Forklifts And Crane Used Inside Factory Are “Motor Vehicles”, Must Be Registered Under MV Act: Kerala High Court

The Kerala High Court has held that forklifts and cranes used exclusively within private factory premises still qualify as “motor vehicles” under Section 2(28) of the Motor Vehicles Act, 1988, and therefore require mandatory registration and payment of motor vehicle tax.Justice Mohammed Nias C.P delivered the judgment while dismissing a challenge to a direction issued by the Motor Vehicles Department prohibiting the petitioner-company from operating two forklifts and a hydraulic crane without registration and insurance.The petitioner contended that the machines function solely as material-handling equipment inside the enclosed factory compound and are never used on public roads, and therefore, they do not fall within the definition of “motor vehicle” under Section 2(28) of the Motor Vehicles Act, 1988, and do not require registration. It was further contended that the Section 39 of the Motor Vehicle Act, 1988 mandates registration only for vehicles intended to be used in “public places" and since the equipment in question were used only inside the factory, registration was not required. The respondents contended that the forklifts and cranes are roadworthy and capable of being used on public roads at any time and hence fall within Section 2(28) of the Act. They further argued that the petitioner's factory premises are accessible to workers, visitors, and other vehicles, and therefore constitute a “public place” under Section 2 (34) of the Act. It was also submitted that the registration and valid insurance are essential to safeguard workers and others who may enter the premises and to ensure compensation in the event of an accident. The Court observed that Section 2(28) cast a widely inclusive term of “motor vehicle” covering any mechanically propelled vehicle adapted for use upon roads, and the only exclusion are vehicles running on fixed rails and those of a special type adapted only for use within a factory or other enclosed premises. “The statutory focus, therefore, is on the adaptability or suitability of the machine for road use, and not on its actual or intended use. Where a machine is structurally capable of road movement—equipped with rubber tyres, functional steering and braking systems, lighting, and mobility features— it is a motor vehicle within the meaning of Section 2(28), even if it is predominantly operated within private premises.” the bench observed. The Court further observed that the determinative test is the road-adaptability, and machinery such as forklift, mobile cranes, dumpers, or similar equipment, if structurally capable of being driven on roads even occasionally, falls within the definition of 'motor vehicle”. The Court also analysed the 2020 amendment to Central Motor Vehicle Rules, which defined the Construction Equipment Vehicle(CEV). The Court noted that the definition recognises CEV as a distinct class of self-propelled machinery used for construction, industrial, and on/off highways operations, broadly covering earth moving equipment, material-handling machines, road-construction and compaction machinery, concrete-handling equipment, and hauling/dumping vehicles.The Court noted that Section 2(28) of Motor Vehicle Act and Rule 2(cab) establishes that any construction equipment vehicle capable of movement on public roads, however occasional or incidental, satisfies the road adaptability test under Section 2(28) and is a motor vehicle requiring registration under Section 39, and only purely off highway machines exclusively adapted for enclosed premises stand outside the statutory framework. The Court harmonised Section 2(28) with Rule 2(cab), relying on the doctrine that parent and subordinate legislation must be read together unless irreconcilable.The petitioner relied on Bolani Ores Ltd. v State of Orissa [(1974) 2 SCC 777], Travancore Tea Estates Co. Ltd and others v. State of Kerala and Others [(1980) 3 SCC 619], Tarachand Logistic Solutions Limited v. State of Andhra Pradesh and Others [2025 SCC OnLine SC 1851], which held that motor vehicle tax is attracted only when a vehicle is used or kept for use on public roads.The Court rejected this line of argument observing that the decisions relied on by the petitioner rest on the compensatory-tax doctrine, under which motor-vehicle tax was viewed as permissible only when linked to public road use. The Court observed that the Supreme Court in JIndal Stainless has rejected the compensatory-tax theory, and the earlier decisions built upon it stand overruled. “When Section 2(28) of the Motor Vehicles Act is read with Rule 2(cab) of the Central Motor Vehicles Rules, every construction-equipment vehicle capable of movement on public roads clearly falls within the definition of “motor vehicle,” making it taxable under Section 3, irrespective of whether it is actually used, or claimed to be used, only within factory premises.” Court added. The Court held that CEV capable of movement on public roads do not fall within the exclusion...

Forklifts And Crane Used Inside Factory Are “Motor Vehicles”, Must Be Registered Under MV Act: Kerala High Court

Anamika MJ

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