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Gujarat High Court · body

2022 DIGILAW 1715 (GUJ)

BIKES AUTO v. STATE OF GUJARAT

2022-12-07

BIREN VAISHNAV

body2022
ORDER : 1. Heard Mr. R.B. Dave, learned counsel for the petitioner, Bikes Auto Ltd. an authorized dealer of M/s. Hero Moto Corp Ltd. has challenged the initial order passed by the regional Transport Officer dated 05.04.2022, by which, the Trade Certificate granted to the petitioner has been suspended for a period of six months. Aggrieved by the order so passed of suspension, the petitioner filed an appeal under Rule 45 of the Central Motor Vehicles Rules (for short “CMV” Rules), 1989. By an order of 31.05.2022, the appeal has been rejected, hence the petition. 2. Facts in brief would indicate that the petitioner, initially had a Trade Certificate No. GJ-01-TC-766 and 767 for the period from 02.04.2021 to 02.04.2022. The same was subsequently renewed for the period from 07.04.2022 to 07.04.2023. By the impugned order of suspension dated 05.04.2022, the Regional Transport Officer, on allegations made in the order of suspension, suspended the Trade Certificate for the period of six months from the date of the order. The suspension period having run its life, normally would result in disposal of this petition without adjudication on merits; however, as the order has been passed based on an earlier period where the petitioner’s Trade Certificate was suspended and during the currency of that suspension, according to the respondents some breaches have occurred has the suspension so resulted. 2.1 Essentially on facts what is the perception of the Regional Transport Officer in suspending the Trade Certificate is that the petitioner has committed breach of Rules 39 to 44 of the CMV Rules, 1989. 3. Mr. R.B. Dave, learned counsel appearing for the petitioner, would submit that the contents of the order of suspension would indicate that the authority had no basis on which such a suspension order could have been passed to suspend the Trade Certificate for dealing in vehicles and assailing the same was not within the domain of Rule 44 of the CMV Rules, 1989, as no delivery has taken place because the same can only happen after granting of a temporary registration under Rule 52(3)(a) of the Gujarat Motor Vehicles Rules, 1988. 3.1 Mr. Dave, learned counsel, would extensively read out Rules 38 to 44 of the Rules, namely, the CMV Rules, 1989, and submit that the order of suspension is without authority of law, without jurisdiction and the same deserves to be quashed and set aside. 4. Ms. 3.1 Mr. Dave, learned counsel, would extensively read out Rules 38 to 44 of the Rules, namely, the CMV Rules, 1989, and submit that the order of suspension is without authority of law, without jurisdiction and the same deserves to be quashed and set aside. 4. Ms. Dhwani Tripathi, learned AGP, would vehemently oppose the petition and justify the order of suspension so passed against the petitioner. Reading the affidavit, Ms. Tripathi, learned AGP, would indicate that initially the Trade Certificate granted for the period from 02.04.2021 to 02.04.2022 was suspended vide order dated 17.08.2021. On an appeal being filed by the petitioner, the period of suspension was reduced to 15 days from period of 20 days. During the currency of this suspension period of 15 days, the petitioner could not have registered or delivered any new vehicle. It is the case of the authorities that when the suspension of the petitioner was in vogue as is evident from the tax invoices annexed to the affidavit-in-reply, the petitioner delivered two wheelers by multiple invoices especially in the same names, and therefore, created a mischief. 4.1 For instance, the affidavit-in-reply indicates that on 22.08.2021 for one customer Sanjiv Kumar Thakore, two invoices were issued in the name of the same person on 22.08.2021 and 06.09.2021. What also is required to be noted according to Ms. Tripathi, learned AGP, is that the petitioner cheated the State Government by not paying tax at the relevant point of time and delivered 81 vehicles without temporary registration. This in the perception of the authorities was in violation of the CMV Rules, 1989 and the suspension, therefore, was justified. She would, therefore, submit that the order rejecting the appeal too was just and proper. 5. Having considered the submissions made by the learned counsels for the respective parties, one needs to set out certain rules which deal with registration of motor vehicles under the CMV Rules of 1989. Chapter 3 of the CMV Rules, 1989, deals with the issue of Trade Certificates. Rule 33 indicates the conditions for exempt from registration. Reading the rule indicates that for the purposes of the proviso to Section 39, a motor vehicle in the possession of dealer shall be exempted from the necessity of registration subject to the condition that he obtains a Trade Certificate from the registering authority having jurisdiction in the area. Rule 33 indicates the conditions for exempt from registration. Reading the rule indicates that for the purposes of the proviso to Section 39, a motor vehicle in the possession of dealer shall be exempted from the necessity of registration subject to the condition that he obtains a Trade Certificate from the registering authority having jurisdiction in the area. Incidentally, sec.39 of the Motor Vehicles Act, 1988, speaks about the necessity of registration and prohibits any person from driving a motor vehicle without it being registered. The proviso to the section, however, indicates that this embargo shall not apply to a motor vehicle in the possession of a dealer subject to such conditions as may be prescribed by the Central Government. 