A petition filed by digital payments platform PhonePe in Karnataka High Court has been dismissed, and the Representatives of state now can’t use privacy laws nor the status of intermediary to avoid working with the legitimate criminal investigations. The court supported a police notice demanding for user information associated with theoretically conducted online sports betting.
In a 32-page verdict which was delivered on April 29 and later uploaded on the court’s website on May 13, the learned Justice M Nagaprasanna had stressed that even as user privacy was important, it could not outweigh the need to help law enforcement in their investigations on cybercrimes. “The privacy aspect of consumers cannot defeat the lawful pursuit by investigating officers to secure evidence and arrive at the logical end of the exercise. Confidentiality has to go hand in hand with accountability”, the judgment said.
The case was filed after a resident of Bengaluru, Karnataka, filed a complaint stating that he has used PhonePe to transfer around ₹6,000 into a sports betting website during an India-South Africa cricket match. Having failed to withdraw his winnings and later getting locked out of the website, the resident made an F.I.R. During the course of investigation, police issued notice to PhonePe, requesting it for details of transactions and list of users who were involved in online gambling.
In its defense, PhonePe came to suggest that as an intermediary by digital means and regulated by the Information Technology Act and the Payment and Settlement Systems Act, PhonePe only facilitated payments and had no control over betting-related transactions. It proceeded to invoke the Bankers Books evidence Act which held that only a court order could raid the data to clients.
However, the High Court contradicted this by citing to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2011, which expressly require intermediaries to provide information to the law enforcement within 72 hours of a lawful request.
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