Mumbai: In a significant ruling protecting bona fide vehicle purchasers, the Bombay High Court has quashed orders cancelling the registration of an imported vehicle that was fraudulently imported using forged customs documents. The court held that an innocent buyer cannot be made to suffer for the illegal acts of others, especially after making full reparations ordered by the customs authorities.
Justice NJ Jamadar allowed a petition filed by Imran Humayun Chandiwala (47), a Mumbai businessman. He had challenged the September 9, 2025 decision of the Appellate Authority and Joint Transport Commissioner, which had upheld the RTO’s cancellation of his vehicle’s registration under Section 55(5) of the Motor Vehicles Act.
The car, Nissan petrol car, was initially imported in the name of diplomatic officer Jong Yong Ryong and registered in 2020 with RTO Manipur in the name of Meenarani Devi. It was later transferred to Mumbai and sold to Chandiwala for Rs1.22 crore, who became the registered owner in December 2020.
The Directorate of Revenue Intelligence (DRI) seized the vehicle in 2021, alleging that it had been imported using a forged bill of entry to evade customs duty. Chandiwala approached the Customs Settlement Commission, which in May 2024 recorded that he had made a “full and true disclosure” and was not involved in the fraudulent import. The Commission settled the duty at Rs66 lakh, interest at Rs35.7 lakh, and imposed a Rs5 lakh redemption fine, granting him immunity from penalty and prosecution under Section 127H. He paid all dues and secured release of the vehicle.
Despite this, the RTO cancelled the registration in March 2025, and the Appellate Authority upheld the decision on the ground that the registration was originally obtained using forged documents.
Advocates Cherag Balsara and Yogesh Patil, representing Chandiwala, argued that he was deceived by the seller and agent, had paid substantial customs dues, and was being subjected to “double jeopardy”. The State, through AGP Abhishek Bhadang, maintained that the cancellation was justified as forged import documents had been used.
The court held that the authorities had ignored the Settlement Commission’s clear findings. It noted that the petitioner “was not involved in the illegal import” and had made full reparation. Cancelling the registration merely because the vehicle’s earlier registration was based on fraudulent documents amounted to a hyper-technical approach, it said.
Invoking the doctrine of proportionality, the court ruled that penalising an innocent purchaser would be unjust. It therefore set aside the RTO and Appellate Authority orders and directed that the vehicle’s registration be restored.
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