A division bench of Justice B.D. Ahmed and Justice Vibhu Bakhru also issued notice to US-based Facebook Inc and Google Inc to file their responses on a plea seeking directions for social networking sites to restrain children below 18 from having an account with them.
The court was hearing a plea that said children below 18 years are allowed to open an account with social networking sites including Facebook which is illegal as Indian laws don't permit it.
The bench said: "How the children below 18 years can have an agreement with any social network sites including Facebook. Union of India is directed to file an affidavit on the issue within 10 days."
"Both Facebook Inc and Google Inc are US-based entities and are hereby impleaded as respondents. Notices to be issued to the newly-added parties," the court said while impleading both the foreign companies as parties in the case.
The court posted the matter's next hearing for May 13.
The court's direction came on a public interest litigation filed by former Bharatiya Janata Party ideologue K.N. Govindacharya.
Appearing for Govindacharya, lawyer Veerag Gupta told the court that penalties should be imposed on social networking sites and other internet-based companies for non-verification of age of their users.
He added that the children below 18 are getting into an agreement with the social networking sites to open an account which is against Indian Majority Act, Indian Contract Act and also the Information and Technology Act.
The counsel further added that the Indian government is not taking any action against the foreign companies which have their Indian operations.
It said that "on the basis of unlawful agreements, data of 50 million users is transferred to the US and used for commercial gains in violation of the right to privacy".
"Due to non verification of users, more than eight crore Facebook users across the world were found to be fake which the Facebook admitted before the US authorities," he added.
He said that five or six percent accounts on social networking sites were fake or being operated by anonymous users due to non-authentication of details by the company before the opening of accounts.
The plea also sought order to recover tax from social networking websites, arising out of their Internet-based business in the country.
The plea asked the court to direct the government to recover all "past and present" direct and indirect tax demands arising from business income from Indian operations of different social networking websites.
The petition sought direction to ensure proper accounting compliances as per the Reserve Bank of India guidelines.
Govindacharya pleaded for a court order to these companies to implement the verification norms issued by the central government.
The petitioner, at present involved in social service through his organisation Rashtriya Swabhimaan Aandolan, said "Facebook gross revenue for previous year was approximately $37 billion"
"They are not paying due taxes on their Indian operations as per provisions of double taxation avoidance agreement and the government is not taking any action to safeguard the national interest and sovereignty of India."