Gujarat High Court strikes down ₹50-per-day additional fee for delayed renewal of vehicle fitness certificates

The petitioner challenged Rules 32 and 81 of the Central Motor Vehicles Rules, 1989 as ultra vires the Motor Vehicles Act, 1988, and sought a direction restraining the Regional Transport Authority, Ahmedabad, from recovering any amount beyond the prescribed regular fee.

During hearing, the challenge to Rule 32 was withdrawn because of its amendment with effect from 29 December 2016.

The remaining challenge concerned the note appended to Serial No. 11 of Rule 81, which prescribed an additional fee of ₹50 for each day’s delay after expiry of a vehicle’s certificate of fitness, over and above the regular fee of ₹200 for grant or renewal of the certificate.

The petitioner contended that the levy was punitive in substance, lacked statutory authority, and had no correlation with any additional service rendered by the authorities.

The Court considered the decisions of the Madras, Karnataka and Rajasthan High Courts, which had struck down similar levies.

1. Whether the levy of an additional fee of ₹50 per day for delay in renewing a certificate of fitness after its expiry was a valid fee authorised by Sections 64(o) and 211 of the Motor Vehicles Act, 1988, or was punitive in nature and beyond the rule-making power.

2. Whether the impugned provision in Rule 81, framed under the Central Motor Vehicles Rules, 1989, was ultra vires the Motor Vehicles Act, 1988.

3. Whether the respondents could recover any additional amount beyond the prescribed regular fee while processing delayed renewal applications.

The Court applied Sections 39 and 56 of the Motor Vehicles Act, 1988, under which a transport vehicle must possess a valid certificate of fitness to be treated as validly registered and lawfully operated on public roads.

Section 64(o) authorises the Central Government to prescribe fees for specified matters, including the grant and renewal of certificates of fitness, while Section 211 permits fees only for applications, certificates, tests and other matters involving the rendering of services by authorities under the Act.

The Court relied on Gaurav Kumar v. Union of India, holding that a delegated authority must act within the express limits of the parent statute and cannot create substantive liabilities or disabilities not contemplated by it.

It also applied Ahmedabad Urban Development Authority v. Sharadkumar Jayantikumar Pasawalla, which holds that the power to impose a fee must be specific and cannot be inferred by implication.

Although a regulatory fee need not involve mathematical quid pro quo, it must have a reasonable relationship with the service or regulatory activity undertaken by the authority.

The Court further relied on State of U.P. v. Vam Organic Chemicals Ltd., holding that a levy unconnected with the cost or administration of regulation cannot be imposed as a regulatory fee.

Sections 210C and 199B were interpreted as operating within the statutory scheme of offences and penalties and not as authorising the creation of a new penalty for delayed renewal of a fitness certificate.

The Court distinguished the valid regular fee for grant or renewal of a fitness certificate from the impugned ₹50-per-day additional levy.

Grant or renewal involves inspection, testing and certification, and therefore bears a reasonable relationship to services rendered by the authorities.

By contrast, the daily additional charge was imposed solely because the application was filed after expiry; the provision did not identify any additional service, administrative cost or regulatory activity corresponding to the amount charged.

The use of the expression “delay,” together with the Government’s stated objective of deterring late renewal and promoting compliance, demonstrated that the levy was punitive rather than compensatory or regulatory.

Sections 39 and 56 already prohibited the operation of a vehicle without a valid fitness certificate, and operating such a vehicle could attract the statutory consequences under the Act; however, the Act did not make delayed renewal itself an offence or authorise the Central Government to impose a new fine for it.

Section 211, being confined to fees connected with services, could not be used to impose a penalty in the guise of an additional fee.

Accordingly, the delegated legislation exceeded the authority conferred by the parent Act.

The impugned note appended to the relevant entry of Rule 81 was declared inoperative, and the respondents were directed not to levy or recover the additional daily charge while considering delayed applications for renewal of fitness certificates.

The challenge to Rule 32 was treated as withdrawn.

The connected Civil Application for directions was disposed of accordingly.