TaxTMI 
TaxTMI 
TaxTMI 
2024 (4) TMI 1194
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 wi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in Clause 2.1 of the DDA, read together with web pages on service fee linked in the DDA, read with Clause 3.4 of the DDA. 11. The invoices raised by respondent no. 3 also pertain to service fee. It is argued that under the DDA, the respondent no. 3 does not impose a charge as contemplated in Section 10A of the PSS Act and as such, there is no violation of the statute at all. None of the private respondents other than respondent no. 6 act as PAs. It is argued that the respondent no. 3 charges service fees for hosting the sites of "Apps" (as software applications are commonly referred to) providing ancillary services such as development, etc. Such fees are charged only if the Apps concerned, engaged in developing such Apps, earn from third parties. However, if the platform is used merely as a developmental base, no service charges are exacted. 12. Learned counsel for the RBI submits that the writ petition should be dismissed as the complaint by way of a written representation was filed by the petitioners only on February 19, 2024, whereas the writ petition has been filed on the very next day. 13. In fact, the RBI has already served notice on Google on or about February 22, 2024 a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nvolved in such adjudication between the parties. As rightly pointed out by the respondents, an overlapping challenge is pending before the Competition Commission of India (CCI) under the Competition Act, 2002, where similar reliefs have been sought by the petitioners, although couched in a somewhat different language. The intended end-relief which has been refused by the CCI is equivalent to reliefs (f) and (g) sought in the present writ petition. 19. An important reason to hold that primary reliefs, hidden in the other reliefs, are prayers (f) and (g) is that prayers (a) and (b) are sham. The RBI is the regulatory and adjudicating authority under the PSS Act. The petitioners gave a representation containing their complaints against the respondent nos. 2 to 6 only on February 19, 2024. Surprisingly (or not so surprisingly) the writ petition claiming inaction of the RBI on the said complaint was filed on the very next date that is on February 20, 2024. The petitioners, by no stretch of imagination, could have expected the RBI to decide the issues raised by the petitioners and complete the adjudicatory process within 24 hours. Thus, the RBI rightly protests that it requires at leas....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... for completion of their payment obligations but the same has to be without the need for the merchants to create a separate payment integration system of their own. PAs not only provide the facility for payments through different modes but also facilitate merchants to connect with acquirers and in the process receive payments from customers, pool and transfer them on to the merchants after a time-period; in other words, the PAs take care of the entire payment chain from end to end, accepting the money from the customers and after due processing, passing the same on to the merchants after a period of time. 25. A perusal of the Google Play Developer Distribution Agreement between the petitioner no. 1 and Google shows that in Clause 2.1 it clearly sets forth that the contract is in relation to the use by the petitioner no. 1 of Google Play to distribute its products. Google will, solely at the discretion of the petitioners and acting pursuant to the relationship defined in Clause 3.1, display and make the products available for viewing, download and purchasing by user. In Clause 3.7, it has been specified that the products of the petitioner no.1 may be available for free at the optio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....handling end-to-end payment mechanisms from merchants to customers. Displaying various payments Apps on its platform including respondent no.6, which is an accredited body incorporated in India as a PA, does not make Google itself or its group of companies other than respondent no.6 a PA per se. 30. The above discussion is only for the purpose of ascertaining whether the petitioners have made out such palpable and ex-facie case which is evident at the first glance that the Google group of companies are operating as PAs without being accredited/registered to do so on Indian soil. However, the above discussion shows that the issues raised are at best arguable and are to be decided by the RBI, which is the designated regulatory and adjudicatory authority under the PSS Act which has its own ecosystem for dealing with contraventions of the said Act. Even the Competition Act provides fora which have already been approached and the petitioners have submitted to the jurisdiction of the CCI. Hence, it would be absolutely premature for the writ court to enter into the merits of the self-same issues and pass interim orders as per prayers (f) and (g) of the writ petition. 31. In so far as pr....