Bombay High Court Restores Registration of Vehicle for Innocent Purchaser

Court Quashes Orders Cancelling Registration Due to Fraudulent Documents, Emphasizes Protection for Bona Fide Purchasers

In a significant decision, the Bombay High Court, presided over by Justice N.J. Jamadar, has overturned the cancellation of a vehicle registration obtained by an innocent purchaser, Imran Humayun Chandiwala, who was misled into buying a car with fraudulent import documentation. The case, "Imran Humayun Chandiwala v. State of Maharashtra," highlights the court's recognition of the rights of bona fide purchasers who act in good faith and fulfill legal obligations.

The judgment dated December 2, 2025, addressed the appeal against the cancellation of the registration of a Nissan petrol car, initially registered under false pretenses in the name of a diplomatic officer, which was subsequently sold to Chandiwala. Despite Chandiwala's payment of customs duty, interest, and fine, the registration was annulled by the authorities on the grounds of the original fraudulent documentation.

Justice Jamadar emphasized the importance of considering the findings of the Customs Settlement Commission, which had previously granted Chandiwala immunity from penalty and prosecution, acknowledging his bona fide actions. The High Court criticized the cancellation as disproportionate, underscoring the doctrine of proportionality in administrative decisions, which mandates that authorities consider less restrictive alternatives and avoid imposing undue burdens on innocent parties.

The court ordered the restoration of the vehicle's registration, reinforcing the principle that an innocent purchaser should not suffer the consequences of deceit by prior parties. This decision underscores the judiciary's role in balancing regulatory enforcement with individual rights, ensuring that justice prevails for those acting in good faith.

Bottom Line:

Registration of Motor Vehicle - Cancellation of registration obtained on basis of false documents - Innocent purchaser who has paid customs duty, interest and fine should not face consequences of fraudulent actions of others - Registration should be restored where fraud was committed by prior parties and purchaser acted in good faith.

Statutory provision(s): Motor Vehicles Act, 1988 Section 55(5), Customs Act, 1962 Section 127J, Motor Vehicles Act, 1988 Section 42(2), Code of Criminal Procedure, 1973 Section 457

Imran Humayun Chandiwala v. State of Maharashtra, (Bombay) : Law Finder Doc Id # 2816667