Centre for Internet and Society

Relationship Between Privacy and Confidentiality

vipul — 2014-12-30T14:27:02Z

The laws of breach of confidentiality and breach of privacy at first glance seem very similar to each other. If a doctor releases health information relating to a patient that s/he is treating then such an act would give rise to a claim both under the law of privacy as well as under the law of confidentiality.

Similar is the case with financial information released by a bank, etc. This makes one wonder exactly where and how it is that the law of breach of privacy intersects with that of the law of confidentiality. An enquiry into such a complex question of law requires a deeper appreciation of the relationship between these two different principles of law which require a better understanding of the origins and evolutions of these principles.

In this paper we shall try to explore the origins of both the law of privacy as well as confidentiality as they have evolved in the field of tort law in India. Although our primary focus is Indian law, however in order to understand the evolution of these principles it is necessary to discuss their evolution in three common law jurisdictions, viz. the United States of America, the United Kingdom and India. The reason for an analysis of these three jurisdictions will become clear as the reader goes further into this paper, however for ease of reference it would be better if the reason is clarified here itself. The concept of a right against breach of confidentiality has existed in English common law for a very long time, however the concept of a claim for breach of privacy originated only in American law, other than some statutory protection granted in the last couple of decades, has still not been granted recognition in English common law.

After a discussion of the evolution of these principles in both American and English law, we will then discuss these principles as they exist in Indian law. This discussion will (or should) at once become easier to understand and digest because of the deeper understanding of the interplay between these two principles gained from a reading of the first two chapters.

Privacy Torts: American Origins

Looking at the origins of privacy law it has been argued by many academics that the law of privacy in common law has its origins in an article published by Samuel Warren and Louis Brandies in the Harvard Law Review in 1890.[1] Warren and Brandeis suggested that one could generalise certain cases on defamation, breach of copyright in unpublished letters, trade secrets and breach of confidence as all based upon the protection of a common value which they called privacy.[2] The authors relied upon the existing body of cases relating to the law of confidentiality and interpreted it in a way so as to create a "right to privacy" which has evolved into a right quite different from the common understanding of confidentiality.

Although there are certain criticisms of the article by Warren and Brandeis, the background in which the article was written and the lacuna that these two scholars were trying to fill in the law of confidentiality as it existed at that time gives some context to the reasons why they felt the need to move away from the existing principles and propose a new principle of law. Samuel Warren and Louis Brandies were both worried about the invasion of personal space by the advent of the news and print media which was experiencing a boom during the late 19^th century. [3] Warren and Brandeis were worried that although the existing body of law on confidentiality would protect a person from having their picture put on a postcard by their photographer without their consent,[4] however if there was no relationship between the two persons there would be no remedy available to the aggrieved party. [5]

One of the criticisms of Warren and Brandeis' article is that to propose the existence of a right to privacy they relied heavily on the English case of Prince Albert v. Strange[6]. It has been proposed by some academics that this was a case which dealt with confidentiality and literary property which was characterized by Warren and Brandeis as a privacy case. [7] In this case Prince Albert sought to restrain publication of otherwise unpublished private etchings and lists of works which were made by Queen Victoria. The etchings appeared to have been removed surreptitiously from the private printer to whom these etchings were given and came into the possession of one Mr. Strange who wanted to print and sell the etchings. The case specifically rejected the existence of a right to privacy in the following words:

"The case is not put by the Plaintiff on any principle of trust or contract, but on property; there is nothing to show contract or confidence. It cannot be maintained that privacy constitutes property, or that the Court will interfere to protect the owner in the enjoyment of it; Chadler v. Thompson (3 Camp. 80). In William Aldred's case (9 Rep. 58 b.), Wray C. J. said, "The law does not give an action for such things of delight"."

Infact the case mentioned the term "privacy" only once, but that statement was made in the context of whether a delay in granting an injunction in such cases would defeat the entire purpose of the suit and was not preceeded or followed by any discussion on a distinct right to privacy:

"In the present case, where privacy is the right invaded, postponing the injunction would be equivalent to denying it altogether. The interposition of this Court in these cases does not depend upon any legal right, and to be effectual, it must be immediate."

However, Warren and Brandeis interpreted this case in a different manner and came to the conclusion that the "principle which protects personal writings and all other personal productions, not against theft and physical appropriation, but against publication in any form, is in reality not the principle of private property, but that of an inviolate personality".[8]

The article further incorporated the language of Judge Cooley's treatise (Cooley on Torts)[9] which used the phrase "the right to be let alone". They said that identifying this common element should enable the courts to declare the existence of a general principle which protected a person's appearance, sayings, acts and personal relations from being exposed in public. [10] However it has been argued by some scholars that this phrase was not used by Judge Cooley with as much import as has been given by Warren and Brandeis in their article. The phrase was used by Judge Cooley in mere passing while discussing why tort law protected against not only batteries but also assaults with no physical contact, and had no connection with privacy rights. [11]

Warren and Brandeis' article started getting almost immediate attention and some amount of recognition from various quarters,[12] though it cannot be said that it was universally well received. [13] However over time this tort of privacy slowly started getting recognized by various Courts throughout the United States and got a huge boost when it was recognized in a brief section in the First Restatement of Torts published in 1939. The right to privacy in American jurisprudence got another boost and became fully entrenched later on specially with the endorsement of Dr. William Prosser who discussed privacy in his treatise on the law of torts, the subsequent editions of which had a more and more elaborate discussion of the tort of privacy. This development of the law was further enhanced by Dr. Prosser's position as a reporter of the Second Restatement of Torts, which imported a four part taxonomy of the privacy tort which had been suggested by Dr. Prosser in his previous works.[14]

Thus we see how, beginning with the article by Warren and Brandeis in 1890, the privacy tort in American jurisprudence developed over the years and became further entrenched due to the influence of William Prosser and his works on the tort of privacy.

Privacy Torts in England: An Elaborate Principle of Confidentiality

The law of confidentiality in English law, as applied in certain specific contexts such as attorney client privileges, [15] doctor patient confidentiality,[16] etc. has been applied since hundreds and even though cases relating to the breach of confidentiality had already existed, however the case of Prince Albert v. Strange,[17] be it due to the interesting facts or the fame of the parties involved, is still considered as the clearest and most well established precedent for the tort of breach of confidence.[18] Similar cases relying upon this tort kept being decided by the English Courts but the tort of confidentiality was further cemented in English common law by the case of Saltman Engineering Co. v. Campbell Engineering Co.,[19] which expanded the application of the principle by holding that the obligation to respect confidence is not limited to only instances where parties have a contractual relationship.

The seminal case on the tort of breach of confidentiality in English law was that of Coco v. A.N Clark (Engineers) Ltd., [20] where an inventor enjoined a moped manufacturer from using design ideas communicated by the inventor during failed contractual negotiations with the manufacturer.[21] In this case Megarry J., held that a case of breach of confidence normally requires three elements to succeed, apart from contract, (i) the information itself must have the necessary quality of confidence about it, (ii) that information must have been imparted in circumstances importing an obligation of confidence, and (iii) there must be an unauthorised use of that information to the detriment of the party communicating it.

Relying on the principles enunciated in the above cases and developed by subsequent decisions, English law relating to the tort of breach of confidentiality developed into a robust and flexible body of law protecting personal and commercial information from disclosure. Infact by the late 1990s, English law was very broad and gradually expanding in its scope of the tort of breach of confidentiality and Courts had stretched the idea of an obligation of confidence so as to include cases where there was not even any communication between the parties, such as secret photography and wiretapping. Further since third parties had already been reposed with an obligation of confidence when they knowingly received confidential material even if they did not have any relationship with the plaintiff, therefore the law of confidence could be extended to parties outside the relationship in which the confidence was initially made. This, although was not as broad and overarching as the American privacy tort, still had the ability to cover a wide range of cases. [22]

While English Courts on the one hand kept trying to expand the scope of the confidentiality tort, they also categorically rejected the existence of a privacy tort on the lines developed under American jurisprudence. The suggestion of the existence of such a privacy tort in English law was most recently rejected by the House of Lords in the case of Wainwright v. Home Office,[23] by Lord Bingham in the following words:

"What the courts have so far refused to do is to formulate a general principle of "invasion of privacy" (I use the quotation marks to signify doubt about what in such a context the expression would mean) from which the conditions of liability in the particular case can be deduced."

In this case the plaintiffs made a claim against the prison authorities for strip searching them before they went to meet an inmate and since the incident occurred before the coming into force of the Human Rights Act, 1998 of the UK had not yet come into force, so the plaintiffs also argued that there was an existing tortuous remedy based on a breach of privacy in common law. While discussing whether English Courts were amenable to or had ever recognized such a common law tort of privacy, the House of Lords cited decisions such as Malone v Metropolitan Police Comr, [24] and R v Khan (Sultan),[25] in both of which the courts refused to recognize a general right to privacy in the context of tapping of telephones.

The absence of any general cause of action for invasion of privacy was also acknowledged by the Court of Appeal in the context of a newspaper reporter and photographer invading into a patient's hospital bedroom in an effort to purportedly interview him and taking photographs, in the case of Kaye v Robertson.[26]

Thus relying on the above line of cases the House of Lords concluded that a general right to privacy does not exist in English common law:

"All three judgments are flat against a judicial power to declare the existence of a high-level right to privacy and I do not think that they suggest that the courts should do so. The members of the Court of Appeal certainly thought that it would be desirable if there was legislation to confer a right to protect the privacy of a person in the position of Mr Kaye against the kind of intrusion which he suffered, but they did not advocate any wider principle."

Thus it is clear that English Courts have time and again denied the existence of an American style right to privacy as emanating from common law. The Courts have instead tried to expand and widen the scope of the tort of confidentiality so as to cover various situations which may arise due to the pervasiveness of technology and which the traditional interpretation of the law of confidentiality was not equipped to deal with.

Therefore it is now a little clearer that the reason for the existence of the confusion between the torts of privacy and confidentiality is that the right to privacy had its origins in the common law precedents but the right to privacy developed as a distinct and separate right in America, primarily due to the influence of Warren and Brandeis's article as well as the works of William Prosser, whereas the Courts in England did not adopt this principle of privacy and instead favored a much more elaborate right to confidentiality. In the Indian context, this has led to some amount of confusion because, Indian case laws, as will be seen in the following chapter, borrowed heavily from American jurisprudence when discussing the right to privacy and not all cases have been able to clearly bring out the difference between the principles of privacy and confidentiality.

Indian Law

Tort of Breach of Privacy

Any analysis of the right to privacy in India, be it in the realm of constitutional law or tort law almost always includes within its ambit a discussion of the two celebrated cases of Kharak Singh v. Union of India[27] and Govind v. State of M.P.,[28] which elevated the right to privacy to the pedestal of a fundamental right under Indian law. However, an unintended consequence of this has been that pretty much every commentator on Indian law includes a discussion of these two cases when discussing the right to privacy, be it under constitutional law or under tort law. However, there is one problem with such an analysis of the right to privacy, viz. these two cases were dealing with a pure constitutional law question and relied upon American case laws to read into Article 21 an inbuilt right to privacy. However from a strictly tort law perspective, these cases are not relevant at all, and the seminal case for the tort of breach of privacy would have to be the Apex Court decision in R. Rajagopal v. State of Tamil Nadu, [29] which specifically recognized this distinction and stated that the right to privacy has two different aspects, (i) the constitutional right to privacy, and (ii) the common law right to privacy.

The facts of the R. Rajagopal case revolve around the publishing of the autobiography written by the prisoner Auto Shankar, who had been placed in jail for committing multiple murders. The autobiography contained proof of involvement of many IAS, IPS officers in his crimes. Although Shankar had initially requested that the magazine print his autobiography, he later requested that his story not be published. The publishers held that it was their right to publish the autobiography while the IPS and IAS officers on the other hand claimed that Auto Shankar was trying to defame them and wanted to ban its publication. The Supreme Court in this case, implicitly accepts the existence of a right to privacy under Indian tort law when

"21.The question is how far the principles emerging from the United States and English decisions are relevant under our constitutional system. So far as the freedom of press is concerned, it flows from the freedom of speech and expression guaranteed by Article 19(1)(a). But the said right is subject to reasonable restrictions placed thereon by an existing law or a law made after the commencement of the Constitution in the interests of or in relation to the several matters set out therein. Decency and defamation are two of the grounds mentioned in clause (2). Law of torts providing for damages for invasion of the right to privacy and defamation and Sections 499/500 IPC are the existing laws saved under clause (2). "

Discussing the distinction between the two aspects of the right to privacy, the Court held:

"The right to privacy as an independent and distinctive concept originated in the field of Tort law, under which a new cause of action for damages resulting from unlawful invasion of privacy was recognized. This right has two aspects which are but two faces of the same coin (1) the general law of privacy which affords a tort action for damages resulting from an unlawful invasion of privacy and (2) the constitutional recognition given to the right to privacy which protects personal privacy against unlawful governmental invasion. The first aspect of this right must be said to have been violated where, for example, a person's name or likeness is used, without his consent, for advertising or non-advertising purposes or for that matter, his life story is written whether laudatory or otherwise and published without his consent as explained hereinafter. In recent times, however, this right has acquired a constitutional status."

After a discussion of the various arguments presented by the parties (a number of which are not relevant for the purposes of this paper), the Supreme Court laid down the following principles regarding freedom of the press and the right to privacy:

(1) The right to privacy is implicit in the right to life and liberty guaranteed to the citizens of this country by Article 21. It is a "right to be let alone". A citizen has a right to safeguard the privacy of his own, his family, marriage, procreation, motherhood, child-bearing and education among other matters. None can publish anything concerning the above matters without his consent whether truthful or otherwise and whether laudatory or critical. If he does so, he would be violating the right to privacy of the person concerned and would be liable in an action for damages. Position may, however, be different, if a person voluntarily thrusts himself into controversy or voluntarily invites or raises a controversy.

(2) The rule aforesaid is subject to the exception, that any publication concerning the aforesaid aspects becomes unobjectionable if such publication is based upon public records including court records. This is for the reason that once a matter becomes a matter of public record, the right to privacy no longer subsists and it becomes a legitimate subject for comment by press and media among others. We are, however, of the opinion that in the interests of decency [Article 19(2)] an exception must be carved out to this rule, viz., a female who is the victim of a sexual assault, kidnap, abduction or a like offence should not further be subjected to the indignity of her name and the incident being publicised in press/media.

