IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM TUESDAY, THE 2ND NOVEMBER 2010 / 11TH KARTHIKA 1932 WP(C).No. 16248 of 2010(E) ---------------------------------------- PETITIONER(S): ------------------------ MOHANDAS, S/O. RAGHAVAN PILLAI, JAITHRAM, IRAVON, KOZHENCHERRY TALUK, PATHANAMTHITTA. BY ADVS. SRI.C.S.MANILAL, SRI.S.NIDHEESH. RESPONDENT(S): --------------------------- 1. THE REGIONAL TRANSPORT OFFICER, (TAXATION OFFICER) PATHANAMTHITTA. 2. AJITHKUMAR S/O. RAVEENDRAN NAIR, MOOKANNOOR, MANGARAM, KONNI. 3. SHINE RAJ, S/O. SUKUMARAN, NANDANAM, PANNIYALI,OMALLOOR, PATHANAMTHITTA. 4. RADHAKRISHNAN,S/O.SIVAN PILLAI, SIVALAYAM, KRISHNAPURAM P.O.,KARTHIKAPPALLY. 5. BINOJ, S/O. GOPALAN, PARANNOLIL HOUSE, KAMBIMULAYKKAL, CHUNNAKKARA VILLAGE, MAVELIKKARA. 6. THE SHRIRAM VEHICLES AND FINANCE LTD., PATHANAMTHITTA, REPRESENTED BY THE BRANCH MANAGER, COLLEGE ROAD, PATHANAMTHITTA. 7. THE THAHASILDAR, REVENUE RECOVERY,PATHANAMTHITTA. R1 BY GOVERNMENT PLEADER SRI. BIJOY CHANDRAN R3 BY ADV. SRI.O.D.SIVADAS R6 BY ADVS. SRI.PHILIP T.VARGHESE, SRI.THOMAS T.VARGHESE. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 02/11/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Kss C.K.ABDUL REHIM, J. ------------------------------------------- W.P.(C).No.16248 of 2010 ------------------------------------------- Dated this the 2nd day of November, 2010 J U D G M E N T ---------------------- 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