
By Anuradha Gandhi and Isha Sharma
Introduction:
The Karnataka High Court has delivered a landmark judgment stating that an OLA driver-subscriber should be considered as an ‘employee’ under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 also known as the POSH Act,
The ruling came from Hon’ble Mr. Justice MGS Kamal, who dismissed Ola’s contentions that it merely acted as an intermediary and partly allowed the writ petition filed by the woman.
A writ petition was filed by the petitioner, who is a victim of sexual harassment at the hands of the driver of OLA Taxi, under Article 226 and 227 of the Constitution of India before the Hon’ble High Court of Karnataka, praying to direct the Internal Committee (IC) of ANI Technologies Private Limited (OLA) to inquire into her complaint filed on September 30, 2018 in accordance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 also known as the POSH Act on the purported premise of it lacking jurisdiction to enquire into the complaint, for the said driver not being the ‘employee’ of OLA.
Brief Facts:
The petitioner filed a complaint against the driver under the POSH Act alleging that she was subject to sexual harassment during a cab ride in 2018. She alleged that the driver engaged in inappropriate behavior, including staring at her through the mirror and watching a pornographic video on his phone in a manner that it was visible to her. As a result thereof, upon reaching her office, she lodged a complaint against the driver on the OLA platform. [1]
Upon receipt of the complaint, the OLA representative informed her that the accused driver had been ‘blacklisted’ and would be sent for counselling and training. Not being satisfied with the response, the petitioner made a request to know the details of the purported counselling and training that would be imparted to the driver and sought further action but in turn the OLA attempted to persuade the petitioner not to take any further action by stating that the driver would be compelled to attend the training and counselling course apart from repeatedly requesting the petitioner to close the complaint.
The petitioner, in such circumstances, was constrained to initiate criminal action against the OLA driver and accordingly filed a complaint dated August 25, 2018 before the Cubbon Park Police Station, Bengaluru.
Thereafter, the petitioner issued a legal notice dated September 21, 2018 to OLA calling upon it to proceed against the driver under the POSH Act. Upon receipt of the complaint, OLA stated that the drivers were not its ‘employees’ but were the ‘independent contractors’, hence, the IC does not have the jurisdiction to initiate any inquiry under the POSH Act.
Therefore, being highly aggrieved by the same, the petitioner approached the Hon’ble High Court of Karnataka to seek relief.
Statement of Objections by Internal Committee (IC) of OLA:
The following contentions were made by the IC in its statement of objections which included:
- That IC is an independent body constituted under the POSH Act, 2013 whereby its jurisdiction is prescribed and is bound by those prescribed limits;
- That IC sympathizes with the petitioner for the episode she faced. IC is committed to redress the complaint raised by the petitioner in exercising of the power vested in it by the POSH Act, 2013. However, in view of the facts of this case, IC is restrained from exercising its jurisdiction as vested by the POSH Act, 2013 in as much as the case of the petitioner falls beyond the prescribed jurisdiction of ICC as such, it is unable to enquire into the complaint of the petitioner;
- That despite there being limitations, IC being committed to its statutory obligation was keen to ascertain if the members could act upon the complaint of the petitioner, as such, it sought the advice from the independent external counsel to determine whether IC had jurisdiction to entertain the complaint in the facts of the present case. That the said external counsel categorically stated that since the driver in the complaint was not an ‘employee’ of the OLA, the jurisdiction of the IC was not made out. That respondent-IC could only enquire into the complaints under Section 11 of POSH Act, 2013 in cases where the respondent was an ‘employee’ under Section 2(g) of the POSH Act, 2013.
- In the present case, the driver was neither an ‘employee’ nor a ‘contractor’ of OLA and as the facts indicated the actual perpetrator of the act was an impostor who was unauthorizedly driving the vehicle in which the incident had occurred, IC could not proceed with the enquiry under the POSH Act, 2013 against the perpetrator. That the IC being a statutory authority had already issued a well-reasoned order as to why it could not entertain the complaint. IC would have transgressed its jurisdiction, if it had proceeded to hold the enquiry as prescribed under the POSH Act.
- That the petitioner is not deprived of her right to civil and criminal remedies under the appropriate provisions of law and that in view of the complaint having been filed for the offences punishable under the provisions of Indian Penal Code, this is not a case for a petition under Article 226 of Constitution of India.
