt Ltd) auction site in 2004, which dragged Bajaj to the court.

Once the scandal broke out baazi.com withdrew the removed the 2.37-minute video clipping from its list and also Ebay later acquired the company.

In December 2004, the Delhi police had registered an FIR under Sections 292 (selling of obscene material) and 294 (obscene act) of IPC against Bajaj and bazee.com for illegally displaying the video clip.

The Delhi High Court, however, dropped sections and 294 in the case but made it clear that the case would continue against Bajaj under Sections 67 and 85 of the IT Act, for selling the obscene video.

While Section 67 bans publishing obscene information in electronic form, Section 85 allows the prosecution of a person responsible for the business of a company over violations.

Challenging the Delhi High Court judgment, Bajaj argued that listing could not be construed as a crime under the IT Act. Also the Act does not define the term 'obscenity', he said.

"Even assuming that video clip is obscene, mere 'listing' cannot be obscene for the purpose of Section 67 of the Act merely because the video clip may be obscene," he said while seeking quashing of all the proceedings against him.