Kerala Abkari Act | Rented Vehicle Put To Illegal Use Without Owner's Knowledge Or Active Involvement Ought To Not Be Confiscated: High Court

The Kerala High Court has laid down that a vehicle which was taken on rental basis, and which was subsequently put to use for illegal purposes, cannot be confiscated when the registered owner of the vehicle had no knowledge of the offence, nor had any active involvement in such act. 

"For a vehicle to be confiscated, it ought to have been established that the owner of the vehicle has prior knowledge or in the alternative, he is a party to the offence, which connotes his active involvement. Once it is indicated from the materials furnished by the writ petitioner (registered owner of the vehicle) that the owner of the vehicle is devoid of any knowledge or that he has connived with the persons who actually were evidenced as illegally transporting any contraband for the sole reason that the vehicle is involved in the offence, he cannot be penalised by ordering to confiscate his vehicle," Justice Mary Joseph observed. 

The petitioner, who is the Managing Director of E.V.M. Passengers Cars India Pvt. Ltd averred that the Company had the license to engage in rent a car business. He averred that one such car belonging to the Company, was rented by one Jinil Mathew for a day and 6 hours on a rent of a rent of Rs. 1,790/-. The petitioner stated that an agreement to this effect had also been entered into specifying the location, date and time of delivery as well as return of the vehicle, apart from the terms and conditions. Mathew was thus expected to return the car to the petitioner's company at 7PM on April 20, 2021. 

However, the vehicle was seized by Vadakara Excise Officials at 12:30P.M. on April 20, alleging that 162 litres of Indian Made Foreign Liquor (IMFL) was found to have been transported in the said vehicle. 

Although the petitioner had filed a written representation before the Deputy Excise Commissioner (2nd respondent) with the vehicular documents and documents pertaining to the rental agreement, the latter issued him a notice to show cause why the vehicle ought not to be confiscated. The said notice was sent to the petitioner only the very next day after it was issued, on which date he was called upon to show cause. The petitioner averred that he had received the same only a month later. 

Thus, the petitioner had initially approached the High Court with a plea seeking the issuance of a direction to the Deputy Excise Commissioner to finalise the proceedings after affording an opportunity to the petitioner to submit his grievances, which was allowed by the Court. 

However, the petitioner alleged that the 2nd respondent subsequently passed the order to confiscate the petitioner's vehicle without properly evaluating the documents submitted by the former. It is challenging the said Order that the petitioner approached the Court again with the present plea. 

The Court found that the rental agreement on the basis of which the car had been rented by the aforementioned Mathew had specifically provided for 'Member's/Customer's responsibility'. The Court thus discerned that since the offence had allegedly taken place while the vehicle was in the custody of the customer  who had taken it on rent, involvement of any nature could not be attributed to the petitioer, who is the owner of the vehicle. 

"A specific term is also incorporated in the rental agreement that the customer has to face legal actions in case of violations of law and he alone would be responsible for that," the Court further noted in this regard. 

It fruther found that the petitioner had also not been mentioned anywhere in the Case Diary, as regards his involvement in the alleged offence. 

On noting the statutory provision Section 67C of the Kerala Abkari Act ('Issue of show cause notice before confiscation under Section 67B') and precedents such as Rajesh K. v. Sub Inspector of Police, Palakkad & Ors. which laid down that the power of confiscation was discretionary and the authorities could exercise the same only under circumstances warranting confiscation, the Court was of the view that the vehicle ought to be returned to the petitioner. 

"...on the basis of the materials furnished by the writ petitioner, the materials collected by the investigating officer in O.R. No.78/2021 of Vadakara Police Station and in the legal backdrop, this Court finds every justification in taking a view that the writ petitioner has no involvement in the offensive acts in the crime and also that necessary precautions have been taken by him while causing the accused in the crime to sign the rental agreement and thereby subjecting him to abide by the terms and conditions appended thereto," the Court observed, while allowing the plea. 

Counsel for the Petitioner: Advocates Dheeraj Rajan, and Anand Kalyanakrishnan

Counsel for the Respondents: Public Prosecutor Seena C. 

Citation: 2023 LiveLaw (Ker) 576

Case Title: Sabu Johny v. State of Kerala & Ors. 

Case Number: WP(CRL.) NO. 529 OF 2021

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