Case: Association of Registration Plates Vs. Union of India and Others

Act says: nothing in this section shall apply to motor vehicle in possession of a dealer subject to such conditions as may be prescribed by the Central Government. Section 41 also points to the same position. It casts an obligation on the owner of a motor vehicle to obtain registration. The question of issuing a certificate of registration and assigning to a motor vehicle a registration mark arises only after sale of motor vehicle. Therefore, until the motor vehicle has been sold to a person by a dealer, the registering authority would not come into the picture and there is no occasion for assigning it a registration mark. A manufacturer of motor vehicle is not at all concerned with registration thereof by the registering authority. On the basis of above interpretation of provisions of the Act, the submission made is that under section 109(3), the Central Government can only prescribe standards for any article or process used by the manufacturer in the manufacturing of the vehicle and not for selecting any manufacturer or registration plates to the exclusion of others. It is submitted that reading sub-section (3) with sub-section (1) & (2) of section 109 of the Act, the position is that the provisions have nothing to do with registration plates of the vehicles. 52. It is further submitted that power to issue directions a contained in para 4(x) of the statutory order of 2001, cannot be traced to any provision in chapter IV of the Act dealing with registration of motor vehicles or to the rule making power under section 64(d). It is submitted that any provision regarding registration plates can only be made by rule framed by Central Government in accordance with provisions of the Act. Sub-section (4) of section 212 of the Act, prescribes a mandatory requirement of first publishing draft rule before making a final rule on any subject. Since in promulgating para 4(x) of the statutory order of 2001, mandatory requirement of section 212(4) has not been complied with, the impugned para of the said statutory order of 2001 cannot be supported even as a statutory rule. The other submission made on the subject is that provisions for selecting only one manufacturer for registration plates in a region or a State is not a subject of prescribing manner and form in which the registration mark would be displayed on the motor vehicles. On the above ground, it is submitted that para 4(x) of the statutory order of 2001 deserves to be struck down as ultra vires the Act. It is violate of the Article 19(1)(g) of the Constitution. 53. The above argument based on section 109(3) and the other provisions in Chapter IV of the Act have been suitably replied by the counsel appearing for the respondents. The reasoning advanced on behalf of the respondents is worthy of acceptance. The statutory order of 2001 is expressly issued under section 109 (3) of the Act which no doubt is concerned with construction, equipment and maintenance of motor vehicles. Sub-section (3) of section 109 permits Central Government to " notify that any article or process used by a manufacturer shall conform to such standard as prescribed". The word "manufacturer" is defined in section 2(21A) of the Act to mean a person engaged in the manufacture of the motor vehicles but the definition clause is prefixed by the words "unless the context otherwise requires". I the context of sub-section (3) of section 109, an article to be affixed to the motor vehicle like a high security registration plates is covered by the use of expression "any article or process used by a manufacturer". `In the context if the provision contained in sub-section 3 is read reasonably, an article which is adjunct or necessarily attachable to a motor vehicle, would also be covered in the said expression. The statutory order of 2001 is published in the official gazette. It does not fall outside the scope of sub-section (3) of section 109 of the Act. The expression `any article or process used by a manufacturer has to be construed `in the context as not to restrict the expression `manufacturer to only manufacturer of motor vehicle as defined under section 2 (21A) of the Act. The definition in the Act has to be construed according to the `context and if the `context otherwise indicates a meaningful interpretation is to be given to the words `any article or process used by any manufacturer as used in sub-section 3 of section 109 of the Act. Registration plates are not manufactured by the manufacturer of motor vehicles but for maintenance and operations of motor vehicles, registration plates are necessary. Therefore, manufacturer of registration plates can be subjected to certain standards by a statutory order to be notified and published in accordance with sub-section (3) of section 109 of the Act. Any restrictive interpretation of the said sub-section is neither called for from the language of the sub-section or the object of the provision. Reference is made to the opinion of learned Brother G.P. Mathur J., in these cases. For the reasons mentioned by us above, in our opinion, the statutory order of 2001 and clause 4(x) thereof cannot be held to be beyond the purview of sub-section 3 of section 109 of the Act. Clause 4(x) of the statutory order of 2001, could be issued under section 109(3), as an aid to the fulfillment of provisions of high security registration plates contained in rule 50. Such power of the State to issue order containing clause 4(x) is not only supported by sub-section 3 of section 109 but by rule 50 itself. Clause 4(x) of the statutory order of 2001 is merely enabling one and re-states what rule 50 contemplates. We also find force in the alternative submission made on behalf of the respondents that the statutory order including clause 4(x) can be supported as having been issued in exercise of executive power of the Central Government which is co-extensive with its legislative power. 54.