On Section 91 Notices and the Razorpay Furore

By: Abhinav Sekri

Razorpay, a payments platform, got a request under Section 91 of the Criminal Procedure Code 1973 [Cr.P.C.] from Delhi Police asking it to furnish information in connection with an ongoing investigation in connection with the journalist Mohammad Zubair and the fact-checking platform Alt News. From news reports and public statements made by parties concerned, it appears that Razorpay was asked to furnish details of persons who made payments to Alt News through the Razorpay platform. 

Razorpay complied, presumably under legal advice, and has since found itself in the middle of a PR mess, being accused (to put it bluntly) of having ratted out not only its client but also the lakhs of persons who contributed to the journalism of Alt News. 

Perfect time to know a little bit more about Section 91, how it is often used, what might be at stake for the recipient of a notice and the options available to them.

Section 91 — An Information Gathering Tool

There are two main ways in which the police can get information during an inquiry or investigation: when the specifics of useful information (what it is, where it might be etc.) are not known, police usually end up conducting search and seizure operations to get that material; where this detail is known, then this invasive exercise can be spared and a notice be issued to the concerned person. Section 91 Cr.P.C. is how the latter course takes place, allowing the police (or court) to direct persons (other than the person accused of an offence) to furnish any material that is believed to be “necessary or desirable” for purposes of an ongoing investigation, inquiry, trial or other proceeding. So while the law does not allow the police to issue notices to get random things, the bar for issuing notices is set rather low — anything can be ‘desirable’ for the investigation. 

The low bar of Section 91 means that, in practice, police often use it to get persons to provide material that might even otherwise be available in the public domain. This is often the case for corporations, which are often sent requests for publicly filed records such as their annual returns etc. Nevertheless, a low threshold for the provision still makes sense, because too high a bar may stall the investigation in its initial stages or even compel police to adopt more invasive methods such as searches.

The Stakes

Whenever any person / entity gets a Section 91 request, there are broadly two courses of option to follow: comply, or decide against complying. The former is straightforward — give the information if you have it, and if you do not have it then make it clear. The latter may occur in different ways — by ignoring the request, by writing back saying that I refuse to comply, or by challenging the legality of the request itself before an appropriate court of law.  

In Razorpay’s case, it appears that the information sought by the police was required to be maintained by Razorpay in compliance with existing regulations governing payment platforms. They, accordingly, chose to comply with the request. What if they decided not to, by adopting any of the courses mentioned above? It is helpful to note what the consequences are. For starters, non-compliance with Section 91 can invite a criminal prosecution, as the police may conclude that Razorpay was obstructing the investigation. But this is still an event far-off in the future — launching a prosecution takes time after all. The more problematic issues following non-compliance are of a more immediate nature, and with questionable legal basis — the police could have temporarily halted Razorpay’s functioning altogether by directing its bankers to freeze accounts.

This is not a hypothetical, but a very real hazard for companies especially in cases where any allegation of financial impropriety over digital payment channels is involved. To just use one example, take a look at what happened with Alibaba Cloud Services in 2021. Someone filed a complaint with the police that there was a scam of around Rs. 1 Crore committed via a website that was hosted on Alibaba cloud servers. The Madhya Pradesh police issued a request to Alibaba for necessary information, which was not adequately responded to. This led to the police writing to Alibaba’s bank, directing that a ‘freeze’ be placed on all transactions. 

The Supreme Court has held that the police do have powers to seize proceeds held in a bank account in the pursuit of an investigation. But only if it is clear that such proceeds are connected to the commission of an offence. There is, thus, no clear power to freeze the bank account in toto at all, and definitely not without making clear the connection that all the money has with the alleged offence. Here, it was not the case that Alibaba had committed the scam, or actively aided it; at all times it was clear that the only link that Alibaba had to this incident was that it hosted the website for some time. So there was a patent illegality in the freezing order to the bank.

Naturally, Alibaba went to court against this patently illegal freezing order. What happened? It did not get any interim relief from the Madhya Pradesh High Court. The observations are noteworthy: 

In the present case, police station-Cyber and High-Tech Crime, Bhopal (M.P.) is investigating Crime No.81/21 under Section 420 of the Indian Penal Code and 66-D of the Information Technology Act. The material available in the case diary shows that the accused persons have duped the complainant and received Rs.97,00,000/- from him in different bank accounts. The said amount has been transferred to Chinese and Pakistani citizens as cryptocurrency. Prime facie, from the evidence collected, it appears that an International Gang is operating to extort money from the people by cheating. The report of Cyber Cell, Bhopal also reveals that a fake web-page was being 2 MCRC-36359-2021 hosted by the accused persons on Alibaba Clouds and the petitioner also provided technical support to the accused persons. There were eleven transactions between the accused persons and the petitioner. As per the facts available in the case diary, during the investigation, when a registered notice was sent to the registered address of the petitioner, it remained unserved which shows that the petitioner is not working from that office.

Since the bank account freeze meant that its business was virtually at a standstill, Alibaba naturally went to the Supreme Court in [SLP (Crl.) 7930 of 2021]. On the third date of hearing (more than two months after the High Court order), it got a stay on the freeze, when the court noted that the only money that Alibaba had actually received was payments made for hosting the website i.e., Rs. 1.5 lakhs. Nevertheless, the petition was disposed only after a few more dates, on 24.01.2022. Again, the conditions on which the bank account was made available again for business are telling:

We need not dwell upon this matter (regarding some details not being furnished to police) in the present proceedings. However, we are inclined to dispose of this petition by continuing the interim relief granted on 22.11.2021 until the disposal of the main proceedings pending in the High Court or until the High Court deems it necessary to alter the same. That, however, will be on condition that the petitioner shall deposit a sum of Rs.1,00,00,000/- (Rupees one crore only), as assured to the Court and recorded in order dated 22.10.2021, within two weeks from today before the High Court in the concerned proceedings. That will remain invested till further orders to be passed by the High Court at the time of disposal of the main proceedings.

Everyone agreed Alibaba did not commit the offence. Everyone agreed that it only received Rs. 1.5 Lakhs in the entire transaction. Yet, the account is made available only upon deposit of Rs.1 Crore, and of course without deciding the legal issue involved. 

Conclusion: Maybe not a matter of Black or White

So, while we can contend that Razorpay could have done things differently here and chosen not to comply or contest the notice, evaluating any choice that is made by them, or any recipient of a notice under Section 91 for that matter, requires some appreciation of the context in which these decisions are being made. Through this post, I offered a glimpse into that context. The signals sent from the legal system, as seen through the story of Alibaba (and, trust me, there are many more examples like that) for other players are that even if you think you have a ‘slam dunk’ legal argument, and spend a lot of money pursuing it through court, it will take a lot of time and you still, just, may not win.

[The author is a criminal lawyer based in New Delhi. This article first appeared on his blog, ‘The Proof of Guilt’.]


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