"Nobody can argue that the state has no right to carry on surveillance... In the present scenario with terrorism, organised crime.
"But we have to install a strict regime enforced by the judiciary, of clear rules about the access, use and automatic destruction of data," Shah said.
"We are in an extremely fluid moment technologically and legally and I wish our executive, Parliament, and courts would protect privacy and enhance security at the same time," Shah said at an event organised by the US-India Business Council.
There should be a balance between the demands of security and the general interest of citizens, said Shah, who had led an expert group on privacy constituted by Planning Commission.
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Citing the Niira Radia case, involving the tapping of the telephonic conversations of the PR consultant, Shah said it had been a "completely illegal" exercise.
"I don't know what happened; whether those telephonic conversations in the Radia case... Is all market gossip or whether there is some criminality involved, I don't know.
"Supreme Court in 1996 had said that such communications (as in the Radia case) are really protected under the right to privacy, which could be restricted by a procedure which is just, fair and reasonable.
"(But) where is that just, fair and reasonable regulation," Shah asked.
India at present does not have a system of judicial monitoring of snooping as exists in the USA, Shah said, even as he noted that the framework in the latter country, too, left much to be desired.