5.1 In other words, the possessor of a Trade Certificate would be eligible to, as a dealer, be exempted from possessing registration provided the vehicle is used for the purposes as provided under the rules. Rules 34 to 44 of the rules, read as under: “34. Trade certificate: (1) An application for the grant or renewal of a trade certificate shall be made in Form 16 and shall be accompanied by the appropriate fee as specified in rule 81. (2) Separate application shall be made for each of the following classes of vehicles, namely: (a) motor cycle. (b) invalid carriage. (c) light motor vehicle. (d) medium passenger motor vehicle. (e) medium goods vehicle. (f) heavy passenger motor vehicle. (g) heavy goods vehicle. (h) 65-a E-rickshaw. (i) E-cart. (j) any other motor vehicle of a specified description. 35. (2) Separate application shall be made for each of the following classes of vehicles, namely: (a) motor cycle. (b) invalid carriage. (c) light motor vehicle. (d) medium passenger motor vehicle. (e) medium goods vehicle. (f) heavy passenger motor vehicle. (g) heavy goods vehicle. (h) 65-a E-rickshaw. (i) E-cart. (j) any other motor vehicle of a specified description. 35. Grant or renewal of trade certificate: (1) On receipt of an application for the grant or renewal of a trade certificate in respect of a vehicle, the registering authority may, if satisfied that the applicant is a bona-fide 65-b [dealer or manufacturer of automobile or automobiles ancillaries or a test agency specified in rule 126] and requires the certificates specified in the application, issue to the applicant one or more certificates, as the case may be, in Form-17 65-c [within thirty days from the date of receipt of such an application] and shall assign in respect of each certificate a trade registration mark consisting of the registration mark referred to in the notification made under sub-section (6) of section 41 and followed by two letters and a number containing not more than three digits for each vehicle, for example: AB - Represent State Code. 12: Registration District Code. TCI - Trade certificate number for the vehicle. (2) No application for trade certificate shall be refused by the registering authority unless the applicant is given an opportunity of being heard and reasons for such refusal are given in writing. 36. Refund - Where the registering authority refuses to issue or renew a trade certificate, it shall refund to the applicant fifty per cent of the fee paid along with the application. 37. Period of validity - A trade certificate granted or renewed under rule 35 shall be in force for a period of twelve months from the date of issue or renewal thereof and shall be effective throughout India. 38. Issue of duplicate certificate: (1) If at any time the trade certificate is lost or destroyed, its holder shall report to the police station in the jurisdiction of which the loss or destruction has occurred and intimate the fact in writing to the registering authority by whom the certificate was issued and apply in Form 18 to the said authority for a duplicate certificate accompanied by the appropriate fee as specified in rule 81. (2) On receipt of an application alongwith the fee, the registering authority may issue a duplicate “Trade Certificate” clearly “marked “Duplicate.” (3) If after the issue of a duplicate certificate the original is traced, the same shall be surrendered forthwith to the registering authority by which it was issued. 39. Use of trade registration mark and number: (1) A trade registration mark and number shall not be used upon more than one vehicle at a time or upon any vehicle other than a vehicle bona fide in the possession of the 65-d [dealer or manufacturer of automobiles or automobile ancillaries or a test agency specified in rules 126] in the course of his business or on any type of vehicle other than the one for which the trade certificate is issued. (2) The trade certificate shall be carried on a motor vehicle in a weatherproof circular folder and the trade registration mark shall be exhibited in a conspicuous place in the vehicle. 40. Restrictions on use of trade certificate or trade registration mark and number - A trade certificate shall be used only by the person to whom it is issued and such person shall not allow or offer or cause the certificate or the number assigned in connection therewith to be used by any other person: Provided that the provision of this rule shall not apply where the person to whom the certificate is granted, or a person bona fide in his employment and acting under his authority, or any other person bona fide acting on behalf of the holder of a trade certificate is present in the vehicle, or if such vehicle is designed for use by only one person and is being used by a prospective purchaser of that vehicle for the purpose of reasonable test or trial. 