A) ABSTRACT / HEADNOTE

The judgment examines the constitutional and statutory validity of Rule 55A of the Madhya Pradesh Motor Vehicles Rules, 1994, which authorises the State Government to levy fees for reservation and allotment of specific or “fancy” registration numbers for motor vehicles. The controversy arose when the High Court of Madhya Pradesh struck down Rule 55A as ultra vires the Motor Vehicles Act, 1988 and the Central Motor Vehicles Rules, 1989, holding that the power to prescribe fees for vehicle registration vested exclusively with the Central Government. The Supreme Court was called upon to examine the scope of Sections 41, 65, and 211 of the Act, and to determine whether the State could, through delegated legislation, impose fees for services connected with registration marks.

The Court undertook a detailed statutory interpretation of the scheme of the Act and emphasized the distinction between prescription of registration fees by the Central Government and rendering of ancillary services by the State authorities. It held that Section 211 is a residual and enabling provision empowering both the Central and State Governments to levy fees for services rendered, even in the absence of express provisions. The Court further recognised that reservation of specific registration numbers constitutes a distinct service involving administrative effort and policy considerations. Consequently, the Court upheld the validity of Rule 55A, restored the State’s legislative competence, and clarified the principles governing delegated legislation, federal balance, and the doctrine of repugnancy.

Keywords: Motor Vehicles Act, Delegated Legislation, Fee vs Tax, Fancy Registration Numbers, Section 211, State Rule-Making Power

B) CASE DETAILS

C) INTRODUCTION AND BACKGROUND OF JUDGMENT

The dispute is rooted in the federal distribution of legislative and rule-making powers under the Motor Vehicles Act, 1988. Parliament enacted the Act to provide a uniform framework governing registration, control, and regulation of motor vehicles across India. While the Central Government was vested with powers to prescribe forms, procedures, and fees for registration, the State Governments were entrusted with implementation through designated registering authorities. Over time, States introduced administrative measures to cater to regional and socio-cultural preferences, including reservation of particular registration numbers considered auspicious.

The State of Madhya Pradesh introduced Rule 55A in 2001, providing a structured mechanism for reserving preferred numbers upon payment of specified fees. This rule was challenged by the respondent vehicle owner, who sought allotment of a particular number without payment of the prescribed fee. The High Court accepted the challenge, holding that the State had exceeded its powers and encroached upon a field occupied by the Central Government.

The appeal before the Supreme Court thus presented issues of statutory interpretation, delegated legislation, and constitutional principles of federalism. The Court was required to reconcile the apparent overlap between Central and State powers, assess the scope of Section 211, and determine whether charging a fee for reserving registration numbers amounted to an impermissible levy or a legitimate fee for services rendered.

D) FACTS OF THE CASE

The respondent purchased a motorcycle in May 2004 and applied for registration before the competent registering authority in Madhya Pradesh. Along with the application in Form 20, the respondent requested allotment of a specific registration number, MP-KL-4646. The registering authority rejected this request on the ground that the respondent had not paid the fee prescribed under Rule 55A for reservation of such a number. Instead, an alternative registration number was allotted, which the respondent declined to accept.

Aggrieved, the respondent approached the High Court of Madhya Pradesh by filing a writ petition, challenging the constitutional validity of Rule 55A. The principal contention was that the power to levy fees in connection with registration vested exclusively with the Central Government under Section 41(2) of the Act. It was argued that the State could not impose an additional fee for allotment of registration numbers, as this amounted to a colourable exercise of power.

The High Court accepted the argument and struck down Rule 55A as ultra vires, directing the registering authority to allot the desired number without insisting on payment of the fee. The State of Madhya Pradesh, along with other authorities, appealed to the Supreme Court, contending that the High Court had misconstrued the statutory scheme and ignored the enabling provisions of Sections 65 and 211.

E) LEGAL ISSUES RAISED

i. Whether Rule 55A of the Madhya Pradesh Motor Vehicles Rules, 1994 is ultra vires the Motor Vehicles Act, 1988?
ii. Whether the State Government is competent to levy fees for reservation of specific registration numbers under Section 211 of the Act?
iii. Whether the field of prescribing fees for vehicle registration is exclusively occupied by the Central Government under Section 41(2)?
iv. Whether reservation of special registration numbers constitutes a distinct service justifying levy of fees?

