VIMALCHAND BOKADIA Vs. REGIONAL TRANSPORT OFFICER

JUDGEMENT

(1.) First petitioner in W.P.(C)No.26909/2015 is an association of individuals engaged in financing of motor vehicles. It is a society registered under the Tamil Nadu Societies Registration Act, 1975. Second petitioner is a member of the 1st petitioner and he is doing hire-purchase finance business. Petitioners in W.P.(C)No.26015/2015 are also persons engaged in financing for motor vehicles.

(2.) Since the reliefs sought in these writ petitions are virtually the same, these cases were heard together.

(3.) Petitioners are aggrieved by Circular Nos.13/2011 dtd. 13/6/2011, 14/2011 dtd. 28/6/2011 and 19/2015 dtd. 22/7/2015 issued by the Transport Commissionerate, Thiruvananthapuram. In the first circular issued on 13/6/2011 the Transport Commissioner stated that the actions to be taken by the Motor Vehicles Department when motor vehicles are being registered and hire-purchase agreements are terminated are explained in Sec. 51 of the Motor Vehicles Act, 1988 and Rules 60 and 61 of the Motor Vehicle Rules, 1989. Endorsements are being made under Sec. 51 without examining the credentials of the financing companies. Such practices were causing difficulties to the vehicle owners and also to the Department. The Department sought advice of the Reserve Bank of India as to who all can be considered as financiers. The Reserve Bank opined that financial institutions as defined under Sec. 45-I(c) of the RBI Act, 1934 (including Hire-purchase Companies registered under the Companies Act, 1956) have to apply for registration under Sec. 45-IA of the RBI Act to carry on business as non-banking financial company. Therefore, the Transport Commissioner directed that at the time of making endorsements with respect to hire-purchase agreements and hypothecation agreements it must be insisted that certificate of registration provided under the Reserve Bank of India Act shall be produced. It was clarified that these directions would not apply in the case of institutions already functioning in the banking sector. Further, it was directed that the instructions shall be followed with effect from 1/7/2011.