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]In the matter of formulating conditions of a tender document and awarding a contract of the nature of ensuring supply of high security registration plates, greater latitude is required to be conceded to the State authorities. Unless the action of tendering Authority is found to be malicious and misuse of its statutory powers, tender conditions are unassailable. On intensive examination of tender conditions, we do not find that they violate the equality clause under Article 14 or encroach on fundamental rights of a class of intending tenderer under Article 19 of the constitution. On the basis of the submissions made on behalf of the Union and State authorities and the justification shown for the terms of the impugned tender conditions, we do not find that the clauses requiring experience in the field of supplying registration plates in foreign countries and the quantum of business turnover are intended only to keep out of field indigenous manufacturers. It is explained that on the date of formulation of scheme in rule 50 and issuance of guidelines thereunder by Central Government, there were not many indigenous manufacturers in India with technical and financial capability to undertake the job of supply of such high dimension, on a long term basis and in a manner to ensure safety and security which is the prime object to be achieved by the introduction of new sophisticated registration plates.Selecting one manufacturer through a process of open competition is not creation of any monopoly, as contended, in violation of Article 19(1)(g) of the Constitution read with clause (6) of the said Article. As is sought to be pointed out, the implementation involves large network of operations of highly sophisticated materials. The manufacturer has to have embossing stations within the premises of the RTO. He has to maintain a data of each plate which he would be getting from his main unit. It has to be cross-checked by the RTO data. There has to be a server in the RTOs office which is linked with all RTOs in each State and thereon linked to the whole nation. Maintenance of record by one and supervision over its activity would be simpler for the State if there is one manufacturer instead of multi-manufacturers as suppliers. The actual operation of the scheme through the RTOs in their premises would get complicated and confused if multi-manufacturers are involved. That would also seriously impair the high security concept in affixation of new plates on the vehicles. If there is a single manufacturer he can be forced to go and serve rural areas with thin vehicular population and less volume of business. Multi-manufacturers might concentrate only on urban areas with higher vehicular population.The fifteen years contract period has also been supported by Union of Indian and State authorities. We find great substance in the submissions made on the data supplied as a justification for awarding contract for long period of 15 years. There would be a huge investment required towards the infrastructure by the selected manufacturer and the major return would be expected in initial period of two years although he would be bound down to render his services for future vehicles on periodically for a long period. Looking to the huge investment required and the nature of the job which is most sophisticated requiring network and infrastructure, a long term contract, if thought viable and feasible, cannot be faulted by the court. If there are two alternatives available of giving a short-term or a long-term contract, it is not for the court to suggest that the short-term contract should be given. On the subject of business management, expertise is available with the State authorities. The policy has been chalked out and the tender conditions have been formulated after joint deliberations of authorities of the State and the intending manufactures. Contract providing technical expertise, financial capability and experience qualifications with a long term of 15 years would serve a dual purpose of attracting sound parties to stake their money in undertaking the job of supply and safeguard public interest by ensuring that for a long period the work of affixation of security plates would continue uninterrupted in fulfilment of the object of the scheme contained in rule 50. Our consideration opinion, therefore, is that none of the impugned clauses in the tender conditions can be held to be arbitrary or discriminatory deserving its striking down as prayed for on behalf of theis no material on record to infer any mala fide design on the part of the tendering authority to favour parties having foreign collaborations and keep out of fray indigenous manufacturers. The high security plates is a sophisticated article - new for manufacturer in India. It is being introduced for the first time under the scheme contained in rule 50 of the Rules and the Act. At the time of issuance of Notices of Tender, technical know-how for manufacture of plates and its further development was undoubtedly outside the country. Only a few concerns in India having collaboration with foreign parties possessed the expertise and were available in the market. The terms of the notice inviting tender were formulated after joint deliberations of Central and State Authorities and the available manufacturers in the field. The terms of the tender prescribing quantum of turnover of its business and business in plates with fixation of long term period of the contract are said to have been incorporated to ensure uninterrupted supply of plates to a large number of existing vehicles within a period of two years and new vehicles for a long period in the coming years. It is easy to allege but difficult to accept that terms of the Notices Inviting Tenders which were fixed after joint deliberations between State authorities and intending tenderers were so tailored as to benefit only a certain identified manufacturers having foreign collaboration. Merely because few manufacturers like the petitioners do not qualify to submit tender, being not in a position to satisfy the terms and conditions laid down, the tender conditions cannot be held to be discriminatory.Certain preconditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work Article 14 of the Constitution prohibits the government from arbitrarily choosing a contractor at its will and pleasure. It has to act reasonably, fairly and in public interest in awarding contract. At the same time, no person can claim fundamental right to carry on business with the government. All that he can claim is that in competing for the contract, he should not be unfairly treated and discriminated to the detriment of public interest. Undisputedly, the legal position which has been firmly established from various decisions of this Court, cited at the Bar (supra) is that government contracts are highly valuable assets and the court should be prepared to enforce standards of fairness on government in its dealings with tenderers and contractors.The grievance that the terms of notice inviting tender in the present cases virtually creates a monopoly in favour of parties having foreign collaborations, is without substance. Selection of a competent contractor for assigning job of supply of a sophisticated article through an open tender procedure, is not an act of creating monopoly, as is sought to be suggested on behalf of the petitioners. What has been argued is that the terms of the Notices Inviting Tenders deliberately exclude domestic manufacturers and new entrepreneurs in the field. In the absence of any indication from the record that the terms and conditions were tailor-made to promote parties with foreign collaborations and to exclude indigenous manufacturers, judicial interference ins uncalled for.Learned counsel for the petitions argues that the use of the word "approved" in para 2 of clause (v) of rule 50(1) has to be given its natural meaning and cannot be read to mean "selected" through notice inviting tender. In this respect, it is further submitted that the rule making authority has used the word `approved and `approve twice in the same paragraph. The rule read harmoniously rules out selection of sole manufacturer through a tender process. The argument in substance is that every approved licence plate manufacturer can be entrusted with the job of supplying the registration plates and selection of one manufacturer for the job is against the intendment of the rule.The above argument seems attractive but on closer scrutiny is unacceptable. The rule is interpreted to mean that the registration plates can either be issued by RTO to the exclusion of all others or all type approval certificate holders must be allowed to do business of supply in open market. In other words, according to the petitioners, the rule contemplates that if the registering authority does not supply the plates itself, it allows all TAC holders to do the business without anyabove argument based on section 109(3) and the other provisions in Chapter IV of the Act have been suitably replied by the counsel appearing for the respondents. The reasoning advanced on behalf of the respondents is worthy of acceptance. The statutory order of 2001 is expressly issued under section 109 (3) of the Act which no doubt is concerned with construction, equipment and maintenance of motor vehicles. Sub-section (3) of section 109 permits Central Government to " notify that any article or process used by a manufacturer shall conform to such standard as prescribed". The word "manufacturer" is defined in section 2(21A) of the Act to mean a person engaged in the manufacture of the motor vehicles but the definition clause is prefixed by the words "unless the context otherwise requires". I the context of sub-section (3) of section 109, an article to be affixed to the motor vehicle like a high security registration plates is covered by the use of expression "any article or process used by a manufacturer". `In the context if the provision contained in sub-section 3 is read reasonably, an article which is adjunct or necessarily attachable to a motor vehicle, would also be covered in the said expression. The statutory order of 2001 is published in the official gazette. It does not fall outside the scope of sub-section (3) of section 109 of the Act. The expression `any article or process used by a manufacturer has to be construed `in the context as not to restrict the expression `manufacturer to only manufacturer of motor vehicle as defined under section 2 (21A) of the Act. The definition in the Act has to be construed according to the `context and if the `context otherwise indicates a meaningful interpretation is to be given to the words `any article or process used by any manufacturer as used in sub-section 3 of section 109 of the Act. Registration plates are not manufactured by the manufacturer of motor vehicles but for maintenance and operations of motor vehicles, registration plates are necessary. Therefore, manufacturer of registration plates can be subjected to certain standards by a statutory order to be notified and published in accordance with sub-section (3) of section 109 of the Act. Any restrictive interpretation of the said sub-section is neither called for from the language of the sub-section or the object of the provision. Reference is made to the opinion of learned Brother G.P. Mathur J., in these cases. For the reasons mentioned by us above, in our opinion, the statutory order of 2001 and clause 4(x) thereof cannot be held to be beyond the purview of sub-section 3 of section 109 of the Act. Clause 4(x) of the statutory order of 2001, could be issued under section 109(3), as an aid to the fulfillment of provisions of high security registration plates contained in rule 50. Such power of the State to issue order containing clause 4(x) is not only supported by sub-section 3 of section 109 but by rule 50 itself. Clause 4(x) of the statutory order of 2001 is merely enabling one and re-states what rule 50 contemplates. We also find force in the alternative submission made on behalf of the respondents that the statutory order including clause 4(x) can be supported as having been issued in exercise of executive power of the Central Government which is co-extensive with its legislative