- That IC being an independent statutory body is mandated to conduct an enquiry when a complaint is initiated against a respondent who is an ‘employee’. OLA on boards its drivers by entering into a Subscription Agreement with them, which explicitly states the Driver Partners would not be construed as employees of the organisation and the relationship is that of principle-to-principle basis. Therefore, it is contended that the nature of an enquiry under Section 11 of the POSH Act cannot empower IC to conduct enquiry by transgressing its prescribed jurisdiction.
Statement of Objections of OLA
In addition to the aforementioned averments made by the IC of OLA in its statement of objections, the Respondent-OLA had further made the following contentions:
- That ANI Technologies Private Limited Company is a Private Limited Company, which is commonly known through its trademark and brand name ‘OLA’, registered under the Companies Act, 1956 and did not qualify as an instrumentality of the State, which would be amenable to the writ jurisdiction.
- That the driver-subscribers associated with OLA, cannot by any stretch of imagination be construed as its employees and consequently an enquiry under the POSH Act against the driver-subscriber would be dehors the jurisdiction of the IC. It added that the driver-subscribers do not satisfy the classical factors required to be fulfilled for the purpose of establishing an ‘employee-employer’ relationship. OLA does not have an exclusive arrangement with its driver-subscribers, and as such the driver-subscribers associated with the platform of the OLA are free to work for competing businesses simultaneously.
- It was further emphasized that most of the driver-subscribers are plying taxis with more than one aggregator platform, which is a leading indicator that the driver-subscribers are independent contractors of OLA and not its employees.
- That the driver-subscribers are free to determine their working hours and they do not have to report at any specific place, time, days or perform any such other acts which may qualify as ‘punching the clock’. These features of discontinuity, indefinite period of duration and non-exclusivity determine that driver subscribers are not employees and OLA does not possess any right to control the manner in which the driver-subscribers operate at its platform.
- Furthermore, the driver-subscribers operate the taxis with the cars which they own or the cars which they have hired from the third party. Therefore, in any event, the subject vehicle is not owned by OLA which indicates that the driver is an independent contractor on principle-to-principle basis. Hence, it is evident that there is no such application of POSH Act whatsoever to the petitioner.
- It was stated that the unfortunate incident in the fact of the instant case is irrefutably a result of ‘driver impersonation’. The OLA on its part had conducted a thorough background check-up by way of PVC and CRS and had taken all precautionary measures towards the safety of its passenger which is depicted from the fact that the OLA had provided full assistance to the police authorities in apprehending the original driver-subscriber, which eventually revealed the factum of impersonation or swapping of the driver-subscriber.
On the basis of the aforementioned grounds, the respondent-both IC and the OLA Company seeks dismissal of the petition filed by the petitioner.
Submissions of the Petitioner:
The Learned Counsel on behalf of the petitioner made the following submissions before the court:
- That the writ petition can be maintained against a private entity if such entity is discharging public duties or functions. Reliance was drawn towards the judgment of the Hon’ble Apex Court in the case of St. Mary’s Education Society vs. Rajendra Prasad Bhargava wherein the court affirmed the relief under Article 226 of the Constitution of India may be granted against the bodies which are performing functions of public nature, in order to emphasis that the services of OLA are not offered to a certain idenitified or limited clientele but available to public at large without any distinguishing or pre-requisite criteria. In addition, the learned counsel also relied upon the judgment of the Hon’ble Apex Court in the case of Andi Mukta Sadguru Shree Muktajee Vandas Swami Suvarna Jayanti Mahotsav Smarak Trust and others, vs. V.R. Rudani and others to contend that under Article 226 relief must not be denied on mere technicalities and the judicial approach must remain flexible to address the injustice whenever it is found. Thus, it was submitted that the functions being performed by OLA are in the nature of discharging public functions as a result of which, OLA is amenable to the jurisdiction of this court under Article 226 of Indian Constitution.
- With regard to the contention raised by OLA that the driver-subscriber was not its employee, the learned counsel draw attention to the definition of ‘employee’ as provided under Section 2(f) of the POSH Act which is wide enough to include drivers within its ambit.
- It further referred to the terms and conditions of OLA Cab in which the terms of the payment to be made to the drivers, refund policy, etc. which provides for the control of the OLA over its drivers, submitting that there is no way one can get in touch with the driver-subscriber without OLA’s intervention. Therefore, considering this, the OLA and IC should not shy away from the responsibility of discharging the statutory obligation of conducting the enquiry upon the complaint filed by the petitioner.
