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Moot Key 2017

ISSUE - I

WHETHER THE RULES FRAMED WERE SUBSTANTIALLY ULTRA VIRES THE


CONSTITUTION OF INDOSTAN AS IT WAS ARBITRARY, UNJUST AND UNFAIR
AND VIOLATED THE RIGHT TO EQUALITY OF THE TAXI SERVICE
PROVIDERS.

Petitioner Respondent

The rules framed were substantially ultra


In the instant case, the petitioners challenged
vires the Constitution of Indostan as they
the constitutional validity of Rules 6.9 and
were arbitrary, unjust and unfair and violated
6.10 of the Aridabad City Taxi Rules, 2016
the right to equality of the taxi service
laid down by the Ministry of Road and
providers.
Transport and Highways under the City Taxi
In the instant case Rule 6.9 of the Aridabad Act, 2016.
City Taxi Rules, 2016 laid down by the
Ministry of Road and Transport and  Validity of Rule 6.9 – Article 14

Highways established a cap on the maximum


A cursory look at the Rule 6.9 sets a cap on
amount that can be charged by app based taxi
the maximum amount that can be charged
services. However, this cap applied to only
over and above the normal fare to the app
Indostani app based taxi services.
based taxi service providers i.e. Rs. 2000.
The rules laid down by the State in the instant Therefore, it is clear that the rules proposed
case violate the Right to Equality under are essential and gives relaxation to those
Article 14 of the Constitution of Indostan. persons who do not overcharge customers for
their rides.
Article 14 grants equal treatment in equal
circumstances. In the instant case, all app “Rule 6.9 of the Rules set out a cap on the
based taxi service providers are in similar maximum amount that could be charged over
circumstances. and above the normal fare, stipulating that
Indostani app based taxi service providers
 Reasonable Classification:
could not charge more than Rs. 2000 as
Laws that contain discriminatory provisions additional fare per ride.”
are only upheld when the discrimination is on
a reasonable basis, as held in the case of
 Class Legislation
Chiranjit lal v. Union of India [(1950) SCR
869] In the case of State of West Bengal v. Article 14, which enshrines the principle of
Anwar Ali [(1952) SCR 284] and Nakara v. equality as a fundamental right mandates that
union of India[AIR 1983 SC 130] it was the State shall not deny to any person
held that: ‘reasonable’ means that the equality before the law or the equal
classification must not be arbitrary but must protection of the laws within the territory of
be rational. India.

In the instant case, the discriminatory The varying needs of different classes or
classification is not reasonable and is sections of people require differential and
arbitrary as there are no particular and separate treatment. Legislature therefore has
justified reasons that have been given for the power to make laws to attain particular
such discrimination between Indostani based objects and for that purpose selecting and
taxi service providers and the others. It must classifying persons upon things laws are to
be borne in mind that Rules imposes operate. The principle of equality of law,
restriction, where in Hola is unable to take thus, means not that the same law should
advantage of a guaranteed right. It is sufficed apply to everyone but that a law should deal
to say that, conclusive finding as to fairness alike with all in one class; that there should
or unfairness can be arrived at this juncture. be an equality of treatment under equal
On the Rules laid down, it prima facie circumstances. It means “that equals should
appears that the same can prejudicially affect not be treated unlike and unlikes should not
the others app based taxi drivers and there is be treated alike. Likes should be treated
no reasonable classification as the effect of alike. Article 14 forbids class legislation; it
the Rules is different from what it appears to does not forbid reasonable classification of
be. persons, objects and transactions by the

In the case of Binoy Vishwam v. Union of Legislature for the purpose of achieving
India [(2017) 7 SCC 59] it was held that the specific ends. Classification to be reasonable
state must have the power of making laws to should fulfil the following two tests:
attain particular objectives. The principle of
i. It should not be arbitrary, artificial or
equality thus means not that the same law
evasive. It should be based on an
should apply to everyone but that a law
intelligible differentia, some real and
should deal alike with all in one class. In the
substantial distinction, which
instant case, all app-based taxi service distinguishes persons or things grouped
providers are in one class and hence there is together in the class from others left out
no legally founded reason to discriminate of it.
against Indostani app-based providers and
ii. The differentia adopted as the basis of
favour the others.
classification must have a rational or
As held in the case of Laxmi Khandsari v. reasonable nexus with the object sought
State of Uttar Pradesh[AIR 1981 SC 87]in to be achieved by the statute in question.
order for a law to be reasonable, the
following conditions have to be satisfied:  Reasonable Classification

Thus, Article 14 in its ambit and sweep


i. It should not be arbitrary, artificial or involves two facets, viz., it permits
evasive. It should be based on an reasonable classification which is founded on
intelligible differentia, i.e. some real and intelligible differentia and accommodates the
substantial distinction. practical needs of the society and the
ii. The basis of the classification must have a differential must have a rational relation to
rational nexus with the object of the law. the objects sought to be achieved. Further, it
iii. The object of the rules laid down were to does not allow any kind of arbitrariness and
prevent exploiting of people that was ensures fairness and equality of treatment. It
taking place through higher pricing is the fonjuris of our Constitution, the
mechanisms that were being used by all fountainhead of justice. Differential
app based taxi service providers. The treatment does not per se amount to violation
classification made for Indostani app of Article 14 of the Constitution and it
based service providers who were alone violates Article 14 only when there is no
subject to Rule 6.9 has no nexus with the reasonable basis and there are several tests
object of the rules, hence it isn’t to decide whether a classification is
reasonable. (Doctrine of Reasonable reasonable or not and one of the tests will be
Classification as laid down in the case of as to whether it is conducive to the
RD Shetty v. The International Airport functioning of modern society.
Authority of India[1979 SCR (3) 1014]
The first test of reasonable classification has
been satisfied as individual Indonistani app
 Intelligible Differentia
based drivers formed a separate class and the
The intelligible differentia used in the instant provision had targeted only the Indosnistani
case to make such a classification is the app based taxi drivers would not be
feedback received from various stakeholders discriminatory on this ground. Therefore, for
and the public views. This fact fails in this purpose alone, individual app based
making the differentia a substantial measure cannot be ridiculed.
distinction and instead makes it arbitrary and
Therefore, the only question would be as to
evasive.
whether this classification is reasonable or
As held in the case of Srinivasa Theatre v not. There cannot be any dispute that there is
State of Tamil Nadu[(1992)2 SCC 643]the a reasonable basis for differentiation and,
differentia taken into account by the state therefore, equal protection clause enshrined
whilst making a reasonable classification in Article 14 is not attracted. What Article 14
must have a rational or reasonable nexus with prohibits is class legislation and not
the object that was sought to be achieved. reasonable classification for the purpose of
The differentia used is feedback received legislation. All app based taxi driver
from various stakeholders pursuant to a providers constitute one class and they are
consultation paper being published, which treated alike by the impugned provision.
invited the public to present their views on
the proposed Rules. This type of differentia  Nexus

