[READ JUDGMENT] SC upholds Power of State Government to allocate Fancy Registration Number of Vehicles for “Special Fee”

In the Supreme Court today a significant Judgment has been delivered by the Bench of Justice L.Nageshwar Rao and Justice S. Ravindra Bhat, in the case of State of M.P. vs Rakesh Sethi and Ors (Civil Appeal 7074 of 2008) regarding validity of Rule 55A of the Motor Vehicles Rules, 1994 framed by the Madhya Pradesh State, levying special fee for allocating Fancy Registration Numbers for vehicles.

Facts

The vehicle owner purchased the motorcycle in May, 2004 and applied for its registration on 25-05-2004 before the concerned registering authority, through the prescribed application in Form No. 20. By an order (of 27-05-2004), 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. He 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 and the powers conferred on the State Government to frame rules under Section 65 of the Act of 1988. He challenged the amendment incorporated in the State Rules of 1994 by a notification dated 15.02.2001. He also sought a direction to the registration authority that he should be assigned the number ‘4646’ for his motorcycle. Under Rule 55A, this number was reserved by the State to be assigned by a separate procedure. The Rules, particularly Rule 55A prescribed not only the procedure but also a special fee for assigning such reserved numbers (which included 4646, which the vehicle owner insisted should be allotted to him). He contended that Rule 55A, was ultra vires the provisions of the Act. The M.P. High Court allowed the challenge and quashed Rule 55A of the Motor Vehicles Rules, 1994 framed by the Madhya Pradesh State.

The State Government feeling aggrieved by the Judgment challenged the same by means of SLP.Notice was served upon the Respondent (Vehicle Owner) but he chose not to appear before the Court, as such having regard to the public importance of issues involved in the present case, Mr. Manoj Swaroop, learned senior counsel, was nominated as Amicus Curiae in the matter by the Court.

Contention of Appellant/State Government:

  1. Under Section 41(6), once a series of numbers (or alpha numeric series) is allotted to a state, the procedure to be followed and the fee to be prescribed for assigning the concerned numbers as registration of individual vehicles is that of the state. The registering authority is none other than a state designated official or agency.
  2. A reading of Section 211 along with Section 65(2)(d) and (k) clearly indicates that the State Government can make rules with regard to the subjects on which it is specifically empowered to do so. As far as the registration of motor vehicles and prescribing fees for registration are concerned, the power is of the State Government to prescribe rules for providing the procedure for assigning or renewing registration numbers, through the registering authority.
  3. Section 211 was erroneously interpreted by the High Court, it was submitted that the provision clearly empowered the state to prescribe a fee not otherwise provided, in respect of a service provided by it. It was further argued that the state provided a separate service, i.e. allocating specific desired numbers to vehicle owners, for which it could well claim a fee, over and above the registration fee prescribed by the Central Government, under Section 41(2).
  4. The generality of the provisions of Section 65(1) and the deployment of the expression “without prejudice to the generality of provisions of sub-section (1)” in Section 65 (2), together with Section 65(2)(p) were meant to clothe the state government with the power to impose a fee for the kind of services involved in the present dispute.

Submissions of Amicus Curaie:

  1. The Act does not empower the State Government to levy fees for registration of a vehicle; therefore, no fees can be prescribed for allotment of a registration mark for a motor vehicle, exercising powers under Section 211. 
  2. Since the power to prescribe a fee for registration of a motor vehicle is vested in the Central Government under Section 41(2), the power to levy a fee under section 211 can be exercised by the State Government only if it is empowered under the Act to prescribe fees for the purpose of registration of a motor vehicle.
  3. State is conferred with power only to make rules providing the procedure for issue or renewal of certificate or recovery of amount or amounts under sub-section (13) of Section 14 i.e., to prescribe the amount to be paid for delay on the part of the owner to file an application for registration of motor vehicle under sub-section (1) of Section 41 or under sub-section (8) of Section 41 for renewal of motor vehicles registration.
  4. Existing provisions do not empower the state to make a rule fixing the fee to be charged for registration of a motor vehicle. It is, therefore, clear that under the Act, the power to prescribe a fee for registration of motor vehicles is only conferred on the Central Government, and in exercise of the such power, the Central Government has already fixed the fee under Rule 81 of the Central Motor Vehicle Rules, 1989.
  5. The splitting up of an indivisible process, by drawing a distinction between “allotment” of numbers by the Centre and their onward assignment by the state registering authority and the charging of a separate fee for the latter, was impermissible. 
  6. The absence of specific provisions enabling the state to prescribe amounts as fees, for particular enumerated services, showed Parliamentary intent to exclude the state from levying a fee for “assigning” a registered number, for an act for which the Central government had prescribed a fee under Section 41(2). Counsel also urged that the provision of Section 41(2) had the effect of excluding the power of prescribing any fee in relation to registration of vehicles, including the state’s powers under Section 65 and 211.

Conclusion of Court:

  1. Parliament intended that contingencies not covered by a specific power to levy fees or amounts, which entailed some activity on the part of the State, including rendering of any service could be legitimately charged or subjected to the levy of fee or amounts.
  2. The assignment of numbers by the registering authority,through an official/agency or department notified by the State Government, cannot be seen as a mere step — albeit at the fag-end of the registration allotment process.
  3. The state, in the opinion of this Court, is entitled to indicate its choice or manner of assigning by prescribing a particular set of procedures for the assignment of numbers.
  4. 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.
  5. The State Government has the authority to prescribe a fee for reserving certain numbers or distinguishing marks to be assigned as registration numbers. 
  6. 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 this 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.

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