The High Court, accepting an affidavit from the DIG showing investigation and arrests against unregistered NBFCs operating illegal loan apps, held no further orders were required and disposed of the PIL.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
(Special Original Jurisdiction)
TUESDAY, THE NINTH DAY OF NOVEMBER TWO THOUSAND AND TWENTY ONE
PRESENT
THE HON'BLE THE CHIEF JUSTICE SATISH CHANDRA SHARMA AND
THE HON'BLE SRI JUSTICE A. RAJASHEKER REDDY
WP(PIL) NO: 13 OF 2021
Between:
Kalyan Dileep Sunkara, S/o.Srinivas Bhagavan Sunkara, Aged 33 Years, Occ. Advocate at High court of relangana,
...pETrroNER
AND
(Rl deleted as per court order dated 14107120211
(Respondent no. t has been deleted and respondent no. 5 and 6 have been impleaded as per court order dated 1410712021 and memo filed vide usr no 53537 dated 131o912021)
...RES''NDENTS
Petition under Article 226 ot lhe Constitution of lndiapraying that in the circumstances stated in the affidavit filed therewith, the High Court may bepleased to issue An appropriate writ, order or direction, moreparticularly one in the nature of Writ of Mandamus to ban all the illegal instant loan apps available on Googleplay store and various web mediums. All these illegal instant loan lending apps aregiving illegal loans, with 150% lo 450o/o RATE OF INTEREST ON WEEKLY AND FORTNIGHT BASIS. These applications are working hand in hand as a chaininstant loan lendinggroups and harassingpeople by accessingtheir mobile phone galleries without following end to end encryptionrules and intimidating, harassingloan borrowers by blackmailing them withpersonal photos and contact list obtainedfrom loan borrowers mobile through unethical andillegalmethodsafter installingthese applications on mobilephone. Withsuchmethods they are provoking peopleto suicide and which eventually resultedin young life'slost recently in the stateof Telangana. complete details with facts andproofs are attachedto this document. Hence we requestyou to direct Respondentno.2 and respondent no.3to ban these applications in the state of Telanganaunder lnformation TechnologyAct.2000 69A.
2
lA NO: 1 oF 2021
Petition under section 151 cpc praying that in the circumstances stated in the affidavit filed in support of the petition, the High court may be pleased to direct the respondent no.2 .no.3 to ban all this online lnstant Loan Apps immediately and respondent no.3 to cortile all kind of illegal call centre operations in the state of Telangana. Disposal of the above Writ petition
Counsel for the Petitioner: SRt KALyAN DILEEP SUNKARA
Counsel for Respondent No. 2: cp FOR GENERAL ADMIN|STRATION
Counsel for Respondent Nos. 3 & 4: Gp FOR HOME
Counsel for Respondent Nos. 5 & 6: SRI N. RAJESHWAR RAO ASSISTANT SOLICITOR GENERAL
The Court made the following: ORDER
and
Writ Petition(PIL) No'13 of 2021
Ofdef: (Pcr the Hon'blcthe Chicf JusticeSatish Chandta Sharma)
The presentPubiic Interest Litigation (PIL) has been [Llecl lor issttanceof an appropriate rvrit or dilection dkecring tl.re respondentsto, take acdon againstthe persons' who are illcgalh, oPCratinirNon-bankingFinancc Con-rpanies' 2. 'l'his Court, on 15.0'1.2021, I.ras passed tl-re follorving
t r rcicr:
"1. (.ountcr ailldavit hlsbee n filt:cl bv thc l)ircctor (lencral of Policc,'I'elanganr Statc,statirlgi ter (1li(1 that theState Policehave idenutredillegal digital money iendingplatformsin GooglePlayStore and Iettets have beenaddtessedto Google PlayStoreto provide regisuationand payment details of loan shark applications.On artalyzitg the information furnishedby GooglePlay Store, it has uanspired that the mobilenumbers furnished were associated with Appsrelaung to telecomservice providets of diffcrentcountries, including India'(ihinir' Ilong l.'ortg.'l ait:rrl,t'S-\ ctcSonlc of tllc irar.rh rcc()tlrrtsirotll thich Pilrl'ncll(ssctc ttraclc firr (iooglc .\1-r1>s irtrsting sclrvlccsbclorlg tothc (-hincsc Illnlis. 2. I nditnrnobilcntrmbcrs associntcrlrvith thc krar-r .'\1lpshar-c also bccrl vcrrt-rcd atrd nlost oi thernrvere acdveintl-re ciq' r>f Rirngalote
Two Chinese nationals belonging to two Non-Banking Finance Companies Q.JBFCs) have also been identified and the enquties made revealed that both of them had left the country in Jar,rtaryand August,2020. About 180 mobile numbers that have been used to lure and threaten the gullible public have been idcnuficcl. Invc.stigadons have revealed thar rwo loan ..\pps rrc linkcd with M/s. Mad Nerwork 'l'cchr.rologics l)rivatc Limitcd and l{,/s. Fincxptcss liir.rancial Sen, iccs Privatc L,imired which are not rcgrstcrcrl NBI;(-s rvith the RBI.
