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2022 Supreme(Cal) 308
IN THE HIGH COURT OF CALCUTTA
Sabyasachi Bhattacharyya, J.
Uber India Systems Private Limited And Another - Appellant
Versus
State Of West Bengal And Others - Respondent
WPA No. 8986 of 2022 with WPA No. 9051 of 2022
Decided On : 21-09-2022
Mr. Ratnanko Banerji, Mr. Deepan Kumar Sarkar, Ms. Nandini Khaitan, Ms. Shreya Singh, Mr. Pratik Shanu, Ms. Nikita Rathi, Mr. S.K. Kapur,Ms. V. Meharia, Mr. Soumalya Ganguli, for the Appellant; Mr. S.N. Mookherjee, Mr. Amal Kumar Sen, Mr. Jaladhi Das, Mr. Lal Mohan Basu, Mr. Nilanjan Bhattacharjee, for the Respondent
The main legal point established in the judgment is the mandatory nature of obtaining a license and complying with prescribed conditions for aggregators under Section 93 of the Motor Vehicles Act, 1988.
Headnote:
Aggregator - Motor Vehicles Act, 1988 - Section 2(1A), Section 93, Section 212 - The court discussed the provisions of the Motor Vehicles Act, 1988, particularly Section 93, which mandates aggregators to obtain a license from the State Government and be subject to prescribed conditions. The court analyzed the distinction between 'conditions' and 'guidelines' and emphasized the mandatory nature of obtaining a license and complying with prescribed conditions. It also highlighted the consultation process and publication requirements for rules and guidelines, and concluded that the impugned guidelines were valid and not unreasonable.
Fact of the Case:
The case involved a challenge to the guidelines for operation of aggregators issued by the State of West Bengal under the Motor Vehicles Act, 1988. Uber and its drivers filed writ petitions challenging the notification, arguing that the guidelines were not binding due to non-compliance with the procedure prescribed in law.
Finding of the Court:
The court found that the provisions of the Motor Vehicles Act, particularly Section 93, made it mandatory for aggregators to obtain a license from the State Government and be subject to prescribed conditions. It concluded that the impugned guidelines were valid and not unreasonable, and refused the interim prayers made by the petitioners.
Issues: The issues involved the interpretation of the provisions of the Motor Vehicles Act, particularly Section 93, and the validity of the guidelines issued by the State of West Bengal for aggregators.
Ratio Decidendi: The court's decision was based on the analysis of the mandatory nature of obtaining a license and complying with prescribed conditions under Section 93 of the Motor Vehicles Act. It also considered the distinction between 'conditions' and 'guidelines' and emphasized the consultation process and publication requirements for rules and guidelines.
Final Decision: The court refused the interim prayers made by the petitioners and directed the respondents to file their affidavit-in-opposition by a specified date for final hearing before the appropriate bench.
JUDGMENT
Sabyasachi Bhattacharyya, J. - WPA No.8986 of 2022 has been filed by Uber India Systems Private Limited and one of its Directors and WPA No.9051 of 2022 by some of the drivers of Uber. Both the writ petitions challenge Notification No. 652-WT/3M- 17/2021 dated March 03, 2022, whereby the State of West Bengal published guidelines for operation of aggregators. Uber is an 'On Demand Transportation Technology' Aggregator (ODTTA). In view of the identity of causes of action, both the writ petitions are taken up for consideration of interim orders together.
2. Admittedly, Uber is a facilitator who provides a technology platform which enables drivers of commercial vehicles to connect with riders/passengers via the software/online application 'Uber' available on smart-phones.
3. The concept of aggregators was introduced in the Motor Vehicles Act, 1988 (for short, 'the 1988 Act') by virtue of the amendment of 2019. As per the amended provisions, Section 2(1A) defines 'aggregator' as a digital intermediary or marketplace for a passenger to connect with a driver for the purpose of transportation.
4. Section 93 of the said Act provides for an agent, canvasser or aggregator to obtain licence.
5. The relevant provision is as follows:
'Section 93. Agent or canvasser or aggregator to obtain licence.-
(1) No person shall engage himself- ...................
(iii) as an aggregator,
Unless he has obtained a licence from such authority and subject to such conditions as may be prescribed by the State Government:
Provided that while issuing the licence to an aggregator the State Government may follow such guidelines as may issued by the Central Government:
..............'
6. The learned Senior Advocates appearing for Uber and for its drivers argue that Section 93 mandates aggregators to obtain a licence from such authority and under such conditions, as would be 'prescribed' by Rules by the State Government. Again, Section 2(32) of the Act defines 'prescribed' to mean prescribed by Rules made under the Act.
7. It is submitted that the negative requirement under Section 93 of an aggregator not being able to operate without a licence is activated only when Rules are framed by the State Government under Sections 93, 96 and 212 of the Act. It is submitted that as no such Rules having been framed with regard to the impugned guidelines as per the procedure prescribed in law, the impugned guidelines are not binding on the aggregators.
8. It is submitted that the first proviso to Section 93(1) confers power on the Central Government to issue guidelines for granting licence to an aggregator, which the State Government, at its discretion, 'may' follow while issuing a licence. Hence, the Central guidelines, by themselves, are not binding on the State Government or the petitioners.
9. It is argued that on November 27, 2020, the Central Government issued the Motor Vehicles Aggregators Guidelines-2020, which is a guiding framework to States for issuance of licence to aggregators. However, the same can be adopted by a State only by way of prescribed Rules within the contemplation of Section 212 of the Act.
10. It is submitted that Section 212 lays down the procedure for publication, commencement and laying of Rules and Notification and provides for a detailed procedure, including publication in the Official Gazette and consultation with the stakeholders, which has not been complied with before issuing the impugned guidelines.
11. Learned counsel for the petitioners rely on the provisions of Section 212 of the Act, read with Section 23 of the General Clauses Act, 1897, to contend that the State Government has to mandatorily comply with such steps. Such steps include publication of draft rules in the Official Gazette inviting objections and suggestions from persons likely to be affected by such Rules and further publication of the draft Rules with suggested amendments after considering the objections raised thereto. The procedure for previous publication is also contemplated
