IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE V.GIRI FRIDAY, THE 19TH JUNE 2009 / 29TH JYAISHTA 1931 WP(C).No. 13661 of 2009(C) -------------------------- PETITIONER(S): --------------- BINDHU.K.S, W/O. SUDHI, SUDHEENDRALAYAM, PEROOR.P.O, ETTUMANOOR, KOTTAYAM. BY ADV. SRI.P.DEEPAK RESPONDENT(S): --------------- 1. THE SECRETARY, REGIONAL TRANSPORT AUTHORITY, KOTTAYAM. 2. THE BRANCH MANAGER, APEX BANK (FORMERLY U.T.I BANK) CHICAGO PLAZA, RAJAJI ROAD, ERNAKULAM. ADD.3. SUNILKUMAR.P.K., SENIOR MANAGER, SHRIRAM TRANSPORT FINANCE CO. LTD., GEETHA COMMERCIAL COMPLEX, NEAR Y.W.C.A. KOTTAYAM REP. BY SUNILKUMAR P.K., SENIOR MANAGER. (ADDL.R3 IMPLEADED VIDE ORDER DTD.19.6.2009 ON I.A.NO.7109/09) R1 BY GOVT. PLEADER SRI.P.N.SANTHOSH R3 BY ADV. SRI.C.HARIKUMAR SRI.ARAVINDA KUMAR BABU T.K. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 19/06/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: V.GIRI, J. ------------------------------------------- W.P(C).No.13661 OF 2009 ------------------------------------------- Dated this the 19th day of June, 2009 JUDGMENT 1. An interesting question, inter alia, involving construction of Section 51 of the Motor Vehicles Act, 1988 (hereinafter referred to as the “Act”) arises for consideration in this writ petition. 2.The petitioner, a contract carriage operator, is the registered owner of a vehicle bearing No.KL-07/X 9525, which had a permit valid till 24.3.2009. Ext.P3 is the copy of the registration certificate in relation to the vehicle in question. The petitioner had entered into a hire-purchase agreement with the second respondent and the second respondent has, therefore, been recognised as the person with whom such agreement has been entered into by the petitioner in relation to the vehicle in question ad so endorsed in Ext.P3. Finding that the permit in question requires a renewal, the petitioner approached the financier, viz., the second respondent, for a No WPC.13661/09 Page numbers Objection Certificate as evidenced by Ext.P4 dated 4.4.2009. According to the petitioner, the financier did not respond to the request made by her and therefore, in terms of Section 51 (7) of the Act, the absence of a response by the financier for an NOC, at the stage of renewal of an existing permit, within 7 days from the date of a request under Section 51(6), will enable the petitioner to proceed as if there is a deemed consent. The petitioner, therefore, proceeded to submit a declaration in terms of Section 51(8) of the Act before the registering authority, along with a copy of the request made to the financier for NOC and proof of service of the same. In spite of this, permit in question has not been renewed and hence, this writ petition. 3. Though notice was served, there is no appearance on behalf of the second respondent. One P.K.Sunilkumar, Senior Manager of Shriram Transport Finance Co. Ltd., has sought permission to get impleaded as the additional third respondent. The contention taken in the affidavit in support of WPC.13661/09 Page numbers the application for impleadment (I.A.7109/09 has been separately allowed) is that there is a tri-partite agreement between the petitioner, second respondent and the additional third respondent and that it was the additional third respondent who enabled the petitioner to avail the financing facility offered by the second respondent. It is also stated that the petitioner defaulted repayment of the loan availed by her from the second respondent and that, consequently, the additional third respondent was bound to discharge the liability. It is common case that there are cases between the parties in the matter of steps for recovery taken by the additional third respondent and action taken by the petitioner for settlement of accounts. The additional third respondent affirms that NOC can be issued only if the petitioner pays it, the amounts which it has paid over to the second respondent. 4. As stated above, there is no appearance on behalf of the second respondent. The question is whether the additional third respondent, who claims to have stepped into the shoes of WPC.13661/09 Page numbers the second respondent, is entitled to resist the plea made by the petitioner for renewal of Ext.P1 permit. 5. I heard learned counsel for the petitioner, learned Government Pleader and learned counsel for the additional third respondent. 6. Section 51 of the Act contains certain provisions regarding motor vehicles subject to hire- purchasing. Section 51(6) deals with the procedure for renewal of permit in respect of such vehicles. Section 51(6) contemplates an NOC from the financier and it provides that the registered owner shall, before applying to the appropriate authority, approach the financier for an NOC. Under Section 51(7), it is open to the financier to issue or refuse the NOC. In the latter case, reasons will have to be recorded and communicated to the applicant. Section 51(7) itself provides for a deeming provision where, if the financier fails to issue the certificate and also fails to communicate the reasons for refusal to issue WPC.13661/09 Page numbers the certificate within the period of 7 days, the certificate applied for by the owner shall be deemed to have been issued by the financier. What takes place next is provided for under Section 51(8), which obliges the registered owner to then