Kerala High Court
Yamaha Sub Dealers Association Of ... vs State Of Kerala on 5 May, 2016
Author: Shaji P.Chaly
Bench: Shaji P.Chaly
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR. JUSTICE SHAJI P.CHALY
THURSDAY, THE 2ND DAY OF JUNE 2016/12TH JYAISHTA, 1938
WP(C).No. 17165 of 2016 (U)
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PETITIONER(S) :
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1. YAMAHA SUB DEALERS ASSOCIATION OF KERALA,
A SOCIETY REGISTERED UNDER THE TRAVANCORE-COCHIN
LITERARY, SCIENTIFIC AND CHARITABLE SOCIETIES ACT, 1955
AND HAVING ITS REGISTERED OFFICE AT " PARIJATHAM"
CHITHIYOORKODU, KOLLODE POST,
THIRUVANANTHAPURAM 695 571,
REPRESENTED BY ITS SECRETARYRAKESH ROSHAN.
2. K. MOHANAN NAIR,
ADITHYA YAMAHA, TC 1/1854-1,OPPOSITE AL SAJ HOTEL,
KAZHAKOOTAM POST, THIRUVANANTHAPURAM 695 582.
BY ADVS.SRI.K.K.DHEERENDRAKRISHNAN
SRI.N.KRISHNA PRASAD
SRI.P.G.PRAMOD
RESPONDENT(S) :
----------------------------
1. STATE OF KERALA,
REPRESENTED BY ITS SECRETARY,
MOTOR VEHICLES DEPARTMENT, GOVERNMENT SECRETARIAT,
THIRUVANANTHAPURAM 695 001.
2. THE TRANSPORT COMMISSIONER,
TRANS TOWERS, OPPOSITE WOMENS COLLEGE,
VAZHUTHACAD, THIRUVANANTHAPURAM
BY SR.GOVERNMENT PLEADER SMT.K.A.SANJEETHA
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION
ON 25-05-2016, ALONG WITH W.P(C).NO.17610 OF 2016 AND
W.P(C).NO.18020 OF 2016, THE COURT ON 02-06-2016 DELIVERED
THE FOLLOWING:
Msd.
WP(C).No. 17165 of 2016 (U)
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APPENDIX
PETITIONER(S)' EXHIBITS :
EXHIBIT P1 TRUE COPY OF THE CIRCULAR NO.16/2016
DATED 05/05/2016.
EXHIBIT P2 TRUE COPY OF THE CERTIFICATE OF REGISTRATION
DATED 26/04/2016.
EXHIBIT P3 TRUE COPY OF THE CERTIFICATE PERTAINING TO
THE SECOND PETITIONER.
EXHIBIT P4 TRUE COPY OF THE SPECIMEN OF TRIPARTITE
AGREEMENT.
EXHIBIT P5 TRUE COPY OF THE BILLED DATED 16/01/2016 ISSUED TO
SRI. OMANAKUTTAN.
RESPONDENT(S)' EXHIBITS :
NIL
//TRUE COPY//
P.S.TOJUDGE.
Msd.
C.R.
SHAJI P. CHALY, J.
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W.P.(C) Nos.17165, 17610 & 18020 of 2016
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Dated this the 2nd day of June, 2016
JUDGMENT
The subject matter of the above writ petitions are concerning adjudication of Trade Certificate applications by the competent authority under the Central Motor Vehicles Rules and in that exercise, whether the said authority is bound by Circular No.3 of 2009 issued by the Transport Commissioner, Thiruvananthapuram. Since the subject matter of these writ petitions are relatively connected, I propose to dispose of the same by a common judgment. Facts are almost similar and therefore whenever separate narration of facts are required, same will be referred with specific reference to the concerned writ petition. The Act and allied Rules viz., the Motor Vehicles Act, Central Motor Vehicles Rules and the Kerala Motor Vehicles Rules are referred to as 'the Act', 'CMV Rules' and 'KMV Rules' respectively.
2. Petitioner in W.P.(C) No.17610 of 2016 is a registered Automobile Dealers' Association having registration No.ER.297/2006. Petitioner in W.P.(C) No.18020 of 2016 is a W.P.(C) No.17165 of 2016 & conn. cases 2 company registered under the Indian Companies Act and is a dealer of passenger vehicles manufactured by M/s. Maruti Suzuki India Ltd. Petitioner in W.P.(C) No.17165 of 2016 is a registered Automobile Association of sub-dealers of Yamaha motor cycles.
