[Cites 20, Cited by 0]
Bombay High Court
Imran Humayun Chandiwala vs State Of Maharashtra Motor Vehicles ... on 2 December, 2025
Author: N.J.Jamadar
Bench: N.J.Jamadar
2025:BHC-AS:52534
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.12921 OF 2025
Imran Humayun Chandiwala
Age 47 years, Occu - Business,
222, A1 Moonaz Arcade, 1st Floor,
Opposite Andheri Post Office,
S.V.Road, Andheri (West),
Mumbai - 400 058. ... Petitioner
versus
1. The State of Maharashtra,
Motor Vehicles Department,
through the Transport Commissioner,
Maharashtra State, having office at
5th Floor, MTNL Building No.2,
M.G.Road, Fort, Mumbai - 400 001.
2. Appellate Authority & Joint Transport
Commissioner (Enforcement-I),
Mumbai, having address at,
Office of the Transport Commissioner,
Maharashtra State, having office at,
5th Floor, MTNL Building No.2,
M.G.Road, Fort, Mumbai - 400 001.
3. Dy. Regional Transport Officer,
Having its office at, Regional Transport
Office, Mumbai (W), 111, Ambiwali
Village, Opp. To Manish Nagar,
Andheri West, Mumbai - 400 053. ... Respondents
Mr. Cherag Balsara i/by Mr. Yogesh Patil, for Petitioner.
Mr. Abhishek Bhadang, AGP for State.
CORAM: N.J.JAMADAR, J.
CLOSED FOR ORDER ON : 13 NOVEMBER 2025
PRONOUNCED ON : 2 DECEMBER 2025
SSP 1/20
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JUDGMENT :
1. Rule. Rule made returnable forthwith, and, with the consent of the
learned Counsel for the parties, heard finally.
2. This Petition under Article 227 of the Constitution of India assails the
legality, propriety and correctness of an order dated 9 September 2025 in
Appeal No.12 of 2025, passed by the Appellate Authority and Joint Transport
Commissioner, Maharashtra State, Mumbai, whereby the Appeal preferred by
the Petitioner against an order dated 27 March 2025 passed by the
Registering Authority, thereby cancelling the Certificate of Registration in
respect of the Vehicle bearing Chassis No.JNITANY62A0120339 and Engine
No.VK56VD397632A, under Section 55(5) of the Motor Vehicles Act, 1988
(the Act, 1988), came to be dismissed.
3. The background facts necessary for the determination of this Petition
can be stated, in brief, as under :
3.1 A Nissan petrol car bearing Chassis No. JNITANY62A0120339 was
initially registered with RTO Manipur in the name of Meenarani Devi, under a
Certificate of Registration issued on 12 February 2020. On 28 February
2020, the State Transport Department, Senapati, Manipur, issued NOC to
register the said car with RTO, Mumbai. Consequently, the said car came to
be registered in the name of Meenarani Devi with Registration No.MH-02/FL-
8055.
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3.2 The Petitioner claimed to have purchased the said vehicle from
Meenarani Devi for a consideration of Rs.1,22,50,000/-. Upon a notice of
transfer of ownership of the motor vehicle being submitted to the RTO,
Mumbai, on 1 December 2020, the said car came to be registered in the
name of the Petitioner.
3.3 Subsequently, it transpired that the said car was fraudulently imported
in the name of Mr.Jong Yong Ryong, a diplomatic officer, by dishonestly
availing the benefit of exemption from payment of customs duty under
Notification No.03/1957-Cus., dated 8 January 1957. The Director of
Revenue Intelligence, thus, seized the said vehicle in the month of August
2021. By an order dated 31 January 2022, the Deputy Commissioner of
Customs (Import), Chennai, allowed the provisional release of the said car on
the condition of execution of bond to the tune of Rs.32,35,50,000/- and bank
guarantee of Rs.70,85,745/-.
3.4 The Petitioner filed Settlement Application before the Central Excise
and Service Tax Settlement Commission, under sub-Section (5) of Section
127C of the Customs Act, 1962. By an order dated 8 May 2024, the
Commission settled the customs duty at Rs.66,00,420/- and interest of
Rs.35,77,789/-. The car was also confiscated. However, the Petitioner was
given an option to redeem the same upon payment of fine of Rs.5,00,000/-.
