# ASSOCIATION OF REGISTRATION PLATES v. UNION OF INDIA AND ORS

- **Citation:** [2004] Supp. 6 S.C.R. 496
- **Court:** Supreme Court of India
- **Decided:** 2004-11-30
- **Bench:** Y.K. Sabharwal, D.M. Dharmadhikari, Tarun Chatterjee
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/association-of-registration-plates-v-union-of-india-and-ors-20377
- **Pages:** 34

## Headnote

Motor Vehicles Act, 1988/Motor Vehicle Rules, 1989/Motor Vehicles
(New High Security Registration Plates) Order 2001-Section 109(3)/Rule
C 50/Para4(x)--Constitution of India, 1950-Artic/es 14and19(J)(g)-Scheme
of High Security Registration Plates-Amen<iment of Rule 50 and passing
of 2001 order-Notices Inviting Tenders-By State Governments~Tender
conditions requiring tenderer having certain experience and having certain
financial capacity and the contract was to be for I 5 years-Contract to be
D given to single manufacturer-Conditions and the Order challenged before
High Courts and this Court-Petitions transferred to this Court from High
Courts-Held: Tender conditions are not violative of Articles I 4 and I 9(1 )(g)
of the Constitution-Conditions requiring experience in the field and quantum
of business turnover in view of nature of contract and job involved cannot
be said to be intended to keep out indigenous manufacturers and to favour
E parties having foreign collaborations as no mala fide intention could be
inferred on the part of tendering Authority-Selection of one manufacturer
through open competition cannot be said to be act of creating monopolyAward of contract for a long period of I 5 years is also justified in view of
nature of job and huge investment involved therein-The statutory Order
F of 2001 and Clause 4(x) thereof cannot be held to be beyond the purview
of Section 109(3) and the same could be issued under the Section as an aid
to fulfillment of provisions of High Security Registration Plates contained
in Rule 50.
Central Government devised a scheme of High Security Registration
G Plates. Consequently Rule 50 of Motor Vehicle Rules, 1989 was amended
to the effect that it required manufacture of Registration Plates of nonreusable and non-replaceable nature, technical specifications of the _ .
Plates would be such as to make the identification and tracking of the
vehicle easier and certain, the Plate with specified technical features was
H to be issued under Government control and supervision. The
496
ASSON. OF REGISTRATION PLATES v. U.0.1.
497
imp_lementation of the Rule required co-operation and coordination A
between the Authorities of the State and the manufacturer of Registration
Plates. Central Government also issued Motor Vehicle (New High
Security Registration Plates) Order, 2001 under Section 109(3) of Motor
Vehicles Act, 1988. After a series of meeting between the Union, States
and Union Territories on introduction of the new Scheme, Union laid
down guidelines for incorporating necessary conditions in the Notices
Inviting Tenders to be issued by various States. On the guidelines and
pursuant to joint deliberations between the officials of Union, States and
B
the manufacturers, several States issued Notices Inviting Tenders which
intera/ia contained conditions for tenderers or any of the members of
joint venture ~iz. (1) Experience of at least in 5 countries for license C
plates and in a minimum of 3 countries with license plates having
security features world-wide and should furnish "Type Approved
Certificate" from "Testing Agencies"; (2) Having a minimum annual
turnover equivalent to INR 30 crores and at least 25% of the turnover
was required to be from the license plate business; (3) and the contract D
would be for 15 years.
Petitioners filed petitions in different High Courts challenging
terms and conditions of the Notices Inviting Tenders. Writ Petitions
were also filed in this Court. All the Writ Petitions filed before High
Courts have been transferred to this Court.
E
Petitioners contended that tender conditions were violative of
fundamental right of trade under Article 19(1)(g) and discriminatory
under Article 14 of the Constitution; that the conditions have been tailor
made to favour companies having foreign collaboration and for a cartel F
companies and aimed at excluding indigenous manufacturers from the
tender process that entrusting of the work to a single license plates
manufacturer for a

## Text

_Characters 0–39,769 of 79,517. This is a partial read: ask again with offset=39769 for what follows._

A
B
ASSOCIATION OF REGISTRATION PLATES
v.
UNION OF INDIA AND ORS.
NOVEMBER 30, 2004
[Y.K. SABHARWAL, D.M. DHARMADHIKARI AND
TARUN CHATTERJEE, JJ.]
