My business's systems were hit by ransomware, what are our legal obligations and options?

Question

Our company's servers were encrypted by ransomware demanding cryptocurrency payment, and we're unsure whether to pay or what we're legally required to do. Before I spend money on it, I want to know whether Information Technology Act, 2000 – Section 66 gives me a remedy here and what proof I would need. Any Section numbers I can quote when I write to them would be useful.

MyVakeel Legal Desk · Accepted Answer

Information Technology Act, 2000 – Section 66, CERT-In Directions, 2022 and Digital Personal Data Protection Act, 2023 – Section 8 is what decides this question in India. Read it alongside the provisions named, because the relief available to you turns on the facts you can prove on paper.

Deploying ransomware to encrypt systems and extort payment is an offence under Section 66 (hacking/data theft) and Section 43 of the IT Act, and paying the ransom does not shield you from separate breach-notification obligations.

Under CERT-In's 2022 Directions, ransomware attacks must be reported to CERT-In within 6 hours of noticing the incident, regardless of the severity or whether you plan to pay the ransom.

If personal data of customers/employees was compromised, Section 8 of the DPDP Act requires notifying the Data Protection Board and affected individuals of the breach, with heavy penalties for non-disclosure.

Paying the ransom is legally risky since it could inadvertently fund sanctioned entities or organised crime, and law enforcement (police cyber cells, CERT-In) generally advise against payment as it doesn't guarantee data recovery.

Engage a certified forensic incident response team immediately to preserve evidence, contain the breach, and support both the CERT-In report and any subsequent police complaint.

What to do next: 1) Isolate affected systems immediately to prevent further spread; 2) Report the incident to CERT-In within 6 hours as mandated; 3) Notify the Data Protection Board and affected data principals if personal data was compromised; 4) Engage a forensic response team and file a police complaint under Section 66 IT Act.

If you are unsure whether your facts fall inside Information Technology Act, 2000 – Section 66, that is worth checking with an advocate before you commit to a route, because switching later costs time. You can post the details on the MyVakeel forum for a practising advocate to review, or book a paid consultation with a Bar Council verified lawyer in cyber law.