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State of M.P. and Ors. Vs. Rakesh Sethi and Ors. - (Supreme Court) (26 Aug 2020)

State Governments are entitled to prescribe fee for reserving registration numbers


Motor Vehicles

Present appeal challenges a judgment of the Madhya Pradesh High Court which quashed Rule 55A of the Motor Vehicles Rules, 1994 (the State Rules) framed by the Madhya Pradesh State and published by it. The Respondent (the vehicle owner) had approached the High Court, contending that, the said Rule was ultra vires the State's power under the Motor Vehicles Act, 1988, and the Central Motor Vehicle Rules, 1989 (the Central Rules). The High Court accepted his contentions.

The vehicle owner purchased the motorcycle in May, 2004 and applied for its registration before the concerned registering authority. By an order, the registering authority rejected the application, stating that the vehicle owner's claim for allotment of registration number 'MP-KL-4646' could not be accepted, as the Petitioner had not paid the required fee prescribed for allotment of that number. The motorcycle was allotted another number (MP20-KL-5100) which the Petitioner did not want.

Petitioner therefore, approached the High Court in writ proceedings, contending that allotment of a particular number on payment of a fee (provided in Rule 55A) was contrary to and inconsistent with the provisions of Section 41 of Act, 1988 and the powers conferred on the State Government to frame Rules under Section 65 of the Act, 1988.

Learned Counsel for the State relied upon the scheme of the Act, and highlighted that while Section 41(2) of Act, 1988 undoubtedly conferred the power to prescribe Rules and also a fee to allot registration numbers, yet Section 41(6) of Act, 1988 was specific in that even while the Central Government was authorized to allot certain numbers to the State, the further or onward registration or assignment of those numbers as registration numbers was left to the State.

An overall reading of the M.P. Rules and the Act therefore clearly establishes that besides the express authorization to levy fees or collect amounts, both the Central Government and the State Government are empowered - in fact duty bound to extend certain services in the performance of such duties. Both these bodies, i.e. the Central and State Governments would therefore, be acting within their authority to charge or levy fees.

If there are any further doubts on this issue, the generality of the power under Section 65(1) to frame rules, in the opinion of this Court is sufficient along with Section 211 of Act, 1988, to conclude that the State Government has the authority to prescribe a fee for reserving certain numbers or distinguishing marks to be assigned as registration numbers.

This Court has, in the past, held that when a central enactment clothes the state with the power, or tasks it to do a thing such as grant of lease of minor minerals, an implicit power to charge lease rent or royalty must be read into the state's power.

Present Court therefore, holds that the assignment of "distinctive marks" i.e. registration numbers to motor vehicles (which includes the power to reserve and allocate them, for a specific fee) is a distinct service for which states or their authorities (such as the registering authorities, in present case) are entitled to charge a prescribed fee. Rule 55A of the MP Rules is not therefore, in excess of the powers conferred upon the state, by the Act or the Central Rules.

Present Court notices that, the impugned judgment proceeded on the assumption that, the State was not competent to make the legislation. The use of that expression, at best can be characterized as misconceived. In the present case, the State of M.P. derived its powers to frame the concerned rules, through the provisions of the Motor Vehicles Act itself. The question, therefore, of repugnance as properly understood, did not arise; rather it was a case whether the state government, as one of the delegated authorities, was empowered through Parliamentary law to frame the Rule that it did.

In the opinion of present Court, the impugned Rule was within the ambit of the powers delegated to the State, and directly related to performance of its functions under Section 41(6) of Act, 1988 for which it could legitimately claim a fee, as was done through Rule 55A. The impugned judgment is therefore set aside. The appeal is accordingly allowed.


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