r
J
citorts havc bccnmaclc tocollcct 'flcccssall' cr-iclcnce.
''2.'lhis is to sr,tbtlit rh:rt this ilcsh affitlrn-ir is bciug tiled in cottrpliatrccof clircctionsi-ssr'rcdbv this I Iorr'ble(.ourt on 15.04.2021
i. lt is to submrtthat in para 3 of tllc orders on 15.01,2021, thc I-ton'bleCourt had directcdthc rcsponclcnts to indicatcthc action takcnagainst nvo unrcgistcredcompanics narnely N'l/st"lad Elephant NenvorkTechnologiesPvt. Ltd ,and \1/s FinexptessFinancial Sen'ices Pvt. Ltd', which are illegally operatingas NBFCs. The following legal actionshave been taken againstthesefwo unregistered comPanies:
3A. Thefollowngaccused persons relating to N{/s. Mad Elephantnework Technologies Pvt' Ltd., have beenarrested in Cr.Nos1136/2020, 116912020,119812020and 9912021of (.r'bercrimcs P.S., Cvberal>adand (.r.No.2-i57l2020, 2+89 l2l)20 and 2-198/2020of (.r'bcr:crtmc P.S., I lvdcrabacl(-in '
I. Vidyavad Dhami D/o Dharam Singh Dhami, Age 37 years, Occ: Director of Mad. Elenh"nr )iyorkTechnologiespvt R/o gZ,f " noor, iri Lakshrru Nilayam, Indane Whitefield. Banealore, liarnataka Srate, and
ll. .Nicholas i\lark, s/o JI( Vincenr. \gc J3 ),:ltt,,lfr,, No. 10. I(amrajNagar, Iiav:r lblsi'n,Jr-a. l( I \ag^r Posr. Bangalorc, I(arnarnka Srrr", ",, lssoclate of the above mcntioncd \ridvau,ati l)h:rnu.
38, l'he follorving accused persons relaung ro M/s Finexpress Financial Services pvt. Ltd., havc bee arrested in the cases in Cr.No.11gl / 2020 of Cybercrimes p.S., Cyberabad and CrN o s.2452 / 220, 249 8 / ZO2O of Cybercrime p. S.,
Hyderabad City.