by itself is vague as it is unclear as to whether


The rationality of the particular rule cannot
there was equal and proper representation by
be challenged on the ground that it has no
all the stakeholders and whether their views
nexus with the objective to be achieved.
have been taken into consideration.
There is a definite objective. As it is clear

In the case of Grih Kalyan Kendra from the facts of the case that, Indostan
Worker’s Union v. Union of India[AIR completely being dependent on private
1991 SC 1173] the doctrine of Equal Pay for players including local taxis who are
Equal Work was highlighted as a part of governed by self-regulated unions.
Article 14. In order to apply this doctrine,
a. Due to lack of government intervention,
there must be reasonable similarity in the
the local taxi unions had become
nature of work, performance of duties and
extremely powerful and were
equality of work performed. In the instant,
overcharging customers for the rides;
case it’s observed that all app based taxi
service providers have reasonable similarity b. Refusal of taxi drivers to carry
and hence Rule 6.9 violates the above passengers, i.e., over powering by taxi
mentioned doctrine. unions;

An arbitrary exercise of Executive power c. A stream of complaints from disgruntled


deserves to be quashed and this is a passengers, requesting government
proposition that does not require the support intervention;
of a precedent. The executive action here is
d. The increased complaints against high
arbitrary and not reasonable and as held in the
pricing mechanisms by all app-based cab
case of E P Royappa v. State of Tamil
service providers;
Nadu[AIR 1974 SC 555]and Maneka
Gandhi v. Union of India[AIR 1978 SC e. Rules were drafted after taking into
597]: “ An action that is arbitrary must consideration feedback received from
necessarily involve negation of equality” various stakeholders pursuant to a

 Violation of Article 19 (1) (g) consultation paper being published,


which invited the public to present their
Rule 6.10 Is Violative Of Article 19 (1) (G) Of views on the proposed Rules.
The Indian Constitution
Having these factors in consideration, it
The provision of Article 19 (1) (g) of the
cannot be said that there is no nexus with the
constitution has been invoked in the context
objective that is sought to be achieved.
of Rule 6.10 of Aridabad City Taxi Rules,
2016 and has been contended to be violative  Non- Discriminatory in Nature
of their fundamental right to carry on
The argument by the petitioners that the
business/ profession: “Rule 6.10 of the Rules
provision had an effect on creation of
prescribed a penalty of Rs. 3, 00,000 for first
artificial class of those who object to the
contravention of Rule 6.9 and mandated
Rules and those who agree with the Rules is
cancellation of the license to do business of
a fallacious argument.
the private app-based taxi service provider for
any subsequent contravention of the said A legislative Rule cannot be challenged on
Rule.” the ground that a certain class of people

In order to understand Rule 6.10 shall be object to the provision and predict
bifurcated into two parts- discrimination on that basis. Therefore, no
third ground was available to any of the
(a) That prescribes a penalty of Rs. 3lakhs for petitioners to challenge the constitutional
first contravention of Rule 6.9; and validity of a legislative enactment. The
(b) Cancellation of license to do business for principle of equality necessarily does not
subsequent contravention of this Rule. mean that every law must have a universal
application for all persons, often the varying
 Rule of Proportionality
needs of different classes of people require
Article 19 (1) (g) states: “to practise any separate treatment and it is permissible for
profession, or to carry on any occupation, the State to do so for legitimate purposes.
trade or business.” Rule 6.10 restricts this
fundamental right. When the state imposes In the present scenario, the impugned rules
restrictions on any fundamental right, the has creates two classes i.e. one class is taxi
Judiciary becomes obligated to test whether drivers and other class of those persons who
such restrictions are arbitrary or not. The are app based cab drivers. Therefore, this
Principle of Proportionality comes into play provision is applicable only to those who use
here. This principle implies therefore that the app based cab services. The question that
Court has to necessarily go into the pros and arises is whether this classification is
cons of any administrative action called into reasonable or not. Article 14 prohibits class
question. Unless the impugned administrative legislation and not reasonable classification
action is advantageous and in public interest for the purpose of legislation. All app based
such an action cannot be upheld. At the core cab drivers constitute one class and they are
of this principle is the scrutiny of the to be treated alike by the Rules.
administrative action to examine whether the
 Judicial Review
power conferred is exercised in proportion to
the purpose for which it has been conferred. The Supreme Court is vested with the power
Thus, any administrative authority while of judicial review under Article 32 as well as
exercising a discretionary power will have to 136 of the Constitution. The parameters on
necessarily establish that its decision is which the power of judicial review of
balanced and in proportion to the object of administrative act is to be undertaken are
the power conferred. This is so as different from the parameters on which a
administrative decisions can often have validity of a legislative enactment is to be
profound implications on the day-to-day lives examined.
of our citizens, their rights, liberties, and
The contours of judicial review have been
legitimate pursuits.
clearly stated in State of M.P. v. Rakesh
Om Kumar v. Union of India [AIR 2000 Kohli [(2012) 6 SCC 312: (2012) 3 SCC
SC 3689] inter alia, the Supreme Court noted (Civ) 481]. SCC pp. 321-22 & 325-27, para
that while dealing with the validity of state 16-17, 26-28 & 30)
framed laws infringing fundamental freedoms
The Statute enacted by the Parliament or a
enumerated in Article 19 (1) of the
State Legislature can only be declared
Constitution of India, the issue of whether
unconstitutional, when able to hold beyond
restrictions imposed by the laws were
the iota of doubt that the violation of the
disproportionate to the situation.
constitutional provisions was so glaring that
The punishments enshrined in Rule 6.10 are the legislative provision under challenge
not proportionate to the offence that may be cannot stand.(para 16)
committed by the private app-based taxi
The legislative enactment can only be struck
drivers. A fine of Rs 3 lakh is a heavy amount
down on two grounds, namely
and a blanket ban on the taxi driver by taking
away the license upon a second violation of (i.) appropriate legislature does not have the
Rule 6.9 is uncalled for and completely competence to make law, and
unjustified. The punishment is not
proportionate to the crime in which case (ii). that it does not violate or abridge the
reduction of the quantum of the crime must fundamental rights enumerated in the
be contemplated by the court of law as done constitution.
in the case of State of U.P. v. Sheo Shanker
Furthermore, it also needs to be specifically
Lal Srivastava and Ors [AIR 2006 SC
noted that apart from the aforesaid two
3548] after application of the proportionality
grounds no third ground is available to
principle.
invalidate any piece of legislation. In Mohd.
The doctrine of reasonableness gives way to Hanif Quareshi v State of Bihar,[AIR
application of principle of proportionality. 1958 SC 731] (AIR pp. 740-41 para 15), the
The heavy fine and cancellation of license Constitution Bench further observed that
principle in Rule 6.10 is unreasonable and there was always a presumption in favour of
hence the quantum of punishment must be constitutionality of an enactment and the
decided in proportion to the offence. burden is upon him, who attacks it, to show
Therefore, these restrictions placed by Rule that there has been a clear violation of the
6.10 are in violation of Article 19 (1) (g) as constitutional principles.
they infringe, unreasonably, upon the right of
It is also necessary to understand that
app-based taxi drivers to freely profess their
legislation cannot be declared
trade and profession.
unconstitutional on the ground that it is
‘arbitrary’ inasmuch as examining as to
whether a particular Act is arbitrary or not
implies a value judgment and the courts do
not examine the wisdom of legislative
choices and, therefore, cannot undertake this
exercise. In Rajbala &Ors. v State of
Haryana & Ors.[(2016) 2 SCC 445] (SCC
p. 481 para 64, 65), the court held, from
State of A.P. v. Mc.Dowell & Co. [(1996) 3
SCC 709] that courts in our county do not
undertake to declare a piece of legislation on
the ground that it is arbitrary.

