1. Vehicle owner challenged the blacklisting of a motor vehicle due to unpaid challans pending for over ninety days, preventing the cancellation of hypothecation in the registration certificate. (Para 1 , 2 )
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2026 Supreme(Online)(Ker) 68004
IN THE HIGH COURT OF KERALA AT ERNAKULAM
Murali Purushothaman, J
T. N ARUN KUMAR – Appellant
Versus
MINISTRY OF ROAD TRANSPORT AND HIGHWAYS – Respondent
WP(C) NO. 27715 OF 2026
Important Points
Subordinate legislation introducing a new restriction or disability, such as Rule 167(7) of the Central Motor Vehicles Rules, is presumed to be prospective and cannot be applied retrospectively to challans issued before its commencement date unless there is clear legislative intent.
Subject
Administrative Law - Motor Vehicles Law
Act Referred
Headnote
(A) Central Motor Vehicles Rules, 1989 - Rule 167 - Motor Vehicles Act, 1988 - Section 51(3) - Retrospective application of subordinate legislation - Rule 167(7) prohibits the registering authority from processing applications regarding the registration of a motor vehicle if challans remain pending beyond ninety days - A provision imposing a new restriction or disability cannot be given retrospective effect unless the legislative intention is clear and explicit - Subordinate legislation is ordinarily prospective in nature, and a right or liability created for the first time cannot be applied to past events (Paras 10, 12).
(B) Statutory Interpretation - Presumption against retrospectivity - Unless a contrary intention appears, legislation is presumed not to be intended to have retrospective operation - This is grounded in the principle of fairness, ensuring that individuals may arrange their affairs based on existing law without subsequent backward adjustment (Para 11).
Facts of the case:
The registered owner of a motor car applied for the cancellation of a hypothecation entry in the Certificate of Registration. The registering authority refused to process the application, stating that the vehicle had been blacklisted as “NOT TO BE TRANSACTED” due to several unpaid challans pending for more than 90 days. The petitioner contended that a significant number of these challans were issued prior to 01.10.2020, the date the amended Rule 167 of the Central Motor Vehicles Rules, 1989, came into force.
Findings of Court:
The court found that Rule 167(7) introduced a restrictive bar on processing registration applications that did not exist prior to the amendment. Since the amendment expressly specified its commencement date as 01.10.2020 and contained no language suggesting retrospective application, the restriction cannot be applied to challans issued before that date.
Issues: Whether the registering authority can retrospectively apply Rule 167(7) of the Central Motor Vehicles Rules to refuse the processing of an application for cancellation of hypothecation on the ground of pending challans issued prior to the commencement of the amended rule.
Ratio Decidendi: A statutory provision that imposes a new disability or restriction must operate prospectively unless legislative intent for retrospectivity is expressly stated or implied. As Rule 167(7) created a new restriction on the processing of vehicle registration applications, it cannot be invoked to deny services based on violations occurring before 01.10.2020.
Result: Direction to the respondent to receive and process the application for cancellation of the entry regarding hypothecation without taking into account the pendency of challans issued prior to 01.10.2020.
(B) Statutory Interpretation - Presumption against retrospectivity - Unless a contrary intention appears, legislation is presumed not to be intended to have retrospective operation - This is grounded in the principle of fairness, ensuring that individuals may arrange their affairs based on existing law without subsequent backward adjustment (Para 11).
Facts of the case:
The registered owner of a motor car applied for the cancellation of a hypothecation entry in the Certificate of Registration. The registering authority refused to process the application, stating that the vehicle had been blacklisted as “NOT TO BE TRANSACTED” due to several unpaid challans pending for more than 90 days. The petitioner contended that a significant number of these challans were issued prior to 01.10.2020, the date the amended Rule 167 of the Central Motor Vehicles Rules, 1989, came into force.
Findings of Court:
The court found that Rule 167(7) introduced a restrictive bar on processing registration applications that did not exist prior to the amendment. Since the amendment expressly specified its commencement date as 01.10.2020 and contained no language suggesting retrospective application, the restriction cannot be applied to challans issued before that date.
Issues: Whether the registering authority can retrospectively apply Rule 167(7) of the Central Motor Vehicles Rules to refuse the processing of an application for cancellation of hypothecation on the ground of pending challans issued prior to the commencement of the amended rule.
Ratio Decidendi: A statutory provision that imposes a new disability or restriction must operate prospectively unless legislative intent for retrospectivity is expressly stated or implied. As Rule 167(7) created a new restriction on the processing of vehicle registration applications, it cannot be invoked to deny services based on violations occurring before 01.10.2020.
Result: Direction to the respondent to receive and process the application for cancellation of the entry regarding hypothecation without taking into account the pendency of challans issued prior to 01.10.2020.
