High Court Of Himachal Pradesh
P.D.DESAI,H,S.THAKUR
PARKASH CHAND MEHTA - Appellant
Versus
THE STATE OF HIMACHAL PRADESH - Respondent
C. W. P. No. 338 of 1984
Decided On : 09/05/1984
MOTOR VEHICLES ACT - TRANSFER OF OWNERSHIP - REVIEW - CANCELLATION - POWER OF REGISTERING AUTHORITY - SCOPE AND LIMITATIONS - SECTION 31, 31-A, 34(4-A).
Fact of the Case:
Petitioner purchased a truck from respondent No. 4 and applied to the Registering Authority for transfer of ownership. The application was supported by an affidavit from respondent No. 4 disclosing that the vehicle was purchased with a loan from United Commercial Bank, Beri, and that the outstanding loan amount was to be paid by the petitioner. The Registering Authority ordered the transfer of ownership on January 23, 1982. Subsequently, the United Commercial Bank objected to the transfer, claiming that the vehicle was hypothecated to the Bank and that the petitioner had not cleared the outstanding loan amount. The Registering Authority issued a show-cause notice to the petitioner and passed various orders, including cancellation of the transfer of ownership and restoration of ownership in the name of respondent No. 4. The petitioner challenged these orders in a writ petition.
Finding of the Court:
The court held that the Registering Authority did not have the power to review its own order dated January 23, 1982, directing the transfer of ownership in favor of the petitioner. The court also held that the subsequent orders passed by the Registering Authority could not be sustained under section 34(4-A) of the Motor Vehicles Act, 1939, as the conditions for the exercise of that power were not satisfied. The court found that the Registering Authority did not give the petitioner a proper opportunity to show cause against the proposed cancellation of the transfer of ownership and did not record reasons in writing for its decision.
Issues: 1. Whether the Registering Authority had the power to review its own order dated January 23, 1982, directing the transfer of ownership in favor of the petitioner? 2. Whether the subsequent orders passed by the Registering Authority could be sustained under section 34(4-A) of the Motor Vehicles Act, 1939?
Ratio Decidendi: 1. The power of review is not an inherent power and must be conferred by law either specifically or by necessary implication. No such power was conferred on the Registering Authority under the Motor Vehicles Act, 1939. 2. The power of cancellation under section 34(4-A) of the Motor Vehicles Act, 1939, can only be exercised if the Registering Authority is satisfied that the registration of a motor vehicle or an entry in the certificate of registration relating to the transfer of ownership was obtained on the basis of documents or representation of facts which were false in any material particular. In the present case, the Registering Authority did not have sufficient material to support such a finding.
Final Decision: The court quashed and set aside all orders passed by the Registering Authority subsequent to the order dated January 23, 1982, directing the transfer of ownership in favor of the petitioner. The court clarified that this decision would not prejudice the civil disputes between the petitioner and respondents No. 3 and 4.
P. D. Desai, C. J.—-On January 23, 1982 the petitioner made an application to the Registering Authority, Ghumarwin, District Bilaspur (respondent No. 2), stating that he had purchased truck No. HPB-1085 from respondent No. 4 and that full payment of the consideration for the vehicle to the extent payable to the said respondent was duly made and praying that the vehicle be transferred in the petitioners name. An affidavit of respondent No. 4, which accompanied the application, was duly sworn on January 13, 1982 before the Executive Magistrate, Bilaspur District, and it bears his signature in English. The affidavit affirmed that the vehicle in question was sold by respondent No. 4 to the petitioner on January 13, 19»2, that the sale price agreed upon by and between the parties was Rs, 1,34,000, that a sum of Rs. 44,000 was received by respondent No. 4 towards the sale price, that the balance amount of Rs. 90,000 was payable to the United Commercial Bank, Beri, Tehsil Sadar, District Bilaspur, towards the repayment of loan of Rs. 90,000 secured by respondent No. 4 against the vehicle and that the petitioner had accepted the liability of repayment of the said loan. Respondent No, 4 affirmed that he had no objection to the vehicle being transferred in the name of the petitioner. A copy of the affidavit is to be found at Annexure-A. The record of the second respondent was also made available for our inspection and the contents of the affidavit hereinabove set out are taken from the original affidavit which is found on the said record. The application appears to have been processed and granted on the same day, that is January 23, 1982 and the transfer of ownership appears to have been ordered to be entered in the name of the petitioner in the certificate of registration by respondent No. 2. According to the stand taken by respondent No. 2 in the present proceedings, the necessary entry in the registration certificate was, however, not immediately made.
2. On March 12, 1982, the Manager, United Commercial Bank, Beri (respondent No. 3), addressed a letter, Annexure R-2/A, to respondent No. 2 pointing out that the vehicle in question was financed by the Bank by granting a loan of Rs. 95,000 to respondent No. 4 and that since there were arrears of instalments, "the tax-token" might not be renewed and that the vehicle might be registered in the name of the Bank, On March 15, 1982 a notice, Annexure-B, was issued to the petitioner by respondent No, 2 to show cause why action in accordance with law and rules should not be taken because the vehicle was hypothecated with the United Commercial Bank, Beri, and its transfer was "against the terms and conditions of the hypothecation". The petitioner does not appear to have sent any reply to the show-cause notice. However, on March 18, 1982, he made an application to respondent No. 2 requesting that an entry regarding the hire- purchase agreement in respect of the vehicle in question, which had been financed by the United Commercial Bank, Beri, be made in the registration certificate. On August 20, 1982, respondent No. 2 passed an order, Annexure-D, cancelling with immediate effect the order relating to the transfer of the vehicle made on January 23, 1982 on the ground that the Manager, United Commercial Bank, Beri, had objected to the transfer "owing to huge amount in arrear of the loan granted against aforesaid vehicle to Shri Hoshiar Singh and the present owner was given enough time to settle the matter with the Bank concerned" and "the present owner failed, to clear the outstanding amount as per assurance given to this office" and for that reason "the transfer of the aforesaid vehicle is prejudicial to the Banks interests". Be it stated that Hoshiar Singh is respondent No, 4 herein and that "the present owner" referred to in the extracted portion is the petitioner,
3. By an order passed within four days thereafter, that is, on August 24, 982, by respondent No. 2, Annexure-C, the order d
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