Motor Vehicles Act, 1988/Motor Vehicle Rules, 1989/Motor Vehicles
(New High Security Registration Plates) Order 2001-Section 109(3)/Rule
C 50/Para4(x)--Constitution of India, 1950-Artic/es 14and19(J)(g)-Scheme
of High Security Registration Plates-Amen<iment of Rule 50 and passing
of 2001 order-Notices Inviting Tenders-By State Governments~Tender
conditions requiring tenderer having certain experience and having certain
financial capacity and the contract was to be for I 5 years-Contract to be
D given to single manufacturer-Conditions and the Order challenged before
High Courts and this Court-Petitions transferred to this Court from High
Courts-Held: Tender conditions are not violative of Articles I 4 and I 9(1 )(g)
of the Constitution-Conditions requiring experience in the field and quantum
of business turnover in view of nature of contract and job involved cannot
be said to be intended to keep out indigenous manufacturers and to favour
E parties having foreign collaborations as no mala fide intention could be
inferred on the part of tendering Authority-Selection of one manufacturer
through open competition cannot be said to be act of creating monopolyAward of contract for a long period of I 5 years is also justified in view of
nature of job and huge investment involved therein-The statutory Order
F of 2001 and Clause 4(x) thereof cannot be held to be beyond the purview
of Section 109(3) and the same could be issued under the Section as an aid
to fulfillment of provisions of High Security Registration Plates contained
in Rule 50.
Central Government devised a scheme of High Security Registration
G Plates. Consequently Rule 50 of Motor Vehicle Rules, 1989 was amended
to the effect that it required manufacture of Registration Plates of nonreusable and non-replaceable nature, technical specifications of the _ .
Plates would be such as to make the identification and tracking of the
vehicle easier and certain, the Plate with specified technical features was
H to be issued under Government control and supervision. The
496
ASSON. OF REGISTRATION PLATES v. U.0.1.
497
imp_lementation of the Rule required co-operation and coordination A
between the Authorities of the State and the manufacturer of Registration
Plates. Central Government also issued Motor Vehicle (New High
Security Registration Plates) Order, 2001 under Section 109(3) of Motor
Vehicles Act, 1988. After a series of meeting between the Union, States
and Union Territories on introduction of the new Scheme, Union laid
down guidelines for incorporating necessary conditions in the Notices
Inviting Tenders to be issued by various States. On the guidelines and
pursuant to joint deliberations between the officials of Union, States and
B
the manufacturers, several States issued Notices Inviting Tenders which
intera/ia contained conditions for tenderers or any of the members of
joint venture ~iz. (1) Experience of at least in 5 countries for license C
plates and in a minimum of 3 countries with license plates having
security features world-wide and should furnish "Type Approved
Certificate" from "Testing Agencies"; (2) Having a minimum annual
turnover equivalent to INR 30 crores and at least 25% of the turnover
was required to be from the license plate business; (3) and the contract D
would be for 15 years.
Petitioners filed petitions in different High Courts challenging
terms and conditions of the Notices Inviting Tenders. Writ Petitions
were also filed in this Court. All the Writ Petitions filed before High
Courts have been transferred to this Court.
E
Petitioners contended that tender conditions were violative of
fundamental right of trade under Article 19(1)(g) and discriminatory
under Article 14 of the Constitution; that the conditions have been tailor
made to favour companies having foreign collaboration and for a cartel F
companies and aimed at excluding indigenous manufacturers from the
tender process that entrusting of the work to a single license plates
manufacturer for a long period of 15 years was against public interest
depriving the consumers from the benefit of competitive market and the
same created monopoly in favour of selected bidders to the complete
exclusion of all others in the field for a long period; that para 2 of Rule G
50(1)(v) did not contemplate selection of sole manufacturer for a State
or Region; and that para 4(x) of Order, 2001 is ultra vires Section 109(3)
of the Act.
Union States and contesting manufacturers contended that the H
498
SUPREME COURT REPORTS (2004] SUPP. 6 S.C.R.
A tender conditions were formulated keeping into account public interest
aspects of high security so as to eliminate newly floated companies; that
in selecting suitable manufacturer; his capability and capacity to invest
and build necessary infrastructure had to be assessed in order ensure
that the Scheme became operationable from the targeted date and the
B same remained operational for a longer period; that selection of single
manufacturer was justified and was in public interest as it would ensure
security aspect because plates were required to be issued on the premises
of RTO and involvement of multiple manufacturers would not result in
satisfactory implementation of the Scheme; that long term contract was
necessitated in order to fix liability on the manufacturer and make him
C answerable and also because it required huge investment. and the
investment of such infrastructure required recovery over a long duration
by way of supply; that if the contract period were lowered the cost of
Plate might go up as the huge investment would be required to be
recovered in a shorter period; and that selecting an approved
D manufacturer through open tender to discharge the statutory duty of
RTO was not an act of the State creating monopoly of any private party.
Dismissing the petitions, the Court
HELD: 1.1. The State as the implementing Authority has to ensure
E that scheme of High security plates is effectively implemented. Keeping in
view the enormous work involved in switching over to new plates within
two year for existing vehicles of such large number in each State, resort to
'trial and error' method would prove hazardous. Its concern to get the
right and most competent person cannot be questioned. It has to eliminate
F manufacturers who have developed recently just to enter into the new
field. The insistence of the State to search for an experienced manufacturer
with sound financial and technical capacity cannot be misunderstood.