In the case of K.T. Plantation (P) Ltd. v


State of Karnataka,[(2011) 9 SCC 1:
(2011) 4 SCC (Civ) 414] (SCC p. 58, para
205) same has been applied. It is therefore
necessary to understand that, we need to
keep in view the aforesaid parameters in
order to term a Rule unconstitutional and
arbitrary is not a parameter to term
legislation unconstitutional.

 Rule 6.10 not violative of Article 19


9 (1) (g)

Article 19 (1) (g) of Constitution of India


provides Right to practice any profession or
to carry on any occupation, trade or business
to all citizens subject to Art.19 (6) which
enumerates the nature of restriction that can
be imposed by the state upon the above right
of the citizens. The provision of Article 19
(1) (g) of the constitution has been invoked
in the context of Rule 6.10 of Aridabad City
Taxi Rules, 2016 and has been contended to
be violative of their fundamental right to
carry on business/ profession.

“Rule 6.10 of the Rules prescribed a


penalty of Rs. 3, 00,000 for first
contravention of Rule 6.9 and mandated
cancellation of the license to do business
of the private app-based taxi service
provider for any subsequent
contravention of the said Rule.”

In order to understand Rule 6.10 shall be


bifurcated into two parts-

(a) That prescribes a penalty of Rs. 3lakhs


for first contravention of Rule 6.9; and

(b) Cancellation of license to do business for


subsequent contravention of this Rule.

The first limb of this Rule 6.10 is concerned


can be held within the competence of
Legislature to make a provision of this nature
and further that it is not offensive of Article
14 of the Constitution. This requirement, per
se, does not find foul with Article (1) (g) of
the Constitution either, inasmuch as,
punishing a person on contravening a cap set
on the normal fare does not, by itself,
impinge upon the right to carry on
profession or trade, etc. Therefore it is not
violative of Article 19 (1) (g) of the
Constitution either.

Now, the second part of the Rule mandates


that the app-based driver’s licenses are
cancelled on subsequent contravention. The
initial imposition of fine of Rs. 3lacks could
be small amount if looked into the large scale
businesses of the app-based drivers. In the
absence of licenses, it is impossible to carry
on business or profession and this
requirement is aimed at curbing overpricing.
Thus, the license of a. app based taxi driver
is withdrawn or is nullified, it definitely
amounts to placing reasonable restrictions on
the right to do business under Article 19(1)
(g).

 Doctrine of proportionality
In the case of Modern Dental College &
Research Centre v. State of M.P,[(2016) 7
SCC 353: 7 SCEC 1], (SCC pp. 412-416,
para 59-65), the application of doctrine of
proportionality could be applied has been
explained. It has been explained that the
Article 19 (1) (g) is not an “absolute right”
and is subject to limitations i.e. “reasonable
restrictions” that can be imposed by law. The
restrictions that are imposed however, have
to be reasonable “in the interest of general
public”. (para 59)

It has been stated in para 60 of the judgment


that State is empowered to make law relating
to the professional or technical qualifications
necessary for practising any profession or
occupation or trade or business but subject to
reasonable restrictions subject to the interest
of general public. “The doctrine of
proportionality” means that the impugned
provisions of the statute and rules amounting
to reasonable restrictions are brought out in
the interest of the general public and that
exercise is required to be undertaken to
balance the fundamental right to carry on
occupation on one hand and restrictions
imposed on the other.

