Sarath and Rakesh v Regional Transport Authority, Alappuzha and Addl. IKF Finance Limited

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN** **THURSDAY, THE 24TH DAY OF JANUARY 2019 / 4TH MAGHA, 1940** ## **WP(C).No. 34789 of 2018** ## **PETITIONERS:** |**1**|**SARATH,**| |---|---| ||**SARATH BHAVAN, CHARUVARANAM, VARANAM PO,**| ||**CHERTHALA, ALAPPUZHA**| |**2**|**RAKESH,**| ||**233(10/233), RAJI BHAVANAM,**| ||**6, THANNERMUKKAM, KARIKKAD P.O.,**| ||**CHERTHALA, ALAPPUZHA**| ||**BY ADVS.**| ||**SRI.G.PRABHAKARAN**| ||**SMT.R.PADMAKUMARI**| ## **RESPONDENTS:** |**1**|**THE REGIONAL TRANSPORT AUTHORITY,**| |---|---| ||**ALAPPUZHA, REPRESENTED BY ITS SECRETARY 688001**| |**2**|**THE SECRETARY,**| ||**REGIONAL TRANSPORT AUTHORITY,**| ||**ALAPPUZHA 688 001**| |**3**|**ADDL.R3 IKF FINANCE LIMITED,**| ||**PONNURUNNI, NEAR PONNURUNNI TEMPLE, VYTTILA,**| ||**ERNAKULAM-682019.(ADDL.R3 IMPLEADED AS PER**| ||**ORDER DATED 05/11/2018 IN IA.NO.02/2018)**| ||**BY ADVS.**| ||**SRI.B.ASHOK SHENOY**| ||**SRI.K.V.GEORGE**| ||**SRI.P.N.RAJAGOPALAN NAIR**| ||**SRI.P.S.GIREESH**| ||**SRI.RIYAL DEVASSY**| ||**SRI K.P.HARISH, SENIOR GOVERNMENT PLEADER**| **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 24.01.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** 2 WP(C)34789 OF 2018 ## **JUDGMENT** The 2[nd] petitioner is the holder of Ext.P1 regular permit on the route Cherthala-Aroor Temple, in respect of stage carriage bearing registration No.KL-53/B-8331, which is owned by the 1[st] petitioner. Ext.P1 regular permit was valid till 25.10.2018. The petitioners have moved this writ petition before this Court, under Article 226 of the Constitution of India, seeking a writ of mandamus commanding respondents 1 and 2 to accept Ext.P2 application for renewal of Ext.P1 regular permit, by accepting necessary fees, and thereafter finalise the same after giving an opportunity of being heard to the petitioners. The further relief sought for is writ of mandamus commanding the respondents to maintain status quo of operation of stage carriage bearing registration No.KL-53/B8331 on the route Cherthala-Aroor Temple, by considering Ext.P3 application for temporary permit. 2. On 25.10.2018, when this writ petition came up for consideration, this Court noticed that stage carriage bearing registration No.KL-53/B-8331 is one purchased by the 1[st] petitioner on the strength of a hire purchase/Hypothecation WP(C)34789 OF 2018 3 agreement with a financier. The learned counsel for the petitioners was directed to furnish a copy of the certificate of registration of the vehicle and also to implead the financier of the said vehicle. 3. Accordingly, the petitioner produced the certificate of registration as Ext.P6, along with I.A.No.3 of 2018. By order dated 05.11.2018 in I.A.No.2 of 2018, the financier of the stage carriage was impleaded as additional 3[rd] respondent. 4. The additional 3[rd] respondent has filed a counter affidavit opposing the reliefs sought for in this writ petition. The petitioners have also filed a reply affidavit. 5. Heard the learned counsel for the petitioners, the learned Senior Government Pleader appearing for respondents 1 and 2 and also the learned counsel for the additional 3[rd] respondent. 6. The pleadings and materials on record would show that stage carriage bearing registration No.KL-53/B-8331 owned by the 1[st] petitioner, which was covered by Ext.P1 regular permit on the route Cherthala-Aroor Temple, is one purchased after entering into a hypothecation agreement with the 3[rd] respondent financier. The fact that the 1[st] petitioner has 4 WP(C)34789 OF 2018 defaulted repayment in terms of the hypothecation agreement is not in dispute. 7. The learned counsel for the 2[nd] respondent financier, after referring to the materials placed on record along with the counter affidavit of the said respondent, would point out that the 1[st] petitioner has defaulted repayment of the amount in terms of hypothecation agreement and as such, the 3[rd] respondent is justified in not issuing no-objection certificate as sought by the 1[st] petitioner. 