HC seeks RBI, ED stand on PIL claiming PayPal operating illegally

The Delhi High Court Wednesday asked RBI and Enforcement Directorate (ED) to respond to a plea alleging that online payment platform PayPal was operating "illegally" without the central bank's authorisation.

A bench of Chief Justice D N Patel and Justice C Hari Shankar issued notice to the Reserve Bank of India (RBI), ED and Paypal Payments Pvt Ltd (PayPal) and sought their stand on the PIL before the next date of hearing on September 18.

Abhijit Mishra, a financial economist, has claimed in his plea that "Paypal is operating as a payment and settlements system in blatant violation of the Payments and Settlements Systems Act".

He said PayPal does not figure in the list of authorised payment system operators published by RBI on May 27, 2019.

According to the PIL, filed through advocate Payal Bahl, PayPal's services are being used by various online travel, clothing and food websites or apps, including Yatra, Makemytrip, Bookmyshow, Dominos Pizza and Myntra.

In his petition Mishra has alleged that PayPal was also "operating as a foreign exchange dealer in contravention of the Foreign Exchange Management Act (FEMA)".

PayPal through its unauthorized operation "has unmonitored and unauthorized access to the personal information such as Aadhaar, PAN, etc of the public", he claimed.

Such access to the personal information of the public was a violation of Article 21 of the Constitution of India, the plea contended and sought directions to PayPal to "immediately stop its allegedly illegal and unauthorized operations".

It has also sought probe by investigative agencies against the directors, management and officers of PayPal for alleged malpractice and violation of provisions of Article 21 of the Constitution of India, Payments and Settlements Act, FEMA and Prevention of Money Laundering Act (PMLA).

Mishra has also sought directions to RBI and ED to take action, including imposition of fines and penalties, against PayPal for the alleged violations.