Federation Of Financiers v. The Special Transport
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 09.06.2022 CORAM :
THE HONOURABLE MR.JUSTICE N.ANAND VENKATESH W.P.NO.22775 OF 2008 AND M.P.NOS.2 AND 3 OF 2008 Federation of Financiers Association Rep.by its General Secretary Shri K.Srinivasan No.45/165, West Car Street Chidambaram 608 001.
... Petitioner -Vs1. The Special Transport Commissioner and the Transport Commissioner Ehilagam, Chepauk Chennai 600 005.
2. Joint Transport Commissioner-cum- Regional Transport Authority No.4, Anderson Salai Ayanavaram, Chennai 600 023.
3. State of Tamil Nadu Rep.by its Secretary to Government Department of Road Transport Fort St.George Chennai 600 009.
4. Union of India Rep. by its Secretary Ministry of Road Transport & Highways Transport Bhavan, I.Parliament Street New Delhi.
... Respondents Prayer : Writ Petition under Article 226 of the Constitution of India praying for the issuance of a Writ of Certiorari, to call for the letter R.No.67853/H2/07 dated 20.03.2008 bearing
Circular No.20/08 issued by the 1st respondent quashing the same as arbitrary, illegal, ultra vires and violative of Article 14 and Article 19(1)(g) of the Constitution of India. For Petitioner :
Mr.Mukunth For Respondents :
Mr.K.Thippusulthan Government Advocate for R1 to R3 Mr.Arumugam for R4
ORDER
Circular No.20/2008 issued by the 1st respondent has been put to challenge in this writ petition.
2.Heard Mr.Mukunth, learned counsel for the petitioner, Mr.K.Thippusulthan, learned Government Advocate for R1 to R3 and Mr. Arumugam , learned counsel for R4.
3.It is brought to the notice of this Court that this Court had already considered the same issue in W.P.Nos.14469 etc., of 2008 and it was held as follows:
11. The short issue involved in the present case is whether, the bankers and financiers while they make entry in the hypothecation agreement, in the registration certificate, it is necessary to obtain trade certificate or not.
12. For better appreciation, Section 51 of the Motor Vehicles Act, Rules 34 and 41 (h) of the Motor Vehicles Rules are extracted hereunder:
"Section 51 of the Motor Vehicles Act:
51.Special provisions regarding motor vehicle subject to hire purchase agreement, etc. - (1) Where an application for registration of a motor vehicle which is held under a hire purchase, lease or hypothecation agreement (hereafter in this section referred to as the said agreement) is made, the registering authority shall make an entry in the certificate of registration regarding the existence of the said agreement.
Rules 34 and 41 (h) of the Motor Vehicles Rules:
34.Trade certificate.- (1) An application for the grant or renewal of a trade certificate shall be made in Form 16 and shall be accompanied by the appropriate fee as specified in rule 81.
41.Purposes for which motor vehicle with trade certificate may be used.- The holder of a trade certificate shall not use any vehicle in a public place under that certificate for any purpose other than the following:- .....................................
(h) for removing the vehicle after it has been taken possession of by or on behalf of the financier due to any default on the part of the other party under the provisions of an agreement of hire purchase, lease or hypothecation."
13. A perusal of Section 51 of the Motor Vehicles Act makes it clear that where an application for registration of a motor vehicle which is held under a hire purchase, lease or hypothecation agreement is made, the registration authority shall make an entry in the certificate of registration regarding the existence of the said agreement. However, the said provision did not impose condition to the bankers and financiers to obtain trade certificate.
14. A perusal of Rule 34 of the Motor Vehicles Rules shows that an application for the grant of renewal of a trade certificate shall be made in Form 16 and shall be accompanied by appropriate fee as specified in Rule 81.
15. On a perusal of Rule 41 (h) of the Motor Vehicles Rules makes it clear that the holder of a trade certificate shall not use any vehicle in a public place under that certificate for any purpose other than for removing the vehicle after it has been taken possession of by the financier due to any default on the part of the other party under the provisions of an agreement of hire purchase, lease or hypothecation.
16. The above said provisions makes it clear that if the bankers and financiers kept the vehicle idle, they need not obtain trade certificate. However, if they want to use the vehicle, they must obtain trade
certificate. It is also not in dispute that whenever the vehicle used ply in the public place, they must be registered the vehicle in the registering authority after registration they are entitled to ply vehicle in the public place such exemption granted to the trader who use the vehicle for trade purpose.
17. However, the bankers and financiers advance loan to a person to purchase the vehicle. They are entitled to make entry in the registration certificate for which they need not obtain trade certificate. However, if the bankers took possession of the vehicle for any default and if they sell the vehicle to third parties to ply the vehicles in the public place, necessarily they must obtain trade certificate.
18. This Court perused the impugned order dated 20.03.2008. The first respondent in paragraph no.2 of the impugned order has clearly stated that generally trade certificates are only issued to the dealers of new motor vehicles leaving financiers, body builders and repairers of motor vehicles and several other categories of 'dealers' as defined under Section 2 (8) of the Motor Vehicles Act, 1988 and it imposed a condition that whenever financial institutions/ banks/ financial corporations approach for registering hire purchase, they should obtain and procure trade certificate for every category of vehicles. Hence for mere making entry in the hypothecation agreement, it is not necessary for obtaining trade certificate, however, if the bankers and financiers want to ply the vehicle in the public place, after taking possession it is necessary to obtain the trade certificate.
19. The decision referred to by the learned Senior Counsel also makes it clear that the grant of trade certificate to a financier is only confined to Rule 41 (h) of the Motor Vehicles Rules. Therefore, the financier cannot use trade certificate for any purpose other than specified under Rule 41 (h) of the Motor Vehicles Rules. The decision squarely apply to the present case on hand.
20. In view of all the above discussions, this Court is inclined to interfere with the impugned order. Accordingly, Clause 7.1), 7.2) and 7.3) of the impugned order dated 20.03.2008 alone are set aside. This Court is not inclined to interfere with the other portions of the impugned order. The writ petitions
stand allowed with the above terms. No costs. Consequently, connected miscellaneous petition is closed.
4.This writ petition is also disposed of in terms of the above order. No costs. Consequently, connected miscellaneous petitions are closed.
Sd/- Assistant Registrar(CS-VIII) //True Copy// Sub Assistant Registrar KP To 1.
The Special Transport Commissioner and the Transport Commissioner Ehilagam, Chepauk, Chennai 600 005.
2.
The Joint Transport Commissioner-cumRegional Transport Authority No.4, Anderson Salai Ayanavaram, Chennai 600 023.
3.
The Secretary to Government State of Tamil Nadu Department of Road Transport Fort St.George, Chennai 600 009.
4.
The Secretary Union of India Ministry of Road Transport & Highways Transport Bhavan, I.Parliament Street New Delhi.
+1cc to the Government Pleader, High Court, Madras, S.R.No.34171 W.P.No.22775 of 2008 BR(CO) RLP(21/06/2022)