Case Summary: Hoichoi Technologies Private Limited & Anr. v. Reserve Bank of India & Ors. [WPA No. 4625 of 2024 (Calcutta High Court)]

Case Name: Hoichoi Technologies Private Limited & Anr. v. Reserve Bank of India & Ors.
Citation: WPA No. 4625 of 2024 (Calcutta High Court)
Bench: Hon’ble Justice Sabyasachi Bhattacharyya
Date of Judgment: 5 April 2024

Introduction

The rapid growth of digital platforms has raised important questions about the regulation of online payment systems and the role of technology companies in facilitating digital transactions. In Hoichoi Technologies Private Limited & Anr. v. Reserve Bank of India & Ors., the Calcutta High Court was called upon to consider whether Google’s Play Billing System amounted to unauthorised payment aggregation under the Payment and Settlement Systems Act, 2007 and the Reserve Bank of India’s Guidelines on Regulation of Payment Aggregators and Payment Gateways.[1] The case is significant because it sits at the intersection of financial regulation, digital platform governance, and judicial review of regulatory action, and because it illustrates the courts’ willingness to defer to specialised regulators on technical questions that fall within their statutory expertise.

Facts

The first petitioner, Hoichoi Technologies Pvt. Ltd., operates a digital platform hosting Bengali films, web series, and television shows, and distributes its mobile application through the Google Play Store. The petitioners alleged that the Google group entities (respondent nos. 2-6) collectively acted as unauthorised Payment Aggregators under the RBI’s Guidelines on Regulation of Payment Aggregators and Payment Gateways. Specifically, they claimed that Google’s Play Billing System facilitated payment transactions without the authorisation required under the Payment and Settlement Systems Act, 2007.

The petitioners had submitted a representation to the RBI on 19 February 2024, but filed the writ petition the very next day, seeking directions to the RBI to initiate adjudication and interim protection against being delisted from the Play Store for declining to adopt Google’s payment system. The RBI, in response, stated that it had already issued notice to Google and held multiple hearings, and asked for at least twelve weeks to complete the adjudicatory process. Similar issues were also pending separately before the Competition Commission of India.

Legal Issues

The case raised four principal questions: whether the Google group entities, by operating the Google Play Billing System, were acting as unregistered Payment Aggregators in violation of the RBI’s 2020 Guidelines and the PSS Act; whether the writ court could issue a mandamus directing the RBI to initiate adjudicatory proceedings when the RBI had already commenced inquiry; whether the petitioners were entitled to interim protection against delisting from the Google Play Store pending the RBI’s adjudication; and whether the writ petition was premature in light of the pending complaint before the RBI and the parallel proceedings before the CCI.

Petitioner’s Contentions

The petitioners, represented by Mr. Sabyasachi Chowdhury, argued that the Google group entities collectively acted as Payment Aggregators by facilitating end-to-end payment transactions through the Google Play Billing System, and that they had done so without obtaining authorisation under Section 4(1) of the PSS Act, in violation of the RBI’s 2020 Guidelines. The specific violations alleged included delayed settlement of funds beyond the prescribed one-to-two-day window, co-mingling of merchant funds with other business operations, and the charging of commissions inconsistent with Clause 8.9.1.2(d) of the Guidelines.

The petitioners further submitted that they had made a detailed representation to the RBI on 19 February 2024 without any action being taken in response. They sought a writ of mandamus directing the RBI to initiate adjudicatory proceedings, and, pending such adjudication, an interim order restraining Google from delisting their app from the Play Store on account of their refusal to adopt the allegedly unlawful payment model.

Judgment and Ratio Decidendi

Justice Sabyasachi Bhattacharyya dismissed the writ petition, holding that it was premature and without merit for the grant of interim relief. The Court made several key findings.

First, it held that the primary reliefs seeking mandamus against the RBI were “sham,” since the petitioners had filed the writ petition only a day after submitting their representation, making any claim of regulatory inaction untenable. The RBI had already initiated inquiry and sought twelve weeks to conclude it, a period the Court considered “sufficiently reasonable.”

Second, on the reliefs seeking interim protection against Google’s payment system and against delisting, the Court found that these were inseparable from the underlying merits of whether Google in fact acted as a Payment Aggregator. The Court declined to usurp the RBI’s jurisdiction, noting that the PSS Act designates the RBI as the regulatory and adjudicatory authority with a complete statutory mechanism for addressing such contraventions.

Third, the Court conducted a prima facie analysis under Clause 1.1.1 of the 2020 Guidelines, which provides that a Payment Aggregator must handle the entire payment chain from customer to merchant. Examining the Developer Distribution Agreement between the parties, the Court found that Google charged only a service fee for hosting and distribution, not for payment aggregation. It held that the mere display of multiple payment options — including that of a registered Payment Aggregator, respondent no. 6, did not convert the entire Google group into Payment Aggregators. The Court concluded that the issues raised were “at best arguable” and required detailed examination by the RBI on a fuller record.

