In a major relief to nearly 1.8 crore credit card holders, the Delhi High Court recently restrained a company named Kony, Inc from disrupting the IT services offered to SBI Cards and Payment Services Private Limited.

Justice Prathiba M Singh passed an ex-parte ad interim order on April 26 and said that considering the nature of services which SBI Cards and Payment Services Private Limited (petitioner) is providing, any apprehension that the software license could be disrupted, would result in enormous risks to customers.

The Court, therefore, restrained Kony or anyone acting on its behalf from taking any action or steps, which would result in the disruption in the credit card services through use of the licensed software.

“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,” the Court said.

It added that the order would be subject to SBI Cards and Payment Services Private Limited depositing a sum of ₹55 lakh with the Registrar General of the High Court.

SBI Cards and Payment Services Private Limited had moved the High Court against four entities connected to one another.

It was argued that the petitioner entered into an agreement with Kony, Inc in 2014 for development of Mobile Application Development Platform (MADP), which enables the petitioner to develop client facing applications that work on mobiles and similar devices for business-to-consumer users.

The Court was told that prior to the expiry of agreement between the two sides in 2023, negotiation had commenced for renewal of the license. A contract was stated to be agreed between the parties.

However, in October 2023, the commercial proposal was changed and there was no consensus between the parties on this proposal.

SBI told the Court that the new proposal was way steeper compared to the agreed commercial proposal.

After considering the case, the Court said that interim protection measures are crucial in the present case as it involves a critical and sensitive aspect of providing financial services.

Disruptions in software licensing or operational access could significantly impact the development and functionality of mobile banking applications that underpin credit card services, the Court stressed.

“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 Court, therefore, passed an ex-parte order and listed the case for further consideration on May 22.

Senior Advocate Rajeev Nayar along with advocates Neeraj Sharma, Arpita Roy Chowdhury, Archana Lakhotia, Adhish Rajvanshi, Prachi Jain, Agniwesh Singh Bikram Bhattacharya appeared for SBI Cards and Payment Services Private Limited. 

[Read Order]