Construction-Equipment Vehicles Adapted For Road Use Fall Within ‘Motor Vehicle’ Definition Under MV Act: Kerala High Court
The Court held that construction-equipment vehicles capable of movement on public roads fall within the definition of “motor vehicle” under Section 2(28) of the Motor Vehicles Act, and therefore require registration.
Justice Mohammed Nias CP, Kerala High Court
The Kerala High Court has held that construction-equipment vehicles, which are mechanically propelled and adapted for road use, fall squarely within the statutory definition of “motor vehicle,” even if they are asserted to be used only inside factory premises.
The High Court clarified that road-adaptability, and not actual road use, is the determinative factor under Section 2(28) of the Motor Vehicles Act, 1988.
The Court was hearing a writ petition filed by a plywood and veneer manufacturing company challenging a direction issued by the transport authorities prohibiting the use of forklifts and a crane within the factory on the ground that they were unregistered and uninsured motor vehicles requiring compliance with the Motor Vehicles Act.
A Single Bench of Justice Mohammed Nias C.P. examined whether forklifts and cranes operating exclusively within a private enclosed factory compound could fall outside the scope of the Motor Vehicles Act and the Kerala Motor Vehicles Taxation Act, and held that “when Section 2(28) of the Motor Vehicles Act is read with Rule 2(cab) of the Central Motor Vehicles Rules, every construction-equipment vehicle capable of movement on public roads clearly falls within the definition of ‘motor vehicle’, making it taxable under Section 3, irrespective of whether it is actually used, or claimed to be used, only within factory premises.”
Advocate V. Krishna Menon appeared for the petitioner. Special Government Pleader (Taxes) Mohammed Rafiq represented the State.
Background
The petitioner company used two forklifts and a crane for material handling inside its six-acre factory premises and claimed that the machinery constituted internal factory equipment not intended for road use.
Following a complaint, the Sub-Regional Transport Officer inspected the premises and issued a communication directing stoppage of use, citing lack of registration, fitness certification and insurance.
The petitioner contended that the machinery was used exclusively inside an enclosed factory and therefore did not fall within the definition of “motor vehicle” under the Act. The respondents argued that the forklifts and cranes were roadworthy, structurally capable of road movement, and therefore required registration and taxation.
Court’s Observation
The Kerala High Court examined Section 2(28) of the Motor Vehicles Act, which defines “motor vehicle” as any mechanically propelled vehicle adapted for use upon roads, and excludes only vehicles of a special type adapted only for use within a factory or other enclosed premises. The Bench held that the test is “road-adaptability”, not actual or intended road use.
The Court noted that forklifts and cranes equipped with rubber tyres, diesel engines, steering and braking systems, lighting, and other mobility features are structurally capable of being driven on public roads. Such machinery, even if operated predominantly within enclosed premises, satisfies the statutory definition and does not fall within the narrow exclusion.
Turning to Rule 2(cab) of the Central Motor Vehicles Rules, the Court observed that construction-equipment vehicles (CEVs) constitute a distinct class of self-propelled machinery used for industrial and construction work and may move on public roads incidentally to their off-highway functions.
The Explanation to Rule 2(cab), the Court noted, excludes only equipment that is inherently incapable of independent road movement. Reading Section 2(28) and Rule 2(cab) harmoniously, the Court held that any CEV capable of road movement remains a motor vehicle.
The Court rejected the petitioner’s reliance on earlier decisions such as Bolani Ores, Travancore Tea Estates, and Tarachand, holding that those judgments rested on the compensatory-tax doctrine. The Constitution Bench decision in Jindal Stainless had since rejected that doctrine, rendering the earlier line of reasoning inapplicable.
Furthermore, the Court highlighted that the Kerala Motor Vehicles Taxation Act, unlike other State statutes, taxes every motor vehicle “used or kept for use in the State,” regardless of whether the use occurs on public roads.
Examining the specifications of the petitioner’s machinery, the Court noted that the forklifts and crane were fitted with diesel engines, functional braking systems, and other features enabling road movement.
On this basis, the Court concluded that they fell within the definition of “motor vehicle” under Section 2(28), required mandatory registration under Section 39, and attracted tax liability under Section 3 of the Kerala Motor Vehicles Taxation Act.
Conclusion
The Kerala High Court dismissed the writ petition, holding that the machinery satisfied the road-adaptability test under Section 2(28) of the Motor Vehicles Act, and that use exclusively within factory premises did not exempt it from statutory requirements once it fell within the definition of a motor vehicle.
Cause Title: Natural Wood & Veneers Pvt. Ltd. v. State of Kerala & Another (Neutral Citation: 2025:KER:88131)
Appearances
Petitioner: Advocates V. Krishna Menon, E.K. Madhavan, P. Vijayamma, J. Surya, A.B. Beenu
Respondents: Mohammed Rafiq, Special Government Pleader (Taxes)
