Ban on the Operation of Bike Taxi is Bad in Law — An Analysis of the Maharashtra Government’s Decision

States like Maharashtra, Delhi and Karnataka jumped on the bandwagon banning the operation of bike taxis in their respective jurisdictions. Karnataka banned the operation of bike taxi way back in 2016. Thereafter, many State Governments joined the chain in banning the operation in their respective States. Karnataka and Delhi have suspended the operation of bike taxis in their respective territories. Maharashtra Government notified the ban on the operation of the bike taxi vide Notification dated 19-1-2023. As per the notification, the Government banned non-transport vehicles including two-wheelers, three-wheelers and four-wheelers for the ride-pooling and aggregations.¹ Subsequently, Rapido approached the department concerned to obtain bike taxi aggregator licence, which was denied basis reliance on the notification. Rapido moved the Bombay High Court challenging the notification after the department refused the permit to operate as a bike taxi aggregator.² However, to its utter disappointment, the High Court rejected the plea by the aggregator. Even the Supreme Court denied the relief it was seeking against the Maharashtra Government’s refusal of the licence. The Government informed the Supreme Court that it is in the process of framing the scheme to regulate the operation of such a class of vehicle. As of now, four States permit the operation of bike taxis, out of which, two States have given provisional licence.

The author finds the notification is in conflict with the law made by the Central Government and therefore is not tenable and must be rendered infructuous. The article has exposed the inconsistency between the State Government’s notification and the notification of the Central Government and pointed to some constitutional provisions and case laws allied thereto in showing such repugnancy renders the State law invalid and the law made by Parliament takes precedence over such law. The 7th Schedule³ classifies road transportation under the Concurrent List.

The order of the State Government is inconsistent with the Central law

The regulation of bike taxis is complex. Till now, there is no settled law to regulate the operation of these vehicles. Road transport falls within the Concurrent List of the Constitution; therefore, the Central and the State Governments possess the requisite authority to regulate the subject-matter. The primary issue sweeping over this situation is, when the Union allowed the operation and the registration of bike taxis through its numerous notifications, orders, and committee reports, can the State Government’s order to ban the operation take precedence over the permission of the operation by the Central Government? The issue is addressed in this article and the assertion is backed by some landmark precedents and constitutional provisions.

Sub-section 2(7)⁴ of the Motor Vehicles Act, 1988 defines contract carriage as reproduced hereunder:

“contract carriage” means a motor vehicle which carries a passenger or passengers for hire or reward and is engaged under a contract, whether expressed or implied, for the use of such vehicle as a whole for the carriage of passengers mentioned therein and entered into by a person with a holder of a permit in relation to such…

The contract carriage means a motor vehicle that carries a passenger for hire and reward and engaged under contract. And one of the parties to the contract must be the one who holds permit to drive such vehicle. The contract must be for the journey from one point to another or to pick up at one location and to drop at another location in return for some reward. Motor vehicle, as defined in the Act, excludes the two-wheeler vehicle from its ambit and therefore such vehicle cannot operate as a contract carriage. Irrespective of that, the Central Government was considering the regulation of the bike taxi for long. In effect, it came up with the notification in 2004 bringing motor bikes within the term transport thereby permitting the operation and registration of such vehicle as transport.⁵

The Committee constituted by Ministry of Road Transport and Highways (MoRTH) vouched for bike taxi permits like the one issued for city taxi and recommended guidelines to operate the same.⁶ The Committee did not let it go unrecognised that allowing bike taxi would facilitate last mile connectivity and offer convenient and affordable option to consumers. Furthermore, the Ministry of Road Transport has confirmed that the State Government can issue licence to the motorbike to operate as a taxi under Sections 72⁷ and 73⁸ of the Motor Vehicles Act, 1988. As held by the Supreme Court, non-issuance of separate licence for the operation bike taxis does not bar such classes of vehicles to operate.⁹ Presuming the Central Government would be apprised of such rulings, it considers the operation of bike taxi legal and allowed its operation on the Indian roads. Even if the word “can” suggest that the State Government has the discretion to allow the operation, the legislative intent, in light of the rulings of the Court, is to allow the operation and explicitly announce such operation to be legal.

The notification issued by the Government under the law is considered to be having the force of law. And the same is deemed to be legislated by the appropriate legislature, and therefore, the notification has the force of law as if made by the legislature itself.¹⁰

Article 254¹¹ of the Constitution provides:

254. (1) If any provision of a law made by the legislature of a State is repugnant to any provision of a law made by Parliament which Parliament is competent to enact, or to any provision of an existing law with respect to one of the matters enumerated in the Concurrent List, then, subject to the provisions of clause (2), the law made by Parliament, whether passed before or after the law made by the legislature of such State, or, as the case may be, the existing law, shall prevail and the law made by the legislature of the State shall, to the extent of the repugnancy, be void.

If provision made by the State Legislature is inconsistent with any law made by Parliament for any subject-matter falls under the Concurrent List, then the law made by Parliament would prevail and the parliamentary law overrides the law made the State Legislature. Considering the legality and the permit of the bike taxi recognised by the Central Government through the issuance of notifications, iterations made by the Ministry of Road Transport and Highways of India (MoRTH) and the committee reports of the governmental organisation, the notification issued by the Maharashtra Government banning the operation of the bike taxi is not tenuous and is invalid.

Bike taxi driver does not require a separate permit

In catena of rulings, the Supreme Court held that the motorbike driver does not require separate licence or permit to drive such vehicle for transportation or carriage services. In Mukund Dewangan v. Oriental Insurance Co. Ltd.¹², the Supreme Court held that the person holding the licence to drive two-wheelers vehicle does not require separate permit to use it for commercial purposes placing reliance on another judgment of the Supreme Court in New India Assurance Co. Ltd. v. Roshanben Rahemansha Fakir¹³.

In a similar vein, the Karnataka High Court in United India Insurance Co. Ltd. v. Beepasha¹⁴ held a person holding licence to drive light motor vehicle registered for private use would not require separate endorsement or licence to drive such vehicle for carrying passengers for hire and reward or for some other commercial purposes. Notably, there is no law which requires aggregators to get registered with authority concerned to operate. It would not be out of place to mention that in many States the aggregators are operating without any registration. In the individual capacity, it is firmly established that the bike taxi driver does not require separate permit to operate. The aggregator is servicing such drivers by linking them with customer and providing affiliation.

Conclusion

In conspectus of the above judgments and the notification issued by the Central Government, the notification issued by the Maharashtra Government in banning the operation of bike taxi is inconsistent and not tenable. The benefits of the operation of such taxis must push the governmental authorities to promote plying of bike taxis on the road. Even Niti Aayog in its report on shared mobility refers to motorbike carrier for carrying passenger for hire and reward as a low-cost option for first and last mile connectivity and lists a number of models, mainly docked, dockless and peer-to-peer basis bike sharing.