(3) There is yet another exception to the rule in (1) above - indeed, this is not an exception but an independent rule. In the case of public officials, it is obvious, right to privacy, or for that matter, the remedy of action for damages is simply not available with respect to their acts and conduct relevant to the discharge of their official duties. This is so even where the publication is based upon facts and statements which are not true, unless the official establishes that the publication was made (by the defendant) with reckless disregard for truth. In such a case, it would be enough for the defendant (member of the press or media) to prove that he acted after a reasonable verification of the facts; it is not necessary for him to prove that what he has written is true. Of course, where the publication is proved to be false and actuated by malice or personal animosity, the defendant would have no defence and would be liable for damages. It is equally obvious that in matters not relevant to the discharge of his duties, the public official enjoys the same protection as any other citizen, as explained in (1) and (2) above. It needs no reiteration that judiciary, which is protected by the power to punish for contempt of court and Parliament and legislatures protected as their privileges are by Articles 105 and 104 respectively of the Constitution of India, represent exceptions to this rule."

The above principles have ruled the roost on the issue of privacy and freedom of the press under Indian law, with certain minimal additions. It has been held by the Delhi High Court that even though a claim for damages may be made under tort law for breach of privacy, the Court may even grant a pre-publication injunction to prevent a breach of privacy.[30] The principles laid down inR. Rajagopal were further clarified in the case of Indu Jain v. Forbes Incorporated, [31] where a case was filed by Indu Jain in the Delhi High Court to stop Forbes magazine from featuring her family in the Forbes List of Indian Billionaires. After a discussion of the various authorities and cases on the issue the Court summarized the principles relating to privacy and freedom of the press and applying those principles rejected the claim of the plaintiff. However for the purposes of our discussion these principles are extremely useful, and have been listed below:

"(V) Public or general interest in the matter published has to be more than mere idle curiosity.

(VI) Public figures like public officials play an influential role in ordering society. They have access to mass media communication both to influence the policy and to counter-criticism of their views and activities. The citizen has a legitimate and substantial interest in the conduct of such persons and the freedom of press extends to engaging in uninhibited debate about the involvement of public figures in public issues and events. (Ref. (1994) 6 SCC 632 R. Rajagopal & Anr. Vs. State of Tamil Nadu & Others Para 18).

(VII) Right to privacy that rests in an individual may be waived by him by express or implied consent or lost by a course of conduct which estops its assertions. Such implication may be deduced from the conduct of the parties and the surrounding circumstances.

(VIII) A public person or personage is one who by his standing, accomplishment, fame, mode of life or by adopting a profession or calling which gives the public a legitimate interest in his doings, affairs and character has so become a public figure and thereby relinquishes at least a part of his privacy.

(IX) The standard to be adopted for assessing as to whether the published material infracts the right to privacy of any individual is that of an ordinary man of common sense and prudence and not an out of ordinary or hyper-sensitive man. (Ref. (2007) 1 SCC 143 Ajay Goswami v. UOI & Ors.).

(X) Even though in this country, the freedom of press does not have presumptive priority as in some other jurisdictions including the United States of America, however the importance of a free media of communication to a healthy democracy has to receive sufficient importance and emphasis.

(XI) In evaluating a relief to be granted in respect of a complaint against infraction of the right to privacy, the court has to balance the rights of the persons complaining of infraction of right to privacy against freedom of press and the right of public to disclosure of newsworthy information. Such consideration may entail the interest of the community and the court has to balance the proportionality of interfering with one right against the proportionality of impact by infraction of the other.

(XII) The publication has to be judged as a whole and news items, advertisements and published matter cannot be read without the accompanying message that is purported to be conveyed to public. Pre-publication censorship may not be countenanced in the scheme of the constitutional framework unless it is established that the publication has been made with reckless disregard for truth, publication shall not be normally prohibited. (Ref.: (2007) 1 SCC 143 Ajay Goswami Vs. UOI & Ors.; (1994) 6 SCC 632 R. Rajagopal & Anr. Vs. State of Tamil Nadu & Others and AIR 2002 Delhi 58 Khushwant Singh & Anr. Vs. Maneka Gandhi)."

Thus we see that the right to privacy in Indian law, even in the realm of tort law has had an inextricable connection with constitutional principles and constitutional cases have had a very huge impact on the development of this right in India. However a perusal of these cases shows that the right to privacy is available only insofar as information which is personal in nature, however in situations where the information is non-personal in nature the right to privacy may not be as useful and this is where, as we shall see below, the tort of breach of confidentiality comes in to fill the void.

Tort of Breach of Confidentiality

While there have been a number of landmark cases in India on the issue of breach of confidence in a contractual or a statutory setting, these cases are not very relevant for a discussion on the tort of breach of confidentiality. This is not to say that the tort of breach of confidentiality is non-existent in Indian law, the Courts here have time and again accepted that there does exist such a tortuous remedy in certain situations. We shall now try to examine the contours of this principle of torts by discussing some of the landmark cases on the topic.

In the case of Petronet LNG Ltd. v. Indian Petro Group and Another, ^{^[32]} the Delhi High Court considered a claim by a corporation seeking to prevent a news and media group from reporting its confidential negotiations and contracts with counterparties. The claim was based upon both the right to privacy as well as the right to confidentiality but in this case the court, looking at the fact that the plaintiff was a corporation and also the type of information involved denied the claim on the right to privacy. However, it did allow the injunction claimed by the corporation based on the right to confidentiality. Summarizing its discussion of the right to confidentiality, the Court stated thus:

"49. It may be seen from the above discussion, that originally, the law recognized relationships- either through status (marriage) or arising from contract (such as employment, contract for services etc) as imposing duties of confidentiality. The decision in Coco (1969) marked a shift, though imperceptibly, to a possibly wider area or zone. Douglas noted the paradigm shift in the perception, with the enactment of the Human Rights Act; even before that, in Attorney General (2) (also called the Spycatcher case, or the Guardian case) the Court acknowledged that there could be situations -where a third party (likened to a passerby, coming across sensitive information, wafting from the top of a building, below) being obliged to maintain confidentiality, having regard to the nature and sensitivity of the information….."

While discussing the factors that the Court would have to consider while deciding a claim based on the breach of confidentiality, the Delhi High Court relied upon and quoted from English judgments as follows:

"50. Even while recognizing the wider nature of duty - in the light of the Human Rights Act, 1998, and Articles 8 and 10 of the European Convention, it was cautioned that the court, in each case, where breach of confidentiality, is complained, and even found- has to engage in a balancing process; the factors to be weighed while doing so, were reflected in A v. B Plc [2003] QB 195; the latest judgment in H.R.H. Prince of Wales indicates that the court would look at the kind of information, the nature of relationship, etc, and also consider proportionality, while weighing whether relief could be given:

"The court will need to consider whether, having regard to the nature of the information and all the relevant circumstances, it is legitimate for the owner of the information to seek to keep it confidential or whether it is in the public interest that the information should be made public….

..In applying the test of proportionality, the nature of the relationship that gives rise to the duty of confidentiality may be important."

Holding that the principles discussed in the English cases given in the context of individual rights of confidentiality would also hold good in the case of corporations, the Court held that:

"51. Though the reported cases, discussed above, all dealt with individual right, to confidentiality of private information (Duchess of Argyll;Frazer; Douglas; Campbell and H.R.H. Prince of Wales) yet, the formulations consciously approved in the Guardian, and Campbell, embrace a wider zone of confidentiality, that can possibly be asserted. For instance, professional records of doctors regarding treatment of patients, ailments of individuals, particulars, statements of witnesses deposing in investigations into certain types of crimes, particulars of even accused who are facing investigative processes, details victims of heinous assaults and crimes, etc, may, be construed as confidential information, which, if revealed, may have untoward consequences, casting a corresponding duty on the person who gets such information - either through effort, or unwittingly, not to reveal it. Similarly, in the cases of corporations and businesses, there could be legitimate concerns about its internal processes and trade secrets, marketing strategies which are in their nascent stages, pricing policies and so on, which, if prematurely made public, could result in irreversible, and unknown commercial consequences. However, what should be the approach of the court when the aggrieved party approaches it for relief, would depend on the facts of each case, the nature of the information, the corresponding content of the duty, and the balancing exercise to be carried out. It is held, therefore, that even though the plaintiff cannot rely on privacy, its suit is maintainable, as it can assert confidentiality in its information."

Apart from privacy, the law of confidentiality has been used in cases where there has been a definite harm to one side but none of the other laws provide for any relief. This was the situation in the case of Zee Telefilms Limited v. Sundial Communications Pvt Ltd, [33] where a company which developed television and media programming had discussed their concept of a new show with a network during negotiations which could not be finalized. The network however subsequently tried to start a new show which was based on the same concept and idea as the one presented by the plaintiff company. The plaintiff sued the network, inter alia on a claim for breach of confidential information and asked that the network be prevented from airing its show. In this case the plaintiff's claim based on copyright was rejected because copyright only subsists on the expression of an idea and not the idea itself, therefore the tort of breach of confidentiality had to be resorted to in order to give relief to the plaintiffs. Discussing the difference between confidentiality and copyright, the Division Bench of the Bombay High Court held:

"10. The law of the confidence is different from law of copyright. In paragraph 21.2 (page 721), [of Copinger and Skone-James on Copyright (13th Edn.)] the learned author has pointed out that right to restrain publication of work upon the grounds, that to do so would be breach of trust of confidence, is a broader right than proprietary right of copyright. There can be no copyright of ideas or information and it is not infringement of copyright to adopt or appropriate ideas of another or to publish information received from another, provided there is no substantial copying of the form in which those ideas have, or that information has, been previously embodied. But if the ideas or information have been acquired by a person under such circumstances that it would be a breach of good faith to publish them and he has no just case or excuses for doing so, the court may grant injunction against him. The distinction between the copyright and confidence may be of considerable importance with regard to unpublished manuscripts / works submitted, and not accepted, for publication or use. Whereas copyright protects material that has been reduced to permanent form, the general law of confidence may protect either written or oral confidential communication. Copyright is good against the world generally while confidence operates against those who receive information or ideas in confidence. Copyright has a fixed statutory time limit which does not apply to confidential information, though in practice application of confidence usually ceases when the information or ideas becomes public knowledge. Further the obligation of confidence rests not only on the original recipient, but also on any person who received the information with knowledge acquired at the time or subsequently that it was originally given in confidence."

A similar view, in a similar fact situation Single Judge Bench of the Delhi High Court had also came to a similar conclusion in the case of Anil Gupta v. Kunal Das Gupta.[34]

The law of confidentiality has also come to the rescue of employers in attempting to prevent important business and client information from being taken or copied by the employees for their personal gain. In the case of Mr. Diljeet Titus, Advocate v. Mr. Alfred A. Adebare, [35] the Delhi High Court had to decide a claim based on breach of confidentiality when some ex-employees of a law firm tried to take away client lists and drafts of legal agreements and opinions from their earlier employer-law firm. Discussing the importance of preventing employees or former employees from away which such actions, the Court held as follows:

"81. I am in full agreement with the views expressed in Margaret, Duchess of Argyll (Feme Sole) v. Duke of Argyll and Ors. (1965) 1 All ER 611, that a Court must step in to restrain a breach of confidence independent of any right under law. Such an obligation need not be expressed but be implied and the breach of such confidence is independent of any other right as stated above. The obligation of confidence between an advocate and the client can hardly be re-emphasised. Section 16 of the Copyright Act itself emphasizes the aspect of confidentiality de hors even the rights under the Copyright Act. If the defendants are permitted to do what they have done it would shake the very confidence of relationship between the advocates and the trust imposed by clients in their advocates. The actions of the defendants cause injury to the plaintiff and as observed by Aristotle: 'It makes no difference whether a good man defrauds a bad one, nor whether a man who commits an adultery be a good or a bad man; the law looks only to the difference created by the injury."

The Court allowed the claim of the law firm holding that the relationship between a law firm and its attorneys is of a nature where information passed between them would be covered by the law of confidence and would not be allowed to be copied or used by the attorneys for their individual gain.

Recently, in 2009, the principles relating to breach of confidentiality under Indian law were very succinctly summarized by the Bombay High Court in the case of Urmi Juvekar Chiang v. Global Broadcasting News Limited,[36] where in a fact situation similar to the ones in Zee Telefilms case and the Anil Gupta case, the Court discussed a number of previous cases on breach of confidentiality and laid down the following principles:

"8. The principles on which the action of breach of confidence can succeed, have been culled out as

(i) he (Plaintiff) had to identify clearly what was the information he was relying on;

(ii) he (Plaintiff) had to show that it was handed over in the circumstances of confidence;

(iii) he (Plaintiff) had to show that it was information of the type which could be treated as

confidential; and

(iv) he (Plaintiff) had to show that it was used without licence or there was threat to use it…… It is further noted that at interlocutory stage, the Plaintiff does not have to prove (iii) and (iv) referred to above, as he will at the trial. But the Plaintiff must address them and show that he has atleast seriously arguable case in relation to each of them."

From the above discussion on Indian law it is clear that the Courts in India have tried to incorporate the best of both worlds, in the sense that it has taken and adopted the principle of a right to privacy, a breach of which would give rise to an action in torts, from American jurisprudence while rejecting the stand taken by English Courts in rejecting such a right to privacy. However, Indian Courts have often referred to the decisions given by English Courts as well as American Courts in interpreting the principle of the right to confidentiality. Therefore on an overall examination it would appear that insofar as the rights to privacy and confidentiality are concerned, Indian jurisprudence has more in common with American law rather than English law.

Conclusion

The law of privacy does not seem to have existed as a recognizable principle of law before it was propounded in the article by Warren and Brandeis in the Harvard Law Review in 1890. It slowly gained traction in American jurisprudence over the twentieth century but was rejected outright by the Courts in England, which preferred to follow the principle of confidentiality rather than privacy and tried to expand that old principle to fit newer and newer situations. Since Indian law borrows heavily from English law and to a smaller extent also from American law, the Courts in India have accepted both, the principle of a right to privacy as well as a right to confidentiality. This is not to say that the Courts in America do not recognize a right to confidentiality and only accept a right to privacy. Infact American Courts, just like their Indian counterparts, recognize both a right to confidentiality as well as a right to privacy.

