The Live webcast of the webinar on Getting ready for the Personal data protection will be available online here
Watch LIVE – 23-Sep-2020 | 10:30am IST
YouTube:
Facebook: https://www.facebook.com/naavi
Twitter: https://twitter.com/naavi
Naavi
FDPPI, Foundation of Data Protection Professionals in India is a Not for profit company established in 2018 dedicated to the empowerment of the Data Protection industry in India.
FDPPI has already established itself as a leading institution in India in the field of Data Protection and provides affordable, global quality certification programs for professionals who want to build a career in Data Protection.
FDPPI is also in the process of establishing a compliance framework “Personal Data Protection Standard of India” as a standard for the use of SMEs and MSMEs on par with the globally recognized standards.
These two projects are expected to not only enable SMEs and MSMEs to be compliant with the Indian and Global data protection laws such as ITA 2008 (at present), PDPA-2020 (Proposed in India), GDPR and other laws which multiple countries have established, without the usual high costs associated with such certifications and compliance programs but save precious foreign exchange for the country.
While Data Protection is a concept well understood in the IT industry, its importance is not so well appreciated in the manufacturing industry and SME sector.
The Personal Data Protection Bill 2019 is now before the Joint Parliamentary Committee of the Parliament and is expected to be passed into a law soon. When the law comes into operation, it will extend the provisions of ITA 2000/2008 (Information Technology Act 2000 amended in 2008) and make it necessary for all organizations handling personal data to be proactively compliant or otherwise face prospects of significant fines. Though certain time would be available for compliance, prudent managements need to start their journey towards compliance early so that they are not caught napping at a later date.
“Getting Ready for the Data Protection Era” is aimed at creating a basic awareness of how the proposed law may affect SMEs including those in the Non IT sector. It is an initiative to spread the awareness of PDPA.
This is a “Free Webinar” available for any interested person upon registration and invitation. The registration form is available here.
Understanding PDPA is not only essential to remain compliant but also to prepare ourselves for the next era of “Non Personal Data Governance Regulation” which the Government of India is working on to unlock the value of Non Personal Data.
We are pleased to inform that the honourable Member of Parliament, Sri Tejasvi Surya has consented to inaugurate the program. Several organizations such as See Change Consulting, KASSIA and BSPIN are supporting the program for the benefit of their members.
Don’t miss the opportunity to attend this Program and enrich your knowledge.
Naavi
“The intention of the insolvency and bankruptcy code is to keep companies a “going concern” and not liquidate them”.
..so said our honourable Finance Minister while getting the Bankruptcy and Insolvency Code passed through the Parliament. But contrary to what the Finance Minister said, the story of Net4India and the application of the IBC indicates that the law is used not only to liquidate the subject company but if possible push many of the 70000 domain name registrants to the brink of liquidation.
To enable the Finance Minister to appreciate how the law can be misused, and is being misapplied, I would draw her the attention to what happened in the NCLT proceedings related to Net4India.
For those who think “Data is Oil”, it is inconceivable to think how Net4India with a wealth of personal and critical corporate data, could ever be declared “insolvent”.
If we go by what happened to CIBIL, which was taken over by TransUnion and got access to sensitive personal data of millions of Indians, net4India should have been a mouth watering acquisition for any company which knows the value of “Data”.
According to rough estimates, Net4india had more than 70000 domain names as of date and might have had over 5 lakh customers at its peak operational level. Many of these domains are also hosted on the Net4India servers and contain more personal data. If a Company had hosted its email server with Net4India, the amount of data that Net4India has access is unimaginable.
In a few months from now, Personal Data Protection Act will be in place in India and make it very difficult for companies to access personal data. At this juncture, Net4India being available should have been an irresistible acquisition for any intelligent business house since the value of personal data in the hands of Net4India would perhaps appreciate after Personal Data Protection Act is passed.
It would therefore be of interest to know how much valuation was assigned to this data by NCLT before it came to the conclusion that the company was not able to repay its debts and an order is to be passed for liquidation of its assets.
