Kerala High Court
State Of Kerala vs C.P.Varghese on 10 January, 2017
Author: V Raja Vijayaraghavan
Bench: V Raja Vijayaraghavan
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE THE CHIEF JUSTICE MR.NAVANITI PRASAD SINGH
&
THE HONOURABLE MR. JUSTICE RAJA VIJAYARAGHAVAN V
FRIDAY, THE 21ST DAYOF JULY2017/30TH ASHADHA, 1939
WA.No. 757 of 2017 () IN WP(C).27633/2016
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AGAINST THE JUDGMENT IN WP(C) 27633/2016 DATED 10-01-2017
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APPELLANT(S)//RESPONDENTS IN THE WRIT PETITION:
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1. STATE OF KERALA,
REPRESENTED BY SECRETARYTO GOVERNMENT,
MINISTRY OF TRANSPORT,GOVERNMENT SECRETARIAT,
THIRUVANANTHAPURAM-695001.
2. THE JOINT REGIONAL TRANSPORT OFFICER,
IRINJALAKUDA-680513.
BY SENIOR GOVERNMENT PLEADER SRI.V.MANU
RESPONDENT(S)/WRIT PETITIONER IN THE WRIT PETITION:
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C.P.VARGHESE,
S/O.PAULOSE, CHUNDEPARAMBIL HOUSE, P.O.THUMBUR,
VELOOKKARA G.P., THRISSUR.
BY ADV. SRI.P.DEEPAK
THIS WRIT APPEAL HAVING COME UP FOR ADMISSION
ON 21-07-2017,ALONG WITH WA .NO.759/2017,AND CONNECTED CASES,
THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
TS
C.R.
Navaniti Prasad Singh, C.J. & Raja Vijayaraghavan V., J.
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W.A. Nos. 757, 759, 761, 763, 771, 776, 777,
778, 779, 780, 783, 785, 786, 800, 801, 822,
845, 846, 854, 916, 932, 933, 937, 942, 945,
953, 957, 958, 959, 963, 965, 972, 974, 975,
981, 982, 983, 984, 985, 986, 987, 988, 990,
991, 992, 1003, 1005, 1006, 1007, 1009, 1013,
1017, 1024, 1025, 1030, 1031, 1035, 1036, 1045,
1049, 1058, 1062, 1079, 1081, 1110, 1131, 1140,
1146, 1173 and 1212 of 2017
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Dated this the 21st day of July, 2017
JUDGMENT
Navaniti Prasad Singh, C.J.
The present batch of appeals by the State is against a common judgment and order dated 10.01.2017 passed in W.P. (C) No.27633 of 2016 and analogous cases by learned single Judge of this Court.
2. Delay in filing the appeals are condoned and with the consent of parties, we have heard the matter at length for its final disposal at this stage itself.
3. The issue relates to the validity of first proviso to Rule 105(2) of the Kerala Motor Vehicles Rules, 1989 as brought in by the Kerala Motor Vehicles (First Amendment) Rules, 2016 with WA No.757 of 2017 and conn. cases -:2:- effect from 18.04.2016. The learned single Judge has declared the proviso as introduced to be ultra vires the rule making powers of the State. The State is aggrieved and hence the intra court appeals.
4. In order to appreciate the controversy it is first necessary to notice the statutory provisions relevant under the Motor Vehicles Act, 1988 (for short 'Act, 1988), Central Motor Vehicles Rules, 1989 (for short 'Central Rules') and the Kerala Motor Vehicles Rules, 1989 (for short 'Kerala Rules'). The dispute is with regard to grant or renewal of certificate of fitness in respect of a transport vehicle and whether the provision that mandates that the application shall not be accepted unless the same is accompanied by a clearance certificate in 'Form CC' from the original registering authority to the effect that the vehicle has 'no government dues, arrears of Motor Vehicle Tax or any other legal action pending in that office' can be sustained in law or not.