The Commission also granted immunity from the penalty and prosecution
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under Section 127H of the Act, 1962, subject to payment of duty, interest and
fine.
3.5 The Petitioner paid the customs duty, interest and fine imposed by the
Commission. The car was released.
3,6 In the meanwhile, Anti Corruption Bureau registered the offences vide
C.R.No.18 of 2023 in connection with the registration of the said car on the
basis of the forged bill of entry against the then Sub-Regional Transport
Officer and others. The vehicle was again seized by the ACB on 20 June
2024.
3.7 The Petitioner filed an application under Section 457 of the Code of
Criminal Procedure, 1973, before the learned Special Judge. By an order
dated 29 June 2024, the car was ordered to be returned to the Petitioner upon
executing a bond in the sum of Rs.75,00,000/-.
3.8 On 30 January 2025, the Deputy RTO issued a notice to the Petitioner
calling upon him to show cause as to why the registration of the said car be
not cancelled under Section 55(5) of the Act, 1988. The Petitioner gave reply
to the said notice.
3.9 By an order dated 27 March 2025, the Registering Authority and Deputy
Regional Transport Officer, cancelled the registration opining, inter alia, that it
was indirectly conceded by the Petitioner that the said car was registered on
the strength of a bogus bill of entry.
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3.10 Being aggrieved, the Petitioner preferred an appeal before the
Appellate Authority.
3.11 By the impugned order, the Appellate Authority dismissed the appeal,
concurring with the view of the Registering Authority. It was observed that the
fact that the conduct of the Petitioner was not blameworthy did not alter the
basic fact that the registration of the vehicle was obtained on the basis of the
forged documents.
3.12 Being further aggrieved, the Petitioner has invoked the writ jurisdiction.
4. An affidavit in reply is filed on behalf of the Respondents in support of
the impugned orders. In the affidavit in reply, an endeavour was made to
contend that, when Meenarani Devi had submitted an application for transfer
of the registration of the vehicle to RTO, Mumbai, from RTO, Senapati,
Manipur, she had furnished her new address, which was found to be that of
the Petitioner. Therefore, it cannot be said that the Petitioner was completely
unaware of the fraud.
Submissions :
5. Mr. Cherag Balsara, learned Counsel for the Petitioner submitted that
the impugned orders are wholly unsustainable as the authorities have
unjustifiably discarded clear and categorical observations of the Settlement
Commission that the Petitioner had made full and true disclosure and
deposited the customs duty, interest and penalty, and, therefore, immunity
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from the prosecution was granted to the Petitioner under Section 127H of the
Customs Act, 1962.
6. Mr. Balsara would urge, initially the Petitioner was deceived by
Meenarani Devi and Rehman Shaikh, an agent through whom the Petitioner
had entered into the transaction with Meenarani Devi. The Petitioner paid
substantial customs duty, interest and penalty. Yet, by the impugned orders,
the Petitioner has been deprived of the legitimate right to run the vehicle, as
the cancellation of registration completely disables the Petitioner from plying
the vehicle. In the circumstances of the case, according to Mr. Balsara, when
no fault is attributable to the Petitioner, nor the Petitioner is privy to the
alleged fraud, the impugned orders cancelling the registration of the vehicle,
in a sense, subject the Petitioner to double jeopardy.
7. Mr. Balsara would urge, in the absence of any cogent material, the
Petitioner cannot be said to be a confederate in the conspiracy to import the
car by evading the customs duty. To buttress this submission, Mr. Balsara
placed reliance on the judgment of the Supreme Court in the case of Central
Bureau of Investigation V/s. V.C.Shukla and Ors.1
8. In any event, since the ground that the Petitioner was privy to the
transaction, was neither raised in the show cause notice, nor in the impugned
orders, the Respondents cannot be permitted to support the impugned orders
1 (1998) 3 SCC 410
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by filing an affidavit. To this end, Mr. Balsara placed reliance on the judgment
of the Supreme Court in the case of Mohinder Singh Gill and anr. V/s. The
Chief Election Commissioner, New Delhi and Ors.2
9. In opposition to this, Mr. Bhadang, learned AGP, stoutly supported the
impugned orders. It was submitted that in the complaint which the Petitioner
had lodged against Mr. Rehman Shaikh and others, the Petitioner had alleged
that on the basis of the forged documents, he was defrauded by Meenarani
Devi, Rehman Shaikh and Faizan Sayed. When the Petitioner himself admits
that he was defrauded on the basis of forged documents, the Petitioner
cannot be permitted to mount a challenge to the cancellation of the
registration obtained on the basis of documents which were forged.
