MV Rules 1989 | Bombay High Court Upholds Levy Of Additional Fees For Delayed Renewal Of Vehicle Registration, Driving Licence

The Bombay High Court on Tuesday dismissed a public interest litigation (PIL) and a writ petition challenging additional fees imposed for delay in applying for various vehicle related services including renewal of driving license and vehicle registration.

A division bench of Chief Justice Devendra Kumar Upadhyaya and Justice Arif S Doctor held that the additional fees do not constitute a penalty but are a legitimate charge for the processing of delayed applications.

“Section 211 of the parent Act (Motor Vehicles Act), if interpreted appropriately, vests power with the Central Government to make Rules providing for levy of additional fee for processing delayed applications for certain purposes such as for seeking renewal of driving license, renewal of registration certificate of a vehicle, change of residence and transfer of ownership of vehicle. We also have no hesitation to hold that the levy of additional fee in this case, is in no manner a penalty, either directly or in disguise”, the court held.

The court disagreed with the judgment of the Madras High Court striking down levy of additional fees.

The petition challenged Rule 32 and Rule 81 of the Central Motor Vehicles Rules, 1989, which stipulate additional fees for the renewal of driving licenses and vehicle registrations after the grace period, as well as for delay in submitting "No Objection Certificates" for ownership transfers and change of residence.

Rule 32 of the 1989 Rules mandates an additional fee of Rs. 1000 for each year or part thereof for renewal of a driving license beyond the grace period, while Rule 81 imposes additional fees for delayed renewal of registration certificates and submission of no objection certificates. Under Rule 81, additional fee of Rs. 300 is applicable for delay of every month or part thereof in respect of motor cycles and Rs. 500 in respect of other classes of non-transport vehicles.

The petitioners argued that delegated legislation like the 1989 Rules cannot introduce provisions inconsistent with the parent Act, the Motor Vehicles Act, 1988 (MV Act). The petitioners asserted that the imposition of additional fees amounts to a penalty disguised as a fee, especially considering that no extra services are provided in exchange for these fees. The petitioners argued that the MV Act does not authorize the imposition of any additional fees.

The Union of India contended that both the central and state governments are empowered to make rules under sections 64 and 110 of the MV Act and have the authority to levy fees for various actions under section 211. Further, section 211 allows for the imposition of different fees, including additional fees, even without the provision of extra services, and this levy cannot be considered a penalty, it contended.

Regarding Section 211, the court emphasized the phrase "notwithstanding the absence of any express provision to that effect," which grants the Central Government the power to levy fees even without explicit provisions.

Further, the court noted that Section 211 permits the Central Government to levy fees for "any other purpose or matter involving the rendering of any service," extending beyond the specific services listed.

Thus, the court concluded that section 211 provides for the levy of not only fees in respect of processing the applications, amendment of documents, issue of certificates, licences, permits etc., but also for the levy of additional fees for processing the delayed application for seeking renewal of driving license or registration certificate.

The court acknowledged potential concerns regarding the broad wording of Section 211, which might grant excessive power to the Central Government. However, since there's no challenge to this section in the petitions, the court refrained from further comment.

Addressing the petitioners' argument regarding the absence of quid pro quo for additional fees for delayed application, the court referred the Supreme Court's observation in Jalkal Vibhag Nagar Nigam v. Pradeshiya Industrial & Investment Corporation that the distinction between taxes and fees has diminished over time.

The court cited the Supreme Court case on Sona Chandi Oal Committee and Ors. v. State of Maharashtra where it was held that regulatory fees do not require a direct quid pro quo and can be levied even if services rendered are not directly tied to individual benefits.

The 1989 Rules offer a provision for considering delayed applications for various purposes such as license renewal or vehicle registration, providing a beneficial facility for vehicle owners, the court said. Therefore, the additional fee cannot be viewed as a penalty, as it does not serve as a deterrent, the court reasoned. The court opined that the fees are regulatory in nature, ensuring that vehicles are driven by trained individuals and are fit for operation.

“Such acts are regulatory in nature in the sense that the same regulate plying of vehicles by trained and well-equipped drivers and those acts also regulate registration of motor vehicles to ensure their fitness for being plied on the roads and other related subjects”, the court observed.

Thus, the court concluded that the impugned provisions of the 1989 Rules are within the legal framework and do not exceed the powers granted by the parent act.

Advocates Vaibhav Kulkarni, Ruturaj Bathe and Mrunal Surana represented the PIL Petitioner.

Senior Advocate RV Govilkar, with Advocates DP Singh and Shaba Khan represented the Union on India.

Case no. – Public Interest Litigation No. 130 of 2022

Case Title – 'K' Savakash Auto Rickshaw Sangha v. Union of India and Ors.

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