5. In this regard the relevant would be Sections 56, 64 (m)
(n) & (o), 65(1), 65(2)(d) & (l), 86(5) & (6) of the Motor Vehicles Act, 1988; Rule 73 of the Central Motor Vehicles Rules, 1989; WA No.757 of 2017 and conn. cases -:3:- the 1st proviso to Rule 105 (2) and Rule 186 of the Kerala Motor Vehicle Rules, 1989 which read as follows:
The Motor Vehicles Act, 1988
56. Certificate of fitness of transport vehicles.- (1) Subject to the provisions of Sections 59 and 60, a transport vehicle shall not be deemed to be validly registered for the purposes of Section 39, unless it carries a certificate of fitness in such form containing such particulars and information as may be prescribed by the Central Government, issued by the prescribed authority, or by an authorised testing station mentioned in sub-section (2), to the effect that the vehicle complies for the time being with all the requirements of this Act and the rules made thereunder.
Provided that where the prescribed authority or the "authorised testing station" refuses to issue such certificate, it shall supply the owner of the vehicle with its reasons in writing for such refusal.
(2) The "authorised testing station" referred to in sub- section(1) means a vehicle service station or public or private garage which the State Government, having regard to the experience, training and ability of the operator of such station or garage and the testing equipment and the testing personnel therein, may specify in accordance with the rules made by the Central Government for regulation and control of such stations or garages.
(3) Subject to the provisions of sub-section(4), certificate of fitness shall remain effective for such period as may be prescribed by the Central Government having regard to the objects of this Act.
(4) The prescribed authority may for reasons to be recorded in writing cancel a certificate of fitness at any time, if satisfied that the vehicle to which it relates no longer complies with all the requirements of this Act and the rules made thereunder; and on such cancellation the certificate of registration of the vehicle and any permit granted in respect of the vehicle under Chapter V shall be deemed to be suspended until a new certificate of fitness has been obtained:
[Provided that no such cancellation shall be made by the prescribed authority unless such prescribed authority holds such WA No.757 of 2017 and conn. cases -:4:- technical qualification as may be prescribed or where the prescribed authority does not hold such technical qualification on the basis of the report of an officer having such qualifications.] (5) A certificate of fitness issued under this Act shall, while it remains effective be valid throughout India.
64. Power of Central Government to make rules.- The Central Government may make rules to provide for all or any of the following matters, namely:-
xxxxx xxxxx xxxxx xxxxx xxxxx
xxxxx xxxxx xxxxx xxxxx xxxxx
(m) the form in which the certificate of fitness shall be issued under sub-section(1) of Section 56 and the particulars and information it shall contain;
(n) the period for which the certificate of fitness granted or renewed under Section 56 shall be effective;
(o) the fees to be charged for the issue or renewal or alteration of certificates of registration, for making an entry regarding transfer of ownership on a certificate of registration, for making or cancelling an endorsement in respect of agreement of hire-purchase or lease or hypothecation on a certificate of registration, for certificates of fitness for registration marks, and for the examination or inspection of motor vehicles, and the refund of such fees.
65. Power of State Government to make rules.- (1) A State Government may make rules for the purpose of carrying into effect the provisions of this Chapter other than the matters specified in Section 64.
(2) Without prejudice to the generality of the foregoing power, such rules may provide for -
xxxxx xxxxx xxxxx xxxxx xxxxx
xxxxx xxxxx xxxxx xxxxx xxxxx
(d) the issue or renewal of certificates of registration and fitness and duplicates of such certificates to replace the certificates lost, destroyed or mutilated;
xxxxx xxxxx xxxxx xxxxx xxxxx
xxxxx xxxxx xxxxx xxxxx xxxxx
WA No.757 of 2017 and conn. cases
-:5:-
(l) the extension of the validity of certificates of fitness pending consideration of applications for their renewal;
86. Cancellation and suspension of permits.- (1) The transport authority which granted a permit may cancel the permit or may suspend it for such period as it thinks fit.
xxxxx xxxxx xxxxx xxxxx xxxxx
xxxxx xxxxx xxxxx xxxxx xxxxx
(5) Where a permit is liable to be cancelled or suspended under clause (a) or clause (b) or clause (e) of sub-section (1) and the Transport Authority is of opinion that having regard to the circumstances of the case, it would not be necessary or expedient so to cancel or suspend the permit if the holder of the permit agrees to pay a certain sum of money, then, notwithstanding anything contained in sub-section (1), the Transport Authority may, instead of cancelling or suspending the permit, as the case may be, recover from the holder of the permit the sum of money agreed upon.
