The criminal case was registered against Ravi Srinivasan subsequent to a "meticulous investigation and legal opinion".
The Puducherry goverment's affidavit comes in the wake of the Supreme Court's notice issued to Union Territory on a public interest litigation seeking scrapping of section 66A of the IT Act.
The petitioner, Shreya Singhal, had cited the arrests of Srinivasan and the two girls in Mumbai to support her contention that the provision was broadly worded and curtailed freedom of speech and expression.
Filed by the chief secretary, the affidavit alleged that Srinivasan had insulted the finance minister's son in general public.
"If such acts were viewed leniently the unruly element of the society, even the violent terrorist and unscrupulous groups may misuse the social networks to spread rumours, offensive messages etc to create panic in the minds of general public by spreading such false and offensive messages and causing insult to the law abiding citizen," the affidavit stated.
Countering the petitioner's plea on section 66A being unconstitutional, Pudicherry cautioned that a lenient provisions of the law might lead to "fearless" spreading of false news on the cyber-world and "unscrupulous" elements might take advantage of it.