Since Indian courts accept both the concept of breach of privacy as well as breach of confidentiality, one should not try to figure out if a particular circumstance is more appropriate for the one over the other, but actually use both principles to supplement one another for achieving the same objective. For example in situations where the conditions required for the application of the law of confidentiality do not exist such as disclosure of personal information by a person who did not receive it in a confidential capacity, one could apply the principle of privacy to prevent such information being disclosed or claim a remedy after disclosure. On the other hand if the information to be disclosed is not of a personal nature then one could try to utilize the law of confidentiality to prevent disclosure or claim damages.

[1] Harry Kalven, Jr., Privacy in Tort Law-Were Warren and Brandeis Wrong?, "31 Law & Contemp. Problems". 326, 327 (1966). Elbridge L. Adams, The Right of Privacy, and Its Relation to the Law of Libel, 39 AM. L. REV. 37 (1905).

[2] Wainwright v. Home Office, 2003 UKHL 53.

[3] Neil M. Richards & Daniel J. Solove, Privacy's Other Path: Recovering the Law of Confidentiality, "96 Georgetown Law Journal", 123 at 128 and 132 (2007).

[4] Pollard v. Photographic Co., (1888) 40 Ch. D. 345.

[5] It is also said that this concern arose out of the personal experience of Samuel Warren, whose wedding announcement as well as the report on his sister-in-law's death in the newspapers did not go down well with him. http://www.english.illinois.edu/-people-/faculty/debaron/380/380powerpoint/privacy.pdf

[6] (1848) 41 Eng. Rep. 1171 (Ch.).

[7] Neil M. Richards & Daniel J. Solove, Privacy's Other Path: Recovering the Law of Confidentiality, "96 Georgetown Law Journal", 123 (2007).

[8] Samuel D. Warren and Louis D. Brandeis, The Right to Privacy, "4 Harvard Law Review", 193 at 207 (1890).

[9] Thomas M. Cooley, The Law Of Torts, 2^nd Ed., 1888, p. 29.

[10] Wainwright v. Home Office, 2003 UKHL 53.

[11] Neil M. Richards & Daniel J. Solove, Privacy's Other Path: Recovering the Law of Confidentiality, "96 Georgetown Law Journal", 123 (2007).

[12] As early as in 1891, the case of Schuyler v. Curtis, 45 NYS 787 (Sup. Ct., 1891) involving the erection of a statue of a dead person, recognized the principle proposed in Warren and Brandeis' article.

[13] Most famously the case of Robertson v. Rochester folding Box Co., 64 NE 442 (NY 1902) where the New York Court of appeals specifically rejected a the existence of a right to privacy as proposed by Warren and Brandeis.

[14] Neil M. Richards & Daniel J. Solove, Privacy's Other Path: Recovering the Law of Confidentiality, "96 Georgetown Law Journal", 123 (2007).

[15] Bredd v. Lovelace, (1577) 21 Eng. Rep. 33 (Ch.)

[16] For doctor patient confidentiality we need look no further than the Hippocratic Oath itself which states "Whatever, in connection with my professional service, or not in connection with it, I see or hear, in the life of men, which ought not to be spoken of abroad, I will not divulge, as reckoning that all such should be kept secret".

[17] (1848) 41 Eng. Rep. 1171 (Ch.).

[18] Neil M. Richards & Daniel J. Solove, Privacy's Other Path: Recovering the Law of Confidentiality, 96 GEORGETOWN LAW JOURNAL, 123 (2007).

[19] [1948] 65 RPC 203.

[20] [1969] RPC 41 (UK).

[21] Neil M. Richards & Daniel J. Solove, Privacy's Other Path: Recovering the Law of Confidentiality, 96 GEORGETOWN LAW JOURNAL, 123 (2007).

[22] Neil M. Richards & Daniel J. Solove, Privacy's Other Path: Recovering the Law of Confidentiality, 96 GEORGETOWN LAW JOURNAL, 123 (2007).

[23] 2003 UKHL 53.

[24] [1979] Ch 344.

[25] [1997] AC 558.

[26] [1991] FSR 62

[27] http://www.judis.nic.in/supremecourt/imgs1.aspx?filename=3641 .

[28] http://www.judis.nic.in/supremecourt/imgs1.aspx?filename=6014 .

[29] http://www.judis.nic.in/supremecourt/imgs1.aspx?filename=11212 .

[30] Phoolan Devi v. Shekhar Kapoor and others, http://indiankanoon.org/doc/793946/.

[31] http://lobis.nic.in/dhc/GM/judgement/25-01-2010/GM12102007S21722006.pdf

[32] http://lobis.nic.in/dhc/SRB/judgement/25-04-2009/SRB13042009S11022006.pdf

[33] http://indiankanoon.org/doc/603848/ .

[34] http://indiankanoon.org/doc/1709727/ .

[35] http://delhicourts.nic.in/may06/DILJEET%20TITUS%20VS.%20ALFED%20A.%20ADEBARE.htm .

[36] http://indiankanoon.org/doc/582634/ .

For more details visit http://editors.cis-india.org/internet-governance/blog/relationship-between-privacy-and-confidentiality

White Paper on RTI and Privacy V1.2

vipul — 2014-11-09T02:53:51Z

This white paper explores the relationship between privacy and transparency in the context of the right to information in India. Analysing pertinent case law and legislation - the paper highlights how the courts and the law in India address questions of transparency vs. privacy.

Introduction

Although the right to information is not specifically spelt out in the Constitution of India, 1950, it has been read into Articles 14 (right to equality), 19(1)(a) (freedom of speech and expression) and 21 (right to life) through cases such as Bennet Coleman v. Union of India,[1] Tata Press Ltd. v. Maharashtra Telephone Nigam Ltd.,[2] etc. The same Articles of the Constitution were also interpreted in Kharak Singh v.State of U.P.,[3] Govind v. State of M.P., [4] and a number of other cases, to include within their scope a right to privacy. At the very outset it appears that a right to receive information -though achieving greater transparency in public life - could impinge on the right to privacy of certain people. The presumed tension between the right to privacy and the right to information has been widely recognized and a framework towards balancing the two rights, has been widely discussed across jurisdictions. In India, nowhere is this conflict and the attempt to balance it more evident than under the Right to Information Act, 2005 (the "RTI Act").

Supporting the constitutional right to information enjoyed by the citizens, is the statutorily recognized right to information granted under the RTI Act. Any potential infringement of the right to privacy by the provisions of the RTI Act are sought to be balanced by section 8 which provides that no information should be disclosed if it creates an unwarranted invasion of the privacy of any individual. This exception states that there is no obligation to disclose information which relates to personal information, the disclosure of which has no relationship to any public activity or interest, or which would cause unwarranted invasion of the privacy of the individual unless the larger public interest justifies the disclosure of such information. [5] The Act further goes on to say that where any information relating to or supplied by a third party and treated by that party as confidential, is to be disclosed, the Central Public Information Officer or State Public Information Officer has to give written notice to that party within five days of receiving such a request inviting such third party (within ten days) to make its case as to whether such information should or should not be disclosed.[6]

A plain reading of section 11 suggests that for the section to apply the following three conditions have to be satisfied, i.e. (i) if the PIO is considering disclosing the information (ii) the information relates to the third party or was given to a Public Authority by the third party in confidence; and (iii) the third party treated the information to be a confidential. It has been held that in order to satisfy the third part of the test stated above, the third party has to be consulted and therefore a notice has to be sent to the third party. Even if the third party claims confidentiality, the proviso to the section provides that the information cannot be withheld if the public interest in the disclosure outweighs the possible harm or injury that may be caused to the third party, except in cases of trade or commercial secrets.[7] The Courts have also held that section 11 should be read keeping in mind the exceptions contained in section 8 (discussed in detail later) and the exceptions contained therein. [8]

This principle of non disclosure of private information can be found across a number of common law jurisdictions. The United Kingdom's Freedom of Information Act, 2000 exempts the disclosure of information where it would violate the data protection principles contained in the Data Protection Act, 1998 or constitute an actionable breach of confidence.[9] The Australian Freedom of Information Act, 1982 categorizes documents involving unreasonable disclosure of personal information as conditionally exempt i.e. allows for their disclosure unless such disclosure would be contrary to public interest.[10] The Canadian Access to Information Act also has a provision which allows the authorities to refuse to disclose personal information except in accordance with the provisions of the Canadian Privacy Act. [11]

An overview of the RTI Act, especially sections 6 to 8 seems to give the impression that the legislature has tried to balance and harmonize conflicting public and private rights and interests by building sufficient safeguards and exceptions to the general principles of disclosure under the Act. [12] This is why it is generally suggested that section 8, when applied, should be given a strict interpretation as it is a fetter on not only a statutory right granted under the RTI Act but also a pre-existing constitutional right. [13] Logical as this argument may seem and appropriate in some circumstances, it does present a problem when dealing with the privacy exception contained in section 8(1)(j). That is because the right to privacy envisaged in this section is also a pre-existing constitutional right which has been traced to the same provisions of the Constitution from which the constitutional right of freedom of information emanates.[14] Therefore there is an ambiguity regarding the treatment and priority given to the privacy exception vs. the disclosure mandate in the RTI Act, as it requires the balancing of not only two competing statutory rights but also two constitutional rights.

The Privacy Exception

As discussed earlier, the purpose of the RTI Act is to increase transparency and ensure that people have access to as much public information as possible. Such a right is critical in a democratic country as it allows for accountability of the State and allows individuals to seek out information and make informed decisions. However, it seems from the language of the RTI Act that at the time of its drafting the legislature did realize that there would be a conflict between the endeavor to provide information and the right to privacy of individuals over the information kept with public authorities, which is why a privacy exception was carved into section 8(1)(j) of the Right to Information Act. The Act does not only protect the privacy of the third party who's information is at risk of being disclosed, but also the privacy of the applicant. In fact it has now been held that a private respondent need not give his/her ID or address as long as the information provided by him/her is sufficient to contact him/her.[15]

It is interesting to note that although the RTI Act gives every citizen a right to information, it does not limit this right with a stipulation as to how the information shall be used by the applicant or the reason for which the applicant wants such information. [16] This lack of a purpose limitation in the Act may have privacy implications as non sensitive personal information could be sought from different sources and processed by any person so as to convert such non-sensitive or anonymous information into identifiable information which could directly impact the privacy of individuals.

The exception in S. 8(1)(j) prohibits the disclosure of personal information for two reasons (i) its disclosure does not relate to any public activity or interest or (ii) it would be an unwarranted invasion into privacy. The above two conditions however get trumped if a larger public interest is satisfied by the disclosure of such information.

One interesting thing about the exception contained in section 8(1)(j) is that this exception itself has an exception to it in the form of a proviso. The proviso says that any information which cannot be denied to the central or state legislature shall not be denied to any person. Since the proviso has been placed at the end of sub-section 8(1) which is also the end of clause 8(1)(j), one might be tempted to ask whether this proviso applies only to the privacy exception i.e. clause 8(1)(j) or to the entire sub-section 8(1) (which includes other exceptions such as national interest, etc.). This issue was put to rest by the Bombay High Court when it held that since the proviso has been put only after clause 8(1)(j) and not before each and every clause, it would not apply to the entire sub-section 8(1) but only to clause 8(1)(j), thus ensuring that the exceptions to disclosure other than the right to privacy are not restricted by this proviso.[17]

Scope of Proviso to section 8(1)(j)
Though the courts have agreed that the proviso is applicable only to section 8(1)(j), the import of the proviso to section 8(1)(j) is a little more ambiguous and there are conflicting decisions by different High Courts on this point. Whereas the Bombay High Court has laid emphasis on the letter of the proviso and derived strength from the objects and overall scheme of the Act to water down the provisions of section 8(1)(j), [18] the Delhi High Court has disagreed with such an approach which gives "undue, even overwhelming deference" to Parliamentary privilege in seeking information. Such an approach would render the protection under section 8(1)j) meaningless, and the basic safeguard bereft of content.[19] In the words of the Delhi High Court:

" The proviso has to be only as confined to what it enacts, to the class of information that Parliament can ordinarily seek; if it were held that all information relating to all public servants, even private information, can be accessed by Parliament, Section 8(1)(j) would be devoid of any substance, because the provision makes no distinction between public and private information. Moreover there is no law which enables Parliament to demand all such information; it has to be necessarily in the context of some matter, or investigation. If the reasoning of the Bombay High Court were to be accepted, there would be nothing left of the right to privacy, elevated to the status of a fundamental right, by several judgments of the Supreme Court. "

The interpretation given by the Delhi High Court thus ensures that section 8(1)(j) still has some effect, as otherwise the privacy exception would have gotten steamrolled by parliamentary privilege and all sorts of information such as Income Tax Returns, etc. of both private and public individuals would have been liable to disclosure under the RTI Act.

Unfortunately, the RTI Act does not describe the terms "personal information" or "larger public interest" used in section 8(1)(j), which leaves some amount of ambiguity in interpreting the privacy exception to the RTI Act. Therefore the only option for anyone to understand these terms in greater depth is to discuss and analyse the case laws developed by the Hon'ble Supreme Court and the High Courts which have tried to throw some light on this issue.

We shall discuss some of these landmark judgments to understand the interpretations given to these terms and then move on to specific instances where (applying these principles) information has been disclosed or denied.

Personal Information
The RTI Act defines the term information but does not define the term "personal information". Therefore one has to rely on judicial pronouncements to understand the term a more clearly. Looking at the common understanding and dictionary meaning of "personal" as well as the definition of "information" contained in the RTI Act it could be said that personal information would be information, information that pertains to a person and as such it takes into its fold possibly every kind of information relating to the person. Now, such personal information of the person may, or may not, have relation to any public activity, or to public interest. At the same time, such personal information may, or may not, be private to the person. [20]

The Delhi High Court has tried to draw a distinction between the term "private information" which encompasses the personal intimacies of the home, the family, marriage, motherhood, procreation, child rearing and of the like nature and "personal information" which would be any information that pertains to an individual. This would logically imply that all private information would be part of personal information but not the other way round. [21] The term 'personal information' has in other cases, been variously described as "identity particulars of public servants, i.e. details such as their dates of birth, personal identification numbers",[22] and as including tax returns, medical records etc.[23] It is worth noting that just because the term used is "personal information" does not mean that the information always has to relate to an actual person, but may even be a juristic entity such as a trust or corporation, etc.[24]

Larger Public Interest
The term larger public interest has not been discussed or defined in the RTI Act, however the Courts have developed some tests to determine if in a given situation, personal information should be disclosed in the larger public interest.

