ORDER
R.P. Sethi, J.
1. All the above titled writ petitions are disposed of by one and the single judgment, as the point of law involved is an identical one.
2. The petitioners in these petitions are the transporters and operate public goods carriers in the State and outside. The vehicles plied by them were hypothecated to the respondent-Banks. Under the agreement of hypothecation the endorsement of hire purchase was made in the registration certificates in accordance with the provisions of Section 31-A of the Motor Vehicles Act, hereinafter referred to as the Act.' The petitioners have also obtained route permits valid up to the dates specified in the writ petitions. After the expiry of the dates of route permits the vehicles could be plied only if the route permits were renewed under the Act, for which procedure has been laid down in Rule 6.29 of the Act. As the petitioners could not pay the instalments to the respondent-Banks, no objection certificates were not issued in their favour in terms of Section 31-A of the Act. It is alleged by the petitioners that the provisions of Section 31-A(1)(5) (a to d) were unconstitutional being contrary to the provisions of Arts, 14and 19 of the Constitution of India asenshrined in Part-Ill of the Constitution. Thepetitioners claim that they are entitled tospecial justice in terms of 20 point economicprogramme as promulgated by theGovernment of India, and therefore, entitledto the renewal of the foute permits for plyingof the vehicles, the business from which theyearn their bread & butter and feed theirchildren. It is submitted that aforesaidprovisions as contained in Section 31-A(1)(5) (a to .d) of the Act, are discriminatory which conferupon the respondents unfettered powers to withhold the no objection certificate or getthe vehicles transferred to its own name. It isfurther submitted that the law was violative of the Constitution of India as it interfered with the right of the petitioners to carry onany business according to their choice, besidespraying for the quashing of the provisions of Section 31-A clauses (a to d), the petitioners pray 'that the respondents-Banks be directed togrant moratorium to the petitioners inpayment of loan amount and issue of noobjection certificate for renewal of the routepermits with a further direction to them torecover the loan amount without any interestfor the periods during which the vehicles did not ply under the circumstances stated in the petitions.
3. In the counter-affidavits filed on behalf of the respondent 3 it is submitted that according to Section 31-A(1) of the Act, once an entry was made in the certificate of registration regarding hire purchase agreement or hypothecation of vehicles, the rights of the parties are governed by Section 31-A of the Act. It,is submitted that Section 31-A of the Act is legal, valid and intra vires of the Constitution. It is further submitted that the concept of Section 31-Aof the Act is that if financier deliberatelyomits to issue no objection certificate, the registering authority is well within its rights to renew the permit if the permit holder satisfies that the financier had deliberatelyrefused to issue the no objection certificate without any sufficient cause.
4. In the objections filed on behalf of the Banks, it is submitted that the writ petitions being misconceived were liable to be dismissed and that the provisions of Section 31-A of the Act are intra vires of the Constitution. No unfettered powers to withhold the no objection certificate or getting the vehicle transferred to its name had been given to the banks as alleged by the petitioners but the petitioners are bound by the terms of the contract entered into with the banks and the petitions are liable to be dismissed.
5. In the counter affidavit filed on behalf of the Union of India, in writ petition No. 626 of 1986 which has been allowed to be adopted in all other writ petitions it has been submitted that the provisions of Section 31-A of the Act were incorporated with object to provide adequate safeguards to financiers who were a class in themselves and which did not make any discrimination. The provisions are regulatory in nature and do not in any way impose unreasonable restriction as alleged by the petitioners. Sufficient safeguards, in favour of the transporters have been made in the section itself and the petitions being misconceived were liable to be dismissed.
6. I have heard the learned counsel for the parties and have perused the record.
7. Section 31-A of the Motor Vehicles Act provides :
'SPECIAL PROVISIONS REGARDING MOTOR VEHICLE SUBJECT TO HIRE-PURCHASE AGREEMENT :-
(1) Where an application for registration ofa motor vehicle which is held under a purchaseagreement is made, the registering authorityshall make an entry in the certificate of iregistration regarding the existence of thesaid agreement. j
(2) When the ownership of any motor!vehicles registered under this Chapter is Itransferred and the transferee enters into ahire-purchase agreement with any person theregistering authority shall, on receipt of an application from the parties to that agreement,make an entry as to the existence of suchhire-purchase agreement in the certificate ofregistration. ;
(3) Any entry made under Sub-section (1) orSub-section (2), may be cancelled by theregistering authority on proof of the termination of the hire-purchase agreement by the parties concerned.
