SUNDARAM FINANCE LIMITED Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) THIS petition involves consideration of interesting and important questions concerning interpretation and application of section 31a (5) of the Motor vehicles Act, 1939, and sections 2 (4), 3, 9 and 10 of the Bombay Motor Vehicles (Taxation of Passenger) Act, 1958. The relevant questions are formulated as under :

(2.) AT all material times, the petitioners were owners of four (4) Motor Vehicles (Tourist Buses) bearing Nos. MMK 4221, MMK 4432, MMK 4367 and MMK 4664. By 4 different agreements of Hire Purchase dated 24th February 1984, 14th August 1984. The petitioners permitted respondent No. 4 to use and operate the said vehicles as hirer on the terms and conditions set out in the said agreements. Under the said written agreements, the petitioner allowed the respondent No. 4 to procure registration certificate as well as permit in respect of the said vehicles in their own name subject to their observance of term and condition of the said agreements. Under the said agreements, the respondent No. 4 was obliged to pay amount of hire as stipulated therein by instalments and exercise option to purchase the said vehicles in the manner set out therein.

(3.) BY Clause 13 of each of the said agreements the respondent No. 4 acknowledged that the respondent No. 4 would hold the said vehicles as a mere bailee of the petitioners and shall not have any proprietary right, title or interest therein until they exercised in writing his option to purchase the said vehicles as provided under the said agreement and until the respondent No. 4 made payment of the entire amount due and payable under the said agreements, to the petitioners. The registration certificate in respect of each of the said 4 vehicles was issued by the prescribed authority under the Motor Vehicles act, 1939 in favour of respondent No. 4 at the instance of the petitioners. Each of the Registration Certificates contained the following endorsement "the motor vehicles above described is held by the person registered as the registered owner under a Hire Purchase Agreement with Sundaram Finance Limited". The petitioners exercised control over the said vehicles by virtue of H. P. endorsement made on the registration certificate as aforesaid. In view of the abovereferred hire purchase arrangement arrived at between the petitioners and respondent no. 4, the respondent No. 4 was also permitted to procure permit in respect of the said 4 vehicles in their own name. Each of the said hire purchase agreements provided that the hirer shall be liable to pay all the taxes fees, duties, licence fee and other charges payable in respect of the said vehicles during the subsistence of the said agreement. Each of the said agreement conferred right on the petitioners-owners to terminate the said hire purchase agreement and resume possession of the vehicles in case the hirer committed default in respect of payment of any of the instalments of the hire amount specified in the said agreement. Under each of the said agreements the petitioners reserved several powers and rights including the power to take inspection of the said vehicles etc. The fourth respondent hirer was permitted to have physical custody and physical control of the said vehicles for the limited purpose of operating the said vehicles during the subsistence of the hire purchase agreement. By Clause 1 (c) of the said agreement it was provided that "the hirer undertake to keep the vehicles covered by a valid permit wherever necessary during the continuance of the agreement and to use the vehicle only for the purpose mentioned in the proposal and strictly in accordance with the terms and conditions laid down in the permits, if any, issued in their favour by the prescribed authority in respect of the said vehicles. A copy of the hire purchase agreement was tendered by the learned Counsel for the petitioners across the bar and the copy of the agreement now forms part of the record of proceedings concerning this writ petition.