Telangana High Court Issues Stern Warning to Finance Ministry Over CIBIL Data Protection PIL
In a significant development concerning financial data privacy, the Telangana High Court has issued a stern warning to the Union Finance Ministry regarding delays in responding to a crucial public interest litigation (PIL). The court explicitly cautioned about imposing financial penalties if the ministry fails to submit its counter-affidavit by the newly established deadline.
Court Sets March 17 Deadline for Ministry Response
A division bench comprising Chief Justice Aparesh Kumar Singh and Justice GM Mohiuddin has directed the principal secretary of the Union Finance Ministry to file the necessary counter affidavits by March 17. This directive came during Wednesday's hearing when ministry counsel requested additional time to prepare their response.
The bench responded firmly to this request, warning of potential fines for further delays and subsequently adjourning the matter. This judicial intervention highlights the court's growing impatience with the prolonged processing of this data protection case that has been pending since 2021.
Background of the CIBIL Data Protection PIL
The PIL was originally filed in 2021 by Hyderabad resident Krupa Soni, seeking judicial intervention to protect citizens' personal data within credit information systems. The petition specifically challenges a 2021 Reserve Bank of India notification concerning the Credit Information Companies Amendment Regulations.
The petitioner has requested the court to restrain major credit information companies, including:
- TransUnion CIBIL
- Equifax
- Experian
- CRIF High Mark
from collecting, processing, and disseminating personal information of Indian citizens through their credit reporting systems.
Core Concerns About Current Credit Reporting Practices
The PIL raises serious concerns about existing practices under the Credit Information Companies (Regulation) Act and its subsequent rules. According to the petition, current systems allow credit score reports to be published on public platforms accessible to various entities without adequate privacy safeguards.
The litigation emphasizes the urgent need for:
- A fair, transparent, and effective mechanism to address disputes regarding credit information provided by financial institutions
- An independent system to resolve data disputes before credit scores are generated and published
- Enhanced protection for citizens whose financial standing is impacted by potentially disputed CIBIL scores
The petitioner argues that the current framework lacks sufficient safeguards to ensure that disputed or inaccurate information doesn't negatively affect individuals' financial opportunities and reputation.
Prolonged Legal Proceedings and Judicial Notices
This case has seen extended legal proceedings since its initiation. The Telangana High Court initially issued notices to the Union Finance Ministry and the credit information companies in December 2021, followed by additional notices in May 2023. Despite these judicial communications spanning over two years, the required counter affidavits from the respondents remain unfiled.
The court's recent warning and deadline setting represent a significant escalation in judicial pressure on the concerned authorities to address these critical data privacy concerns that affect millions of Indian citizens whose financial data is processed through credit information systems.