In fact most of the data processing industry as well as Cyber Insurance companies are struggling to develop a model for valuing personal data. When the Non Personal Data Governance Act comes in the next couple of years, we will also be trying to value the Non Personal Data which is put through a data exchange and value unlocked.
If therefore NCLT has used some yard stick to value the data and then arrive at the inventory of assets of Net4India, it would be a precedence which would establish a model for data valuation. Was it done on the basis of replacement cost?, Was it done on the basis of sensitivity of data, was it done on the basis of any other criteria would be a great learning point for the industry.
I hope NCLT would release its valuation model for all of us to learn.
There is however one school of thought that NCLT might have assigned no value to data and gone ahead with the liquidation process.
It is here that we need to ask whether NCLT went by the “Going Concern” basis or “Gone Concern basis” to decide that Net4India should be put under the sword.
I am not sure how NCLT can be made to disclose the basis on which they ordered the sale of the assets of the company without taking precautions to unlock the value of the data.
I request some public spirited person in Delhi to raise an RTI query with the Finance Ministry and NCLT to disclose the data valuation model used in the Net4India case can be made public.
If however, it is found that in this instance,
a) NCLT valued the data at zero value under a gone concern approach,
b) decided that no notice is to be issued to the data owners,
c) decided that no consideration is to be given to the deposits made by the customers and resellers in their account,
then it is time for the IT Ministry to wake up and protect the interest of domain registrants in the country by measures such as declaring that all “Domain Name Registrars” and “ISPs” are to be considered as “Critical IT Infrastructure” and any discontinuance of the business be subjected to prior approval of the Government.
The Government may introduce a Registration system for such service providers, collect security deposit like the Statutory Liquidity Ratio of Banks and MeitY supervised winding down plan when required, so that the service providers donot vanish from the scene whenever it is convenient.
These can be brought through notifications under Section 70B and 79 of ITA 2000. If not under PDPA these organizations have to be declared as “Significant Data Fiduciaries” and subject to codes and practices to protect the interest of the data principals.
In the case of Net4India it is also necessary to re-visit the irregularities in the granting of loan to the company by SBI particularly since there is a rumour that the promoters had fled the country some time back around 2017 when the problems first surfaced.
I hope that these measures if implemented, would atleast help some learning out of this episode.
Naavi
NCLT and the Finance Minister are in opposition
While we were discussing the problems of 70000 plus customers of Net4India who are using the domain name registration service or web hosting service or e-mail server service or secured server etc, honourable Minister of finance Smt Nirmala Sitaraman was answering a query in the Parliament on 19th September 2020 where she expressed that the Bankruptcy code was not intended to be merely a recovery mechanism but a program to enable industrial recovery.
The NCLT order on Net4India which was sent to me yesterday however indicates that the bench consisting of Mr M.M. Kumar and S.K.Mohapatra in its order dated 8/3/2019 based on a petition by State Bank of India has done precisely what Mrs Nirmala Sitharaman said was not the objective of the Bankruptcy code.
This order ought to have been a matter of public discussion since it affected a very large number of customers who enjoy the rights under the Consumer Protection Act. According to the website of Net4India, there are over 5 lakh customers while the ICANN indicates that there were 73000 domain name registrants under Net4India. Whatever may be the correct figure, it is large enough and it is a fact that NCLT had no idea of how its order would affect these 70000+ customers.
NCLT was literally blind in looking at the problem only as an application from SBI to recover its borrowings of about Rs 194 crores. It has just seen whether there was a loan, whether it was not repaid and simply issued an order. Its 30 page order does not make any mention of what is the business of Net4India and what would be the consequence of its order.
The applicant namely Edelweiss Asset Reconstruction Company has filed the application under Section 7 of the Insolvency and Bankruptcy Code 2016 proposed one Mr Vikram Bajaj as the Resolution Professional, a Chartered Accountant and Company Secretary by profession.