10. Mr. Bhadang further submitted that, under Rule 47 of the Central Motor
Vehicles Rules, 1989, in case of imported vehicles, an application for
registration of the motor vehicle must be accompanied by a customs
clearance certificate. In the case at hand, a forged bill of entry was filed to
claim that the vehicle was imported for the diplomatic officer. Therefore, the
authorities were within their rights in cancelling the registration.
11. Mr. Bhadang further submitted that, as the authorities below have
recorded concurrent findings, which cannot be said to be perverse, this Court
in exercise of the supervisory jurisdiction ought not to interfere with such
2 (1978) 1 SCC 405.
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orders. Mr. Bhadang placed reliance on the judgment of the Supreme Court
in the case of Ajay Singh V/s. Khacheru and Ors. 3, wherein it was
enunciated that it is well-established principle that the High Court, while
exercising its jurisdiction under Article 226 cannot reappreciate evidence and
arrive at a finding of facts unless authorities below had either exceeded its
jurisdiction or acted perversely.
Consideration :
12. The aforesaid submissions now fall for consideration. At the outset, it is
necessary to note that, there is not much controversy over the fact that the
car was imported in the name of Mr.Jong Yong Ryong, a Diplomatic Officer,
without payment of duty by availing the benefit of the customs duty exemption
under Notification No.03/1957-Cus., dated 8 January 1957. It was initially
registered in the name of Meenarani Devi with RTO, Senapati, Manipur.
Meenarani Devi got registration transferred to RTO, Mumbai, and registration
certificate was issued in the name of Meenarani Devi by RTO, Mumbai.
Thereafter, Meenarani Devi sold the car to the Petitioner, and, thus, the
Petitioner became the registered owner of the car. The seizure of the car first
by DRI and then by ACB, is a matter of record. Likewise, the release of the
car, pursuant to the orders of the Settlement Commission upon payment of
penalty of Rs.5 lakhs, in view of the confiscation, and, return of the car to the
3 (2025) 3 SCC 266
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Petitioner pursuant to the orders of the learned Special Judge in C.R.No.18 of
2023 are also not much in dispute.
13. Before adverting to consider what implication the aforesaid orders,
especially the order dated 8 May 2024 passed by the Settlement
Commission, have on the challenge of the Petitioner to the cancellation of
registration, it may be apposite to note few provisions of the Act, 1988 and the
Rules.
14. Chapter IV of the Act, 1988 subsumes provisions under the caption
'Registration of Motor Vehicles'. Section 39 declares that, no person shall
drive any motor vehicle and no owner of a motor vehicle shall cause or permit
the vehicle to be driven in any public place or in any other place unless the
vehicle is registered in accordance with the said Chapter and the certificate of
registration has not been suspended or cancelled. Section 39, thus,
emphasises the necessity of registration and the consequences that entail the
cancellation of registration. Simply put, the vehicle sans registration cannot
be driven.
15. Section 40 of the Act, 1988 provides that, subject to the provisions of
Sections 42, 43 and 60, every owner of a motor vehicle shall cause the
vehicle to be registered by any registering authority in the State in whose
jurisdiction he has the residence or place of business where the vehicle is
normally kept. Section 41 contains a fasciculus of provisions for the
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registration of the vehicle. Section 42 envisages special provision for
registration of motor vehicles of diplomatic officers, etc. Sub-sections (1) and
(2) of Section 42 assume significance in the context of the controversy at
hand. They read as under :
"42. Special provision for registration of motor vehicles
of diplomatic officers, etc. - (1) Where an application for
registration of a motor vehicle is made under sub-section (1)
of section 41 by or on behalf of any diplomatic officer or
consular officer, then notwithstanding anything contained in
sub-section (3) or sub-section (6) of that section, the
registering authority shall register the vehicle in such manner
and in accordance with such procedure as may be provided
by rules made in this behalf by the Central Government under
sub-section (3) and shall assign to the vehicle for display
thereon a special registration mark in accordance with the
provisions contained in those rules and shall issue a
certificate (hereafter in this section referred to as the
certificate of registration) that the vehicle has been registered
under this section; and any vehicle so registered shall not, so
long as it remains the property of any diplomatic officer or
consular officer, require to be registered otherwise under this
Act.
