TMI Blog2004 (5) TMI 579X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 Chapter IV and the vehicle carries a registration mark displayed in the prescribed manner. Section 41 of the Act deals with registration of the vehicle and it lays down that on an application made by or on behalf of the owner of a motor vehicle for registration in the prescribed form and accompanied by prescribed fee, the registering authority shall issue to the owner of a motor vehicle registered by it a certificate of registration in such form and containing such particulars and information and in such manner as may be prescribed by the Central Government. Sub-section (6) of this Section provides that the registering authority shall assign to the vehicle for display thereon, a distinguishing mark referred to as the registration mark consisting of one of the groups of such of those letters and followed by such letters and figures as are allotted to the State by the Central Government from time to time by notification in the Official Gazette, and displayed and shown on the motor vehicle in such form and in such manner as may be prescribed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d registration mark shall be issued by the registering authorities/approved dealers of the license plates manufacturer along with the regular registration marks, and thereafter if such sticker is destroyed it shall be issued by the license plate manufacturer or his dealer; (v) the plate shall be fastened with non-removable/non-reusable snap lock fitting system on rear of the vehicle at the premises of the registering authority; The license plates with all the above specifications and the specified registrations for a vehicle shall be issued by the registering authority or approved license plates manufacturers or their dealers. The Central Road Research Institute, New Delhi or any of the agency authorised by the Central Government shall approved the license plates manufacturers to the above specifications. (vi) .....(omitted as not relevant) 3. In Exercise of the power under Sub-section (3) of Section 109 of the Act the Central Government issued an order known as Motor Vehicles (New High Security Registration Plates) Order, 2001 on 22nd August, 2001 in order to notify certain standards in respect of new system of high security registration plates for motor vehicles and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n plate will be supplied to the motor vehicle owners by the vendor against the authorization by the Road Transport Officer or any office redesignated for the purpose by the State Transport Department. (xii) The replacement for any existing registration plate may be made by the concerned transport authority only after ensuing that the old plate has been surrendered and destroyed. (xiii) A proper record of the registration plates issued by the manufacturer or the vendor, authorised by the State Government, should be maintained on a daily basis and got tallied periodically with the records of the Transport Office. (xiv) Periodic audit shall be carried out by concerned testing agencies to ensure compliance of the requirements of the High Security Registration Plates. 4. The aforesaid Order was amended by a notification dated 16th October, 2001 issued by the Cental Government in exercise of power under Section 109(3) of the Act and the Order so issued is called Motor Vehicles (New High Security Registration Plates)(Amendment) Order, 2001. By this Order certain provisions of the earlier order were amended and in Sub-clause (v) the following proviso was inserted: Provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Union of India and Ors.) NITs issued by State of Pondicherry and State of West Bengal have been challenged which contain more or less similar clauses. The eligibility criteria of Clause 1.5.3 of NIT issued by State of Pondicherry requires that the bidder or the promoter or any of the members of Joint Venture should have sufficient experience in the field of Registration Plates and should be working in minimum of five countries with Registration Plates having security features. Clause 1.5.6 requires that the bidder or the joint venture partners together must have a minimum annual turn over equivalent to Indian ₹ 75 crores in the immediately preceding last year and at least 15% of this turnover must be from the Registration Plates business. Similarly Clause 1.5.5 of NIT issued by the State of West Bengal requires the bidder or the joint venture partners together must have a minimum net worth equivalent to Indian ₹ 50 crores and Clause 1.5.6 requires the bidders or the joint venture partners together must have a minimum annual turn over equivalent to Indian ₹ 50 crores during preceding financial year i.e. 2002-2003 and 25% of this amount should have come from Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otices issued by the various State Governments inviting tenders for selection of one manufacturer or vendor for whole of the State clearly violates the fundamental right of the writ petitioner guaranteed under Article 19(1)(g) of the Constitution as a monopoly is being created in favour of a single private operator, who will get a huge business of Rupees four to five thousand crores. 