The relevant terms and conditions are so formulated to enable the State
to adjudge the capability of a particular tenderer who can provide a fail
- safe and sustainable delivery capacity. Only such tenderer has to be
G selected who can take responsibility for marketing, servicing and providing
continuously the specified plates for vehicles in large number firstly in
initial two years and annually in the next 13 years. The manufacturer
chosen would, in fact, be a sort of an agent or medium of the RTOs
, concerned for fulfillment of the statutory obligations on them of providing
H high security plates to vehicles in accordance with Rule 50. Capacity and
-
..
ASSON. OF REGISTRATION PLATES v. U.O.I.
499
capability are two most relevant criteria for framing suitable conditioins A
of any Notices Inviting Tenders. [519-F, G, H; 520-A, BJ
1.2. It is true that many indigenous manufacturers are in a position
to supply the plates on the basis of technical assistance available in and
outside the country. There are many tenderer who possess Type Approval B
Certificates but to ensure major quantity of supply in initial two years
and periodical supply for new vehicles for long period, only a
manufacturer who is sound both technically and financially is required.
Technically and financially, competent indigenous manufacturers are
mostly those who are in collaboration with foreign companies engaged
in such manufacturing activities. The scheme contemplated under Rule C
50 of registration plates is a new experiment for India. In the initial
stages of its implementation, tender conditions encouraging such
manufacturers who are in foreign collaborations cannot be held to be
discriminatory to indigenous manufacturers. Keeping in view the nature
of the contract and job involved particlarly its magnitude and the huge D
investment for infrastructure required, attempt to select such
manufacturer-may be having collaboration with foreign companies and
experience in foreign countries, cannot be held to be a deliberate attempt
on the part of the State Authorities to eliminate indigenous
manufacturers. [520-E, F, G, H; 521-A, BJ
Association of Registration Plates v. Union of India and Ors., [2004J
5 sec 364, referred to.
1.3. Unless the action of tendering Authority is found to be malicious
E
and misuse of its statutory powers, tender conditions are unassailable. F
On intensive examination of tender conditions, it is seen that they do not
violate the equality clause under Article 14 or encroach on fundamental
rights ofa class of intending tenderer under Article 19 of the Constitution.
There is no material on record to infer any ma/a fide design on the part
of the tendering Authority to favour parties having foreign collaborations
and keep out of fray indigenous manufacturers. Merely because few G
manufacturers like the petitioners do not qualify to submit tender, being
not in a position to satisfy the terms and conditions laid down, the tender
conditions cannot be held to be discriminatory. [521-C; 523-A, DJ
1.4. Selecting one manufacturer through a process of open H
500
SUPREME COURT REPORTS [2004] SUPP. 6 S.C.R.
A competition is not creation of any monopoly, in violation of Article
19(l)(g) of the Constitution read with clause (6) of the said Article. The
implementation involves large network of operations of highly
sophisticated materials. Maintenance of record by one and supervision
-
over its activity would be simpler for the State ifthere is on manufacturer
B instead of multi-manufacturers as suppliers. The actual operation of the
Scheme though the RTOs in their premises would get complicated and
confused if multi-manufacturers are involved. That would also seriously
impair the high security concept in affixation of new plates on the
vehicles. If there is a single manufacturer he can be forced to go and
c
serve rural areas with thin vehicular population and less volume of
business. Multi-manufacturers might concentrate only on urban areas
with higher vehicular population. [521-G, H; 522-A, B, CJ
1.5. Looking to the huge investment required and the nature of the
job which is most sophisticated requiring network and infrastructure,
D a long term contract, found viable and feasible, cannot be faulted by the
Court. If there are two alternatives available of giving a short-term or
a long-term contract, it is not for the Court to suggest that the shortterm contract should given. On the subject business management,
expertise is available with the State Authorities. The policy has been
E
chalked out and the tender conditions have been formulated after joint
deliberations of Authorities of the State and the intending manufacturers.
Contract providing technical expertise, financial capability and
experience qualification with a long term of 15 years would serve a dual
purpose of attracting sound parties to stake their money in undertaking
the job of supply and safeguard public interest by ensuring that for a
F long period the work of affixation of security plates would continue
uninterrupted fulfillment of the object of the Scheme contained in
Rule 50. [522-E, F, G]
1.6. Article 14 of the Constitution prohibits the Government from
G
arbitrarily choosing a contractor at its will and pleasure. It has to act
reasonably, fairly and in public interest in awarding contract. At the
same time, no person can claim fundamental right to carry on business
~
with the Government. All that he can claims that in competing for the .
contract, he should not be unfairly treated and discriminating to the
detriment of public interest. Government contracts are highly valuable
H assets and the Courtshould be prepared to enforce standards of fairness
' .
ASSON. OF REGISTRATION PLATES v. U.0.1.
