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Facts of the Case:
In 2019, the petitioner, a woman passenger, booked an OLA cab and alleged that she faced sexual harassment from the driver during the trip. She lodged a formal complaint with ANI Technologies, the parent company of OLA Cabs, seeking appropriate action against the driver. However, ANI Technologies, acting on advice from external legal counsel, declined to hold an inquiry into the matter through its Internal Committee (IC), asserting that it lacked jurisdiction to investigate such a case. The company’s rationale was that the driver was an independent contractor, not an employee, and therefore, the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013 (POSH Act) was inapplicable. Dissatisfied with this response, the woman approached the Karnataka High Court, seeking directives for an inquiry and further action against ANI Technologies and the driver.
Table of Contents
Contentions of the Parties:
Petitioner’s Arguments:
The petitioner argued that OLA, as a platform providing cab services, had a direct responsibility for the behaviour of its drivers. OLA should be treated as an employer under the POSH Act because the petitioner had contracted with the company, not the driver individually, when booking the ride.
It was contended that there was no privity of contract between the petitioner and the driver. OLA, by failing to act on the complaint, violated its obligations under the POSH Act. The IC’s refusal to inquire was against the law, and OLA was liable to investigate under the Act, regardless of the driver’s contractor status.
The petitioner also sought broader directions for ensuring women’s safety in ridesharing services and asked the court to instruct the Ministry of Women and Child Development and the state government to enforce compliance with the POSH Act within such platforms.
Respondent’s (OLA) Arguments:
OLA’s counsel contended that the drivers were independent contractors and not employees of the company, which placed them outside the purview of labour laws such as the POSH Act. The company compared its role to that of a marketplace or intermediary, much like an e-commerce platform such as Amazon, where it merely connects passengers and drivers without direct employment ties.
The counsel further argued that holding OLA accountable for every driver’s action would be an “extreme stretch” and that punitive damages could not be imposed on the company. OLA maintained that the company had already taken action against the driver and that the IC’s stance was legally sound.
Court’s Observations:
The court considered whether OLA, as a ridesharing platform, could claim exemption from liability under the POSH Act by arguing that its drivers were independent contractors. Justice M.G.S. Kamal noted that despite OLA’s assertions, the company’s direct role in connecting drivers with passengers, and its operational control over drivers, could not be disregarded. The court questioned whether OLA could be absolved of responsibility when the petitioner booked the ride through their platform and the service was facilitated by OLA.
Citing principles of corporate responsibility and public safety, the court underscored the importance of companies like OLA ensuring a safe environment for their customers, especially women. The court also referenced Section 16 of the POSH Act, cautioning the parties about maintaining confidentiality in sensitive cases, especially regarding the identities of the involved individuals.
Court’s Decision:
The Karnataka High Court directed ANI Technologies (OLA) to pay ₹5 lakhs to the petitioner as compensation for the sexual harassment incident, recognizing the company’s failure to take timely and appropriate action. An additional ₹50,000 was awarded to the petitioner for litigation expenses.
The court directed OLA’s Internal Committee (IC) to conduct a full inquiry into the sexual harassment complaint in compliance with the POSH Act. This inquiry was to be completed within 90 days, and the IC was instructed to submit its findings to the District Officer.
The court ordered the Karnataka State Road Transport Authority to continue its investigation into ANI Technologies’ compliance with safety regulations. This process was to be completed within 90 days, after providing OLA with an opportunity to be heard. A penalty of ₹1 lakh was imposed on the State Government for its failure to adequately respond to the petitioner’s grievances.
The petitioner’s plea to issue broader directives for ensuring safety in cab services was acknowledged. The court expressed its concern for passenger safety and urged the authorities to ensure strict enforcement of laws and guidelines protecting women and children who use such services.
The High Court stated that there is a growing need to hold service platforms accountable for the conduct of their affiliated contractors, especially in sensitive matters like sexual harassment.