In the same para the court had quoted Aharin


Barak, Proportionality: Constitutional Rights
and Their Limitation (Cambridge University
Press 2012), who stated that there are four
sub-components of proportionality which
need to be satisfied a limitation of a
constitutional right will be constitutionally
permissible if:

i. it is designated for a proper purpose;


ii. the measures undertaken to effectuate
such a limitation are rationally
connected to the fulfilment of that
purpose;
iii. the measures undertaken are
necessary in that there are no
alternative measures that may
similarly achieve that same purpose
with a lesser degree of limitation; and
finally
iv. a need to be a proper relation
(“proportionality stricto sensu” or
“balancing”) between the importance
of achieving the proper purpose and
the social importance of preventing
the limitation on constitutional right.
Keeping in view of the parameters and
principles in mind, the restrictions imposed
are reasonable. The main purpose of the
Rules is to ascertained in a flawless manner
leeway any app based taxi driver to resort to
any dubious practice. Therefore, it is clear
that the Parliament in the instant case is fully
competent to enact the Rules 6.9 & 6.10 and
its authority to make law cannot be diluted.
The Rules are not discriminatory nor it
offends equality clause enshrined under
Article 14 and restricts freedom to practice
any profession under Article 19 of the
Constitution.

 Not in Public Interest

From the facts of the case, it is clear that it is


a motivated litigation, wherein the latest
financials filed by Hola show that substantial
donations have been made to the Non-
Government Organisation, CMUCL. The
petitioners in the instant case have filed for
personal interest and not in the public
interest.
ISSUE II

WHETHER THE RULES FRAMED BY MORTH AND PERTAINING TO INSTALLATION


OF CCTV CAMERAS INSIDE THE CABS WERE IN CONTRAVENTION OF THE RIGHT
TO PRIVACY THAT THE CITIZENS OF INDOSTAN ARE ENTITLED TO AS A
FUNDAMENTAL RIGHT.

Petitioner Respondent

The rules framed by MORTH and pertaining Right to Privacy enshrined as a Fundamental
to installation of CCTV cameras inside the Right under the Constitution of Indostan can
cabs are in contravention of the right to be subject to reasonable restrictions.
privacy that the citizens of Indostan are
A. Right to Privacy does not fall within
entitled to as a Fundamental Right.
the ambit of Fundamental Right
A. Right to Privacy falls within the
Right to privacy is a fundamental right but it
ambit of a Fundamental Right
is subject to limitations and restrictions.In the
enshrined under the Constitution of
caseof Govind v. State of Madhya
Indostan.
Pradesh[(1975) 2 SCC 148], Mathew, J.
In the case of R Rajagopal v State of
accepted the right to privacy as an emanation
Tamil Nadu [AIR 1995 SC 264] and
from Art. 19(a), (d) and 21, but right to
People’s Union for Civil Liberties v
privacy is not absolute right and must be
Union of India [AIR 1991 SC 207, 211],
subject to restriction on the basis of
it was held that right to privacy is a part
compelling public interest. In the case of Mr.
of right to life and personal liberty
‘X’ v. Hospital ‘Z’ [AIR 1995 SC 495]the
enshrined under Article 21 of the Indian
Supreme Court held that although the right to
constitution. The apex court in the recent
privacy is a Fundamental Right under Art. 21
case of Justice K. S. Puttaswamy(Retd.)
of the Constitution it is not an absolute right
& Anr v. Union of India & Ors.
and restrictions can be imposed on it for the
[W.P.(Civil) No. 494 of 2012]has cleared
prevention of crime, disorder and protection
the position with regards to the question
of rights and freedoms of others. Sincethe
of privacy being a part of Article 21. The
CCTV was being used was for public safety
court in this case has upheld that privacy
so it overtakes the right to privacy and falls
is a constitutionally protected right which
within an extended understanding of Article
emerges primarily from the guarantee of
21 of the Constitution of Indostan, the
life and personal liberty in Article 21 of
counsel for the respondents are claiming that
the Constitution.Since right to privacy is there was no violation of this fundamental
an extended understanding within article right in this case.
21, the counsel for the petitioners are
 Invasion of privacy is in
claiming that there was violation of this
accordance with restrictions on the
fundamental right in this case.
right to privacy.
B. Privacy- Scope extended to even
public spaces.
The right to privacy is too subject to
Can the insides of a cab be considered
limitations and is not absolute, like
as a private space of a passenger or
any other fundamental right.
should it be held as public space.
Therefore, a person’s privacy can be
Does the right to privacy apply
infringed only when such
equally when private and public
infringement falls within the valid
spaces are concerned?The term
restrictions upon the right to privacy.
privacy has been explained by judges
The case of Gobind v State of
in the various precedents as “the
Madhya Pradesh [(1975) 2 SCC 148]
right to be left alone”. The question
and Mr. X v Hospital Z [(1998) 8
is whether this privacy as a right is to
SCC 296] has held that only in cases
be available to people only in their
where there are compelling state
private sphere and not be extended to
interests, can a privacy right be
public spaces. This question has been
beached. Also in the case of Peoples
answered by a nine judge bench of the
Union for Civil Liberties v. Union
Supreme Court in the case of Justice
of India[AIR 1991 SC 1378]it was
K. S. Puttaswamy(Retd.) & Anr v.
held that Right to Privacy under
Union of India & Ors. [W.P.(Civil)
Article 21 cannot be curtailed ‘except
No. 494 of 2012]. The referred case
according to a procedure established
has held that privacy should not be
by law.’ In this case the rules were
limited to non-intrusion in people’s
framed by the state for providing
private space only but must be
public safety and hence there was a
provided even in public places
reasonable restriction on the right to
(subject to limitations on the
privacy as it was through a procedure
right).“… privacy is not lost or
established by law.
surrendered merely because the
individual is in a public place”. This
essentially means that a person is  Scope of privacy under Art. 21
entitled to the protection of his
It is contested that the existence of a
privacy irrespective of private or
fundamental right of privacy is in doubt
public space. Hence, the any
in view of two decisions: the first - M P
contention based on the fact that a
Sharma v Satish Chandra , District
passenger seated inside a cab has no
Magistrate , Delhi [(1954) S.C.R.
right to privacy as such, the cab
1077]was rendered by a Bench of eight
essentially being in public domain
judges and the second, in Kharak Singh
does not possess merit owing to the
v State of Uttar Pradesh[AIR 1963 SC
extended application of privacy to
1295]was rendered by a Bench of six
even in public spaces.
judges. Each of these decisions, in the
contained observations that the Indian
C. Unlawful use of stored data- Gross
Constitution does not specifically protect
Violation of Private Interest.
the right to privacy.
1. Violation of privacy- Leak of
CCTV footage on social media  Violation of privacy- Leak of
platform CCTV footage on social media
The meaning of privacy includes platform.
privacy even in the online media There were reasonable security
forum. Hence, no person’s privacy measures taken up by SOBER.
should be breached by displaying Handling sensitive personal data with
his or her video or photographs on proper and reasonable protection, it
social networking platforms or the can be observed that there were
internet without their consent. reasonable procedures in places by
Para 10 of the facts in the present SOBER as they were already in
case show that in order to curb compliance with Rule 7 of the draft
increased instances of harassment, bill of Reasonable Security Practices
molestation and rape of of Indostan, 2011. It can also be
passengers by the drivers of apps contested that the rules mandated the
based cab service providers, preservation of the recordings of the
MORTH formulated certain rules. CCTV footage for one year to
These rules prescribed that the app maintain a balance between public
based cab service providers safety and privacy as there were
needed to install cameras in the many complains of harassment and
cab that would continuously video rape in the cabs.
record the inside of the cab. Also,
such footage recorded required to  The case of footage leak is not
be preserved for at least one year. intentional
Sober readily installed the Attraction of liability in the instant
cameras (Hola failed due to case for the material that has been
economic constraints).However, it uploaded is justified and cannot
soon came to light that certain attract any offence it was committed
footages were being sold on an without the knowledge of the Sober
online selling platform operating and offence has not be committed by
in Indostan. One such video the company or due to neglect of the
footage that was leaked on social company director, manager, secretary
media captured a famous actress or other officers.
sitting in a revealing position Hence, it can be contended though
inside a cab. Therefore, there has CCTV were installed to provide
been a violation of privacy as safety and security to passengers and
video footage of persons has been there has been no breach of right to
released online without their privacy in this case.
consent. In the case of Ram Das v. State of
2. Invasion of privacy not in Bengal [AIR 1954 SC 711], though
accordance with restrictions on the assault was there but the intention
the right to privacy to outrage the modesty could not be
Agreeably this right is too subject proved the High Court upheld the
to limitations and not absolute. acquittal.
Therefore, a person’s privacy can The facts of the present case, it can be
be infringed only when such seen that the passengers were aware
infringement falls within the valid of the presence of CCTVs in cabs
restrictions upon the right to owing to the rules published by
privacy. Justice K. S. MORTH. The loss of such data was
Puttaswamy(Retd.) & Anr v. not intentional, with knowledge and
Union of India & Ors. there is no reason to believe that it
[W.P.(Civil) No. 494 of 2012] has was due to the negligence of the
held that a law which encroaches party. The installation of cameras in
upon privacy will have to the taxis was expressed in good faith
withstand the touchstone of in an opinion respecting the merits of
permissible restrictions on the increased sexual harassment,
fundamental rights. Hence, only a molestation and rape by drivers.
procedure or an action which is Here the act of leaking footage of
fair, just and reasonable can cause persons was not done with a malafide
an invasion of one’s privacy. The intention or to hamper thee interests
breach of privacy can only happen of those persons whose video has
for the greater interests or lawful been leaked.
purposes which would include
breach for protecting national
security, preventing and
investigating crime, encouraging
innovation and the spread of
knowledge, and preventing the
dissipation of social welfare
benefits. In this case, the CCTV
footage leak did not lead to
preservation of any such greater,
beneficial interest of the country.
Contrarily, the act of leaking
footage of persons in revealing
positions was thoroughly foul and
done with malafide intention to
hamper the private interests of
those persons whose video had
been leaked.
3. The case of footage leak is not
accidental but intentional
If the footage were to be leaked by
accident, then footage of all
passengers would be on display,
however, the case is not so here.
The fact sheet in para 10 clearly
states that the footage of CCTVs
installed in the cabs were being
sold on online selling platform
operating in Indostan. The same
were being put up on social media
as well. Only selective footage
where any passenger was seen
sitting in a revealing position (the
case of the actress for instance)
were being sold. This shows that
the people having access to such
footage were misusing the same.
All the above reasons show that
there was unlawful use of the
CCTV footage.