The ratio decidendi that emerges is that a writ court will not grant interim relief or issue a mandamus against a statutory regulator where the regulator has already commenced adjudication, the time sought for completion is reasonable, and the dispute turns on technical regulatory questions best left to the expert authority designated under the governing statute.

Critical Analysis

The judgment exemplifies the principle of primary jurisdiction: that courts should defer to specialised regulatory bodies where a statute provides a complete mechanism for adjudication. Under Section 24(3) of the PSS Act, disputes between system participants or providers are to be referred to the RBI, and by declining to grant interim relief, the Court respected this statutory scheme. This approach is consistent with the Supreme Court’s long-standing position that alternative statutory remedies must ordinarily be exhausted before a writ court will intervene, absent exceptional circumstances — a principle most recently reaffirmed in Godrej Sara Lee Ltd. v. Excise and Taxation Officer-cum-Assessing Authority.[2] The petitioners in this case were unable to show any urgency or irreparable harm, particularly given that the RBI had already acted within days of receiving their representation.

Filing a writ petition twenty-four hours after submitting a representation to a statutory authority is arguably an abuse of process, and the Court was right to characterise the primary reliefs as “sham.” This sends a clear signal against forum-shopping and against rushing to writ courts without allowing regulators a reasonable opportunity to act. That said, one could argue that the Court might have issued a limited direction requiring the RBI to decide the matter within a fixed timeline, though it ultimately expressed only its “hope and trust” that a decision would follow within twelve weeks.

The Court’s prima facie reading of Clause 1.1.1 of the 2020 Guidelines is sound: a Payment Aggregator must provide end-to-end payment processing, including the receipt, pooling, and settlement of funds. Google’s role, hosting applications, displaying payment options, and charging a service fee, does not automatically satisfy this definition. The distinction between a platform that facilitates a choice of payment methods and one that aggregates and settles funds is a crucial one, and the judgment correctly notes that the presence of a registered Payment Aggregator (respondent no. 6) among several payment options does not, by itself, convert the entire group into unregistered Payment Aggregators.

The decision sits comfortably alongside the broader body of Supreme Court authority counselling judicial restraint while a statutory authority is actively seized of a matter.[3] At the same time, the judgment does not clarify what, precisely, constitutes “end-to-end” payment handling in a digital ecosystem involving multiple intermediaries, the app store, the payment gateway, the bank, and the merchant, leaving room for further litigation on this point. The Court’s reliance on a “prima facie” analysis, even with an express disclaimer as to the merits, may also be seen as venturing some distance into the substance of the dispute. On balance, however, the judgment stands as a model of judicial restraint that reinforces the primacy of sectoral regulators, while leaving open the broader question, now for the RBI to resolve, of whether mandatory app-store billing systems amount to disguised payment aggregation.

Conclusion

The Calcutta High Court dismissed the writ petition as premature, holding that the petitioners had approached the Court barely twenty-four hours after submitting their representation to the Reserve Bank of India. Such haste, the Court rightly observed, left no room for any genuine claim of regulatory inaction. By declining to grant interim relief against Google’s payment system or against delisting, the Court reinforced the principle that writ courts must respect the jurisdiction of specialised statutory authorities, particularly where those authorities have already initiated adjudicatory proceedings.

The judgment underscores that the RBI, as the designated regulator under the Payment and Settlement Systems Act, 2007, is best placed to examine complex factual questions such as whether the Google group entities collectively operate as unregistered Payment Aggregators. While the Court expressed hope and trust that the RBI would decide the matter within twelve weeks, it deliberately refrained from entering into the merits of the dispute. The decision ultimately leaves the core legal question, whether mandatory app-store billing systems constitute disguised payment aggregation, for the RBI, and if necessary the higher judicial fora, to determine on a fuller record.

Bibliography

Regulatory Materials
[1] Reserve Bank of India, Guidelines on Regulation of Payment Aggregators and Payment Gateways (17 March 2020, updated 17 November 2020).

Cases
[2] Godrej Sara Lee Ltd. v. Excise and Taxation Officer-cum-Assessing Authority, 2023 SCC OnLine SC 95.
Hoichoi Technologies Private Limited & Anr. v. Reserve Bank of India & Ors., WPA No. 4625 of 2024 (Calcutta High Court, 5 April 2024).
[3] Securities and Exchange Board of India v. Classic Credit Ltd., 2017 SCC OnLine SC 961.
Whirlpool Corporation v. Registrar of Trade Marks, (1998) 8 SCC 1.

Legislation
Payment and Settlement Systems Act, 2007 (India).
Competition Act, 2002 (India).