8. In **Shabu Sukumaran v. Regional Transport Officer, TVM and others [2018(2) KHC 470]** , after referring to the provisions under Section 51 of the Motor Vehicles Act, 1988, this Court has held that, as per sub-section (8) of Section 51, while applying for renewal of permit or for issuance of duplicate certificate of registration or for assignment of a new registration mark, the registered owner shall submit the certificate, if any, obtained from the financier under sub-section (7) or, where no such certificate has been obtained, the communication received from the financier under that sub-section, or, as the case may be, a declaration that he has not received any communication from the financier within WP(C)34789 OF 2018 5 the period of seven days specified in that sub-section. In the said decision, this Court held further that, even in the case, in which financier has objected renewal of permit, registering authority has discretion to renew the permit, after affording the applicant an opportunity of being heard. In the said decision, this Court has also held that registering authority has to apply its mind to the objections, if any, raised by the financier and take an appropriate decision as to whether despite such objections of the financier, applicant is entitled for renewal of permit. Paragraphs 4 to 6 of the said decision reads thus: “4. Section 51 of the Motor Vehicles Act (hereinafter referred to as 'the Act' for short) deals with special provisions regarding motor vehicle subject to hire purchase agreement. Sub-section (6) of Section 51 provides that the registered owner shall, before applying to the appropriate authority, for the renewal of a permit under section 81 or for the issue of duplicate certificate of registration under sub-section (14) of Section 41, or for the assignment of a new registration mark under Section 47, or removal of the vehicle to another State, or at the time of conversion of the vehicle from one class to another, or for issue of no objection certificate under Section 48 or for change of residence or place of business under Section 49, or 6 WP(C)34789 OF 2018 for the alteration of the vehicle under Section 52, make an application to the person with whom the registered owner has entered into the said agreement of hire purchase (such person being referred to as the financier) for the issue of a no objection certificate. Sub-section (7) of Section 51 provides that within seven days of the receipt of an application under subsection (6), the financier may issue, or refuse, for reason which shall be recorded in writing and communicated to the applicant, to issue, the certificate applied for, and where the financier failed to issue the certificate and also fails to communicate the reasons for refusal to issue the certificate to the applicant within the said period of seven days, the certificate applied for shall be deemed to have been issued by the financier. 5. Sub-section (8) of Section 51 provides that the registered owner shall, while applying to the appropriate authority for the renewal of any permit under Section 81, or for the issue of a duplicate certificate of registration, under sub-section (14) of Section 41, or while applying for assignment of a new registration mark under Section 47, submit with such application the certificate, if any, obtained under subsection (7) or, where no such certificate has been obtained, the communication received from the financier under that sub-section, or, as the case may be, a declaration that he has not received any communication from the financier within the period of 7 WP(C)34789 OF 2018 seven days specified in that sub-section. As per Clause (a) of sub-section (9) of Section 51, on receipt of an application for the renewal of any permit or for the issue of duplicate certificate of registration or for assignment of a new registration mark in respect of a vehicle which is held under the said agreement, the appropriate authority may, subject to the other provisions of this Act, in a case where the financier has refused to issue the certificate applied for, after giving the applicant