D. Unexplained procedures regarding


storage of data and subsequent
disposal
Lack of legislation on regulating
privacy breach in Indostan
The present case involves a leak in
CCTV footage and usage of the same
in a wrong, unlawful manner. This
indicates that either there has been
unauthorized access to the stored
footage or any person possessing
authority has caused or has aided the
leak. Essentially, it shows poor
storage and security measures for the
CCTV data. One such cause is the
absence of adequate or specific
legislation to handle CCTV footage
and its misuse. The rules framed by
MORTH were also silent on which
body should be in charge of storing
the CCTV footage for a period of one
year. It also did not lay down any
guidelines on how this data is to be
disposed off post one year
completion, nor did it say as to who
can have access to the same.
Section 66E of the Information
Technology Act, 2000 provides
punishment for breach of privacy but
is silent on the procedure to be
adopted while making use of CCTV.
As of present, there is no existence of
a Privacy Act in Indostan.
In the absence of any legislation,
attention can be drawn to the
‘National Privacy Principles of India’.
These principles were given by the
Privacy Commission that was set up
to oversee the handling of personal
data and to address potential cases of
breach. Headed by J. A.P. Shah, the
principles given by the Commission
are as follows-
•Principle of Notice, • Principle of
Choice and Consent, • Principle of
Collection Limitation, • Principle of
Purpose Limitation, • Principle of
Access and Correction, • Principle of
Disclosure of Information, • Principle
of Security, • Principle of Openness, •
Principle of Accountability
Here if we compare the facts of the
present case with these principles, it
can be seen that the passengers were
aware of the presence of CCTVs in
cabs owing to the rules published by
MORTH. The crux of these principles
put forth that access to such private
data must not be provided to any third
party (unless there is consent). Also,
while handling such data, security
measures must be strict to prevent any
loss, unauthorized access or misuse.
These were not followed in the
present case. Disclosure of CCTV
footage has taken place and also its
subsequent misuse.