F) PETITIONER / APPELLANT’S ARGUMENTS

The counsels for the appellants submitted that the High Court failed to appreciate the true scope of Sections 65 and 211 of the Act. It was contended that while the Central Government prescribes fees for registration applications, the State Government retains authority to regulate the manner of assignment of registration marks. The appellants argued that reservation of specific numbers involves administrative effort and constitutes a service distinct from ordinary registration.

Reliance was placed on judicial precedents emphasizing that delegated legislation framed under a general rule-making power is valid unless it transgresses the parent statute. It was further submitted that Section 211 operates as a residual provision enabling levy of fees for services rendered, even in the absence of express authorization.

G) RESPONDENT’S ARGUMENTS

The counsels for the respondent submitted that the Act creates a complete code with respect to registration and fees. It was argued that Section 41(2) exhaustively covers the subject of registration fees, leaving no scope for State intervention. The respondent contended that allotment of registration numbers is an integral part of registration, and the State cannot artificially segregate this process to impose additional financial burdens.

The doctrine of expressio unius est exclusio alterius was invoked to argue that express provisions empowering States to levy fees in limited circumstances implied exclusion in other cases. The respondent supported the High Court’s reasoning that Rule 55A amounted to impermissible encroachment upon Central legislative power.

H) JUDGMENT 

The Supreme Court allowed the appeal and set aside the High Court’s judgment. The Court held that the High Court erred in construing Section 211 narrowly and in assuming that the Central Government’s power under Section 41(2) excluded all State authority. The Court observed that Section 211 is deliberately framed in wide terms to empower both Central and State Governments to levy fees for services rendered in the discharge of statutory functions.

The Court reasoned that assignment and reservation of registration numbers is not a mechanical or trivial act. It involves administrative discretion, policy considerations, and catering to public demand. The State is entitled to regulate this process and to recover reasonable fees for providing such optional services. The Court further held that Rule 55A does not conflict with the Central Rules, nor does it amount to repugnancy under Article 254 of the Constitution, as it operates within the framework of the parent Act.

a. RATIO DECIDENDI

The power of the State Government to levy fees for reservation and allotment of specific registration numbers flows from the combined reading of Sections 65(1) and 211 of the Motor Vehicles Act, 1988. Reservation of special registration numbers constitutes a distinct service, separate from the basic act of registration, and therefore justifies levy of fees. The enumeration of specific powers in Section 65(2) is illustrative and does not curtail the general rule-making authority conferred by Section 65(1).

b. OBITER DICTA

The Court observed that socio-cultural practices, such as preference for auspicious numbers, cannot be ignored by the State while framing regulatory measures. The availability of such choices, when regulated transparently and reasonably, enhances administrative efficiency and public satisfaction.

c. GUIDELINES

i. Fees levied under delegated legislation must correspond to services rendered.
ii. Residual provisions like Section 211 must be interpreted broadly to fulfill legislative intent.
iii. Courts should avoid readily inferring repugnancy between Central and State laws and must strive for harmonious construction.

I) CONCLUSION & COMMENTS

The judgment reinforces the principle that delegated legislation must be interpreted in light of functional realities and legislative intent. By upholding Rule 55A, the Supreme Court clarified the distinction between mandatory statutory fees and optional service charges. The ruling strengthens cooperative federalism by recognising the complementary roles of Central and State authorities under a unified statutory framework. It also provides clarity on the scope of residual fee-levying powers, thereby offering guidance for future regulatory measures across States.

J) REFERENCES

a. Important Cases Referred
i. Offshore Holdings (P) Ltd. v. Bangalore Development Authority, (2011) 3 SCC 139
ii. Sarkari Sasta Anaj Vikreta Sangh v. State of M.P., (1981) 4 SCC 471
iii. Academy of Nutrition Improvement v. Union of India, (2011) 8 SCC 274

b. Important Statutes Referred
i. Motor Vehicles Act, 1988
ii. Central Motor Vehicles Rules, 1989