Judgment:
ORDER
Ajit Kumar Sinha, J.
1. The petitioner has preferred this writ petition for issuance of an appropriate writ, order or direction to quash the order dated 03.12.2002, contained in letter No. 3040, vide which the respondent authority has directed the petitioner to pay up-to-date arrears of tax of Vehicle No. BR-14P-5754 before getting the same registered upon transfer in favour of the petitioner-firm. Prayer has also been made for transfer of the vehicle in favour of the petitioner-firm in view of Section 51(5) of the Motor Vehicles Act, 1988.
2. The brief facts, as stated by the petitioner, are set out as under:
The petitioner is a financial firm providing loan for purchase of vehicles under Hire Purchase Agreement. The case of the petitioner is that it had financed for purchase of an old bus bearing Registration No. BR-14P-5754 to one Smt. Rubina Khatoon (respondent No. 4) on 11.06.1998 and she had agreed to pay the entire amount with interest in 24 monthly installment of Rs. 11,682/- per month. On failure to make regular payment of the installment, the petitioner suffered great loss and, accordingly, lodged a complaint case vide Complaint Case No. 127 of 2001, which was later on registered as Kotwali P.S. Case No. 110 of 2001. The petitioner in accordance with the Hire Purchase Agreement took possession of the vehicle for non-payment of dues on 17.5.2001 and informed the District Transport Officer accordingly. The petitioner also informed that the vehicle was not in running condition and a copy of the same was also forwarded to Kotwali Police Station by way of information and the hirer was also informed and was further directed to pay the balance amount to settle the outstanding and the contract. The petitioner further submits that the hirer did not turn up to settle the matter nor came forward to show her interest to settle the dispute. However, the petitioner firm filed an application for issuance of a fresh certificate of registration and deposited the required fee for the same. On the request of the District Transport Officer, the petitioner submitted a fresh application for issuance of fresh registration in the name of the petitioner-firm and deposited the required fee through Chalan dated 22.05.2002. Lastly vide letter dated 15.06.2002 the petitioner and the hirer, namely, Rubina Khatoon, were called upon by the District Transport Officer to appear on 14.07.2002. The petitioner appeared before the District Transport Officer but respondent No. 4 the hirer neither appeared nor raised any objection. The petitioner again received a letter dated 17.07.2002 vide Memo No. 1857, wherein, the District Transport Officer directed the petitioner and respondent No. 4 to appear in person on 21.08.2002. Petitioner again appeared on the date fixed but respondent No. 4 again defaulted and did not appear nor raised any objection. The petitioner again gave a representation for transfer and registration of the vehicle in its favour, enclosing therewith Form 36 & 37 along with a Chalan of Rs. 100/-, as per the requirement under the Motor Vehicles Rules and again on request, it applied on 21.08.2002 along with a Chalan of Rs. 600/- with the Form No. 36 & 37. The petitioner being constrained represented to the higher authorities and also enclosed the judgment of Hon'ble Apex Court in similar matters. The respondent authorities finally passed the impugned order dated 03.12.2002, whereby, the petitioner was informed vide letter No. 3040 that the respondent authorities are agreeable to register the vehicle in favour of the petitioner with a pre-condition to clear the tax/arrears of tax due in view of Section 51(5) of the Motor Vehicles Act and Section 13 of the Bihar Motor Vehicles Taxation Act, 1994 for fresh registration.
3. After considering the aforesaid submissions and hearing the argument of both the sides, it appears that issue in dispute lies in a very narrow compass as to whether the financer is liable to pay the tax/arrears of tax of a motor vehicle for the purposes of fresh registration in its own name and/or whether it is liable to pay the arrears of tax in respect of any motor vehicle, which remained unpaid by the hirer in accordance with Section 13 of the Bihar Motor Vehicles Taxation Act, 1994. Section 13 of the Bihar Motor Vehicles Taxation Act, 1994 is quoted as under:
13. Liability of successor to pay arrears.- If the tax leviable in respect of any motor vehicle remains unpaid by any person liable for payment thereof and such person before having paid 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 this section shall be deemed to affect the liability of the person who has transferred the ownership or has ceased to be in possession or control of such vehicle, for payment of the said tax.xxx xxx xxx
4. On a bare reading of the aforesaid provision it appears that the liability of successor to pay arrears is provided under Section 13 and the successor includes the person to whom the ownership of the vehicle has been transferred or the person who has possession or control of such vehicle.
