Four Mumbai RTOs 'Inspect' 10 Ola Electric Stores Over Lack Of Trade Certificates

Troubles continued to mount for Ola Electric Mobility Ltd. on Tuesday after four Mumbai RTOs “inspected” 10 of the company's stores in the city over lack of trade certificates, according to two people aware of the matter.

Four Mumbai RTOs inspected 10 Ola Electric stores in Mumbai today, a person within the Motor Vehicles Department of Maharashtra told NDTV Profit on the condition of anonymity. NDTV Profit was tipped off on the inspection by a second person.

⁠The stores, according to the transport official, were found to be operating without trade certificates. ⁠A notice has been served to the Ola Electric stores to explain the lack of trade certificates.

“Pratap Singh & Associates, Gurugram, lodged a complaint against Ola Electric and other companies regarding their failure to obtain a trade certificate while operating showrooms and stores across Maharashtra,” according to an inspection report seen by NDTV Profit.

“Based on this complaint, a special inspection drive was conducted over two days, and action was taken through RTOs in Mumbai (Central, West, and East) and Borivali.”

The people said 10 Ola Electric scooters were confiscated following the special inspection drive. A company spokesperson claimed otherwise in a WhatsApp text to this writer, but didn't offer any further comment on the matter.

According to the Central Motor Vehicles Act, 1988, and Rule 33 of Central Motor Vehicles Rules, 1989, it is necessary to obtain business authorisation certificate for the sale and distribution of vehicles. Additionally, as per Rule 35 of the Central Motor Vehicles Rules, 1989, every individual exhibitor, showroom, or vehicle display-related representative must obtain a trade certificate. Vehicles distributed by individuals or companies holding a trade certificate are considered eligible for exemption from registration under Section 39 of the Central Motor Vehicles Act, 1988.

The “inspections” adds to the mountain of troubles for a company that was once India's largest electric two-wheeler maker amid a slump in sales.

Just last week, two of Ola Electric's vendors—Rosmerta Digital Services Pvt. and Rosmerta Safety Systems Pvt. Ltd.—sought to initiate insolvency proceedings against a subsidiary of the company over unpaid dues of about Rs 25 crore. Ola Electric has informed the stock exchanges of only one petition filed with the National Company Law Tribunal, Bengaluru. The companies processed vehicle registrations and generated high-security registration number plates, respectively, for Ola Electric scooters.

Additionally, the company is facing questions over the legality of its sales figures reported in February. Ola Electric claimed to have sold 25,000 scooters last month but only a third of them could be registered. The VAHAN numbers are looking up in March either.