States can levy special fees for fancy vehicle registration numbers, Supreme Court rules

Supreme Court sets aside 2008 MP High Court order that said the right to prescribe a fee for registration of vehicles rested solely with the Centre.

File photo of the Supreme Court of India | Manisha Mondal | ThePrint

New Delhi: States have the power to levy special fees to reserve distinctive marks or number plates for the registration of vehicles, the Supreme Court has held.

A bench of justices L.N. Rao and S.R. Bhat set aside the Madhya Pradesh High Court order quashing Rule 55A of the State Motor Vehicle Rules, 1994. The HC had, in 2008, held that Rule 55A was in contravention to the legal framework enumerated in the Central Motor Vehicles Rules, 1989 as well as the Motor Vehicles Act of 1988.

The high court had said the right to prescribe a fee for an application for registration had been exclusively conferred upon the Centre, so the state could not claim any fee for such a task. It had made this ruling on a petition filed by a two-wheeler owner who had questioned the imposition of special fees for special registration numbers.

However, the Madhya Pradesh government had filed an appeal against the HC order, and the Supreme Court bench ruled that the service to reserve and allocate special marks for registration of a vehicle is a separate service, and thus, the state’s authorised wing is empowered to impose the special fee.

The top court said Rule 55A is not in excess of the powers conferred upon the state by the central act or the rules, and that Section 211 of the Motor Vehicles Act — a central legislation — confers upon states the power to prescribe fees.

Allotment of special numbers for vehicle registration is a service rendered by state authorities to those who opted for “fancy” or “auspicious” numbers, the SC said.

“There are certain services and functions for which the state is empowered to levy fees. It is precisely to cover these contingencies, i.e. where the service is rendered or some function performed, that the state is empowered by a residual provision (much like the central government with which it shares the power concurrently) to levy fees,” the bench said.

‘HC ruling misconceived’

Saurabh Mishra, counsel for the Madhya Pradesh government, relied upon the scheme of the law to highlight that the state was “undoubtedly” conferred with the power to prescribe rules and also a fee to allot registration numbers. Although the Centre was authorised to allot certain numbers to the state, the further or onward registration or assignment of those numbers as registration numbers was left to the state.

The central government is not concerned with the allocation of distinguished registration marks, Mishra argued.

Advocate Manoj Swarup, who assisted the bench as amicus curiae, outlined the scheme of the Act to argue that the central government had exclusive authority to prescribe the particulars required and the registration form for various kinds of vehicles. The state, according to him, had no power to prescribe fees, much less prescribe by-rules for a procedure to assign specific numbers.

But the bench opined that the assignment of numbers is an important step in the process of registration of vehicles. The HC finding, it said, “at best be characterised as misconceived”.

It said assignment of numbers is an important step in the process of registration of vehicles and the state is entitled to indicate its choice or manner of assigning by prescribing a particular set of procedures to assign numbers.