TMI Blog2016 (7) TMI 1502X X X X Extracts X X X X X X X X Extracts X X X X ..... itiate contempt proceedings against the Respondents. M/s. Utsav has given an undertaking to the effect that in future it shall not outsource the blank plate manufacturing as jobwork and that the HSRP scheme will be implemented as per the terms and conditions of the contract. Though we are not inclined to initiate the contempt proceedings yet in order to enable the statutory authorities to keep a control over the implementation of the scheme, it is necessary to issue directions/guidelines for proper implementation of the HSRP Scheme - contempt petitions are disposed of. - C.P. (C) No. 483 of 2013 in W.P.(C) No. 510 of 2005 and Contempt Petition (C) No. 3 of 2015 in Writ Petition (C) No. 510 of 2005 - - - Dated:- 13-7-2016 - T.S. Thakur, C.J.I., R.K. Agrawal and R. Banumathi, JJ. For Appearing Parties: Maninder Singh, ASG, Arvind Verma, Paras Kuhad, Sanjiv Sen, Kapil Sibal, Sr. Advs., Suryanarana Singh, AAG, Surain Uppal, Hari Haran, Charu Mathur, Ajay Sharma, S. Wasim A. Qadri, Gunwant Dara, Zaid Ali, Sunita Sharma, D.S. Mahra, Piyush Kumar, Vanshaja Shukla, Aditya Narayan Singh, C.D. Singh, Darpan Bhuyan, Anip Sachthey, Saakaar Sardana, Shagun Matta, Pragati Neekhra, S. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Central Motor Vehicles Rules, 1989 (for brevity 'CMV Rules') which deals with Form and manner of display of registration marks on the motor vehicles was amended by the Central Government in exercise of its Rule making power Under Section 64 of the MV Rules. The amended scheme of Rule 50 substituted the erstwhile system where the registration number was given by the RTO and the ordinary registration plates obtained from the open market were installed on the vehicles. Rule 50 was amended to ensure the technical competence of the prospective manufacturers, controlled issuance of registration plates and a manufacturer can manufacture the said plates only after it has got Type Approved Certificate (TAC) from one of the autonomous certifying agencies. Supply of the plates to the vehicular users can be made only after the grant of certificate of Conformity of Production (CoP). 3. The Government of India on 28.03.2001 issued a notification Under Section 41(6) of the Motor Vehicles Act, 1988 (for short the Act ) read with Rule 50 of the MV Rules for implementation of the provisions of the Act in terms of Sub-section (3) of Section 109 of the Act. The Central Government ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within the State, it will lead to discrepancy and non-uniformity in price structure prevailing in different regions. 7. Difficulty in assimilation of data from more than one manufacturer would lead to disaggregated and confusing database signals. Such sensitive and security-related business must be governed by uniform database management processes and unified standardised coding practices. 8. Different manufacturers would mean that there would be variation in quality of the material and in terms of workmanship. 9. Possible duplication of registration plates due to competition between manufacturers of different regions and lack of aggregated security-controlled database management systems. 10. Non-conformity of data of different manufacturers would lead to confusion and integration of data from the State RTOs. 11. Difficulty in fixing up the answerability on any one manufacturer for not following the prescribed procedure. 12. Confidentiality of the public database would be severely compromised. 13. Provision of training of RTO personnel by each manufacturer would be a logistic nightmare and would lead to confusion and further lead to the system being compromise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be in the interest of all concerned if the States and the Union Territories take definite decision as to whether there is need for giving effect to the amended Rule 50 and the Scheme of HSRP and the modalities to be followed. 7. Despite the above order of this Court, most of the States have failed to implement the scheme in its true spirit. This resulted in filing of I.A. No. 5 in Writ Petition (C) No. 510 of 2005 wherein the applicant prayed for a clarification of order dated 08.05.2008 stating that some of the States were carrying the impression as if they had the discretion to give effect to the amended Rules and the scheme. Vide the Order dated 05.05.2009, this Court held that there is no discretion given to the States/Union Territories in implementation of the amended rules. 