Vehicle confiscation penalties cannot be imposed mechanically without assessing the owner’s involvement and insured value.

The petitioner was the registered owner of a Mahindra Scorpio bearing registration no. UP16DV-6875. He had leased the vehicle through the Zoomcar digital platform to one Sikender pursuant to a booking and vehicle lease agreement dated 23 September 2024. Before handing over the vehicle, the petitioner verified the identity documents and driving licence of the proposed driver, Mohit, and the vehicle was activated through an authorised OTP on the platform.

On 25 September 2024, the vehicle was seized after the alleged recovery of 497.16 litres of liquor, resulting in registration of Kanti P.S. Case No. 524 of 2024 under Sections 317(4), 317(5) and 324(4) of the Bharatiya Nyaya Sanhita and Section 30(a) of the Bihar Prohibition and Excise Amendment Act, 2022.

The petitioner was not named as an accused in the FIR, although he was shown as an accused in his capacity as the vehicle’s owner.

The District Revenue Officer-cum-Confiscating Authority, Muzaffarpur, passed an order dated 13 March 2026 in Confiscation Case No. 142 of 2024–25, imposing a penalty of Rs. 5,00,000 for release of the vehicle. The petitioner challenged that order and sought release of the vehicle.

The State opposed the writ petition on the ground that the petitioner had an alternative appellate remedy under Section 92 of the Bihar Prohibition and Excise Act, 2016.

Whether the confiscating authority’s order imposing a penalty of Rs. 5,00,000 was sustainable when it failed to consider the petitioner’s involvement, the quantity of intoxicant recovered, and the latest insured value of the vehicle as required by Rule 12A(2) of the Bihar Prohibition and Excise Rules?

Whether the petitioner, as the registered owner who had rented out the vehicle through a digital platform, could be denied release of the vehicle despite the absence of any direct or indirect involvement in the alleged excise offence?

Whether the writ petition was maintainable in view of the alternative appellate remedy under Section 92 of the Bihar Prohibition and Excise Act, 2016?

The Court considered Section 92 of the Bihar Prohibition and Excise Act, 2016, which provides an appellate remedy against confiscation orders.

It primarily applied Rule 12A(2) of the Bihar Prohibition and Excise Rules, which requires the Collector or authorised officer, while determining the penalty for release of a seized vehicle, to consider the quantity of intoxicant recovered, the involvement of the vehicle’s owner, and the latest insured value of the vehicle; the penalty must not be less than 10% of the latest insured value and must not exceed Rs. 5,00,000.

The Court also applied the principle that a confiscation or penalty order must disclose due consideration of the relevant statutory factors and must not be cryptic, mechanical, or unsupported by reasons.

The Court found that although the petitioner was the registered owner, the vehicle had been intercepted during the period in which it had been lawfully rented through the Zoomcar platform, and the petitioner had taken steps to verify the guest and driver before handing over possession.

The lease terms also prohibited unlawful use of the vehicle.

The confiscating authority nevertheless imposed the maximum penalty of Rs. 5,00,000 without examining the petitioner’s actual involvement or explaining the basis for selecting that amount.

In doing so, it failed to apply the mandatory considerations under Rule 12A(2), including the quantity recovered, the owner’s involvement, and the latest insured value.

The order was therefore held to be cryptic, mechanical, and passed without proper application of mind.

The Court further concluded that the record disclosed no direct or indirect involvement of the petitioner in the commission of the offence.

It directed the District Revenue Officer-cum-Confiscating Authority, Muzaffarpur, to release the vehicle to the petitioner upon payment of 10% of the vehicle’s latest insured value, within two weeks from receipt or production of the judgment.

The writ petition was accordingly disposed of.