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CS Executive · Jurisprudence, Interpretation and General Laws · Law relating to Information Technology

A cloud service provider, under a lawful contract, accesses a customer's personal information. Intending to cause wrongful loss, it discloses that material to a third party without the customer's consent. Under Section 72A as currently worded, what is the consequence?

The provider is liable to a penalty that may extend to twenty-five lakh rupees. Section 72A covers any person, including an intermediary, who discloses personal information accessed under a lawful contract without consent, with intent or knowledge of causing wrongful loss or gain. Actual gain is not required.

  1. AImprisonment of seven years with fine, as the offence is cognizable
  2. BThe provider is liable to a penalty which may extend to twenty-five lakh rupeesCorrect
  3. CNo liability, because only individuals and not intermediaries are covered
  4. DLiability only if the third party actually gains wrongfully

Explanation

Section 72A covers any person including an intermediary who, while providing services under a lawful contract, accesses personal information and discloses it without consent or in breach of contract, with intent to cause or knowing likely to cause wrongful loss or gain. Since the 2023 amendment, the consequence is liability to penalty up to twenty-five lakh rupees. The seven-year term belongs to Sections 69 and 69A, not 72A, and actual gain is not required.

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