Karnataka HC dismisses PhonePe's plea against police notice, says privacy not a shield against lawful investigation
'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.
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