Informist, Monday, Apr 29, 2024

NEW DELHI – The Delhi High Court has restrained Kony Inc and some other technology companies from taking any action which could disrupt credit card services of SBI Cards and Payment Services Ltd till May 22, the next date of hearing. The order is subject to the condition that SBI Cards will deposit a sum of 5.5 mln rupees with the registrar general within one week, said the high court.

Justice Prathiba M. Singh said it has to be ensured that no disruption was caused to the services provided by SBI Cards to ensure that SBI Cards users are not inconvenienced in any manner. The parties shall also stand restrained from taking any steps or changing any credentials including passwords or the software versions, which may result in disruption of SBI Cards' services, said Justice Singh.

"Interim protection measures are crucial in the present case as the same involve 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," said the high court.

In 2014, SBI Cards availed information technology services from Kony. This included Kony developing a platform, which enabled SBI Cards to develop client-facing applications that worked on mobiles and similar devices. For this, an agreement was executed between the parties, including a licence agreement in the same year, wherein Kony gave SBI Cards a licence for use of its software.

The negotiations commenced between the parties for renewal of the agreement, prior to its expiry in 2023. Initially, the parties decided in a commercial proposal to extend the agreement for another three years; however, the it was not executed. Later, the proposal was changed by Kony, to which SBI Cards objected. The new commercial proposal was way steeper compared with the agreed commercial proposal, said SBI Cards.

On Apr 19, Kony was served a cease and desist notice by SBI Cards, in effect terminating the licence agreement. Thereafter, SBI Cards moved the high court seeking interim measure to ensure access to the licenced software and prevent Kony and other parties from disrupting the utilisitation of software licences.

"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," said the high court.

Today, the shares of SBI Cards and Payment Services Ltd ended 3.5% lower at 724.10 rupees on the National Stock Exchange. End

Reported by Surya Tripathi

Edited by Akul Nishant Akhoury

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