"Highly Improper": Karnataka HC Frees Seized Mercedes, Slams RTO for Overreach and Court Defiance

In a sharp rebuke to Karnataka's transport authorities, the High Court at Bengaluru's Dharwad Bench has quashed the seizure of a luxury Mercedes-AMG G63 and the subsequent cancellation of its registration. Justice Jyoti M ruled the actions illegal, primarily because an unauthorized officer exceeded his mandate, and condemned the registration cancellation as a "flagrant disregard" for ongoing court proceedings. Petitioner Neeraj Kumar Sharma, who legally acquired the vehicle through a bank settlement, gets it back forthwith.

A Luxury Car's Fraudulent Journey and Tax Evasion Suspicion

The saga began with Mangaluru resident Nihal Ahmed purchasing a Mercedes-AMG G63 for Rs 1.96 crore from Sundaram Motors in Bengaluru, financed by HDFC Bank. In March 2023, Ahmed sold it illicitly to Delhi's Amar Motors without bank consent, triggering a Delhi Police FIR (No. 0073/2023) under IPC sections for cheating and forgery. Police seized the vehicle, but a Delhi court favored HDFC, enabling repossession in September 2024.

HDFC settled the loan via one-time payment from Sharma, issuing a No Objection Certificate. Sharma registered it in Karnataka as KA-20-MH-0888 on January 18, 2025, based on a temporary certificate describing it as a lower-value GLA 200 GDI (Rs 35 lakh), allegedly to dodge higher luxury taxes.

In June 2025, a special RTO squad in Mysuru spotted it parked near Nitin Shetty's residence. Citing an inspection matching engine/chassis numbers to the original G63, they seized it via Form 27, alleging Rs 78.31 lakh tax fraud through document manipulation. Notices went to Ahmed and Shetty, unanswered. Sharma filed Writ Petition No. 36250/2025, challenging the seizure during pendency.

Petitioner's Plea: Legitimate Buy, Illegal Grab

Sharma argued he followed due process post-HDFC auction/settlement. The seizure bypassed statutory procedures under the Motor Vehicles Act, 1988 (MV Act), and Karnataka Motor Vehicles Taxation Act, 1957 (KMVT Act). Only RTOs or authorized inspectors can seize under Section 207 (MV Act, invalid documents) or Section 11A (KMVT Act, tax default). He accused mala fide action and invoked Bishwajit Dey v. State of Assam (AIR 2025 SC 549) for procedural fairness.

State's Defense: Fraud Uncovered, Evasion Exposed

Authorities claimed a June 2025 memo formed a squad under Mysore RTOs to hunt untaxed luxury vehicles. Officer Ranjit, from Bengaluru South, inspected and seized, insisting his memo (Annexure R-11) empowered him. They alleged Sharma fabricated documents—temporary registration listed "Mercedes-Benz GL-63-AMG," but sale certificate said "GLA 200 GDI"—defrauding Rs 78 lakh in taxes. No claimant approached RTO; Sharma bypassed to court.

Court's Razor-Sharp Analysis: No Power, No Jurisdiction

Justice Jyoti M dissected the powers: Seizure limited to MV Inspectors or Police Inspectors; RTOs under specific sections only. Ranjit's memo tasked mere reporting under Mysore West RTO supervision—not independent seizure. "He acted beyond the scope of his authority as though he himself were the Regional Transport Officer," the court held, deeming it "without jurisdiction and therefore unsustainable."

Echoing settled law, "when a statute confers a specific power upon a designated class of officers, the same cannot be exercised by any other person who is not expressly authorised." Seizure quashed as illegal.

Worse, amid writ pendency, RTO cancelled registration on January 16, 2026. "Shocking... prima facie, appears to be arbitrary... deserves to be condemned," Justice M wrote, calling it "legally untenable" as sub judice.

Key Observations from the Bench

"Such action clearly exceeded the scope of his authority and amounts to an exercise of power without jurisdiction."

"This Court finds such conduct on the part of the respondent authorities to be highly improper. Once this Court seizes of the matter and is pending adjudication, any precipitative action... is wholly unwarranted."

"The cancellation of the vehicle registration during the pendency of the Writ Petition is legally untenable and cannot be sustained, as the subject matter is sub judice."

"...officials of the RTO Department are not merely enforcers of statutory provisions but are representatives of the State... expected to act with fairness, transparency, empathy, and a high sense of public duty."

Victory Lap: Release Ordered, Lessons for RTOs

The court quashed the investigation report (Annexure-A) and cancellation order, directing RTO Mysore West to restore registration and release the vehicle "forthwith" without delay. No costs.

This ruling reinforces strict statutory silos for vehicle enforcement, curbing rogue actions by squads. It signals RTOs: respect court stays, stick to mandates—or face quashing. As reports note, it underscores public trust in governance, potentially deterring hasty luxury vehicle probes without ironclad authority.

Advocate H. Pavan Chandra Shetty appeared for Sharma; AAG V.G. Bhanuprakash for the State.