According to the order, Net4India established in 1985 approached SBI in 2002 and was granted a loan which after several enhancements became an NPA of Rs 194 crores. SBI filed a recovery proceedings which is pending at Lucknow DRT.
In the meantime Edelweiss invoked the Bankruptcy code under which NCLT issued an interim order appointing a Resolution Professional Mr Vikram Bajaj. A public notice was also released on the sale of a property and the status of the sale is unknown.
No Notice to Customers
In all these development, neither NCLT nor the RP made any attempt to keep the customers of Net4India informed. No notice was displayed on the website of the company and no individual notice was served on individual creditors of the company. Many of these customers have placed advance deposits with the company and are creditors.
The entire proceedings have been done in a suspicious manner as if to take over the property of the company by vested interests. A separate investigation is required to find out if there is any real estate mafia involved in the transaction.
Considering that the business of Net4India was a money spinner, it is inconceivable that it ran up a debt of Rs 194 crores without an active negligence from SBI. Hence how the debt arose in the first place and how the NCLT ignored the DRT pendency and went ahead with its order culminating in the sale of immovable property is a matter fit for CBI investigation and investigation by the vigilance department of SBI.
While the investigation whether this is another Vijay Mallya type of Banking fraud is a separate issue flagged for the Ministry of Finance to consider, we would like to highlight certain failures of the NCLT and the RP in the issue of and execution of the order which disrupted the critical business of over 70000 domain name registrants who registered their domain names with Net4India and many more who used the other services so that the system is improved in the long run.
NCLT did not value Data
It is clear from the order that NCLT chose to ignore the impact of the proceedings on the customers of Net4India and also the value of the “Data” that was inside the servers which were housed in the building which is now up for sale.
It is a common principle that when a building with tenants are sold, the tenants would be given sufficient notice and time to shift out. But in this NCLT order, the service users who have parked their web assets including some on which there could be IPR, have been frozen without notice.
This is a violation of the fundamental right of the Citizens. NCLT does not have any right to forcibly close down my business nor confiscate my web assets. RP had no right to cause the services to be disrupted. It is possible that NCLT and RP may say that they have not prevented Net4India to continue its services. But this is not a matter of finding an excuse. NCLT and the RP must take the responsibility for the damage they have caused to all the customers of Net4India.
Had Net4India been a Bank, would not the NCLT taken steps to ensure that the rights of other depositors are protected?. The Government of India recently amended the cooperative bank’s law to enable such intervention in case of winding down of a cooperative Bank. The same principle should have applied here also.
Had Personal Data protection Act been in place, the Data Protection Authority would have come into reckoning before this order was issued. Now Net4India and NCLT as well as the RP have not accounted for the “Data” as an asset and whether it was an asset which was covered by the mortgage deed and whether NCLT had any right to confiscate the data as part of the Asset reconstruction exercise.
In case the data had been valued, perhaps the decision that Net4India was insolvent itself would have been considered as incorrect. Hence NCLT has defaulted in the basic evaluation of whether Net4India was solvent or not since it did not value the data sitting inside the servers of net4India. The order is therefore wrong ab-initio.
It is also possible that NCLT and the RP were not even aware of the value of data they were immobilizing in the process of this asset reconstruction. Despite Naavi.org highlighting this, the MeitY has also not realized how the valuable data is being dumped aside in a locked building in the sale proceeds.
If tomorrow the company closes down, the RP may sell the Computers along with the data residing there in without even worrying about the confidentiality of the information which would be “Sensitive Personal Information”.
This is the Voice of 70000 customers of Net4India
We are now raising the voice of the 70000 plus customers of Net4India that NCLT and the RP have caused disruption of their respective business for which there would be a claim of damages and this group of customers need to be considered as a major creditor of Net4India entitled to the proceeds of any asset realization.
A Core group of the affected persons today met virtually and decided to form a “Forum of Net4India Customers” and take up a legal fight against those who ignored the interests of the customers and are going ahead with the distribution of assets within a closed group by misleading the NCLT which may be ignorant of how a “Going Concern” involved in critical internet services can wind down its operations.