Legal Category Hierarchy
Advocates:
For the Appellants/Petitioners: Vipin Narayan, Ashwanth Padman
For the Respondents: Sarath
For the Appellants/Petitioners: Vipin Narayan, Ashwanth Padman
For the Respondents: Sarath
Table of Contents
2. Petitioner argued against the retrospective application of new rules imposing restrictions for past violations, while respondents maintained the validity of blacklisting based on the current portal status. (Para 3 , 4 )
3. The court examined the scope of delegated legislation, noting that sub-rules imposing new restrictions or liabilities cannot operate retroactively without clear legislative intent or explicit statutory language. (Para 5 , 6 , 8 , 9 )
4. Subordinate legislation, when creating new restrictions or disabilities, is presumed prospective unless explicitly stated; thus, rules cannot retrospectively invalidate transactions based on pre-existing conduct. (Para 10 , 11 , 12 )
5. Directed the authorities to process the application for cancellation of hypothecation disregarding challans issued prior to the effective date of the amended rule. (Para 13 )
6. Can regulatory rules that create new restrictions on vehicle registration be given retrospective effect?
No, rules creating new restrictions or disabilities are presumed to be prospective. They cannot apply to past events or transactions completed before the rule's commencement unless the legislature has explicitly and clearly manifested an intention for such retrospective operation. (Para 9 , 10 , 11 , 12 )
7. Does the non-payment of challans issued prior to 01.10.2020 justify blacklisting a vehicle under Rule 167 of the Central Motor Vehicles Rules?
No. Rule 167(7) operates prospectively from 01.10.2020. Consequently, it cannot be invoked to prevent processing registration-related applications based on challans that were issued before the amendment came into force. (Para 9 , 12 , 13 )
“C.R”
JUDGMENT
The petitioner is the registered owner of a motor car bearing Registration No.KL-07-CE-6306 which was purchased in the year 2015 under hypothecation to Bank of Baroda, Perumbavoor Branch. After closing the loan account, when the petitioner approached the 3rd respondent, the Regional Transport O cancellation of the hypothecation entry in the Certificate of Registration, he was informed that the vehicle had been blacklisted on account of challans remaining unpaid for more than 90 days and the application could not be accepted. The petitioner has produced the list of challans issued in respect of the vehicle as Exts.P3 and P4. The petitioner states that Ext.P4 challans pertain to the period prior to 01.10.2020, i.e., before the coming into force of Rule 167 of the Central Motor Vehicles Rules, 1989, introduced by way of the Central Motor Vehicles (Eleventh Amendment) Rules, 2020. The petitioner has produced the copy of the amended Rules as Ext.P5 which states that the Rules shall come into force with effect from 01.10.2020. The petitioner also relies on Ext.P6 Advisory dated 02.01.2023, issued by the 1st respondent, which prescribes the categories of vehicles to be flagged as “NOT TO BE TRANSACTED” on the VAHAN portal. Sl.No.09(d) thereof covers cases where challans remain pending for more than 90 days. The petitioner states that challans listed in Ext.P3 were issued subsequent to the aforesaid amendment and those listed in Ext.P4 were generated prior to the amendment and the petitioner has already paid the compounding fees in respect of Ext.P3 challans. The petitioner further states that no prosecution or court proceedings are pending in respect of the alleged speed violations pertaining to the period from 2015 to 2019. The petitioner, therefore, contends that the challans listed in Ext.P4 do not fall within the purview of Rule 167 of the Central Motor Vehicles Rules, 1989, and that the vehicle cannot be blacklisted for non-payment of those challans. It is contended that Rule 167(7) cannot operate retrospectively so as to impose a new restriction or disability upon the petitioner on the basis of alleged violations committed prior to the coming into force of the amended provision. The amended provision came into force only with effect from 01.10.2020, whereas the alleged violations relied upon by the 3rd respondent pertain to a period prior thereto. A provision imposing a new restriction or disability cannot be given retrospective effect, particularly when it prejudicially affects the rights of the petitioner. Therefore, it is contended the respondents cannot deny the petitioner the services sought for.
2. A statement has been filed on behalf of the 3rd respondent wherein the details of the challans issued in respect of the subject vehicle prior to and subsequent to 01.10.2020 are given.
3. Heard Sri.Vipin Narayan, the learned counsel for the petitioner and the learned Government Pleader.
4. Sri.Vipin Narayan, the learned counsel for the petitioner refers to the decisions of the Hon’ble Supreme Court in Panchi Devi v. State of Rajasthan and Others [2009 KHC 4145] and Commissioner of Income Tax (Central)-I, New Delhi v. Vatika Township Private Limited [(2015) 1 SCC 1] to contend that a right or liability created for the first time under an amended provision cannot be given retrospective effect. It is contended that the intention of the State to give retrospective effect to a rule must be clear and explicit. In Ext.P5 Amendment Rules, the date of commencement of the amendment is specified as 01.10.2020, though the Rules were published on 25.09.2020. This, according to Sri.Vipin, indicates the intention of the State to give only prospective effect to the amendments introduced by Ext.P5. Therefore, it is contended that the vehicle of the petitioner cannot be blacklisted and service cannot be denied to him for non payment of the challans generated and issued prior to 01.10.2020.
5. Ext.P5 Amendment Rules defines “Challan” as
