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N. Sathianathan Vs. B.K.P.M. Amaravathi Ammal and ors. - Court Judgment

LegalCrystal Citation
SubjectMotor Vehicles
CourtChennai High Court
Decided On
Case NumberWrit Appeal Nos. 220 to 223 of 1962
Judge
Reported inAIR1965Mad308
ActsMotor Vehicles Act - Sections 47, 59, 59(1), 59(4) and 61; Constitution of India - Article 266
AppellantN. Sathianathan
RespondentB.K.P.M. Amaravathi Ammal and ors.
Excerpt:
.....226 of constitution of india - petitioner challenged validity of order quashing permit granted by state transport appellate tribunal - order of court below granted permit to disqualified company which was screened by regional transport authority on ground that its managing director trafficked in permits - state transport appellate tribunal put onus of establishing bona fides of transfers on disqualified company - no reasons to interfere such decision - court quashed order below. - - the sale consideration was utilise by him for purchasing second hand buses and a ford diesel chassis for body building and paying the income-tax and the balance of rupees 16000 and odd was merged in his 'proprietary bus business'.the particulars available in the income-tax assessment order showed that..........gounder respectively. there were number of appeals filed by the disappointed applicants of the state transport appellate tribunal m madras. the state transport appellate tribunal confirmed the grant of one permit to s. b. sri ranga vilas (p) ltd., but set aside the grant of the other permit to sr. b. k. periamunuswami gounder, and allotted it to n. sathianathan proprietor of n. s. motor service, salem. among the disappointed appellants, before the state transport appellate tribunal, was sri balasubramania bus service (p) ltd., who was screened by the regional transport authority on the ground that in 1948, 1949 and 1950 one devaraja mudiliar, the managing director of his company, who owned the bulk of the shares therein, had trafficked in permits. in the appeal also, the state.....
Judgment:

Ramakrishnan, J.

(1) The principal appeal out of which this batch are connected, is W. A. No. 222 of 1962, and it arises form W. P. No. 1168 of 1959 filed before this court by Sri Balasubramania Bus Service (P) Ltd., Tiruvannamlai. the circumstances under which these writ appeals are filed are briefly, the following:

(2) For the route Hosur to Tiruvannamalai, a distance of about 99 miles, the Regional Transport Authority, Salem, invited applications for the stage carriage permits. After considering the claims of the various applicants, the Regional Transport Authority granted the two permits to S. B. Sri Ranga Vilas (P) Ltd., and to Sri B. K. Periamunuswami Gounder respectively. There were number of appeals filed by the disappointed applicants of the State Transport Appellate Tribunal m Madras. The State Transport Appellate Tribunal confirmed the grant of one permit to S. B. Sri Ranga Vilas (P) Ltd., but set aside the grant of the other permit to Sr. B. K. Periamunuswami Gounder, and allotted it to N. Sathianathan proprietor of N. S. Motor Service, Salem. among the disappointed appellants, before the State Transport Appellate Tribunal, was Sri Balasubramania Bus Service (P) Ltd., who was screened by the Regional Transport Authority on the ground that in 1948, 1949 and 1950 one Devaraja Mudiliar, the managing director of his company, who owned the bulk of the shares therein, had trafficked in permits. In the appeal also, the State Transport Appellate Tribunal confirmed this finding, and disqualified Sri Balasubramania Bus Service (P) Ltd., before granting the second permit to Sri Sathianathan.

