Despite the Kerala High Court’s acknowledgement of the technology’s benefits for financial transactions, the Unified Payment Interface (UPI) system in the nation has raised security concerns.
Justice Devan Ramachandran appreciated the beneficial effects that UPI has had on financial transactions in a ruling issued on October 19, 2023, but he also pointed out that the system had security flaws that had to be fixed.
The Court made its views as it was deliberating a group of petitions submitted by individuals whose bank accounts had been frozen by authorities conducting investigations and the police after an alleged cyber offender purportedly transferred funds into their accounts using UPI. The petitioners stated that because their bank accounts were now inaccessible, they would suffer unimaginable losses for their enterprises and that the UPI system had seriously undermined the confidence of the business community.
The Court further stated that those people as long as the probe ultimately proves that they had been unlawfully involved with the cybercrime or else had received the same having knowledge of it would never be considered accused of the crime.
According to the central government’s legal representatives, the National Cyber Crimes Portal (NCCP) automatically triggers an appropriate police reaction when a complaint is filed there. He claimed that the State police had given the directives, and that they were required to follow the funds used in cybercrimes that the accused had routed via various accounts.
The Court raised the question as to why the entire account was required to be frozen considering the requisitions in such matters state the exact sum of money anticipated of having been transferred those accounts.
As a result, the Court instructed the petitioners’ respective banks to only temporarily suspend access to their accounts up to the amounts specified in the police orders. The police were also instructed to let the banks know whether or not the petitioners’ accounts were to be kept frozen, and if so, for how long. The judgement indicated that the petitioners were allowed to again approach for relief to the Court if the same had not been done.
The Court’s decision serves as a reminder at the right time underlying the necessity to improve the UPI system’s security aspect, which is currently India’s most widely used payment method. The Court’s recognition of the predicament of innocent persons whose accounts have been frozen owing to no fault from their end is likewise a positive development.
References:
- https://www.barandbench.com/news/upi-transformed-indi-not-immune-cybercrime-requires-safeguards-kerala-high-court
- https://legal.economictimes.indiatimes.com/news/litigation/kerala-hc-stresses-needs-for-safeguards-for-upi/104561646#:~:text=58%20PM%20IST-,The%20Kerala%20High%20Court%20has%20expressed%20security%20concerns%20about%20the,in%20which%20people%20transact%20money.
- https://ianslive.in/kerala-hc-wants-safeguards-for-upi–20231019173006
- https://www.livelaw.in/high-court/kerala-high-court/kerala-high-court-bank-account-freezing-order-limit-proceeds-of-crime-240587?infinitescroll=1
Written by: Divyani Newar of 5th Semester of NEF Law College, an intern under Legal Vidhiya
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