(6) The powers exercisable by the Transport Authority under sub-section(5) may, where an appeal has been preferred under Section 89, be exercised also by the appellate authority. Central Motor Vehicles Rules, 1989
73. Tax clearance certificate to be submitted to the testing station.-No authorised testing station shall accept an application for the grant or renewal of a certificate of fitness unless the same is accompanied by a tax clearance certificate in such form as may be specified by the State Government, from the Regional Transport Officer or Motor Vehicle Inspector having jurisdiction in the area to the effect that the vehicle is not in arrears of motor vehicle tax or any compounding fee referred to in sub-sections (5) and (6) of Section 86.
Kerala Motor Vehicles Rules, 1989
105. Certificate of fitness.- (1) Issuing Authority.-A certificate of fitness under Section 56 of the Act, shall be granted or renewed by the Registering Authority or by any other Inspector of Motor Vehicles, or by an authorised testing station referred to in sub- section (2) thereof.
WA No.757 of 2017 and conn. cases -:6:- (2) Form of application for grant or renewal.- Application for the grant or renewal of a certificate of fitness shall be made to the Registering Authority, or to the Inspector of Motor Vehicles, in whose functional area the vehicle is normally kept. Application for the grant of a certificate shall be in Form "CFA" and for the renewal of certificate in Form "CFRA":
[Provided that no officer of the Motor Vehicles Department shall accept an application for the grant or renewal of certificate of fitness or other services, except for remittance of tax, with respect to a transport vehicle, unless the same is accompanied by a clearance certificate in "Form CC" from the original registering authority to the effect that the vehicle has no government dues, arrears of Motor Vehicles Tax or any other legal action pending in that office:] Provided that the Registering Authority or any other Registering Authority may, if satisfied on an application made to it in writing, that there are sufficient grounds, permit the inspection of any vehicle for the grant or renewal of a certificate of fitness by any other Inspector of Motor Vehicles.
186. Recovery of sum of money in lieu of cancellation or suspension of permit under Section 86(5)- Procedure - (a) The Transport Authority while passing an order of cancellation or suspension of a permit under clause (a) or clause (b) or clause (c) of sub-section(1) of Section 86 of the Act shall specify-
(i) the sum of money payable by the permit holder in case he agrees for the composition;
(ii) the date by which the permit holder should intimate acceptance of composition;
(iii) the date by which the composition fee should be remitted and the chalan produced; and
(iv) the date from which the suspension or cancellation will take effect in case the composition fee is not paid within the date specified under clause (iii)
(b) The Transport Authority shall, in determining the sum of money to be recovered in lieu of cancellation or suspension of different classes of permit have regard to the following, namely:-
(i) nature, gravity and frequency of the breach of conditions committed;
(ii) the quantum of punishment that would otherwise have been imposed; and WA No.757 of 2017 and conn. cases -:7:-
(iii) the earning capacity of the vehicle with reference to the nature of the route and passenger capacity in the case of stage carriages, and average daily mileage of the vehicle and hire charges, if any, in respect of other classes of transport vehicles;
Provided that the amount so recoverable in lieu of suspension shall in no case be less than the minimum or more than the maximum specified in the table below:-
xxxxx xxxxx xxxxx xxxxx xxxxx
xxxxx xxxxx xxxxx xxxxx xxxxx
6. The submission of the writ petitioners was that the insertion of the first proviso to Rule 105(2) of the Kerala Rules was beyond the legislative power delegated to the State. They are vague and uncertain and are beyond the object of the Act and the Rules. It may be noted that earlier the State Transport Commissioner, in absence of such a proviso, had issued an executive Circular issuing similar instructions. That had been declared ultra vires by this Court holding inter alia that by executive directions or Circulars, no such condition could be imposed with regard to grant or renewal of certificate of fitness. It is soon thereafter the rules were amended in the manner noted above which were then challenged.