Aggrieved with this decision Sri Balasubramania Bus Service (P) Ltd., filed W. P. 1168 of 1959 before this court, praying for a writ of certiorari, to quash the order of the State Transport Appellate Tribunal. The other disappointed appellants also filed writ petitions, and these are W. P. No. 892 of 1959 (leading to W. A. 220 of 1962) by R. K. Periamunuswami Gounder, W. P. 233 of 1960 (Leading to W. A. 221 of 1962) by V. Dhanammul Sowcar and W. P. No. 693 of 1960 (leading to W. A. 223 of 1962) by G. Subramania Mudaliar. The learned Judge, Srinivasan, J. who hard and disposed of these writ petitions held that the grievances of Periamunuswami Gounder, Dhanamul Sowcar and G. Subramania Mudaliar in their respective writ petitions, in which they attacked the decision of the State Transport Appellate Authority could not be sustained. But while dealing with the claim of Sri Balasubramania Bus Service (P) Ltd, in W. P. No. 1168 of 1959, the learned Judge held that he decision on which this applicant was screened for trafficking in permits involved an erroneous conception of what trafficking meant and also the extent for the Regional Transport Authority's power to go into a question which must be considered to the Regional Transport Authority had approved the transfer of the permits. The learned Judge allowed W. P. 1168 of 1959 and quashed the order for the State Transport Appellate Tribunal. Though the State Transport Appellate Tribunal had found against the contentions of the petitioners in the other three writ petitions above referred tot he learned Judge felt that as a consequence of the allowing of the writ petition of Sr. Balasubramania Bus Service (P) Ltd., it was necessary to allow these petitions also, and he ac aside the order of the State Transport Appellate Tribunal so far as the grant of the second permit was concerned while preserving the grant of the first permit to S. B. Sri Ranga Vilas (P) Ltd. The State Transport Appellate Tribunal was directed to dispose of the appeals afresh in the light of the observations in the judgment.

(3) We may recall that the State Transport Appellate Tribunal granted the second permit to N. S. Sathianathan. He is the appellant before us in the present four appeals directed against the decision of Srinivasan J.

(4) The learned counsel for the appellant attacked before us the finding of the learned Judge on the question of 'trafficking in permits', the disqualification alleged against Sri Balasubramania Bus Service (P) Ltd. It was also urged by the learned counsel for appellant that the learned Judge after having found against the other three writ petitioners on the merits of their case should not have left their claims for reconsideration by the State Transport Appellate Tribunal.

(5) We will take up first, the question of 'trafficking in permits' alleged against Sri Balasubramania Bus Service (P) Ltd. The State Transport Appellate Tribunal has given the facts about this disqualification thus:

'The order of the R. T. A. does not give any details for their trafficking, but the remarks of the R. T. A. on the appeal memorandum at p. 368 c.f. how that the R. T. A relied on the particulars furnished by he R. T. A. North Arcot before the meeting commenced, according to which Sri T. V. Devaraja Mudaliar had transferred permits on three occasions.................... 5 permits to Sri Dhanmul Sowcar on 19-10-1948, 3 permits to Sri G. Subramania Mudaliar in 1949 and 4 to Gajalakshmi Ammal in 1950.'

The petition of Devaraja Mudaliar in Sri Balasubramania Bus Service (P) Ltd, was this. Out of 2020 shares in this company 2000 shares were owned by Devaraja Mudaliar, 15 shares by his wife and 5 shares by a stranger. The company appears to have been formed after the above transfers were made, with Devaraja Mudaliar as it managing director. After making the transfer, Devaraja Mudaliar still retained 9 permits with him.

A verification of the book value of the buses sold to Dhanamul Sowcar, and the sale price, showed that Devaraja Mudaliar made a profit of Rupees 20,000 on the sale. The sale consideration was utilise by him for purchasing second hand buses and a ford diesel chassis for body building and paying the income-tax and the balance of Rupees 16000 and odd was merged in his 'proprietary bus business'. The particulars available in the income-tax assessment order showed that he ale of three buses to Subramania Mudaliar would have fetched a good profit. There were not date for estimating the profit in the case for the sales to Gajalakshmi Ammal of three buses, but there was room to infer that here must have been good profit on this transaction. This appeared, therefore, to be a transaction also. This appeared, therefore, to be a clear case where Devaraja Mudaliar effected the sales of buses for 3 years in succession followed by transfer of 12 permits to the transferee, making for himself a substantial profit by the transactions. Since Devaraja Mudaliar held practically the entire interest in Sri Balasubramania Bus Service (P) Ltd, the disqualification earned by him by trafficking in his permit would also attach itself to Balasubramania Bus Service (P) Ltd.