3. In these writ petitions, petitioners impugn the diverse instructions issued by the respondent Transport Commissioner to the Registering Authorities/Additional Registering Authorities empowered to register motor vehicles under Chapter IV of Motor Vehicles Act, 1988 [hereinafter referred to as 'the Act']. The said instruction issued by way of a Circular is produced in W.P.(C) No.17610 of 2016 as Ext.P1. The same reads as follows:
"No.C1/18717/TC/2007 Transport Commissionerate, Kerala Trans Towers, Thiruvananthapuram Dated: 25.03.09 CIRCULAR No.3/2009 Sub: Motor Vehicels Dept. - Issue/Renewal of Trade Certificate to the bonafide dealer - Instructions - Issued - Reg.
Ref: Rule 35 of CMVR, 1989.
........
Several complaints have been received from various manufactures and dealers that certain agencies are indulging in W.P.(C) No.17165 of 2016 & conn. cases 3 sales of new motor vehicles unauthorizedly through their outlets after obtaining Trade Certificates from the concerned Regional Transport Officers claiming status for themselves as sub-dealers.
As per Section 2(8) of the Motor Vehicles Act, 1988, the "Dealer" includes a person who is engaged;
(a) In building bodies for attachment to chassis; or
(b) In the repair of motor vehicles; or
(c) In the business of hypothecation, leasing of or hire-
purchase of motor vehicle.
In the normal parlance any person who is engaged in the sale of vehicles can be called a dealer of motor vehicle. As per Rule 35 of CMVR, 1989, Trade Certificate can be issued only to a 'bonafide dealer'.
As the term 'bonafide dealer' is not defined, it has to be the dealer authorized and appointed directly by the manufacturer for sale of vehicles manufactured by them. Since a vehicle is registered solely on the basis of sale certificate in Form 21 issued by the manufacturer or dealer it has to be issued by a bonafide dealer.
When the authorized dealer issued invoice in the name of the Sub Dealer, the sale is taking place and the sale by Sub Dealer will become a second sale. Delivery of vehicle to the Sub Dealer then will become a violation of Rule 42 of the CMV Rules.
Hence Trade Certificates for the purpose of the sale and registration of vehicles shall be issued only to the dealers authorized by the manufacturer for sale of vehicle.
In the above circumstances, it is hereby clarified that Trade Certificates shall not be issued/renewed to the so called sub dealers for sale and registration of motor vehicles, henceforth. Registering Authorities shall insist on the copy of the authorization issued by the manufacturer for sale of vehicles for grant/renewal of Trade Certificate. However the authorized dealers may sell the vehicles through Sub Dealers, under Form 21 provided the invoice is issued only by the authorized dealer.
Transport Commissioner W.P.(C) No.17165 of 2016 & conn. cases 4 To All Deputy Transport Commissioners.
All Regional Transport Commissioners.
All Joint Regional Transport Officers of Sub Offices. Copy to: CA to TC, CA to Addl.TC, CA to Senior DTC & Secretary, STA. Senior AO, Senior FO, All Senior Supdts, All Sections.".
4. The contention of the petitioners is that the instruction so couched in the form of a circular have the effect of supplanting the provisions of the Act itself, and also tinkers with the exercise by quasi-judicial functions of the Registering Authorities. The respondent Transport Commissioner is the appellate authority against the orders passed by the Registering Authorities with respect to issuance of Trade Certificate. The primary authority as well as the appellate authority are empowered to hear and adjudicate on applications in Trade Certificates and refusal of the same and the power vested and exercised by them are of a quasi-judicial nature. Therefore, it is the contention of the petitioners that a hierarchical structure of the adjudicative machinery constituted under the Act and Rules made thereunder is overturned and rendered sterile by such instructions issued by the appellate authority.
