Unpaid traffic challans issued before October 1, 2020 cannot be used to block vehicle registration services, the Kerala High Court has held, ruling that Rule 167(7) of the Central Motor Vehicles Rules operates only prospectively.
Kochi: A 73-year-old car owner whose vehicle was flagged “NOT TO BE TRANSACTED” over unpaid speeding challans from 2015 to 2019 has won relief from the Kerala High Court, which held that the bar on processing registration applications under Rule 167(7) of the Central Motor Vehicles Rules, 1989 cannot be applied to challans issued before the rule came into force on October 1, 2020 [T.N. Arun Kumar v. Ministry of Road Transport and Highways and Others].
Justice Murali Purushothaman disposed of the writ petition on October 6, 2026, directing the Regional Transport Officer, Ernakulam, to process the petitioner’s application to cancel the hypothecation entry in his registration certificate within one month, without taking into account challans issued before October 1, 2020.
The blacklisted car
Petitioner T.N. Arun Kumar of Perumbavoor bought his car in 2015 under hypothecation to Bank of Baroda. After closing the loan, he applied to the Regional Transport Officer to remove the hypothecation entry, but was told the vehicle had been blacklisted because challans had remained unpaid for more than 90 days and his application could not be accepted.
He told the Court that he had already paid the compounding fees for challans issued after October 1, 2020, that the remaining challans related to alleged speed violations between 2015 and 2019, and that no prosecution or court proceedings were pending on them. A Ministry advisory of January 2, 2023 lists vehicles with challans pending beyond 90 days among those to be flagged “NOT TO BE TRANSACTED” on the VAHAN portal.
What Rule 167(7) says
Rule 167 was introduced by the Central Motor Vehicles (Eleventh Amendment) Rules, 2020, published on September 25, 2020 and brought into force from October 1, 2020. Sub-rule (7) provides that if a challan remains due beyond 90 days, except where prosecution has been instituted in court, applications relating to the offender’s licence or the vehicle’s registration shall not be processed, other than applications on permit, fitness and tax.
The Court’s reasoning
Relying on the Supreme Court’s rulings in Panchi Devi v. State of Rajasthan, Zile Singh v. State of Haryana and the Constitution Bench decision in CIT v. Vatika Township, the Court noted that subordinate legislation is ordinarily prospective and that a new liability or disability cannot be applied to past events without clear legislative intent. It found that before the amendment, a pending challan did not by itself bar processing of a registration application:
“It is trite law that a statutory provision imposing a new restriction must operate prospectively, unless a contrary legislative intention is either expressly stated or arises by necessary implication.”
Pointing to the express commencement date in the Amendment Rules, the Court concluded:
“Rule 167(7) being substantive law, operates prospectively as retrospectivity is not clearly made out by its language. Therefore, in the absence of a clear legislative intention to confer retrospective effect on Rule 167(7), the provision cannot be invoked to interdict the processing of applications for registration of motor vehicles merely on the ground that challans issued prior to 01.10.2020 remain pending against the applicants.”
The direction
The Regional Transport Officer, Ernakulam, was directed to receive and process the application for cancellation of the hypothecation entry in accordance with law, ignoring pending pre-October 2020 challans, as expeditiously as possible and in any event within one month of receiving a copy of the judgment. The judgment is marked for reporting.
Why the judgment matters
Many vehicle owners find routine transactions such as hypothecation removal, transfer of ownership or address change blocked on the VAHAN portal over old challans. The ruling draws a clear line: the Rule 167(7) bar applies only to challans issued on or after October 1, 2020. It does not wipe out older challans or any liability under them, but it stops authorities from using the post-2020 blocking mechanism to enforce them.
Case Title: T.N. Arun Kumar v. Ministry of Road Transport and Highways and Others
Case No.: WP(C) No. 27715 of 2026; 2026:KER:77134
Bench: Justice Murali Purushothaman, Kerala High Court
Date of Judgment: October 6, 2026
Appearances: Advocates Vipin Narayan and Ashwanth Padman for the petitioner; Government Pleader Sarath for the State respondents; Central Government Counsel Amal Parthasaradhy for the Ministry of Road Transport and Highways
