IMPORTANT POINT
The issues raised under the Payment and Settlement Systems Act, 2007 and the 2020 Guidelines on Regulation of Payment Aggregators and Payment Gateways were to be decided by the RBI, the designated regulatory and adjudicatory authority.

JUDGMENT :

Sabyasachi Bhattacharyya, J

1. The petitioner no. 1, Hoichoi Technologies Private Limited, with its Director, petitioner no. 2, have preferred the instant writ petition. The petitioner no. 1-Company hosts Bengali Movies, Web Series, TV shows and films through its mobile application and is a subscription-based model which monetizes its contents. Respondent nos. 2 to 6 are loosely referred to as the “Google Group of Companies”. Respondent no. 6, namely Google India Digital services Private Limited (Google India) is an online Payment Aggregator (PA) incorporated under Indian Laws.

2. The petitioners argue that the entire Group of Companies comprised of respondent nos. 2 to 6 provide inter-related services and act as PAs as contemplated in the Guidelines on Regulation of Payment Aggregators and Payment Gateways issued by the Reserve Bank of India (RBI) on March 17, 2020 (updated as on November 17, 2020). PAs have been defined under Clause 1.1.1 of the Guideline as entities that facilitate e-commerce sites and merchants to accept various payment instruments from the customers for completion of their obligations without the need for merchants to create a separate payment integration system of their own. PAs facilitate merchants to connect with acquirers. In the process, they receive payments from customers, pool and transfer them on to the merchants after a time period.

3. Learned counsel for the petitioners argues that by virtue of providing Google Play Services, the respondent nos. 2 to 6, which are entities belonging to the Google Group of Companies, employ the Google Play Billing System (GPBS) for facilitation of payment transactions on the Google Play Store. Thus, it is contended that even without being incorporated within the laws of India as contemplated in the Payment and Settlement Systems Act, 2007 (hereinafter referred to as, “the PSS Act”), the respondent nos. 2 to 6 combine forces to act as PAs, thereby flouting the provisions of the PSS Act.

4. The petitioners, it is contended, have already given a comprehensive representation in that regard with the complaint indicated above to the RBI, which is the regulatory and adjudicatory authority under the PSS Act but the same has not yet been decided by the RBI. It is prayed that the RBI be directed to resolve the issues expeditiously and in the meantime the petitioners are not subjugated and forced to accept the payment system of GPBS-UCB employed by the respondent nos. 2 to 6 and that the petitioner no. 1 be not delisted from the Google Play Store for its delay in adopting the allegedly illegal payment model of Google.

5. Learned counsel for the petitioners elaborately argues on the definition of PA under the RBI Guidelines and seeks to impress upon the Court that the 2020 Guidelines are being flouted by the Google Group of Entities.

6. Respondent nos. 4 to 5, despite not being authorized under Section 4(1) of the PSS Act, are being used as a payment system to be integrated in the petitioners’ App (Application) forcibly.

7. As per Clause 8 (Settlement and Escrow Account Management) of the 2020 Guidelines, the PA shall settle the funds debited from the customer account to the merchant account of Hoichoi within 1-2 days of such debit. Clause 12.3 of the GPTS Agreement signed between the petitioner no. 1 and the respondent no. 4 contemplates that the payments are released after a gap of 15 to 46 days from the date of the transaction.

8. Clause 8.9.1.2(d) of the Guidelines provides that the PAs shall be permitted for payment of commission to the intermediaries at a pre-determined rate, which is also being flouted by the respondents.

9. In terms of Clause 8.12, settlement of funds with merchants shall not be co-mingled with other business, if any, handled by the PAs, which is also being flouted.

10. Learned senior counsel appearing for the respondent nos. 2 to 6 controverts such submissions and argues that in terms of the Developers Distribution Agreement (DDA) between the petiti