Skip to content


Villa Venkata Rao Vs. Satyanandam Mummidi and ors. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtChennai High Court
Decided On
Case NumberWrit Petn. No. 4490 of 1976
Judge
Reported inAIR1978Mad299; (1978)1MLJ529
ActsMotor Vehicles Act, 1939 - Sections 47(1)
AppellantVilla Venkata Rao
RespondentSatyanandam Mummidi and ors.
Appellant AdvocateK. Parasaran, Adv. for ;C.S. Prakasa Rao, Adv.
Respondent AdvocateK.K. Venugopal, Adv. for ;M. Manivannan and ;M. Krishnappan, Advs. and ;T. Somasundaram, Govt. Pleader
DispositionPetition allowed
Excerpt:
.....made in favour of petitioner - availing benefit of moratorium law by any person would not show financial pressure - availing of such benefit may be with view to evade payment and not avoid payment - stronger proof necessary to show that any person is under financial pressure - petitioner accorded status of hindu undivided family instead of registered firm - no sufficient ground to believe that petitioner was under any financial pressure - held, order of authority set aside - writ petition allowed. - - it further proceeded to consider who among the two applicants would be better suited and it came to the conclusion that the first respondent herein was entitled to the permit because of his financial stability as he had immoveable property worth its. therefore, there was a prima..........made by the regional transport authority was not correct, because he did not have the necessary financial stability. on an analysis of the materials before it, it came to the conclusion that, on an overall assessment of the position, the grant made in favour of the writ petitioner who was suffering under financial pressure was not justified. accordingly, it was set aside. it further proceeded to consider who among the two applicants would be better suited and it came to the conclusion that the first respondent herein was entitled to the permit because of his financial stability as he had immoveable property worth its. 40,000 and he was also a new entrant. hence the present writ petition.3. mr. k. parasaran, learned counsel for the petitioner, urges that the reasons adduced by the.....
Judgment:
ORDER

Mohan, J.

1. This writ petition seeks to quash the order of the State Transport Appellate Tribunal, Pondicherry in M. V. A. No, 37 of 1975 dated 19-11-1976.

2. The petitioner, the applicant No. 1, was granted permit on the ground that he was the existing operator of one bus and as' such he had an edge over the new entrants. He had maintained his workshop and workshop arrangements on the way. Thus his claims were taken to be superior than the other applicants. Against this order, the matter was taken up in appeal to the Tribunal. The first respondent's appeal is M. V. A. N. 37 of 1975. The Tribunal posed two questions-- (1) Whether the grant of permit to respondent 1 is justified; and (2) if not, whether any of the two appellants is entitled to the permit. Concerning this, it was found that the grant of permit made by the Regional Transport authority was not correct, because he did not have the necessary financial stability. On an analysis of the materials before it, it came to the conclusion that, on an overall assessment of the position, the grant made in favour of the writ petitioner who was suffering under financial pressure was not justified. Accordingly, it was set aside. It further proceeded to consider who among the two applicants would be better suited and it came to the conclusion that the first respondent herein was entitled to the permit because of his financial stability as he had immoveable property worth Its. 40,000 and he was also a new entrant. Hence the present writ petition.

3. Mr. K. Parasaran, learned counsel for the petitioner, urges that the reasons adduced by the Appellate authority for arriving at a conclusion that the writ petitioner was financially unstable is based upon improper and incorrect reasonings. He would urge that merely because the petitioner had filed an application claiming the benefit of certain moratorium law, which claim was found to be false, that does not prove that he was suffering from financial pressure. Equally, the fact that he was sharing 40 per cent of his profits in partnership with his son-in-law, however illegal it might be under the law of income-tax, assuming that be so, that cannot form the basis for concluding that the petitioner was under financial pressure. In fact, for the assessment year 1975-76, documentary evidence was produced to show that the petitioner was accorded the status of a Hindu undivided family, instead of registered firm, which is proof enough to show that the partnership ceased to exist. Therefore, the insistence on the production of a deed of partnership or any other evidence was wholly unnecessary to hold that such an arrangement would amount to a manoeuvre resulting in a permanent disqualification or a financial pressure is a perverse reasoning.

4. Mr. K. K. Venugopal, learned counsel for the contesting respondent, would, however, submit that this is a case in which the fact that there was a suit against the petitioner and he claimed the benefit of certain moratorium falsely alleging that he is a marginal farmer would itself disclose that he was putting forth a different plea, pressed by financial instability. Otherwise, there was no need to claim such a benefit. Therefore, there was a prima facie evidence before the appellate authority, which evidence that authority can well take into consideration to conclude that he was under financial pressure. Equally when the petitioner had denied entering into partnership agreement for running Veerabadra Bus service with his son-in-law, later on was confronted with the income-tax returns for the year 1973-74 and 1974-75, would show that he was attempting to defraud the tax authorities, that amounting to dishonesty. It is not merely dishonesty alone that weighed. Such a course became necessary since the petitioner did not have necessary financial stability. The recourse to such methods would be sufficient to show that the petitioner did not have the necessary financial stability.

5. Then again there were suits pending between the petitioner and his son-in-law, though it was stated that they were withdrawn, no evidence was produced in support of that plea. Where by an overall assessment, the appellate authority found financial instability, this court exercising writ jurisdiction cannot interfere on a question of fact, since a person like the petitioner who has been dishonest both before the court and before the income-tax authority cannot be safely entrusted with the public utility service; and rightly therefore the grant made in favour of the petitioner had come to be set aside.

