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Section 106: Disposal of article found in vehicles

Motor Vehicles Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 1988
Section 105 All 217 Sections of Motor Vehicles Act Section 107

Legal Commentary & Landmark Judgments: Section 106

Section 106 of the Motor Vehicles Act, 1988 prescribes the statutory procedure for the custody, public auction, and proceeds reimbursement regarding unattended or abandoned passenger property found in transport vehicles operated by State Transport Undertakings.

  • Custodial Responsibility of STU: Applies to any article, baggage, or property left behind or found unattended in any transport vehicle operated by an STU, placing the undertaking in the position of a statutory bailee during the prescribed holding period.
  • Statutory Power of Sale by Public Auction: Where the rightful owner fails to claim the article within the holding period prescribed by State rules, the STU is statutorily authorized to sell the property in the prescribed manner (ordinarily via public auction).
  • Reimbursement of Net Proceeds on Demand: Mandates that the sale proceeds, after deducting incidental administrative, storage, and auction costs, must be kept available and paid over to the true owner upon demand and verification of ownership.
Key Landmark Precedents:
  • Basava Kom Dyanmancouda Patil v. State of Mysore (1977) 4 SCC 358: The Supreme Court held that statutory authorities exercising custodial powers over unclaimed property owe a fiduciary duty of reasonable care and accurate record-keeping, emphasizing that disposal by sale must strictly follow published procedural rules to safeguard property rights.
  • State of Gujarat v. Memon Mahomed Haji Hasam AIR 1967 SC 1885: The Supreme Court established that where statutory bailees fail to preserve property entrusted to their custody or dispose of it without strictly adhering to statutory preconditions, an action in tort for conversion or restitution of the true market value lies against the State.
Courtroom Practice & Strategic Litigation Guidance:

In consumer or civil claims against an STU for lost passenger luggage, demand production of the official Lost Property Register and the auction dispatch log. The STU cannot shield itself under Section 106 unless it affirmatively proves compliance with the prescribed retention notice period and verified calculation of incidental auction deductions.

Section 105 All 217 Sections of Motor Vehicles Act Section 107