Sadik Mohammed Karikkanakudiyil House; V. N. Rajesh Varickakkal House; Joshy John; Faizal V.A. Velakkol Puthenpura v Regional Transport Officer, Deputy Transport Commissioner (Central Zone II), State Bank of Travancore, Transport Commissioner

**IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** **THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN &** **THE HONOURABLE MR. JUSTICE ASHOK MENON** **THURSDAY, THE 25TH DAY OF JANUARY 2018 / 5TH MAGHA, 1939** **WA.No. 45 of 2018 IN WPC. 4047/2015** **AGAINST THE ORDER/JUDGMENT IN WP(C) 4047/2015 of HIGH COURT OF KERALA DATED 11-07-2017** ## **APPELLANT(S)/PETITIONERS** **1 SADIC MOHAMMED KARIKKANAKUDIYIL HOUSE, VELLOORKUNNAM PO, MUVATTUPUZHA, ERNAKULAM DISTRICT.** **2 V.N.RAJESH VARICKAKKAL HOUSE, EDAVETTY PO, THODUPUZHA.** ## **3 JOSHY JOHN** **VADAKKEKKARA HOUSE, PERUMBAVOOR PO, MUVATTUPUZHA, ERNAKULAM DISTRICT** **4 FAIZAL V.A VELAKKOL PUTHENPURA, MUVATTUPUZHA, ERNAKULAM DISTRICT.** **BY ADVS.SRI.M.A.FAYAZ** **SMT.A.LOWSY** ## **RESPONDENT(S)/RESPONDENTS:** **1. REGIONAL TRANSPORT OFFICER** **CIVIL STATION, KAKKANAD, ERNAKULAM - 682 030.** **2. DEPUTY TRANSPORT COMMISSIONER CENTRAL ZONE - II, KAKKANAD, ERNAKULAM - 682 030.** ## **3. STATE BANK OF TRAVANCORE** **REPRESENTED BY ITS REGIONAL MANAGER, ERNAKULAM - 682 036.** ## **4. TRANSPORT COMMISSIONER** - **TRANSPORT BHAVAN, THIRUVANANTHAPURAM - 695 001.** **R1, R2 & R4 BY SRI.MOHAMMED RAFEEQ, SR.GOVERNMENT PLEADER R3 BY SRI.SANTHOSH MATHEW, SC, STATE BANK OF TRAVANCORE** **THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 25-01-2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** jg-3/2 ## K.VINOD CHANDRAN & ASHOK MENON, JJ. ------------------------------------------- W.A.No.45 of 2018 ------------------------------------------Dated this the 25[th] day of January, 2018 ## J U D G M E N T ## Ashok Menon, J. Common Judgment of the learned Single Judge in WP(C) Nos. 4047/2015 and 28545/2014 is impugned. The appellants herein are the petitioners in WP(C) No.4047 of 2015. Consequent to an auction notice dated 16.02.2010 by the third respondent Bank pursuant to the final order in O.A.Nos.203/2007 and 161/2008 under the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 by the Debt Recovery Tribunal, the petitioners had bid and purchased four vehicles in auction conducted on 05.03.2010. As successful bidders, the appellants approached the third respondent Bank for obtaining registration certificates pertaining to the vehicles. They were directed to approach the first respondent for issuance of duplicate certificates as originals were not available with the Bank. On approaching the first respondent, they were told that the clearance certificate could WA 45/2018 -2- not be issued as there were outstanding liability of Rs.90,000/- on each of the vehicles towards the arrears of motor vehicle tax. The appellants contended that they were not liable to pay the tax and that the registered owners of the vehicles at the relevant point of time, had the obligation to pay the same. The first respondent refused to accede to the request and so the petitioners were constrained to approach this Court by filing WP(C) No.28062/2010, challenging the order of the first respondent. As per Ext.P1 judgment, the said Writ Petition was disposed directing the first respondent to consider and pass orders, as early as possible, at any rate, within a period of two months, fixing the liability for payment of arrears of motor vehicle tax in respect of the four vehicles in question, and that the Bank Guarantee furnished by the appellants was directed to be kept alive till the finalisation of the order. Accordingly, the first respondent passed Exts.P2 to P5 orders, all dated 19.01.2012, casting the liability to pay the arrears of tax on the third respondent Bank. The appellants again approached this Court in WP(C) No.4933/2012 seeking return of the Bank Guarantee furnished by them in pursuance of Ext.P1 judgment. The third WA 45/2018 -3- respondent Bank also approached this Court with WP(C) No.7295/2012 contending that they were not given any notice before Exts.P2 to P5 orders were passed by the first respondent. As per Ext.P11 common judgment in the aforesaid Petitions, Exts.P2 to P5 were quashed and the first respondent was directed to hear the matter afresh, after notice to all the affected parties and to return the Bank Guarantee to the appellants in case the order is in their favour. The first respondent after hearing both the sides as directed by this Court, passed Ext.P7 order, once again mulcting the liability on the third respondent Bank. The Bank challenged Ext.P7 order in appeal before the second respondent-Deputy Transport Commissioner. As per Ext.P8 order, the appeal was dismissed and hence, the appellants once again approached this Court by filing W.P.