Bengaluru-based taxi app takes on Government in Karnataka High Court

A city-based company that offers a mobile application to help passengers seeking taxi services approached the High Court.

Published: 25th May 2016 05:56 AM  |   Last Updated: 25th May 2016 05:56 AM   |  A+A-

BENGALURU: A city-based company that offers a mobile application to help passengers seeking taxi services approached the High Court against the Karnataka On Demand Transportation Technology Aggregator Rules, 2016 framed by the state government to regulate the functioning of taxi aggregators.

The regulation includes the imposition of fee limits on them.

After hearing the petition filed by M/s Helion Technologies Private Limited, represented by its director Vishal Kumar, a vacation bench of High Court on Tuesday declined to stay the Karnataka On Demand Transportation Technology Aggregator Rules.

However, Justice A S Bopanna issued a notice to the Principal Secretary, Department of Transport and Commissioner for Transport and Road Safety.

Helion Technologies contended that the Aggregator Rules are framed erroneously by implementing the Section 93 of the Motor Vehicles Act, 1988, with the on-demand transportation technology aggregator platforms (ODTTP) service providers being considered as agents/canvassers relying on the said Act and hence the said rules deserved to be quashed.

“Section 93 of the Motor Vehicles Act, requires that any person engaged in soliciting customers for travel by public service vehicle is required to obtain a license from the appropriate authority...However, we are providing a digital platform, whereby, we connect existing taxi drivers holding valid permits, to passengers seeking taxi services, through the mobile application. Hence, we come under Information Technology Act, not under Motor Vehicles Act”, the petitioner company contended.

“ODTTP service providers do not fall within the definitions of agent or canvasser nor do ODTTP service providers solicit customers for particular vehicles. Our service providers are those who use IT based ODTTP to connect passengers with taxi drivers. Therefore, as Section 93 does not provide for imposition of limits on the fee that may be charged by ODTTP service providers, it is beyond the competency of the Transport Department to regulate the prices charged by the taxi aggregators under the guise of Section 93 of the Act”, the petitioner said.

The petitioner further said that Department of Transport, Government of Karnataka, published the draft of the rules for the governance of the ODTTP in the gazette and called for objections/suggestions from the public.

The players in the ODTTP service filed that their service does not fall within the purview of the Motor Vehicles Act, 1988. Without considering the objections, Transport Department notified the Rules in the official gazetteer on April 2, 2016.

“A bare perusal of the rules reveals that Transport Department besides lacking the necessary power to frame the rules, has also deviated from the essence of the guidelines issued the Ministry of Road Transport and and Highways”, petitioner said.

Following rules lack application of mind by the Transport Department: Petitioner

Section 14 of the rules stipulates a maximum security deposit payable by an agent/canvasser to be `1 lakh, up to a maximum of `5 lakh. The said provision directly contradicts Section 93 of Motor Vehicles Act that specifically caps any security deposit that may be demanded by the transport department from agent/canvassers that facilitate provision of contract carriage at C5,000.

Section 3 and 5(3) of the Rules restrict a person from owing/leasing/employing vehicles or representing themselves as taxi service providers without a license. However, Section 6(a) of the Rules mandates that, to avail that license, one must have a fleet of a minimum of 100 taxis.

The petitioner also challenged one of the rules that the driver shall be a resident of Karnataka for a minimum period of two years. Such acts are unreasonable restriction on the freedom of profession, as any resident of the state may obtain license with the freedom to driver anywhere in India.


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