Supreme Court Issues Notice in Privacy Violation Plea Against Credit Information Companies

The Supreme Court took cognizance of a plea alleging violations of the right to privacy by four foreign credit information companies operating in India, signaling a pivotal moment in the ongoing debate over data protection and privacy rights. In the case of Surya Prakash v. Union of India and Others, a three-judge Bench comprising Chief Justice of India (CJI) DY Chandrachud and Justices JB Pardiwala and Manoj Misra issued notices to several key stakeholders, including government ministries and the credit information companies implicated in the petition.

Despite the absence of representation for the petitioner, the Court proactively sought responses from the Ministry of Finance, the Reserve Bank of India (RBI), the Ministry for Electronics & Information Technology, and the Ministry of Home Affairs. Additionally, the four foreign credit information companies - TransUnion CIBIL, Experian Credit Information Company of India, Equifax Credit Information Services, and CRIF High Mark Credit Information Services - were also directed to respond to the allegations.

In a significant move, the Court appointed Advocate K Parameshwar as amicus curiae to assist in the proceedings, underscoring the gravity of the issues raised in the plea.

The petitioner contended that these companies were infringing upon individuals' right to privacy by surreptitiously collecting and processing confidential financial data without their consent, in violation of the Credit Information Companies Regulation (CICR) Act, 2005. Allegations were made against the companies for colluding with regulatory bodies and government ministries, thereby exacerbating privacy concerns for millions of citizens and businesses across the country.

Moreover, the petitioner highlighted the issue of data localization, asserting that the storage of sensitive financial information on servers located outside India further compounds privacy risks. The plea also drew attention to the alleged creation of a "parallel underworld economy" facilitated by credit scoring systems, which purportedly discriminate against individuals based on their creditworthiness, perpetuating financial marginalization and hindering economic opportunities.

In light of these concerns, the petitioner urged the Court to intervene and direct regulatory authorities to enforce stringent measures to regulate data-sharing practices by these companies. Additionally, directives were sought to ensure compliance with the provisions of the CICR Act, 2005, to safeguard the privacy rights of Indian citizens.

The case underscores the growing significance of privacy protection in an increasingly digitized world, with the Supreme Court's intervention poised to shape the contours of data governance and regulatory frameworks governing credit information companies in India. As the proceedings unfold, all eyes will be on the Court's deliberations, which hold far-reaching implications for data privacy and consumer rights in the country.

Author: Anushka Taraniya

News Writer, MIT ADT University