2003 (11) TMI 631 - SC - Indian Laws

Constitutional validity of Sections 16(6) (7) (8) 20-A and 20-B of the Madhya Pradesh Motoryan Karadhan Adhiniyam 199 the Act - Repugnancy between the Madhya Pradesh Motoryan Karadhan Adhiniyam and the Motor Vehicles Act 1988 - Proportionality and arbitrariness of the confiscation provisions - HELD THAT - Section 192A of the MV Act provides that if a motor vehicle is driven in contravention of Section 66(1) that is if a vehicle is driven or caused to be driven as a transport vehicle without permit or in contravention of any or in contravention of any condition thereof relating to the route on which or the area in which or the purpose for which the vehicle may be used the user is punishable with fine for the first offence and imprisonment for the subsequent offence but this section does not provide for confiscation of the vehicle. Section 16(6) of the Act provides that subject to the provisions of Sub-section (8) where upon receipt of report about the seizure of the vehicle under Sub-section (3) the Taxation Authority is satisfied that the owner has committed offence u/s 66 read with Section 192A of the MV Act of plying vehicle without permit and he may by order in writing and for reasons to be recorded confiscate the vehicle seized under the said provision. Under Section 16(3) of the Act a vehicle seized for non-payment of tax or other dues is liable to be returned on showing that tax has been paid. Thus if tax with regard to the seized vehicle is paid that vehicle has got to be released. So far as the link that is sought to be established with taxation procedures snaps the moment tax is paid and vehicle is released. In such an event also motor vehicle can be confiscated on a report that such vehicle had been seized. The cause or basis for confiscation of motor vehicle is driving such vehicle contrary to Section 66 of the MV Act read with Section 192A of the MV Act and a report of seizure u/s 16(3) of the Act. The mere fact that such vehicle is seized for that purpose by itself will not result in confiscation of the vehicle. For confiscation of the vehicle the factor that weighs with the authority as provided u/s 16(6) of the Act is that the owner of the vehicle should have committed an offence u/s 66 read with Section 192A of the MV Act for which provision has been made in the MV Act itself and that provision clearly sets out the nature and degree of punishment but does not include confiscation. It is clear that confiscation would arise only in the event if an offence is committed u/s 66 read with Section 192A of the MV Act and therefore such provision could not have been enacted without the assent of the President as the same directly impinges upon Article 254 of the Constitution. Under Article 254 of the Constitution the law made by Parliament will prevail in respect of subjects covered under List III of the Seventh Schedule to the Constitution. An exception is carved out in Clause (2) of Article 254 of the Constitution whereby the law made by the State Legislature will prevail if the Presidential assent is received. But before this clause can be invoked there must be a repugnancy between the State Act and an earlier Act made by Parliament. In effect the scheme is that Article 254(2) gives power to the State Legislature to enact a law with the assent of the President on any subject covered under List III of the Seventh Schedule to the Constitution even though the Central Act may be inconsistent operating in that State relating to that subject. In the case on hand the prescription of punishment is for the same offence arising u/s 66 read with Section 192A of the MV Act and further punishment is prescribed under the State MV Taxation Act for forfeiture of the vehicle. Thus there is clear conflict between the two enactments. Therefore we hold that the provision of Section 16(6) of the Act and the consequential provisions thereto are repugnant to Section 66 read with Section 192A of the MV Act and hence invalid as the State Law has not complied with requirements under Article 254(2) of the Constitution of obtaining assent of the President to the State Law. When the offences arising upon the Union Law and the State Law respectively are substantially identical but additional penalties are imposed for the contravention by the provision of the State Law it would be inconsistent with the Law of the Union and therefore invalid. In the instant case apart from what is available u/s 192A of the MV Act there are additional penalties arising u/s 16(6) of the Act. This discussion is enough to dispose of this case and we do not propose to deal with other contentions raised by the learned counsel of the appellants and are left open. These appeals are thus allowed quashing Section 16(6) and the consequential provisions of Sections 16(7) 16(8) 20-A and 20-B of the Act and the order of the High Court stands set aside.

Summary

Issues Involved:

1. Constitutional validity of Sections 16(6), (7), (8), 20-A, and 20-B of the Madhya Pradesh Motoryan Karadhan Adhiniyam, 1991.
2. Repugnancy between the Madhya Pradesh Motoryan Karadhan Adhiniyam and the Motor Vehicles Act, 1988.
3. Legislative competence of the State Legislature.
4. Proportionality and arbitrariness of the confiscation provisions.
5. Impact on owners under hire purchase agreements.

Summary:

1. Constitutional Validity:
A batch of writ petitions challenged the constitutional validity of Sections 16(6), (7), (8), 20-A, and 20-B of the Madhya Pradesh Motoryan Karadhan Adhiniyam, 1991, as amended by the Madhya Pradesh Motoryan Karadhan [Sanshodhan] Adhiniyam, 1999. The High Court upheld the validity, stating that the provisions were not repugnant to the Motor Vehicles Act, 1988 (MV Act) and operated in different fields.

2. Repugnancy:
The petitioners argued that the impugned provisions were repugnant to the MV Act, particularly Sections 66 and 192A, as they provided for vehicle confiscation, which was not covered under the MV Act. The High Court found no repugnancy, stating that the provisions dealt with different aspects'taxation versus regulation.

3. Legislative Competence:
The State contended that the Act and its amendments fell under Entries 56 and 57, List II of the Seventh Schedule to the Constitution, thus within the State's legislative competence. The petitioners argued that the MV Act, enacted under Entry 35, List III, prevailed over the State law per Article 254 of the Constitution. The Supreme Court held that the State law required Presidential assent due to its repugnancy with the MV Act, which it lacked, rendering the provisions invalid.

4. Proportionality and Arbitrariness:
The petitioners contended that the confiscation provisions were arbitrary and disproportionate, violating Article 14 of the Constitution. They argued that confiscating vehicles worth lakhs for non-payment of a few thousand rupees in tax was excessive. The Supreme Court noted that the confiscation provisions were indeed arbitrary and disproportionate.

5. Impact on Owners under Hire Purchase Agreements:
Owners argued that confiscation targeted ownership, while the primary tax liability lay with the hire purchaser. The Supreme Court did not specifically address this issue but quashed the confiscation provisions, rendering the argument moot.

Conclusion:
The Supreme Court allowed the appeals, quashing Sections 16(6), 16(7), 16(8), 20-A, and 20-B of the Act, and set aside the High Court's order. The Court held that the provisions were repugnant to the MV Act and invalid due to the lack of Presidential assent as required under Article 254(2) of the Constitution.