The court established that the power under Section 51(5) of the Motor Vehicle Act could be exercised when the registered owner defaults in repayment and the financier takes possession of the vehicle, irrespective of the owner's refusal to deliver the certificate of registration or absconding.

JUDGMENT :

1. The instant petition has been filed challenging the order dated 14.06.2023 passed by respondent no. 2 i.e. Assistant Regional Transport Officer (Administration), Bareilly and for a mandamus restraining respondent no. 2 from issuing fresh Registration Certificate in favour of respondent no. 3.

2. The facts in brief are that the petitioner had taken finance from respondent no. 3 for purchasing a truck bearing Registration No. UP25 CT-6625. In the writ petition, the petitioner has not disclosed the amount of finance/assistance taken by him from the said respondent, however, it is stated in paragraph no. 5 of the writ petition that the petitioner had contributed Rs. 8,00,000/-out of Rs. 42,00,000/-, the total price at which the truck was purchased. Meaning thereby that the remaining amount was financed by respondent no. 3. It was to be returned by the petitioner in monthly installments.

3. It is also admitted in the writ petition that the petitioner could not deposit the monthly installments. It appears that respondent no. 3 on account of default on part of the petitioner in paying the installments, exercised its right to possess the vehicle. Accordingly, its possession was taken on 23.05.2021 by respondent no. 3. Thereafter, respondent no. 3 requested the Regional Transport Officer, Bareilly by filing Form-36 to issue fresh Registration Certificate (for short 'RC') in its name. When the R.T.O. did not transfer the vehicle in favour of respondent no. 3 even after lapse of considerable time, it filed writ petition No. 7366 of 2023 before this Court with the aforesaid grievance. The writ petition was disposed of vide order dated 28.04.2023 directing the R.T.O. to take final decision in the matter within six weeks. Thereafter, the R.T.O. has passed the impugned order dated 14.06.2023, directing for grant of fresh Registration Certificate for the remaining period of validity in favour of respondent no. 3 after realizing requisite fee in exercise of power under Section 51(5) of the Motor Vehicle Act, 1988.

4. The impugned order records that after receipt of Form-36 from respondent no. 3, a notice dated 10.11.2022 was issued in Form-37 to the petitioner. In response to it, the petitioner filed his objection and submitted that the vehicle may not be transferred in favour of respondent no. 3. The objection of the petitioner was forwarded by R.T.O. to respondent no. 3 seeking its comments on the same. Respondent no. 3 submitted its reply thereto on 05.12.2022. In the said reply, respondent no. 3 reiterated that the petitioner had defaulted in payment of the outstanding amount despite notice to him. The R.T.O. in the impugned order has noted that the petitioner in his objection has not mentioned anything about payment of the outstanding amount. Thereafter, the R.T.O. being satisfied that the petitioner had taken financial assistance from respondent no. 3 for purchasing the vehicle; that respondent no. 3 had taken possession of the vehicle owing to default on part of the registered owner in repaying the loan in terms of the agreement relating to finance, directed for fresh RC being issued in name of respondent no. 3.

5. Learned counsel for the petitioner submits that power under Section 51(5) of the Motor Vehicle Act, 1988 could only be exercised in case the registered owner refuses to deliver the certificate of registration or has absconded. He submits that the original Registration Certificate was lying in the vehicle at the time its possession was taken by respondent no. 3 and therefore, it was not a case of refusal to deliver the Certificate of Registration.

6. Section 51 (5) of the Act reads as follows:-

“(5) Where the person whose name has been specified in the certificate of registration as the person with whom the registered owner has entered into the said agreement, satisfies the registering authority that he has taken po