The biggest question that arises is why it did not occur to the NCLT that there are thousands of customers whose web assets would be frozen if they are not transferred out to an alternate service provider before the building is locked down.
The ICANN has been talking individually to some and perhaps allowing some transfers to happen on privileged basis without extending the benefits to common people. MeitY has not woken up to the fact that the “Critical infrastructure asset” of the country is at stake. The CERT In and the National Security Advisor, Mr Ajit Doval have not recognized that there is a national security interest involved here.
It is to be recognized that Net4India has been in business since around 1998 when I first registered a domain name and most of the old timers which may include Banks and others might be having their domain names registered with Net4India. Now if all of them have to close down their shop because of the NCLT order, then national interests are at stake.
An evaluation of the impact of the closing down of the Net4India operations should have been conducted by NCLT before it issued the interim order. It should have invited a public objection after proper advertisement across the country and individual notices to all the customers before acting on the complaint.
In the Data Protection Scenario, NCLT has caused a large scale harm to data subjects (even forgetting the corporate entities who suffer loss of business), by not issuing individual notices to all individual customers and not securing their interests as a “Data Fiduciary”. While the proposed PDPA has some exemptions for the tribunals, the ITA 2000 does not spare any organization that causes wrongful loss to an entity by contravention of Section 43 and 43A of ITA 2000.
We can explore if the RP Mr Vikram Bajaj may be held liable for the wrongful loss of the tens of thousands of data subjects and service users and how the NCLT will bear the vicarious responsibility.
These are issues which have been flagged for the first time in India and there is a need for a complete review of the way NCLT has handled this issue.
We therefore urge NCLT to immediately modify its order and appoint a technical team under the guidance of NIXI to ensure that all data in the Net4India servers are secured and made operational so that the services such as domain name transfers, changes in domain name related information, the e-mail services and hosting services are commenced without any further delay.
The core team of suffering customers of Net4India have therefore decided to form the “Forum of Net4India Customers” and represent their requirements to the appropriate forums.
All those customers who are interested in joining in this fight may kindly contact Naavi for more information.
Naavi
Yesterday late in the night I posted the article on the possibility of ICANN facing trial in the Supreme Court in India.
There have been some developments to report since then.
Dr Mahendra Limaye, of Nagpur has indicated that he is preparing a PIL on the issue and invites all persons who can join the petition to write to him. Those of you who are interested may send a request either to me to be forwarded to him or directly to him (mahendra@cyberorgindia.com ).
Mr Namith Kothari has brought to my attention that the Resolution Professional for the insolvency petition is
Vikram Bajaj, Resolution Professional, Net 4 India Ltd.
308, 3rd Floor, Pearls Business Park, Netaji Subhash Place,
Pitampura, Delhi – 110034
bajaj.vikram@gmail.com
The resolution professional has issued an expression of interest regarding sale of some properties through a document but has not indicated any recognition of how the action has inconvenienced thousands of Net users. (According to the home page of the company there are 500000 customers of Net4India, and not only 73000 we indicated in yesterday’s article).
It is time for the Bankruptcy law to be revamped so that innocent customers of the company are not denied access to critical services because the RP is unaware of the type of service that a company provides and whether it is necessary to block the services. I hold the RP liable for denial of service to the customers and must be made a party to the PIL.
It was also indicated that ICANN had sent a notice to jasjit.s@net4.in taking note of the insolvency petition and suspending Registrar license of Net 4 India asking them to indicate the details of the notice of suspension on its website which it has failed to do. The suspension was to prevent any inbound new transactions but did not mention how the existing customer interests had to be undertaken.
Presently we require an immediate resolution of the customer’s problems by ICANN taking over the registry keys and assigning it to another temporary registrar so that the services can be continued. This is a serious Business Continuity issue for most and cannot await the conclusion of insolvency proceedings.
