Mr. Airbrush owned a firm operating a fleet of eighteen taxis engaged in the transportation of passengers in and across the state of Madhya Pradesh.…
CA Intermediate · Corporate and Other Laws · MTP · May 2026
Mr. Airbrush owned a firm operating a fleet of eighteen taxis engaged in the transportation of passengers in and across the state of Madhya Pradesh. The business had started way back in 1986 wherein the vehicle permits were obtained and the business was being run successfully. The registration for the vehicle expired in the year 1988 and the firm applied for renewal of registration of the vehicles under section 58 of the Motor Vehicles Act, 1939. The application under the aforesaid Act was still pending when such Act was replaced by the Motor Vehicles Act, 1988. To get the application processed, Mr. Airbrush applied to the authorities to consider the application under the Motor Vehicles Act, 1988 taking plea of section 6(c) of the General Clauses Act, 1897. The application was not entertained by the authorities on the pretext that since the application was filed under the repealed law, the old application would not be considered and that the application should have been filed within time. Later, Mr. Airbrush died leading to the closure of business. The family of Mr. Airbrush still lives in one of the flat bought by Mr. Airbrush during his life-time from Mr. Paintbrush, a builder and contractor dealing in construction and selling of flats. Mr. Paintbrush was the owner of six flats in the city of Indore. He was advised by one of his finance consultants to rent his unoccupied flats and thereby earn handsome passive income in form of monthly rents. The advice was given to him in the year 2017 and he has been renting out the properties since then. Alps Motors Ltd., an automobile dealer opened his office in one of the flats for commercial purposes in the year 2019 for a rent of 3.15 Lakh per month. Initially the rental dues were timely paid by the dealer but later the automobile dealer defaulted in paying the above resulting in cumulative arrears of rent being - 1.20 crore as on latest date. Mr. Paintbrush, filed a suit for recovery of rental arrears on immovable property pleading the court to treat such arrears as benefit out of land as defined in under section 3(26) of the General Clauses Act, 1897, under the head of "Immovable Property". The defendant submitted that arrears of land revenue in this case cannot be termed as "benefits from land". Alps Motors Ltd. offered Mr. Paintbrush a passenger family car worth - 3.00 crore at 1.80 crore to compensate the loss incurred by Mr. Paintbrush on rental dues. Unfortunately, color selected by Mr. Paintbrush was unavailable at the selected purchase date. The marketing manager informed and assured that the color will be available after a waiting period of 3 months. Alps Motors Ltd. further asked Mr. Paintbrush for an advance cheque of minimum 50% of the sale value to shield the purchaser from any future price enhancement. A postdated cheque of 90 Lakh was handed over to the dealer as the booking amount. The cheque was kept with the showroom owners but could not be deposited by them in their account until the last day of third month when Mr. Paintbrush came to know about the above failure on part of the car dealer. The car dealer insisted that Sunday being the last day of the third month, the bank was closed and the cheque could not be deposited thus showing his inability to deliver the car which had arrived on Saturday. The dealer insisted on issuing of fresh cheque. On the basis of above facts and by applying applicable provisions of the General Clauses Act, 1897, choose the correct answer (one out of four) of the following Multiple Choice Questions given herein under:
Suggested Answer and Working Notes:
Correct Answer: Option (A)
The rejection was not justified and the same old application should have been considered as per the new Motor Vehicles Act, 1988.
Topics: The Foreign Exchange Management Act, 1999, The General Clauses Act, 1897
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