8. Further, by an order dated 07.04.2011 of this Court, reported in (2011) 11 SCC 315, passed in I.A. Nos. 10-11 of 2010, wherein the States sought extension of time for implementation of the HSRP scheme, this Court took serious view of the matter that there are certain States which have not even started the process of implementing the HSRP Scheme and directed such States to file affidavits expla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d continue as such till the performance of the contract. 11. By the aforesaid order dated 08.12.2011 in paras (4) to (6), this Court has also set aside the approach adopted by the State of Andhra Pradesh in tender proceedings and directed the State of Andhra Pradesh to issue fresh tender, award the contract and commence implementation of the HSRP Scheme positively by 29.02.2012. Paras (4) to (6) of Order dated 08.12.2011 read as under: 4. It is the case of the State of Andhra Pradesh that it published the notice inviting the tenders on 8-10-2011 and the due date of the tender bids was 26-11-2011. The State claims that it has prepared a comprehensive framework to implement the HSRP scheme and authorised Andhra Pradesh State Road Transport Corporation to roll out the end to end solution for the project. It has decided to have a competitive bidding process by segregating the tender into different Sections i.e. one for manufacturing, another for embossing, hot stamping and printing of HSRP and yet another to supply the same to the Corporation for installation. 5. Again, the process adopted by the State of Andhra Pradesh is not only in violation of the directions contained in p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der different heads or in parts. It is a mandatory requirement that one person should exclusively be responsible for the entire process in the interest of security. Thus, we make it clear that DIMTS, when it is getting the HSRP manufactured from the contractor, such manufacture should be firstly from a single contractor and secondly it should, without fail, be under the direct supervision and control of DIMTS. They should not let the sub-contractors or other parties to have control over the manufacturing processing and fixation of HSRP in any manner, whatsoever. They should ensure that one single person is responsible for manufacturing, affixation of seals, imprinting of numbers and affixation of HSRP on the vehicles in the NCT of Delhi. 13. Finally, vide an Order dated 07.02.2012 reported in (2012) 4 SCC 568 titled Maninderjit Singh Bitta v. Union of India and Ors., this Court disposed of the W.P.(C) 510/2005 by sending the files to respective High Courts to take action as per law and in para (17), it was held as under: 17. Having perused the report of the Registrar and the affidavits filed on behalf of different States, we issue the following directions: (a) All States ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he disobedience of the various Orders of this Court discussed hereinabove, specifically orders dated 08.12.2011 and 07.02.2012. This Court vide Order dated 01.05.2014 observed that as per the bid document, the location of the factory of M/s. Utsav Safety Systems Pvt. Ltd. (the technical partner) is disclosed at Plot No. 3A, Phase-IV, Industrial Area, Golemath, District Bilaspur, Himachal Pradesh. Petitioner alleges that though M/s. Utsav has informed ARAI (testing agency) only about the existence of two manufacturing plants i.e. Himachal Pradesh and Delhi, Blank High Security Plates are manufactured by M/s. Utsav Safety Systems Pvt. Ltd. at a plant in Assam by outsourcing the work to M/s. Rosmerta Technologies Pvt. Ltd. The Order dated 08.12.2011 reported in (2012) 1 SCC 707 does not permit sub-contracts to be awarded by the contractor to whom the contract for manufacturing and fixation of HSRP is awarded and accordingly this Court took the cognizance of the contempt petitions. 15. Petitioner has alleged that M/s. Utsav in utter violation of Rule 50, terms of bid and TAC and various orders passed by this Court has manufactured HSR plates through job work at an unauthorised unit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs after laser coding Out of a total 5673391 Pcs HSRP plates, 19,19,550 HSRP plates were dispatched in the month of November, 2013 by Utsav to various implementing companies while 51830 Pcs HSRP is stock at the Guwahati factory of Utsav. Petitioner alleges that as per bid document of M/s. Utsav, HSRPs ought to have been manufactured at Himachal Pradesh Plant of M/s. Utsav. However, the plates were manufactured at an unauthorized unit in Assam and thus it is a clear case of sub-contracting of work carried without control and supervision of M/s. Utsav which has been conferred TAC and CoP and a clear case of violation of Rule 50 and Orders of this Court emerges. 