Sabyasachi Bhattacharyya, J
1. 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 Actâ€) 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.â€
(1) No person shall engage himselfâ€
……………….
(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:
…………..â€
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 in Section 24 of the Bengal
General Clauses Act, 1899, it is submitted. Thereafter, either on or from the date of publication in the Official Gazette or from a later date, the Rules
can come into force.
12. It is admitted by Uber that the impugned guidelines were ultimately published in the Official Gazette on June 15, 2022, but without adhering to the
mechanism prescribed by law.
13. It is also argued that in case of an earlier Notification issued by the State Government for licensing and the regulation of the conduct of the
ODTTAs, issued before the amendment to Section 93 by the 2019 amendment, which is the subject matter of challenge in another pending writ
petition bearing WP No.23880(W) of 2016, the State Government had followed the procedure prescribed under Section 212 of the Act, including
previous publication in the Official Gazette. Such procedure, however, has been flouted in the present case.
14. Learned counsel place reliance on Gulf Goans Hotels Company Limited and another Vs. Union of India and others [(2014) 10 SCC 673], in
support of the proposition that if the statute prescribes a mode of publication, such mode has to be mandatorily followed.
15. By placing reliance on Vasu Dev Singh and others Vs. Union of India and others [(2006) 12 SCC 753], it is argued that delegated legislation has to
be framed strictly in terms of and not in violation of any provision of the enabling act. Several provisions of the impugned guidelines, it is argued, are
excessively harsh, oppressive, onerous, unreasonable and discriminatory.
16. It is submitted that the ODTTA drivers would be required as per the guidelines to undergo various additional onerous tests, training programmes
and satisfy various other requirements which other cab drivers rendering same service would not have to undergo.
17. For the purpose of grant of interim orders, the petitioners submit that they will not go into the nitty-gritties of such provisions.
18. The impugned guidelines, it is submitted, are unworkable, such as putting the onus on aggregators to verify that all pending vehicle-related cases
are disposed of within a period of two months of issuance of the cases and also requiring the aggregators to share confidential data with other
aggregators and uploading confidential algorithms on their websites. It is submitted that the impugned guidelines are, therefore, unreasonable and
impracticable. Being delegated legislation, even if the rules had been validly framed, the impugned guidelines could not enjoy the same degree of
immunity as a statute and the prejudicial effect of the guidelines on the aggregators carrying on business is to be seen, it is contended. In this context,
the learned Senior Advocates rely on State of Kerala Vs. Unni and another [(2007) 2 SCC 365]. The decisions passed by the Bombay High Court and
the Supreme Court in the cases of Savina R. Crasto Vs. Union of India and others and of Uber India Systems Private Limited and another Vs. Union
of India and others are interlocutory and do not contain any final pronouncement of law, it is argued. Moreover, status quo was granted by the
Supreme Court, it is submitted, which permits the petitioners to enjoy licence without having to comply with the 2020 Guidelines. Learned counsel also
places reliance on Tulsipur Sugar Co. Ltd. Vs. The Notified Area Committee, Tulsipur [(1980) 2 SCC 295] for the proposition that Rules can only be
framed through previous publication. It is argued that the present case is one of delegated legislation and not conditional legislation since the power to
make Rules has not been delegated to the State Government.
19. The provisions of the Act, it is submitted, do not confer such power of issuing declaration without resorting to delegated legislation in compliance
with Section 212 of the Act, for which, the learned Senior Advocate appearing for Uber cites Vasu Dev Singh (supra). It is submitted that a
Karnataka High Court judgment relied upon by the State is of no consequence, since the said High Court, in appeal, had directed that no coercive
action for violation of the Rules framed in Karnataka should be taken.
20. Although the petitioners do not oppose being regulated by Rules, but such regulation, it is argued, has to be in compliance with the procedure and
requirements as laid down in the Act.
21. It is contended on behalf of the petitioners that the Central Government Rules differ substantially from entries of the impugned Guidelines of the
State of West Bengal.
22. There was no publication of the draft proposed Rules inviting objections from all stakeholders, fixing of dates for hearing of objections and/or
revision in the draft proposed Rules after considering objections, in the present case, it is argued. It is reiterated that a basic principle of law lying
settled is that if the manner of doing a particular Act is prescribed under any statute, the Act must be done in that manner or not at all.
23. It is submitted that the Bombay High Court and the Supreme Court judgments cited by the State are circumscribed by the status quo granted by
the Supreme Court. The said matters are still at large and in a fluid stage pending final adjudication.
24. The drivers’ stand is supported in Tulsipur Sugar Co. (supra) insofar as the Rules can be framed only through the ‘previous publication’
route as was provided in Section 39(3) of the UP Town Area Act, 1914 in that case.