Whenever a Public Information Officer is asked for personal information about any person, it has to balance the competing claims of the privacy of the third party on the one hand and claim of public interest on the other and determine whether the public interest in such a disclosure satisfies violating a person's privacy. The expression "public interest" is not capable of a precise definition and does not have a rigid meaning. It is therefore an elastic term and takes its colors from the statute in which it occurs, the concept varying with the time and the state of the society and its needs. This seems to be the reason why the legislature and even the Courts have shied away from a precise definition of "public interest". However, the term public interest does not mean something that is merely interesting or satisfies the curiosity or love of information or amusement; but something in which a class of the community have some interest by which their rights or liabilities are affected.[25]

There have been suggestions that the use of the word "larger" before the term "public interest" denotes that the public interest involved should serve a large section of the society and not just a small section of it, i.e. if the information has a bearing on the economy, the moral values in the society; the environment; national safety, or the like, the same would qualify as "larger public interest".[26] However this is not a very well supported theory and the usage of the term "larger public interest" cannot be given such a narrow meaning, for example what if the disclosure of the information could save the lives of only 10 people or even just 5 children? Would the information not be released just because it violates one person's right to privacy and there is not a significant number of lives at stake? This does not seem to be what all the cases on the right to privacy, right from Kharak Singh[27] all the way to Naz Foundation, [28] seem to suggest. Infact, in the very same judgment where the above interpretation has been suggested, the Court undermines this argument by giving the example of a person with a previous crime of sexual assault being employed in an orphanage and says that the interest of the small group of children in the orphanage would outweigh the privacy concerns of the individual thus requiring disclosure of all information regarding the employee's past.

In light of the above understanding of section 8(1)(j), there seem to be two different tests that have been proposed by the Courts, which seem to connote the same principle although in different words:

1. The test laid down by Union Public Service Commission v. R.K. Jain:

(i) The information sought must relate to „Personal information‟ as understood above of a third party. Therefore, if the information sought does not qualify as personal information, the exemption would not apply;

(ii) Such personal information should relate to a third person, i.e., a person other than the information seeker or the public authority; AND

(iii) (a) The information sought should not have a relation to any public activity qua such third person, or to public interest. If the information sought relates to public activity of the third party, i.e. to his activities falling within the public domain, the exemption would not apply. Similarly, if the disclosure of the personal information is found justified in public interest, the exemption would be lifted, otherwise not; OR (b) The disclosure of the information would cause unwarranted invasion of the privacy of the individual, and that there is no larger public interest involved in such disclosure. [29]

2. The other test was laid down in Vijay Prakash v. Union of India, but in the specific circumstances of disclosure of personal information relating to a public official:

(i) whether the information is deemed to comprise the individual's private details, unrelated to his position in the organization;

(ii) whether the disclosure of the personal information is with the aim of providing knowledge of the proper performance of the duties and tasks assigned to the public servant in any specific case; and

(iii) whether the disclosure will furnish any information required to establish accountability or transparency in the use of public resources. [30]

Constitutional Restrictions
Since there is not extensive academic discussion on the meaning of the term "larger public interest" or "public interest" as provided in section 8(1)(j), one is forced to turn to other sources to get a better idea of these terms. One such source is constitutional law, since the right to privacy, as contained in section 8(1)(j) has its origins in Articles 14,[31] 19(1)(a) [32] and 21[33] of the Constitution of India. The constitutional right to privacy in India is also not an absolute right and various cases have carved out a number of exceptions to privacy, a perusal of which may give some indication as to what may be considered as 'larger public interest', these restrictions are:

a) Reasonable restrictions can be imposed on the right to privacy in the interests of the sovereignty and integrity of India, the security of the State, friendly relations with foreign States, public order, decency or morality, or in relation to contempt of court, defamation or incitement to an offence; ^{^[34]}

b) Reasonable restrictions can be imposed upon the right to privacy either in the interests of the general public or for the protection of the interests of any Scheduled Tribe;^{^[35]}

c) The right to privacy can be restricted by procedure established by law which procedure would have to satisfy the test laid down in the Maneka Gandhi case.^{^[36]}

d) The right can be restricted if there is an important countervailing interest which is superior; ^{^[37]}

e) It can be restricted if there is a compelling state interest to be served by doing so; ^{^[38]}

f) It can be restricted in case there is a compelling public interest to be served by doing so; ^{^[39]}

g) The Rajagopal tests - This case lays down three exceptions to the rule that a person's private information cannot be published, viz. i) person voluntarily thrusts himself into controversy or voluntarily raises or invites a controversy, ii) if publication is based on public records other than for sexual assault, kidnap and abduction, iii) there is no right to privacy for public officials with respect to their acts and conduct relevant to the discharge of their official duties. It must be noted that although the Court talks about public records, it does not use the term 'public domain' and thus it is possible that even if a document has been leaked in the public domain and is freely available, if it is not a matter of public record, the right to privacy can still be claimed in regard to it.^{^[40]}

Section 8(1)(j) in Practice

The discussion in the previous chapter regarding the interpretation of section 8(1)(j), though (hopefully) helpful still seems a little abstract without specific instances and illustrations to drive home the point. In this chapter we shall endeavor to briefly discuss some specific cases regarding information disclosure where the issue of violation of privacy of a third party was raised.

Private Information of Public Officials
Some of the most common problems regarding section 8(1)(j) come up when discussing information (personal or otherwise) regarding public officers. The issue comes up because an argument can be made that certain information such as income tax details, financial details, medical records, etc. of public officials should be disclosed since it has a bearing on their public activities and disclosure of such information in case of crooked officers would serve the interests of transparency and cleaner government (hence serving a larger public interest). Although section 8(1)(j) does not make any distinction between a private person and a public servant, a distinction in the way their personal information is treated does appear in reality due to the inherent nature of a public servant. Infact it has sometimes been argued that public servants must waive the right to privacy in favour of transparency.[41] However this argument has been repeatedly rejected by the Courts, [42] just because a person assumes public office does not mean that he/she would automatically lose their right to privacy in favour of transparency.

If personal information regarding a public servant is asked for, then a distinction must be made between the information that is inherently personal to the person and that which has a connection with his/her public functions. The information exempted under section 8(1)(j) is personal information which is so intimately private in nature that the disclosure of the same would not benefit any other person, but would result in the invasion of the privacy of the third party.[43] In short, the Courts have concluded that there can be no blanket rule regarding what information can and cannot be disclosed when it comes to a public servant, and the disclosure (or lack of it) would depend upon the circumstances of each case.

Although the earlier thinking of the CIC as well as various High Courts of the country was that information regarding disciplinary proceedings and service records of public officials is to be treated as public information in order to boost transparency,[44] however this line of thinking took almost a U-turn in 2012 after the decision of the Supreme Court in Girish Ramchandra Deshpande v. Central Information Commissioner,[45] and now the prevailing principle is that such information is personal information and should not be disclosed unless a larger public interest is would be served by the disclosure.

It would also be helpful to look at a list of the type of information regarding public servants which has been disclosed in the past, gleaned from various cases, to get a better understanding of the prevailing trends in such cases:

(i) Details of postings of public servants at various points of time, since this was not considered as personal information; [46]

(ii) Copies of posting/ transfer orders of public servants, since it was not considered personal information; [47]

(iii) Information regarding transfers of colleagues cannot be exempted from disclosure, since disclosure would not cause any unwarranted invasion of privacy and non disclosure would defeat the object of the RTI Act;[48]

(iv) Information regarding the criteria adopted and the marks allotted to various academic qualifications, experience and interview in selection process for government posts by the state Public Service Commission;[49]

(v) Information regarding marks obtained in written test, interview, annual confidential reports of the applicant as well as the marks in the written test and interview of the last candidate selected, since this information was not considered as personal information; [50]

(vi) Information relating to the appointment and educational certificates of teachers in an educational institution (which satisfies the requirements of being a public authority) was disclosed since this was considered as relevant to them performing their functions. [51]

The performance of an employee/officer in an organization is primarily a matter between the employee and the employer and normally those aspects are governed by the service rules which fall under the expression "personal information", the disclosure of which has no relationship to any public activity or public interest. To understand this better below is a brief list of the type of information that has been considered by the Courts as personal information which is liable to be exempt from disclosure under section 8(1)(j):

(i) (a) Salary details, (b) show cause notice, memo and censure, (c) return of assets and liabilities, (d) details of investment and other related details, (e) details of gifts accepted, (f) complete enquiry proceedings, (g) details of income tax returns;[52]

(ii) All memos issued, show cause notices and orders of censure/punishment etc. are personal information. Cannot be revealed unless a larger public interest justifies such disclosure;[53]

(iii) Disciplinary information of an employee is personal information and is exempt under section 8(1)(j); [54]

(iv) Medical records cannot be disclosed due to section 8(1)(j) as they come under "personal information", unless a larger public interest can be shown meriting such disclosure;[55]

(v) Copy of personnel records and service book (containing Annual Confidential Reports, etc.) of a public servant is personal information and cannot be disclosed due to section 8(1)(j);[56]

(vi) Information regarding sexual disorder, DNA test between an officer and his surrogate mother, name of his biological father and step father, name of his mother and surrogate step mother and such other aspects were denied by the Courts as such information was considered beyond the perception of decency and was an invasion into another man's privacy.[57]

It is not just the issue of disclosure of personal details of public officials that raises complicated questions regarding the right to information, but the opposite is equally true, i.e. what about seemingly "public" details of private individuals. A very complicated question arose with regard to information relating to the passport details of private individuals.

Passport Information of Private Individuals
The disclosure of passport details of private individuals is complicated because for a long time there was some confusion because of the treatment to be given to passport details, i.e. would its disclosure cause an invasion of privacy since it contains personally identifying information, specially because photocopies of the passport are regularly given for various purposes such as travelling, getting a new phone connection, etc. The Central Information Commission used a somewhat convoluted logic that since a person providing information relating to his residence and identity while applying for a passport was engaging in a public activity therefore such information relates to a public activity and should be disclosed. This view was rejected by the Delhi High Court in the case of Union of India v. Hardev Singh,[58] and the view taken inHardev Singh was later endorsed and relied upon in Union of India v. Rajesh Bhatia, [59] while hearing a number of petitions to decide what details of a third party's passport should be disclosed and what should be exempt from disclosure.

A list of the Courts conclusions is given below:

Information that can be revealed:

(i) Name of passport holder;

(ii) Whether a visa was issued to a third party or not;

(iii) Details of the passport including dates of first issue, subsequent renewals, dates of application for renewals, numbers of the new passports and date of expiry;

(iv) Nature of documents submitted as proof;

(v) Name of police station from where verification for passport was done;

(vi) Whether any report was called for from the jurisdictional police;

(vii) Whether passport was renewed through an agent or through a foreign embassy;

(viii) Whether it was renewed in India or any foreign country;

(ix) Whether tatkal facility was availed by the passport holder;

Information that cannot be revealed:

(i) Contents of the documents submitted with the passport application;

(ii) Marital status and name and address of husband;

(iii) Whether person's name figures as mother/guardian in the passport of any minor;

(iv) Copy of passport application form;

(v) Residential address of passport holder;

(vi) Details of cases filed/pending against passport holder;

(vii) Copy of old passport;

(viii) Report of the police and CID for issuing the passport;

(ix) Copy of the Verification Certificate, if any such Verification Certificate was relied upon for the issue of the passport.

Other Instances

Apart from the above two broad categories of information that has been the subject of intense judicial discussion, certain other situations have also arisen where the Courts have had to decide the issue of disclosure under section 8(1)(j), a brief summary of such situations is given below:

(i) names and details of people who received money as donations from the President out of public funds was considered as information which has a definite link to public activities and was therefore liable to be disclosed;[60]

(ii) information regarding the religion practiced by a person, who is alleged to be a public figure, collected by the Census authorities was not disclosed since it was held that the quest to obtain the information about the religion professed or not professed by a citizen cannot be in any event; [61]

(iii) information regarding all FIRs against a person was not protected under section 8(1)(j) since it was already a matter of public record and Court record and could not be said to be an invasion of the person's privacy;[62]

(iv) information regarding the income tax returns of a public charitable trust was held not to be exempt under section 8(1)(j), since the trust involved was a public charitable trust functioning under a Scheme formulated by the District Court and registered under the Bombay Public Trust Act as such due to its character and activities its tax returns would be in relation to public interest or activities.[63]

Conclusion

A discussion of the provisions of section 8 and 11 of the RTI Act as well as the case laws under it reveals that the legislature was aware of the dangers posed to the privacy of individuals from such a powerful transparency law. However, it did not want the exceptions carved out to protect the privacy of individuals to nullify the objects of the RTI Act and therefore drafted the legislation to incorporate the principle that although the RTI Act should not be used to violate the privacy of individuals, such an exception will not be applicable if a larger public interest is to be served by the disclosure. This principle is in line with other common law jurisdictions such as the U.K, Austalia, Canada, etc. which have similar exceptions based on privacy or confidentiality.

However it is disappointing to note that the legislature has only left the legislation at the stage of the principle which has left the language of the exception very wide and open to varied interpretations. It is understandable that the legislature would try to keep specifics out of the scope of the section to make it future proof. It is obvious that it would be impossible for the legislature or the courts to imagine every single circumstance that could arise where the right to information and the right to privacy would be at loggerheads. However, such wide and ambiguous drafting has led to cases where the Courts and the Central Information Commission have taken opposing views, with the views of the Court obviously prevailing in the end. This was illustrated by the issue of disclosure of passport details of private individuals with a large number of CIC cases taking different views till the High Court of Delhi gave categorical findings on the issue in the Hardev Singh and Rajesh Bhatia cases. Similar was the issue of service details of public officials since before the decision of the Supreme Court in the case of Girish Ramchandra Deshpande in 2012 the prevailing thinking of the CIC was that details of disciplinary proceedings against public officials are not covered by section 8(1)(j), however this thinking has now taken a U-turn as the Supreme Court's understanding of the right to privacy has taken stronger roots and such information is now outside the scope of the RTI Act, unless a larger public interest in the disclosure can be shown.