16. The Petitioner's counsel also relies upon the report of the Inquiry Committee of NCT of Delhi dated 31.01.2014 which reported large-scale violations committed by the approved manufacturer in the NCT of Delhi (i.e., consortium of M/s. Utsav-Technical Partner and M/s. Rosmerta-Financial Partner). It is stated that NCT of Delhi had also issued show cause notice dated 10.03.2014 to the consortium of M/s. Utsav i.e. M/s. Rosmerta stating that M/s. Utsav Safety Systems Pvt. Ltd. Technical Partner of SPB are not s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... document the only plant which was approved was Bilaspur, Himachal Pradesh Plant and there is enough material on record to show that 5725221 blank HSR Plates were manufactured and supplied from the unauthorised and unapproved plant in Assam and there was no approval granted to the said plant at Assam and the same is in violation of Rule 50 and orders of this Court and such violation is due to lack of Respondent's administrative conviction to abide by the existing statutory norms and the Petitioner therefore prayed for initiating contempt proceeding against Respondents and also inter alia prayed for various directions for strict compliance of HSRP Order 2001. 19. Per Contra, counsel for the Respondents have in response to the allegations in the contempt petitions, filed various affidavits denying that there has been any disregard to the orders of this Court. In the affidavit filed on behalf of Respondents No. 1 to 4, it is averred that Rule 50 of CMV Rules of 2001 does not place a specific bar on 'job work' or sub-contracting and the same would however be subject to Sub-clauses (xvii) and (xviii) of Clause 4 of the Motor Vehicles New HSRP Order that the manufacturer or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imperative to discuss what are TAC and CoP: Type of Approval Certificate (TAC) and Conformity of Production (CoP): Once a person has been declared successful bidder for the manufacturing of HSRPs then such bidder has to obtain TAC and CoP from the testing agency before starting manufacturing. Rule 50 of the Central Motor Vehicles Rules 1989 provides for form and manner of display of registration marks. Rule 50 authorizes the testing agency to give TAC to individual manufacturer for the manufacture of HSRPs. In conformity with the specifications prescribed under the rules. At present there are four testing agencies to issue TAC which include the Automotive Research Association of India (ARAI); Vehicle Research and Development Establishment (VRDE); Central Road Research Institute (CRRI), New Delhi. The successful bidder for the manufacturing of HSR plates after completion of manufacturing of HSR plates to apply for TAC, has to pay the prescribed fee and submit prototype samples of licensed plates conforming to the specifications under the rules. After brief checking of approval of drawings, each manufacturer will have to submit prototype samples of the licensed plates conforming ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per the CoP guidelines, the manufacturer of HSRPs has to inform the testing agency which had granted the TAC within one month of commencement of manufacturing and thereafter has to inform after every fifteen lakhs plates manufactured or two years whichever is earlier. As noticed earlier, as per the report of the inspecting team dated 29.11.2013, M/s. Rosmerta-Assam Plant had manufactured a total number of 5725221 blank HSRPs and distributed to consortium partners of all States. However, M/s. Rosmerta has not been granted the CoP certificate from the testing agency, evidently the HSRPs manufactured at M/s. Rosmerta Assam Plant could not have been verified by the testing agency. 26. M/s. Utsav filed IA No. 3/14 dated 25.02.2014 stating that joint venture consortium of M/s. Utsav with M/s. Rosmerta in the NCT of Delhi is the approved manufacturer. While M/s. Utsav in consortium with M/s. Linkpoint (SPV partners) is the approved manufacturer in the States of Haryana, Madhya Pradesh, Himachal Pradesh, Uttarakhand, Bihar, Delhi and Andhra Pradesh, in I.A. No. 3/14 M/s. Utsav has highlighted how it has lost control over the manufacturing process, is in violation of CoP, and also manufa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot only at Himachal Pradesh but at any other place duly approved by the competent authority/ies. The statement made in Para 4 hereinabove shall equally apply to any such manufacturing activity. Having regard to the undertaking filed by M/s. Utsav and considering the passage of time, we are not inclined to proceed with the contempt proceedings. 