W.P.(C) No.17165 of 2016 & conn. cases 5
5. Thereby, the petitioners apprehend that consequent to the issuance of the said circular, the registering authority is bound by the instructions contained therein, whereby the power conferred on the Registering Authority to adjudicate an issue as a quasi-judicial authority has lost its efficacy and independence, since it interferes with the power exercised by the Registering Authority independently of a hierarchical authority of superior officer, and therefore the circular so issued is unconstitutional. In W.P.(C) No.17165 of 2016, petitioner has a case that the members of the 1st petitioner Association are sub-dealers of the dealer of Yamaha motor bikes and since there is a specific direction issued in the circular in question, that the dealer defined under the Motor Vehicles Act is only a dealer approved by the manufacturer interferes with the power of adjudication conferred on the registering authorities. In order to consider the issues raised by the petitioners, a reference to the provisions of the Motor Vehicles Act and Rules is necessitated. Sec.2(8) of the Act deals with dealer. A dealer is defined as follows: W.P.(C) No.17165 of 2016 & conn. cases 6
"2(8). "dealer" includes a person who is
engaged:-
(a) In building bodies for attachment to chassis;
or
(b) In the repair of motor vehicles; or
(c) In the business of hypothecation, leasing or hire-purchase of motor vehicles."
6. Going by the definition provided to a dealer, it can be seen that it is an inclusive definition by including persons who is engaged in the activities referred to thereunder and it pre-supposes all dealers of motor vehicles. So also, Sec.39 of the Act deals with registration of motor vehicles and without a registration, no motor vehicle can be driven on public road. The proviso thereto reads as follows:
"Provided that nothing in this section shall apply to a motor vehicle in possession of a dealer subject to such conditions as may be prescribed by the Central Government".
Therefore, merely because a dealer is in possession of vehicles, registration cannot be insisted upon by the authority concerned, but however, subject to the condition as may be prescribed by the Central Government for having possession. W.P.(C) No.17165 of 2016 & conn. cases 7
7. In order to understand the prescriptions/stipulations made by the Central Government, so far as the issue in these cases pertaining to adjudication of applications for issuance of Trade Certificates are concerned, a reference to some of the Rules among Rules 33 to 46 of CMV Rules is necessitated. Rule 33 deals with condition for exemption from registration, which reads as follows:
"33. Condition for exemption from registration.- For the purpose of proviso to Section 39, a motor vehicle in the possession of a dealer shall be exempt from the necessity of registration subject to the condition that he obtains a trade certificate from the registering authority having jurisdiction in the area in which the dealer has his place of business in accordance with the provisions of this Chapter".
Therefore, on a reading of the said rule, it is specific that in order to have possession of a motor vehicle by a dealer, the dealer is exempted from the necessity of registration, subject to the condition that he obtains a certificate from the Registering Authority having jurisdiction in the area in which the dealer has his place of business in accordance with the provisions of Chapter-III. Rule 34 deals with submission of application for the grant or renewal of a Trade Certificate by W.P.(C) No.17165 of 2016 & conn. cases 8 which it is insisted that the same shall be accompanied by appropriate fee specified in Rule 81. The said provision mandates separate application for each classes of vehicle mentioned in sub-rule (2) like, motor cycle, invalid carriage, Light Motor Vehicle, medium passenger motor vehicle etc. etc. Rule 35 deals with grant or renewal of a Trade Certificate, which reads as follows:
"35. Grant or renewal of trade certificate.-
(1) On receipt of an application for the grant or renewal of a trade certificate in respect of a vehicle, the registering authority may, if satisfied that the applicant is a bona fide dealer and requires the certificates specified in the application, issue to the applicant one or more certificates, as the case may be, in Form 17 [within thirty days from the date of receipt of such an application] and shall assign in respect of each certificate a trade registration mark consisting of the registration mark referred to in the notification made under sub-section 6 of section 41 and followed by two letters and a number containing not more than three digits for each vehicle, for example:-
AB-Represent State Code.
12-Registration District Code.
TC.1- Trade Certificate number for the vehicle. (2) No application for trade certificate shall be refused by the registering authority unless the applicant is given an opportunity of being heard and W.P.(C) No.17165 of 2016 & conn. cases 9 reasons for such refusal are given in writing".
