The Supreme Court on Tuesday rejected a request for an interim order to halt the operation of Pathao, a popular ride-sharing service company, providing a temporary relief to the business which has seen its existence challenged multiple times in the past few months.

A division bench of Justices Kedar Prasad Chalise and Anil Sinha declined the petitioner’s plea for a stay on Pathao’s services after hearing arguments from both parties in a session that lasted several hours.

The writ against Pathao was filed by advocate Shyam Kumar Shrestha, a member of the Nepal Bar Association, who argued the company was operating illegally and demanded it be shut down.

In his petition, Shrestha argued Pathao, a subsidiary of the US-based Pathao Inc, violated multiple foreign investment laws by offering services beyond its approved objectives and engaging in foreign exchange without following due process.

The petitioner had demanded that the court issue an interim order for a temporary halt of services while the final judgement on the case is pending.

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As in his petition, Shrestha’s arguments on Tuesday were focused primarily on his claims that Pathao violated the Companies Act 2006 by engaging in services beyond its approved objectives and has been breaking country’s foreign exchange laws by transferring large sums of money overseas.

“We challenged the petitioner’s claims which did not have any basis or ground,” said Nirab Gyawali, an advocate, who was part of the legal team representing Pathao. “Pathao is a tech company that connects service providers with customers and that’s what we argued in front of the court.”

The defence also made note of the fact that the company was operating in loss and that the petitioner’s claims that it has been engaged in transferring large sums of money were completely unfounded. “Our books show that we are not generating profit and it will be another two years or so before our business is in profit. So the claim that we are somehow siphoning off large sums of money to a foreign country is totally baseless,” said Shashank Thapa, assistant manager at Pathao. 

A government attorney representing various state agencies named in the writ petition stated the concerned departments were already aware of Pathao’s operations and that it is currently in the process of drafting policies that will address businesses like Pathao and bring them under regulation.

Both parties will now be presenting their written explanation to the court.