ISSUES RAISED:
Thus, on consideration of the averments made in the present petition and submission made by either parties, following points arise for consideration:
- Is the IC and OLA Company are amenable to the writ jurisdiction of this Court under Article 226 of the Constitution of India?
- Can the driver-subscriber be construed as an ‘employee’ of OLA Company as defined under Section 2(f) of the POSH Act?
- Can the OLA company can be construed only as an ‘Intermediary’ as contended?
However, the petition was reserved for order on August 20, 2024 and was pronounced by Hon’ble Mr. Justice MGS Kamal on September 30, 2024.
COURT ANALYSIS
- Maintainability of the Writ Petition:
With regard to the issue pertaining to maintainability of the writ petition against the IC and OLA Company, the court reiterated the judgment of the Hon’ble Apex Court in the case of St. Mary’s Education Society and Others and in the case of Andi Muktha Sadhguru Shree Mukta vs. V.R. Rudani and others and makes it clear that writ petition against private entities is maintainable if it is shown that it owe a duty and obligation to public involving the public law element and such authority is accepted by public at large.
Further, the court opined that as per the statutory obligation cast upon OLA of constituting the Internal Committee for enquiring into the complaints of sexual harassment and taking further actions under the POSH Act as well as the obligations imposed under Aggregator Rules, 2016 which undoubtedly a duty and obligation which it owe towards the public at large, IC and OLA cannot be heard to say that they are not discharging any ‘public duty’ involving ‘public law element’ making them amenable to Article 226 of the Constitution of India.
Therefore, in view of the same, the court held that the present writ petition under Article 226 is maintainable.
- Relationship between OLA and driver
One of the main contention urged on behalf of the respondents- IC and OLA Company is want of relationship of ‘employer’ and ‘employee’ between the OLA, driver-subscriber and the impersonator, enabling the IC to initiate enquiry upon the complaint filed by the petitioner. In view of the same, the court find it relevant to call for a close scrutiny of the terms of Subscription Agreement which is admittedly entered into between OLA and the Transport Provider and Driver-Subscriber in the light of statement of objects and reasons which the POSH Act seeks to achieve.
Prior scrutinizing the terms of Subscription Agreement, the court emphasized the definition of the term ‘employee’ and employer as provided under the Section 2(f) and 2(g) of the POSH Act respectively to suggest the vast scope of its applicability.
The extract of the provision is mentioned below:
Section 2(f) defines employee “means a person employed at a workplace for any work on regular, temporary, adhoc or daily wage basis, either directly or through an agent, including a contractor, with or, without the knowledge of the principal employer, whether for remuneration or not, or working on a voluntary basis or otherwise, whether the terms of employment are express or implied and includes a co-worker, a contract worker, probationer, trainee, apprentice or called by any other such name”
While, as per Section 2(g) of the POSH Act, “employer has been defined to mean any person responsible for the management, supervision and control of the workplace and management includes the person or board or committee responsible for formulation and administration of policies for such organisation.”
In addition, the court critically analysed the terms and conditions of Subscription Agreement governing the relationship between OLA and its drivers, which elaborately set out management, supervision and control which OLA has over the manner, method and mode of rendering services by the driver and also the consequence of breach of these terms by the driver. The court underscored that the Subscription Agreement covers and restricts driver from having any option or liberty of whatsoever in booking, deciding the route, having any conversation or discussion with the user, to the extent restricting his own mobile usage while rendering the service, etc.
Considering this, the court opined that it cannot take the status of ‘Driver’ found in the Agreement away from the definition of ‘Employee’ under POSH Act, 2013 as the said definition also includes employing someone on contract basis and/or a contract worker.
Furthermore, the court stated that the bare perusal of the commercial terms indicates the whole and entire control of revenue being generated from the business to be vested upon OLA.
“From fixing the ride rates, payment/receipts, commission sharing, deduction, enhancement, changes in rates, payment of statutory dues, to determination, resolution and settlement of any disputes including execution and implementation of outcome of such determination is at the sole discretion of the OLA. One important aspect of this segment requiring highlight is payment of incentives by OLA to the Transport Service Provider, yet again at the sole discretion of OLA,.” The court added.
