Special provisions regarding motor vehicle subject to hire-purchase agreement, etc
Section 51 of the Motor Vehicles Act, 1988 deals with special provisions regarding motor vehicle subject to hire-purchase agreement, etc. Where an application for registration of a motor vehicle which is held under a hire-purchase, lease or hypothecation agreement (hereafter in this section referred to as the said agreement) is made, the registering authority shall make an entry in the certificate of registration regarding the existen The Act came into force on 01 Jul 1989.
(1) Where an application for registration of a motor vehicle which is held under a hire-purchase, lease or hypothecation agreement (hereafter in this section referred to as the said agreement) is made, the registering authority shall make an entry in the certificate of registration regarding the existence of the said agreement.
(2) Where the ownership of any motor vehicle registered under this Chapter is transferred and the transferee enters into the said agreement with any person, the 1[last registering authority] shall, on receipt of an application in such form as the Central Government may prescribe from the parties to the said agreement, make an entry as to the existence of the said agreement in the certificate of registration 2[and an intimation in this behalf shall be sent to the original registering authority if the last registering authority is not the original registering authority].
(3) Any entry made under sub-section (1) or sub-section (2), may be cancelled by the 1[last registering authority] on proof of the termination of the said agreement by the parties concerned on an application being made in such form as the Central Government may prescribe 2[and an intimation in this behalf shall be sent to the original registering authority if the last registering authority is not the original registering authority].
(4) No entry regarding the transfer of ownership of any motor vehicle which is held under the said agreement shall be made in the certificate of registration except with the written consent of the person whose name has been specified in the certificate of registration as the person with whom the registered owner has entered into the said agreement.
(5) Where the person whose name has been specified in the certificate of registration as the person with whom the registered owner has entered into the said agreement, satisfies the registering authority that he has taken possession of the vehicle 3[from the registered owner] owing to the default of the registered owner under the provisions of the said agreement and that the registered owner refuses to deliver the certificate of registration or has absconded, such authority may, after giving the registered owner an opportunity to make such representation as he may wish to make (by sending to him a notice by registered post acknowledgement due at his address entered in the certificate of registration) and notwithstanding that the certificate of registration is not produced before it, cancel the certificate and issue a fresh certificate of registration in the name of the person with whom the registered owner has entered into the said agreement:
Provided that a fresh certificate of registration shall not be issued in respect of a motor vehicle, unless such person pays the prescribed fee:
Provided further that a fresh certificate of registration issued in respect of a motor vehicle, other than a transport vehicle, shall be valid only for the remaining period for which the certificate cancelled under this sub-section would have been in force.
(6) The registered owner shall, before applying to the appropriate authority, for the renewal of a permit under section 81 or for the issue of duplicate certificate of registration under sub-section (14) of section 41, or for the assignment of a new registration mark 4[under section 47, or removal of the vehicle to another State, or at the time of conversion of the vehicle from one class to another, or for issue of no objection certificate under section 48, or for change of residence or place of business under section 49, or for the alteration of the vehicle under section 52, make an application] to the person with whom the registered owner has entered into the said agreement (such person being hereafter in this section referred to as the financier) for the issue of a no objection certificate (hereafter in this section referred to as the certificate).
Explanation.-- For the purposes of this sub-section and sub-sections (8) and (9), "appropriate authority" in relation to any permit means the authority which is authorised by this Act to renew such permit and, in relation to registration, means the authority which is authorised by this Act to issue duplicate certificate of registration or to assign a new registration mark.
(7) Within seven days of the receipt of an application under sub-section (6), the financier may issue, or refuse for reasons which shall be recorded in writing and communicated to the applicant, to issue, the certificate applied for and where the financier fails to issue the certificate and also fails to communicate the reasons for refusal to issue the certificate to the applicant within the said period of seven days, the certificate applied for shall be deemed to have been issued by the financier.
(8) The registered owner shall, while applying to the appropriate authority for the renewal of any permit under section 81, or for the issue of a duplicate certificate of registration under sub-section (14) of section 41, or while applying for assignment of a new registration mark under section 47, submit with such application the certificate, if any, obtained under sub-section (7) or, where no such certificate has been obtained, the communication received from the financier under that sub-section, or, as the case may be a declaration that he has not received any communication from the financier within the period of seven days specified in that sub-section.
(9) On receipt of an application for the renewal of any permit or for the issue of duplicate certificate of registration or for assignment of a new registration mark in respect of a vehicle which is held under the said agreement, the appropriate authority may, subject to the other provisions of this Act,--
(a) in a case where the financier has refused to issue the certificate applied for, after giving the applicant an opportunity of being heard, either--
(i) renew or refuse to renew the permit, or
(ii) issue or refuse to issue the duplicate certificate of registration, or
(iii) assign or refuse to assign a new registration mark;
(b) in any other case,
(i) renew the permit, or
(ii) issue duplicate certificate of registration, or
(iii) assign a new registration mark.
(10) A registering authority making an entry in the certificate of registration regarding--
(a) hire-purchase, lease or hypothecation agreement of a motor vehicle, or
(b) the cancellation under sub-section (3) of an entry, or
(c) recording transfer of ownership of motor vehicle, or
(d) any alteration in a motor vehicle, or
(e) suspension or cancellation of registration of a motor vehicle, or
(f) change of address,
shall communicate 5[by registered post acknowledgment due] to the financier that such entry has been made.