(6) There was, however, a fairly long interval (nearly 8 years) between the last of the sales above mentioned and the present application for permits. In a decision of Rajagopala Aiyangar J. (as he then as) in W. P. No. 25 of 1957 (Mad) the question of trafficking in permits and also the weight to be given to the interval between the time of the trafficking and the time of the application for permits came for consideration. The State Transport Appellate Tribunal referred to the above decision and held that in the present case, even though 8 years had elapsed between the last of the sales of the permits and the present application, it was necessary in the public interest to uphold the order of disqualification but on a future occasion the case of the appellant could be considered favourable.

(7) Before Srinivasan J. the several claims on behalf of Sri Balasubramania Bus Service (P) Ltd, which were urged before the State Transport Appellate Tribunal were reiterated, namely, that Devaraja Mudaliar was a different entity form Sri Balasubramania Bus Service (P) Ltd, that there was no complaint form the other rival applicants about trafficking, that the alleged trafficking was long before the application of the company, and that the policy of the Government was, at the relevant period, to permit operators to build up viable units and to encourage transfers. He replied these objections, by the observed, however, that he most important circumstance in the case was that the transfers of bus permits could be effected only with the permission of the Regional Transport Authority and that, in the present case, all these transfers had received the approval of the Regional Transport Authority and were recognised under the provisions of the Act. He concluded that where a lawfully constituted authority empowered to sanction transfers of permits and vehicles, had purported to do so, after an examination of the matter, it was not open to the Tribunal, the more so when it was not sitting in appeal over the question of transfer even if such an appeal lay to canvass the grounds for the transfer and to come to a conclusion which had practically the effect of unsetting the validity of the transfer. The State Transport Appellate Tribunal took an erroneous view of what trafficking meant, and upon the scope of its powers to enter into a question which had been already decided by the appropriate authorities on the proper occasion. The learned Judge also referred to the fact that the decision of Rajagopala Aiyangar J. (as he then was) in W. P. No. 25 of 1957 (Mad) had been reversed by a Bench of this court in W. A. No. 138 of 1957 (Mad) and the appellate judgment was delivered after the order of this State Transport Appellate Tribunal. The petition of Sri Balasubramania Bus Service (P) Ltd, was allowed and the other petitions, were also allowed as a consequential result though, on the merits, the contentions of these other petitioners were found against.

(8) Now the word 'trafficking: in connection with permits has not been defined, either in the Motor Vehicles Act or in the rules frame there under. The ordinary dictionary meaning of the word 'trafficking' gives a fairly accurate idea of it import. Murray's New English Dictionary defines it as:

'To carryon a trade in, to buy and sell; often with a sinister implication; used in disparaging sense, or in sense of dealing considered improper.'

(9) We may also refer to the use of phrases like slave traffic, opium traffic, trafficking in men's lives and so on. The terms will cover a case where there are repeated sales conducted as a business that is a profit motive, in a commodity, whose sales would be improper or would carry a stigma. No doubt, as pointed out by the learned Judge, the Motor Vehicles Act, itself allows for transfer of stage carriage permits in certain contingencies. Therefore, the mere fact of the transfer of permits as such, without further evidence, may not carry any stigma to satisfy of trafficking Section 59(1) says:

'Save as provided in S. 61, a permit shall not be transferable form one person to another except with the permission of the transport authority which granted the permit and shall not with out such permission operate to confer on any person to whom a vehicle covered by the permit is transferred any right to use that vehicle in the manager authorised by the permit.'

Section 61 to which the saving clause refers, provides for the user of a permit by the successor-in-title, of the permit holder on the latter's death for a period of three months, provided that within 30 days of the death of the of the holder, he has informed the transport authority of the death. After this period of grace, the successor-in-title has necessarily to get orders recognising the transfer under S. 59 of the Act. Now if a transfer is made in the normal circumstances of business, or through the exigencies of the death of the operator, obviously it will be a bona fide transfer. But when sales of buses along with the transfer of the permits are restored to repetitively when the normal course of business are effected with the clear motive of making a profit by such transfers it is obvious that the operator is taking an undue advantage of his position, as a permit holder, to make profits on sales of his permits. This will attract the stigma of trafficking, and it will not be desirable to prefer him as he had shown himself to be a person who has abused the permits granted to him.