The ambiguity that arises in application when trying to balance the right to privacy against the right to information is a drawback in incorporating only a principle and leaving the language ambiguous in any legislation. This paper does not advocate that the legislature try to list out all the instances of this problem that are possibly imaginable, this would be too time consuming and may even be counterproductive. However, it is possible for the legislature to adopt an accepted practice of legislative drafting and list certain instances where there is an obvious balancing required between the two rights and put them as "Illustrations" to the section. This device has been utilised to great effect by some of the most fundamental legislations in India such as the Contract Act, 1872 and the Indian Penal Code, 1860. An alternative to this approach could be to utilize the approach taken in the Australian Freedom of Information Act, where the Act itself gives certain factors which should be considered to determine whether access to a particular document would be in the public interest or not.

List of References

Primary Sources

1. Australia Freedom of Information Act, 1982.

2. Bennet Coleman v. Union of India, AIR 1973 SC 106.

3. Bhagat Singh v. Chief Information Commissioner, 2008 (64) AIC 284 (Del).

4. Calcutta High Court, WP (W) No. 33290 of 2013, dated 20-11-2013.

5. Canadian Access to Information Act.

6. Canara Bank v. Chief Information Commissioner, 2007 (58) AIC Ker 667

7. Constitution of India, 1950.

8. Govind v. State of M.P., Supreme Court of India, WP No. 72 of 1970, dated 18-03-1975.

9. Haryana Public Service Commission v. State Information Commission, AIR 2009 P & H 14.

10. Jamia Millia Islamia v. Sh. Ikramuddin, Delhi High Court, WP(C) 5677 of 2011 dated 22-11-2011.

11. Jitendra Singh v. State of U.P., 2008 (66) AIC 685 (All).

12. Kharak Singh v. State of U.P., AIR 1963 SC 129.

13. Maneka Gandhi v. Union of India, Supreme Court of India, WP No. 231 of 1977, dated 25-01-1978.

14. Naz Foundation Delhi High Court, WP(C) No.7455/2001 dated 02-07-2009.

15. P.C. Wadhwa v. Central Information Commission, Punjab and Haryana High Court, LPA No. 1252 of 2009 dated 29-11-2010.

16. Paardarshita Public Welfare Foundation v. Union of India and others, AIR 2011 Del 82.

17. President's Secretariat v. Nitish Kumar Tripathi, Delhi High Court, WP (C) 3382 of 2012, dated 14-06-2012.

18. Public Information Officer v. Andhra Pradesh Information Commission,2009 (76) AIC 854 (AP).

19. R. Rajagopal v. Union of India, Supreme Court of India, dated 7-10-1994.

20. Rajendra Vasantlal Shah v. Central Information Commissioner, New Delhi, AIR 2011 Guj 70.

21. Rajinder Jaina v. Central Information Commission, 2010 (86) AIC 510 (Del. H.C.).

22. Right to Information Act, 2005

23. Secretary General, Supreme Court of India v. Subhash Chandra, Delhi High Court - Full Bench, LPA No.501/2009, dated 12-01-2010.

24. Srikant Pandaya v. State of M.P., AIR 2011 MP 14.

25. Surendra Singh v. State of U.P, AIR 2009 Alld. 106.

26. Surup Singh Hyra Naik v. State of Maharashtra, 2007 (58) AIC 739 (Bom).

27. Tata Press Ltd. v. Maharashtra Telephone Nigam Ltd., (1995) 5 SCC 139.

28. U.K. Freedom of Information Act, 2000.

29. UCO Bank v. Central Information Commissioner and another, 2009 (79) AIC 545 (P&H).

30. Union Centre for Earth Science Studies v. Anson Sebastian, AIR 2010 Ker. 151

31. Union of India v. Hardev Singh WP(C) 3444 of 2012 dated 23-08-2013.

32. Union of India v. Rajesh Bhatia WP(C) 2232/2012 dated 17-09-2013.

33. Union Public Service Commission v. R.K. Jain, Delhi High Court W.P.(C) 1243/2011 & C.M. No. 2618/2011 ( for stay), dated 13-07-2012.

34. Vijay Prakash v. Union of India, 2009 (82) AIC 583 (Del).

Secondary Sources

1. "Country Report for U.K.", Privacy International, available at https://www.privacyinternational.org/reports/united-kingdom.

2. "Country Report for Australia", Privacy International, available at https://www.privacyinternational.org/reports/australia.

3. "Country Report for Canada", Privacy International, available at https://www.privacyinternational.org/reports/canada.

[1] AIR 1973 SC 106. This case held that the freedom of the press embodies in itself the right of the people to read.

[2] (1995) 5 SCC 139.

[3] AIR 1963 SC 129.

[4] Supreme Court of India, WP No. 72 of 1970, dated 18-03-1975.

[5] Section 8(1) in its entirety states as follows:

(1) Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen,-

(a) information, disclosure of which would prejudicially affect the sovereignty and integrity of India, the security, strategic, scientific or economic interests of the State, relation with foreign State or lead to incitement of an offence;

(b) information which has been expressly forbidden to be published by any court of law or tribunal or the disclosure of which may constitute contempt of court;

(d) information including commercial confidence, trade secrets or intellectual property, the disclosure of which would harm the competitive position of a third party, unless the competent authority is satisfied that larger public interest warrants the disclosure of such information;

(e) information available to a person in his fiduciary relationship, unless the competent authority is satisfied that the larger public interest warrants the disclosure of such information;

(f) information received in confidence from foreign Government;

(g) information, the disclosure of which would endanger the life or physical safety of any person or identify the source of information or assistance given in confidence for law enforcement or security purposes;

(h) information which would impede the process of investigation or apprehension or prosecution of offenders;

(i) cabinet papers including records of deliberations of the Council of Ministers, Secretaries and other officers:

Provided that the decisions of Council of Ministers, the reasons thereof, and the material on the basis of which the decisions were taken shall be made public after the decision has been taken, and the matter is complete, or over:

Provided further that those matters which come under the exemptions specified in this section shall not be disclosed;

(j) information which relates to personal information the disclosure of which has no relationship to any public activity or interest, or which would cause unwarranted invasion of the privacy of the individual unless the Central Public Information Officer or the State Public Information Officer or the appellate authority, as the case may be, is satisfied that the larger public interest justifies the disclosure of such information:

Provided that the information which cannot be denied to the Parliament or a State Legislature shall not be denied to any person.

[6] Section 11 of the RTI Act.

[7] The Registrar General v. A. Kanagaraj, (Madras High Court, 14 June 2013, available at http://www.indiankanoon.org/doc/36226888/.

[8] Arvind Kejriwal v. Central Public Information Officer, (Delhi High Court, 30 September 2011, available at http://www.indiankanoon.org/doc/1923225/.

[9] Sections 40 and 41 of the U.K. Freedom of Information Act, 2000.

[10] Section 11A read with section 47-F of the Australia Freedom of Information Act, 1982.

[11] Section 19 of the Canadian Access to Information Act.

[12] Public Information Officer v. Andhra Pradesh Information Commission,2009 (76) AIC 854 (AP).

[13] Bhagat Singh v. Chief Information Commissioner, 2008 (64) AIC 284 (Del).

[14] Articles 14, 19(1)(a) and 21 of the Constitution of India, 1950.

[15] Calcutta High Court, WP(W) No. 33290 of 2013, dated 20-11-2013.

[16] Jitendra Singh v. State of U.P., 2008 (66) AIC 685 (All).

[17] Surup Singh Hyra Naik v. State of Maharashtra, 2007 (58) AIC 739 (Bom).

[18] Surup Singh Hyra Naik v. State of Maharashtra, 2007 (58) AIC 739 (Bom), para 14. Where the Court held that since the medical records of a convict cannot be denied to Parliament or State legislature therefore they cannot be exempted from disclosure under the Act.

[19] Vijay Prakash v. Union of India, 2009 (82) AIC 583 (Del).

[20] Union Public Service Commission v. R.K. Jain, Delhi High Court W.P.(C) 1243/2011 & C.M. No. 2618/2011 ( for stay), dated 13-07-2012.

[21] Union Public Service Commission v. R.K. Jain, Delhi High Court W.P.(C) 1243/2011 & C.M. No. 2618/2011 ( for stay), dated 13-07-2012.

[22] Vijay Prakash v. Union of India, 2009 (82) AIC 583 (Del).

[23] Secretary General, Supreme Court of India v. Subhash Chandra, Delhi High Court - Full Bench, LPA No.501/2009, dated 12-01-2010.

[24] Jamia Millia Islamia v. Sh. Ikramuddin , Delhi High Court, WP(C) 5677 of 2011 dated 22-11-2011.

[25] Union Public Service Commission v. R.K. Jain, Delhi High Court W.P.(C) 1243/2011 & C.M. No. 2618/2011 ( for stay), dated 13-07-2012.

[26] Union Public Service Commission v. R.K. Jain, Delhi High Court W.P.(C) 1243/2011 & C.M. No. 2618/2011 ( for stay), dated 13-07-2012.

[27] AIR 1963 SC 129.

[28] Delhi High Court, WP(C) No.7455/2001 dated 02-07-2009.

[29] Union Public Service Commission v. R.K. Jain, Delhi High Court W.P.(C) 1243/2011 & C.M. No. 2618/2011 (for stay), dated 13-07-2012. This ruling was overturned by a Division Bench of the High Court relying upon a subsequent Supreme Court ruling, however, it could be argued that the Division Bench did not per se disagree with the discussion and the principles laid down in this case, but only the way they were applied.

[30] Vijay Prakash v. Union of India, 2009 (82) AIC 583 (Del).

[31] Right to equality.

[32] Freedom of speech and expression.

[33] Right to life.

[34] Article 19(2) of the Constitution of India, 1950.

[35] Article 19(5) of the Constitution of India, 1950.

[36] Maneka Gandhi v. Union of India, Supreme Court of India, WP No. 231 of 1977, dated 25-01-1978. The test laid down in this case is universally considered to be that the procedure established by law which restricts the fundamental right should be just, fair and reasonable.

[37] Govind v. State of M.P., Supreme Court of India, WP No. 72 of 1970, dated 18-03-1975.

[38] Govind v. State of M.P., Supreme Court of India, WP No. 72 of 1970, dated 18-03-1975.

[39] Govind v. State of M.P., Supreme Court of India, WP No. 72 of 1970, dated 18-03-1975. However the Court later used phrases such as "reasonable restriction in public interest" and "reasonable restriction upon it for compelling interest of State" interchangeably which seems to suggest that the terms "compelling public interest" and "compelling state interest" used by the Court are being used synonymously and the Court does not draw any distinction between them. It is also important to note that the wider phrase "countervailing interest is shown to be superior" seems to suggest that it is possible, atleast in theory, to have other interests apart from public interest or state interest also which could trump the right to privacy.

[40] R. Rajagopal v. Union of India , Supreme Court of India, dated 7-10-1994. These tests have been listed as one group since they are all applicable in the specific context of publication of private information.

[41] Vijay Prakash v. Union of India, 2009 (82) AIC 583 (Del).

[42] Secretary General, Supreme Court of India v. Subhash Chandra, Delhi High Court - Full Bench, LPA No.501/2009, dated 12-01-2010. Also see Vijay Prakash v. Union of India, 2009 (82) AIC 583 (Del).

[43] Canara Bank v. Chief Information Commissioner, 2007 (58) AIC Ker 667. This case also held that information cannot be denied on the ground that it would be too voluminous.

[44] Union Centre for Earth Science Studies v. Anson Sebastian, AIR 2010 Ker. 151; Union Public Service Commission v. R.K. Jain, Delhi High Court W.P.(C) 1243/2011 & C.M. No. 2618/2011 (for stay), dated 13-07-2012

[45] 2012 (119) AIC 105 (SC).

[46] Girish Ramchandra Deshpande v. Central Information Commissioner, 2012 (119) AIC 105 (SC).

[47] Girish Ramchandra Deshpande v. Central Information Commissioner, 2012 (119) AIC 105 (SC).

[48] Canara Bank v. Chief Information Commissioner, 2007 (58) AIC Ker 667.

[49] Haryana Public Service Commission v. State Information Commission, AIR 2009 P & H 14.

[50] UCO Bank v. Central Information Commissioner and another, 2009 (79) AIC 545 (P&H).

[51] Surendra Singh v. State of U.P, AIR 2009 Alld. 106.

[52] Girish Ramchandra Deshpande v. Central Information Commissioner, 2012 (119) AIC 105 (SC).

[53] Girish Ramchandra Deshpande v. Central Information Commissioner, 2012 (119) AIC 105 (SC).

[54] R.K. Jain v. Union Public Service Commission, Delhi High Court, LPA No. 618 of 2012, dated 12-11-2012.

[55] Secretary General, Supreme Court of India v. Subhash Chandra, Delhi High Court - Full Bench, LPA No.501/2009, dated 12-01-2010.

[56] Srikant Pandaya v. State of M.P., AIR 2011 MP 14.

[57] Paardarshita Public Welfare Foundation v. Union of India and others, AIR 2011 Del 82. It must be mentioned that this case was not exactly under the procedure prescribed under the RTI Act but was a public interest litigation although the courts relied upon the provisions of the RTI Act.

[58] WP(C) 3444 of 2012 dated 23-08-2013.

[59] WP(C) 2232/2012 dated 17-09-2013.

[60] President's Secretariat v. Nitish Kumar Tripathi, Delhi High Court, WP (C) 3382 of 2012, dated 14-06-2012.

[61] P.C. Wadhwa v. Central Information Commission, Punjab and Haryana High Court, LPA No. 1252 of 2009 dated 29-11-2010.

[62] Rajinder Jaina v. Central Information Commission, 2010 (86) AIC 510 (Del. H.C.).

[63] Rajendra Vasantlal Shah v. Central Information Commissioner, New Delhi, AIR 2011 Guj 70.

For more details visit http://editors.cis-india.org/internet-governance/blog/white-paper-on-rti-and-privacy-v-1.2

DNA Database for Missing Persons and Unidentified Dead Bodies

vipul — 2014-11-04T15:46:29Z

This blog discusses the possible implications of the public interest litigation that has been placed before the Supreme Court petitioning for the establishment of a DNA database in respect to unidentified bodies.

