JUDGMENT

Yashwant Varma, J.

For ease of reference, refer the table as under:-

A. PREFACE

1. PayPal Payments Private Limited [PayPal], the petitioner impugns the order dated 17 December 2020 passed by the first respondent the Financial Intelligence Unit India [FIU-IND] holding it to be a 'reporting entity' under the Prevention of Money Laundering Act 2002 [PMLA] and consequently proceeding to impose monetary penalties for it having failed to comply with the reporting obligations as placed under the Prevention of Money Laundering (Maintenance of Records) Rules 2005 [2005 Rules]. PayPal asserts that it is not a 'payment system operator' as defined under the PMLA and consequently it would be erroneous for FIU-IND to hold it to be a Reporting Entity. This is asserted on the basis of it not being engaged in rendering services relating to clearing, payment or provision of settlement between a payer and a beneficiary. It essentially avers that it merely provides a technological interface enabling export related transactions that may be undertaken by an Indian exporter and an overseas buyer. It is its categorical case that in the chain of transaction which ensues between the Indian exporter and an overseas buyer, PayPal is at no stage engaged in the actual handling of funds. According to it, the transmission of funds occurs between the constituent Authorised Dealer Category-1 Schedule Commercial Banks [AD Banks] which not only collect the amounts from the foreign purchaser directly and without any intervention of PayPal, the said funds are then transmitted to the AD Partner Bank`s Export Collection Account. PayPal also relies upon the stand as struck by the Reserve Bank of India [RBI] which in separate proceedings had averred on affidavit that it is not a payment system operator. The petitioner seeks to derive advantage from the stand so taken by RBI in those proceedings since the definition of a 'Payment System' under the Payments and Settlements System Act 2007 [2007 Act/PSS Act] is identical to the provision embodied in the PMLA.

2. For the purposes of evaluating the challenge which stands raised, it would be apposite to notice the following essential facts. As per the disclosures made in the writ petition the officials of the petitioner are stated to have participated in a meeting with the Additional Director of the FIU-IND on 08 October 2017 where they had been invited to explain the scope and content of their business operations in India. The petitioner asserts that it had expressed its willingness to cooperate with the FIU-IND in that meeting and remains bound by that obligation even today. On 16 March 2018 FIU-IND issued a communication directing PayPal to register itself as a reporting entity under the PMLA. FIU-IND further asserted that the business model of PayPal clearly established that it would fall within the definition of a reporting entity as embodied in Section 2(1)(wa) of the PMLA. FIU-IND alleged that despite the detailed clarifications that had been submitted by PayPal it was convinced that it was liable to register itself in accordance with the statutory obligations placed by the PMLA. Acknowledging the receipt of that letter, PayPal in terms of its communication of 06 April 2018 sought further time to respond. Ultimately and on 17 April 2018, it addressed a communication to F