X1 v. ANI Technologies Pvt. Ltd.

The Cyber Blog IndiaCase Summary

Liability of a cab aggregator in a case of sexual harassment by its contracted cab driver

X1 v. ANI Technologies Pvt. Ltd.
In the High Court of Karnataka
WP 8127/2019 (GM-RES)
Before Justice M.G.S. Kamal
Decided on September 30, 2024

Relevancy of the case: Liability of a cab aggregator in a case of sexual harassment by its contracted cab driver

Statutes and Provisions Involved

  • The Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013 (Section 9, 11) (“POSH Act”)
  • The Karnatak On-Demand Transportation Technology Aggregator Rules, 2016 (Rule 10(3))

Relevant Facts of the Case

  • The petitioner was sexually harassed while on a commute from her home to her workplace while using OLA. The driver watched pornography on his phone in a way that it was visible to the petitioner, and started masturbating. The petitioner asked the driver to stop multiple times, but he did not comply and dropped her off at her workplace.
  • Thereafter, she lodged a complaint against the driver with OLA Cabs. The platform informed her that they had blacklisted the driver, and he would undergo counselling and training. She was not satisfied with the outcome and asked for the details of the said counselling. Thereafter, she received a call from OLA Cabs requesting her to close the complaint. She then lodged a criminal complaint against the driver.
  • During the investigation, the police found that the driver registered with the company did not match the driver recognised by the petitioner. Thereafter, she issued a legal notice against the driver under the POSH Act. She discovered that the platform failed to notify the relevant authorities because the driver was an independent contractor, not an employee, and thus, they lacked jurisdiction.
  • She then filed a complaint with the Internal Complaints Committee (ICC) of OLA under Section 9 of the POSH Act. Her email was bounced as OLA did not allow complaints from non-employees. Thereafter, she sent an email to the CEO and Director – Legal of OLA, explaining the applicability of the POSH Act. The ICC stated that it did not have jurisdiction to take cognisance of the complaint as the drivers were independent contractors.
  • Being aggrieved by these events, the petitioner has approached the Court.

Prominent Arguments by the Counsels

  • The petitioner’s counsel argued that:
    • The present petition is maintainable because OLA does not have a limited clientele, but instead discharges public duties and functions. The company is performing a public function for over 125 million users across the country, including women and children. Therefore, aggregators like OLA are not permitted to function without obtaining a license from the State Authorities. Hence, relief under Article 226 shall be granted, and such relief cannot be denied based only on technicalities.
    • It is the public duty of the platform to provide safety and security in the transport. This is based on the fact that the word ‘OLA’ is synonymous with ‘taxi’ or ‘cab’. The POSH Act, along with fundamental rights under Articles 14, 15, 19, and 21, imposes a public duty on OLA. Abdication of this duty will be harmful to the public.
    • The counsel also submitted that the platform has complete control and authority, including termination if a driver violates their subscription agreement. Hence, a driver shall be considered an employee for the purpose of the POSH Act.
    • Moreover, there was inaction on the part of the ICC while discharging the statutory obligation.
  • The counsel, appearing for respondents ICC and OLA, contended that:
    • The ICC did not proceed with the case as the delinquent driver was neither an employee nor a contractor of OLA, but an imposter.
    • The petitioner has already set the criminal proceedings in motion, so the case is not maintainable.
    • The vehicles used by the drivers are not owned by OLA. Drivers provided by OLA are not employees within the meaning of the POSH Act. They are driver subscribers, and the terms of their contract do not create an employer-employee relationship.
    • Writ is not maintainable against OLA as it does not engage in any public function, nor is it an instrumentality of the state.
    • OLA is merely an intermediary as defined under the Information Technology Act, 2000.
    • OLA has not violated the 2016 Rules and has not caused or allowed a taxi to be used in any manner which is not authorised by permit. OLA is not jointly or severally liable.
    • The petitioner should take alternative remedies as mentioned in Rule 11 of the 2016 Rules.
  • The counsel, appearing for Karnataka State Transport Authority, submitted:
    • The Authority would frame rules to protect women and children availing transportation services through digital platforms.
    • The Authority has also issued a show cause notice for the incident and would take appropriate action as per the 2016 Rules.

Opinion of the Bench

  • Writ petitions against private entities are maintainable, given that they have a duty and obligation to the public involving public law elements and such authority is accepted by the public at large.
  • Drivers fall under the definition of “employee” under Section 2(g) of the POSH Act, 2013. Workers under significant company control are considered employees, even under unconventional arrangements.
  • Further, OLA had not complied with Rule 10(3) of the 2016 Rules as it failed to report the complaints to the State Transport Authority.

Final Decision

  • The court partly allowed the petition with the following directions:
    • The ICC and OLA must complete an enquiry within 90 days and submit the report to the District Officer. They should pay a sum of ₹5 lakh as compensation, along with an additional sum of ₹50,000/- towards litigation expenses to the petitioner.
    • The State Authority should proceed further with the guidelines within 90 days and notify the division bench before taking any further actions.
    • The Additional Commissioner for Transport and Secretary of the State Transport Authority shall personally pay a sum of ₹1 lakh, payable to the Karnataka Legal Services Authority.

Aali Jaiswal, an undergraduate student at Ram Manohar Lohia National Law University, Lucknow, Shreya Shree, a graduate of Chota Nagpur Law College, Ranchi, Shruti Dhakarwal, an undergraduate student at Jayoti Vidyapeeth Women’s University, and Stanzin Angmo, a graduate of Campus Law Centre, University of Delhi, worked on this case summary during their internship with The Cyber Blog India in January/February 2025.