8. On a reading of Sec.35, what can be gathered is that, when an application is received by a Registering Authority, the Registering Authority may, if it is satisfied that the applicant is a bonafide dealer and requires the certificates specified in the application issued to the applicant, one or more certificates, as the case may be, in Form 17, within thirty days from the date of receipt of such an application, and shall assign in respect of each certificate a trade registration mark consisting of the registration mark referred to in the notification made under sub-section 6 of Sec.41 and followed by two letters and a number containing note more than three digits for each vehicle. Sub-rule (2) of Rule 35 mandates that, no application for Trade Certificate shall be refused by the Registering Authority unless the applicant is given an opportunity of being heard and reasons for such refusal are given in writing. Therefore, my first endeavour is to find out the nature of power enjoyed by the Registering Authority under the said Rule.
9. On a reading of Rule 35, sub-rules (1) and (2), it is clear that the power vested on a Registering Authority is W.P.(C) No.17165 of 2016 & conn. cases 10 independent and without being eclipsed or circumscribed by any notification or circular issued by any authority. There is no mention anywhere in Rule 35 that the power, is to be exercised by the Registering Authority subject to any instructions issued by any superior authority. Moreover, the Registering Authority is independently empowered to adjudicate the issue, who is a bonafide dealer and whether he requires certificates specified in the application. Only on finding such bonafides of an applicant, the Registering Authority is bound to issue Trade Certificates. Moreover, the Registering Authority cannot refuse a Trade Certificate sought for by an applicant without providing an opportunity of being heard, and reasons for such refusal be given in writing. That apart, under Rule 44, Registering Authority is vested with powers to suspend or cancel a certificate after providing an opportunity of being heard to the holder. Therefore, on a cumulative appreciation of the powers conferred on the Registering Authority, it is categoric and clear that under Rule 35, the Registering Authority is exercising the power of a quasi-judicial authority independent of the hierarchical power of superior authorities under the Motor Vehicles Act and Rules. W.P.(C) No.17165 of 2016 & conn. cases 11 Accordingly, further consideration of the subject issue is by bearing in mind that the Registering Authority of a motor vehicle is a quasi-judicial functionary.
10. Rule 39 of the CMV Rules deals with use of trade registration mark and number. A prohibition is created by the said rule by constituting an embargo to the effect that a trade registration mark and number shall not be used upon more than one vehicle at a time or upon any vehicle other than a vehicle bonafide in the possession of the dealer in the course of his business or on any type of vehicle other than the one for which the Trade Certificate is issued. Therefore, what the said rule contemplates is that, even if a person has acquired only 10 Trade Certificates and there are 20 vehicles in his possession, for the purpose of using the 10 vehicles on road, 10 Trade Certificates can be used and thereafter the very same Trade Certificates can be used for the purpose of using the other 10 vehicles on road. That apart, Rule 40 creates a prohibition from using Trade Certificate issued to a person to offer or cause the certificate or the number assigned in connection therewith to be used by any other person. However, an exception is carved out in the proviso to the said W.P.(C) No.17165 of 2016 & conn. cases 12 rule which may not be necessary and vital to consider the issues raised in these writ petitions. Rule 41 stipulates the purposes for which motor vehicle with Trade Certificate may be used, which reads thus:
"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:-
(a) for test, by or on behalf of the holder of a trade certificate during the course of, or after completion of, construction or repair; or
(b) for proceeding to or returning from a weigh bridge for or after weighment, or to and from any place for its registration; or
(c) for a reasonable trial or demonstration by or for the benefit of a prospective purchaser and for proceeding to or returning from the place where such person intends to keep it; or
(d) for proceeding to or returning from the premises of the dealer or of the purchaser or of any other dealer for the purpose of delivery; or
(e) for proceeding to or returning from a workshop with the objective of fitting a body to the vehicle or paining or for repairs; or
(f) for proceeding to and returning from airport, railway station, wharf for or after being transported; or
(g) for proceeding to or returning from an exhibition of motor vehicles or any place at which the W.P.(C) No.17165 of 2016 & conn. cases 13 vehicle is to be or has been offered for sale; or
(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."