501
on Government in its dealings with tenderers and contractors. [523-F, G] A
1.7. In interpreting Para 2 of Rule 50(1)(v) the object of the Scheme
providing for affixation of high security plates has to be kept in view.
Where the RTO himself is not making the supply of plates, an approved
registration plate manufacturer can be selected for supply. The legal B
obligation on the registering Authority under Rule 50(1)(v) to issue
specified kinds ofregistration plates implies issuance of such registration
plates through a selected approved plate manufacturer. Paragraph 2 of
Clause (v) of Rule 50(1), if reasonably construed, does not indicate any
prohibition of selection of an approved plate manufacturer for assisting
the registering Authority to implement the Scheme of affixation of high C
security registration plates to existing vehicles and new vehicles. Such an
interpretation fulfils the object of the Scheme. The interpretation sought
to be placed by the petitioners on the said para of the rule would result in
frustrating the high security aspect and object of the Scheme of affixation
of high security registration plates on vehicles. [525-D, E, F]
D
2. In the context of Section 109(3) of the Act, an article to be affixed
to the motor vehicle like a high security registration plate is ·covered by
the use of expression "any article or process used by a manufacturer".
The expression 'any article or process used by a manufacturer' has to be
construed 'in the context' as not to restrict the expression 'manufacturer'
to only manufacturer of motor vehicles as defined under Section 2(21A)
of the Act. The definition in the Act has to be construed according to the
'context' and if the 'context' otherwise indicates, a meaningful
interpretation is to be given to the words 'any article or process used by
any manufacturer' as used in Section 109(3). Registration plates are not
manufactured by the manufacturer of motor vehicles but for maintenance
and operations of motor vehicles, registration plates are necessary.
Therefore, manufacturer ofregistration plates can be subjected.to certain
standards by a statutory order to be notified and published in accordance
E
F
with Section 109(3). Any restrictive interpretation of the said sub-section G
is neither called for from the language of the sub-section nor the object of
the provision. The statutory Order of2001 and clause 4(x) thereof cannot
be held to be beyond the purview of Section 109(3). Clause 4(x) of the
statutory Orderof2001, could be issued under Section 109(3), as an aid to
the fulfillment of provisions of high security registration plates contained
in Rule 50. Such power of the State to issue order containing clause 4(x) H
502
SUPREME COURT REPORTS [2004] SUPP. 6 S.C.R.
A is not only supported by Section 109(3) but by Rule 50 itself. Clause 4(x)
of the statutory order of2001 is merely enabling one and re-states what
Rule 50 contemplates. The statutory Order including clause 4(x) can be
supported as having been issued in exercise of executive power of the
Central Government which is co-extensive with its legislative power.
B
(528-B, C, D, E, F, G, HJ
Krishnan Kakkanth v. Govt. of Kera/a, (1997) 5 SCC 495; Ugar Sugar
Works Ltd. v. Delhi Administration and Ors., (2001) 3 SCC 635; MR.F.
Ltd v. Inspector Kera/a Govt. and Ors., (1998) 8 SCC 227; Air India v.
Cochin International Airport Ltd, (2000) 2 SCC 617 and Asia Foundation
C and Construction Ltd v. Trafalgar House Construction Ltd., [1997) 1 SCC
738, referred.
D
E
CIVIL ORIGINAL JURISDICTION: Writ Petition (C) No. 41 of2003.
Under Article 32 of the Constitution of India.
WITH
W.P. (C) No. 24/2003, T.C.(C) Nos. 3031, 32, 38, 39-40, 41., 42, 62/
2003, W.P. (C) Nos. 56, 395, 77 of 2003.
Mohan Parasaran, Additional Solicitor General, Gopal Subramanium,
R.F. Nariman, Harish N. Salve, T.L.V. Iyer, S. Balakrishanan, Vivek K.
Tankha, Hiren Uppal, Abhishek Agrawal, Ms. Sarika Varma, Ms. Liz Mathew,
Ms. Indu Malhotra, Vikram Mehta, Rakesh K. Sharma, K.V. Vijay Kumar,
Navin Prakash, Ms. Sandhya Goswami, B.K. Prasad, S.W.A. Qadri, Mrs.
F Anil Katiyar, Saket Singh, Anil Aggarwalla, Prashant Kumar, Joseph
Pookkatt, Rein Karanjawala, Ms. Ruby Singh Ahuja, Arunabh Choudhary,
Ms. Niharika, Sarvesh Singh, Ms. Manik Karanjawala, B.B. Singh, V.G.
