HC dismisses PhonePe’s challenge of a police notice

Bengaluru: The Karnataka High Court has dismissed a petition filed by PhonePe Private Limited, a digital payment gateway, challenging a notice issued by the Bengaluru cyber police, seeking information.

"Confidentiality must coexist with accountability,” Justice M Nagaprasanna observed while rejecting the petition.

The company had contested a summons/notice issued on December 7, 2022, under Section 91 of the CrPC. The notice sought specific information based on a complaint filed by Prashanth, a resident of Anekal, who lost Rs 6,150 through cricket betting applications.

The petitioner argued that the summons directing it to furnish confidential transaction details and full account credentials of registered PhonePe users/merchants for the purpose of freezing a particular user's transactions, without a complete investigation, was untenable.

It also submitted that neither PhonePe Private Limited nor its employees were accused in the crime and that the company was merely acting as a system provider in the UPI payment system.

The police, in turn, submitted that they are empowered to seek such information for a fair investigation, and pointed out that the Union government has issued guidelines under Section 87 of the Information Technology Act. They also argued that the police are a statutory authority to issue a notice under Section 91 of the CrPC.

Justice Nagaprasanna noted that Section 91 of the CrPC permits summoning documents and other materials.

Citing other High Court judgments, he observed that new-age crimes like cyber offences demand a swift, targeted, and effective response, and the police must be empowered within legal limits to unearth digital evidence that could otherwise disappear.

"Therefore, while privacy as contended by the petitioner should be maintained, it cannot be wielded as a shield against lawful investigation,” he said.

The court further held, “The duty to protect data must yield, where public interest and criminal investigation intersect. 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’."