(C) No.28545/2014 seeking return of the Bank Guarantee furnished by them consequent to the finding in Ext.P7 order as confirmed in Ext.P8 order. However, the third respondent Bank preferred a revision against Ext.P8 order before the fourth respondent-Transport Commissioner. The fourth respondent, as per Ext.P10 order, allowed the revision and remanded the matter to WA 45/2018 -4- the first respondent, for consideration afresh. 2. In WP(C) No.4047/2015, the appellants impugn Exts.P8 and P10 orders contending that in view of Exts.P1 and P11 Judgments, the order of the fourth respondent is vitiated and that in view of the order passed by the first respondent fixing the liability on the third respondent Bank, it was not open to them to challenge the orders of the first respondent in appeal before the second respondent or in revision before the fourth respondent. 3. The Writ Petitions 4047/2015 and 28545/2014 were disposed by the learned Single Judge by the impugned judgment, holding that the appellants cannot dispute the correctness of the order of the fourth respondent, at this belated stage; as the first respondent has, pursuant to Ext P10, passed an order on 28.01.2015, even prior to filing of W.P(C) 4075/2015. But at the same time, held that nothing would stand in the way of the appellants independently challenging the order dated 28.01.2015 of the first respondent for the limited purpose of establishing that tax liability fixed against the appellants in respect of the vehicles in question is excessive, or for the purpose of showing that there WA 45/2018 -5- could not have been any liability in respect of the vehicles in question for any particular period, on account of any exemption that the appellants were entitled to. 4. We heard the counsel appearing for both sides. 5. The learned counsel for the appellants submits that Section 3(3) of the Kerala Motor Vehicles Taxation Act, 1976 (‘Act’, for short) clearly states that the registered owner or any person having possession or control of a motor vehicle, shall be liable to pay tax for every vehicle used or kept for use in the State, and it is adequately clear that the Bank had taken possession of the vehicles for which loans were defaulted and hence, liable to pay tax for the period the vehicles were in their possession. The learned counsel also points out that Section 9 (2) of the Act states that nothing contained in sub-Section (1) shall be deemed to affect the liability to pay the said tax of the person who has transferred the ownership or has ceased to be in possession or control of the vehicle, and that therefore, the liability of the owner and the subsequent possessor of the vehicles continues despite the vehicles being transferred to the appellants. It is further argued that even though there is a charge WA 45/2018 -6- on the vehicles for the tax due, action can be resorted to against them, only if other methods to recover motor vehicle tax from the person who committed default, fail. The learned counsel relies on the decision in Vibhuraj v. Joseph , [2007(1) KLT 853] to argue that the liability of the registered owner does not get extinguished and that he cannot be exonerated from the liability to pay the motor vehicle tax dues merely because the vehicle has been transferred. He also relies on yet another decision of this Court in NPR Finance Ltd. v. State of Kerala [2002(1) KLT 591], wherein it was held that by virtue of Section 9, the financier who was in control of the vehicle, is liable to pay the amount due by way of arrears of motor vehicle tax. It is submitted that, In view of the above precedents, the judgment of the learned Single Judge is liable to be set aside. 6. A reading of Sections 3(3) and 9 of the Act would be apposite. “ Section 3(3) : The registered owner of, or any person having possession or control of a motor vehicle shall, for the purposes of this Act, be deemed to use or keep such vehicle for use in the State, except during any period for which no tax is payable on such motor vehicle under sub-section (1) of Section 5.” WA 45/2018 -7- “9.Liability to payment of tax by persons succeeding to the ownership, possession or control of motor vehicles.