6[(11) A registering authority registering the new vehicle, or issuing the duplicate certificate of registration or a no objection certificate or a temporary certificate of registration, or issuing or renewing, a fitness certificate or substituting entries relating to another motor vehicle in the permit, shall intimate the financier of such transaction.
(12) The registering authority where it is not the original registering authority, when making entry under sub-section (1) or sub-section (2), or cancelling the said entry under sub-section (3) or issuing the fresh certificate of registration under sub-section (5) shall communicate the same to the original registering authority.]
Section 51, The Motor Vehicles Act, 1988 (Act 59 of 1988).
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
This section refers to
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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Right Leasing and Hire Purchase Co. P. LTD vs Commissioner of Income Tax, Trichur
Court's Decision & Legal Precedent
The interest component included in hire-purchase instalments paid by customers to non-banking finance and leasing companies is not taxable as interest under Section 2(7) of the Interest-Tax Act, 1974, because: (1) hire-purchase agreements are composite transactions with elements of bailment and sale, not simple loan transactions; (2) the definition of 'interest' in the Interest-Tax Act is narrow and restrictive, limited to interest on loans and advances made directly; (3) hire charges are remuneration for the use of the asset and the option to purchase, not interest on a loan or advance; (4) the hirer's option to return the vehicle distinguishes the transaction from a loan; and (5) the finance company's retention of ownership rights and title in the vehicle further distinguishes it from a lending transaction.
On this section: Provision requiring registering authority to enter details of hire-purchase agreement in certificate of registration; discussed in context of ownership and control of vehicles
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Judgments citing this section
These may be obiter dicta or a precedent, for you to study. These are the judgments where this section is quoted.
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… The hirer, as a borrower, had been charged a flat rate of interest. The hirer, on payment of instalments, had the option to purchase the vehicle for one rupee, which was an empty formality, because the vehicle was already registered in his name. As per Section 51 of the Motor Vehicles Act, 1988<sup>5</sup> , the registering authority is required to enter the details of the hire-purchase agreement in the certificate of registration. The respondent – assessee therein had the license to repossess the vehicle on default, but to get ownership they had to apply for change in name …
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… be a legal requirement, the person applying for renewal of permit has to file a declaration that he sought for an NOC from the financier and despite the same and in spite of the passage of more than 7 days, no communication has been issued by the financier. The learned Government Pleader relies on Subsection 8 of Section 51 of the Motor Vehicles Act, 1988 (hereinafter referred to as the 1988 Act) in support of his contentions. 4. The learned counsel appearing for the 4th -5- respondent would submit that the 5th respondent has not cleared the liability with the 4th respondent and as on date, an …
Made under this section, and citing it
4 instruments state that it was made under this provision — the power to make it comes from here, so a change to any of them changes what this section requires in practice. Newest first.
Another 4 instruments name this provision in its title or its text without being made under it.
- draft GSR 192(E) 10th March, 2022 RVSF amendmentNotification 2022
- 6th G.S.R 240(E) dated 31.03.2021 Committe A licensing of driversNotification 2021
- GSR 653(E) dated 23rd September 2021 Registration and Functions of vehicle scrapping facility rules 2021Notification 2021
- 3rd amendment GSr 178(E) 16 march 2020Notification 2020
Questions about Section 51
What have the courts held on Section 51 of the Motor Vehicles Act?
Right Leasing and Hire Purchase Co. P. LTD vs Commissioner of Income Tax, Trichur (03 Jan 2023) is the leading judgment on this section among those set out below: Provision requiring registering authority to enter details of hire-purchase agreement in certificate of registration; discussed in context of ownership and control of vehicles.
How do I find court cases under Section 51 of the Motor Vehicles Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: MV Act 51, section 51 MV Act, section 51 of the Motor Vehicles Act. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 1 reported judgment on this section is set out on this page, beginning with Right Leasing and Hire Purchase Co. P. LTD vs Commissioner of Income Tax, Trichur (03 Jan 2023).
What should I read with Section 51 of the Motor Vehicles Act, and has it changed?
Its own text turns on section 41 (Registration, how to be made), section 47 (Assignment of new registration mark on removal to another State), section 48 (No objection certificate), section 49 (Change of residence or place of business), and on 2 further provisions, so none of them can safely be read on its own. 3 other provisions in this corpus refer back to it. The rules and notifications made under it are where it actually bites, and there are 4: most recently SO 859(E) 25 Feb 2022 Implementation of Section 50-57 and 93 of MV(A) Act, 2019 (2022), then Central Motor Vehicles (Fifth Amendment) Rules, 2017 (2017), and 2 more.
When did Section 51 of the Motor Vehicles Act come into force?
Section 51 of the Motor Vehicles Act, cited as MV Act 51, came into force on 01 Jul 1989, having been enacted on 14 Oct 1988. It is in force as at the date shown on this page.
Other sections of this Act
- 2. Definitions1948 words
- 88. Validation of permits for use outside region in which granted1560 words
- 150. Duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks1102 words
- 96. Power of State Government to make rules for the purposes of this Chapter995 words
- 72. Grant of stage carriage permits868 words
- 9. Grant of driving licence857 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 14 Oct 2026. This page is not a substitute for legal advice.