(4) No entry regarding the transfer of ownership of any motor vehicle which is held under a hire-purchase agreement shall be made in the certificate of registration except with the written consent of the person whose name has been specified in the certificate of registration as the person with whom the registered owner has entered into a hire purchase agreement.
(5) Where the person whose name has been specified in the certificate of registration as the person with whom the registred owner has entered into a hire-purchase agreement, satisfies the registering authority that he has I taken possession of the vehicle owing to the default of the registered owner under the provisions of the 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 acknowledgment 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 to the person with whom the registered owner has entered into the hire-purchase agreement;
Provided that a fresh certificate of registration shall not be issued in respect of a motor vehicle, unless the person pays the prescribed fee;
Provided further that a fresh certicificate 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.
(5A) The registered owner shall, before applying to the appropriate authority, for the renewal of a permit, make an application to the person with whom the registered owner has entered into a hire-purchase agreement (such person being hereafter in this section referred to as the financier) for the issue of a no objection certificate (hereinafter in this section referred to as the certificate).
Explanation : -- In this section 'appropriate authority' in relation to any permit, means the authority which is authorised by this Act to renew such permit.
(5B) Within seven days of the receipt of anapplication under Sub-section (5A), the financiermay issue, or refuse, for reasons which shallbe recorded in writing and communicated tothe applicant, to issue the certificate appliedfor and where the financier fails to issue thecertificate and also fails to communicate thereasons for refusal to issue the certificate tothe applicant within the said period of sevendays, the certificate applied for shall bedeemed to have been issued by the financier.
(5C) The registered owners shall, whileapplying to the appropriate authority for therenewal of any permit, submit with suchapplication the certificate, if any, obtainedunder Sub-section (5B) or, where no suchcertificate has been obtained, thecommunication received from the financierunder sub-section, or, as the case may be, adeclaration that he has not received anycommunication from the financier within theperiod specified in that sub-section.
(5D) On receipt of an application for the renewal of any permit under the section, the appropriate authority may subject to the other provisions of this Act : --
(i) 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;
(ii) in any other case, renew the permit.
(6) The provisions of Sub-sections (1) to (5D) shall, so far as may be, apply to a motor vehicle which is subject to hypothecation as they apply to, any motor vehicle which is held under a hire-purchase agreement.'
8. A persual of this section would show that special provision has been made regarding the motor vehicle subject to hire-purchase agreements. Entries regarding the hire- purchase agreements can be revoked and cancelled by the registering authority on proof of the termination of the hire-purchase agreement and even in cases where the financier has refused to issue the no objection certificate, the appropriate authority, after giving the applicant an opportunity of being heard, may renew or refuse the permit, but in all other cases is under an obligation to renew the permit. To ascertain the intention of the legislature and under-lying idea for making the provisions to provide safeguards to the financiers a reference may be made to theobject and reasons of the enactment whichwas incorporated by Motor Vehicles(Amendment) Act, 1969 (Act No. 56 of 1969)as under :
'At present there are no substantive provisions in the Act, enabling any endorsement on the certificate of registration of a vehicle to indicate that the vehicle is either covered by hire-purchase agreement or is hypothecated against any loans. The existing forms E and G in the First Schedule relating to registration of a motor vehicle, include a provision for indicating the name of the hire-purchase financier if a vehicle at the time of registration is held under an agreement. Detailed provisions have of course, been made by the State Governments, in the Motor Vehicles Rules regarding hire purchase transactions. However, experience has shown that statutory provisions with regard to this matter are necessary.
Motor vehicles are acquired not merely on hire-purchase basis but also with loans taken from banks, etc. The vehicles are offered as security for such loans. In the absence of any provision in the Act in regard to such hypothecation, it has been pointed out that banks, etc., are reluctant to finance the purchase of vehicles.
This clause provides for the endorsement of hire-purchase or hypothecation agreements on certificates of registration. Cancellation of such endorsement and transfer of vehicles held under such agreements' :-- S.O.R.
Clause 16. Section 31- A of the Act contains special provisions regarding motor vehicles subject to hire-purchase agreement. Under Sub-section (5) of Section 31-A, if the person with whom the registered owner of a motor vehicle has entered into a hire-purchase agreement satisfies the registering authority that he has taken possession of the vehicle owing to the default of the registered owner under the provisions of the agreement and the registered owner refuses to deliver the certificate of registration or has absconded, the registering authority may, after giving the registered owner an opportunity to make representation in the matter, cancel the certificate and issue a duplicate thereof to the person whose name has been specified in the certificate of registration as the person with whom the registered owner has entered into a hire-purchase agreement. This sub-section is proposed to be amended to make the intention clear. Provision is also made for applying for the issue of a fresh certificate within the period specified therein. The fresh certificate so issued will be valid only for the period for which the suspended certificate would have been in force. S.O.R. Gaz. of India, 17-8-78, pt. II, Section 2, Ext. p. 1122.