25. The learned Senior Advocate for the drivers of Uber argues that in The Municipal Corporation, Bhopal Vs. Misbahul Hasan and others [(1972) 1
SCC 696], the Supreme Court stipulated that the legislative procedure envisaged by Section 234 was in consonance with notions of justice and fair
play, as it would enable persons likely to be affected to be informed so that they may take steps open to them to have the wisdom of a proposal duly
debated and considered before it becomes law. Such mandatory process, it is argued, has not been complied with in the present case.
26. Learned Advocate General appearing for the State of West Bengal controverts the submissions of the petitioners and argues that the requirement
of a licence under Section 93(1) of the 1988 Act is mandatory for a person to operate as an aggregator, subject to conditions laid down by the State
Government. Even if no Rules have been framed by the State following the procedure prescribed under Section 212 of the Act, the aggregators
cannot claim to operate unregulated.
27. The learned Advocate General argues that the first proviso to Section 93(1) provides that, while issuing licence to an aggregator, the State
Government may follow such guidelines as may be issued by the Central Government.
28. In the present case, the Central Government has already undertaken the legislative exercise of framing the Central Government Guidelines dated
November 27, 2020, which have been adopted by the State through the impugned notification. It is an example of conditional legislation and not a
delegated legislation, it is contended.
29. The State Government has merely followed, adopted and brought into force the Central guidelines in the State of West Bengal on March 03, 2022
instead of creating new ones, in terms of the first proviso to Section 93. Hence, the principles contemplated in Tulsipur Sugar Co. (supra) and Vasu
Dev Singh (supra) have been duly complied with, since the State Government derives its power to adopt the Central Guidelines under Section 93, first
proviso itself. As such, Section 212 need not be complied with.
30. The Central Government, it is argued, had undertaken a consultation process prior to issuing the guidelines dated November 27, 2020, as would be
evident from the meeting held by the Union of India on March 05, 2021, where Uber had also participated (pages 141-144 of the writ petition).
31. The State of West Bengal first issued directives regulating operational activities of ODTTAs on November 30, 2021. Uber’s letter to the State
of West Bengal dated March 10, 2022 seeking clarifications on the impugned notification (also annexed to the writ petition) shows Uber’s
intensions to comply with the impugned notification. There was no challenge to the impugned notification in Uber’s e-mail in such context.
32. As admitted in the writ petition, on April 06, 2022 there was a meeting between the State of West Bengal and Uber to discuss concerns regarding
the impugned notification. The Bombay High Court had also held that where no Rules are framed by a State, the Central Guidelines will have to be
followed, because a licence is mandatory. Instead of restraining Uber from operating in the State of Maharashtra, the Bombay High Court ruled in
Savina R. Crasto Vs. Union of India and others [(2022) SCC OnLine Bom 490] that Uber would have to obtain a licence by complying with the
Central Guidelines.
33. The status quo order passed by the Supreme Court on April 21, 2022 would mean that no new steps must be taken. The order of the Bombay
High Court dated March 07, 2022 in Savina R. Crasto (supra) has not been stayed, it is argued.
34. It is submitted by the learned Advocate General that the impugned Guidelines are not impossible to comply with, which is evident from the fact
that the State of West Bengal has already received applications from, and issued provisional licenses to, other aggregators including the Ola cabs,
which is another major competitor of Uber in the market. Hence, other market competitors are willing to follow such guidelines.
35. It is further argued that the impugned notification is for the benefit and safety of the consumers of the aggregators, including Uber. Clauses such
as Refresher Training Programmes, Remedial Training Programmes, Surge Pricing, Driver and Vehicle Compliances, Aggregator App Compliances,
Safety Compliances, Ride Pooling and Non-discrimination are all for the benefit of the consumers.
36. As held in Satish N. Vs. State of Karnataka, reported at ILR 2017 Kar 735, yellow taxies and ODTTAs do not form a homogeneous class.
37. Learned Advocate General further distinguishes the judgments cited by the petitioners by reiterating that this is a case of conditional, and not
delegated, legislation and that merely because the impugned notification is difficult to implement, does not make it unreasonable and arbitrary.
38. Hence, it is argued on behalf of the State that the interim prayers made by the petitioners be refused.
39. Upon consideration of the submissions of parties, it transpires from the definition of “aggregator†in Section 2(1A) of the 1988 Act (as
amended), that the Uber, also an aggregator, is a “digital intermediary†or “market place†facilitating the communication between the
passengers and drivers for the purpose of transportation.
40. The provisions of Section 93(1), if scrutinized closely, indicate that the same is couched in a negative language, thus making the issuance of license
mandatory for operation by the agents, canvassers and aggregators.