11. Rule 42 creates a prohibition to the holder of a Trade Certificate from delivering the motor vehicle to a purchaser without registration, whether temporary or permanent. Rule 43 mandates every holder of Trade Certificates to maintain a register in Form No.19. Rule 44 enables the Registering Authority to suspend or cancel a Trade Certificate if it has reason to believe that the holder of any Trade Certificate has not complied with the provisions of Rules 39 to 43, after providing the holder, an opportunity of being heard. Rule 45 enables any aggrieved person to prefer an appeal from the order of the Registering Authority under Rule 35 or Rule 44, within thirty days of the receipt of any such order to the head of the Motor Vehicles department established under Sec.213 of the Act.
12. Rule 46 deals with the procedure for appeal and sub-rule (2) of the said Rule empowers the appellate authority to conduct an enquiry and after providing an opportunity to the W.P.(C) No.17165 of 2016 & conn. cases 14 parties of being heard, pass orders in the appeal within a period of thirty days from the receipt of such an appeal. Therefore, on a harmonious reading of Rules 45 and 46, it is crystal clear that the appellate authority is a quasi-judicial functionary functioning independent of any superior hierarchical authority. The State Transport Commissioner is the authority appointed under Sec.213 of the Act, accordingly the head of the Motor Vehicles department and therefore the State Transport Commissioner is the appellate authority under Rule 45 of the CMV Rules.
13. Rule 405 of the Kerala Motor Vehicles Rules deals with appointment of the State Transport Commissioner as the head of the department and the power conferred on the Transport Commissioner to issue circulars and instructions and the said circulars and instructions issued by the State Transport Commissioner shall be carried out by the officers of the Motor Vehicles Department.
14. Therefore, the contention of the writ petitioners are that, the circular issued by the State Transport Commissioner to the Registering Authority by issuing instructions with respect to the manner in which the Trade Certificates are to be W.P.(C) No.17165 of 2016 & conn. cases 15 issued is absolutely in violation of the quasi-judicial power conferred on the Registering Authorities, and therefore the circular in question interfering with such independent powers to be exercised by the Registering Authorities, is nothing but an arbitrary exercise of power and therefore unconstitutional. Since the writ petitions are founded on pure questions of law, learned Senior Government Pleader has offered to argue the matter without filing a counter affidavit.
15. Heard Sri. P. Deepak and Sri. N. Krishna Prasad, learned counsel for the petitioners and Senior Government Pleader, Smt. K.A. Sanjeetha for respondents.
16. On the other hand, learned Senior Government Pleader, on instructions, submitted that the State Transport Commissioner is empowered under Rule 405 of the Kerala Motor Vehicles Rules to issue circulars and instructions to guide the officers of the Motor Vehicles Department and therefore the Registering Authority issuing a Trade Certificate is bound by such instructions issued by the Transport Commissioner. It is also submitted by learned Government Pleader that a bonafide dealer mentioned under Rule 35 of the CMV Rules is an agent of the dealer appointed by the manufacturer. W.P.(C) No.17165 of 2016 & conn. cases 16
17. In that circumstances, learned Senior Government Pleader contends that the Transport Commissioner who is vested with powers to issue circulars etc. under Rule 405 of the Kerala Motor Vehicles Rules is entitled to issue circulars so as to enable the Registering Authorities to follow the prescriptions and stipulations contained under law correctly. That apart, it is contended that bonafide dealer is not defined under the Act. Therefore, by issuing the circular, the Transport Commissioner intended to provide a meaning to bonafide dealer in order to enable the Registering Authorities to take decisions appropriately and in accordance with law. Therefore, the meaning provided to a bonafide dealer in the circular under question to mean that it has to be the dealer authorized and appointed directly by the manufacturer for sale of vehicles manufactured by them, cannot be said to be irregular, irrational or illegal. In that view of the matter, learned Government Pleader contended that, the circular do not suffer from any legal infirmities warranting interference of this Court in a writ jurisdiction. Learned Government Pleader has also invited my attention to Rule 41(g) of the CMV Rules and contended that a Trade Certificate is required for the vehicle W.P.(C) No.17165 of 2016 & conn. cases 17 on road for the purpose of proceeding to or returning from an exhibition of motor vehicles or any place at which the vehicle is to be or has been offered for sale. It is also contended by learned Government Pleader that, whatever be the circumstances, an original Trade Certificate is to be carried by a dealer or his agent in the circumstances mentioned under Rule 41 of the CMV Rules, but however, the dealers always attempt to register the vehicles over and above the Trade Certificates issued by producing photocopy of the Trade Certificates. In order to curb such illegal methods adopted by the dealers or their agents, the circular in question is issued with the bonafide intention of providing strict interpretation to the provisions of the Act and the Rules. That apart, it is contended that, there is no cause of action for these writ petitions, since petitioners are not aggrieved by any orders passed by the Registering Authorities.