We may also find fault with the Tribunal for its ignorance or apathy with which it has appointed the RP without understanding the business the client is in and without alternative arrangements being made for continuity of the services. We need to prevent recurrence of such orders through an appropriate legislative measure in Information Technology Act 2000 through an amendment.
Naavi.org had made some suggestions on including Cyber Squatting in ITA 2000 when the first amendment was considered (Refer here).
Now it is suggested that “Domain Name registrars” must be declared as “Intermediaries” in ITA 2000 and should be strictly brought under a control which should include “registration”, a “Sunset clause for withdrawal from business” etc. This should be the objective of the PIL so that a permanent solution is found to the anarchy created by situations like Net4India insolvency.
Hope the PIL makes a suitable demand on MeitY to make the necessary amendments to ITA 2000. However, since the registrars are anyway considered “Intermediaries” even under the present law, perhaps a notification from MeitY should be sufficient.
Also whenever insolvency petitions are launched against registered intermediaries, the MeitY has to be informed before the NCLT admits theathe petition and NCLT should always consider “Continuity of the business of the customers of the subject company” while ordering an RP to take further action.
It would be better if NCLT adopts this as a voluntary procedure before the Government brings suitable amendments to the procedure. While the objective of NCLT is laudable, it cannot be used callously to inconvenience thousands of customers who have no stake in the dispute for which one insolvency petition is justified.
Naavi
The apex organization that controls the Internet namely ICANN (Internet Corporation of Assigned names and Numbers) is all set to face the Indian Courts. A PIL is all set to be filed in the Indian Supreme Court against ICANN thanks to a Sub Contractor for domain name registration called “Net4India”.
In all probability, the Ministry of Information Technology and the registrar Open providers.com will also be the respondents.
This will perhaps be the first time that the Internet Governance system will be questioned in a Court of law because ICANN has repeatedly failed to safeguard the interests of the public.
When Internet was started, it was a US Government project. But after it was handed over to the public domain, ICANN emerged as the apex regulatory organization controlling the IP addresses and also the Domain names.
In the initial years, ICANN mismanaged the IP address allocation system under IPv4 which resulted in an inequitable distribution of available IP addresses to different countries. After the IPv6 system was introduced, the problem of non availability of IP addresses has been pushed to the background.
Then ICANN mismanaged the Domain Name system introducing multiple TLDs with inadequate control in registration and allowing overlaps of domain names. At the same time, it used its might to stifle technology which could have brought Alternate Domain Name Systems in use. It allowed the proliferation of Phishing with complete lack of control on registration of domain names. From the initial First Cum First served basis of domain name registration, ICANN gave way to trade mark right dominated UDRP system without preventing the registration of conflicting domain names. This lead to innocent persons registering domain names only to lose it out in a IPR battle with the large corporations who owned trade marks.
Subsequently, ICANN introduced the Country Code domain names but failed to ensure proper use of the country codes so that it only multiplied the IPR issues.
More recently, ICANN gave room for Privacy Protection of WhoIs register which is a boon for Cyber Criminals.
Thus time and time again, ICANN failed in its fundamental duty to set a proper path for the Cyber Space administration.
In particular, ICANN considered domain name system as a money spinner for itself and appointed registrars with a hefty registration fee and did not exercise the required control over them. This enabled registrars to cheat the public by allowing arbitrary pricing of domain name registrations, appointment of unverified sub contractors for domain name registrations etc leading to the public being at the mercy of the registrars and exposing the registrants to various frauds.
Now in India one of the ICANN’s faults has exploded into a major problem causing a disruption in the Internet system.
Naavi.org had brought to the attention of the public way back in July 2017 raising a question “Is Net4India closing its operations?” .
This article highlighted the then just developing problem with Net4India appearing to indulge in some accounting malpractices and failing to respond to customer queries.
