IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 16248 of 2010(E)
1. MOHANDAS, S/O. RAGHAVAN PILLAI,
... Petitioner
Vs
1. THE REGIONAL TRANSPORT OFFICER,
... Respondent
2. AJITHKUMAR S/O. RAVEENDRAN NAIR,
3. SHINE RAJ, S/O. SUKUMARAN,
4. RADHAKRISHNAN,S/O.SIVAN PILLAI,
5. BINOJ,S/O. GOPALAN, PARANNOLIL HOUSE,
6. THE SHRIRAM VEHICLES AND FINANCE LTD.,
7. THE THAHASILDAR, REVENUE RECOVERY,
For Petitioner :SRI.C.S.MANILAL
For Respondent :SRI.PHILIP T.VARGHESE
The Hon'ble MR. Justice C.K.ABDUL REHIM
Dated :02/11/2010
O R D E R
C.K.ABDUL REHIM, J.
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W.P.(C).No.16248 of 2010
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Dated this the 2nd day of November, 2010
J U D G M E N T
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The petitioner is the registered owner of a Bus
bearing Regn.No:KL-3/C-567. According to the
petitioner, the said vehicle was sold to the 2nd
respondent by virtue of Ext.P1 agreement, on
12.11.2006. Thereafter the 2nd respondent sold the
vehicle into the name of the 3rd respondent by virtue of
Ext.P2 agreement, on 10.11.2007. There occurred
further transfers of the vehicle, by the 3rd respondent to
the 4th respondent and by the 4th respondent to 5th
respondent, on 24.3.2008 and on 11.6.2008 by virtue of
Ext.P3 and P4 agreements. It is stated that the vehicle
was under hypothecation arrangement with the 6th
respondent and at the time of transfer effected by the
petitioner the 2nd respondent had undertaken to pay off
the liability due to the 6th respondent.
W.P.(C).16248/10 -2-
2. Issue involved in this writ petition pertains to
payment of the Motor Vehicles Tax. According to the
petitioner, to the best of his knowledge, there was no
arrears till the date of Ext.P4, i.e. till 11.6.2006. Contention
of the petitioner is that on the event of sale of the vehicle to
the 2nd respondent, the petitioner had intimated about the
transfer to the Motor Vehicles authorities concerned as
provided under Section 60 of the Motor Vehicles Act.
However, it is conceded that registration of the vehicle was
not transferred and the same remains still in the name of
the petitioner. It is further stated that the 5th respondent
had committed default in payment of amounts due to the 6th
respondent and the vehicle in question was surrendered to
the 6th respondent, and it is remaining under custody of the
6th respondent. While so, revenue recovery steps were
initiated against the petitioner for realising the arrears of
Motor Vehicles Tax due for the period from 1.10.2008 to
1.12.2009. Ext.P5 is the demand notice issued under
Section 7 of the Kerala Revenue Recovery Act for realising a
sum of Rs.2,66,438/-.
W.P.(C).16248/10 -3-
3. Petitioner is challenging the recovery steps on the
ground that there is liability for payment of Motor Vehicles
tax by the person who is in possession of the vehicle. Since
the petitioner had parted with possession of the vehicle as
early as in the year 2006, he is not liable for payment of the
amount now demanded, which is for the period during
2008-’09. It is also contended that the financier who had re-
possessed the vehicle could not deny liability for payment of
tax and hence the recovery steps initiated against the
petitioner is unsustainable. Yet another contention is that
since the Motor Vehicles Tax is a charge on the vehicle as
per Section 13(2) of the Kerala Motor Vehicle Taxation Act,
the vehicle in question is liable to be proceeded against.
4. The petitioner had raised a further contention
that at the time when the vehicle was transferred by the
petitioner to the 2nd respondent the hypothecation
agreement was also transferred into the name of the 2nd
respondent. It was contended that since the 6th respondent
had entered into a hypothecation agreement with the 2nd
respondent, the obligation of the petitioner stood
W.P.(C).16248/10 -4-
terminated. In this regard the petitioner had produced
additional documents, Ext.P6 to P11. From Ext.P6 to P8
receipts it is evident that the 6th respondent had received
payments of Rs.15,000/- each from the 2nd respondent on
9.5.2008, 30.5.2008 and 11.4.2008 respectively. Ext.P9 is a
lawyer notice caused by the 6th respondent to the 2nd
respondent and his wife, demanding payment of the balance
amount due under the hypothecation agreement and also
intimating appointment of an arbitrator. Ext.P10 and P11
are the notices caused by the arbitrator so appointed about
the proceedings initiated under the Arbitration and
Conciliation Act 1996.
5. In a statement filed on behalf of the 1st respondent
it is mentioned that there exists arrears of tax due with
respect to the vehicle, for the period from 1.10.2008 to
31.12.2009. It is further mentioned that a memo
demanding payment of tax to the tune of Rs.1,83,750/- was
issued to the petitioner as per Ext.R1(a), which was
acknowledged by the petitioner as evidenced from Ext.R1
(b) postal acknowledgment card. But the petitioner had
W.P.(C).16248/10 -5-
failed to respond to the notice nor he had filed any appeal
against the demand as provided under Section 13(2). It is
contended that the petitioner being the registered owner is
liable for payment of the tax amount, as per provisions
under Section 9(2) of the Kerala Motor Vehicles Taxation
Act. It was also pointed out by the 1st respondent that the
vehicle in question is not traceable and a report in this
regard was submitted by the Assistant Motor Vehicles
Inspector as per Ext.R1(c).
6. From the facts and circumstances as stated
above, it is evident that the vehicle in question was
transferred by the petitioner to the 2nd respondent and such
transfer was accepted by the 6th respondent. It is also
evident that there was subsequent transfer of possession of
the vehicle by the 2nd respondent to the 3rd respondent and
further transfers in favour of respondents 4 and 5. It is also
contended that the vehicle was ultimately taken over
possession by the 6th respondent and the same was in their
custody. The arrears of tax sought to be realised pertains
to the period from 1.10.2008 to 31.12.2009 whereas the
W.P.(C).16248/10 -6-
transfer of the vehicle was effected by the petitioner by
virtue of Ext.P1 as early as on 12.11.2006. At the same time
it is evident that the petitioner continues to be the
registered owner of the vehicle. Eventhough it is evident
that the petitioner had not responded to Ext.R1(a) notice
and had not taken any effective challenge against the
demand, I am of the considered opinion that the matter
requires an enquiry and adjudication at the hands of the 1st
respondent for fixing the liability for payment of the arrears
of tax. This is especially because of the fact that the vehicle
was allegedly in the possession of the 6th respondent.
7. Under such circumstances the writ petition is
disposed of directing the 1st respondent to conduct an
adjudication for the purpose of fixing liability with respect
to payment of arrears of Motor Vehicles Tax due on the
vehicle bearing Regn.No.KL-3/C-567, after issuing notice to
the petitioner and respondents 2 to 6, and after affording
opportunity to them to adduce documentary evidence in
support of their claim. A decision in this regard shall be
taken by the 1st respondent at the earliest, at any rate
W.P.(C).16248/10 -7-
within a period of two months from the date of receipt of a
copy of this judgment.
8. Till such time orders are passed by the 1st
respondent as directed above, further steps of recovery
initiated pursuant to Ext.P5 notice shall be kept in
abeyance.
9. Needless to say that if any of the parties are
aggrieved by such decision taken, it will be left open for
them to pursue remedies as provided under the statute
before the appropriate appellate authority.
C.K.ABDUL REHIM, JUDGE.
okb