Subsequent Purchaser’s Vehicle Registration Cannot Be Cancelled For Prior False Representation Through Forged Import Papers Claiming Diplomatic Duty Exemption: Bombay High Court Restores RC
Deekshitha Sharmile
The High Court of Bombay, Single Bench of Justice N.J. Jamadar has quashed the transport authorities’ orders cancelling the registration of an imported car and directed that the registration certificate be restored. The dispute concerned a vehicle whose initial registration was linked to forged import documents used to claim a duty exemption for a diplomatic import, after which the car was transferred to a subsequent purchaser. The purchaser later paid the customs duty, interest and redemption fine as determined in settlement proceedings, and the Court noted that these binding findings had to be considered. Holding that the purchaser should not face consequences of another’s fraud after complying with statutory liabilities, the Court found registration could not be cancelled solely on the basis of the original forgery.
A Nissan petrol car was initially registered in Manipur in the name of a private individual and later transferred to Mumbai. The petitioner purchased the vehicle for consideration and obtained registration in his name. Subsequently, it was discovered that the car had been fraudulently imported in the name of a diplomatic officer by availing customs duty exemption through forged documents. The Director of Revenue Intelligence seized the vehicle, and later the Customs authorities allowed provisional release subject to bond and bank guarantee.
The petitioner approached the Settlement Commission, which settled the customs duty, interest, and fine, and granted immunity from penalty and prosecution. The car was released after payment. Meanwhile, the Anti-Corruption Bureau registered offences against transport officials for registration based on forged documents and seized the vehicle again. The Special Judge ordered its return to the petitioner on bond. Later, the Regional Transport Officer issued notice proposing cancellation of registration under Section 55(5) of the Motor Vehicles Act, 1988. The registration was cancelled, and the appellate authority upheld the decision, holding that the registration was obtained on forged documents. The petitioner challenged these orders, contending that he was an innocent purchaser and had complied with customs obligations.
Justice N.J. Jamadar recorded: “There is not much controversy over the fact that the car was imported in the name of Mr. Jong Yong Ryong, a Diplomatic Officer, without payment of duty by availing the benefit of the customs duty exemption under Notification No.03/1957-Cus., dated 8 January 1957.”
The Court stated: “The seizure of the car first by DRI and then by ACB, is a matter of record. Likewise, the release of the car, pursuant to the orders of the Settlement Commission upon payment of penalty of Rs.5 lakhs, in view of the confiscation, and, return of the car to the Petitioner pursuant to the orders of the learned Special Judge in C.R.No.18 of 2023 are also not much in dispute.”
The Court observed: “Evidently, under sub-section (5) of Section 55, if the registering authority is satisfied that the registration of the vehicle has been obtained on the basis of the documents which were false in any material particular, or by making false representation of facts, the registering authority is empowered to cancel the registration, after providing an opportunity of hearing to the registered owner.” The Court recorded: “The observations of the Settlement Commission in paragraph Nos.7.14 and 7.15 assume critical salience.”
It held: “The Bench observes that it has been established by the investigation itself that all the documents pertaining to ownership of the car were forged by Rehman Iqbal Shaikh to sell the said vehicle to Shri Imran Chandiwala… Furthermore, the Bench notes that the vehicle was registered by the RTO in Mumbai bearing Registration No.MH-02/FL-8055 and the supporting documents included a NOC issued by the RTO, Manipur. In view of the above, normal precautions by way of prudence within means of any ordinary citizen were undertaken.”
The Court further quoted: “Thus, the Bench holds that Shri Imran Chandiwala is not liable to penalty under the provisions of Customs Act, invoked in the SCN.” The Court stated: “The registration of the vehicle in the name of the Petitioner could not have been cancelled on the sole premise that, the initial registration in the name of Meenarani Devi was obtained by making a false representation and on the basis of forged documents.”
The Court observed: “If the vehicle had changed hands and came to be registered in the name of an innocent purchaser who pays the customs duty, interest and fine, as ordered by the Settlement Commission, then the vehicle ought to be registered under the provisions of Section 40 of the Act, 1988, lest the consequences of fraudulent action would befall an innocent purchaser.”
The Court recorded: “It is not permissible to use a ‘sledge-hammer to crack a nut. As has been said many a time; ‘Where paring knife suffices, battle axe is precluded’.”
The Court held: “For the foregoing reasons, in the peculiar facts of the case, this Court is of the considered view that the dictate of command of justice warrants that the impugned orders be quashed and set aside and the certificate of registration restored. The Writ Petition, therefore, deserves to be allowed.”
“The impugned orders dated 9 September 2025 and 27 March 2025 cancelling the certificate of registration of the subject Vehicle stand quashed and set aside. Rule made absolute.”
Advocates Representing the Parties
For the Petitioners: Mr. Cherag Balsara i/by Mr. Yogesh Patil
For the Respondents: Mr. Abhishek Bhadang, AGP for State
Case Title: Imran Humayun Chandiwala vs The State of Maharashtra & Ors
Neutral Citation: 2025:BHC-AS:52534
Case Number: Writ Petition No.12921 of 2025
Bench: Justice N.J. Jamadar