Pragasam, S. Prasad, Abhay Kumar, Ms. U. Hazarika, Ms. Sumita Hazarika,
Avatar Singh Rawat, Additional Advocate General for State of Uttaranchal
G Baldev Atreya, Jatinder Kumar Bhatia, Arun K. Sinha, Rakesh Singh, Ashok
Bhan, D.S. Mabra, Ms. Sunita Sharma, Bijan K. Ghosh, Rana Mukherjee,
Siddharth Gautam, Suchit Mohanty, Pawan Kumar, Sanjay K. Verma,
Goodwill Indeever, Ranjan Mukherjee, P.N. Ramalingam, Praveen Swarup,
Ashok K. Mahajan, Mrs. Sarla Chandra, Vishwajit Singh, B.S. Banthia,
Avijit Battacharjee, Ms. Rachna Gupta, Anis Suhrawardy and Vijay Kumar
H for the appearing parties.
ASSON. OF REGISTRATION PLATES v. U.0.1. [DHARMADHIKARI, J.] 503
The Judgment of the Court was delivered by
DHARMADHIKARI, J. : The present writ petition along with the
cases transferred from various High Courts have been placed before this
Bench on a difference of opinion between Hon'ble Judges~,onstituting the
A
Division Bench.
B
The dispute concerns the terms and conditions of Notices Inviting
Tenders [NITs] for supply of High Security Registration Plates to motor
vehicles. The tenders have been issued by various State Governments on the
guidelines circulated by the Central Government for implementing the
provisions of Motor Vehicles Act, 1988 (hereinafter referred to as 'the Act') C
and the newly amended Central Motor Vehicles Rules, 1989 (hereinafter
referred to as 'the Rules').
The main grievance of the petitioner is that all Notices Inviting Tenders
(NITs) which have been issued by various State Governments contain
conditions which seem to have been tailored to favour companies having
t
foreign collaboration. The tender conditions
are described to be
discriminatory under Article 14 of the Constitution of India being aimed at
excluding indigenous manufacturers from the tender process. In all the
cases the grievance is that the work of supply of High Security Registration
Plates for all existing vehicles and new vehicles is being entrusted to a
single license plates manufacturer in a State or a region and for a long period
of 15 years thus creating monopoly in favour of selected bidders to the
complete exclusion of all others in the field. The contention advanced is
that creation of monopoly in favour of few parties having connection with
foreign concerns is violative of fundamental right .of trade under Articles
19 ( l) (g) and discriminatory under Article 14 of Constitution of India.
A survey of the relevant provisions of the Act and Rules continuing
the Scheme of High Security Registration Plates is necessary for considering
the merit of the petitioners' grievances.
D
E
F
0
The object of the new scheme is to curb the increasing menace of
vehicle thefts and their usage in commission of crimes like murder, dacoity,
kidnapping etc. It is felt urgent to check usage of motor vehicles in terrorists
activities. The Central Government on the recommendation of its Technical
Committee has devised a system of High Security Registration Plates which H
504
SUPREME COURT REPORTS (2004] SUPP. 6 S.C.R.
A will ensure public safety and security. With the above purpose, Rule 50 of
the Motor Vehicles Rules has been amended. Rule 50 was first amended on
28.03.2001, then on 24.09.2001 and lastly on 21.01.2003 w.e.f. 01.01.2004.
The relevant part of the rule in its amended form reads as under:
B
c
D
E
F
G
H
"Rule 50- Form and manne1' of display of registration marks on the
motor vehicles - (1) On or after commencement of this rule, the
registration mark referred to in sub-section ( 6) of Section 41 shall
be displayed both at the front and at the rear of all motor vehicles
clearly and legibly in the form of security license plate of the
following specifications, namely: -
(i)
the plate shall be a solid unit made of 1.0 mm aluminium
conforming to DIN 1745/DIN 1783 or ISO 7591. Border edges and
corners of the plate shall be rounded to avoid injuries to the extent
of approx. 10 mm and the plates must have an embossed border.
The plate shall be suitable for hot stamping and reflective sheet has
to be guaranteed for imperishable nature for minimum five years.
The fast colouring oflegend and border to be done by hot stamping;
(ii) the plate should bear the letters "IND" in blue colour on the
extreme left center of the plate. The letter should be one fourth of
the size of letters mentioned in rule 51 and should be buried into
the foil or applied by hot stamping and should be integral part of
the plate;
(iii) each plate shall be protected against counterfeiting by applying
chromium-based hologram, applied by hot stamping. Stickers and
adhesive labels are not permitted. The plate shall bear a permanent
consecutive identification number of minimum seven digits, to be
laser branded into a reflective sheeting and hot stamping film shall
bear a verification inscription;
(iv) apart from the registration marks on the front and rear, the
third registration mark in the form of self destructive type, chromium
based hologram sticker shall be affixed on the left hand top side
of the windshield of the vehicle. The registration details such as
registration number, registering authority, etc., shall be printed on
the sticker. The third registration mark shall be issued by the
ASSON. OF REGISTRATION PLATES v. U.O.I. [DHARMADHIKARI, J.] 505
registering authorities/approved dealers of the license plates A
manufacturer along with the regular registration marks, and thereafter
if such sticker is destroyed it shall be issued by the license plate
manufacturer or his dealer;
(v) the plate shall be fastened with non-removable/non-reusable
snap lock fitting system on rear of the vehicle at the premises of B
the registering authority; The licence plates with all the above
specifications and the specified registrations for a vehicle shall be
issued by the registering authority or approved the licence plates
manufacturers or their dealers. The Central Road Research Institute,
New Delhi or any of the agency authorized by the Central C
Government shall approve the license plates manufacturers to the
above specification;
(vi)
the size of the plate for different categories of vehicles shall
be as follows:-
For two and three wheelers
For light motor vehicles and
Passenger cars
For medium commercial vehicles
Heavy commercial vehicles and
Trailer/combination
200 x 100 mm
340 x 200 mm/
500 x 120 mm
340 x 200 mm
Provided that this sub-rule shall apply to already registered vehicles
D
E
two years from the date of commencement:
F
Provided further that the size of the registration plates for agricultural
tractors shall be as follows:-
Front -
Rear -
285 x 45 mm
200 x 100 mm
2 to 6 ...................................................... .
