A division bench of the court, however, qualified its nod, saying commuters would pay the new fare only if the meter is recalibrated according to the new fare structure.
The new minimum fare for taxis will be Rs21 over a distance of 1.5km and Rs17 for autorickshaws. The hike works out to about 14 per cent overall.
Taxi and auto operators have been given a period of 45 days to recalibrate their meters. But the unions have asked for an extension as it would take at least four or five days for transport authorities and meter manufacturers to work out the calibration.
Judges Abhay Oka and AS Chandurkar delivered their order on Tuesday, on an application by the state government seeking permission to implement the new fares proposed by the Hakim committee.
"The revised fares will be applicable to only those taxis and autos which have recalibrated meters. This is for the benefit of the public and to avoid malpractice by taxi and auto owners," the judges stated.
The court also directed the government to take action against owners of taxis and autos who may try to charge the new fares without getting their meters recalibrated.
The government had decided on June 20 to implement the fare hike, but had to take the permission of the court as the process of setting the fare has been challenged by the Mumbai Grahak Panchayat.
Refusing to stay the fare hike, the judges said: "We are of the view that no case is made out for grant of interim relief against the June 20 government decision. Prima facie we find nothing arbitrary and irrational in the government's decision to hike the fare."
The high court relied on earlier Supreme Court judgments that said the courts should not interfere with policy decisions of the government unless they were found to be inconsistent with the constitution, arbitrary or they amounted to abuse of power.
Thampi Kurien of Mumbai Rickshawmen's Union said: "We will meet with regional transport officers, transport department officials and meter manufacturers on Wednesday to chart out a programme to recalibrate the meters, so that the work is completed in 45 days.
He said that according to his calculations, the auto fare would increase by around 14.7 per cent. "If you are paying Rs50 for your journey now, you will end up paying Rs57 under the new structure," Kurien said.
AL Quadros of Mumbai Taximen's Union said the 45-day deadline for recalibration would be tight. "There are just two technical colleges for this and they can't do more than 50 a day," he said.
How much do you pay?
Current flag down fare: Rs15 (1.5km)
New minimum charge: Rs17
Current fare for every subsequent km: Rs9.87
New charge for every subsequent km: Rs11.33
Current flag down fare: Rs19
New minimum charge: Rs21
Current fare for every subsequent km: Rs12.35
New charge for every subsequent km: Rs13,96