apply to the appropriate authority for renewal of permit and submit before the registering authority either the certificate obtained under Sub-section 7 or the communication of refusal, if any, received thereon or a declaration that it has not received any communication from the financier within the period of 7 days. According to the petitioner, she has produced before the registering authority a declaration as contemplated by Section 51(8) to the effect that a request for NOC was made by the petitioner, served on the financier, not responded to within the requisite time and what thereafter remains is the consideration of the application for renewal in terms of Section 51(9) of the Act. 7. Learned counsel for the additional third respondent submits that the third respondent should now be treated as the hire- WPC.13661/09 Page numbers purchase agreement holder vis.a.vis. the petitioner as the third respondent has stepped into the shoes of the second respondent. Consequently, the third respondent has been vouchsafed such rights as are otherwise available to the second respondent under the statute. The question is, is it so? 8. For a moment, it may be assumed that the case put forward by the additional third respondent that there was a tri-partite agreement between the petitioner, second respondent and the third respondent regulating the terms of the finance availed of by the petitioner from the second respondent, is true. It may also be assumed for a moment (though it cannot be found as a fact in these proceedings) that amounts due to the financier from the petitioner was ultimately paid by the additional third respondent and the additional third respondent is, therefore, entitled to exercise a right of subrogation qua the petitioner. It may also be assumed for a moment that all these acts were done by the petitioner and the additional third respondent in terms of a tri-partite agreement between the petitioner, WPC.13661/09 Page numbers second respondent and the third respondent. Does it enable the additional third respondent to step into the shoes of the second respondent and exercise the rights of the second respondent in relation to the vehicle belonging to the petitioner? 9. Section 51 of the Act deals with a special provision where a vehicle is purchased availing a facility from a third party. The person who enables the purchase of the vehicle may be called as a financier. He exercises rights as provided under the terms of the agreement relating to the facility afforded in favour of the registered owner of the vehicle. He is entitled to assert a right as the hirer of the vehicle, in the context of a hire-purchase agreement. The owner of the vehicle is defined under Section 2 (30) of the Act. When the motor vehicle is the subject matter of a hire-purchase or an agreement of hypothecation, it is the person in possession of the vehicle, in law and in fact, who is entitled to claim the status of an owner. Section 51 comprehends registration of a motor vehicle held WPC.13661/09 Page numbers under a hire-purchase or hypothecation agreement. It deals with cases where ownership of a motor vehicle registered under Chapter IV of the Act is sought to be transferred. The existence of a hire-purchase agreement will be taken note of and endorsed in the certificate of registration. This brings within its wake more than one consequence. Once the existence of a hire purchase agreement or hypothecation agreement is taken note of and endorsed in the certificate of registration, its factual existence cannot be denied by the owner of the vehicle. Secondly, termination of the hire- purchase agreement, even if it otherwise takes place in terms of the agreement between the parties, can be acknowledged as a fact by the officials only when it is endorsed in the certificate of registration in terms of Rule 61 of the Central Motor Vehicles Rules. Thus, endorsement of the existence of a hire purchase-agreement or hypothecation or agreement for lease in the certificate of registration carries with it statutory consequences. WPC.13661/09 Page numbers 10. Once therefore the existence of a hire-purchase agreement is endorsed in the certificate of registration, and the person is also treated as the registered owner of the vehicle in terms of the certificate of registration, appropriate status in relation to the vehicle in question can be claimed by a person only with reference to the endorsement and entries contained in the certificate of registration. No doubt the motor vehicle is a movable property and therefore, sale or transfer or creation of any other encumbrance thereon is governed by the provisions of the Sale of Goods Act. Consequently, it is always open to the parties to contract among themselves with regard to the transfer of the same. But the competent officials under the Motor Vehicles Act are bound by the entries and endorsement in the certificate of registration and a change or alteration in the endorsements will have to be preceded by the procedure which is provided in the Act itself. Sub-section 5 of Section 51 of the Act deals with the case where the hirer of a vehicle, i.e., to say, a person who has purchased the vehicle takes possession thereof under the provisions of the agreement, he WPC.13661/09 Page numbers may approach the authority under the Act for the issuance