41. It may be noted that, whereas sub-section (1) proper stipulates that both a licence from the designated authority and conditions prescribed by the
State Government are mandatory for operation by the aggregators, the first proviso stresses that “while issuing the licence to an aggregatorâ€, the
State Government may follow the Central Government guidelines.
42. The concepts of “conditions†and “guidelines†as appearing in the above provision are clearly distinguishable in the light of the use of the
said terms in Section 93.
43. Whereas the conditions are prescribed by the Central Government, guidelines issued by the Central Government and not “prescribed†as per
Rules, as envisaged in Section 212.
44. It is relevant to note that obtaining a licence and being subjected to conditions prescribed by the State Government are two distinct, mandatory
components of the prerequisite for operating as an aggregator.
45. On the other hand, the State Government, as per the first proviso, in its discretion, may follow the guidelines issued by the Central Government
“while issuing the licence to an aggregatorâ€.
46. Hence, the stages of adhering to the guidelines issued by the Central Government and being subjected to the prescribed conditions of the State
Government are entirely different.
47. In a particular case, it may very well be that the aggregator has to obtain a licence, in addition to being subjected to conditions prescribed under
Section 212 of the Act by the State Government. Additionally, the aggregator may have to follow the guidelines of the Central Government, if so
required by the State Government, at the point of issuing the licence itself.
48. By way of illustration, it may happen that an aggregator has to follow the guidelines issued by the Central Government, as followed by the State
Government at the juncture of obtaining the licence itself and, in addition, be subject to the conditions which are prescribed as per Section 212 read
with Section 23 of the General Clauses Act, by the State Government.
49. The petitioners in the present case have sought to mix up and put on the same footing the concepts of the prescribed “conditions†as
contemplated in sub-section (1) proper of Section 93 and the “guidelines†of the Central Government, which may be merely “followedâ€
without being published in the form of Rules as per the prescribed procedure.
50. For abundant caution, however, admittedly, the State Government in the present case has published the impugned notification subsequently on June
15, 2022 in the Official Gazette.
51. Hence, the State Government has gone one step further than merely following the guidelines issued by the Central Government. In case of the
earlier conditions, referred to by Uber itself in its written notes of arguments, the prior publication in the Gazette was in terms of Section 93(1) proper,
and the conditions were “prescribed†by the State Government by way of Rules.
52. However, in contradistinction with the same, the guidelines impugned in the present writ petitions merely “follow†the Central Government
Guidelines which were, in turn, published only after following due process of law and consultation with all stakeholders.
53. In fact, Uber did not initially challenge the veracity or legality of the impugned notification when it sought clarification for the purpose of complying
with the guidelines stipulated therein.
54. The arguments as regards the guidelines being unworkable do not, ipso facto, render them invalid or vitiated in law. Apart from the fact that the
impugned guidelines substantially follow the Central Government guidelines, the minor deviations with the Central Government guidelines do not
consist of any major impediment in functionality.
55. That apart, as rightly argued by the State, the guidelines are entirely for the benefit and safety of the consumers of the aggregators. Procedures
like Refresher Training Programmes, Remedial Training of Drivers, Surge Pricing issues, Safety and Driver Compliances, non-discrimination, etc., are
entirely necessary, particularly in the context of recent instances of untoward incidents of harassment of passengers at the behest of drivers affiliated
to aggregators.
56. The concept of ODTTA (Aggregators) is that of a digital market place or facilitator, which means that the passenger depends entirely on the
recommendation of the aggregators with regard to the credibility and credentials of the concerned driver allotted to the said passenger.
57. The entire process is monitored and payment is channelized via the “Uber†application, which casts responsibility on the aggregator to ensure
that the passengers are insulated from unnecessary risks. It is common knowledge that unregulated surge pricing has become rampant in recent times,
just as refusals and cancellations by drivers, which largely afflict the ODTTA cabs.
58. In any event, the relevant guidelines do not form an impossible code of conduct, which would render the same impracticable.
59. Hence, on a prima facie consideration of the available materials and the relevant legal provisions, I find no discrepancy or illegality whatsoever in
the issuance of the impugned guidelines by way of the Notification dated March 3, 2022, subsequently published in the Official Gazette on June 15,
2022.
60. Hence, there is no scope of granting any of the interim reliefs, including stay of operation of the impugned Guidelines, as prayed for by the
petitioners in both the writ petitions.
61. Hence, the interim prayers made in connection with the writ petitions are hereby refused.
62. The respondents in the writ petitions shall file their affidavit-in-opposition by November 11, 2022. Affidavits-in-reply, if any, shall be filed within
November 25, 2022, when the matter shall next be enlisted for final hearing before the appropriate bench.