18. To meet the said contention, learned counsel for the petitioners contended that the requirement of Trade Certificate is not to be equivalent to the vehicles possessed by a dealer or his agent. The only requirement under law is that when the vehicles are taken on road, each of the said vehicles should W.P.(C) No.17165 of 2016 & conn. cases 18 have Trade Certificates issued by the authority.
19. Learned counsel for the petitioner in W.P.(C) No.18020 of 2016 has brought my attention to Exts.P1 and P1
(a) to P1(c), which are show cause notices issued by Regional Transport Officers directing the sub-dealers to show cause why action shall not be initiated against them, since the sub- dealers are engaged in the display and delivery of motor cars without sanction from the Registering Authorities which amounts to violation of Rule 35 of the CMV Rules, 1989. Therefore, the learned counsel contended that the intention of the Registering Authorities is that, a sub-dealer is not recognized by the Registering Authorities as authorized dealers, and the same is done in accordance with the stipulations contained in the circular in question. Therefore, the counsel contends that the Registering Authorities who are bound to adjudicate the applications legalistically and with pragmatic perception is misled by the circular issued and therefore the quasi-judicial power conferred on the Registering Authorities has lost its efficacy and independent nature. That apart, learned counsel appearing for the petitioners also contended that, as per Rule 45 of the CMV Rules, the W.P.(C) No.17165 of 2016 & conn. cases 19 Transport Commissioner is an appellate authority to consider the appeals from the orders passed by the Registering Authority under Rules 35 and 44, which deals with grant or renewal of Trade Certificate and suspension or cancellation of Trade Certificates respectively. Taking into account the appellate powers so conferred on the Transport Commissioner by issuing circular, the Transport Commissioner himself binds him by his own circular and is attempting to confine himself to a narrow and pedantic approach by providing a meaning to a 'dealer' while considering the appeal. The appellate authority is also a statutory functionary and therefore he must deal every appeal with an open mind, and taking into account the facts and circumstances of each and every case.
20. Having considered the rival submissions made by the respective counsel and on perusal of the records and the provisions of law referred to above, I am of the considered opinion that the predominant question to be considered in these writ petitions is whether the respondent, Transport Commissioner is empowered to issue any circular interdicting the quasi-judicial power conferred on the Registering Authority under Rule 35 of the CMV Rules. I have already held earlier W.P.(C) No.17165 of 2016 & conn. cases 20 that the power conferred on the statutory authority under Rule 35 of the CMV Rules is a quasi-judicial power and going by the nature of power exercised by the said authority, it can be found that it is also quasi-judicial in nature. In that circumstances, whether the Transport Commissioner can issue a circular interdicting the power conferred on a quasi-judicial authority, is the question. It is true that, Rule 405 of Kerala Motor Vehicles Rules enables the Transport Commissioner to issue circulars or instructions to the officers of the Motor Vehicles Department. It is also true that, being the head of the Motor Vehicles Department, as provided under law, the Transport Commissioner is enabled with power to ensure that the provisions of law contained under the Act and Rules are enforced by the subordinate officers in accordance with law. But however, here the question is whether such power under Rule 405 is resourceful enough, to interdict the power of the Registering Authority by issuing circulars and making stipulations thereunder in order to consider the applications submitted by the applicants in a particular manner.