However, Section 13(2) starts with a non-obstante clause, wherein, it is mentioned that nothing contained in this section shall be deemed to affect the liability of the person who has transferred the ownership or has ceased to be in possession or control of such vehicle, for payment of the said tax. Meaning thereby, Sub-section (2) of Section 13 of the Bihar Motor Vehicles Taxation Act, 1994 qualifies Section (1) with non-obstante clause as well, reiterating the liability of the person, who has transferred the ownership or has ceased to be in possession, which in the instant case will be the hirer and not the petitioner, who was the financer. On reading the impugned order dated 03.12.2002, which is sought to be challenged in this writ petition, it appears that the District Transport Officer has made the registration conditional i.e. subject to payment of tax/arrears of tax outstanding on the vehicle. This has been demanded on the basis of Section 51(5) of the Motor Vehicles Act, 1988 and Section 13 of the Motor Vehicles Taxation Act, 1994. Section 51(5) of the Motor Vehicles Act, 1988 is quoted as under:
51. Special provisions regarding motor vehicle subject to hire-purchase agreement, etc.
xxx xxx xxx(5) Where the person whose name has been specified in the certificate of registration as the person with whom the registered owner has entered into the said agreement, satisfies the registering authority that he has taken possession of the vehicle (from the registered owner) owing to the default of the registered owner under the provisions of the said agreement and that the registered owner refuses to deliver the certificate of registration or has absconded, such authority may, after giving the registered owner an opportunity to make such representation as he may wish to make (by sending to him a notice by registered post acknowledgement due at his address entered in the certificate of registration) and notwithstanding that the certificate of registration is not produced before it, cancel the certificate and issue a fresh certificate of registration in the name of the person with whom the registered owner has entered into the said agreement:
Provided that a fresh certificate of registration shall not be issued in respect of a motor vehicle, unless such person pays the prescribed fee:Provided further that a fresh certificate of registration issued in respect of a motor vehicle, other than a transport vehicle, shall be valid only for the remaining period for which the certificate cancelled under this Sub-section would have been in force.xxx xxx xxx
5. Section 51(5) of the Motor Vehicles Act, 1988 nowhere refers or demands the payment of tax or arrears on the motor vehicle before issuance of a fresh certificate of registration in the name of the person with whom the registered owner has entered into the said agreement. Section 51(5) is further qualified with a proviso, which provides for fresh certificate of registration only on the condition for payment of prescribed fee. It will be clear on reading Section 51(5) that on taking the possession of the vehicle in question owing to the default of the registered owner under the provisions of the said hire purchase agreement, when the registered owner refuses to deliver the certificate of registration or does not turn up, the authority is empowered to give notice to the registered owner and opportunity to make such representation. However, in case of no reply or the registered owner does not turn up, the authority is fully empowered to cancel the certificate and issue a fresh certificate of registration in the name of the person with whom the registered owner had entered into such agreement and the proviso only asks for payment of the prescribed fee, which has been duly deposited by way of Challan by the petitioner herein. It will be evident on reading the entire Section 51(5) of the Motor Vehicles Act, 1988 that the same has been fully complied with and the reliance of the authority on Section 51(5) of the Act is erroneous and misplaced. The Hon'ble Supreme Court had the occasion to consider a case, reported in : AIR2000SC3478 (State of Maharashtra v. Sundaram Finance), wherein, in an identical situation, arising out of a hire purchase agreement followed by default in payment of the installment, the Hon'ble Supreme Court while interpreting the word 'operator' in Bombay Motor Vehicles (Taxation of Passengers) Act, 1958 and the amended definition, came to the following conclusion at paragraph No. 7:
7. That this is the correct interpretation is indicated by the following: the original definition was expanded to cover cases where the stage carriage was used or caused or allowed to be used without a permit and for that purpose the word 'operator' was said to be (i) the person in whose name the stage carriage was registered, or (ii) the person having possession or control of such stage carriage. Upon this interpretation, the Division Bench was right in the view that it look that the first respondent could not be made liable for the arrears of passenger tax as the operator of the vehicles.
6. In the aforesaid background and also in view of the settled law, the impugned order dated 03.12.2002, passed by the District Transport Officer, Ranchi, is held to be illegal and unsustainable in the eyes of law and is, thus, quashed. The writ petition is, accordingly, allowed and the respondent authorities are directed to register the motor vehicle in question.