l. . Thushan Hemavathi Muddu Veemiah S/o Muddu Veeraiah, age 23 years, O... Oir..t* ,._rT Leadetof FinexpressFinancialServices l,vt, R/o #215, Huskut Gate, Anath Nagar, I " Phase, Paras Malligae Apartrnents, Electronic Cirv l,ost, tsangalore, Kamataka State. ,;,: Anju Thasleem, Dlo Zakeet Hussain, ,lge ^:y^O zJ ye rs, Occ: Director & eam Laeader ofr Finexpress..Frnancial Senrice pvt. iJ" oi. [)omiue Lavout, Bangalore, Karnataka State. Itt. Subham, S/o Nabi Rasool, Age: 25 vears. Il/o H.No; 1.8/93, Raiaji S",,'OfJ- f .*.,r. /\nanrhapur. A p, an associate of thc ab,,r .l nrendoned Thushan HNI Vecraiah and Na.r,alr r\nju Thasleem, and
I'. Iiammur Sameer, S/o I(. Md llafi, Age 22 1cars,.R/o H.No.18/92, Rajaji Strect, Oia;iilrrri -\nanthapur. .\p, an associa," "f ,n" ,,i.,r.: .\ nrcntiorrccl n1tr'l haslecm andl hushan H.NI \recraiah "rra N^rr,,t,
. lhchira I(arumbaiah lialappa S/o B.llopaiah, agc 23 vears, Occ: Addrtronal i>ir..ro, 'i"-"l.c,ade-r-ofFinexpressFinancial S.."1.., ^nd f]",.^i,.i, R/o 87, fuchmand Road, Bangalore. t<urno,rt State. ^
4 Further, it is to submit that charge sheets will be submitted in due course in all the cases tegistered against the said two companies. 5. It is submitted that sincere and sustained investigative efforts are being made in all the cases
I
5
\
fcgrsrcrc(l aqair)st illstxnr lotn .\pps in ali rhc thrcc Cornrrissione r:ares z, a., FIt,derabacl, (_l,bcrabad and I{acital<rtncl:i as rvcll in otltcr units in tlte rcst of 'fclangana State. It is submrttccl that after conrp)erion of invcstigauon, Chalge ,sheets lvcre also filed in cnme numbers 2465/2020 and, 2466/2020 of Cyber Crime PS, Hyderabad. F'urther progress of cases related to instant loan Apps pertairung to three Commissinerates z.a, Hyderabad, Cyberabad and Rachakonda have been submitted through their respectivc affidavits filed by the tespective Commissioners of police. 6. It is to submrt that due to the arrests. seizures and sftir-rgent action taken by.Ielangana State Police, con'rplaints abor-rt illegal acuviues of these loan .-\pps hln-c completcLv cerascd and no frcsh cases har-e becrr rcoistcted in the cntire state sincc -\pril-2i)2 I ro till ciatc,"
-1.'l hc affrclar-rt n-ralics ir verlr slg21 tjrat action l.ras bccn r,r1(en againsr rwo unregistered companies ai1., NI/s. I{acl Elephant Nerwork Technologies Private Limited afld M/s. Finexpress Financial Services Private Limited. A large number of crimes have also been tegistered in Cybetabad and in Hyderabad. Charge sheets have also been filed in some of the cases and persons are being prosecuted.
5, In the considered opiflion of this Court and keeping in vicu' thc a fllclavit tilccl bv the l)irector (leneral oi Police, nc>
r
I
furtl-rer orclcrsare requue d to be passcdir.rt1-repl'cscnt1)11'
and thesanle stands disposecl oI accordingh''
(-onsequentlv, InterlocutorvAppLrcatrons'penclinqii
rrnr'. strncl,:1isrl-ris s ed.
l
SD/-K.VENKAIAH ASSISTANT REGISTRAR
,TRUE COPY// hrr'^
To,
SECTION OFFICER
1 One CC to Sri Kalyan Dileep SunkaraAdvocate IOPUCI 2 Two CCs to GP For General Adminidtration, Hijn Court for the State of 4.e Telangana. Two CCs to [OUT]GP For Home High Court for the State of Telangana. [OUT] one cc to sri Namavarao,i n{eswira ffi, A;[i;;i soiiiiiEict,ierr'1oeucl Two CD Copies 6. One Spare Copy MBC j--,-
HIGHCOURT
DATED:0911112021
{ $E STA 14:
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a/
ORDER
WP(PIL).No.13 of 2021
DrsPoslNGOF THE wP(PlL)
tVt
'vu \ \
a)
WITHOUTCOSTS.
Kalyan Dileep Sunkara
Union of India
The State of Telangana
Department of Financial Service
Ministry of Electronics and Information Technology
Satish Chandra Sharma
A. Rajasheker Reddy
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