7. The learned single Judge, by a well considered judgment, has held in favour of the writ petitioners on all counts and WA No.757 of 2017 and conn. cases -:8:- ultimately declared the newly inserted proviso to Rule 105(2) of the Kerala Rules to be ultra vires.
8. The learned Government Pleader for the State submits in appeal that the proviso was necessary to be introduced in interest of the State revenue, as there were a large number of transport vehicles from whom huge sums of money were due on various counts and who were managing to evade payment thereof and continued to ply the vehicles. Transport vehicles have been defined in Section 2(47) of the Act 1988 to include a public vehicle, a goods carriage, an educational institution bus or private service vehicle. Certificate of fitness issued for those vehicles is valid for an year and has to be secured before a permit is granted or permit is renewed. Without a valid certificate of fitness, the vehicle cannot be plied. Therefore, using this necessity, the new proviso was incorporated to club it with the obligation to discharge all liabilities before one is granted the said fitness certificate. Keeping this object in mind, it cannot be said that the provision is beyond the powers of the State or is vague or otherwise unreasonable.
WA No.757 of 2017 and conn. cases -:9:-
9. The first thing we would notice is the phraseology used in the first proviso to Rule 105(2) as sought to be introduced. It mandates that the vehicle shall have no government dues. Now the nature of Government dues which is contemplated is not stated. So far as the arrears of Motor Vehicle Tax is concerned, that is a quantified sum which is known. But when we come to the last phrase "or any other legal action pending in that office"
which would mean, the office of the Transport Officer, we are not sure of the import of the said expression. Even otherwise, this expression if held to be applicable and valid, would mean that if any action is proposed to be taken and is pending, the certificate of fitness cannot be issued till that action culminates to its finality. Thus, pending some legal action, the vehicle has to be removed from use. In our view, on the face of it, the expressions "Government dues and other legal actions" are absolutely vague and uncertain. One of the ways in dealing with this case is to hold it so and as the learned single Judge has done, declare the provision void for uncertainty and vagueness. We cannot find fault with the learned single Judge. But to us, there is a better WA No.757 of 2017 and conn. cases -:10:- way to resolve the situation, if we look to the scheme of the Act, the Central Rules and the State Rules.
10. If we refer to Section 56(1) of Act 1988 as quoted above, it clearly stipulates that the registration certificate of a transport vehicle shall not be valid, unless it carries a certificate of fitness. Certificate of fitness has to be in such a form containing such particulars and information as may be prescribed by the Central Government and has to be issued by the prescribed authority certifying that the vehicle in question complies, for the time being, with all the requirements of the Act and the Rules made thereunder. This, to our understanding means that, what the rule seeks, for grant or renewal of certificate of fitness, is a certificate showing compliance of the provisions of the Act and the Rules framed thereunder. Therefore, the ambit of Section is limited to the Act and the Rules made thereunder.