(2) If any vehicle registered under this section, ceases to
be the property of any diplomatic officer or consular officer,
the certificate of registration issued under this section shall
also cease to be effective, and the provisions of sections 39
and 40 shall thereupon apply."
16. Rule 47 of the Central Motor Vehicles Rules, prescribes the documents
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which are required to be annexed to an application for registration of the
motor vehicles. It reads as under :
"47. Application for registration of motor vehicles
(1) An application for registration of a motor vehicle shall be
made in Form 20 to the registering authority within a period
of 1[seven days] from the date of taking delivery of such
vehicle, excluding the period of journey and shall be
accompanied by--
(a) sale certificate in Form 21;
(b) valid insurance certificate;
[(c) copy of the proceedings of the State Transport Authority
or Transport Commissioner or such other authorities as may
be prescribed by the State Government for the purpose of
approval of the design in the case of a trailer or a semi-
trailer;]
(d) original sale certificate from the concerned authorities in
Form 21 in the case of ex-army vehicles;
(e) proof of address by way of any one of the documents
referred to in rule 4;
(f) temporary registration, if any;
(g) road-worthiness certificate in Form 22 from the
manufacturers, 3[Form 22-A from the body builders];
[(h) custom's clearance certificate in the case of imported
vehicles along with the licence and bond, if any:
Provided that in the case of imported vehicles other
than those imported under the Baggage Rules, 1998, the
procedure followed by the registering authority shall be same
as those procedure followed for registering of vehicles
manufactured in India, and]
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(i) appropriate fee as specified in rule 81.
[(j) proof of citizenship;
(2) In respect of vehicles temporarily registered, application
under sub-rule (1) shall be made before the temporary
registration expires."
17. Section 55 with which we are primarily concerned in this Petition,
contains provisions for the cancellation of registration. Sub-section (5) of
Section 55, under which the registration of the vehicle in question has been
cancelled, reads as under :
"(5) If a registering authority is satisfied that the registration
of a motor vehicle has been obtained on the basis of
documents which were, or by representation of facts which
was, false in any material particular, or the engine number or
the chassis number embossed thereon are different from such
number entered in the certificate of registration, the registering
authority shall after giving the owner an opportunity to make
such representation as he may wish to make (by sending to
the owner a notice by registered post acknowledgment due at
his address entered in the certificate of registration), and for
reasons to be recorded in writing, cancel the registration."
18. Evidently, under sub-section (5) of Section 55, if the registering
authority is satisfied that the registration of the vehicle has been obtained on
the basis of the documents which were false in any material particular, or by
making false representation of facts, the registering authority is empowered to
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cancel the registration, after providing an opportunity of hearing to the
registered owner to make a representation against the notice to show cause
as to why the registration be not cancelled.
19. In the case at hand, the impugned orders do not suffer from procedural
irregularities. It seems that, the authorities have followed the principles of
natural justice and have provided an effective opportunity of hearing to the
Petitioner before passing the impugned order. The challenge in this Petition
is on the substance of the matter. Whether the authorities, in the backdrop of
the facts that have emerged, were justified in cancelling the registration ?
20. The thrust of the submission on behalf of the State was that,
notwithstanding the payment of customs duty, interest and fine, as imposed
by the Settlement Commission and the latter's decision to exempt the
Petitioner from penalty and prosecution, the authorities were justified in
cancelling the registration, as it could not be controverted that the vehicle was
imported on the basis of a forged bill of entry to evade the customs duty.
21. Mr. Balsara would urge, in the circumstances of the case, the view of
the authority suffers from the vice of a pedantic and hyper technical approach.