of a fresh certificate of registration, contending that the original registered owner of the vehicle is refusing to hand over the certificate of registration. In such cases, the registering authority cannot, merely by taking note of the fact that the applicant is a financier of the vehicle and would, therefore, in law be entitled to renew the same, proceed to issue a certificate of registration. Notice will have to be issued to the registered owner, who is entitled to be heard and resist the issuance of a fresh certificate of registration, going by what is contained in Section 51(5). At least from the limited purpose, the registering authority called upon to issue fresh certificate of registration will be bound to go into the question as to whether re-possession of the vehicle by the financier took place in terms of the provisions of the agreement and law. I hasten to make it clear that any action with the registering authority in this context or any enquiry conducted by him in this regard, obviously would not be resultant upon an adjudication regarding the rival claims of title raised by the WPC.13661/09 Page numbers parties under the agreement. Those are matters which will have to be left to the civil court or the arbitrator, as the case may be. 11. The discussion as above, making an attempt to delineate the scope of the provisions of Section 51 of the Act also intends to provide the backdrop for a better understanding of Sections 51 (6) to 51(9) of the Act. Section 51(6) obliges the registered owner before applying to the appropriate authority for renewal of permit to approach the person with whom the registered owner has entered into an agreement (referred to as financier) for issuance of NOC. May be the owner of the vehicle has entered into more than one agreement with more than one person for purchase of the vehicle. But it is only that person with whom an agreement is stated to have been entered into for hire-purchase of the vehicle or hypothecation agreement, as the case may be, and so endorsed in the certificate of registration in terms of Section 51(1) of the Act, who is entitled to claim the status of the financier for the purpose of WPC.13661/09 Page numbers Section 51(6) of the Act. It is only such person who can claim the right to be involved in the procedure provided under Sections 51(7) and 51(8) of the Act or the right to be heard in terms of Section 51(9) of the Act. 12.May be by reason of any event subsequent to the actual registration of the vehicle, there has been a change in the contractual relationship between the original registered owner and the financier. May be the financier has availed of a re- financing facility from another person. May be, as is alleged to have happened in the instant case, the additional third respondent has stepped into the shoes of the second respondent on payment of the amounts due from the petitioner to the financier. But these are aspects which could be resolved only under the auspices of a contract between the parties and in terms of the said contract. But power cannot be conceded to the registering authority under the Act, to decide matters relating to discharge of liability under a contract or decide issues relating to the extent of the right of subrogation WPC.13661/09 Page numbers available to a person who has discharged the liability originally incurred by the registered owner qua the financier. The conferment of such a power on the registering authority would be tantamount to conferring powers of adjudication on a registering authority, akin to that of a civil court appropriately exercising jurisdiction over rival claims between parties bound by the terms of a contract. 13.In the above circumstances, I am unable to accept the submission of the additional third respondent that it is entitled to be treated as having stepped into the shoes of the second respondent and therefore, entitled to assert the status of the second respondent as a financier in relation to the vehicle in question. May be the second respondent has no objection to the third respondent asserting to such a status. May be the second respondent would even concede the right of subrogation in favour of the third respondent. May be the petitioner herself had earlier entered into a tri-partite agreement with respondents 2 and 3. But this will not enable WPC.13661/09 Page numbers the third respondent to claim the status of a financier in the context of Section 51 of the Act. Right thereunder cannot be claimed by anyone other than the person with whom, existence of an agreement is endorsed in terms of Section 51(1) of the Act. Consequently, the status of the financier, discernible in favour of the second respondent, cannot be attributed to the additional third respondent. Of course, it would be open to the third respondent, nevertheless to move the competent civil court for appropriate declaratory relief with the registering authority on the party array. 14. In the result, the writ petition is disposed of directing the first respondent to proceed further with the application for renewal of the permit, Ext.P1, as referred to in Ext.P2 and take further steps as contemplated by Section 51(9) of the MV Act, after notice to the second respondent also within six weeks from the date of receipt of a copy of this judgment. Sd/- V.GIRI, Judge. kkb.20/6.