ASSOCIATION OF REGISTRATION PLATES versus UNION OF INDIA AND ORS.

Citation: [2004] SUPP. 6 S.C.R. 496 · Decided: 30-11-2004 · Supreme Court of India · Bench: Y.K. SABHARWAL · Disposal: Dismissed

Judgment (excerpt)

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 monopoly-
Award 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 non-
reusable 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) 

Excerpt shown. Read the full judgment & AI analysis in Lexace.