Hence, it can be contended though


CCTVs were installed to provide
safety and security to passengers,
such recordings have been misused
and caused a violation of a person’s
privacy. Privacy breach is essentially
a violation of a Fundamental Right
under the Constitution of Indostan.
For the same reason, the usage of
CCTVs should be banned until
specific laws are laid down to regulate
CCTV footage storage, its access and
disposal.
ISSUE - III

WHETHER SOBER HAS VIOLATED CONTRACT AND DATA


PRIVACY/PROTECTION LAWS OF INDOSTAN IN A MANNER THAT HAS
SEVERELY IMPACTED LARGER PUBLIC INTEREST?

Petitioner Respondent

 Violation of Contract
 No violation of contract
In this case, the validity of click wrap
agreements as such is not being questioned, A click wrap agreement (also known as a
but the click wrap agreement as entered in "click through" agreement or click wrap
this particular case w.r.t the consent for the license) is a common type of agreement
amendments is being challenged. which is mostly used in connection with
software license. In the facts it has been
A click wrap agreement is a type of contract
clearly mentioned that it was a click wrap
which is widely used with software licenses
agreement where the customer had the
and online transactions wherein a user must
knowledge and had agreed to purchase the
agree to terms and conditions before using
product. This implies that there was consent
the product or service. Sober stated that
from the purchaser in respect to such
while downloading their app-based services,
contract.
the users have agreed to all terms and
conditions, which included giving up any  Valid Consent
rights under applicable data privacy and
The issue of shrink-wrap and click-wrap
protection laws. Such a term is invalid and it
contracts first arose in the United States. The
cannot be deemed to have been consented by
US Courts have faced the issue of clickwrap
the users as there is no express mention of
contracts in two ways. In ProCD Inc. v.
the rules as such. Since the consent part is
Zeidenberg [86 F.3d 1447], it was held that
not consensus ad idem, i.e. Since there is no
an enforceable contract emerged as soon as
meeting of the minds on the same subject in
the product was used after the consumer had
the same sense, it cannot be said to have been
had the opportunity to read the terms.It
consented and therefore it is a voidable
upheld the Click wrap contracts/ licenses
contract.
holding that once the software was opened
 Invalid Consent for use, the user was given the option to
1. Section 13 of the Indian Contract Act, either accept the terms of use or reject the
1872 defines consent as a situation wherein same. Thus, the contract entered by the
two or more persons agree upon the same customers makes them binding on the all the
thing in the same sense. There is supposed to terms that have been accepted on the usage of
be consensus ad idem, that is meeting of the the application (app).
needs on the same thing in the same way.
In the case of TracFone Wireless, Inc. v.
2. In a click wrap agreement, the users have Pak China Group Co. Ltd.,the Hon’ble
to give their consent for all the terms and court of Florida held that “Contract for sale
conditions in order to be able to use the of goods may be made in any manner
services of the service provider. There is no sufficient to show agreement, including
scope for bargain on the contractual terms conduct by both parties which recognizes the
and conditions. In the case of LIC India v existence of such a Contract, which also
Consumer Education & Research Centre includes ‘Shrink-Wrap and Click Wrap
[AIR 1995 SC 1811], The Supreme Court Contracts”, in which an agreement becomes
rightly noted that “In dotted line contracts effective as soon as a customer accepts the
there would be no occasion for a weaker terms.
party to bargain as to assume to have equal
bargaining power. He has either to accept or In the case of LIC India v. Consumer
leave the service or goods in terms of the Education and Research Centre [AIR 1995
dotted line contract. His option would be SC 1811]it was held by the court that the
either to accept the unreasonable or unfair customer has to either accept or leave the
terms or to forgo the service forever.” This service or goods in terms of Contract. Also
can be observed in the present case too as the he has to prove that the good or product was
users had the option to either give their an absolute necessity and he had no other go
consent to all the terms and conditions of the but to accept the product. In the instant case,
contract or to forgo the cab services offered the customers were not forced to give their
by Sober. personal information and was at their option
of paying for the service either by cash or
In the case of Specht v. Netscape [1995 AIR
through card. It was clear that the customers
1811], it was set out that it is not just the tick
where clear and aware that the personal
box or “I Agree” button that’s important, it is
details should be given in order to make
also that the terms need to be conspicuous,
transactions for the services.
and it needs to be clear that the tick box or
button relates to the agreement to the terms
One of the most high-profile cases on the
(rather than something else). The Court, in
matter was Feldman v. Google, Inc., [513 F.
this case concluded that “plaintiffs’
Supp2 2d 229 (E.D.Pa.2007)], were in
downloading of smartdownload did not
Feldman & Associates purchased advertising
constitute acceptance of defendants’ license
from Google’s “AdWords” Program. The
terms. Reasonably conspicuous notice of the
dispute in this case was the forum selection
existence of contract terms and unambiguous
clause, wherein dispute resolution would take
manifestation of assent to those terms by
place. It was similarly contended by them
consumers are essential if electronic
that the Agreement “was neither signed nor
bargaining is to have integrity and
seen and negotiated by Feldman &
credibility.”
Associates or anyone at his firm”. The Court
Bargaining potential is another concept in this case cited Baer v. Chase [ 392 F.3d
adopted by courts to understand the context 609], saying
of consent by the parties. In the case of
Henningen v. Bloomfield Motors [32 N.J. “Contracts are ‘express’ when the parties
385, 161 A2d 69 (1960)], the Court paid state their terms and ‘implied’ when the
homage to the principle of freedom of parties do not state their terms. The
contract and also emphasized sized that the distinction is based not on the contracts’
disclaimer was contained in a "standard legal effect but on the way the parties
form." According to the Court, "freedom of manifest their mutual assent. […] To
contract" is most at home when a contract is determine whether a clickwrap agreement is
the result of "free bargaining of parties. . enforceable, courts presented with the issue
.who meet each other on a footing of apply traditional principles of contract law
approximate economic equality" rather than and focus on whether the plaintiffs had
the 'standardized mass contract . . . used reasonable notice of and manifested assent to
primarily by enterprises with strong the clickwrap agreement.”
bargaining power and position" and which is
The court held that Feldman had reasonable
presented to the consumer on a take-it-or-
notice of the terms and manifested assent to
leave-it basis.
the agreement. The Judge noted:
Also, in the case of Bragg v Linden
“The user here [Feldman] had to take
Research Inc. [487 F. Supp. 2d 593
affirmative action and click the “Yes, I agree
(E.D.Penn. 2007)] the Court held that When
to the above terms and conditions” button in
the weaker party has presented the clause and order to proceed to the next step. Clicking
told to ‘take it or leave it’ without the “Continue” without clicking the “Yes”
opportunity for meaningful negotiation, button would have returned the user to the
oppression, and therefore procedural same webpage. If the user did not agree to all
unconscionability, are present. of the terms, he could not have activated his
account, placed ads, or incurred charges”.
Moreover, related to the issue of consent is
Thus, the terms and conditions in the click-
the requirement of transparency which
wrap agreement were held valid.
requires a disclosure by the data recipient of
information pertaining to data transfer and The essence of Click Wrap Contract is that
use.In the present case, there was no express the terms and conditions are disclosed until
disclosure by Sober in this regard with the contract is accepted by the customer. In
respect to transfer of sensitive personal data the instant case the customer is bound by the
to a 3rd country and hence consent cannot be Contract since he/she has accepted the
said to have been obtained. service and that all the terms and conditions