an opportunity of being heard, either renew or refuse to renew the permit or issue or refuse to issue the duplicate certificate of registration or assign or refuse to assign a new registration mark. 6. The provisions under sub-section (9) of Section 51 of the Act would make it explicitly clear that even in a case in which the financier has objected the renewal of permit, the registering authority has the discretion to renew the permit, after affording the applicant an opportunity of being heard. Therefore, merely for the reason that the financier has refused to issue the certificate applied for under sub-section (7) of Section 51, the registering authority cannot reject an application made for renewal of contract carriage permit, in a mechanical exercise of power. Since certain discretion has been vested with the registering authority, in view of the provisions under sub-section (9) of Section 51 of the Act, the registering authority has to apply its mind to the objections, if any, raised by the financier and take an appropriate decision as 8 WP(C)34789 OF 2018 to whether despite such objections of the financier, the applicant is entitled for renewal of permit.” 9. Having considered the submissions made by the learned counsel on both sides, this writ petition is disposed of with the following directions; (i) Within ten days from the date of receipt of a certified copy of this judgment, the 2[nd] petitioner shall resubmit Ext.P2 application for renewal of Ext.P1 regular permit before the 1[st] respondent, after remitting the requisite fee. (ii) If that application is in order and the 2[nd] petitioner has remitted the requisite fee, the 2[nd] respondent shall place it before the 1[st] respondent Regional Transport Authority and thereafter the said authority shall consider the same and pass appropriate orders thereon, with notice to the petitioners and also to the additional 3[rd] respondent financier and after affording them an opportunity of being heard. While taking such decision, the 1[st] respondent shall take into consideration the law laid down by this Court in the decision referred to supra WP(C)34789 OF 2018 9 and also the validity of the agreement stated to have been executed between the 1[st] petitioner and the 2[nd] petitioner, in respect of the stage carriage in question, which is hypothicated to the 3[rd] respondent financier. A decision in this regard shall be taken, as expeditiously as possible, at any rate, within a period of two months from the date of receipt of a certified copy of this judgment. Sd/- **ANIL K. NARENDRAN JUDGE** **yd** 10 WP(C)34789 OF 2018 ## **APPENDIX** ## **PETITIONERS' EXHIBITS:** **EXHIBIT P1 TRUE COPY OF THE PERMIT WITH ITS NO. P. ST.4/1902/2013 EXHIBIT P2 TRUE COPY OF THE RENEWAL OF PERMIT APPLICATION DATED 9.10.2018 EXHIBIT P3 TRUE COPY OF THE TEMPORARY PERMIT APPLICATION DATED 20.10.2018 EXHIBIT P4 TRUE COPY OF THE CHELAN RECEIPT DATED 20.10.2018** **EXHIBIT P5 TRUE COPY OF THE REPORT ISSUED BY THE RTO DATED 23.10.2018 EXHIBIT P6 TRUE COPY OF THE RC BOOK OF THE VEHICLE WITH ITS VEHICLE NO.KL-53/B8331. EXHIBIT P7 TRUE COPY OF THE PERMIT FOR THE PERIOD 04.12.2018 TO 03.04.2019 DATED 03.12.2018.** ## **3RD RESPONDENT'S EXHIBITS:** **EXHIBIT R3(A) TRUE COPY OF LOAN AGREEMENT ALONG WITH POWER OF ATTORNEY, DEMAND PROMISSORY NOTE AND LOAN APPLICATION DATED 15.07.2017 EXECUTED BY 1ST PETITIONER AND MR.ANILKUMAR T.A. AND MS. SHEEBA KAINATHAN, IN FAVOUR OF ADDITIONAL RESPONDENT NO.3. EXHIBIT R3(B) TRUE COPY OF STATEMENT OF ACCOUNT AS TO AMOUNTS OUTSTANDING DUE FROM 1ST PETITIONER TO ADDITIONAL RESPONDENT NO.3, AS ON 20.11.2018.** WP(C)34789 OF 2018 11 **EXHIBIT R3(C) TRUE COPY OF DEMAND NOTICE DATED 17.03.2018 ISSUED BY ADDITIONAL RESPONDENT NO.3 TO THE 1ST PETITIONER EXHIBIT R3(D) TRUE COPY OF DEMAND NOTICE DATED 09.08.2018 ISSUED BY ADDITIONAL RESPONDENT NO.3 TO THE 1ST PETITIONER EXHIBIT R3(E) TRUE COPY OF POSTAL ACKNOWLEDGMENT CARD, DATED 21.03.2018, SIGNED BY 1ST PETITIONER. EXHIBIT R3(F) TRUE COPY OF POSTAL ACKNOWLEDGMENT CARD, DATED 16.08.2018, SIGNED BY 1ST PETITIONER.** ## **TRUE COPY** **P.A. TO JUDGE**