Supreme Court Stays Delhi High Court: No Bike-Taxi of Rapido & Uber to Operate in Delhi

Supreme Court Stays Delhi High Court: No Bike-Taxi of Rapido & Uber to Operate in Delhi

The Supreme Court has stayed the order passed by the Delhi High Court allowing bike-taxi aggregators Rapido and Uber to operate bike-taxis without aggregator licenses in Delhi till the Delhi Government notified its policy for the same.

“Under these circumstances, in our opinion, an interim order staying the whole-scale operation of a statutory regime till the finalization of policy was unwarranted and we stay both the impugned orders passed by the Delhi High Court.”

The vacation bench Justices Aniruddha Bose and Rajesh Bindal, while staying the interim order passed by the Delhi High Court, recorded the statement of Senior Advocate, Manish Vashisht appearing on behalf of the Delhi Government that the concerned policy would be in place and the licensing regime would be operational by 31st July, 2023.

Further as urged by the Senior Counsels representing the petitioners, the Bench categorically noted that once the State’s notification was in place it would deal with the applications in a time-bound manner.

The Bench also granted liberty to the parties to approach the Delhi High Court seeking early hearing of the main matter.

The Delhi Government on 19th February, 2023 had issued a public notice, in essence, prohibiting use of two wheelers by aggregators. As per the notice two wheelers were being utilized by the aggregators without proper license or permit.

Aggregators challenged the said public notice before the Delhi High Court invoking its writ jurisdiction. While the matter was pending before the High Court, the Delhi Government issued show cause notice to the aggregators on 21st February 2023 contemplating coercive action. By way of the impugned order, passed by the Delhi High Court on 26th May, 2023, it directed that no coercive action be taken against the bike-taxi aggregator till a final policy has been notified by the Delhi Government.

In the plea filed before the Supreme Court, the Delhi government said that owing to the High Court’s interim order, Uber and Rapido are continuing the use of non-transport vehicles including two-wheelers for the purpose of aggregation and ride pooling, which is impermissible under the Motor Vehicles Act read with the Motor Vehicle Aggregator Guidelines, 2020 without obtaining valid permits.

Representing on behalf of Uber, Senior Advocate NK Kaul retaliated Delhi Government’s contention and argued that there is no such prohibition under the statute.

Kaul submitted that though the Union Government had formulated the Motor Vehicle Aggregator Guidelines in 2020, till date the Delhi Government has not drafted a scheme based on Centre’s guidelines.

To this, Justice Bose asked, “Can the guidelines override a statute?”

Kaul vehemently asserted that there was no such prohibition as has been pleaded by the Delhi Government under the Motor Vehicles Act. He submitted that in terms of Section 41(4) of the Motor Vehicles Act two wheelers have been permitted to be used as transport vehicles. He further assured that no harm would be caused to the general public of the two wheelers are allowed to ply pending the formulation of the policy by the Delhi Government.

The judge was of the opinion that two wheelers cannot ply on the roads of Delhi without valid Government permits.

Previously, the Apex Court had sought the Centre’s response in the plea. Appearing before the Bench on behalf of the Union Government, Additional Sanjay Jain (ASG) Sanjay Jain submitted that though it is State subject there is a guideline formulated by the Central Government to facilitate the State Governments.

ASG submitted, “The Central Govt guidelines have been issued to facilitate the State Government because it is a State subject. License is of course the sine qua non. No doubt about that. Kindly see the definition of license.”

He further highlighted that though a license is necessary, as per the Union Government’s guidelines aggregators can use two wheelers.

Justice Bose asked, “Two wheelers can be a transport vehicle but can it be permitted without registration?”

The ASG submitted, “Section 93 license is a regime in itself. There mayn’t be any need to go under Section 66, which is for transport vehicles.”

The judge further enquired, “But can it be so that once you have the aggregator license unregistered vehicle can be permitted.”

The ASG stated that the Vehicles have to be registered.

However, Kaul contended that the regulation of aggregators falls under the ambit of Entry 37 in List I of the Seventh Schedule of the Constitution of India and is not a state subject. In view of the same, he submitted that the State Government cannot lay down any guidelines pertaining to the operation of the aggregators.

Kaul also referred to an order of the Bombay High Court wherein aggregators were asked to register under the Central Government guidelines till the time the State Government came up with a framework.

Advocate Vashisht in order to distinguish between the Maharashtra matters and the present proceedings, reminded the Bench that in the former the Apex Court had directed them to register under Section 93 of the Motor Vehicles Act, whereas in the latter the provision is under challenge.

Senior Advocate, Siddharth Bhatnagar appearing on behalf of Rapido attempted to distinguish the present proceedings from the Maharashtra matters. He submitted,

“In the Maharashtra case, the RTO Pune had rejected my license under guidelines. In Delhi, the license has not been rejected. They have passed no order on my license. I had applied under Central Govt notification,” he said.

Justice Bose commented, “License is at two stages, by owner and aggregators. The permit is absent at both the stages in this case. How can you override the statute which mandates the same?”

Justice Bindal added, “Can you use a vehicle which is not registered as a transport vehicle?”

The Bench was further apprised that the Delhi Government has drafted the policy (Delhi Motor Vehicle Aggregator Scheme, 2023); public notices have been invited to participate and give objections. The last date for receiving objections is June 24. The Delhi Government aims to notify the policy by 31st July, 2023.