11. If we then refer to Section 64(m), (n) and (o), it is the Central Government who has to prescribe the forms and other details in respect of the certificate of fitness. Section 64 is the WA No.757 of 2017 and conn. cases -:11:- rule making power of the Central Government. Then we may refer to Section 65, which is the rule making power of the State Government. The first thing to be noticed is, Section 65(1) as quoted above, which clearly gives authority on the State Government to make rules "for the purpose of carrying into effect the provisions of this Chapter other than the matters specified in Section 64". Thus, the rules to be made by the State Government under or with reference to Section 65 would be, for the purposes of carrying out the provisions of this Chapter, and not any other, and that too, with a rider that it shall be in respect of matters other than matters specified in Section 64 of the Act. This would be of some importance because, with reference to Section 64, the Central Government has framed inter alia Rule 73 as quoted above. A reference to Rule 73 of the Central Rules would show that it talks of a tax clearance certificate in a form to be specified by the State Government in relation to Motor Vehicle tax or any compounding fee, as referred to in Section 86(5) and (6). Therefore, the requirement under the Central rules made with reference to Section 64 is limited to Motor Vehicle Tax and WA No.757 of 2017 and conn. cases -:12:- compounding fee alone. But, when we come to the newly inserted proviso, what we find is, it has travelled beyond these two i.e., Motor vehicle Tax or compounding fee and it has gone to 'no government dues and other legal actions pending in that office' meaning, office of the Transport Authority. Surely these could be beyond the object and the scope of the Act itself. For example, if there is some sales tax dues in respect of the Motor Vehicle when the Motor Vehicle was purchased, (Sales Tax later replaced as Value Added Tax and now Goods and Services Tax) it has its own provisions for recovery of any amount due. The object of the Motor Vehicle Act is not to ensure a secondary mechanism for recovery of those taxes. The rules, as is well known, are only to effectuate the provisions of the Act and it cannot travel beyond the Act. Here if we see Section 64, the rule making power of the Central Government and Rule 73 of the Central Rules, then in effect what has been prescribed is that in order to get a fitness certificate what is required is a tax clearance certificate in respect of Motor vehicle Tax and pending dues relating to compounding fee. At this stage, if reference is WA No.757 of 2017 and conn. cases -:13:- made to Rule 186 of the State rules, we may notice that a compounding fee under or with reference to the Motor Vehicles Act is a liability to pay a fee to compound a default. It arises only when a person has agreed to compound and was thus liable to pay a fee which is not paid in spite of compounding. Thus, there are only two dues, both referable to the Motor Vehicles Act and the vehicle in question i.e. the Motor Vehicle tax and the compounding fee which is due. But, when we come to the State amendment to the rules, they go beyond the rules and the Act itself in providing 'for any government dues' without defining even the words 'any government dues' or 'any other legal action pending in the office of the registering authority'. Even though the proceedings may be contested, the result would be that , if a certificate of fitness is required, then the person requiring the certificate would have to end the litigation or surrender to the authorities and give up the contest by agreeing to compound the matter. This would be destructive of the basic principles of good governance and rule of law. It is for the reasons aforesaid that we have indicated in the beginning that the judgment of the WA No.757 of 2017 and conn. cases -:14:- learned single Judge is correct and cannot be faulted with. But the other manner to look for what is to be done would be to read down the provisions of the amendment to make it consistent with the Act and the Rules. We have in detail noted the scope of the rules. Having noted Section 64 of the Act, Section 65 dealing with the State rules, Rule 73 of the Central rule as well as Section 86 and Rule 186 of the State rules, keeping all this in mind, the only way to uphold the newly inserted proviso would be to read that the expression that the vehicle has got 'no government dues', to mean, no government dues under the Motor Vehicles Act or the rules framed thereunder, and the expression 'other legal action pending in that office' to mean, where a person has agreed to compound but has failed to pay the compounding fee .Thus the proviso can be brought in line with the requirements of Rule 73 of the Central rules and limited to that purpose alone and not beyond that. Reading the proviso thus would mean that the clearance certificate in form 'CC' as prescribed by the State, obtained from the original registering authority, would only be in relation to clearance of any dues WA No.757 of 2017 and conn. cases -:15:- under the Motor Vehicles Act or the Rules framed thereunder and the arrears of Motor Vehicle tax or any compounding fee, agreed but not paid , and no other matter. Thus read, the proviso would be consistent with the object of the Act and the Rules and the rule making power.
With the above modification to the judgment of the learned single Judge, all these appeals are disposed of.
Sd/-
Navaniti Prasad Singh, Chief Justice Sd/-
Raja Vijayaraghavan V., Judge ttb/24/07