[Underlining for pointed attention]
G
The rule .in the above manner requires manufacture of such registration H
506
SUPREME COURT REPORTS [2004] SUPP. 6 S.C.R.
A
plates which would be non-reusable and non-replaceable. The technical
specifications of the registration plates are such as to make identification
of the vehicle and its tracking easier and certain. The other requirements
contained in Rule 50 'are that apart•from regulating the aspect of issuing
registration mark with use of specific kinds of letters and numerals, it seeks
B to ensure its safety and security by regulating issuance and fixation of
number plate from the premises of the Regional Transport Office of the
concerned area. The RTO will issue registration number and also issue the
plate itself. Thus a high security number plate with specified technical
features is to be issued under Governmental control and supervision. The
c
D
E
F
G
H
Scheme contained in Rule 50 substitutes the existing system where the
registration number was given by the RTO and ordinary plate obtained from
the open market. The implementatiop of the rule requires cooperation and
coordination between the authorities of the State and the manufacturer of
registration plates.
The source of power for providing Scheme of High Registration
Plates by Rule 50 is traceable to Rule Making Power of Central Gov,ernment
contained in Section 64, clauses (a) to (e) of the Act which read as under:-
"Section 64, Power of Central Govt. to make rules. - The Central
Government may make rules to provide for all or any of the
following matter namely :-
(a) the period within which and the form in which an application
shall be made and the documents, particulars and information it
shall accompany under sub-section (I) of Section 41;
(b) the form in which the certificate of registration shall be made
and the particulars and information it shall contain and the manner
in which it shall be issued under sub-section (3) of Section 4 I;
(c) the form and manner in which the particulars of the certificate
of registration shall be entered in the records of the registering
authority under sub-section (5) of Section 41;
(d) the manner in which and the form in which the registration
mark, the letters and figures and other particulars referred to in sub.:
section ( 6) of Section 4 I shall be displayed and shown;
ASSON. OF REGISTRATION PLATES v. U.0.1. [DHARMADHIKARI, J.] 507
(e) the period within which and the form in which the application A ~
shall be made and the particulars and information it shall contain
under sub-section (8) of Section 41
(f)
to (o) ............................. .
The Central Government has also issued the Motor Vehicles (New
High Security Registration Plates) Order, 200 I in purported exercise of
power under sub-section (3) of Section 109 of the Act. The relevant parts
of the order of 2001 contained in sub-clauses (viii) to (xiv) read as under:-
"(i) to (vii) ............... .
(viii) The registration plates fitted in the rear of the vehicles shall
be fastened with non-removable/non-resuable snap lock system.
For the sake of better security, at least two such snap locks shall
B
c
be fitted.
D ·
(ix) No high security plate shall be affixed outside the premises of
the registering authority.
(x) The manufacturer or the vendor selected by the State Transport E
Department for supply of such registration plates may be for the
State as a whole or for any region of the State.
(xi) The registration plate will be supplied to the motor vehicle
owners by the vendor against the authorization by the Road Transport
Officer or any other designated for the purpose by the State Transport
Department.
(xii) The replacement for any existing registration plate may be
n~ade by the concerned transport authority only after ensuring that
the old plate has been surrendered and destroyed.
(xiii) A proper record of the registration plates issued by the
manufacturer or the vendor, authorized by the State Government,
should be maintained on a daily basis and got tallied periodically
with the records of the Transport Office.
F
G
H
A
B
c
D
E
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SUPREME COURT REPORTS [2004] SUPP. 6 S.C.R.
(xiv) Periodic audit shall be carried out by concerned; testing
agencies to ensure compliance of the requirements of the High
Security Registration Plates."
{Highlighted for emphasis}
According to the respondents, the source of power to issue the New
High Security Registration Plates Order, 2001 is to be found in sub-section
3 of Section 109. The petitioners have challenged the validity of the
Registration Plates Order, 2001 (hereinafter shortly referred to as Order of
2001) which according to them is beyond provisions of the Act and has no
legal efficacy.
