Karnataka High Court: Blanket Ban On Bike Taxis Unconstitutional; Motorcycles Can Operate As Contract Carriages

The Court was hearing a batch of writ appeals filed by ANI Technologies Pvt. Ltd. (Ola), Uber India Systems Pvt. Ltd., Rapido, and individual bike taxi operators, challenging the State Government’s refusal to permit registration of motorcycles as transport vehicles and grant of contract carriage permits for bike taxi services.

The Division Bench comprising Chief Justice Vibhu Bakhru and Justice C.M. Joshi examined whether motorcycles can legally be used as transport vehicles and whether the State Government could impose a blanket prohibition on bike taxi operations, and held that “a blanket prohibition on issuing contract carriage permits to motorcycles cannot be considered as a reasonable restriction within the meaning of Article 19(6) of the Constitution of India for several reasons”.

Background

The matter arose from the Karnataka Government’s refusal to permit registration of motorcycles as transport vehicles and to issue contract carriage permits for bike taxis, despite representations from aggregators and individual operators.

The petitioners contended that the Motor Vehicles Act, 1988, permits motorcycles to be registered as transport vehicles and used as contract carriages to carry passengers for hire or reward, and that the State’s refusal constituted an unconstitutional restriction on their right to carry on business.

The State Government defended its position by arguing that motorcycles are not motor cabs, that bike taxis raise safety and regulatory concerns, and that the State had not framed a policy permitting such operations.

Previously, a Single-Judge Bench had ordered all bike taxi services to be halted in Karnataka within six weeks.

Court’s Observation

The High Court undertook a detailed statutory analysis of the Motor Vehicles Act, 1988, and the Central Motor Vehicles Rules, 1989, to determine whether motorcycles fall within the category of transport vehicles and contract carriages.

The Court held that under Section 2(25), Section 2(27), Section 2(35), and Section 2(47) of the Motor Vehicles Act, a motorcycle used to carry a pillion passenger for hire or reward squarely falls within the definition of a “motorcab” and a “contract carriage.” The Bench noted that a motorcycle is capable of carrying a passenger and therefore qualifies as a public service vehicle when used for hire or reward.

The Court relied on the Central Government notification dated 05.11.2004, which expressly recognised motorcycles used for hire to carry one passenger on the pillion as transport vehicles. It further relied on the Ministry of Road Transport and Highways clarification dated 22.01.2024, which clarified that motorcycles fall within the scope of “contract carriage” under the Act.

The Bench rejected the State’s argument that the absence of the words “carrying passengers” in the category definitions under Rule 2 of the Central Motor Vehicles Rules implied exclusion of motorcycles from passenger transport. The Court held that the vehicle classification rules are based on construction and technical features, and not on whether the vehicle is used for hire or reward.

The Court further held that the Motor Vehicles Act is a Central legislation traceable to Entry 35 of List III, and State action cannot militate against the legislative intent of the Act. It was observed that the Act permits motorcycles to be registered as transport vehicles and used as contract carriages, and therefore, the State cannot impose a blanket prohibition inconsistent with the Central statute.

On the constitutional aspect, the Court held that a blanket ban on bike taxis cannot be justified as a reasonable restriction under Article 19(6). The Bench noted that while the State may regulate bike taxi operations in the interest of safety, traffic management, and public interest, an absolute prohibition, without framing a regulatory framework. is disproportionate and contrary to the scheme of the Motor Vehicles Act.

The Court also held that failure to frame subordinate legislation or guidelines cannot operate as a prohibition on carrying out a lawful business activity. The Bench clarified that the State is required to regulate and not prohibit an activity which is otherwise permitted by law.

“In view of the above, the motorcycle owners are at liberty to file applications for registration of their vehicles as transport vehicles (yellow board), …we direct the State Government to consider such applications for the registration of motorcycles as transport vehicles and for the grant of permits to operate them as contract carriages, …regional Transport Authority may also impose such conditions as it considers necessary, as attached to the said permits, in accordance with law and having regard to the provisions of Section 74(2) of the MV Act”, the Court Concluded.

Conclusion

Allowing the writ appeals in part, the Karnataka High Court set aside the order of the Single-Judge Bench and directed the concerned authorities to consider the pending applications of the aggregators and pass appropriate orders. The aggregators were granted the liberty to file fresh applications for licences.

Cause Title: ANI Technologies Pvt. Ltd. & Ors. v. State of Karnataka & Ors.

Appearances

Appellants: Senior Advocate K Arun Kumar, with Advocates Faisal Sherwani & Aditya Vikram

Respondents: Shashikiran Shetty, Advocate General; Mahesh A Chowdhary, Special Counsel; Advocates Rashi Singh, Adoorya Harish, Omkar Margad; Nayana Tara BG CGC & Others

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