In the year 2012 Lokniti, a Non Governmental Organization filed a public interest litigation in the Supreme Court of India asking the government to establish a DNA database in respect of unidentified dead bodies as well as for those individuals for whom missing persons reports have been filed so that DNA of unidentified dead bodies can be matched against missing persons - arguing that the right to be identified is a part of the right to dignity, and that such systems have been adopted across the globe. The case has come up a few times since 2012 and parties have been given time to file their replies in these instances. Prior to the 2012 Public Interest Litigation filed by Lokniti, in 2009 a Public Interest Litigation was filed by a Haryana based doctor. The PIL petitioned for the DNA profiling of unidentified bodies to be made mandatory - arguing that thousands of individuals die with their identity being unknown. During the hearing the Bench asked a number of questions including why the Ministry of Health was not brought into the case, given the fact that a number of labs that conduct DNA profiling function under the ministry.

While the case is still pending, the Supreme Court on 22^nd September 2014 gave another interim order which was a little more detailed. On this date the Ministry of Science and Technology of the Government of India, through the Department of Biotechnology stated that they are piloting a DNA profiling Bill that would establish a DNA Profiling Board and a National DNA Data Bank. The National DNA Data Bank is envisaged to maintain the following indices for various categories of data:

I. a crime scene index;

II. a suspects' index;

III. an offenders' index;

IV. a missing persons' index;

V. unknown deceased persons' index

VI. a volunteers' index; and

VII. such other DNA indices as may be specified by regulations made by the Board.

One of the Ministry's plans under this Bill is to create DNA profiles of individuals whose relatives have gone missing, on a voluntary basis to help the relatives identify missing persons and unidentified dead bodies. They also stated that cross-matching of DNA profiling data in the database would require specialized software and the CDFB, Hyderabad is in the process of acquiring the same from the Federal Bureau of investigation, USA.

The advocate for Lokniti responded to this saying that the DNA profiling Bill has been pending for a long time and has not seen the light of day for the last seven years. To this the response of the government was that it was a complex Bill involving a number of issues which take a long time to resolve.

At this point the Supreme Court, without going into the details of the Bill asked the advocate for the Union of India to obtain instructions regarding the following two aspects:

(1) Whether pending the Bill coming into force the concerned Department can constitute a Data Bank in respect of dead persons who are not identifiable; and

(2) when there are missing reports in respect of persons to collect the DNA from the permissible sources like siblings or others so that in case any unidentified dead body is found to match the DNA to arrive at the conclusion about the missing persons who are dead; or as an ancillary the missing person who is a victim of the crime of kidnapping or where any child, who is not able to find out his parents, can be in a position to find out through the DNA.

Thus it seems that the Supreme Court, recognizing its limitations in directing the legislature to pass a law and the fact that the passing of the DNA profiling Bill may take a long time to become law, has tried to find a way out in which the concerns of the petitioner regarding a DNA Databank for missing persons and unidentified dead bodies could be addressed without the passage of the DNA profiling Bill. However since the case is still pending in the Supreme Court no final directions have been given in this regard. Thus, the Court has left the government with the responsibility to address the question of whether a DNA Databank can be established without the passing of a legislation providing legal basis for the collection, profiling, databasing, and use of DNA samples.

http://indianexpress.com/article/india/india-others/sc-wants-centre-to-create-dna-data-bank/#sthash.7zqU0Ill.dpuf

http://indianexpress.com/article/india/india-others/sc-seeks-govt-response-on-making-dna-profiling-mandatory/

The order dated September 22, 2014 can be found at http://courtnic.nic.in/supremecourt/temp/wc%2049112p.txt

For more details visit http://editors.cis-india.org/internet-governance/blog/dna-database-for-missing-persons-and-unidentified-dead-bodies

The Gujarat High Court Judgment on the Snoopgate Issue

vipul — 2014-10-27T04:40:17Z

Pranlal N. Soni v. State of Gujarat, C/SCA/14389/2014

In the year 2013 the media widely reported that a female civil services officer was regularly spied upon in 2009 due to her acquaintance with the then Chief Minister of Gujarat (and current Prime Minister of India) Mr. Narendra Modi. It was reported that the surveillance was being supervised by the current president of the BJP, Mr. Amit Shah at the behest of Mr. Modi. The case took another twist when the officer and her father said that they had no problems with such surveillance, and had repeatedly conveyed to various statutory authorities including the National Commission for Women, the State Commission for Women, as also before the Hon’ble Supreme Court of India, that they never felt that their privacy was being interfered with by any of the actions of the State Authorities. Infact, para 3.5 of the petition indicated that it was at the behest of the father of the female officer that the State government had carried out the surveillance on his daughter as a security measure.

Inspite of the repeated claims of the subject of surveillance and her father, the Gujarat Government passed a Notification under the Commissions of Inquiry Act, 1952 appointing a two member Commission of Inquiry to enquire into this incident without jeopardizing the identity or interest of the female officer. This Notification was challenged in the Gujarat High Court by the very same female officer and her father on the ground that it violated their fundamental right to life and liberty. The petitioners claimed that they had to change their residential accommodation four times in the preceding few months due to the constant media glare. The print, electronic and social media, so called social workers and other busybodies constantly intruded into the private life of the petitioners and their family members. The petitioner's email accounts were hacked and scores of indecent calls were received from all over. Under the guise of protecting the petitioner's privacy, every action undertaken by the so called custodians for and on behalf of the petitioners resulted into a breach of privacy of the petitioners, making life impossible for them on a day to day basis.

After hearing the arguments of the petitioners, including arguments on technical points the Court struck down the Notification issued by the State government to enquire into the issue of the alleged illegal surveillance. However the Court also briefly touched upon the issue of violation of the privacy of the female officer in this whole episode. However, instead of enquiring into whether there was any breach of privacy in the facts of the case, the Court relied upon the statement made by the female officer that whatever surveillance was done did not cause any invasion into her privacy, rather it was the unwelcome media glare that followed the revelations regarding the surveillance which had caused an invasion of her privacy.

Thus we see that even though the whole snoopgate episode started out as one of “alleged” unwarranted and illegal surveillance this particular judgment is limited only to challenging the validity of the Inquiry Commission appointed by the State Government. In order to challenge the Notification in a PIL the female officer had to show that some fundamental right of hers was violated and in such circumstances privacy is the most obvious fundamental right which was violated.

Although this judgment talks about privacy, it does not have enough legal analysis of the right to privacy to have any significant ramifications for how privacy is interpreted in the Indian context. The only issue that could possibly be of some importance is that the we could interpret the Court’s reliance on the statement of the female officer that there was no breach of privacy rather than its own examination of facts to mean that in cases of breach of privacy, if the person whose privacy has been breached did not feel his or her privacy to have been invaded then the Courts would rely on the person’s statements rather than the facts. However this is only an interpretation from the facts and it does not seem that the Court has spent any significant amount of time to examine this issue, therefore it may not be prudent to consider this as establishing any legal principle.

Note: The details of the case as well as the judgment can be found at http://gujarathc-casestatus.nic.in/gujarathc/tabhome.jsp

For more details visit http://editors.cis-india.org/internet-governance/blog/gujarat-high-court-judgment-on-snoopgate-issue

The Aadhaar Case

vipul — 2014-09-05T09:12:21Z

In 2012 a writ petition was filed by Justice K.S. Puttaswamy in the Supreme Court of India challenging the policy of the government in making an Aadhaar card for every person in India and its later plans to link various government benefit schemes to the same.

Over time a number of other cases have been filed in the Supreme Court challenging the Aadhaar mechanism and/or its procedure most of which have now been linked to the main petition filed by Justice Puttaswamy.[1] This means that the Supreme Court now hears all these cases together (i.e. at the same time) since they throw up similar questions and involve the same or similar issues. The court while hearing the case made an interim order on September 23, 2013 whereby it ordered that no person should suffer on account of not having an Aadhaar card and that Aadhaar cards should not be issued to any illegal immigrants. The relevant extract from the Order of the court is reproduced below:

"No person should suffer for not getting the Aadhaar card in spite of the fact that some authority had issued a circular making it mandatory and when any person applies to get the Aadhaar card voluntarily, it may be checked whether that person is entitled for it under the law and it should not be given to any illegal immigrant."[2]

It must be noted that the above order was only an interim measure taken by the Supreme Court till the time it finally decided all the issues involved in the case, which is still pending in the Supreme Court.

In November 2013 during one of the hearings of the matter, the Supreme Court came to the conclusion that it was an important enough matter for all the states and union territories to be impleaded as parties to the case and passed an order to this effect.[3] This was probably because the Aadhaar cards will be issued in the entire country and this is a national issue and therefore it is possible that the court thought that if any of the states have any concerns regarding the issue they should have the opportunity to present their case.

In another petition filed by the Unique Identification Authority of India (UIDAI), the Supreme Court on March 24, 2014 reiterated its earlier order and held that no person shall be deprived of any service just because such person lacked an aadhaar number if he/she was otherwise eligible for the service. A direction was issued to all government authorities and departments to modify their forms/circulars, etc., so as to not compulsorily require an aadhaar number. In the same order the Supreme Court also restrained the UIDAI from transferring any biometric data to any agency without the consent of the person in writing as an interim measure.[4] After passing these orders the Supreme Court linked this case as well to the petition filed by Justice Puttaswamy on which final arguments were being heard in February 2014 which so far do not seem to have concluded.

Note : Please note that the case is still being heard by the Supreme Court and the orders given so far and explained in this blog are all interim measures till the case is finally disposed off. The status of the cases can be seen on the following link:

http://courtnic.nic.in/supremecourt/casestatus_new/caseno_new_alt.asp

The names and number of the cases that have been covered in this blog are given below:

W.P(C) No. 439 of 2012 titled S. Raju v. Govt. of India and Others pending before the D.B. of the High Court of Judicature at Madras.
PIL No. 10 of 2012 titled Vickram Crishna and Others v. UIDAI and Others pending before the High Court of Judicature at Bombay.
W.P. No. 833 of 2013 titled Aruna Roy & Anr v. Union of India & Ors.
W.P. No. 829 of 2013 titled S.G. Vombatkere & Anr v. Union of India & Ors.
Petition(s) for Special Leave to Appeal (Crl) No(s).2524/2014 titled Unique Identification Authority of India & another v. Central Bureau of Investigation.

All the above cases have now been linked with the ongoing Supreme Court case of K. Puttaswamy v. Union of India.

[1] W.P(C) No. 439 of 2012 titled S. Raju v. Govt. of India and Others pending before the D.B. of the High Court of Judicature at Madras and PIL No. 10 of 2012 titled Vickram Crishna and Others v. UIDAI and Others pending before the High Court of Judicature at Bombay were transferred to the Supreme Court vide Order dated September 23, 2013. Also W.P. No. 833 of 2013 titled Aruna Roy & Anr Vs Union of India & Ors, W.P. No. 829 of 2013 titled S G Vombatkere & Anr Vs Union of India & Ors and Petition(s) for Special Leave to Appeal (Crl) No(s).2524/2014 titled Unique Identification Authority of India & another v. Central Bureau of Investigation.

[2] http://judis.nic.in/temp/494201232392013p.txt

[3] http://judis.nic.in/temp/4942012326112013p.txt

[4] http://courtnic.nic.in/supremecourt/temp/sr%20252414p.txt

For more details visit http://editors.cis-india.org/internet-governance/blog/the-aadhaar-case

Can Bitcoin Be Banned by the Indian Government?

vipul — 2017-04-07T12:56:21Z

The paper analyses the laws and regulations that apply to Bitcoin in India, and comes to the conclusion that the government has wide powers that it can exercise, if it wishes, to regulate Bitcoin. Given the lack of existing legal and regulatory analysis on this issue in India, we greatly welcome comments on this issue.

Bitcoin: Legal Treatment under the Current Indian Legal and Regulatory Regime

This paper is an effort to examine the legal basis and treatment of Bitcoin under the current legal and regulatory regime in India. It seeks to explore whether Indian laws and regulations as they stand today would even consider Bitcoin as ‘currency’ and which regulations would govern different kinds of Bitcoin transactions. In this paper we shall first give a brief description of Bitcoin and then move on to what its legal treatment would most likely be which would then lead us to examine which regulations would most likely apply to various Bitcoin transactions.

What is Bitcoin?

Bitcoin is a cryptography based digital currency first described in a 2008 paper by a single or group of pseudonymous developer(s) by the name of Satoshi Nakamoto, who called it a “peer-to-peer, electronic cash system”. Bitcoin creation and transfer is based on an open source cryptographic protocol and is not managed by any central authority. Each Bitcoin is subdivided down to eight decimal places, forming 100,000,000 smaller units called satoshis. Bitcoins can be transferred through a computer or smartphone without an intermediate financial institution. The processing of Bitcoin transactions is secured by servers called Bitcoin “miners”. These servers communicate over an internet-based network and confirm transactions by adding them to a ledger which is updated and archived periodically using peer-to-peer filesharing technology, also known as the “blockchain”. The integrity and chronological order of the blockchain is enforced with cryptography. In addition to archiving transactions, each new ledger update creates some newly-minted Bitcoins. The number of new Bitcoins created in each update is halved every 4 years until the year 2140 when this number will round down to zero. At that time no more Bitcoins will be added into circulation and the total number of Bitcoins will have reached a maximum of 21 million Bitcoins.

Each user of Bitcoin gets a digital wallet and a Bitcoin address which is the address from and to which Bitcoins can be transferred once this address is given to another party for the transfer. A transaction or transfer of Bitcoins is simply a transfer of value between Bitcoin addresses that gets included in the block chain or the system log, which ensures that each transaction is valid and that nobody can use his or her Bitcoins more than once i.e. it avoids double spending.. Bitcoin wallets keep a secret piece of data called a “private key” for each Bitcoin address. Private keys are used to sign transactions, providing a mathematical proof that they have come from the owner of the addresses. The “signature” also prevents the transaction from being altered by anybody once it has been issued.

With this very basic and brief understanding of Bitcoin, we shall now try to examine whether Bitcoins should be treated under Indian law as (i) currency, (ii) security, (iii) derivative, (iv) negotiable instrument, (v) prepaid payment instrument, or (vi) movable property.

Can Bitcoins be Treated as Currency?

