The Supreme Court on Monday directed Uber India Systems Pvt. to apply for an aggregator license in Maharashtra, stating that it is a statutory requirement under the Motor Vehicles Act, 1988.
The regulatory role of state governments requires quick action in the form of policy decisions so that unnecessary litigation can be avoided, a three-judge bench of the apex court noted.
The case reached the top court after the Bombay High Court directed Uber to comply with the Motor Vehicle Aggregator Guidelines of 2020 issued by the central government.
According to the Motor Vehicles (Amendment) Act and Motor Vehicles Aggregators Guidelines, 2020, cab aggregators require a licence to ply. An aggregator is a digital intermediary that allows a passenger to connect with a driver for transportation.
Uber had approached the apex court seeking clarifications on the licensing provisions under the Act since Maharashtra has yet to notify the final rules.
Arguing for the government, advocate Siddharth Dharmadhikari said that as per the provisions of the Act, any person willing to carry on operations as an aggregator has been mandated to obtain a license and therefore, cannot function without it.
Dhruv Mehta, counsel for Uber, said that although provisional licences have been issued to them for 30 days, some of the requirements are so stringent that they cannot be complied with. This is because the rules in the state have not yet been finalised and aggregators are being required to comply with the central guidelines instead.
The CJI, DY Chandrachud, while pronouncing the order, said that an aggregator cannot work in the absence of a licence. That is a statutory requirement. Meanwhile, Uber can submit a representation to the state government showing the unworkability of some of the conditions until the rules for aggregators are finalised by the state, the bench said.
The apex court said that this is a matter of policy that pertains to the jurisdiction of the state government.
The state government, as a regulator, must take an expeditious decision on the formulation of an appropriate policy. The indecision of the state government unnecessarily leads to litigation and uncertainty in the business operations of aggregators, which is best avoided, the Supreme Court held.
Accordingly, Uber has been directed to apply for a licence before March 6, 2023.