28. Though, we are not proceeding against the contemnors, it is open to the respective states to proceed against M/s. Utsav or the respective SPV for violation, if any, noticed or brought to its notice. Be it noted that in view of the continued non-compliance of Authority's instructions and statutory violations, the State of Madhya Pradesh has terminated the Concessionaire Agreement by its Order No. 1538 dated 19.06.2014. M/s. Link Utsav Auto Systems Pvt. Ltd. filed W.P. No. 3654/2014 before the High Court and the said termination was quashed by the High Court by its order dated 05.08.2014 on the ground that M/s. Link Utsav Auto Systems Pvt. Ltd. did not get adequate opportunity to explain its conduct and the Court granted liberty to the State Government to issue a fresh show cause notice within a period of three months. After issui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of checks to be carried out at the first and subsequent CoPs are at Annexure-I. The CoP frequency shall be 5 lakh number plates or six months whichever is earlier. 30. The main concern of the Petitioner is that M/s. Utsav Safety Systems Pvt. Ltd. which is holding TAC issued by ARAI has to manufacture the HSRP in its own plant and it cannot give incomplete plates or jobwork to other consortium partners namely M/s. Linkpoint Infrastructure Pvt. Ltd. and M/s. Rosmerta Technologies Ltd. who are selling illegal HSRPs in various States. ARAI has no role to play so far as activities of M/s. Linkpoint Infrastructure Pvt. Ltd. and M/s. Rosmerta Technologies Ltd. are concerned. ARAI has stated that it has no role to play in job work and that M/s. Utsav Safety Systems Pvt. Ltd. shall exercise complete control over all security features in its possession and shall be responsible for the use of any security feature on registration plate in the open market either by himself or by any other person on his behalf. 31. In the counter affidavit filed by the Director, CRRI it is stated that CRRI is one of the agencies empowered by law to issue Type Approval Certificate. Consequent to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uisite capacity and infrastructure thereby ensuring smooth implementation at the grass root level. The State Governments shall ensure selection and authorisation only of those TAC manufactures who have been financially and technically competent to manufacture and supply the requisite number of HSRP in the State. ii. Manufacturing of HSRP starts with the grant of TAC and CoP. Hence, periodic assessment, review and audit by the testing agencies of all the aspects involved in the HSRP product specifications, process compliances and operational procedures in totality is warranted. The testing agencies shall ensure that quality and specifications is not being compromised. iii. Furthermore, the HSRP contracts should be awarded pursuant to a transparent tender process. The factors such as topographical and geographical conditions, vehicular population, adequate infrastructure, cost of managing logistics, equipments and human resources etc. must be considered before accepting any bid and entering into the contract. iv. The authorized HRSP manufacturer shall not outsource the blank plate manufacturing as job work for the purpose of implementation of terms and condition of the Contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ementation of the process of production and fixation of HSRP. All the concerned authorities are directed to look after the aforesaid process being adopted for fixation of HSRPs and State must report back if the violation continues. x. The testing agencies along with the team comprising of State level officer (not below the rank of RTO) and one expert as nominated by the Transport Commissioner of the respective State shall inspect the unit and certify the manufactured HSRP and manufactured HSRP shall leave the factory premises of the manufacturer only after being cleared by the testing agencies. xi. The transport officials of the State Government shall ensure that manufacturing units are periodically inspected and ensure compliance of Rule 50 of the CMV Rules and also the terms and conditions of the Contract. Additionally the Central Government should form Committees in collaboration with the State Governments in order to keep regular check on the manufacturing units which are engaged in HSRP project. The manufacturing units must be periodically inspected by the Committee so constituted and report be sent to MoRTH and also to the Transport Commissioner of the concerned State h ..... 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