Indian laws do not define digital currency or virtual currency, so we will have to look at the traditional definition of currency to see if Bitcoin falls in that definition. The term currency is defined in section 2(h) of the Foreign Exchange Management Act, 1999 (“FEMA”) in the following words:

“currency” includes all currency notes, postal notes, postal orders, money orders, cheques, drafts, travellers cheques, letters of credit, bills of exchange and promissory notes, credit cards or such other similar instruments, as may be notified by the Reserve Bank;

It is notable here that this is an inclusive definition which means that it has a large scope for expansion. The legislature has consciously made the definition capable of further expansion by making it inclusive and also by giving the Reserve Bank of India (“RBI”) the authority to notify other similar instruments. This means that if any instrument which is being used as a currency is not covered by the definition as it stands, then the RBI is free to notify it and include it in the definition of currency. All “currency” other than Indian currency is considered by the FEMA as “foreign currency” which would have to then comply with various rules and regulations under FEMA. This means that if Bitcoin is classified as a “currency”, it would have to come under the definition of “foreign currency” and Bitcoin transactions would therefore have to comply with the entire foreign exchange regime under FEMA.

It is clear that Bitcoin is not really similar to any of the instruments mentioned in the definition, not least because none of them are digital or virtual in nature. On May 3, 2000 the RBI notified “debit cards, ATM cards or any other instrument that can be used to create a financial liability” as “currency” under the FEMA (by Notification No. FEMA 15/2000/RB dated May 3, 2001). Since Bitcoin is not really backed by any institution and has no backing by any central bank or institution and because most of the transactions involving acceptance of Bitcoin are voluntary in nature, therefore it does not seem that Bitcoin is an instrument that can be used to create a financial liability. This can be explained further with the help of two examples:

(i) If a person owns Indian rupee notes worth Rs. 500 and everyone stops accepting the currency, he can always go to the Governor of the RBI and claim Rs. 500 from him, however if I own Bitcoins then whether my Bitcoins can be used to buy any goods or services is entirely dependant upon the willingness of third parties to accept Bitcoin as a valuable item.

(ii) If I order a pair of shoes worth Rs. 500 from flipkart.com and pay for those shoes using Indian currency, then it does not matter if flipkart decides to not accept Indian currency (whether by means of cash, credit card, cheque, etc.) and accepts payment only in Bitcoins. As soon as I give flipkart currency notes or coins worth Rs. 500, my legal obligation to pay for the shoes is fulfilled. On the other hand if I pay for those shoes with Bitcoins then unless flipkart voluntarily accepts payment in Bitcoin, my liability to pay for the shoes will still legally exist till I pay flipkart Rs. 500 in Indian currency.

Therefore it is clear that Bitcoins do not fit into the plain vanilla definition of currency under Indian law. However this does not mean that the RBI cannot regulate Bitcoins or transactions involving Bitcoins. The RBI can very well notify Bitcoins as “currency” and then come out with rules and regulations for Bitcoin transactions. Cynics may argue that this is not possible due to the peer to peer nature of Bitcoins and the Bitcoin network and they would be right to the extent that it may not be physically feasible for the RBI to regulate every Bitcoin transaction, but it would be possible for them to target Bitcoin exchanges which is the entry point for most users of Bitcoin. To sum up, although Bitcoins may not be classified as a currency at present, this does not preclude the RBI from regulating them in the future.

Can Bitcoins be considered as Securities?

The term “securities” is defined in section 2 (h) of the Securities Contracts (Regulation) Act, 1955 in the following manner: “securities” include —

(i) shares, scrips, stocks, bonds, debentures, debenture stock or other marketable securities of a like nature in or of any incorporated company or other body corporate;

(ia) derivative;

(ib) units or any other instrument issued by any collective investment scheme to the investors in such schemes;

(ic) security receipt as defined in clause (zg) of section 2 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002;

(id) units or any other such instrument issued to the investors under any mutual fund scheme;

(ii) Government securities;

(iia) such other instruments as may be declared by the Central Government to be securities; and

(iii) rights or interest in securities;”

It is clear from a bare reading of this definition that Bitcoin does not come within any of the parts of the definition of securities, other than possibly ‘derivative’ (which is something we shall examine in the next part of this paper). Apart from the term derivative, the only other way in which Bitcoins can be brought under the definition of ‘securities’ is if the Central Government notifies Bitcoins as such since the Central Government has the power to declare any instrument as a ‘security’. In such a scenario it will be the entire gamut of regulations governing securities including the various rules and regulations prescribed by the Securities and Exchange Board of India (SEBI). Another argument is that Bitcoin may fall under the definition of a “derivative”.

Can Bitcoins be considered as a Derivatives or a Negotiable Instruments?

The definition of “derivative” under the SCRA is

(ac) “derivative” includes— (A) a security derived from a debt instrument, share, loan, whether secured or unsecured, risk instrument or contract for differences or any other form of security; (B) a contract which derives its value from the prices, or index of prices, of underlying securities;

As discussed above, Bitcoin is not a security and therefore would not satisfy the first part of the definition of “derivative” within the SCRA. Further since Bitcoin is only a voluntary currency based on two parties deciding that the code itself has some value, therefore Bitcoin can also not be described as a contract which derives its value from the prices or index of prices of underlying securities. Therefore it is clear that Bitcoin would not satisfy the requirements of being a derivative under the SCRA. Under Indian law, another definition of the term derivative is provided under the Reserve Bank of India Act, 1934 which defines “derivative” in section 17(6A) to mean:

an instrument, to be settled at a future date, whose value is derived from change in one or a combination of more than one of the following underlyings, namely:--

(a) interest rate,

(b) price of securities of the Central Government or a State Government or of such securities of a local authority as may be specified in this behalf by the Central Government,

(c) price of foreign securities,

(d) foreign exchange rate,

(e) index of rates or prices,

(f) credit rating or credit index,

(g) price of gold or silver coins, or gold or silver bullion, or

(h) any other variable of similar nature.

Since Bitcoins are used as currency because Bitcoin users think it has inherent and not because its value is derived from any other underlying thing or object, therefore Bitcoin cannot be said to fall under the definition of “derivative” under the Reserve Bank of India Act, 1934 either.

The term negotiable instrument on the other hand is defined in the Negotiable Instruments Act, 1881 and defines a negotiable instrument as a “promissory note, bill of exchange or cheque payable either to order or to bearer”. Since the terms promissory note, bill of exchange or cheque are easily understood in trading parlance, there is no need to go into the definitions of these instruments as provided under the Negotiable Instruments Act, 1881, suffice it to say that Bitcoins do not fall under the definitions of any of these terms under the Act.

Can Bitcoin be Classified as a Prepaid Payment Instrument?

The enactment of the Payment and Settlement Systems Act, 2007 has brought the payment systems involved in the issuance of prepaid payment instruments under the regulatory jurisdiction of the RBI. In exercise of its powers under Section 18 of the Payment and Settlement Systems Act, 2007 the RBI on April 27, 2009 issued policy guidelines governing institutions issuing prepaid payment instruments such as mobile wallets, Paypal, etc. In these guidelines the term Prepaid Payment Instrument is defined in the following words:

Pre-paid payment instruments are payment instruments that facilitate purchase of goods and services against the value stored on such instruments. The value stored on such instruments represents the value paid for by the holders by cash, by debit to a bank account, or by credit card…

Since Prepaid Payment Instruments have a definite value stored on them which is equal to the amount paid by the holders in cash or by debit or credit card, it seems that Bitcoins cannot be classified as Prepaid Payment Instruments since there is no static value stored in Bitcoins, rather they have an inherent value. In other words the amount of money that a person pays to buy Bitcoin does not represent the value of the Bitcoins that the person is buying, rather the value (or exchange rate) of Bitcoins keeps changing on a daily basis. Therefore Bitcoins cannot be classified as prepaid payment instruments because the value stored on prepaid instruments such as Paypal is always constant and is equal to the amount of money paid to the system to get a Paypal balance, but this is not the case with Bitcoins.

What can Bitcoins be Classified As?

As discussed above, Bitcoins cannot be classified as regular financial instruments such as ‘currency’, ‘security’, ‘derivative’ or ‘negotiable instruments’ as these instruments are currently defined under Indian law. What therefore, should be the legal treatment of Bitcoins under Indian law? Bitcoins are essentially lines of code which create the system of transfer of Bitcoin currency from one account to another. The Indian Copyright Act defines the term “computer programme” as “a set of instructions expressed in words, codes, schemes or in any other form, including a machine readable medium, capable of causing a computer to perform a particular task or achieve a particular result”. Based on this definition as well as the generally understood meaning of computer programme it would be fairly safe to say that Bitcoins would fall under the definition of the term “computer programme”. Now the General Clauses Act, 1897 defines the term movable property as property of every description, except immovable property. Immovable property has been defined to include land, benefits arising out of land or things attached to the earth or permanently fastened to anything attached to the earth. Clearly a computer programme would not fit into the definition of immovable property and relying upon the broad definition of movable property in the General Clauses Act, 1897 it can be said that a computer programme and by logical extension Bitcoins should be considered as movable property. Further the Forward Contracts (Regulation) Act, 1952 also defines goods to mean “every kind of movable property other than actionable claims, money and securities”. It would seem that on a bare reading, Bitcoins would also fulfill this condition and be generally defined as goods under Indian law.

Now that we have determined that Bitcoins would in all likelihood be treated as goods or movable property under the current legal regime in India, it would be beneficial to discuss what laws would regulate the various Bitcoin transactions that occur in general practice, for the purposes of this paper we shall limit our discussion to the following transactions:

i) Mining of Bitcoins; ii) Transfer of Bitcoins from one person to another within the territory of India; iii) Exchange of Bitcoins for Indian Rupees, provided the entire transaction is based in India; iv) Transfer of Bitcoins from one person to another where the person sending the Bitcoins is not resident in India; v) Exchange of Bitcoins for Indian Rupees, where the exchange is based outside India.

Mining of Bitcoins

Since Bitcoins are essentially lines of code and therefore would fall within the definition of “computer programme”, the mining of Bitcoins is essentially the utilization of one’s own computing power and electricity to generate more computer programmes or an extension of an existing computer programme. Thus Bitcoin ‘mining’ would be like making your own computer programme and there is no law which prevents or prohibits a person from doing so, therefore it seems that mining Bitcoins in India would be a perfectly permissible and legal activity.

Transfer of Bitcoins from one person to another within the territory of India

Although we have determined above that Bitcoins would in all probability be treated as goods and therefore any sale of Bitcoins would be governed by the Sale of Goods Act, 1930 however it must be noted that the Sale of Goods Act does not regulate barter transactions. This is so because the sale of goods means a contract whereby the property in the goods is actually transferred by the seller to the buyer and according to section 4 of the Sale of Goods Act the transfer of the property in the goods is for a price, i.e., for money consideration. As price is an essential element of a contract of sale, barter is ruled out from a transaction of sale of goods. This means that any transaction whereby payment is made in Bitcoins would come within the category of a barter transaction, for example if flipkart.com starts accepting payment in Bitcoin then the transaction of paying for a pair of shoes through Bitcoin would infact be a barter transaction and would not be governed by the Sale of Goods Act.

Exchange of Bitcoins for Indian Rupees, provided the entire transaction is based in India

In case there is an online Bitcoin exchange where one can buy or sell Bitcoins using real currency (such as Mt.Gox) based in India which deals only with Indian residents and buys or sells Bitcoins for Indian Rupees, then as per our discussion above all the transactions of this online exchange would be governed by the Sale of Goods Act and all relevant laws regarding sale of goods on an exchange platform with regard to goods such as computer programmes would be applicable to such an online exchange including the Forward Contracts (Regulation) Act, 1952. (As noted above, Bitcoins would satisfy the definition of ‘goods’ within the Forward Contracts (Regulation) Act, 1952.) This would imply that as long as the online exchange does plain vanilla buying and selling of Bitcoins it would not be amenable to regulatory oversight but if it wants to offer Bitcoin derivatives such as Bitcoin futures then it would have to get itself registered as per the provisions of the Forward Contracts (Regulation) Act and also follow all the rules and regulations prescribed thereunder.

Transfer of Bitcoins from one person to another where the person sending the Bitcoins is not resident in India

If Bitcoins are transferred from a person residing outside India to a person resident within India then that would amount to import of computer programmes within India. If this transfer is done in return for the Indian party sending an item or rendering a service to the foreign party then this would be a barter transaction. It is useful to note that although the Indian import and customs regulations do not mention barter transactions, the guidance on the website of the Directorate General of Valuation, Central Board of Excise and Customs, Government of India seems to suggest that barter transactions for import of goods although are not prohibited but do present unique problems of valuation of the goods. However since software imported online does not attract any duty under Indian law, therefore it would be immaterial to discuss exactly how a barter transaction involving Bitcoins should be valued under the Indian customs regime. For the purposes of this discussion it is sufficient to note that a Bitcoin transaction entered into by an Indian with a party outside India is not prohibited as long as the item or service being exported out of India is itself legal and above board. For example, a transaction involving an Indian designing a website for a person sitting in Australia and being paid in Bitcoin would be legal whereas sending contraband substances to the same person while getting paid in Bitcoin would not be allowed. This would be the legal analysis for a general citizen but this analysis is subject to regulations governing specific instances, for example exchange or goods or items from certain countries may be declared illegal or the receipt of foreign articles by certain class of entities may be banned or otherwise regulated, such as political parties or Non Governmental Oorganisations (“NGOs”).

Can an NGO based in India receive donations in Bitcoin?

This is an interesting question because it would be perfectly legal for a regular citizen to receive Bitcoins from abroad as a gift or donation, etc. However if the entity receiving such Bitcoins is an NGO then there would be the added layer of regulation from the Foreign Contributions Regulation Act, 2010 (“FCRA”) which regulates all foreign contributions received by NGOs. Section 2(1)(h) of the FCRA defines foreign contribution to include the receipt of any article from a foreign source. This means that even if an NGO based in India receives contribution from a foreign source in Bitcoins, such a transaction would fall within the regulatory ambit of the FCRA and any such a transaction would have to be reported to the Ministry of Home Affairs in Form FC – 7 under Rule 17(3) of the Rules under the FCRA.