The main features of the High Security Registration Plates as provided
in Rule 50 and the order of 2001 are as follows:-
1.
It provides for a solid aluminium plate.
2.
The plate should be suitable for hot stamping and would be
a reflective sheet.
3.
The plate should bear the letters "IND" in blue colour.
4.
It should have a chromium based hologram which shall also
be hot stamped.
5.
There would be third registration mark which would be selfreflective being a chromium based hologram sticker and which
F
would be affixed on the windshield of the vehicle.
6.
The plate on the rear shall be fastened with non-removable/
non-resuable snap lock fitting system
The above-mentioned features to the High Security Registration Plates
G have been insisted upon for the following reasons:-
H
1.
Hot Chromium based hologram would prevent counterfeiting.
2.
The ingress letter "IND" on the plate would secure national
identity and standardization.
•
ASSON. OF REGISTRATION PLATES v. u.o.i. [DHARMADHIKARI, J.) 509
3.
The laser etched 7 digits code to be given by the manufacturer. A
to each plate is with a view that there should be a sequential
identification ofindividual registration plate across the country.
4.
This would act as a watermark and not erasable by any
mechanical or technical process.
Snap lock to be fitted on the rear portions of the vehicle would
be temper proof. Any.,attempt to remove the plate would break
it.
5.
The reflective sheet of superior grade would be visible from
a minimum of 200 meters.
6.
The alpha-numeral would be easily readable and identifiable.
7.
On alpha-numeral border, ingress letters "IND" would prevent
painting and screen printing which would act as protection
and counterfeiting.
8.
The sticker to be affixed on the windshield would have 7 digit
laser code containing the engine number and the chassis
number. This was so designed to be self-destructive upon
removal.
After :k.ule 50 was amended and New High Registration Plates
(amendment) Order, 2001 was issued in purported exercise of power under
Section 109(3) of the Act. The Ministry of Road Transport and Highways
vide its letter dated 6.3.2002 circulated the minutes of meeting of 4.3.2001
B
c
D
E
held between the representatives of all States and Union Territories on F
introduction of the new system of the registration plates.
A series of
meetings were held by the Union with the States. Eventually, on 6.3.2002
the Union laid down guidelines for incorporating necessary conditions in
the Notices Inviting Tenders to be issued by the various States. In substance,
the guidelines suggest as follows:-
G
1.
The tender document would specify whether the appointment
of vendor was for the whole State or for certain parts.
2.
The tender document would specify the terms of the bank
guarantee.
H
A
B
510
SUPREME COURT REPORTS (2004] SUPP. 6 S.C.R.
3.
The tender document would require report back on certain
aspects on "a periodic and regular basis".
4.
The bidder must furnish proof of past experience/expertise in
this area or proof of the same with a collaborator.
NIT guidelines were later modified by letter dated 14.6.2002 sent by
the Ministry. It was suggested that the bidders may be asked to provide
details about the experience/capability of its collaborator to the satisfaction
of the State Authorities.
C
On 16.9.2002, meeting was held between officials of Ministry,
representatives of States/Union Territories and manufacturers of New
Registration Plats wherein several issues pertaining to the introduction of
the new system as well as the terms of NIT were discussed. The minutes
of the said meeting resulted in issuance of a clarificatory letter on 13.11.2002
D wherein it is reiterated that the guidelines are suggestive in nature. The main
features of the guidelines issued after due deliberations between Union and
States officials and the representatives of manufacturers are as follows:-
E
F
"The determination of the physical and financial capability of the
bidder was to be done by the State. A suggestion was voiced that instead
of tender process the market process should be given and all manufacturers
would obtain technical approval certificate for being allowed to sell their
product. This led to clarification by the Secretary of Road Transport and
Highways that the State Transport Authorities will have to exercise control
over issuance of registration plates. Representatives of certain States opposed
to free open market situation having large vehicular population of cities and
likelihood of successful tenderer neglecting the rural area having low vehicular
population."
The Ministry of Road Transport and Highways left the discretion to
the States in the matter of issuing NIT but reiterated security and rural
G concerns. On the guidelines given by Central Government and pursuant to
joint deliberations between the officials of the Union, States and the
manufacturers, several States issued Notices Inviting Tenders which led to
filing of petitions in the High Courts of several States. The petitioners have
challenged the terms and conditions of the NITs. All those cases have been
H transferred to this Court for decision along with the writ petitions directly
-I
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ASSON. OF REGISTRATION PLATES v. U.0.1. [DHARMADHIKARI, J.] 511
filed here. It is not necessary to reproduce all the conditions in various A
Notices Inviting tenders issued by different States. The gist of impugned
conditions in various NITs may be summerised as under:-
Condition (a) :Tenderer/bidder or the promoter or any of the members
of joint venture should have sufficient experience in the field ofr.egistration B
plates and should be working at least in 5 countries for license plates and
in a minimum of 3 countries with license plates having security features
world-wide (necessary credentials from the Government of such country
should be attached along with a performa as per annexure XIII duly filed
in). Apart from the above credentials the tenderer/bidder should furnish
"Type Approved Certificate" from Testing Agencies".
