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Indian Express
15-05-2025
- Business
- Indian Express
Karnataka HC dismisses PhonePe's plea against police notice, says privacy not a shield against lawful investigation
Noting that 'confidentiality must coexist with accountability', the Karnataka High Court recently dismissed a petition by PhonePe Private Limited against a police notice issued to the financial service company in connection with the investigation in a 2022 online sports betting case. 'The submissions of the petitioner's counsel that information that is to be kept confidential need not be divulged, cannot be accepted. The protection of consumer privacy cannot eclipse the lawful imperative of investigating officers to secure evidence and take the investigation to its logical conclusion,' said a single-judge bench of Justice M Nagaprasanna in the order dated April 29. The police issued the notice on December 7, 2022, to PhonePe to provide details based on a complaint from a resident of the Chikkamagaluru district, who alleged that he lost funds while transacting through several payment gateways for cricket betting. The notice under the Criminal Procedure Code (CrPC) directed PhonePe to furnish transaction details of certain users. PhonePe's counsel argued that the company is merely an intermediary under the IT Act and that neither the company nor its employees are implicated in the case. The counsel further said the Bankers' Books Evidence Act and the Payment and Settlement Systems Act prohibit the company from disclosing information. The company contended that the investigating officer cannot summon documents or information through a notice without a directive from a court. The bench observed that as per Section 87 of the Information Technology (IT) Act, information would have to be given within 72 hours of the notice from an investigating officer. Citing previous judgments of the high courts of Kerala, Madras, and Bombay, it observed that the laws cited by PhonePe would not be stretched to immunise an institution from investigation. 'The duty to protect data must yield, where public interest and criminal investigation intersect,' the court noted. 'Conventional crimes have receded, and new age crimes have sprung in large numbers. The new age crimes are cyber crimes – the clandestine modern offences… while privacy as contended by the petitioner should be maintained, it cannot be wielded as a shield against lawful investigation,' the court added, while rejecting PhonePe's plea.
Hindustan Times
14-05-2025
- Hindustan Times
Karnataka HC dismisses PhonePe's petition against police notice in betting case
The Karnataka High Court has dismissed a petition filed by digital payments platform PhonePe, which had challenged a police notice seeking user information in connection with an alleged online sports betting case. The court held that the company could not use user privacy as a shield against lawful criminal investigations. Justice M Nagaprasanna, who delivered the verdict recently, observed that in the digital age, the nature of crime has evolved and that cyber offences demand a prompt and targeted investigative approach. Also Read - Bengaluru rains flood BMTC bus near Manyata Tech Park, passengers soaked amid heavy downpour. Video He stressed that while consumer privacy is important, it cannot override the necessity of lawful inquiries. "Today, conventional crimes have receded, and new-age crimes have emerged in large numbers. These new-age crimes are cyber crimes – the clandestine modern offences. Such offences demand a swift, targeted, and effective response," the judge noted. "While privacy, as contended by the petitioner, should be maintained, it cannot be wielded as a shield against lawful investigation," he added. The court also underlined the importance of balancing confidentiality with accountability. "The protection of consumer privacy cannot eclipse the lawful imperative of investigating officers to secure evidence and take the investigation to its logical conclusion. Confidentiality must coexist with accountability," Justice Nagaprasanna said. The case stemmed from a 2022 complaint by a man who claimed to have deposited around ₹6,000 via PhonePe into a sports betting website during India vs South Africa cricket matches. He alleged that he was later unable to withdraw his funds and that the website became inaccessible. Also Read - Sonu Nigam moves Karnataka High Court to quash FIR over remarks on Kannadigas in Bengaluru concert Accusing the platform of "cheating", he lodged a complaint. Following the complaint, police issued a notice to PhonePe in December 2022 under Section 91 of the then-prevailing Code of Criminal Procedure (CrPC). The notice sought user details linked to the betting transactions, asked whether the company had conducted any due diligence while onboarding users, and whether it had noticed any suspicious or gambling-related activity on its platform. PhonePe was also asked to provide a list of users possibly involved in online gambling. The company challenged the notice, arguing that it had a legal obligation under the Payment and Settlement Systems Act, 2007, and the Bankers' Books Evidence Act, 1891, to maintain user confidentiality. It claimed that disclosure of user data was only permissible through a court order. However, the court found that these laws do allow the sharing of information with statutory bodies, including investigating agencies. It also cited the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2011, which mandate intermediaries to provide user data to investigating officers within 72 hours of a legitimate request. "The duty to protect data must yield where public interest and criminal investigation intersect," the court ruled, emphasising that such requests must be specific and not overly broad or speculative. In this instance, it found the notice was targeted and lawful, aimed at tracing a possible network of illegal financial transactions. Accordingly, the court dismissed PhonePe's petition. Advocate Nitin Ramesh appeared for PhonePe, while Additional Government Advocate Mohammed Jaffar Shah represented the state.
New Indian Express
14-05-2025
- New Indian Express
No secrets from law, Karnataka HC raps PhonePe on lost money
BENGALURU: Noting that privacy should be maintained but cannot be wielded as a shield against lawful investigation, High Court dismissed the petition filed by PhonePe Private Limited, questioning the summons issued by CEN police of Bengaluru Rural District to provide details of transactions of the complainant, who lost money after paying through several payment gateways for cricket betting. 'The submissions of the petitioner's counsel that information that is to be kept confidential need not be divulged, cannot be accepted. The protection of consumer privacy cannot eclipse the lawful imperative of investigating officers to secure evidence and take the investigation to its logical conclusion. Confidentiality must coexist with accountability,' said Justice M Nagaprasanna, rejecting the petition filed by PhonePe Private Limited. It further said that today, conventional crimes have receded and new-age crimes have sprung up in large numbers. New-age crimes are cybercrimes, modern offences which demand a swift, and effective response. The police must be empowered within the limits of law to unearth digital footprints that could otherwise vanish. Therefore, while privacy as contended by the petitioner should be maintained, it cannot be wielded as a shield against lawful investigation, the court said. CEN police issued summons dated December 7, 2022, to PhonePe to provide details after receiving a complaint from Prashanth, a resident of Chikkamagaluru district, that he lost funds while transacting through several payment gateways for cricket betting. However, PhonePe contended that it is protected under the Bankers' Books Evidence Act, 1891, and cannot divulge the information.
