Kerala High Court Enforces Transparency in Government Vehicle Auctions

Court mandates disclosure of statutory restrictions on re-registration of government vehicles sold at auction.

In a landmark judgment, the Kerala High Court has ruled that government agencies must ensure full transparency in auction notices for government vehicles, highlighting statutory prohibitions on re-registration. The ruling came in the case of Jibin Shaji v. Kerala Forest Department, where the petitioner, Jibin Shaji, challenged the non-transferability of a vehicle purchased at a government auction due to statutory restrictions under Rule 52-A of the Central Motor Vehicles Rules, 1989.

The petitioner purchased a Mahindra LMV Motor Car from the Kerala Forest Department at an e-auction conducted by MSTC Ltd., a public sector undertaking, and paid a sum of Rs.3,36,301/- for the vehicle. Despite completing the transaction and receiving the vehicle, Shaji was denied the transfer of ownership by the Regional Transport Office due to the statutory prohibition on renewing registration after 15 years for government vehicles, a restriction not disclosed in the auction notice.

Justice Mohammed Nias C.P., presiding over the matter, emphasized that the statutory prohibition under Rule 52-A prevented re-registration of government vehicles after 15 years and mandated their disposal through a Registered Vehicle Scrapping Facility. The court highlighted the duty of government agencies to disclose all material facts in auction notices, including statutory bars affecting re-registration, to uphold the principles of fairness, transparency, and non-arbitrariness mandated by Articles 14 and 298 of the Constitution of India.

The judgment pointed out that the State, when engaging in commercial transactions, must act as a model seller, disclosing known defects and statutory prohibitions. The doctrine of caveat emptor was ruled inapplicable to the State, which must hold itself to a higher standard of conduct, ensuring that citizens are not misled or disadvantaged due to undisclosed statutory restrictions.

The court directed all government departments, public sector undertakings, and auctioning agencies to include clear statements in auction notices regarding the year of purchase, completion of 15 years, statutory bars under Rule 52-A, and the fitness of vehicles solely for scrapping. The judgment aims to prevent arbitrariness and uphold public trust in government auctions.

The ruling also leaves room for the petitioner to pursue compensation claims before a competent civil court, acknowledging the financial loss incurred due to non-disclosure of statutory restrictions. The case underscores the importance of transparency and fairness in government dealings, reinforcing the legal obligation of public authorities to act in a manner that preserves legitimate expectations and public confidence.

Bottom Line:

Rule 52-A of the Central Motor Vehicles Rules, 1989 imposes a statutory prohibition on the renewal or continuation of registration of Government vehicles after 15 years. Auctions by Government agencies must disclose all statutory restrictions affecting re-registration of vehicles to ensure fairness, transparency, and non-arbitrariness.

Statutory provision(s):  

• - Rule 52-A of the Central Motor Vehicles Rules, 1989  
• - Articles 14 and 298 of the Constitution of India  
• - Motor Vehicles Act, 1988

Jibin Shaji v. Kerala Forest Department, (Kerala) : Law Finder Doc Id # 2810142