Authority: High Court of Karnataka at Bengaluru

Order Date: 28 July 2026

Case Overview

  • Parties: Appellants – State of Karnataka (Secretary, Department of Transport), Joint Commissioner of Transport, Regional Transport Officer Mysore West, Senior Inspector of Motor Vehicles, Mysore West. Respondent – Neeraj Kumar Sharma (resident of Bengaluru).
  • Background: The vehicle – Mercedes‑Benz AMG G63, chassis No. WDB4632722X261301, engine No. 15798460107755 – was purchased by Mr. Nihal Ahmed from T.V. Sundaram Iyengar and Sons Pvt. Ltd. on 31‑12‑2016 for ₹1,96,95,000, financed by HDFC Bank Ltd (loan ₹1,95,15,000). A temporary registration KA51/TR005155/2016‑17 was issued on 04‑01‑2017.
  • Ahmed allegedly sold the car without the bank’s consent; the vehicle later appeared in Himachal Pradesh as “HP‑976063” using fabricated documents, and the registration was cancelled on 10‑02‑2021. Ahmed lodged an FIR (Crime No.0016/2022) on 18‑01‑2022 for offences under IPC §§406, 420, 504, 34.
  • Subsequent investigations linked the car to various accused, including Sri Manish Gajendra, Sri Surya, and Sri Harmanpreet Singh Walia of Amar Motors, who was later found in possession of the vehicle in Delhi under a fabricated registration PB‑05‑AH‑8877.
  • HDFC Bank filed an application before the Chief Metropolitan Magistrate, Dwaraka Courts, New Delhi, seeking cancellation of an order that released the vehicle to Walia and for the vehicle’s release in favour of the bank. The magistrate ordered release to the bank on 15‑03‑2024, subject to a ₹1,00,00,000 indemnity bond.
  • Ahmed later wrote to HDFC Bank (01‑08‑2024) offering a settlement of ₹62,50,000; the bank accepted, issued NOCs on 03‑10‑2024, and removed its hypothecation.
  • The respondent (Neeraj Sharma) applied for a temporary registration; on 10‑01‑2025 a temporary certificate was issued, incorrectly describing the vehicle as “BENZ GLA 200 CDI” with engine capacity 3982 CC and cylinders ‘0’.
  • The State alleged that the respondent, colluding with RTO officials, misdescribed the vehicle to understate its value (stated ₹32,15,000 vs actual ₹1,96,95,000) and evade road tax (tax payable ₹78,31,161 reduced to ₹12,69,376). Fabricated documents cited include Form‑21 sale certificate, Form‑22 roadworthiness certificate, tax invoice dated 08‑11‑2017, and insurance policy.
  • A Special Checking Squad was constituted on 12‑06‑2025 to investigate high‑value vehicle tax evasion. On 15‑06‑2025 the vehicle was inspected at Mr. Nithin K. Shetty’s residence in Mysuru; engine and chassis numbers matched the original AMG G63. The vehicle was seized under Form‑27 (Rule 27‑A, KMVT Rules, 1957) and handed to the SHO, Vijayanagar Police Station.
  • Notices were issued to Nihal Ahmed (03‑07‑2025) and Nithin Shetty (23‑06‑2025). Lokayukta Police registered Crime No.07/2025 against certain RTO officials; four officials were suspended on 26‑06‑2025.
  • The respondent filed Writ Petition No.36250/2025 (MV) seeking quash of the Investigation Report (CR.No.214476 dated 15‑06‑2025) and release of the vehicle. The Single Judge quashed the report, directed restoration of registration, and ordered release of the vehicle to the respondent.
  • The State filed a Statement of Objections (09‑12‑2025) contesting the petition, noting that the registration had been cancelled by RTO Udupi on 16‑01‑2026 under Section 55(5) of the Motor Vehicles Act, 1988, on grounds of fabricated documents.
  • The Single Judge also questioned the authority of the officer who seized the vehicle, concluding that the officer (Mr. Ranjit N) was not authorised under Section 11A of the KMVT Act or Section 207 of the MV Act.

Final Outcome

  • The Karnataka High Court allowed the intra‑court appeal, set aside the impugned order dated 24‑03‑2026, and restored the registration of the vehicle (KA20MH0888).
  • The court held that the seizure was unlawful because the officer lacked statutory authority, and that the cancellation of the registration issued on 16‑01‑2026 was made in flagrant disregard of pending court proceedings and therefore could not be sustained.
  • The judgment affirmed that the Special Checking Squad’s powers were limited to reporting and investigation, not to seize vehicles without proper authorisation.

Topics: Vehicle Registration, Tax Evasion, Judicial Review