Banking heavily upon the observations of the Settlement Commission that the
Petitioner was not at all at fault and had taken all the precautions as a prudent
person, before purchasing the car, Mr. Balsara would urge, the Petitioner
cannot be made to suffer the consequences of the fraudulent actions of the
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persons who deceived him to purchase the car, despite payment of customs
duty, interest and fine.
22. The observations of the Settlement Commission in paragraph Nos.7.14
and 7.15 assume critical salience. They read as under :
"7.14 The Bench observes that it has been established by
the investigation itself that all the documents pertaining to
ownership of the car were forged by Rehman Iqbal Shaikh to
sell the said vehicle to Shri Imran Chandiwala. As brought
out in the SCN and elaborated supra, the Co-Applicant
purchased the said car on the bonafide belief that the
documents were genuine. The SCN also elaborates on the
fact that documents such as the invoice and Bill of Lading
were forged by the syndicate in order to make the
prospective buyer believe that the said Nissan Petrol car had
been imported in the name of Meenarani Devi (paras 9.6.1
and 9.6.2 of the SCN). Furthermore, the Bench notes that the
vehicle was registered by the RTO in Mumbai bearing
Registration No.MH-02/FL-8055 and the supporting
documents included a NOC issued by the RTO, Manipur. In
view of the above, normal precautions by way of prudence
within means of any ordinary citizen were undertaken.
7.15 Further, the DRI has conducted detailed investigations
with respect to the various actors involved in the smuggling
syndicate but have not been able to establish any connection
of Shri Imran Chandiwala to the import of the impugned car.
Thus, the Bench holds that Shri Imran Chandiwala is not
liable to penalty under the provisions of Customs Act, invoked
in the SCN."
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23. In the light of the aforesaid observations, the provisions contained in
the Customs Act, 1962, deserve to be noted. Under Section 127H, the
Settlement Commission is empowered to grant immunity from prosecution
and penalty. The provisions contained in Section 127J give overriding effect
to the order passed by the Settlement Commission under Section 127C(5) of
the Act, 1962. It reads as under :
"127J. Order of settlement to be conclusive
Every order of settlement passed under sub-section (5) of
section 127C shall be conclusive as to the matters stated
therein and no matter covered by such order shall, save as
otherwise provided in this Chapter, be reopened in any
proceeding under this Act or under any other law for the time
being in force."
24. A conjoint reading of the provisions contained in Sections 127C(5) and
127H of the Act, 1962, justifies an inference that once Settlement order is
passed, the determination therein cannot be reopened in any proceedings
under the said Act, save as otherwise provided by the said Act, or under any
other law. Therefore, it cannot be said that the determination by the
Settlement Commission with regard to the import of the car by evading the
customs duty, to the extent it reflects upon the role of the Petitioner, is of no
consequence. As noted above, under Rule 47 of the rules, what was
otherwise required to be produced, in the case of imported vehicle was,
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customs clearance Certificate. To evade the customs duty, the bill of entry
was allegedly forged. The Petitioner has paid the customs duty, interest and
fine. Thus, the Petitioner made the reparation for the illegal acts of his
vendor. Prima facie, the Petitioner was not involved in the illegal import of the
vehicle. The authorities under the Act, 1988, therefore, ought to have taken
into account the order passed by the Settlement Commission.
25. The registration of the vehicle in the name of the Petitioner could not
have been cancelled on the sole premise that, the initial registration in the
name of Meenarani Devi was obtained by making a false representation and
on the basis of forged documents.
26. At this stage, the provisions contained in Section 42(2) of the Act, 1988
deserve to be noted. Sub-section (2) of Section 42 provides that if any
vehicle registered under Section 42 governing the registration of motor
vehicle of diplomatic officer, ceases to be the property of diplomatic officer or
consular officer, the certificate of registration issued under the said Section,
shall also cease to be effective and the provisions of Sections 39 and 40 shall
thereupon apply. The legislature has thus envisaged a situation of diplomatic
officer ceasing to hold the vehicle by transfer or otherwise, and provided a
mechanism to register the vehicle in the ordinary manner.