9. In a developing country like India it is acknowledged to be necessary to encourage the transport industry and attract more people for expansion of transport system and facilities. Without proper and adequate transport facilities, it is not possible to spread the benefits of development to the far-flung areas and to utilise the natural resources spread all over for the purposes of industrialisation, development and furtherance of the economic activities. The importance of the transport system and transport industry being unique in nature in a country like ours, the State would be justified in making legislations for attracting more people and institutions to take steps for expansion of the transport system. In so far as the institution of the private property exists in our country, the State would be justified in making adequate provisions and in protecting the rights of the persons making investments for, the purposes of the advancement of the transport industry which is inevitable in a developing country. The petitioners themselves acknowledge that but for the assistance rendered by the banks they would not have been in a position to purchase and ply the vehicles. The petitioners who wanted to ply the vehicles were attracted by the different slogans and incentives given by the State in that behalf. As the individual transporters were not in a position to develop or expand the transport industry on account of their meagre resources it was felt by the Parliament to make provision for safeguarding the interests of those who helped the citizens in developing the transport industry in our country. A persual of the objects and reasons of the amendment clearly shows that the Parliament had considered all the implications and thought it fit in their wisdom to make special provisions for those who wereconsidered contributory to the cause ofproviding better facilities for transport in thecountry. The persons who have beenbestowed the benefits under the enactmenthave not been shown to be a privileged classof persons or group of persons but in fact arethe nationalised banks. There is hodiscrimination made between the personssimilarly situated. Even though it is a factthat thousands of citizens in our State arealleged to have obtained the benefits fromthe banks yet a hand full of the petitionershave approached the court to allegediscrimination under Section 31-A of the Actsufficient safeguards have been made in thesection for the benefit of the individualtransporters as well. According to Sub-section (5D) of Section 31-A of the Act, the competentauthority can renew the route permit evenwithout no objection certificate if the personconcerned satisfies it about the circumstancesshowing that the no objection certificateshad been withheld without sufficient cause.The provisions of Section 31-A have providedsafeguards both for the transporters as wellas for the financiers. There being nodiscrimination, the provisions cannot beheldto be unconstitutional. I also do not agreewith the argument of the learned counsel forthe petitioners that the provisions ofSection 31A(1){5) (A to D) of the Act put anyrestriction on the rights of the petitioners tocarry on their trade and business.
The restrictions imposed upon the personswho-have obtained loans are reasonable, validaccording to law and in furtherance of thepolicy contemplated by the legislature, whileenacting the provisions of the aforesaidsection. The equality as contemplated byArticle. 14 of the Constitution has to be examinedwith the presumption that the State action isreasonable and justified. The presumption ofconstitutionality stems from the wide powersof classification which the legislature must,of necessity, possess in making of persons inorder to give effect to its policies. A personalleging discrimination has, therefore, tosatisfy the court about the allegeddiscrimination. If the legislative policy is clearand definite, is prima facie proved to beeffective method of carrying out the policyof the State for the welfare of the people of the development of the society, the statute cannot be deemed as a piece of discriminatory legislation. Article 14 forbids class legislation but does not forbid reasonable classification for the purposes of legislation. The enactment incorporated in the form of Section 31-A(1)(5) (A to D) of the Act therefore, cannot be held to be discriminatory or ultra-vires of the provisions of the Constitution as contended by the learned counsel for the petitioners, under these circumstances the writ petitions are dismissed but under the peculiar circumstances of the cases without any order as to costs. The stay orders granted in favour of the petitioners shall stand vacated and the connected CMPs disposed of.
10. While parting with the judgment I would observe that it would be in the interest of the respondent-Banks if some arrangement is made with the petitioners facilitating the plying of their vehicles for the purposes of liquidating the debts obtained by them from the institutions like the Banks. I was assured by the learned counsel for the respondent-Banks that they would take up the matter with the higher authorities of the Banks and provide for liquidation of the debts in instalments after making the vehicles of the petitioners plying. It may be further observed that if no such arrangements are made the petitioners and the concerned Banks would suffer. As the writ petitions were mainly based upon the constitutionality of the aforesaid provisions of the Motor Vehicles Act, I refrain from giving any directions to the Banks concerned and hope that the views expressed by their counsel would be compassionately considered by their higher authorities and needful be done in favour of the petitioners.