IT Rules: Why Madras HC's Ruling on Digital Intermediaries Is Significant

The order assumes importance by highlighting one of the primary tests which could be used to reveal the unconstitutionality of the rules under Part II.

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The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 have been mired in controversy since their notification on February 25, 2021. The Rules are expansive in scope, with Part II seeking to regulate digital intermediaries, and Part III dealing with OTT platforms and digital news media platforms. The need to regulate the operation of various business models in the tech industry, and in particular today’s social media giants, is increasingly recognised.

While the Rules seek to do so, they have drawn widespread criticism for being undemocratic and unconstitutional, and challenges to their constitutionality are currently pending before numerous courts including the high courts of Bombay, Kerala, Delhi and Madras and also before the Supreme Court.

The latest development in this saga comes in the form of an interim order passed recently by the Madras high court. While other courts have also passed interim orders in the matters challenging the Intermediary Rules, the Madras high court’s order is the first one that pertains to Part II of the Rules i.e., the part governing digital intermediaries.

Earlier, interim orders had all been in relation to Part III of the Rules which have anyway been widely argued to be outside the rule-making scope of the Information Technology Act, 2000. For instance, the Bombay high court has stayed the operation of rules which require publishers to adhere to a Code of Ethics and establish a grievance redressal mechanism for ensuring such compliance.

The Kerala high court has similarly restrained any coercive action against LiveLaw under Part III. Although the petitions in these and other cases pertain broadly to the entirety of the Intermediary Rules (i.e., both Part II and III), the Madras high court’s order is unique in being the first one to deal with the more contentious Part II of the Rules.

Also read: Madras HC Stays Rule 9 Provisions of IT Rules, Says They Rob Independence of Media

Unlike Part III, Part II is not entirely new and the Intermediary Rules of 2011 which these new Rules substitute also governed actions of intermediaries. Given their prior existence in the 2011 Rules, relatively straightforward arguments of the rules being outside the legislative scope of the IT Act or amounting to excessive delegation could be difficult to mount against Part II.

Reliance on a ‘test’ 

In this context, the Madras high court’s order assumes importance by highlighting one of the primary tests which could be used to reveal the unconstitutionality of the rules under Part II. The Madras high court relies on the standards applicable to restrictions on the freedom of speech and expression under the IT Act, as set out in the Supreme Court’s landmark judgement in Shreya Singhal.

The court in Shreya Singhal had held that “any law seeking to impose a restriction on the freedom of speech can only pass muster if it is proximately related to any of the eight subject matters set out in Article 19(2)”.

Under Article 19(2) right to freedom of speech and expression can be restricted in the interest of sovereignty and integrity of India, the security of the state, friendly relations with foreign states, public order, decency or morality or in relation to contempt of court, defamation or incitement to an offence.

The Madras high court in its order refers to this test in Shreya Singhal while considering Rule 3(1)(b)(x) which prohibits an intermediary from publishing any information that is “patently false and untrue”, and is written or published, with the “intent to mislead or harass” for financial gain or to cause any injury.

Illustration: The Wire.

The Madras high court has noted that at the outset, these restrictions seem to be beyond the scope of Article 19(2). The court has also acknowledged the impact of the rules on individual citizens – observing that “there is a genuine apprehension, that a wink or a nod from appropriate quarters may result in the platform being inaccessible to a citizen”.

It is important to note that even after making these prima facie observations about Rule 3, the court did not actually stay its operation. Instead, the court noted that any action taken against an intermediary for non-compliance with these requirements would be subject to the outcome in the petitions challenging the constitutionality of the Rules. What this means is that action can still be taken under the rules.

However, if for instance, a fine is levied pursuant to these rules and the rule is subsequently struck down as being unconstitutional then such fine would have to be reverted. Declaration of unconstitutionality of a law doesn’t always have a retrospective effect. However, this holding of the Madras high court means that if subsequently these rules are found to be unconstitutional then any action taken under them would be undone.

Also read: New IT Rules Violate Fundamental Rights, Says Latest Petition Challenging Them

Although it does not stay the operation of the rules, the Madras high court order is significant because of its reliance on the Shreya Singhal test for the permissibility of restrictions to right to freedom of speech and expression. This test has the potential to be more broadly applied to other aspects of the Rules (many retained from the earlier rules of 2011), which have been criticised for using vague or broad terms that do not represent legal standards and seem to be outside the constitutionally permissible limits of Article 19(2).

Apart from this, the order is also significant because it affirms that the Bombay high court’s stay on Rules 9(1) and (2) would have a pan-India effect. Thus, both the Bombay and the Madras high courts have now recognised the inherent problem in giving the executive oversight and adjudicatory powers over digital media and OTT platforms.

The Madras high court echoing the concerns of the Bombay high court has noted that the “oversight mechanism to control the media by the government may rob the media of its independence and the fourth pillar, so to say, of democracy may not at all be there”.

Even as individual courts deal with petitions challenging the Intermediary Rules and create a patchwork of orders staying the application of certain parts of the Rules, the Supreme Court will likely be the final arbiter of the matter. However, till the Supreme Court delivers its opinion on these questions, the order of the Madras high court is a source of cautious optimism.

Smitha Krishna Prasad is an assistant professor at the National Law School of India University, Bangalore. Madhavi Singh is a research fellow at Law, Technology and Society Initiative of National Law School of India University, Bangalore.