RTO Has Discretion To Reject Application For Permit Replacement If Proposed Vehicle Is Older Than The Existing One: Supreme Court Upholds Rule 174(2)(c) of Kerala Motor Vehicle Rules

The Supreme Court upheld Rule 174(2)(c) of Kerala Motor Vehicle Rules,1989 which enables the road transport authority to reject an application for replacement if the proposed vehicle is older than the one covered under the existing permit.

The court observed that under this Rule, the Authority can apply discretion, wherever necessary, while exercising the power to grant replacement of a vehicle under a permit.

Where the vehicle sought to be substituted is marginally and inconsequentially older than the vehicle covered under the permit, the Authority may perhaps be justified in permitting such an application, the bench comprising Justices KM Joseph and PS Narasimha said.

Law Involved

Section 83 of the Motor Vehicles Act, 1988, provides that the holder of a permit may, with the permission of the authority by which the permit was granted, replace any vehicle covered by the permit by any other vehicle of the same nature. Rule 174 (2)(c) provides that, upon receipt of an application, the Transport Authority may in his discretion reject an application seeking permit - replacement, if the new vehicle proposed is older than the one sought to be replaced.

Background

Allowing a writ petition filed by one applicant, the single bench of the High Court held that while considering an application seeking replacement permit, it was road worthiness and viability of the vehicle which has to be considered and not the model of the vehicle, meaning thereby, the year of manufacture of the vehicle. Dismissing the appeal filed by the State/RTO, the Division bench observed that the Rule, 174(2)(c) restricts that an older vehicle cannot be brought in, it would be restricting the right conferred to a person by the provisions of the Act. Thus, Rule 174(2)(c) was held to be inoperative.

Issues Raised

In appeal before the Supreme Court, the following issues were raised:

(1) Whether Rule 174(2)(c) of Kerala Motor Vehicles Rules, 1989 is ultravires the provisions of the Act as the power with respect to prescription of age limit of a motor vehicle is in the exclusive domain of the Central Government?

(2) Whether Rule 174(2)(c) of the Kerala Motor Vehicles Rules, 1989 travels beyond and contrary to Section 83 of the Motor Vehicles Act, 1988? 

(3) What is the scope of the discretion exercised by the Authority in exercise of its power under Rule 174(2)(c) of the Kerala Motor Vehicles Rules, 1989?

Referring to Section 83 of MV Act, the bench observed that the purpose and object of mandating replacement by a vehicle of the same nature in Section 83 is only to ensure that the scrutiny and the conditions that were undertaken and imposed at the time of the grant continue even during the subsistence of the permit.

Does not impinge upon the powers of the Central Government 

Regarding issue (1), the court said that Rule 174 (2) (c) made by the State Government to enable replacement of the vehicle under a Transport permit, does not impinge upon the powers of the Central Government with respect to fixation of the age of the vehicle, or fitness of the vehicle conferred upon it under Sections 56 and 59 in Chapter IV.

"The scrutiny under Rule 174 is only to enable the Authority to ensure that the subsisting permit is not interrupted and at the same time public interest is not compromised by deviating from the permit. The Rule will have no bearing on the power of the Central Government and as such it would not be ultra vires the provisions of the Act. . There is yet another aspect which can lend a certain amount of clarity to this position. The vehicle which the Authority may not approve for replacement under section 83 on the ground that it is older than the vehicle covered under the permit, can be used as a transport vehicle within the State. There is no prohibition for such a usage as the said vehicle may continue to be fit and within the age limit prescribed by the Central Government. The rigour of Rule 174 (2) (c) is only in the context of a subsisting transport permit and not as a condition for transport vehicles as such."

No need to restrict the meaning of an expression 'same nature'

While answering the issue (2), the court noted that the High Court had interpreted "same nature" in Section 83 as follows: Same nature would mean; a bus by a bus, a mini bus by a mini bus, an air-conditioned bus by an air- conditioned bus, a truck by a truck and not a bus by a mini bus and an airconditioned bus by a non-air-conditioned bus or mini bus by a regular bus; that is the only restriction.

"The assumption in the impugned judgment that the expression "same nature" is confined only to, mean "a bus by bus, a mini-bus by mini-bus and not bus by a minibus…." is not a correct way to read the provision. There is no need to restrict the meaning of an expression same nature. In fact, expressions such as this are better kept open ended to enable courts to subserve the needs of changing circumstances", the court observed", the bench observed.

Government has expressly enabled the Authority to apply discretion, wherever necessary,

The bench noted the submission made by the State that, it is not as if applications seeking replacement of a vehicles, older than the one's covered by the Transport permit would stand rejected by the operation of the rule and that the Authority is given the power to exercise its discretion before rejecting an application on the said ground. In this regard, the bench said:

"Discretion is to be exercised wherever necessary in order to render the exercise of power reasonable, fair and non-arbitrary. Discretion could be express or implied. Rule 174(2) is a provision where the Government has expressly enabled the Authority to apply discretion, wherever necessary, while exercising the power to grant replacement of a vehicle under a permit. This discretion will have to be exercised reasonably, fairly as the facts and circumstance would clearly demonstrate. For instance, where the vehicle sought to be substituted is marginally and inconsequentially older than the vehicle covered under the permit, the Authority may perhaps be justified in permitting such an application. The Authority will also bear in mind the circumstances in which the permit holder was chosen in cases of comparative merit under which the rival applicants would have offered their own vehicles. Needless to say, that if the exercise of the discretion is not based on just reasonable and non-arbitrary principles, such a decision would be vulnerable and subject to correction in appeal and a further review. There is no need to delve on this issue any further."

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