41. Purposes for which motor vehicle with trade certificate may be used - The holder of a trade certificate shall not use any vehicle in a public place under that certificate for any purpose other than the following: (a) for test, by or on behalf of the holder of a trade certificate during the course of, or after completion of, construction or repair. (b) for proceeding to or returning from a weigh bridge for or after weighment, or to and from any place for its registration. (b) for proceeding to or returning from a weigh bridge for or after weighment, or to and from any place for its registration. (c) for a reasonable trial or demonstration by or for the benefit of a prospective purchaser and for proceeding to or returning from the place where such person intends to keep it. (d) for proceeding to or returning from the premises of the dealer or of the purchaser or of any other dealer for the purpose of delivery. (e) for proceeding to or returning from a workshop with the objective of fitting a body to the vehicle or painting or for repairs. (f) for proceeding to and returning from airport, railway station, wharf for or after being transported. (g) for proceeding to or returning from an exhibition of motor vehicles or any place at which the vehicle is to be or has been offered for sale. (h) for removing the vehicle after it has been taken possession of by or on behalf of the financier due to any default on the part of the other party under the provisions of an agreement of hire-purchase, lease or hypothecation. 42. Delivery of vehicle subject to registration - No holder of a trade certificate shall deliver a motor vehicle to a purchaser without registration, whether temporary or permanent. 43. Register of trade certificate: (1) Every holder of a trade certificate shall maintain a register in Form 19 in duplicate which shall be in a bound book, with pages numbered serially. (2) The particulars referred to in Form 19 except the time of return under column 7, shall be entered in the register before the commencement of each trip by the holder of the trade certificate or his representative and a duplicate copy of Form 19 made prior to the commencement of each trip shall be carried during the trip by the driver of the vehicle and shall be produced on demand by any officer empowered to demand production of documents by or under the Act. (3) The holder of a trade certificate shall, at the end of a trip, fill in column 7 of Form 19 (both original and duplicate) and the register and the duplicate shall be open for inspection by the registering authority. 44. (3) The holder of a trade certificate shall, at the end of a trip, fill in column 7 of Form 19 (both original and duplicate) and the register and the duplicate shall be open for inspection by the registering authority. 44. Suspension or cancellation of trade certificate - If the registering authority has reason to believe that the holder of any trade certificate has not complied with the provisions of rules 39 to 43, it may, after giving the holder an opportunity of being heard, suspend or cancel the trade certificate held by him.” 5.2 Essentially, for the purposes of adjudication of this order of suspension, Rule 41 which is important would indicate that the holder of a Trade Certificate shall not use any vehicle in a public place under that Certificate for any purposes other than those specified in Rule 41. For example, such a vehicle can be used by a dealer only for testing, for reasonable trial or demonstration for proceeding or returning to the workshop etc. 5.3 Rule 42 indicates that no holder of a Trade Certificate shall deliver a motor vehicle to a purchaser without registration whether temporary or permanent. For the purposes of registration, the relevant provisions under the Gujarat Motor Vehicles Rules, is rule 52, which indicates that an application for Certificate of Temporary Registration can only be made if it is accompanied by an original sale certificate. 6. Reading of the affidavit which essentially is the translated version of the suspension order indicates that the authorities have come to a conclusion that because of the agency having issued tax invoices during the currency of the period of suspension of 15 days by virtue of the order of suspension dated 17.08.2021has delivered vehicles to a purchaser without registration whether temporary or permanent. 7. Secondly, when Rule 52 of the Gujarat Motor Vehicles Rules is read in context of the Rule 42 of the CMV Rules, issuance of invoice proceeds the procedure for applying for a temporary registration certificate it can be done only based on a original sale certificate annexed to such application. Unless that incident happens, obviously there cannot be a delivery of a vehicle to a purchaser without jurisdiction. Unless that incident happens, obviously there cannot be a delivery of a vehicle to a purchaser without jurisdiction. Essentially therefore, the reasonings on the order indicate that “reason to believe that the suspended authority has arrived at for breach of the rules so enacted in the order or beyond apprehension and not having a nexus with the rules that is sought to be invoked.” 8. As far as the other omission as to fake invoices have not been issued, as indicated in the affidavit-in-reply, an FIR has been lodged against the petitioner, which will take its own course. 9 For the aforesaid reasons therefore, the order of suspension dated 05.04.2022 and the order of the Appellate Authority dated 31.05.2022 are hereby quashed and set aside. The petition is allowed, accordingly.