JUDGMENT A.H. Joshi, J.
1. Rule. Rule is made returnable forthwith by consent of the learned Advocates for the parties.
2. The petitioners herein have challenged circular Annexure-P2, wherein respondent No. 1 -the Transport Commissioner, Maharashtra State, Mumbai, communicated to all officers under his control certain instructions. Apart from recital-part contained in the said circular, the direction-part reads as follows:
(A) In your office a list be prepared containing the Financial Institutions/Banks/Finance Corporations, who are providing loans for vehicle purchase and are recognized by the Reserve Bank of India, along with their branches.
(B) Whenever these financial institutions/banks/finance corporations approach for registering the hire purchase/mortgage charge, they should make it compulsory to seek trade certificate for every category of vehicle. Branches should be asked to seek separate trade certificate. Fees and necessary taxes be accepted.
(C) If there is no financial institution in your area, then in whose jurisdiction they are operating, they should have the trade certificate from that registering authority. For example : Vehicle owners is from Kolhapur and office of financial institution is at Sangli, at such time, financial institution should have obtained the Trade Certificate from the Deputy Regional Transport Officer, Sangli.
(D) If the state government and central government department is giving loan to its employees, then they be excluded from this.
(E) If the financial company is from other state, then they be asked to obtain Trade Certificate from this State.
(F) This circular be implemented scrupulously and government revenue be recovered. Said circular be acknowledged.
3. We find that the effort of the petitioners is to prove their proposition that the said circular is ultra vires by taking use of provisions regarding concession carved out under a supporting legislation, i.e. Rules 33, 34 and 35 of the Central Rules, while the principal enactment, i.e. the Motor Vehicles Act, 1988, in no ambiguous terms, describes what the dealer. means. For ready reference, the definition of dealer. is quoted as below:
Section 8 - dealer includes a person who is engaged-
(a) Omitted by Act 54 of 1994.
(b) in the building bodies for attachment to Chassis; or
(c) in the repair of motor vehicles; or
(d) in the business of hypothecation, leasing or hire-purchase of motor vehicle.
4. The petitioners have challenged the very power of respondent No. 1 to issue the said circular and hence contended that the said circular is ultra vires. The petitioners, therefore, prayed that the said circular be struck down and quashed. The foundation of the challenge contained in the petition can be summarized as follows:
(a) Though the petitioners do not dispute that a dealer. admittedly includes one who is engaged in business of hypothecation, lease or hire purchase of motor vehicles, nevertheless, this class of traders/financers does not claim certain concessions carved out under the Central Rules and in particular of playing vehicles without obtaining registration under Rules 33, 34 and 35 thereof and hence insistence of authorities for trade certificate to financers is wholly unnecessary.
(b) The Motor Vehicles Act, 1988, being a Central Legislation, no power of rule-making is vested with the State Government or any of its officers and, therefore, in absence of express provision requiring registration of dealer, financer, etc., insisting on a trade certificate for such person amounts to legislating without authority.
5. The learned Advocate for the petitioners placed reliance on the judgments in (1) Parmeshwar Prasad v. Union of India and Ors. , (2) Orix Auto Finance (India) Ltd. v. Jagmander Singh and Anr. , and (3) Feroz Ahmad v. Delhi Development Authority and Ors. , in support of his submissions.
6. We find that though the Motor Vehicles Rules are made under a Central enactment by the Central Government, its implementation is vested with the State Government. Further, the matters related to tax on motor vehicles is a matter within the power of the State. While we do not wish to view the circular prescribing necessity of a trade certificate as a review mopping measure for the State, we find that Rule 41 of Central Motor Vehicle Rules, 1989, which enumerates purposes for which motor vehicles with trade certificates may be used, may make it desirable that the petitioners have a trade certificate. The relevant part of Rule 41 is reproduced as under:
Rule 41. Purposes for which motor vehicle with trade certificate may be used. - The holder of a trade certificate shall not use any vehicle in a public place under that certificate for any purpose other than the following:
(a) .. .. ..
(b) .. .. ..
(c) .. .. ..
(d) .. .. ..
(e) .. .. ..
(f) .. .. ..
(g) .. .. ..
(h) for removing the vehicle after it has been taken possession of by or on behalf of the financier due to any default on the part of the other party under the provisions of an agreement of hire-purchase, lease or hypothecation.
A financer, who is in the business of hypothecation, lease or hire purchase in motor vehicles, may obviously be required to remove a vehicle after repossessing it, should the borrower fail to pay the amount loaned. Therefore, ordinarily for such removal after repossession a trade certificate may have to be used. It will, therefore, be implicit that the Companies involved in hire purchase of vehicles would have to hold a trade certificate in order to avail the benefit of Clause (h) of Rule 41. Therefore, we do not see any illegality in respondents' insistence that the petitioners should obtain a trade certificate.
7. While executing and implementing the provisions of the Act or the Rules, the Executive Authorities may face various practical problems and in public interest they would sort out those problems by following certain practices. It is always in interest of public at large to have such practices declared and kept on record in written format and made known to the public at large. This course helps in avoiding subjectivity in actions of the Executive Authorities. A common borrower, whose motor vehicle is sought to be repossessed and removed by financer, may not know that the financer can removed such a vehicle by using a trade certificate and, therefore, may not have been able to ask the financer if he possesses such a trade certificate. Therefore, a circular, which makes it necessary for the financer to have a trade certificate, may not be undesirable. In this background when the person doing the business of the type referred to in Sub-clause (d) of Clause 8 of Section 12 of the Act are included in the definition of dealer., and under Clause (h) of Rule 41 of the Central Motor Vehicle Rules, such person could remove a repossessed vehicle by using a trade certificate, insistence on such person's applying for trade certificate is obviously for the purpose of enforcing the existing provisions of law. A circular issued to enforce existing law, therefore, does not amount to exercising a rule-making power, muchless exercising such power without existence of the authority of or under the law. We find that the circular in question is, therefore, in the nature of a direction for ensuring the compliance of statutory provisions and, therefore, do not in any manner amount to transgression of executive function under purported exercise of legislative power. We are not persuaded to believe that law makers were unmindful while including in the definition of "dealer" class of persons referred to in Clause (d) of Sub-section (8) of Section 12.
8. The judgment in Orix Auto Finance (India) Ltd. refers to recognition of hire purchaser's right. We find that the circular in question does not in any manner put fetters on hire purchaser's right under the general law or under the contract between the parties. The circular in question only prescribes as to how and when the trade certificate should be insisted upon.
In the aforesaid factual background, we do not think that it is necessary to go into the details and refer to the judgments of the Apex Court relied upon by the petitioners. The administrative law in relation to performance of executive functions always has a different penumbra than one in service law.
9. We find that there is no substance in the challenge to the validity of circular on the ground of absence of power to issue the same.
10. The petitioners' grievance suggested indirectly is about the fee chargeable on such application and its renewal. We find that there is no challenge to the circular in the petition on such a ground.
11. It was also suggested that the obligation of Registering Authority is to register the hire purchase agreement under Section 51 of the Act. Though the nature of obligation is of imperative nature, it does not absolve the dealer referred to in Sub-clause (d) of Clause 8 of Section 12 of the Act of the requirement of obtaining trade certificate and insistence of the authorities to have such trade certificate and, therefore, it cannot be painted as refusal to discharge obligation under Section 51 of the Act.
12. We, therefore, find that there is no merit in the petition and the same is, therefore, dismissed. Rule is discharged with costs.