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RTO Has Discretion to Reject Application For Permit Replacement if Proposed Vehicle is Older Than the Existing One: Supreme Court Upholds Rule 174(2)(c) of Kerala Motor Vehicle Rules

Team SoOLEGAL 18 Feb 2022 5:41pm

RTO Has Discretion to Reject Application For Permit Replacement if Proposed Vehicle is Older Than the Existing One: Supreme Court Upholds Rule 174(2)(c) of Kerala Motor Vehicle Rules

NEW DELHI: The Supreme Court affirmed Rule 174(2)(c) of the Kerala Motor Vehicle Rules, 1989, which allows the road transport authority to deny a replacement application if the proposed vehicle is older than the one covered by the current license.


The court stated, under this Rule, the Authority has the ability to use judgment whenever appropriate while exercising the right to authorize replacement of a vehicle under a permit.


The Authority may be justified in allowing such an application if the vehicle sought to be substituted is slightly and inconsequentially older than the vehicle covered by the permit, observed the bench of Justices KM Joseph and PS Narasimha.


Law Involved
Section 83 of the Motor Vehicles Act of 1988 states that the holder of a permit may, with the agreement of the authority that issued the permit, replace any vehicle covered by the permit with any other vehicle of the same type. Rule 174(2)(c) states that the Transport Authority may, at his discretion, deny an application for permit – replacement if the new vehicle suggested is older than the one sought to be replaced.


Background
Allowing a writ case submitted by one petitioner, a single bench of the High Court found that while examining an application for a replacement permit, the road worthiness and viability of the vehicle must be examined rather than the model of the vehicle, implying the year of manufacture. The Division bench dismissed the State/appeal, RTO’s observing that if the Rule 174(2)(c) specifies that an older vehicle cannot be brought in, it would be restricting a person’s right provided by the provisions of the Act. As a result, Rule 174(2)(c) was declared ineffective.


Issues Raised
The following issues were raised in an appeal to the Supreme Court:


1.      Whether Rule 174(2)(c) of the Kerala Motor Vehicles Rules, 1989 violates the provision of the Act because the ability to prescribe the age limit of a motor vehicle is only in the hands of the Central Government?


2.      Whether Rule 174(2)(c) of the Kerala Motor Vehicles Rules, 1989 goes beyond and is in conflict with section 83 of the Motor Vehicles Act, 1988.


3.      What is the Authority’s discretion in exercising its power under Rule 174(2)(c) of the Kerala Motor Vehicles Rules, 1989?


Referring to Section 83 of the Motor Vehicle Act, the bench observed that the purpose and object of mandating replacement by a vehicle of the same type in section 83 is only to ensure that the scrutiny and conditions were undertaken and imposed at time of grant continue even during the permit’s subsistence.


Does not Impinge Upon the Powers of the Central Government
Concerning issues (1), the court stated that 174(2)(c) enacted by the State Government to allow replacement of the vehicle under a Transport Permit does not infringe on the Central Government’s powers to fix the age of the vehicle or the fitness of the vehicle conferred upon it by Section 56 and 59 of Chapter IV.


“The scrutiny under Rule 174(2)(c) is only to enable the Authority to ensure that the subsisting permit is not interrupted and at the same time public interest is not interrupted and at the same time public interest is not compromised by deviating from the permit. The rule will have no bearing on the power of the Central Government and as such it would not be ultra vires the provisions of the Act…There is yet another aspect which can lend a certain amount of clarity to this position. The vehicle which the Authority may not approve for replacement under Section  83 on the ground that it is older than the vehicle covered under the permit, can be used as a prohibition for such a usage as the said vehicle may continue to be fit and within the age limit prescribed by the Central Government. The rigout of Rule 174(2)(c) is only in the context of a subsisting transport permit and not as a condition for transport vehicles as such.”


No Need to Restrict the Meaning of an Expression ‘Same Nature’
In response to problem (2), the court stated that the High Court had constructed the term ‘same nature’ in Section 83 as follows: Same Nature would mean a bus by a bus, a mini – bus by a mini – bus, an air – conditioned bus by an air – conditioned bus, a truck by a truck, and not a bus by a mini – bus; that is the sole constraint.


“The assumption in the impugned judgment that the expression ‘same nature’ is confined only to, mean ‘a bus by bus, a mini – bus by mini – bus and not bus by mini – bus…’ is not a correct way to read the provision. There is no need to restrict the meaning of an expression same nature. In fact, expressions such as this are better kept open ended to enable courts to sub – serve the needs of changing circumstances, the court observed,” the bench observed.


Government Has Expressly Enabled the Authority to Apply Discretion, Wherever Necessary,
The bench took note of the State’s submission that it is not as if application seeking replacement of vehicles older than those covered by the Transport Permit would be rejected by the Rule’s operation, and that the authority is given the authority to exercise its discretion before rejecting an application on the said ground. The bench stated in this regard:


“Discretion is to be exercised wherever necessary in order to render the exercise of power reasonable, fair and non – arbitrary. Discretion could be express or implied. Rule 174(2)(c) is a provision where the government has expressly enabled the authority to apply discretion, wherever necessary, while exercising the power to grant replacement of a vehicle under a permit. This discretion will have to be exercised reasonably, fairly as the facts and circumstance would clearly demonstrate. For instance, where the vehicle sought to be substituted is marginally and inconsequentially older than the vehicle covered under the permit, the Authority may perhaps be justified in permitting such an application. The Authority will also bear in mind the circumstances in which the permit holder was chosen in cases of comparative merit under which the rival applicants would have offered their own vehicles. Needless to say, that if the exercise of the discretion is not based on just reasonable and non – arbitrary principles, such a decision would be vulnerable and subject to correction in appeal and a further review. There is no need to delve on this issue any further.”



Tagged: Supreme   Court   Kerala   Motor   Vehicle   Act   New   Delhi   Discretion   RTO   Application   Permit   Replacement   Vehicle   Upholds   Rules   1989   174   2   c   Justices   KM   Joseph   PS   Narasimha   Section   83   Petitioner   Bench   High   Court   Road   Central   Governement   Act   Authority   Section   56   59   Chapter   4   IV   Same   nature  
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