- (1) If the tax leviable in respect of any motor vehicle remains unpaid by any person liable for the payment thereof and such person before the payment of the tax has transferred the ownership of such vehicle or has ceased to be in possession or control of such vehicle, the person to whom the ownership of the vehicle has been transferred or the person who has possession or control of such vehicle shall be liable to pay the said tax. (2) Nothing contained in sub-section (1) shall be deemed to affect the liability to pay the said tax of the person who has transferred the ownership or has ceased to be in possession or control of such vehicle.” 7. A conjoint reading of the aforesaid Sections would clearly indicate that the registered owner or any person having possession or control of the motor vehicle shall be liable to pay tax. Section 9(1) would only indicate that nothing prevents the Government from proceeding against the earlier owner of the vehicle for realisation of motor vehicle tax though he has transferred the ownership. In Vibhuraj's case, it is held thus; “ We are of the view, assuming that the review petitioner is ceased to be in possession of the vehicle and subsection (1) of S.9 would enable the authorities to levy tax from the person who is in possession or control of the WA 45/2018 -8- vehicle that does not mean the registered owner though not in possession can escape from the liability. Argument raised on rebuttable presumption is also not sound. We are of the view the liability of the registered owner and the person who is in possession or control of the vehicle is joint and several. We are of the view, so far as review petitioner continues to be registered owner he is equally liable just like a person who is in possession and control of the vehicle. Review petitioner cannot import the provisions of the Sale of Goods Act to raise a contention that in fact there was transfer of the vehicle from the registered owner. Registered owner has been defined in S.2(e) of the Act which means the person in whose name a motor vehicle is registered or deemed to be registered under the Motor Vehicles Act, 1939. S.3 deals with levy of tax and S.4 deals with payment of tax and issue of licence, S.9 deals with liability to payment of tax by persons succeeding to the ownership, possession or control of motor vehicle. On a conjoint reading of all the provisions it is clear that the liability is joint and several on the registered owner, person who is in possession or the person who is in control of the vehicle.” 8. In NPR Finance Ltd , the finance company wanted to be exonerated. It was held that they continue to be liable as they were in possession. The decisions cited by the learned counsel for the appellants only indicate that the owner or the financier cannot be exonerated from the liability to pay the tax arrears. In other words, the owner, the financier in possession as well as the transferee, are jointly and severally liable for the tax arrears, which remains a WA 45/2018 -9- charge on the vehicle. The argument of the learned counsel for the appellants that they cannot be proceeded against till action is resorted to against the original owner or the financier, is not acceptable to us. 9. Learned counsel for the appellants argues that the Bank did not inform the appellants about the tax liability prior to the vehicles being put in auction. It is the basic rule applicable to sale of goods, that, buyer beware. The rule of caveat emptor would hold ground here as well. A perusal of the website pertaining to the Kerala Motor Vehicles Department would have revealed the outstanding liability on the vehicles which the appellants had intended to bid in auction. Hence, the argument that the Bank did not disclose the liability and hence they are not liable to pay the arrears of tax is not acceptable to us for that reason too. The learned Single Judge has adequately made it clear that proceedings could be resorted to by the appellants/petitioners for claiming refund of any tax, that is paid by them consequent to the direction in the judgment and that nothing contained in the judgment shall stand in the way of the appellants independently challenging the WA 45/2018 -10- order dated 28.1.2015 of the first respondent in separate proceedings for the limited purpose of establishing the tax liabilities fixed against the appellants. We would also make it clear that the petitioners could also initiate proceedings against the earlier registered owner or the Bank, in whose possession the vehicles remained earlier; which could have to be adjudicated in that proceedings. The State, however, could proceed against either, all or one of the persons who have the joint and several liability. We find no reason to interfere with the judgment of the learned Single Judge, and therefore, dismiss the appeal. No order as to costs. K.VINOD CHANDRAN Judge ASHOK MENON Judge dkr/jg