Brief: Karnataka High Court held that OLA is not an intermediary portal for cab drivers to render their services. As per the POSH Act, it is an ‘employer’, and its Driver Subscribers are its ‘employees’. Therefore, there has been negligence on part of ANI technologies & IC for not conducting a POSH inquiry after receiving petitioner’s complaint.
Case Description
X v. Internal Complaints Committee & Ors.
Karnataka High Court (Bengaluru)
Case Type: Writ Petition
Case No.: WP 8127/2019
Date of Final Order: 30.09.2024
Bench: M.G. S Kamal, J.
Brief Facts:
- Petitioner had availed cab services from the respondent. During her ride, she was subjected to sexual harassment by the cab driver.
- Petitioner filed a complaint with the respondent and sought an Internal Committee (“IC”) inquiry into the matter under the POSH Act.
- Respondent denied the request stating that the cab driver was not their employee and, therefore, it cannot undertake an IC inquiry under POSH Act.
- Aggrieved, the petitioner filed a writ in High Court and sought court’s direction obliging the respondent to investigate her complaint.
Issues
- Whether the Internal Committee of intermediary platforms, like OLA, are responsible to deal with incidents of sexual harassment committed by drivers under their agreement?
- Whether intermediary platforms can be treated like employer and made responsible for actions of their drivers?
Laws Involved
- Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“POSH Act”)
- Aggregators Rules, 2016 (framed by State of Karnataka under the provisions of Motor Vehicles Act, 1988)
Court’s Previous Observations & Directions
- Court noted respondent’s apathy and deliberate ignorance of statutory duty.
- It opined that cab aggregators cannot compare itself to online marketplace like Amazon, since in the case of latter there is barely any scope of such allegations of sexual harassment.
- Moreover, the Bench noted that the State had framed rules to govern over issues related to cab aggregators and yet has not taken any stand.
- Hence, the Hon’ble Court listed the matter for further hearing and directed the respondent to submit the details of external counsel who advised them against taking petitioner’s complaint. Further, it ordered the respondent to submit details of its Internal Committee.
Court’s Analysis (on last hearing)
- With regards to maintainability of writ against private entities
- Writ petition can be filed against private entities if it is shown that such entity owes duty and obligations involving public law element and that such authority is accepted by public at large.
- POSH Act 2013 vests authority and obligations having public law element in person/body such as OLA and IC. Under section 4 of the Act, it obligates OLA as an employer of a workplace to constitute an Internal Committee, by an order of writing, and this duty is owed to public at large.
- Moreover, under Aggregators Rules 2016 (framed by State of Karnataka under the provisions of Motor Vehicles Act 1988) OLA is an ‘Aggregator’ and a ‘Licensee’. Therefore, it has an additional statutory duty to ensure safety of its passengers. It is duty bound to ensure proper use of vehicles and inform occurrence of any untoward incident to the Licensing Authority and to jurisdictional police.
- Based on these considerations, the Court noted that OLA undoubtedly has a duty and obligation which it owes to public at large.
- With regards to Subscription Agreements
- The Agreement between OLA and the Transport Provider and Driver subscriber, read with POSH Act’s definitions of “employer” and “employee” covers all possible means and modes of engaging a person as an employee at a workplace by an employer for furtherance of the latter’s business objectives.
- The language, without ambiguity, indicates the wide scope of the definition’s applicability. It can be adopted by for:
- Various recognised modes, means and methods of working arrangements,
- contractual or otherwise, for any duration,
- with or without compensation or on voluntary basis or otherwise directly or indirectly, with or without knowledge
with whomsoever he/she/they want for the purpose of their domestic, business, commercial or entrepreneurial activities, completely under the responsibility, control, supervision and management of the employer.
- The Court analysed the terms of the Subscription Agreement and observed that OLA has the whole and entire control of revenue generated from the business. The fixing of rate, payment, commission sharing, deduction, enhancement, changes in rate, payment of statutory dues, and dispute resolution resides solely at the discretion of OLA.
- The “Commercial term segment” in the agreement makes it apparent that the respondent does not merely act as an intermediary portal for transport service providers; rather, it plays an active role in the process of management, supervision and control of the business.
- Lastly, the incentive clause (regarding payment of incentive over and above charges payable) establish that OLA employs the transport service providers for its commercial activities.
- With regards to negligence of OLA and IC
- The Hon’ble bench noted that for implementing the provisions of POSH Act 2013, it is important to construe driver subscriber (transport service provider) as an ‘employee’ of OLA. If the definition of ‘employee’ fails to cover persons like driver subscriber— whose services are directly in connection with OLA’s commercial activity— then it will render the intent and object of POSH Act 2013 ineffective in private sector.
- Petitioner opted for the OLA ride, believing on OLA’s promise and assurance of safety and protection, and had encountered a horrendous incident. She registered her complaint with OLA for intervention of its IC. Such action is in furtherance of her fundamental, statutory and contractual right— a right she became entitled to upon her entering into an agreement with OLA when she downloaded the OLA cab app.
- The Court noted that despite petitioner’s repeated pleas and requests, OLA and IC displayed insensitivity and disregarded the seriousness of matter on their presumption that their driver-partners were not their employees.
- Furthermore, the Bench observed that OLA has been operating without renewal of its license— a mandatory requirement under Aggregator Rules 2016. Additionally, KSTA, before whom the alleged application of renewal was pending has also displayed inaction towards its statutory duties and obligations under the Motor Vehicles Act.
Conclusion
- OLA’s statutory duty under the Aggregator Rules 2016 obligated it ensure proper use of vehicle and report untoward incident to the License Authority and to the jurisdictional police. If this duty is not complied with, it can lead to revocation of licence. There is no material on record to show OLA’s compliance to the same.
- OLA discharges public duty involving public element. Therefore, OLA and its IC are amenable to Article 266 of Constitution.
- The Court held that OLA is not an ‘intermediary’ platform, and that Driver-Subscribers (transport service providers) are its employees.
- The Hon’ble Court found OLA and IC to be guilty of deliberate negligence and inaction and awarded compensation of Rs. 5,00,000/-, along with Rs. 50,000 as litigation cost, to the petitioner. Moreover, the Bench held them to be liable for prosecution under the POSH Act.
- Further, it clarified that the petitioner’s compensation is not for the hardships or mental agony that she faced; it is awarded as a recognition of breach and violation of the petitioner’s fundamental right caused due to inaction of OLA and IC.
- Lastly, the Bench directed IC of OLA to hold an inquiry into the complaint of the petitioner in accordance with POSH Act and complete the procedure expeditiously within 90 days.
- The Court did not pass any directions to Women and Child Development Union of India to ensure compliance of POSH laws by OLA and IC, as such directives have already been passed by the Apex Court in Aureliano Fernandis vs. State of Goa ((2024) 1 SCC 632) and Initiatives for Inclusion Foundation and Another vs. Union of India and Others ((2024)1 SCC 779).
By – Ayush Bardhan, Trainee Associate, The Legal Swan