Time to Re-visit “Adjudication” under ITA 2000

ITA 2000 has been the epoch making legislation in India which is now being considered for a major revision.

The revisions are focussed mainly on how to bring new technology such as AI or Meta Verse or Blockchain or Quantum Computing into a clear legal framework. to be. In the mean time, the advent of another key legislation in the Cyber field namely the DPDPA 2023 has opened up another need.

DPDPA 2023 is focussed on disciplining the data fiduciaries with stringent penalties for non compliance. For this purpose the Data Protection Board (DPB) will act as the adjudication authority under DPDPA 2023 receiving complaints, conducting an Inquiry and determining the penalties.

For effective functioning of the DPB there is a need for complaints to reach them so that they can take up the inquiries. If no complaints come forth, the possibility of DPB conducting its own surveillance and take suo moto action is remote. If any data breach incident comes to the media attention, then DPB may take up the inquiry. Otherwise the DPB may not be actively scouting the market space to identify potential violators of basic personal data protection principles.

Data Principals who are unhappy with any data fiduciary who may be a mobile app service owner or a website owner may initially report to the DPB enthusiastically about permissions being collected in excess of the requirement etc. However, after a while data principals will realize that any complaint made by them may invoke an inquiry and penalty for the data fiduciary but may not result in any compensation to be available to them. Public interest reporting may be even discouraged by the DPB which may stick to the complaints of data principals who have a cause of action against the data fiduciary such as any of his rights of access, right of grievance redressal etc has not been complied with.

Naavi.org has already initiated an action plan to create some kind of recognition to the data principals who file complaints with the DPB and contribute to the cleaning of the system.

However, those data principals who need to pursue a claim of compensation may find that they only have a remedy under ITA 2000 and making a complaint with the Adjudicator claiming contravention of Section 43 with any other sections and claiming the compensation.

When Section 43A was introduced, there was one case in Bengaluru where an advocate successfully argued (Later over ruled by the appellate authority) that Section 43A will apply to body corporates and Section 43 will apply to others. WIth Section 43A being removed, there will be no confusion now that in any event of a wrongful loss suffered by a person and a contravention of ITA 2000 is identified, the remedy for compensation lies under IAT 2000 with an adjudication.

We can therefore see that demand for adjudication may increase. Also since adjudication is based on evaluation of the value of wrongful loss, it will be necessary for the adjudicator to assess the “Valuation” of personal data for the purpose of providing compensation. In many cases, the per-capita loss may be small but the aggregate loss of a community may be large. In such cases, adjudicator may have to allow class action, or take up suo-moto investigation, collect compensation for a group and distribute it to the affected persons.

At present it appears that the Adjudicators under ITA 2000 who are IT secretaries in States, may not be either inclined for such extended duties nor they may be equipped to take up personal data valuation and distribution of compensation.

If therefore the system of penalizing data fiduciaries donot take off, data principals will also lose interest in making complaints and hence the society is unlikely to see any noticeable improvement in the privacy protection culture of organizations.

It is therefore necessary to strengthen the Adjudication system under ITA 2000 and make it ready to take on the increased work load.

In this context Naavi.org urges that the old system of designating the IT secretary as the Adjudicator should be replaced and a dedicated Adjudicator should be appointed in each state under the judicial system itself. Hence there is a need for initiating an action plan to set up a new Adjudication offices in each State with a judicial person in charge and MeitY to modify its notification of March 2003 and recognize any such Adjudication offices set up by the judicial system as the Adjudicator of the State and relieve the ITA secretary.

This is also necessary for another reason since many of the complaints under DPDPA 2023 may be raised against Government bodies and there will be a perceived conflict of interest between the ITA secretary as a servant of the Government and the respondent of the complaint. The celebrated case of Gujarat Petrosynthese Ltd vs Axis Bank which suffered due to the mis interpretation of the applicability of Section 43/43A was an example of such a conflict since the IT secretary was also the e-Governance secretary and the respondent Axis Bank was also the Banker for the e-Governance department.

It would be therefore ideal if the change of the Adjudication system from the IT secretaries to the judicial system starts from Karnataka itself. I request institutions interested in public good to take up this initiative.


About Vijayashankar Na

Naavi is a veteran Cyber Law specialist in India and is presently working from Bangalore as an Information Assurance Consultant. Pioneered concepts such as ITA 2008 compliance, Naavi is also the founder of Cyber Law College, a virtual Cyber Law Education institution. He now has been focusing on the projects such as Secure Digital India and Cyber Insurance
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