From the cases mentioned above and the including the giving away the rights present
facts of the present case, it can be observed in the Contract.
that the users had not given their consent to
 No Violation of data protection
transfer of sensitive personal data to Chunisia
laws
as it was not expressly mentioned in the
contract, and that the users had to give a o Collection of SPDI
blanket consent to all the terms and
According to the Information Technology
conditions of the contract as they had no
(Reasonable Security Practices & Procedures
bargaining power. Since there is no free
and Sensitive Personal Data or Information)
consent and Sober performed out of the
Rules, 2011, the Rules accord to the
contractual terms and conditions, the contract
Protection of Personal Data or Information
is said to be breached.
(SPDI) which essentially consists of personal
 Violation of data protection laws information relating to passwords, financial
o Collection of SPDI information such as bank account or credit

Rule 6 of the Information Technology card or debit card or other payment


(Reasonable Security Practices & Procedures instrument details.
and Sensitive Personal Data or Information)
Rule 6 of the Information Technology
Rules, 2011 (Reasonable Security Practices & Procedures
and Sensitive Personal Data or Information)
This section states that before transmitting
Rules, 2011 states that before transmitting the
the data to a 3rd party, the consent of the
data to a third party, the consent of the
provider of such information is required. In
provider of such information is required. In
the present case, no such consent was
the present case, consent was obtained by
obtained from the provider and though Sober
Sober explicitly for the permission to handle
is contending that it has been entered into by
their customer’s payment related data in the
the customers upon agreeing to all the terms
manner that they were handling as stated in
and conditions, there is no express mention
the fact sheet. Such information that has been
regarding disclosure of data to a third party
collected in the present case was essential
in that agreement. From the facts, it can be
and required for a lawful purpose connected
observed that Sober only collected the bank
with functioning of Sober. Sober has also
details from the customers, but there is no
taken reasonable steps to ensure that the
mention of publication of information with
customers had knowledge about the
regard to transfer of sensitive personal data to
collection of information, the purpose of
Chunisia, implying that the consent of the
collection of such information, the intended
users was not taken in this respect. Moreover,
recipients and the name and address of the
it is necessary for the body corporate to
agency (in the current case Chunisia)
publish such information on their website
collecting and retaining the information. The
under Rule 4 of the Information Technology
information was used only for the purpose for
(Reasonable Security Practices & Procedures
which it is collected and was not retained for
and Sensitive Personal Data or Information)
a period longer than what is required.
Rules, 2011, which it failed to do so. Mere
clicking of the “I Agree” button does not Therefore, it is clear that assent was taken
amount to consent of all the terms and from the customers in relation to transfer of
conditions, especially with regard to those data. Even then it is evident from the fact
which are not mentioned in the contract. sheet that the customers were aggrieved by

o Transfer of SPDI the data leak than the transfer of information


to “Chunisia”.
In paragraph 9 of the fact sheet, it is stated
that Sober transmitted the data to a country o Transfer of SPDI
called Chunisia with inferior data security
Sober had authorization to transfer SPDI to
laws. As per Rule 7 of the Information
Technology (Reasonable Security Practices other body corporate, located across the
& Procedures and Sensitive Personal Data or globe, ensuring data protection was adhered
Information) Rules, 2011 states that “A body by the body corporate as per the Rules. As
corporate or any person on its behalf may the transfer has been permitted as it was
transfer sensitive personal data or necessary for the performance of lawful
information including any information, to contract between Sober and the customers
any other body corporate or a person in India, and where the customers have consented to
or located in any other country, that ensures such transfer.
the same level of data protection that is
o Disclosure to Third Party
adhered to by the body corporate as provided
for under these rules. The transfer may be As the Rules specify, Sober had obtained
allowed only if it is necessary for the permission from the information
performance of the lawful contract between provider, prior to disclosure of such
the body corporate or any person on its information to a third party and an
behalf and provider of information or where agreement has been entered between the
such person has consented to data transfer.” parties.
This implies that the transfer was invalid as
Chunisia had inferior data security laws  Section 43A of the Information