27. If the fact situation in the case at hand is considered in the light of the
aforesaid provisions, the certificate of registration obtained on the basis of a
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false bill of entry, would cease to operate upon discovery of the fraud. In the
meanwhile, if the vehicle had changed hands and came to be registered in
the name of an innocent purchaser who pays the customs duty, interest and
fine, as ordered by the Settlement Commission, then the vehicle ought to be
registered under the provisions of Section 40 of the Act, 1988, lest the
consequences of fraudulent action would befall an innocent purchaser.
28. At this stage, recourse to the doctrine of proportionality may be
apposite. Proportionality is a test which the Court applies to judge the
justifiability of the decision on the basis of the norms which the decision
making authority ought to have kept in view. Whether the authority has given
due importance to all the relevant factors, in the decision making process, and
arrived at a decision, which satisfies the balancing test and necessity test.
29. A useful reference in this context can be made to a decision of the
Supreme Court in the case of Coimbatore District Central cooperative
Bank V/s. Coimbatore District Central Cooperative Bank Employees
Assn and Anr.4, wherein the principle of proportionality was illuminatingly
postulated, as under :
"17. So far as the doctrine of proportionality is concerned,
there is no gainsaying that the said doctrine has not only
arrived at in our legal system but has come to stay. With the
rapid growth of Administrative Law and the need and necessity
to control possible abuse of discretionary powers by various
4 (2007) 4 SCC 669
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administrative authorities, certain principles have been
evolved by Courts. If an action taken by any authority is
contrary to law, improper, unreasonable, irrational or otherwise
unreasonable, a Court of Law can interfere with such action by
exercising power of judicial review. One of such modes of
exercising power, known to law is the 'doctrine of
proportionality'.
18. 'Proportionality' is a principle where the Court is
concerned with the process, method or manner in which the
decision-maker has ordered his priorities, reached a
conclusion or arrived at a decision. The very essence of
decision making consists in the attribution of relative
importance to the factors and considerations in the case. The
doctrine of proportionality thus steps in focus true nature of
exercise - the elaboration of a rule of permissible priorities.
19. de Smith states that 'proportionality' involves 'balancing
test' and 'necessity test'. Whereas the former ('balancing test')
permits scrutiny of excessive onerous penalties or
infringement of rights or interests and a manifest imbalance of
relevant considerations, the latter ('necessity test') requires
infringement of human rights to the least restrictive alternative.
['Judicial Review of Administrative Action'; (1995); pp. 601-
605; para 13.085; see also Wade & Forsyth; 'Administrative
Law'; (2005); p.366].
20. In Halsbury's Laws of England, (4th edn.); Reissue,
Vol.1(1); pp.144-45; para 78, it is stated;
"The court will quash exercise of discretionary powers
in which there is no reasonable relationship between the
objective which is sought to be achieved and the means used
to that end, or where punishments imposed by administrative
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bodies or inferior courts are wholly out of proportion to the
relevant misconduct. The principle of proportionality is well
established in European law, and will be applied by English
courts where European law is enforceable in the domestic
courts. The principle of proportionality is still at a stage of
development in English law; lack of proportionality is not
usually treated as a separate ground for review in English law,
but is regarded as one indication of manifest
unreasonableness.
21. The doctrine has its genesis in the field of
Administrative Law. The Government and its departments, in
administering the affairs of the country, are expected to honour
their statements of policy or intention and treat the citizens
with full personal consideration without abuse of discretion.
There can be no 'pick and choose', selective applicability of
Government norms or unfairness, arbitrariness or
unreasonableness. It is not permissible to use a 'sledge-
hammer to crack a nut'. As has been said many a time;
"Where paring knife suffices, battle axe is precluded".
(emphasis supplied)
30. For the foregoing reasons, in the peculiar facts of the case, this Court is
of the considered view that the dictate of command of justice warrants that the
impugned orders be quashed and set aside and the certificate of registration
restored. The Writ Petition, therefore, deserves to be allowed.
31. Hence, the following order :
ORDER
(i) The Writ Petition stands allowed.
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(ii) The impugned orders dated 9 September 2025 and 27 March
2025 cancelling the certificate of registration of the subject Vehicle stand
quashed and set aside.
(iii) Rule made absolute in the aforesaid terms.
(iv) No costs.
( N.J.JAMADAR, J. )
Signed by: S.S.Phadke
Designation: PS To Honourable Judge
Date: 02/12/2025 21:04:47