In more recent times, the problems escalated and Naavi.org followed up with the following several articles
ICANN Has to find a solution to Net4India problem
ICANN should release Domain Secret Code for transfer on request from the Consumer
Net4India discontinuance of service..Towards finding a solution
Unfortunately, the MeitY appeared to be completely oblivious of the seriousness of the issue. The India representative of ICANN Mr SamiranGupta failed to find a solution and ICANN was totally disinterested.
As a result today thousands of customers of Net4India are having problems of not being able to renew their domain names transfer their domain names. Many have their hosting stuck up, E mail servers not serviced.
Even today there appears to be nearly 73261 domains registered with Net4India and the chaos that the freezing of these domain names have created in the Indian Cyber Space is unimaginable.
At such a time, it looked funny that National Security Advisor today was speaking in a conference about “Cyber Security” without having any idea of what is the role of domain names in the healthy functioning of the Cyber Space.
It is unfortunate that the Ministry of Information Technology, is either unable to understand the gravity of the problem or is uninterested in resolving the issue.
For the records, it may be stated that Net4India may have filed an insolvency petition and neither ICANN nor MeiTy has any idea of how to tackle such a situation.
Given the fact that Naavi.org gave a three year advance warning the failure of ICANN and MeitY to find a solution during this period is simply unacceptable.
Who ever is the “Receiver” who is handing the bankruptcy proceedings should also be questioned about their inability to ensure the continuity of the service even while the proceedings of winding down is being attended to.
Since it was found out that another registrar namely Open Provider.com had some interest in Net4India’s domain activities, Naavi.org contacted them to take over the operations of the servers of Net4India so that the domain name services can be continued. Unfortunately, Open Provider replied
“Thanks for reaching out to us.
But as per our commitments with our Reseller, we do not target their end customers and it will be against our protocol to on-board our Resellers end customer.
However, you are free to use our services for all your new registrations.
Incase if you are facing any problems, please mention it so I can pass this information and ask them to respond you. “
Obviously this registrar to whom Net4India may be financially related in some form is not interested in resolving the customer issue and is speaking of “ethics” of business.
Naavi.org has been receiving a number of queries from individuals and companies about what is the solution to this problem.
Though Naavi.org has tried to elicit response from MeitY, Mr Samiran etc, there is no response from any of them.
It is therefore time that a PIL is required to be filed in Supreme Court with a request for ICANN to introduce an automatic system of transfer of domain registrar services to an alternative service provider in case of such defaults.
It is also the responsibility of the Ministry of IT in India to ensure that under the Intermediary Guidelines of ITA 2000, the registrars should be made answerable for such defaults.
At present, Net4India has committed a fraud on the public by first causing denial of service and then disabling some of their services with a view to shut off enquiries from the customers. A criminal case can be filed on this company and appropriate changes need to be brought to ITA 2000 to prevent such happenings in future.
Some advocates are already planning to file a PIL on this matter and I urge them to expedite their petition and ensure that they make MeitY, the Receiver to the bankruptcy proceedings, Openprovider.com as well as the ICANN and its India representative parties to the suit.
Naavi.org has also urged clients at different places to file adjudication applications with the respective adjudicators in their states so that they can also take up the complaints and try to find solution.
Looking forward to the PIL lawyers who understand the issue to act without further delay.
Naavi
P.S: Submitted the following complaint at ICANN today on 19th September 2020..at https://www.icann.org/complaints-office
A domain name registrar by name ‘ net4india’ operating from Delhi, India has ceased operations. It is not issuing AuthCode for transfer of domains, not responding to any customer queries. It is receiving inward payments with no accountability. Over 70000 domain names may be in the limbo along with e-mail services, domain hosting services.
There is a need to transfer the registry to another operating registrar immediately.
For the future a system has to be made available to handle such withdrawal of registrars from business.
Problem was first pointed out in July 2017 by Naavi.org and more recently a number of persons have reported the issue in India to authorities including Mr Samiran Gupta, the ICANN representative.
If ICANN does not handle the issue immediately, a class action suit may be filed against ICANN and its executives.
Request immediate attention and action.
