
In a recent development, the Delhi High Court has provided a major relief to nearly 1.8 crore credit card holders by restraining Kony, Inc., a company, from disrupting the IT services offered to SBI Cards and Payment Services Private Limited. The court order, passed by Justice Prathiba M Singh on April 26, emphasizes the potential risks to customers if the software license supporting SBI Cards’ services were to be disrupted.
Order Details and Restrictions
The court’s ex-parte ad interim order ensures that Kony and anyone acting on its behalf refrain from taking any action or steps that would lead to the disruption of credit card services provided through the licensed software. The court further directed that no disruption should be caused to the services being provided to ensure the convenience of the large number of customers. The respondents, including Kony, are also prohibited from taking any steps or making changes that could disrupt the petitioner’s services or the services of the platform’s users.
To enforce the order, SBI Cards and Payment Services Private Limited must deposit a sum of ₹55 lakh with the Registrar General of the High Court.
Background of the Case
SBI Cards and Payment Services Private Limited approached the High Court in response to concerns regarding four interconnected entities. The petitioner entered into an agreement with Kony, Inc. in 2014 for the development of a Mobile Application Development Platform (MADP) that enables the creation of client-facing applications for business-to-consumer users on mobile and similar devices.
Negotiations for the renewal of the license began before the agreement expired in 2023, and a contract was reportedly agreed upon. However, in October 2023, the commercial proposal was changed, leading to a lack of consensus between the parties. SBI Cards argued that the new proposal was significantly different from the agreed commercial proposal and was financially burdensome.
Importance of Interim Protection Measures
The Court recognized the critical and sensitive nature of providing financial services and the potential impact of disruptions in software licensing or operational access. The development and functionality of mobile banking applications, which support credit card services, could be significantly affected. The Court highlighted the risks to customer data, transaction processing, service continuity, financial losses, and erosion of consumer trust that could occur if interruptions were to happen. Therefore, the interim protection measures are deemed essential to maintain the smooth operation of credit card-related software, ensuring uninterrupted service delivery, customer satisfaction, and compliance with financial regulations.
Future Consideration and Legal Representation
The Court passed an ex-parte order and scheduled further consideration of the case for May 22. Senior Advocate Rajeev Nayar, along with advocates Neeraj Sharma, Arpita Roy Chowdhury, Archana Lakhotia, Adhish Rajvanshi, Prachi Jain, and Agniwesh Singh Bikram Bhattacharya, appeared on behalf of SBI Cards and Payment Services Private Limited.