The Supreme Court stayed a government notification that set up a Fact Checking Unit under the Press Information Bureau to identify fake news related to the business of the Union government on social media platforms.

The stay will continue until the Bombay High Court decides on the constitutional validity of the Information Technology (Intermediary Guidelines and Digital Media Ethical Code) Amendment Rules 2023, which amend the Information Technology (Intermediary Guidelines and Digital Media Ethical Code) Amendment Rules.

The Ministry of Electronics and Information Technology notified the Financial Conduct Union under the 2023 Amendment Rules to act as a "deterrent" against the creation and dissemination of false or misleading information regarding the Union's administration.

Telecom service providers and social media intermediaries like Facebook, Instagram, YouTube and X must take down any misinformation, or they will lose their safe harbour immunity against legal proceedings.

The three-judge bench led by Chief Justice D.Y. Chandrachud, without expressing any opinion on the merits of the pending HC case, said that the challenge to Rule 3(1)(b)(v), as amended by in 2023, raises serious questions.

The apex court said the implementation of Wednesday's notification would remain stayed until a third judge of the HC takes a final call on the validity of the provisions of Rule 3(1)(b)(v) After a split verdict by the Division Bench of the HC, the case is expected to be heard by a third judge on April 15.

An assortment of petitions filed by comedian Kunal Kamra, the Editors Guild of India (EGI) and a few media organizations sought an interim halt to the government's notification regarding the fact-checking unit.

Legally, the guidelines don't require a rewrite, according to Dhruv Garg, an attorney and tech policy expert.

Nevertheless, non-compliance with the FCU will result in the abolition of the safe-haven for the intermediary. So, they will take down the information on their own, in effect. Garg said that the FCU has a chilling effect on him.