6. In order to appreciate rival contentions advanced before, me, it is necessary for me to note the relevant law which formed the basis for the grant of the permit. Section 47 of the Motor Vehicles Act lays down the various factors to be taken into consideration before the grant of a permit and regard has to be had to the following matters--.

(a) the interest of the public generally;

(b) the advantages to the public of the service to be provided including the saving of time likely to be effected thereby and any convenience arising from journeys not being broken;

(c) the benefit to any particular locality ot localities likely to be afforded by the service;

(d) the operation by the applicant of other transport services, including those in respect of which application from him for permits are pending;

(e) the condition of the roads included in the proposed route or area.

7. The Pondicherry Motor Vehicles Rules dated 15-12-1959 state that 'the State Transport Authority shall in deciding whether to grant or refuse a stage carriage permit have regard to the following matters in addition to those mentioned in Section 47(1) of the Motor Vehicles Act 1939'. The relevant sub-rule (iii) says 'the applicant should have financial stability and must be free from undue financial pressure; and this may be judged from the income-tax returns, solvency certificate, encumbrance certificate, or other appropriate evidence'. In this case, fortunately for the petitioner, in no unmistakable terms, the appellate authority has found as follows-

'It is true that he has got immoveable property worth more than a lakh. But it is not the financial worthiness of a person which should be taken into account, but his financial stability, resulting from his capacity to manage his estate or his business, in order to ascertain his ability to run smoothly the bus service.'

From the above, it will be clear that the Tribunal was drawing niceties between financial worthiness and stability. Even accepting this as a correct approach, the question to be posed is, has the Tribunal on proper reasons arrived at the conclusion that the petitioner did not have the necessary financial stability.

8. The first point that is put against the petitioner is, he advanced a false plea before court in Andhra Pradesh that he was entitled to the benefit of a moratorium law. This according to the Tribunal would show that he was under financial pressure. To use the very words of the Tribunal 'the learned counsel for respondent 2 (writ petitioner herein) would say that the respondent 2 was entitled to plead that he was a marginal farmer and nothing else, because such was his position as far as his assets in Andhra Pradesh were concerned and that such plea taken before that Court would have no bearing, on this case. In making such a submission, the respondent 2 is falling from Scylla into Chary-bdis. If his version is true, he would be an affluent person attempting to take shelter under a provision of law intended to protect poor persons in order to avoid payment of debt contracted by him and making a clear misrepresentation in a court of law disclosing dishonesty which would be a permanent disqualification worse than financial pressure. I, therefore, consider the affidavit for what it is on the face of it, that is to say, a declaration of inability to pay the debt he contracted disclosing financial pressure'. I am hard put to appreciate this reasoning. If in law a person is entitled to claim a benefit of a moratorium law, the fact that he availed himself of the claim would not go to show financial pressure. For aught one knows, it may be with a view to evade payment and not avoid payment.

9. Then again, stronger proof is necessary than a mere affidavit to show that he was under financial pressure. In this connection it is to be remembered that the Tribunal is not a court of equity, but a Tribunal set up under certain rules; and regard shall be had only to those criteria mentioned in Section 47 and the rule which I have extracted above. However desirable it may be to decide the honesty of a person, that is not warranted under the scope of the rules.

10. The second point of attack levelled against the petitioner, and which weighed with the Tribunal, is that for two assessment years, 1973-74 and 1974-75, he was assessed to income-tax as a registered firm wherein it was shown that he was sharing profits with his son-in-law. Sharing of the profits, with the son-in-law would hardly disclose financial instability. On the contrary, if any person is affluent enough to share his profits with his son-in-law, that only proves his financial stability. Therefore, that cannot be put against him.

11. Then again, the writ petitioner had filed a valuable evidence by producing the assessment order in respect of 1975-76, which discloses that he was accorded the status of the Hindu undivided family instead of a registered firm. This is proof enough to hold that the contention to the contrarycannot prevail Nevertheless, the Tribunal insisted upon the production of a partnership deed and evidence as to bow the partnership had come to an end. Be it noted that the Tribunal was not concerned with a partnership dispute, but only the financial stability. Again to characterise 'such manoeuvre as a permanent disqualification worse than financial pressure for being in charge of a public utility service like the operation of a bus route' is to say the least most uncharitable. As 1 stated above, however desirable it may be to decide the honesty or the conduct of an applicant for a stage carriage permit, the rules do not provide for such an examination and therefore if these considerations had prevailed with the Tribunal, I have to un-hesitatingly say that such reasonings are 'perverse.

12. The last straw which the first respondent herein could clutch at was, there were suits against the petitioner by his son-in-law, The details relating to the suits were lacking. In any event it was said they had been withdrawn or in the process of being withdrawn. Therefore, the Tribunal was not justified in holding against the petitioner on this point.

13. Looked at from any point of view, therefore, the order suffers from various perverse reasonings which I have clearly indicated above. Therefore, this writ petition will stand allowed and the matter is remitted to the Tribunal for fresh disposal in the light of the observations made above. The petitioner will be entitled to his costs. Counsel's fee Rs. 200 to be paid by the contesting respondent.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //