X Corp appeal: High Court stays order on Rs 50 lakh cost, directs to deposit Rs 25 lakh

The High Court on Thursday passed a conditional interim order staying the operation of the single judge order against X Corp (formerly Twitter) insofar the imposition of cost.

A division bench, headed by Chief Justice Prasanna B Varale, has directed the multi-blogging platform to deposit a portion of the cost amount to the tune of Rs 25 lakh within a week.

The bench said the operation of the single judge’s order on cost stands stayed till the next date of hearing of the appeal filed by X Corp subject to payment of Rs 25 lakh. 

“We further make it clear that permission to deposit part of the cost to the tune of Rs 25 lakh may not be treated as any acceptance by this court that some equity lies in favour of appellant. This is only on the statement made by the appellant to show their bonafide.

As such, on depositing the cost of 25 lakh, the order of the single judge insofar as imposition of cost is stayed until the next hearing. Meantime, the respondent (union government) is permitted to file statement of objections and application for vacation of interim order,” the bench said.

The single judge had said that the cost is payable to Karnataka State Legal Services Authority (KSLSA) in 45 days time and if delay is brooked, petitioner has to pay additional amount of Rs 5,000 per day.

In its appeal, X Corp stated that the single bench had erroneously held that section 69A (1) of Information Technology Act does not require blocking orders to contain reasons in writing. The company contended that the failure on the part of the union government to comply with Rule 14 of the Blocking Rules has been ignored by single judge.

In regards to imposition of Rs 50 lakh cost, the company claimed that the single judge awarded exorbitant cost, that too in favour of a third party (KSLSA) and the same is in violation of Apex Court guidelines. It prayed the division bench to stay the order on cost, which is due on August 14.

At the hearing, the bench asked the counsel for the appellant to point out from the plea any instance of compliance by the company with blocking orders issued by the union government. The bench observed that while some of the blocking orders were issued in February 2021, the same were complied with in June 2022 and there was delay and latches, as noted by the single bench.

X Corp had challenged the blocking orders issued by the ministry of electronics and information technology. In June 2023, the single judge had imposed the cost on X Corp for not complying with government’s directions and resorting to speculative litigation. The single judge had observed that X Corp had demonstrably adopted a tactical approach to delay compliance and that shows its intent to remain non-compliant to Indian law.