C
Condition (b) :The tenderers/bidders of the joint venture partners
together must have a minimum annual turnover equivalent to INR 30 crores
in the immediately preceding last year. At least 25% of this turnover must
be from the license plate business. Certificate confirming and the certification D
of the minimum 25% turnover being from licensed plates business will have
to be provided duly attested by a Chartered Accountant/any bank to be
attached in support of fulfillment of this condition.
Condition (c) : The conzract will be for a period of fifteen years
commencing from the date of commencement of the scheme. A detailed
agreement shall be entered into between the successful bidder and the
Government for a period of fifteen years and government ensures that no
second bidder will be approved during the currency of the contract in the
State except in the case of termination of the contract in view of the strictest
E
of adherence to High Security Features and to impose answerability on to F
the successful bidder. [Portions highlighted being under specific challenge]
We shall now take up for consideration the various submissions made
by the counsel appearing for the petitioners in assailing certain conditions
of the Notices Inviting Tenders issued by various States, provisions of the
Rule 50 and the statutory order of 2001 issued to implement the scheme Of G
High Security Registration Plates.
(1)
Challenge to the impugned tender conditiO.IJS.
_...
The learned counsel appearing for the petitioners submit tliat the three H
. ...
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SUPREME COURT REPORTS [2004] SUPP. 6 S.C.R.
A
conditions concerning experience and extent of business (the gist of which
has been mentioned above) contained in the Notices Inviting Tenders, are
per se discriminatory and unreasonable. They are apparently tailor-made to
sub-serve the business interests of a class of manufacturers having foreign
collaboration and for a cartel of companies. He further submitted that the
B above mentioned three clauses which are substantially same in all the NITs
issued by many of the States, make it mandatory for the bidders to enter into
collaboration with the foreign collaborators. It becomes a pre-condition to
participate in the bidding process. It envisages collaboration with few known
foreign companies in the field of manufacture which alone can satisfy the
tender conditions. It is known to tendering authorities that there are not
C more than 1 or 2 companies that could satisfy the stringent eligibility
conditions laid down in the NITs.
It is submitted that Rule 50 as amended has inbuilt safeguards to
ensure the technical competence of the prospective manufacturer and for
D 'controlled issuance ofregistration plates. The manufacturers can manufacture
the said plates only after it has got type approved certificate from one of
the autonomous certifying agencies. Supply of the plates to the vehicle users
can be made only after the grant of certificate of conformity of the standard
of the production. The States, therefore, can have no jurisdiction to decide
E
or declare any of the manufacturers as competent or incompetent with ·
respect to their technical competence.
To reinforce the challenge to the conditions and describing them as
highly unreasonable and resulting in complete exclusion of indigenous
manufacturers, it is submitted that at present, registration plates with specified
·p
security features are in use only in some of the countries which are much
smaller than India. They are Armenia, Columbia, Congo, Curacao, Ethiopia,
Georgia, Iraq, Mali, Malta Oman, Palastine, Sri Lanka, Tanzania, Uganda,
Uragua, and Zambia. The learned counsel argues that it is difficult to
understand as to how the experience of working in the above mentioned
G
small countries with a very small vehicular population would be of any help
as an experience for supplying registration plates for large vehicular
population oflndia whose needs and requirements are of far greater magnitude
and in no way comparable to the above mentioned small countries. The total
vehicular population of all above mentioned nations accumulated does not · .
match the vehicular population of Delhi alone. Indigenous manufacturers
H of High Security Plates can manufacture and supply registration plates on
ASSON. OF REGISTRATION PLATES v. U.O.l. [DHARMADHIKARI, J.] 513
their own strength by complying with all standards and in conformity with A
all norms laid down in Rule 50 without entering into collaboration with any
foreign partner.
It is contended that in the name of implementing the amended Rule
50, the States are imposing conditions in the tender that would take away, B
the existing rights of the manufacturers of plates in India. The implication
of conditions is that indigenous manufacturers, although capable of fulfilling
the requirements of Rule 50, are prohibited to do the business of manufacturing
and supplying the High Security plates. This violates their fundamental
right under Article 19 (l) (g) of the Constitution of India.
The further contention is that all security features for number plates
have been specified for the first time in India and, therefore, insistence on
possessing experience in five countries from the manufacturers is to eliminate
manufacturers of India. It is pointed out that as per the requirements of Rule
c
50 the plates are required to conform to DIN 1745/DIN 1783 or ISO 7591 D
standards (DIN of the German Standards and ISO of the World standards).
The other security features are the additional features. It is submitted that
these standards have been used to suit only one or two manufacturers.