The Kerala High Court has held that vehicle registration-related applications cannot be rejected under Rule 167(7) of the Central Motor Vehicles Rules, 1989, solely on the basis of pending traffic challans issued before October 1, 2020. The Court ruled that the provision, which introduced restrictions on processing certain applications when challans remain unpaid, cannot be applied retrospectively.
Justice Murali Purushothaman delivered the judgment while disposing of a writ petition filed by a 73-year-old vehicle owner who was unable to get the hypothecation entry removed from his vehicle's registration certificate.
Background
The petitioner, T. N. Arun Kumar, purchased a car in 2015 through a loan from Bank of Baroda, Perumbavoor Branch. After repaying the loan, he approached the Regional Transport Officer (RTO), Ernakulam, seeking cancellation of the hypothecation entry in the vehicle's registration certificate.
However, the RTO informed him that the vehicle had been blacklisted because certain traffic challans had remained unpaid for more than 90 days. As a result, his application could not be accepted.
Arun Kumar submitted that some of the pending challans related to alleged traffic violations between 2015 and 2019, before Rule 167 of the Central Motor Vehicles Rules came into force on October 1, 2020. He also stated that the compounding fees for the challans issued after the amendment had already been paid.
He argued that Rule 167(7) could not be applied retrospectively to impose a new restriction based on challans issued before the amended provision came into force.
The High Court examined Rule 167(7), which prevents licensing and registering authorities from processing specified applications relating to driving licences and vehicle registration when challans remain unpaid beyond the prescribed 90-day period, subject to certain exceptions.
The Court considered the Supreme Court's decisions in Panchi Devi v. State of Rajasthan and Commissioner of Income Tax (Central)-I, New Delhi v. Vatika Township Private Limited while examining whether the amended provision could operate retrospectively.
Referring to the principle laid down in Zile Singh v. State of Haryana & Ors., the Court noted:
"It is a cardinal principle of construction that every statute is prima facie prospective unless it is expressly or by necessary implication made to have a retrospective operation. But the rule in general is applicable where the object of the statute is to affect vested rights or to impose new burdens or to impair existing obligations. Unless there are words in the statute sufficient to show the intention of the Legislature to affect existing rights, it is deemed to be prospective only 'nova constitutio futuris formam imponere debet non praeteritis' a new law ought to regulate what is to follow, not the past."
The Court also referred to the Constitution Bench's decision in Vatika Township, which explained the principle against retrospective application of legislation:
"Of the various rules guiding how a legislation has to be interpreted, one established rule is that unless a contrary intention appears, a legislation is presumed not to be intended to have a retrospective operation. The idea behind the rule is that a current law should govern current activities. Law passed today cannot apply to the events of the past."
After examining these principles, the Court observed that Rule 167(7) introduced a restriction that did not exist before the amendment. Since the amended rules expressly came into force on October 1, 2020, and contained no clear intention to give the provision retrospective effect, the restriction could not be applied to challans issued before that date.
The Court further held that Rule 167(7), being a substantive provision, must operate prospectively.
The Kerala High Court directed the Regional Transport Officer, Ernakulam, to receive and process the petitioner's application for cancellation of the hypothecation entry in accordance with law, without taking into account the pendency of challans issued before October 1, 2020.
The Court directed the authority to complete the process as expeditiously as possible and, in any event, within one month from the date of receipt of a copy of the judgment.
Accordingly, the writ petition was disposed of.
Case Details
Case Title: T. N. Arun Kumar v. Ministry of Road Transport and Highways & Ors.
Case Number: W.P.(C) No. 27715 of 2026
Judge: Justice Murali Purushothaman
Decision Date: 6 October 2026
