The Supreme Court refused to entertain Rapido’s plea against the Maharashtra Government, whereby the government had refused to grant two-wheeler bike taxi aggregator license to the company.

The Court granted liberty to the company to approach the Bombay High Court under Article 226 of the Constitution, against the notification dated January 19, 2023 of the State Government whereby they had prohibited the use of non-transport vehicles as transport vehicles for aggregation and ride pooling.

The Bench of Chief Justice DY Chandrachud, Justice PS Narasimha and Justice JB Pardiwala observed that “There was no challenge before the High Court to the notification dated 19 January 2023. We are not inclined to entertain the challenge to the notification dated 19 January 2023 of the Home Department of the State Government in proceedings under Article 32 of the Constitution. The petitioners would be at liberty to pursue the alternate remedy under Article 226 of the Constitution before the High Court. The correctness of the order of the RTO dated 21 December 2022 stands subsumed by the decision which has been taken by the High Court to entrust the examination of the entire issue by the Committee.”

Senior Advocate Mukul Rohatgi appeared for the petitioners and Solicitor General Tushar Mehta appeared for the State of Maharashtra.

In this case, the first petitioner was an aggregator within the amended provisions of the statute and had claimed to provide the services of an aggregator for two-wheeler vehicles across the State of Maharashtra. The petitioner had made an application for the grant of a license, which was rejected by the Road Transport Office at Pune (RTO) on the ground that it did not comply with the various terms and conditions of the Guidelines of 2020.

Against the decision of RTO, the petitioner had approached the High Court which rejected the same and observed that the Guidelines 2020 left a certain degree of latitude to state government and that there was no policy of the State government at present based on which the petitioner would have unrestricted right to obtain a license.

The Bombay High Court further noted that the issue of whether non-transport vehicles ought to be permitted to be used as transport vehicles including for aggregation and ride pooling required consideration and for the same, a committee was constituted comprising of IAS and government officers to look into the same. Thereafter the State Government had come up with the notification of January 19, 2023 whereby the use of non-transport vehicles for the purpose of aggregation was prohibited.

The Apex Court noted that “The effect of the amended provision is that no person can act as an aggregator without a licence. The licence is to be “from such authority and subject to such conditions as may be prescribed by the State Government”. In terms of the first proviso to Section 93(1), the State Government, while issuing a licence to an aggregator, “may follow” the guidelines issued by the Central Government.”

It was also noted by the Court that following the amendment of the provisions of the Act in 2019, the Union Government in the Ministry of Road Transport and Highways had formulated the Motor Vehicle Aggregator Guidelines 2020 which provided that 'while issuing a license to an aggregator, the State Government may follow such guidelines as may be issued by the Central Government' and further noted that "The Guidelines commence with a prefatory statement that they have been issued “as guiding framework for State Government for issuance of licenses to transport aggregators and for the purposes of regulating the business conducted by such aggregators”.

The Court also noted that the State government had not formulated any rules in relation to aggregators for the purpose of enforcing the provisions of Chapter V, more particularly, Section 93(1). “it is evident that while these Guidelines have to be borne in mind, the ultimate decision is to be arrived at by the State Government.” said the Court.

Subsequently, the Court said that "The correctness of the order of the RTO rejecting the application for a licence on 21 December 2022 is now overshadowed by the subsequent decision of the State Government arising out of its notification dated 19 January 2023. The State Government has categorically taken a decision that the issue as to whether non-transport vehicles should be permitted to be used as transport vehicles including for aggregation and ride pooling merits detailed consideration. Pending the decision of the Committee, the State Government has taken a decision to prohibit the use of non-transport vehicles for the purpose of aggregation."

Accordingly, the petition was disposed of.

Cause Title- Roppen Transportation Services Pvt Ltd v. Union of India & Ors

Click here to read/download the Judgment