Thus the commercial term segment of the Subscription Agreement makes it abundantly clear that the service offered by the OLA and the arrangement arrived at between OLA and its transport service provider /driver-subscriber is not merely usage of its portal as ‘intermediary’ but has a whole lot of active role to play in the process of management, supervision and control of entire business. The clause providing for payment of incentives over and above the charges payable as agreed upon further establish beyond any doubt that OLA has indeed employed the transport service provider/driver-subscriber for its commercial activity.
Therefore, in light of the clauses specified under the Subscription Agreement and the admitted position of the fact that the vehicle which was used at the time of incident was belonging to the group companies of OLA, the court is convinced that for the purpose of the implementation of the provisions of the POSH Act, driver-subscribers be construed as an ‘employee’ of OLA.
“In the instant case the components of the definition ‘employee’ which is encapsulated hereinabove leaves no doubt that the driver-subscriber is rendering his services directly in connection with the commercial activity of OLA for which it is established. In that view of the matter and more particularly for purposes advancement of the intent and object of the POSH Act, 2013 it is necessary and compelling that the meaning of the term ‘employee’ be extended to cover the persons like driver-subscriber. Anything short of this would result in rendering the purpose, intent and object of the POSH Act, 2013 ineffective in the vast private sector of this nature,” the court remarked.
- Can OLA be merely construed as ‘Intermediary’
From a conjoint reading of the terms and conditions of the Subscription Agreement and the terms of Agreement between OLA and the ride-subscriber, the court opined that it cannot be said that OLA is just in the business of receiving, storing or transmitting the electronic records on behalf of another or providing service only with respect to that record which includes telecom service providers, network service providers, internet service providers, web-hosting service providers, search engines, online payment sites, online-auction sites, online-market places and cyber cafes as envisaged in the definition of the term ‘Intermediary’ as defined under the Information Technology Act, 2000.
On the other hand, unbridled and unilateral power and control which is retained exclusively by the OLA and which it wields over the driver-subscriber and the ride-subscriber with regard to every aspect of the contract terms including but not limited to determining rates of various fees, charges for the ride contemplated, nature, extent and manner of service offered, usage, maintenance of devices provided by OLA during the service as well as power and control with regard to receiving and declining the bookings, payments of the consideration, manner and method of payment, cancellation policies, emergency service offer to the customers, disclaimers, indemnifications, applicable laws in the event of disputes and the saving clauses in the agreements would manifestly indicate that the OLA is in complete control of the entire business of providing transportation though it claims that it is only providing a technology platform to arrange and schedule the transportation. There is hardly any bargaining power or option left with the ride-subscriber or with the driver-subscriber in the matter of drafting the terms of those Agreements.
Therefore, for foregoing reasons and analysis, the Court is of the considered view that for the purpose of POSH Act, the Driver-Subscriber is an ‘Employee’ of OLA and OLA is not merely an ‘Intermediary’ as contended.
Verdict:
In light of the aforementioned facts and circumstances, the court held that the IC being under statutory obligation to accept the complaint filed by the petitioner, to enquire into allegations of sexual harassment against her by the driver of OLA taxi, has failed in discharging it statutory obligation on the erroneous premise of it lacking jurisdiction in the matter.
As a result thereof, the writ petition has been partly allowed by the Hon’ble Karnataka High Court vide order dated September 30, 2024.
The court directed that the Internal Committee of ANI Technologies Private Limited (OLA) shall hold an enquiry into the complaint of the petitioner dated September 30, 2018 in accordance with the provisions of the POSH Act and complete the process as expeditiously as possible within an outer limit of 90 days from the date of receipt of certified copy of this order as per Section 11 of the POSH Act, and submit the report to the District Officer as provided thereunder.
Further, the IC and OLA has been directed to pay a sum of INR 5,00,000/- to the Petitioner towards compensation and an additional sum of INR 50,000/- towards litigation expenses within 30 days from the date of receipt of certified copy of this order.
In addition, the court also found the officers in charge of the Karnataka State Transport Authority guilty of deliberate inaction and negligence in discharging their statutory obligation, thus imposing a penalty of INR 1,00,000 payable to the Karnataka Legal Service Authority within 30 days from the date of receipt of certified copy of this order.
Moreover, directives have also been issued to the respondents and all concerned to ensure compliance of provision of Section 16 of the POSH Act, in not publishing the identity and addresses of the persons involved in the matter.
[1] https://ssrana.in/posh-law/articles/ola-drivers-are-not-employees-under-the-posh-act-a-legal-battle/