21. It is a well-settled proposition in law that a quasi- judicial functionary is to act independently with erudition and W.P.(C) No.17165 of 2016 & conn. cases 21 with an absolute free and thoughtful mind while discharging the power conferred on him under law. Faith on the quasi- judicial system of power sustains and works effectively when authorities conferred with quasi-judicial power discharges the power conferred on them in a judicious, fair and independent manner. When such authorities are expected to exercise the power independently of any interference in any manner of whatsoever nature, I do not think that the Transport Commissioner can issue a circular and totally eclipse the power conferred on the quasi-judicial functionary. If that is done, then the entire purpose of adjudicating an issue by invoking Rule 35 is completely lost. This is more so since the orders refusing Trade Certificate by the Registering Authority under Rule 35 of the Rules is to be dealt with by the Transport Commissioner in appeal under Rule 45 of the CMV Rules. Therefore, by issuing the circular and by making interdiction with respect to the power exercised by the Registering Authority, the Transport Commissioner himself is also bound by such an interdiction, while discharging his functions as an appellate authority. Therefore, there is no liverage or sufficient play in the joints, which enables the Registering W.P.(C) No.17165 of 2016 & conn. cases 22 Authority as well as the appellate authority to exercise their powers in accordance with law, and independently of any instructions or stipulations from any statutory authority.
22. Learned counsel for the petitioner has invited my attention to the judgments of this Court in 'Bavasons Constructions Pvt. Ltd. v. State of Kerala and others' [2007 (2) KHC 409 : 2007 (3) KLT 101] and in 'Kerala Bus Transport Association and another v. Transport Commissioner' [2013 (1) KHC 384 : 2013 (1) KLT 440 : ILR 2013 (1) Ker. 570], wherein this Court had occasion to consider the directive issued by the superior authority to a subordinate officer in the matter of exercise of quasi-judicial power and this Court has held that any interference with such powers conferred on quasi-judicial functionaries is violative of Article 14 of the Constitution of India.
23. In 'Kerala Bus Transport Association and another' (supra), a learned Single Judge had occasion to consider the interdiction contained in Circular No.17/2011 issued by the Transport Commissioner and held that Clause 20 and Clause 30 of the said circular are arbitrary and unreasonable because the said circular interfered with the W.P.(C) No.17165 of 2016 & conn. cases 23 powers conferred on the Registering Authority with respect to renewal of permit and certificate of fitness depending on the check report. So also, learned counsel has invited my attention to the judgment of the Apex Court in 'B. Rajagopala Naidu v. State Transport Appellate Tribunal and others' [AIR 1964 SC 1573], wherein the Apex court had occasion to consider whether the notification issued by the State Transport Authority was binding on the Tribunals in matters which have to be dealt with in quasi-judicial manner. Therein, it was held that the decision of the appellate Tribunal based on impugned order was invalid.
24. Learned Government Pleader also relied on the judgment of the Apex Court in 'B. Rajagopala Naidu' (supra) and referred specifically to paragraph 15. True, there the Apex Court considered the question with respect to the power of the State Transport Authority to issue circulars and notification on the administrative side, and held that such authority is empowered under law, to guide the subordinate officers properly and to exercise their function in accordance with law. But however, the question with respect to the binding nature of such circulars or notifications as a quasi-judicial authority W.P.(C) No.17165 of 2016 & conn. cases 24 was considered in paragraph 17 and held as follows:
"17. But there are several other considerations which support Mr. Kumaramangalam's construction. The first is the setting and the context of the section. As we have already seen, this section has been introduced by the Legislature in response to the decision of the Madras High Court in C.S.S. Motor Service case I.L.R [1953] Mad. 304 and that would indicate that the Madras Legislature intended to confer on the State Government power to issue administrative orders or directions of a general character. Besides, the two preceding sections s. 42 and s. 43 and s. 44 which follows support the argument that the field covered by s.43A like that covered by Sections 42, 43 and 44 is administrative and does not include the area which is the subject matter of the exercise of quasi- judicial authority by the relevant Tribunals".
25. So also, Rule 35 in any manner controls the power provided to the Registering Authority by circumscribing with stipulations of any nature. On that account, learned counsel for the petitioners has invited my attention to the judgment in 'State of Punjab v. Hari Kishan Sharma' [AIR 1966 SC 1081], there the very same question was considered under the Punjab Cinemas (Regulation) Act, 1952, wherein Sec.5 (2) in which the power conferred on the licensing authority was considered and held that since the licensing power was subject W.P.(C) No.17165 of 2016 & conn. cases 25 to the control of the Government, the licensing authority was empowered to grant licences under the said Act to such persons as it think fit on such terms and conditions as determined by the controlling authority. But, however, in paragraph 12 of the said judgment, the Apex Court has held as follows:
"12. x x x x x x x x It is true that Section 5(2) provides that the licensing authority may grant licences subject to the provisions of Section 5(1) and subject to the control of the Government; and it may be conceded that the control of the Government subject to which the licensing authority has to function while exercising its power under Section 5(1) and (2) is very wide; but however wide this control may be, it cannot justify Appellant 1 to completely oust the licensing authority and itself usurp his functions. The legislature contemplates a licensing authority as distinct from the Government. It no doubt recognises that the licensing authority has to act under the control of the Government; but it is the licensing authority which has to act and not the Government itself. The result of the instructions issued by Appellant 1 is to change the statutory provision of Section 5(2) and obliterate the licensing authority from the Statute-book altogether. That, in our opinion, is not justified by the provision as to the control of Government prescribed by Section 5 (2)".