when compared to Indostan. Technology Act

 Section 43A of the Information Section 43A of the IT Act is not


Technology Act, 2000 applicable in this case with reference to
the press note of 24thAugust, 2011 which
It states that “Where a body corporate,
was released by Ministry of
possessing, dealing or handling any sensitive
Communication and Information
personal data or information in a computer
technology as a clarification on
resource which it owns, controls or operates,
Reasonable Security Practices and
is negligent in implementing and maintaining
Procedures and Sensitive Personal Data
reasonable security practices and procedures
or Information. In this notification, it was
and thereby causes wrongful loss or wrongful
held that services related to collection,
gain to any person, such body corporate shall
storage, dealing or handling of sensitive
be liable to pay damages by way of
personal data or information under
compensation to the person so affected.
contractual obligation with any legal
Sober, a company that was engaged in a entity if provided by a foreign company
commercial activity, thereby qualifying as a which is not essentially located within
body corporate, started cashless payments, India, then the aforesaid section in the
for which the users were required to furnish first place will cease to apply. Further, the
their bank details. All those users who notification exempts outsourcing
wanted to make cashless payments were companies in Indian from the provisions
mandatorily required to submit their details of collection and disclosure of SPDI. As
to Sober. Section 3(2) of the Information the data was collected and stored in
Technology (Reasonable Security Practices Chunisia which is beyond the territory of
and Procedures and Sensitive Personal Data Indonistan, Section 43A shall not be
or Information) Rules, 2011 covers credit applicable to Sober.
card details to be ‘Sensitive Personal Data’
 Section 72A of the Information
under the IT Act, 2000. In this manner,
Technology Act, 2000
Sober was in possession of sensitive personal
data, which it later transmitted to Section 72A of the IT Act, 2000 states
Chunisia.Paragraph 9 of the fact sheet that if under a contract, any person
mentions that in order to make data storage dealing with any material containing
mechanism cheaper, Sober transmitted the personal information about another
rd
data to Chunisia, which is a 3 country person, with the intent to cause or
having inferior data security laws. This knowing that he is likely to cause
implies that Sober was negligent in wrongful loss or wrongful gain discloses,
implementing strong mechanisms for without the consent of the person
protection of sensitive data of its users, due concerned, or in breach of a lawful
to which their data was leaked and there was contract, such material to any other
a breach of the privacy of the users as person, shall be punished with
publishing of any such sensitive personal imprisonment for a term which may
data is a violation of the Right to Privacy. It extend to three years, or with fine which
was held in the cases of Kharak Singh v. may extend to five lakh rupees, or with
State of U.P.[AIR 1963 SC 1295], Govind both.
v. State of Madhya Pradesh[1975 AIR
1378, 1975 SCR (3) 946],R. Rajagopalan v. In this case, the customers consent is

State of Tamil Nadu[1995 AIR 264, 1994 present and it was a mere allegation that

SCC (6) 632] and many other cases that had been stated in the fact sheet. This

Right to Privacy can be interpreted as a part procedure of disposal of data after a


of Right to Life and hence, there is a breach on the customers’ part is a fact
violation of Fundamental Right; thus causing that the customers were made aware of
a wrongful loss. while purchasing the product and this is
also evident as a condition in the contract.
 Section 72A of the Information
However, these allegations had been
Technology Act, 2000
denied by Sober and stated that there has
Section 72A of the Act states that if under a been no such data breaches via a public
contract, any person dealing with any statement.
material containing personal information
about another person, with the intent to cause  No violation of privacy

or knowing that he is likely to cause


In the present case, Sober is functioning in an
wrongful loss or wrongful gain discloses,
E-Commerce Platform, where it is difficult to
without the consent of the person concerned,
complete any online transaction without
or in breach of a lawful contract, such
collecting some form of personal information
material to any other person, shall be
of the users such as details about their
punished with imprisonment for a term
identity and financial information. Apart
which may extend to three years, or with fine
from the collection of primary data from the
which may extend to five lakh rupees, or
users, it was at the option of the other party to
with both. In the present case, Sober has
give their banking payment information.
disclosed the sensitive personal data of its
Hence, the important consideration for Sober
users to a 3rd country called Chunisia
in this case is to maintain privacy of its users.
knowing that it has weaker data protection
The two primary considerations should be
laws, which might cause wrongful loss to its
taken to understand the case are:
users. Therefore Sober is liable under this
section for disclosure of information in i. Authorised access to personal information;
breach of a lawful contract.
ii. Non-misuse of such personal information;
 Violation of Privacy
There is no statute in India that expressly sets
In the present case, the users were violated of
out individual rights over their personal data
their right to privacy due to disclosure of
or places obligations on organisation that
rd
their sensitive personal data to a 3 country
collects and use personal data. In Petronet
with inferior data protection laws without
LNG v. Indian Petro Group[(2009) 95 SCL
their consent and the subsequent leakage of
207 (Delhi)], the plaintiff company was
data therefrom. It can be seen that various
core privacy principles, which have been seeking an injunction restraining the
formulated out of the efforts of the defendant company from publishing
Organisation for Economic Cooperation and confidential and/or misleading information
Development (OECD), have been violated. relating to the plaintiff's negotiations and
They are: contracts, in the form of articles or news
items or in any other form on their website.
i. Purpose Specification Principle – In the
The Delhi High Court declined to recognise
present case, the data was being collected for
any right to privacy against non-state actors.
enabling bank payments. But its subsequent
storage and usage was not communicated The absence of specific legislation, the
explicitly to the consumers, thereby violating Supreme Court of India in the cases Kharak
the principle. Singh v. State of UP[AIR 1963 SC

ii. Use Limitation Priniciple- This principle 1295]andPeople's Union of Civil Liberties
states that the data made available by the v. the Union of India[AIR 2005 SC
users should not be disclosed or made 2419]recognised the “right to privacy” as a
available by the information holder except subset of the larger “right to life and personal
with the consent of the data subject or under liberty” under Article 21 of the Constitution
authority of law. In the present case, Sober of India. However a right under the
failed to take consent of its users in this Constitution can be exercised only against
regard. Their initial acceptance with respect any government action. Non-state initiated
to terms and conditions for usage of the violations of privacy may be dealt with under
services was deemed to be applicable for all principles of torts such as defamation,
other subsequent additions or amendments, trespass and breach of confidence.
which is incorrect and violative of the
principle.

iii. Security Safeguards Principle- This


principle which states that reasonable
security safeguards against risks of loss or
unauthorised access, destruction, use,
modification or disclosure of data should be
taken has been violated by Sober upon
transfer of sensitive personal data to a 3rd
country i.e. Chunisia with inferior data
security practices.

Also, publishing of any such sensitive


personal data is a violation of the Right to
Privacy. It was held in the cases of Kharak
Singh v. State of U.P.[AIR 1963 SC
1295],Govind v. State of Madhya
Pradesh[1975 AIR 1378, 1975 SCR (3)
946], R. Rajagopalan v. State of Tamil
Nadu[1995 AIR 264, 1994 SCC (6) 632]
and many other cases that Right to Privacy
can be interpreted as a part of Right to Life
and hence, there is a violation of
Fundamental Right; thus causing a wrongful
loss.