Delhi HC Restrains Kony Inc. & Others From Taking Any Steps That Can Result In Disruption Of SBI Credit Card Services
|The Delhi High Court has brought significant relief to approximately 1.8 crore credit card holders by issuing a restraining order against Kony, Inc., preventing any disruptions to the IT services provided to SBI Cards and Payment Services Private Limited.
The legal dispute stemmed from an agreement between SBI Cards and Kony, Inc., dating back to 2014, for the development of a Mobile Application Development Platform (MADP). This platform enabled SBI Cards to create client-facing applications for business-to-consumer users on mobile and similar devices.
Negotiations for the renewal of the licensing agreement commenced before its expiration in 2023. However, disputes arose when the commercial proposal was altered in October 2023, leading to a lack of consensus between the parties. SBI Cards argued that the revised proposal was considerably more burdensome compared to the original agreement.
A Bench of Justice Prathiba M Singh issued an ex-parte ad interim order, highlighting the critical importance of the services offered by SBI Cards and the potential risks posed to customers if there were any interruptions to the software license. The Court said, “It shall be ensured that no disruption is caused to the services, which are being provided in order to ensure that the large members of the public are not inconvenienced in any manner. The Respondents shall also stand restrained from taking any steps or change any credentials including passwords or the software versions etc., which may result in disruption of the Petitioner’s services, or cause disruption to the services of the users of the platform of the Petitioner.”
Moreover, the Court emphasized the need to ensure the smooth continuation of services to prevent inconvenience to the public. It mandated that Kony and related entities refrain from altering any credentials, passwords, or software versions that could disrupt SBI Cards' services or inconvenience its users.
Senior Advocate Rajeev Nayar appeared for the Petitioner.
Recognizing the sensitive nature of the case and the critical role of IT services in financial operations, the Court stressed the importance of interim protection measures. Disruptions to software licensing or operational access could significantly impact the development and functionality of mobile banking applications, thereby posing risks to customer data, transaction processing, and overall service continuity. The Court said, “Given the sensitive nature of these services, any interruption could pose risks to customer data, transaction processing, and overall service continuity. This, in turn, could lead to financial losses for the parties involved and erode consumer trust. Therefore, the interim protection measures are essential to maintain the smooth operation of credit card-related software, ensuring uninterrupted service delivery, customer satisfaction, and compliance with financial regulations.”
The case has been listed for further consideration on May 22.
Cause Title: SBI Cards And Payment Services Private Limited v. Kony INC. & Ors., [2024:DHC:3316]
Appearance:
Petitioner: Senior Advocate Rajeev Nayar, Advocates Neeraj Sharma, Arpita Roy Chowdhury, Archana Lakhotia, Adhish Rajvanshi, Prachi Jain, Agniwesh Singh, and Bikram Bhattacharya.
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