KARNATAKA HIRE PURCHASE ASSOCIATION Vs. COMMISSIONER FOR TRANSPORT IN KARNATAKA

JUDGEMENT

(1.) The writ petitions are filed by the Hire Purchase Association as also the private financiers challenging the Circular issued by the Transport Commissioner vide annexure dated 6.9.2010.

(2.) In the Circular it is noted that as per S. 51 of the Motor Vehicles Act, entries have been made in the RC Books in the usual course with regard to the vehicle owners who have purchased the vehicles on obtaining loan/financial assistance from nationalised banks and other financial institutions. How-ever, it is also expressed that some transport financiers and also private financiers are ex-tracting more interest and thus deceiving the vehicle owners. Referring to the provisions of the Money Lenders Act, 1961 and the Rules therein and also based on the letter of the Government dated 14.6.2010, the Com-missioner for Transport has issued the Cir-cular to various Regional Transport Officers directing the registering authorities to cross-check private financiers whether they are registered under the Karnataka Money Lend-ers Act and also whether they are charging interest in excess of the limit prescribed un-der the Exorbitant Interest Act on the money lent for the purchase of the vehicle and, only after securing the necessary documents in this regard, to make entry of the name of the fin-ancier in the RC Book, meticulously.

(3.) On the ground that the Circular dated 6.9.2010 issued by the Transport Commis-sioner to cross-check and to seek for all nec-essary documents from private financiers as to whether they have obtained money lend-ing license and whether they are charging interest on the money lent on the basis of the Money Lenders Act and the prohibition im-posed therein on charging excess interest, is illegal, the said Circular has been challenged by the Association of private money lend-ers. They are questioning their authority in insisting for all details before making entry of the names of the financier whether they are registered under the Money Lending Act or not or the rate of interest they are charg-ing.