9. Shri S. Uppal who appeared for the petitioner in writ petition No. 77 of 2003 has submitted that the selection of a single supplier for the whole of the State goes against the preamble of the Constitution which lays emphasis on securing to all its citizens equality of opportunity and also violates Article 39(b) and (c) of the Constitution by creating a monopoly in favour of a single individual. Shri M.L. Verma, while supporting the writ petitioners has submitted that in terms of the Order issued by the Central Government on 22nd August, 2001 or the amended Order issued on 16th October, 2001 anyone having a Test Approval Certificate from one of the bodies mentioned in second para of Rule 50(1)(v) of the Rules is fully entitled to supply HSVRP. Therefore neither any such Order can be issued by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urer or supplier and consequently Clause 4(x) of the Order issued by the Central Government and also the procedure adopted by the State Governments cannot be faulted in any manner. Shri Dhawan has further submitted that Article 19(6) of the Constitution does not in any manner prohibit giving of a contract to a single individual and selection of a person does not create a monopoly. Shri Dipankar Gupta who has appeared for respondent No. 2 (West Bengal Transport Infrastructure Development Corporation Ltd.) an Undertaking of Transport Department, Government of West Bengal has submitted that the Motor Vehicles Act and the Rules framed thereunder require High Security Number Plates and the respondent No. 2 has no choice in the matter and has to implement the Scheme. He has further submitted that Scheme cannot be successfully implemented if there are number of persons who are manufacturing or supplying number plates and having too many manufacturer or suppliers would defeat the Scheme itself. 11. Before considering the legal submissions made by learned counsel for the parties it is necessary to bear in mind that HSVRP by itself has nothing to do with the security of the vehicle. HSVRP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he registering authority. The registration mark has to be displayed in the form of licence plates which shall be issued by the registering authority or approved licence plates manufacturers or their dealers. Therefore it is open for the registering authority itself to issue a licence plate after charging an appropriate fee or consideration. In addition to the registering authority, licence plates may also be issued by a licence plates manufacturer who has been approved by the Central Road Research Institute, New Delhi (CRRI) or any other agency authorised by the Central Government and also by dealers of such manufacturers. 13. the statutory provisions namely, the Act and the Rules do not lay down that there has to be only one manufacturer for the entire State. The question which requires consideration is whether in view of these statutory provisions is it permissible for the Central Government, while exercising power under Section 109(3) of the Act, to issue an Order to the affect that the manufacturer or the vendor selected by the State for supply of such registration plates may be for whole of the State or any region of the State which in affect means selection of a single man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al right of the writ petitioner guaranteed under Article 19(1)(g) of the Constitution. 15. Clause 6 of Article 19 of the Constitution was amended by the Constitution (First Amendment) Act, 1951 which came into force on 18th June, 1951 and it reads as under: (6) Nothing in Sub-clause (g) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, in the interests of the general public, reasonable restrictions on the exercise of the right conferred by the said sub-clause, and, in particular nothing in the said sub-clause shall effect the operation of any existing law in so far as it relates to, prevent the State from making any law relating to,- (i) the professional or technical qualifications necessary for practising any profession or carrying on any occupation, trade or business, or (ii) the carrying on by the State, or by a corporation owned or controlled by the State, of any trade, business, industry or service, whether to the exclusion, complete or partial, of citizens or otherwise. 16. In view of Article 19(6)(ii) the carrying of any trade, business, industry or service by the Sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain challenged and in Rashbihari Panda v. State of Orissa which was decided by a Constitution Bench. It was held that the validity of the law by which the State assumed the monopoly to trade in a given commodity has to be judged by the test whether the entire benefit arising therefrom is to enure to the State, and the monopoly is not used as a cloak for conferring private benefit upon a limited class of persons. It was also held that the action of the government if conceived and executed in the interest of the general public is not open to judicial scrutiny but it is not open to the government thereby to create a monopoly in favour of third parties from their own monopoly. It was accordingly held that both the Schemes evolved by the government were violative of the fundamental right of the writ petitioners under Article 19(1)(g) and Article 14 because the schemes give rise to a monopoly in the trade in Kendu leaves to certain traders, and singled out other traders for discriminatory treatment. This principle was more succinctly stated in State of Rajasthan v. Mohan Lal Vyas in the following words: (i) There cannot be any law in violation of the provisions of the Constitution. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese directives are largely ineffective. This shows that even members of European Economic Community adopt a policy of favouring local contractors and, therefore, some directives have been issued. But, in the present case, the conditions mentioned in the NITs by different State Governments are just the reverse and have been purposely so designed so as to completely oust an Indian manufacturer and to ensure that the contract is awarded to such a company which must have a joint venture with a foreign company already dealing in such kind of business. The award of contract for a period of 15 years would mean that not only the doors for Indian companies or the Government would be shut for such a long period but even if a better or cheaper technology is developed, either here or abroad, the same cannot be implemented. 19. Shri S. Ganesh, learned senior counsel has also assailed the eligibility conditions mentioned in the NITs issued by some of the State Governments as wholly arbitrary, irrelevant and discriminatory against the Indian manufacturers of HSVRP. As mentioned earlier the eligibility criteria in NIT issued by the Union Territory of Daman and Diu contains a clause that the bid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause (v) of Sub-rule (1) of Rule 50 of the Rules says that the Central Road Research Institute, New Delhi or any of the agency authorised by the Central Government shall approve licence plates manufactures to the specifications given in Clause (i) to (iv) of the sub-rule. Therefore in terms of the Rules once approval is given to a licence plates manufacturer by Central Road Research Institute, New Delhi or any other agency authorised by the Central Government, it becomes eligible to supply HSVRP (licence plates). The HSVRP are sought to be introduced for the first time in the country after Rule 50 had been amended on 28.3.2001. Any clause in NIT which requires that the tenderer or bidder or joint venture partner should have a turnover of ₹ 50 crores in the immediately preceding last year and at least 25 per cent of this turnover must be from the licence plates business, inevitably means that it would be a foreign company. The HSVRP having not been introduced in India so far it is obvious that no Indian company can have a turn over of that magnitude in the preceding year. The clear impact of this condition is that all Indian companies must be ousted even though they may be tec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... une, 2002 were merely suggestive in nature and they do not stipulate details about experience/capacity of bidder/collaborators.. It was also mentioned therein that experience in 5 countries is not a mandatory requirement. This letter has been completely ignored while laying down the eligibility criteria. 23. It may be mentioned here that the Order issued by the Central Government on 16th October, 2001 by which a proviso was appended to Clause (v) of the Order issued on 22nd, August 2001 requires that permanent consecutive identification number shall be preceded by two alphabets representing the name of vendor or manufacturer or the supplier. This itself contemplates existence of several manufacturer or supplier otherwise there was on necessity of mentioning their name and that several manufacturers can simultaneously operate. 24. In Tata Cellular v. Union of India it was held that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favourtitism. It was also held that the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation plates may be for the State as a whole or any region of the State is ultra vires as no such order can be made in the exercise of power conferred by Sub-section (3) of Section 109 of the Act. Section 109 finds place in Chapter VII of the Act and the title of the said Chapter is - Construction, Equipment and Maintenance of Motor Vehicles. Section 109 of the Act reads as under: Section 109: General provision regarding construction and maintenance of vehicles: (1) Every motor vehicle shall be so constructed and so maintained as to be at all times under the effective control of the person driving the vehicle. (2) Every motor vehicle shall be so constructed as to have right hand steering control unless it is equipped with a mechanical or electrical signaling device of a prescribed nature. (3) If the Central Government is of the opinion that it is necessary or expedient so to do, in public interest, it may by order published in the Official Gazette, notify that any article or process used by a manufacturer shall conform to such standard as may be specified in that order. 28. Section 2(21-A) defines manufacturer and it means a person who is engaged in the manufacture of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the impugned notification in exercise of power conferred by this provision. Section 64 confers rule making power upon the Central Government but in view of Section 212 the power to make rules under the Act is subject to the condition of the rules being made after previous publication. It is not the case of the respondents that the previous publication of the notification dated 22nd August, 2001 had been made. The Central Government has also never treated it to be a rule. Consequently the impugned notification cannot be held to have been made by the Central Government in exercise of power under Section 64(d) of the Act. In fact the Central Government has always treated it to be an Order issued under Sub-section (3) of Section 109 of the Act. The inevitable conclusion is that Clause 4(x) of the notification dated 22nd August, 2001 could not be issued by the Central Government in exercise of the power conferred by Section 109(3) of the Act and therefore the said notification is ultra vires. 29. For the reasons mentioned above the Writ Petitions and Transfer Petitions are allowed with costs. Clause 4(x) of the Motor Vehicles (New High Security Vehicle Registration Plates) Order, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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