W.P.(C) No.17165 of 2016 & conn. cases 26
26. Therefore, it is clear from the said decision that even if on the administrative side a power is conferred on the State Transport Commissioner to issue notifications, circulars and other stipulations, but that cannot extend so as to interfere with the powers conferred on a quasi-judicial functionary.
27. In my view, a quasi-judicial authority functioning under a statute is a part of the extended judicial system from the administrative side of the Government. When orders passed by such authorities are susceptible to judicial review by invoking the powers conferred on this Court under Article 226 of the Constitution of India, such authorities are expected to exercise the power conferred without adverting to any stipulations made in any circulars interdicting the exercise of quasi-judicial power conferred under the Act and Rules. Rule of law encompasses such a situation also and any attempt to inter-meddle with the same, result in miscarriage of justice and erosion in public trust and faith in the legal system. It is true that, if the Trade Certificate holders misuse the same, the authority conferred with power may have to act on the administrative side and he is entitled to take action as W.P.(C) No.17165 of 2016 & conn. cases 27 contemplated under the Act and Rules. But when the very same authority exercises the power of quasi-judicial nature, he has to exercise the same independent of his administrative power. In that view of the matter, I think a reference to Sec. 2(8) of the Motor Vehicles Act, 1988 is relevant. Sec. 2(8) is an inclusive definition where a dealer is defined as 'inclusive of'. The specific reference to 'dealer' in the said provision is relating to a person or organization dealing with the matters in relation to repair, construction and other activities of a motor vehicle. Therefore, in order to provide life and blood to the term 'dealer' under Rule 35 of the CMV Rules, the Registering Authority is conferred with power to adjudicate, every application independently in order to identify a bonafide dealer, especially when bonafide dealer is not defined under the Act or Rules. Therefore, on that account also, it can be seen that consequent to the issuance of circular, the power conferred on the Registering Authority with respect to a decision as to who is a bonafide dealer has lost its efficacy, by stipulating in the circular that, a sub-dealer is not a dealer of manufacturer. Learned Government Pleader has vehemently contended that there is no cause of action for the writ petition since none of W.P.(C) No.17165 of 2016 & conn. cases 28 the petitioners have invoked the power of the Registering Authority under Rule 35 of CMV Rules. But however, that by itself is not a ground to non-suit the writ petitioners since the challenge is based on a larger question as to the Constitutional vires of the circular in question. Therefore, the said ground urged by the learned Government Pleader also cannot be sustained under law. It is also a well-recognized principle in law that, no Government Order, notification or circular can replace the statutory rules framed under authority of law.
28. Taking into account the aforesaid cumulative circumstances, I am of the considered opinion that, Circular No.03/2009 issued by the Transport Commissioner interdicts, eclipses and interferes with the quasi-judicial power conferred on the authority under Rule 35 of the CMV Rules, 1989, and therefore the same is arbitrary and illegal and liable to be struck down.
29. Resultantly, the writ petitions are allowed to the extent of quashing Circular No.03/2009 dated 25.03.2009 issued by the Transport Commissioner, Thiruvananthapuram. However, the same will not dissuade the respective statutory authorities from functioning in accordance with law as provided W.P.(C) No.17165 of 2016 & conn. cases 29 under the Motor Vehicles Act and Rules, by exercising their powers on the administrative side.
The above writ petitions are allowed accordingly.
Sd/-
SHAJI P. CHALY JUDGE //true copy// P.S. to Judge St/-
26.05.2016