Exchange of Bitcoins for Indian Rupees, where the exchange is based outside India

If a person imports a computer programme into India he would have to pay the customs duty at the prevalent rates, however if this import of software is done via the internet and does not involve any physical shipments (e.g. downloading paid software from the internet) then no import duty is levied on the import of computer software in India. This would mean that any person buying a computer programme or software from a vendor abroad would not be liable to pay any customs duty or file any documentation with the customs authorities in India. This situation would also be applicable to any person buying Bitcoins from an online exchange based outside India. The only documentation that would be required for buying Bitcoins from an online exchange abroad would be that which the bank may insist upon for exchanging Indian rupees into a foreign currency and then transferring it to an overseas account. This documentation would involve filing of Form A-1 if the total value of the money being exchanged is greater than USD 5,000 however if the amount of money being exchanged is less than USD 5,000 then the person is only required to give a simple letter containing basic information viz. the name and the address of the applicant, name and address of the beneficiary, amount to be remitted and the purpose of remittance. If the transaction is done using a credit card then in most instances, banks would not be insist upon this letter since these transactions usually go through their automated channels.

Conclusion

Although Bitcoins can currently be classified only as movable property and more specifically as computer software, this position is not tested in a Court of law. Further it appears from the analysis of the definitions of ‘currency’ and ‘prepaid payment instrument’ that the government has the power to bring Bitcoins into the definition of either currency or prepaid payment instrument by just amending the regulations, which is not a very cumbersome process since financial regulations, by their very nature, are quite fluid and prone to changes. Even so it is worth noting that even as the legal regime stands now offering of derivative products in Bitcoins might require registration and approval under the Forward Contracts Regulation Act.

It is worth noting that unlike other digital currencies such as e-gold, liberty reserve, etc. Bitcoin is a peer to peer network based currency which does not have one centralized agency or institution regulating the entire system and therefore an argument is made that even if the agencies want to regulate or shut it down they will not physically be able to do so as there is no nodal institution that the authorities can go after. However this argument is fallacious to a certain extent in that the authorities can go after online exchanges which are websites or portals run by individuals or entities which have a physical manifestation. They would have names, addresses, bank accounts, etc. and the authorities could easily go after the major exchanges to cut off the supply or cash into the Bitcoin system by attacking the source where cash or ‘real currency’ enters or leaves the system thereby severely reducing the efficacy of Bitcoins.

Looking at the relatively small number of people who use Paypal or other e-wallets in India, it would not be entirely unlikely that the regulations to govern Bitcoin, whenever they come, would be a reaction to a particular event and whether these regulations are enabling or disabling in nature would probably depend upon the nature of the event to which they are reacting.

Note: Although not referred to here because of the limited context of this paper, a similar and much more thorough examination of the legality of Bitcoins done by Nokolei M. Kaplanov in the article titled Nerdy Money: Bitcoin, the Private Digital Currency, and the Case Against Its Regulation in the Temple Law Review.

For more details visit http://editors.cis-india.org/internet-governance/bitcoin-legal-regulation-india

Are Indian Consumer Laws Ready for the Digital Age?

vipul — 2013-08-08T11:52:40Z

The Economic and Social Council of the United Nations, recognizing the need for protection of the rights of consumers, drafted a set of model guidelines on consumer protection which were adopted by the General Assembly in 1985. The United Nations Guidelines for Consumer Protection (UNGCP) act as an international reference point of the consumer movement, however since it has been over a quarter of a century since they were first drafted, there is a strong argument for revising them to bring them in line with new developments in technology and business practices.

It is for this reason that that United Nations Conference on Trade and Development has undertaken a revision of the UNGCP. Consumers International, an international consumer rights organization has along with CIS and other groups been trying to represent the voice of consumers at the negotiations for this revision. As part of this effort, Consumers International has produced a book titled "Updating the UN Guidelines for Consumer Protection for Consumers in the Digital Age". This blog has been produced through a filteration of the essence of some of the arguments and issues addressed in that book.

In December 2012 there was a news report that pegged the market for online commerce in India at roughly USD 14 billion,[1] which is why some of the poster children of online retail in India are getting stratospheric valuations even though they are yet to show any major profits, case in point, Flipkart had a valuation of around USD 800 million[2] in 2012 and is looking for an IPO in around three to four years. Such huge numbers give a sneak peek into the size and scope of the Indian e-commerce marketplace which begs the question, if there are so many transactions occurring in the online marketplace and since a large number of those transactions are between retailers and domestic consumers, then are there any specific laws out there protecting the interests of consumers in the online world.

Apart from the Information Technology Act, 2000 and various circulars by the Reserve Bank of India regarding online banking and money transfer activities which are more generic in nature trying to secure the online space as a whole, there are no specific laws that seek to protect consumers in the online space. However, that does not necessarily mean that the consumers are left without any recourse and in this post we shall examine whether it is possible to use the Consumer Protection Act, 1986 to protect consumer rights in the online environment as well.

The Consumer Protection Act, 1986 (“COPRA”) was enacted with the purpose of empowering consumers to take on the might of large corporations and preventing unscrupulous businessmen from taking undue advantage of the weak position which consumers are inherently placed in under the archaic Indian judicial system. It set up special tribunals, simpler procedures and enacted special provisions to help consumers get a better bargaining position vis-à-vis manufacturers and retailers, etc. However, since this law was enacted more than a quarter of a century ago and it is not entirely geared towards protecting consumer rights in the digital era. However, that does not mean it is entirely toothless in the online environment although it certainly needs some major provisions to come to grasp with the special circumstances and practices of the online marketplace, as the rest of the discussion will demonstrate.

For any transaction to come under the purview of COPRA, it should have the following three essential requirements:

There should be a ‘good’ or ‘service’ sold or provided to a consumer;
Such good or service must be ‘sold’ i.e. there must be a ‘sale’;
There should be a ‘defect’ in the good or ‘deficiency’ in the service;

We will now examine different types of e-commerce transactions and discuss whether they fulfill the requirements given above and therefore are amenable to the jurisdiction of COPRA.

There should be a ‘good’ or ‘service’
This is issue is not very complicated so far as digital purchases of physical items are concerned. Since a book or a mobile phone is considered as a ‘good’ then it will always be considered as a ‘good’ irrespective of whether it has been bought from a physical shop or an online retailer. However, the question does take on an air of some complexity when dealing with digital items such as mp3 files and software programmes. The General Clauses Act, 1897 states that all property which is not immovable property is considered as movable property. Since immovable property is defined as land and things attached to the land, therefore it is pretty clear that ‘computer software’ would in all likelihood be considered as movable property. Whether such movable property can be considered as a ‘good’ or not is a question which is yet to be tested in the courts of law in India, however it must be mentioned that in the context of the Sales Tax Act, the Supreme Court of India has held canned software to be a ‘good’. Laying down a test for determining whether a property is a ‘good’ or not, the Supreme Court in that case laid down the following test:

“A 'goods' may be a tangible property or an intangible one. It would become goods provided it has the attributes thereof having regard to (a) its utility; (b) capable of being bought and sold; and (c) capable of transmitted, transferred, delivered, stored and possessed. If a software whether customized or non-customized satisfies these attributes, the same would be goods.”[3]

It must be emphasized again that the Supreme Court’s ruling was given in the context of the Sales Tax Act and it may not be accepted by a court deciding a case on COPRA. This is one issue which could and should be addressed under Indian laws to ensure that the large numbers of Indian consumers who buy items in the online marketplace are not left in a lurch and without the protection of the COPRA.

There must be a “Sale” of the good or service
Just as the previous issue, this question again can be simple when asked in relation to sale of physical goods using the internet but may not be so when talking about digital goods. When a physical item is purchased using the internet, a sale may be said to have occurred when the ownership of the good passes from the seller (online retailer) to the buyer (consumer) and the payment and delivery are complete. However, the question whether sale of software (here we are using this generic term for all sorts of computer programmes and data because the reasoning and legal analysis can be applied to both types of data) in an online environment would actually constitute a ‘sale’ requires a little more analysis. A huge problem in labeling online software purchases as a ‘sale’ is that most of these ‘sales’ are made in the form of a license. The manufacturers or retailers would argue that such an online purchase is not really a sale since the consumer usually only gets a license to use the product under strict conditions and does not buy the product as an owner, further this is really the industry standard when it comes to software purchases. The argument on the other side is that most websites advertise these products as an outside sale, for example, if you go to the Quick Heal antivirus website today and go to the page for “Home Users”[4] the page clearly shows a “Buy Now” tab and indicates the price at Rs. 1549/-. In fact in a number of cases you can actually buy the file containing the software without ever being shown the contractual terms of the agreement. These terms usually specify that you are only getting a license to use the product and may not have the right to resell or lend the product to others, rights which a traditional buyer of a product enjoys under law.

This issue was also discussed by a Full Bench of the Supreme Court of India in the case of Tata Consultancy Services v. State of Andhra Pradesh,[5] which ultimately held that the ‘sale’ of canned software (the term the court used for non customized software which is sold off the shelf) would be a sale of goods and therefore liable to be taxed under the Sales Tax Act. As is evident this decision was given in the context of the Sales Tax Act, but it could be argued that since tax statues are anyways supposed to be interpreted strictly and beneficial statutes such as the COPRA are required to be interpreted broadly, as per the accepted rules of legal interpretation, therefore it is possible that such a ‘license’ for computer software bought by an ordinary consumer could be considered as a ‘sale’ so as to bring the item within the ambit of the COPRA.

Here again we see that although there might be arguments which could be made to justify such licences for computer software as a ‘sale’, however it is still an untested issue and the COPRA certainly needs to take these issues into account if we want to protect the rights of the ever growing number of online consumers.

There should be a “defect” in the goods
If I order a pair of shoes from flpikart.com and the shoes arrive with one of the soles torn off, it’s a pretty straightforward case of there being a defect. In such a scenario unless the retailer has a specified return policy (which incidentally flipkart has) the consumer would have a right to approach the consumer forum to lodge a compliant. Similarly, if I buy a software from a manufacturer for my personal use and the file has a bug in it, it can fairly easily be considered as a defect since any fault, imperfection or shortcoming in the quality, quantity, potency, purity or standard or the good can be considered as a defect.

This is where things get a little interesting. What if we argue that stringent Digital Rights Management techniques by some online retailers are actually a defect in the goods since they do give the consumer all the rights that a buyer of goods would traditionally have. For example, if I buy an e-book with DRMs which restrict lending and on-selling, then two of my rights as a traditional book buyer are straightaway rescinded. Let us now examine the issue in the traditional context of the term ‘defect’.

If an article bought has any fault, imperfection or shortcoming in the quality, etc., then it would be considered as a defective good. For example, if a person buys a generator which is creating excessive noise, then it can be said that there is a shortcoming in the quality or the standard which is required to be maintained. A generator may supply electricity perfectly well and there may not be any fault at the time of running the machine but while operating the machine if it is creating more noise than the prescribed level, it can be said that there is a defect in the manufacture. An e-book with DRMs may also let a consumer read its contents but that may not be the only criteria to determine whether an item is defective or not. Using the traditional definition of a ‘buyer’, we can argue that a traditional buyer commonly has rights such as the right to resale, the right to make copies for personal use, the right to lend, the right to gift, etc., which may not exist in a an e-book with DRMs. Thus, an argument could be made that such measures constitute a ‘defect’ in the goods under the COPRA.

Again, this is only an argument and it is entirely possible that a court of law may reject such an argument, especially in light of the fact that the consumer has entered into a license agreement while completing the transaction which specifically grants the consumer only specific and limited rights in regard to the item being purchased. A possible counter to this argument could be that the agreement is generally long and verbose and is only presented to the consumer towards the end of the transaction when the consumer generally does not have the time to read it. Further, there is hardly ever a situation where the consumer can negotiate the terms of the contract, it is usually a standard form of contract which is heavily tilted in favour of the seller and the consumer is given no real choice in this regard. This is why in common law jurisdictions the courts have laid down certain principles or extra conditions which a standard form of contract has to abide by for it to be enforceable viz.,:

Sufficient notice: This principle requires that the major and specially the unusual terms in a contract should be displayed in a sufficiently highlighted manner so that a reasonable consumer is not likely to miss these unusual terms.[6]
Fundamental breach of contract: If the contract is so drafted that it would impose additional obligations on the consumer or restrict the liability and obligations of the seller in such a way that it would result in breaching any of the fundamental or main terms or obligations that one expects in such a contract, then such a contract may not be enforceable.[7]
Exclusion of unreasonable terms: Another type of protection that is available to consumers is the principle which seeks to exclude unreasonable terms from a contract i.e. a term which would defeat the very purpose of the contract or if it is repugnant to the public policy.[8]

Relying on the above principles of standard form contracts, it is possible to at least argue that highly strict and limiting terms which are put into a long verbose standard form contract which backs the Technology Protection Measures on a protected software may not be entirely enforceable, in which case the alleged consent of the consumer for such DRMs gets negated and the software with all its DRM limitations could be considered as ‘defective’.

Conclusion
From the discussion above it is clear that the nature of online transactions and digital goods presents certain unique problems for the legal regime which seeks to protect consumer rights. The law needs to be amended to take into account the unique circumstances of this fledging marketplace that exists online and ensure that the legal regime is fully capable of facing the challenges thrown up by e-commerce. One of the initiatives in this regard is the effort by Consumers International to include amendments in the Model United Nations Guidelines for Consumer Protection to include various provisions which deal with the online marketplace and its unique challenges as well as issues relating to access to knowledge (A2K). Perhaps it is time for the establishment in India to also take this into account and bring our quarter of a century old consumer protection legislation in line with the digital age.

[1]. http://goo.gl/Mh74vB

[2]. http://goo.gl/By5x3i

[3]. Tata Consultancy Services v. State of Andhra Pradesh, 5 November, 2004, available at http://goo.gl/Bn7KRp

[4]. http://goo.gl/lMdoI

[5].http://goo.gl/Bn7KRp

[6]. Henderson & others v. Stevenson, 1875 2 R (HL) 71, Interfoto Picture Library Ltd v. Stiletto Visual Programmes Ltd. [1988] 1 All ER 348.

[7]. Harbutt's "Plasticine" Ltd. v. Wayne Tank and Pump Co Ltd [1970] 1 QB 447.

[8]. Lily White v. R. Mannuswami, AIR 1966 Mad.13.

For more details visit http://editors.cis-india.org/a2k/blogs/are-indian-consumers-laws-ready-for-digital-age