INTRODUCTION
The Calcutta High Court has delivered an observation on how modern generative AI fits within India’s legal framework and held that artificial intelligence platforms like ChatGPT cannot claim the status of a passive “intermediary” under section 2(1)(w) of the Information Technology Act, 2000. Instead, the court held that ChatGPT’s generative qualities prima facie make it an “originator” under Section 2(1)(za). Justice Ravi Krishan Kapur, hearing an interim application filed by a B2B e-commerce platform against OpenAI, denied an injunction to compel visibility for the platform in searches made on ChatGPT.
BACKGROUND
The petitioner has been engaged in an integrated electronic B2B platform, IndiaMart, since 1996 with free and paid listings for a wide variety of products. Consumers obtain access to suppliers for diverse products through this platform. Respondent 1, Open AI INC, was established to build Artificial General Intelligence (AGI) having global outreach. The technology behind ChatGPT allows users to submit text prompts and get generated responses by the software which are done using LLMs. The B2B platform argued that the AI was leaving out links to IndiaMart in response to user queries while allegedly providing the links for rival platforms, making the classification of ChatGPT within the Information Technology Act a central issue. The petitioner complains of infraction of the IT Act and the Rules. They contend that under Section (2)(1)(w) read with Section 79(2)(c), IT Act, ChatGPT functions like a search engine and should be classified as an intermediary and is thus obliged to act. The functions which ChatGPT performs as a search engine do not permit any kind of discrimination under Rule 3(1)(n), IT Rules, 2021.
KEY POINTS
- Justice Ravi Krishan Kapur dismissed IndiaMart’s application, observing that under Section 2(1)(za) of the IT Act, an originator is defined as a person who sends, generates or transmits any electronic message. As ChatGPT creates unique content via its LLM, it functions more like an originator than a passive intermediary.
- The court also distinguished ChatGPT from conventional search engines while noting that search engines typically crawl the internet, rank the websites, and present them to the users. As ChatGPT actively manufactures and generates new responses, the court rejected the idea that it acts as a standard search engine. Consequently, the OpenAI and ChatGPT platform is not bound by the non-discrimination rules under Rule 3(1)(n) of the IT Rules, 2021.
- Further, the judgment defended the economic principle of laissez-faire while ruling that no private business can be legally compelled to benefit a competitor’s economic interests without any contractual or statutory obligation towards the same. Thus, the petitioner failed to demonstrate any breach of a positive legal obligation owed to it by the respondent.
- The court further noted that the issue remains a complex question of both law and fact and requires expert technical evidence before a final ruling. The court also emphasized that as modern generative AI does not fit neatly into the IT Act framework which was drafted before AI systems existed, and resolution of these issues will likely require fresh legislative intervention to properly distribute liability between AI developers and users.
RECENT DEVELOPMENTS
This ruling highlights the legal concerns when it comes to assimilating AI models into existing legal frameworks. If GenAI platforms are classified as originators, tech giants in this sector would lose all the “safe harbour” protections against liability for third-party content that internet intermediaries such as search engines have been given under Section 79 of the IT Act. There have been critics who have argued against this classification of GenAI as originators by pointing out that ChatGPT’s responses are dependent on the user’s specific prompts, which essentially gives the intent and becomes the true originator while the AI is simply an advanced resource mechanism. Justice Kapur thus acknowledged that this question is incredibly “complicated and vexed.” The ultimate status of AI under Indian law can be settled during a full trial, while relying heavily on technical, scientific and expert evidence.
CONCLUSION
The Calcutta High Court’s observations in Indiamart Inter Mesh Limited v. OpenAI Inc. & Ors 2026 SCC OnLine Cal 5738 highlights the growing need for legislative clarity on assimilation of AI software into the existing laws. By noting that generative AI platforms possess an element of algorithmic independence, the Court has signalled that AI developers cannot easily hide behind the protective safe harbour cloaks meant for passive intermediaries. Ultimately, Justice Kapur emphasized that resolution will require comprehensive legislative intervention to create a distinct liability model that proportionally distributes accountability between AI developers and users based on their active control over the system.
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WRITTEN BY: MANALI ANAND SAWANT
