Business To Ply Bike Taxis Protected Under Article 19(1)(g), State Can Impose Reasonable Restrictions But No Blanket-Ban: Karnataka High Court
The Karnataka High Court on Friday (January 23) upheld taxi aggregators' right to business of plying bike taxis observing that it is a legitimate business protected under Article 19(1)(g) of the Constitution, adding that a blanket-ban by the State is not a reasonable restriction under Article 19(6).In doing so the court set aside a single judge's order which held that bike taxis cannot operate...
The Karnataka High Court on Friday (January 23) upheld taxi aggregators' right to business of plying bike taxis observing that it is a legitimate business protected under Article 19(1)(g) of the Constitution, adding that a blanket-ban by the State is not a reasonable restriction under Article 19(6).
In doing so the court set aside a single judge's order which held that bike taxis cannot operate in the State unless the government issues relevant guidelines and rules under the Motor Vehicles Act.
Against this taxi aggregators like Uber, OLA, Rapido, motorcycle owners and welfare associations had moved the division bench in appeal.
A division bench of Chief Justice Vibhu Bakhru and Justice CM Joshi in its 111 page order held:
"...it cannot be disputed that the business of plying taxis is a legitimate business, and the right to engage in such activity is protected under Article 19(1)(g) of the Constitution of India. The said business is not inherently dangerous, illegal or immoral...However, engaging in such business maybe subject to reasonable restriction under Article 19(6) of the Constitution of India, which expressly provides that Article 19(1)(g) does not prevent the State from making any law imposing reasonable restrictions in the interest of the general public...In our view, 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".
State can impose restrictions but no blanket-ban
The court said that the MV Act, in its pith and substance, relates to entry 35, List III Seventh Schedule which contemplates the subject of “mechanically propelled vehicles, including the principles on which taxes on such vehicles are to be levied.”
"...it is not open for the State Government to enact any legislation which is repugnant to the MV Act. The provisions of the MV Act occupy the legislative field which is traceable to entry 35 of List III of the Seventh Schedule to the Constitution...MV Act expressly contemplates the inclusion of motorcycles as transport vehicles. Plainly, it would not be open for the State Government of Karnataka to exclude motorcycles from registration as transport vehicles. The powers that can be exercised by the State Government are necessarily confined to those as provided under the MV Act, as the legislative field is occupied by the MV Act...blanket ban on the use of motorcycles as bike taxis is contrary to the scheme and provisions of the MV Act, permits inclusion of motorcycles as transport vehicles, contract carriages and public service vehicles."
Referring to Section 67 MV Act which pertains to power of the State to control road transport, the bench said while the government has the power to issue directions but the power cannot be "unbridled or unguided". It has to be exercised having regard to "passengers' convenience, economically competitive fares, prevention of overcrowding and road safety".
It further noted that the Government has the power to make a scheme for the transportation of goods and passengers however, the scheme has to be guided by factors such as last mile connectivity, rural transport, reducing traffic congestion, improving urban transport, safety of road users, the increase in the accessibility and mobility of people among others.
The bench said that the government has the power to even modify a permit however it "would not be permissible for the State Government to issue a blanket ban prohibiting grant of permits to a class of transport vehicles".
"Once it is accepted that the citizen has freedom to engage in legitimate trade and commerce and practice any vocation, the same cannot be restricted except by a valid law, which must satisfy the test of reasonableness and the condition of being in the interest of the general public, on the anvil of Article 19(6) of the Constitution of India. The scheme of the MV Act must be construed bearing the aforesaid in mind. Thus, while the Regional Transport Authority has the power to refuse a grant of permit under Section 74(1) of the MV Act, the said power must not ordinarily be exercised. Further, such refusal must be for reasons that must be communicated to the applicant in writing. A meaningful reading of Section 74(1) of the would indicate that it does not contemplate a blanket ban on the grant of permits to a class of transport vehicles".
The court however said that as per Section 74 of MV Act, Regional Transport Authority is fully empowered to impose the conditions.
The bench further said that there is no statutory rule, instrument or notification that prohibits the registration of motorcycles as transport vehicles or the issuance of contract carriage permits for motorcycles.
"The State contends that it is a policy decision. However, absent any set out policy and the considerations for the same, there are no grounds to assume that the same would constitute a reasonable restriction in the interest of the general public...In this case, there is a complete ban on providing bike taxi service. Thus, the necessity for proscribing the carrying on of such service in the interest of the general public requires substantiation by credible material. Further, if any adverse effects of bike taxi services are identified, it is also necessary to establish that a measure less than a complete ban would not address them. Quite apart from the fact that there is no informed decision to prohibit bike taxi services, we note that the State Government has recognised the importance of providing such a service. The opening paragraphs of the e-bike taxi scheme noted the requirement to provide such a service. The contention that several areas in various cities are congested and thus not served by public transport has not been denied. The contention that there is an acute need for last-mile connectivity remains uncontroverted. The expert committee report of 2019 also recognised the same, but recommended developing infrastructure for connectivity rather than permitting bike-taxis".
It further noted that several other States– such as Haryana, Punjab, Rajasthan, Uttar Pradesh, West Bengal, and Mizoram–have issued permits for bike taxis, recognising that denying such permits would offend fundamental rights.
Motorcycle is a transport vehicle
The court noted that while motorcycle had been defined under the MV Act, taxi wasn't defined. It however said that taxi connotes a transport vehicle used as a 'contract carriage' within the meaning of 2(7) of the MV Act. The court also noted that "contract carriage" also uses terms such as 'maxicab' and a 'motorcab'.
"It is apparent from the definition of the term “contract carriage” that it refers to a motor vehicle, which carries a passenger or passengers for hire or reward under a contract (express or implied) that is entered into by a person who holds a permit in relation to such a vehicle. The said vehicle includes a maxicab and/or a motorcab. The term maxicab, as defined under Section 2(22) of the MV Act, is a vehicle constructed or adapted to carry more than six passengers. The term 'motorcab' as defined under Section 2(25) means a motor vehicle constructed or adapted to carry not more than six passengers. Thus, the expressions 'maxicab' and 'motorcab' cover vehicles with the entire range of capacities for carrying passengers...There is no cavil that the motorcycle is constructed to carry two passengers ‒ a rider and a pillion. If the rider is excluded, a motorcycle can carry one passenger (pillion). Thus, a motorcycle used for hire or reward falls within the meaning of a motorcab as defined under Section 2(25) of the MV Act. It follows that a "motorcycle" clearly falls within the definition of 'contract carriage' if the same is used by a person holding a permit in relation to a motorcycle for carrying a passenger for hire or reward under a contract, whether express or implied".
It said that transport vehicle is defined under Section 47(2) which means a public service vehicle, a goods carriage, an educational institution bus or a private service vehicle.
It said that the term 'public service vehicle' defined in Section 2(35) refers to a motor vehicle that is used or adapted to be used for “the carriage of passengers for hire or reward". However the definition does not refer to the minimum number of passengers that the vehicle can carry and the definition is an inclusive one, which would include 'maxicabs' and 'motorcabs'.
On the contention of State that motorcycle falls outside the definition of contract carriage as it is not a motorcab, the court said that motorcycle is also used for carrying a passenger and it has the capacity to carry two persons, including the rider.
Referring to the Rule 2k Central Motor Vehicles Rules the court said that the expression "for carrying passengers" in respect of three wheelers and four wheelers is used for the purpose of defining the seating capacity of those categories of vehicles, which are used for the carriage of passengers as against the carriage of goods.
"Thus, the contention that the words “carrying passengers” are used for describing different categories of vehicles, differentiating whether the vehicle can be used for carrying passengers for hire or reward, is ex facie erroneous. The question of whether the vehicle can be used for hire or reward is not a relevant factor in categorising vehicles under Rule 2 of the CMV Rules. The various clauses of Rule 2 of the CMV Rules, as referred to above, merely categorise vehicles by capacity and whether they are constructed for carrying passengers or goods. There is no dispute that the motorcycle is used for carrying passengers. The question of whether it can be used for hire or reward is not a feature of the construction of the motor vehicle and thus not relevant to its classification".
It also referred to a Central Government notification of 2004 under the MV Act and noted that it clearly referred to a motorcycle used for hire to carry one passenger on pillion.
"Thus, the use of a motorcycle as a means of transport for carrying one passenger on the pillion is clearly contemplated. In view of the above, the contention that a motorcycle cannot be classified as a transport vehicle, is unmerited," it said.
The court while allowing the appeal issued directions to motorcycle owners and taxi aggregators and the concerned authorities.
Case title: ANI TECHNOLOGIES PRIVATE LIMITED v/s STATE OF KARNATAKA AND BATCH
WRIT APPEAL NO. 906 OF 2025 and connected appeals