[Answered] Examine the evolving jurisprudence on platform liability in India, balancing the ‘Safe Harbor’ principle with the imperative of founder accountability. Evaluate how recent judicial interventions regarding intermediary due diligence impact digital entrepreneurship and the protection of user rights in the burgeoning digital economy.

Introduction

India’s digital economy, projected to reach $1 trillion by 2030 (MeitY–IBEF), faces rising platform-liability disputes, as courts recalibrate ‘safe harbor’ protections amid online fraud, deepfakes, and escalating intermediary accountability.

Evolution of Platform Liability Jurisprudence in India

From Neutral Intermediaries to Conditional Immunity

1. The foundation of platform liability lies in Section 79 of the Information Technology Act, 2000, which grants intermediaries ‘safe harbor’ from liability for third-party content.
2. However, this immunity is conditional upon adherence to ‘due diligence’ and non-involvement in content initiation, modification, or transmission.
3. The Supreme Court in Shreya Singhal v. Union of India (2015) clarified that ‘actual knowledge’ triggering liability arises only through court orders or government notifications, thereby protecting platforms from arbitrary policing.”

Judicial Shift toward Fact-Specific Scrutiny

1. Recent cases, including Anupam Mittal v. State of Telangana (2026), mark a jurisprudential shift from blanket immunity to contextual examination.
2. The Supreme Court’s insistence that High Courts assess whether allegations disclose any offence at all reflects a move towards ‘merit-based liability’, rather than procedural shortcuts such as reliance on low punishment thresholds (as cautioned in Arnesh Kumar).

Safe Harbor vs. Founder Accountability

Piercing the Corporate Veil in the Digital Context

1. A notable trend is the naming of founders and CEOs in FIRs, effectively ‘piercing the corporate veil’.
2. Law enforcement increasingly invokes Bharatiya Nyaya Sanhita (BNS) provisions on cheating and breach of trust to bypass IT Act protections.
3. This represents a transition from platform-level to individual-level accountability, particularly where alleged negligence in verification or grievance redressal exists.

Due Diligence 2.0: From Reactive to Proactive Compliance

1. The IT Rules, 2021 (amended 2023), mandate grievance officers, traceability (for significant social media intermediaries), and proactive content moderation.
2. Courts now assess whether platforms followed their own safety protocols, cooperated with investigations, and adopted reasonable verification measures.
3. In the Shaadi.com case, the core issue is whether absence of mandatory ID verification amounts to criminal negligence or remains within permissible intermediary discretion.

Impact on Digital Entrepreneurship

Chilling Effect on Innovation and Startups

1. India hosts over 100,000 startups, many operating ‘trust-based’ platforms such as matrimonials, EdTech, and HealthTech.
2. The threat of founder arrest for off-platform user crimes risks creating a ‘regulatory chill’, discouraging entrepreneurship and innovation.
3. Smaller startups may be disproportionately affected, as compliance-heavy regimes favour capital-rich Big Tech, undermining the government’s ‘Ease of Doing Business’ and ‘Startup India’ objectives.

Rising Compliance Costs and Digital Exclusion

1. Enhanced verification norms increase operational costs and may exclude users lacking formal identification, exacerbating the digital divide.
2. The World Bank’s Digital Development Report warns that excessive gatekeeping can marginalise vulnerable populations, particularly women and rural users, from online platforms.

Protection of User Rights in the Digital Economy

1. Victim-Centric Concerns in the Age of AI Fraud: With the proliferation of AI-generated profiles, deepfakes, and romance scams, victims increasingly perceive ‘safe harbor’ as a shield for platform irresponsibility. NCRB data indicates a sharp rise in cyber fraud cases, intensifying demands for platform accountability.
2. Judicial Balancing through Proportionality: The Supreme Court’s approach in remitting the Mittal case underscores proportionality—protecting founders from arbitrary criminalisation while ensuring platforms cannot hide behind neutrality if due diligence is demonstrably absent. This signals a gradual shift from ‘notice-and-takedown’ to a ‘duty of care’ model, without adopting the stringent EU-style Digital Services Act wholesale.

Conclusion

As Dr. A.P.J. Abdul Kalam envisioned technology as an enabler of inclusive growth, India’s courts now seek equilibrium—fostering digital innovation while embedding responsibility, fairness, and trust within an increasingly complex online ecosystem.