Introduction
The Central Motor Vehicle Rules (CMVR)[1], 1989 outlines a comprehensive set of regulations governing the operations of motor vehicles in India. One of the key aspects of these rules is the imposition of various fees, which serve to regulate and administer the motor vehicle system. Two specific rules namely Rule 32[2] and Rule 81[3] have been under contention of their constitutional validity. The question to be delved into primarily focuses on the aspect of the challenge is twofold such that the additional levy is a penalty and beyond the powers of the central government. The aforementioned question is highly equivocal and vexing.
To develop an insight, a clear read of Rule 32[4], Rule 81[5] and Section 211[6] of the Motor Vehicles Act is empirical.
Rule 32[7] and Rule 81[8] primarily provide for the levy of additional fees in respect of the renewal of the driving license for which application is made after the grace period. It also includes the levy of additional fees for the renewal of a certificate of registration in respect of motorcycles and other vehicles of non- transport nature. The rules include the levying of an additional fee in the case of delay of submission of the no objection certificate for transfer of ownership of the vehicle and also the delay in submission of change in residence. The proviso clause of the same includes that the state may levy a fee lower than the specified amount and may also levy additional amounts to cover the cost of technology and automation for conducting the testing also providing any additional valuable services. The litigation in question has assailed the legitimacy of Rule 32[9] and Rule 81[10] of CMVR, 1989, positing profound jurisprudential inquiries into statutory validity and constitutional consonance. A public interest litigation and a writ petition had been filed challenging the same at the Bombay High Court.
Judgments Challenging the Rules
Public Interest Litigation No. 130/2022– ‘K’ Savakash Auto Rickshaw Sangathan v. Union of India & Ors[11].
Writ Petition No. 11380/2017- Mumbai Bus Malak Sangathana v. Union of India & Ors[12].
The Issues in those above are as follows :
- Whether the Central Government have the power under the Motor Vehicles Act 1988[13] to levy these additional fees?
- Whether additional fees can be considered a valid fee rather than an impermissible penalty?
The PIL and Writ Petition challenged Rules 32[14] and 81[15] of the CMVR, 1989. The reasons provided for the same were that the additional fees were not justified as there is no additional service provided by the authorities. The second contention made was that the additional fees are like a penalty, which is not permissible without any statutory backing.
The adjudication in the case was a paragon of judicial acumen, characterized by its erudite exegesis and meticulous disquisition, thereby setting a formidable precedent in legal scholarship. The court has dismissed the PIL and Writ Petition. The decision was made per Section 211[16] of the Motor Vehicle Act. The legislation vests power with the central government to make rules providing for the levying of additional fees. The levy of additional fees is not a penalty as it provides a facility to the vehicle owners and allows them to seek renewal beyond a prescribed time limit.
The court relied on the judgment of the Supreme Court, Jalkal Vibhag Nagar Nigam v. Pradeshiya Industrial & Investment Corporation[17]. It challenged an argument rejecting the distinction between tax and fee based on the principle of quid pro quo. This doctrine can be defined regarding the legislation as the fee must be charged for a specific service. The Supreme Court held that the distinction between tax and fee has been effaced and for regulatory fees, the services rendered are not a condition precedent.
In the case of Sona Chandi Oal Committee & Ors v. State of Maharashtra[18], the concept of quid pro quo has received a considerable transformation. According to this case for regulatory fees, the service to be rendered is not a condition precedent and the fee does not lose its character as long as it is not excessive.
The court disagreed with the judgment given by the Madras High Court, Chennai City Auto Ootunargal Sangam v. Tamil Nadu Driving School Owners Federation[19]. The government’s announcement to change the Central Motor Vehicle Rules 1989 to impose additional costs in specific instances is being contested by the petitioner associations, representing owners of cars, trucks, and driving schools. The primary argument is that Section 211[20] of the Motor Vehicles Act 1988 only permits the imposition of fees; it does not allow the imposition of extra “punitive” fees as suggested in the notification. The petitioners cite other rulings that concluded that a charge section cannot be read automatically and must be included in the legislation to impose a penalty. The respondents contend that the additional fees are legitimate, citing a ruling that supported the implementation of compensatory penalties for filing tax returns after the deadline. The petitioner associations are properly registered, and the relief sought directly affects their members, thus the court determines that the writ petitions are maintainable in the first instance. The Motor Vehicles Act of 1988[21] and the rulings referenced by the parties will be examined by the court to determine whether the authority to impose additional costs is lawful.
Conclusion and Insight on the Research
The High Court has astutely upheld the validity of the additional fee provisions in Rule 32 and Rule 81 of the Central Motor Vehicles Rules, 1989 (CMVR). The court’s reasoning is robust, recognising the central government’s authority under Section 211 of the Motor Vehicles Act, 1988, to levy these additional fees, even absent an express provision in the parent Act. The court correctly discerned that these fees are not impermissible penalties but valid regulatory charges, drawing on the Supreme Court’s judgment in Jalkal Vibhag Nagar Nigam v. Pradeshiya Industrial & Investment Corporation, which elucidated the diminishing distinction between tax and fee, particularly for regulatory fees. The High Court rightly diverged from the Madras High Court’s prior judgment invalidating these provisions, asserting that Section 211 unequivocally empowers the government to impose various fees for services related to licenses and registrations, including additional ones. The High Court’s thorough analysis of the statutory provisions and precedents is sound, affirming that the additional fees constitute a legitimate regulatory charge within the ambit of the Motor Vehicles Act. In summation, the High Court’s decision to uphold the additional fee provisions in Rule 32 and Rule 81 of the CMVR is judicious and firmly anchored in the pertinent legal framework and jurisprudence, validating the government’s regulatory authority under the Motor Vehicles Act.
By my reasoning, I find the charging of fees in this scenario to be a penalty, not a fee. There is a clear distinction between a fee and a penalty. Fee refers to the imposition of cost for providing any service whereas penalty refers to the cost to be born on non-performance or violation of any decided regimentation. The amount charged under the provision is a form of penalty tagged under the term of fee. It henceforth is against the constitutional validity since already provisions are specifically made to penalise under the Act. These provisions are thus violating the fundamentals of the act itself and incline with the judgement of the Madras High Court which has been struck down.
[1] Central Motor Vehicle Rules, 1989
[2] Central Motor Vehicle Rules 1989, Rule 32
[3] Central Motor Vehicle Rules 1989, Rule 81
[4] Ibid
[5] Ibid
[6] Motor Vehicles Act 1988, s 211
[7] Ibid
[8] Ibid
[9] Ibid
[10] Ibid
[11] K Savakash Auto Rickshaw v. Union of India & Ors. PIL No.- 130/2022
[12] Mumbai Bus Malak Sangathana v. Union of India & Ors. Writ Pet. No.- 11380/ 2017
[13] Ibid
[14] Ibid
[15] Ibid
[16] Ibid
[17] Jalkal Vibhag Nagar Nigam v. Pradeshiya Industrial & Investment Corporation (2021) SCC Online SC 960
[18] Sona Chandi Oal Committee and Ors. v. State of Maharashtra (2005) 2SCC 345
[19] Chennai City Auto Ootunargal Sangam v. Tamil Nadu Driving School Owners Federation (2017) Scc online Mad 28037
[20] Ibid
[21] Ibid
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