SUNDARAM FINANCE LIMITED Vs. REGIONAL TRANSPORT OFFICER

JUDGEMENT

(1.) THE third respondent got possession of a stage carriage vehicle, as per Ext. P-2 agreement, styled as a "hire purchase agreement". In accordance with Ext. P-2 agreement, the petitioner, who is carrying on business as financiers were to let, and the third respondent to take, on hire, the motor vehicle together with the equipment and accessories for a term of 24 calendar months from June 9, 1973, subject to determination as mentioned below : THE hirer was to pay the owners (petitioner) by way of rent, the sum mentioned in the second schedule to the agreement on the dates therein mentioned. He was to keep the vehicle in sole custody. He could not sell, assign, pledge, charge, underlet, lend or otherwise part with the possession, custody or beneficial interest of, in the said vehicle without the previous written consent of the petitioner. If the hirer failed to pay any of the instalments within the stipulated time whether legally demanded or not, becomes insolvent or attempts to pledge or seller otherwise alienate or transfer the vehicle, etc., then the rights of the hirer shall forthwith be determined ipso facto without any notice to the hirer and all the instalments previously paid by the hirer shall be forfeited to the petitioner, who shall thereupon be entitled to seize, remove and retake possession of the vehicle with its accessories. Only upon the hirer paying the entire amount specified in the schedule, the said vehicle will become the sole and absolute property of the hirer. As per the agreement itself the petitioner had agreed to permit the hirer to have the registration of the vehicle in his name provided that he should transfer the registration in the name of the petitioner whenever required to do so by them and especially when the hirer commits breach of any of the conditions of the agreement and the petitioner was obliged to seize the vehicle.

(2.) WHAT happened in this case was that the third respondent defaulted payment of the instalments in accordance with the agreement. The petitioner seized the vehicle. On that day, an amount of Rs. 19,375 was due from the third respondent to the petitioner by way of arrears of hire money besides other amounts by way of incidental charges, etc. After the seizure of the vehicle and taking possession of the same, the petitioner made an application to the Regional Transport Officer, the first respondent, requiring him to issue a tax clearance certificate in respect of the vehicle. Another application was also filed for cancellation of the original registration certificate issued in the name of the third respondent and for the issue of a fresh registration certificate in the name of the petitioner. This application was, in effect, rejected by the first respondent on the ground that the Tax Recovery Officer (Income-tax), the second respondent, had raised objection in regard to the transfer of the vehicle to anybody, as the registered owner, the third respondent, had not cleared the income-tax arrears due from him.

(3.) THE TRO has filed a counter-affidavit in the matter. THErein it is stated that an amount of Rs. 8,137 plus interest is due from the third respondent as per revenue recovery certificates received from the ITO, Ernakulam. THE details for arrears, with the date of service of demand notice, issued under Rule 2 of Sch. II of the I.T. Act, 1961, is given hereunder: