S.91 CrPC | Payment Platforms Must Disclose User Details To Agencies Investigating Criminal Case/ Cyber Crimes: Karnataka High Court

The Karnataka High Court has dismissed a petition filed by digital payment intermediary 'Phonepe', challenging a police notice seeking transaction details/ full account credentials of its registered users and merchants, while investigating a criminal case.In doing so, Justice M Nagaprasanna said,“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'". The company had challenged a Section 91 CrPC notice, which empowers a Court or an officer in charge of a police station to issue a summons or a written order for the production of any document or other thing.It was contended that it is an intermediary under Section 79 of the Information Technology Act and is governed under the Payment and Settlement Systems Act, 2007 and has no role to play in any of the transactions leading to filing of the FIR. Further, it was argued that the Bankers Books Evidence Act, 1891 which is made applicable to the Payment and Settlement Systems Act, 2007, bars divergence of confidential information of the customers.Any document or information can be produced only after an order of the Court and not produced if it is directly summoned by an Investigating Officer, Phonepe argued. Reliance was placed on Section 91(3) (CrPC) which carves out an exception to the application to the provisions of the Bankers Books Evidence Act as it is a special enactment. The prosecution opposed the plea contending that in the days of rising number of cyber crimes, the police have the power to seek necessary information to conduct a fair investigation. It referred to Central Government guidelines under Section 87 of the IT Act and alleged that Phonepe had violated the guidelines to safeguard merchants involved in Cricket betting. Findings: The court emphasised that in times when conventional crimes have receded and new age cyber crimes have sprung in large numbers, swift, targeted and effective response is need of the hour."The police must be empowered within the limits of law to unearth digital footprints that could otherwise vanish. Therefore, while privacy as contended by petitioner should be maintained, it cannot be wielded as a shield against lawful investigation,” Court said.Rejecting the contention of petitioners that inspection of books under the Bankers Books Evidence Act is only after the Court passes an order, the bench said, “Rule 3 of the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2011, which deals with due diligence by an intermediary, mandates that information should be given within 72 hours of receipt of an order from the Investigating Officer.” Further turning down the argument of petitioner that it being a digital system payment gateway will not divulge any information as sought by the Investigating Officer, the Court said, “The Investigating Officer is a statutory authority, who is acting in terms of the powers conferred under the Cr.P.C., while conducting investigation. Therefore, the submission that the documents cannot be divulged is only noted to be rejected.”Stating that Section 2(4) of the Bankers Books Evidence Act defines a legal proceeding by which an inquiry in which evidence may be required or in which any investigation or inquiry under the CrPC is contemplated, the court said “Therefore, notice under Section 91 of the Cr.P.C, in pursuance to an investigation or inquiry can be construed to be a notice under Section 2(4) of the 1891 Act.”Therefore, it rejected Phonepe's submission that Payment and Settlement Systems Act has an overriding effect on the Bankers Books Evidence Act and does not permit information to be divulged. The Court held,“The notice under Section 91 of the Cr.P.C, though required to be specific and not a fishing expedition, is not per se illegal on the suspicion of the police to a money trail, which has a link between several accounts, in the facts of the case. The power of the Investigating Officer acting as a statutory authority to issue a notice under Section 91 of the Cr.P.C. for the purpose of summoning the document of an intermediary is within the bounds of law.”Appearance: Advocate Nitin Ramesh for Petitioner.AGA Mohammed Jaffar Shah for RespondentCitation No: 2025 LiveLaw (Kar) 181Case Title: PhonePe Private Limited AND State of Karnataka & ANR Case No: WRIT PETITION No.3757 OF 2023Click Here To Read/Download Order

S.91 CrPC | Payment Platforms Must Disclose User Details To Agencies Investigating Criminal Case/ Cyber Crimes: Karnataka High Court

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