Pending Pre-October 2020 Traffic Challans Cannot Be Used To Block Vehicle Registration Services: Kerala High Court

Justice Murali Purushothaman held that applying the provision to earlier challans would amount to giving retrospective effect to a substantive provision that introduces a new restriction on vehicle owners.

The case arose, when the petitioner, who is a registered owner of a motor car, had approached the Regional Transport Officer seeking cancellation of the hypothecation entry following repayment of the vehicle loan obtained from Bank of Baroda. The Regional Transport officer declined to process the application on the ground that the vehicle had been blacklisted because certain traffic challans had remained unpaid for more than 90 days.

The petitioner contended that the challans in question related to alleged traffic violations committed between 2015 and 2019, before the introduction of Rule 167 through the Central Motor Vehicles (Eleventh Amendment) Rules, 2020. The amendment came into force only on October 1, 2020.

It was contended that Rule 167 (7) cannot operate retrospectively so as to impose a new restriction or disability upon the petitioner on the basis of alleged violations committed prior to the coming into force of the amended provision.

It was argued that Rule 167(7) introduced a new statutory disability by preventing the processing of applications relating to driving licences and vehicle registration where challans remained pending beyond the prescribed period. Since the provision did not exist when the earlier challans were issued, the authorities could not retrospectively impose the restriction.

The Court examined Rule 167 and noted that Rule 167(5) requires challans to be disposed of within 90 days from their issuance, except in cases of offences instituted for prosecution before a court. Sub-rule (6) provides for an additional payment notice where a challan remains unpaid beyond the prescribed period.

Sub-rule (7) provides that where a challan remains due beyond the period specified in sub-rule (5), applications relating to the offender's driving licence or the registration of the motor vehicle shall not be processed by the licensing or registering authority, as the case may be. The provision, however, excludes applications relating to permits, fitness and payment of motor vehicle taxes.

The Court also took note of Item No. 9(d) of the Ministry of Road Transport and Highways' Advisory dated January 2, 2023, which provides for vehicles against which challans remain pending for more than 90 days to be flagged as "NOT TO BE TRANSACTED" on the VAHAN portal.

n arriving at its conclusion, the Court relied on the Supreme Court's decisions in Panchi Devi v. State of Rajasthan and Others [2009 KHC 4145] and Commissioner of Income Tax (Central)-I, New Delhi v. Vatika Township Private Limited [(2015) 1 SCC 1].

The Court relied on the decision in Panchi Devi v State of Rajasthan and Other [2009 KHC 4145], where the Supreme Court held that subordinate legislation is ordinarily prospective in operation and that a right or liability created for the first time under an amended provision cannot be given retrospective effect.

Reliance was also placed on Zile Singh v. State of Haryana & Others [2004 (3) KLT OnLine 1205 (SC)], wherein the Supreme Court reiterated that legislation is presumed to be prospective unless retrospective operation is expressly provided or necessarily implied.

The Court thus noted that Rule 167(7) introduced a restriction that did not previously exist. Before the amendment, the mere pendency of a challan did not, by itself, constitute a statutory bar against processing an application relating to the registration of a motor vehicle.

The Court emphasised that the administrative mechanism for flagging vehicles could not expand the reach of Rule 167(7) or give it retrospective operation.

“Rule 167(7) being substantive law, operates prospectively as retrospectivity is not clearly made out by its language. Therefore, in the absence of a clear legislative intention to confer retrospective effect on Rule 167(7), the provision cannot be invoked to interdict the processing of applications for registration of motor vehicles merely on the ground that challans issued prior to 01.10.2020 remain pending against the applicants.” the Court said.

The Court consequently directed the Regional Transport Officer, Ernakulam, to receive and process the petitioner's application for cancellation of the hypothecation entry in the vehicle's Registration Certificate without taking into account the pendency of challans issued before October 1, 2020.

The writ petition was accordingly disposed of.

Counsel for Petitioner: Vipin Naryan, Ashwanth Padman

Counsel for Respondents: Sarath (GP), Amal Parthasarathy (CGC)