Motor Vehicles Act | Aggregators License -States May Keep In Mind Centre's Guidelines While Framing Rules : Supreme Court

The Supreme Court of India has held that when the State Government formulates rules in pursuance of its power under Section 96 of the Motor Vehicles Act, it may also bear in mind the Guidelines which have been framed by the Union Government in 2020 (Motor Vehicle Aggregators Guidelines, 2020). The observation by the court came in the order passed by Apex Court in Rapido's plea against the Maharashtra government's refusal to grant two-wheeler bike taxi aggregator license to the company. The order was passed by a bench comprising Chief Justice DY Chandrachud, Justice PS Narasimha, and Justice JB Pardiwala. Through the order, the court had declined to entertain Rapido's plea and asked to pursue alternative remedy before the Bombay High Court.

Through its order, the court held that the State of Maharashtra may keep in mind Centre's guidelines while making rules on aggregator license. For context, Chapter V of the Indian Motor Vehicles Act provides for provisions to control transports. Section 93(1) of the Act deals with the issuance of licenses to aggregators. The first proviso to this section stipulates that while issuing a license, the State Government may follow guidelines issued by the Central Government.

Thus, the court in its order stated–

"When the State Government formulates rules in pursuance of its power under Section 96, it may also bear in mind the Guidelines which have been framed by the Union Government in 2020."

However, highlighting that the ultimate decision would be of the State government, the court added–

"The Guidelines issued by the Central Government in 2020 are only of persuasive value and are not mandatory. The ultimate decision on granting a license and formulating rules lies with the State Government, who may consider the Guidelines while making their decision."

Case Title: Roppen Transportation Services Pvt Ltd v. Union of India & Ors

Citation : 2023 LiveLaw (SC) 100

For Petitioner(s) Mr. Mukul Rohatgi, Sr. Adv. Mr. D.S. Naidu, Sr. Adv. Ms. Fereshte Sethna, Adv. Ms. Anuradha Dutt, Adv. Ms. Suman Yadav, Adv. Mr. Chaitanya Kaushik, Adv. Mr. Abhishek Tilak, Adv. Ms. Praprati Kedia, Adv. Ms. Shivani Sanghavi, Adv. Mr. Suyash Bhave, Adv. Mr. Mohit Tiwari, Adv. Mr. Ashish Mishra, Adv. Mr. Shubham Airi, Adv. Mr. Aman Dutta, Adv. Ms. B. Vijayalakshmi Menon, AOR Mr. Gaurav Agrawal, Adv. Ms. Akriti Chaubey, AOR

For Respondent(s) Mr. Tushar Mehta, SG Mr. Siddharth Dharmadhikari, Adv. Mr. Aaditya Aniruddha Pande, AOR Mr. Shrirang B. Varma, Adv. Mr. Abhikalp Pratap Singh, Adv. Mr. Bharat Bagla, Adv. Ms. Kirti Dadheech, Adv. Mr. Shantnu Sharma, Adv. Mr. Bhuvan Kapur, Adv. Mr. Rohit Khare, Adv. Ms. Shreya Saxena, Adv. Ms. Indira Jaising, Sr. Adv. Ms. Gayatri Singh, Sr. Adv. Ms. Nupur Kumar, AOR Mr. Paras Nath Singh, Adv. Ms. Ronita Bhattacharya Bector, Adv. Mr. Rohin Bhatt, Adv. Mr. Anand Dilip Landge, AOR Mr. Akshay Deshmykh, Adv. Mr. Avineesh Jha, Adv

Motor Vehicles Act 1988- Aggregators License- The Guidelines issued by the Central Government in 2020 are only of persuasive value and are not mandatory. The ultimate decision on granting a license and formulating rules lies with the State Government, who may consider the Guidelines while making their decision- When the State Government formulates rules in pursuance of its power under Section 96, it may also bear in mind the Guidelines which have been framed by the Union Government in 2020 - Para 8, 9

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