Banks can’t be compelled to re-issue vehicle’s certificate of registration: HC

Kolkata: The Calcutta High Court is learnt to have held that in hire-purchase agreements where a bank repossesses a vehicle and re-sells it due to a default by the vehicle’s registered owner, the bank cannot be compelled to re-issue the vehicle’s certificate of registration under Section 51(5) of the Motor Vehicles Act (MV Act).

A Single Bench of Justice Rai Chattopadhyay held: “Court finds that the petitioner or the respondent bank cannot be compelled to take steps for due adherence to the said provision of law, that is, under section 51(5) of the said Act. The financer having taken possession of the vehicle and having not complained about any non-receipt of the certificate of registration from the erstwhile registered owner and also having already sold and delivered the possession thereof to the petitioner by dint of an order of the Arbitrator, – compliance by it, of the provision under Section 51 (5) of the said Act, would actually be redundant and a futile exercise.”

In the present case, the petitioner challenged an order passed by the RTA, Tamluk, Purba Medinipur dated November 17 2023. The writ petitioner was the auction purchaser of a vehicle covered under a hire purchase agreement executed between IDFC Bank (respondent bank) and the erstwhile registered owner. The erstwhile registered owner defaulted on the loan amount taken from the respondent bank, leading to arbitration proceedings. By arbitrator’s order, the bank took steps for the sale of the vehicle. After the present petitioner purchased it, the bank transferred the title of the vehicle to the present petitioner and reserved no right to the same any further.

After purchase, the petitioner approached the authorities i.e. respondent no. 3 for registration of his vehicle, who were directed by the High Court to consider the petitioner’s prayer due to their inaction. The resultant order has been challenged in this case.

The court found that the petitioner or the respondent bank cannot be compelled to take steps for due adherence to the said provision of law, that is, under section 51(5) of

the said Act.