(10) Again, it is a matter for ordinary knowledge that when a permit is transferred to another persons, only the transferor and the transferee will be interested in the transfer, and they are expected to apply to the Regional Transport Authority for recognising the transfer. there is no direction in section 59 of the Act that the Regional Transport Authority should hold an elaborate enquiry or should given notice to he other operators on the route or to the public, before giving his sanction to the transfer. There is also no ruled that the applicant should give information about the prior sales. On the application, the Regional Transport Authority makes only a rough and ready enquiry. No doubt, if his enquiry was comprehensive and sufficiently penetrating, it might be possible for him to discover that here was a profit motive in the application for transfer of the permit or that there were previous sales of a similar character, and hence the application was not bona fide. On the other hand, the Regional Transport Authority at that stage might not have had the facilities for making a detailed investigation or might have failed to make it for one reasons or other. But, as pointed out already, these transfers could have gone without challenge by other interested persons at the time of their recognition under S. 59(1) of the Act and the Regional Transport Authority should not be blamed if he had dealt with the application in a routine manner, without a searching enquiry. There is no appeal provided against his decision in such case, because no one at that stage could be deemed as aggrieved by his order.

With due respect to the learned Judge, it will not be therefore proper in our opinion, to deal with the decision of the Regional Transport Authority recognising the transfer of a permit, as conclusive not the question of the bona fide of the transfer and to hold that he question of bona fides of the transfer would not directly arise, before the Regional Transport Authority at a subsequent time, when the alleged trafficker is screened along with other applicants for the grant of new permit. In our judgement, the question is certainly open for consideration at that time and should be considered by the Regional Transport Authority when it is brought before it, either by the objections raised by rival applications under S. 59(4), or is made apparent to the Regional Transport Authority on the basis of the usual enquiry that he makes through departmental channels, for the purpose of satisfying himself of the position of the various applicants, to enable him to determine the rival claims, bearing in mind the principles laid down in S. 47 of the Act. This is what the Regional Transport Authority did when he screened Balasubramania Bus Service (P) Ltd., and that screening was so confirmed by the State Transport Appellate Tribunal in appal. We are therefore unable to uphold the main ground on which the learned Judge set aside the decision of the State Transport Appellate Tribunal.

(11) We briefly refer to the point that he decision of Rajagopala Aiyangar J. (as he then was) in W. P. No, 25 of 1957 (Mad) has been reverse by a Bench of this Court in W. A. No. 138 of 1957 (Mad). In that particular case, one Kanniah Pillai, who was an applicant, had been screened by the Regional Transport Authority on the ground that on the prior occasion when an application for transfer of his permits came before the Regional Transport Authority, it was observed that the would have no preference for a new permit. The Regional Transport Authority considered this single occasion as amounting to trafficking and screened him The State Transport Appellate Tribunal reversed the order because the remarks of the Regional Transport Authority in 1952 on a single occasion, would that the interval, which had elapsed subsequently was long enough to nullify the effect, if any, of the earlier marks.

Rajagopala Aiyangar, J. (as he then was), reversed the decision of the State Transport Appellate Tribunal holding that the onus was on the applicant to prove that he transfer was bona fide and that he Tribunal could have re-examined the circumstances for this transfer and reached its own finding on the point. The condonation of the lapse of five years without reference to any other fact was also held to be vitiated by error. When the matter came up by way of appeal in W. A. No. 138 of 1957 (Mad) this court held that the duty lay on the objectors to place before the Tribunal the circumstances under which the transfer was made to show that it amounted to trafficking in permits, that it was not the duty of the Tribunal to embark on such an enquiry, and that the condonation of delay involved no error which could justify interference by a writ of certiorari. It was a pure question of fact within the province of the State Transport Appellate Tribunal to decide whether by reason of one incidence of transfer made by the applicant in 1952 he could be held tot be guilty of trafficking. The finding that It did not so amount be trafficking was one of fact, which could not be interfered with in a writ petition under Art. 266 of the Constitution.

(12) There is no allegation in this case, that he State Transport appellate Tribunal put the onus of establishing the bona fides of the transfers on the applicant Sri Balasubramania Bus Service (P) Ltd. The question whether the transfer amounted tot trafficking was decide as a question of fact on the data placed before, it including the income-tax statements and auditors' report without reference to the onus of proof. In our view, adequate reasons have not been shown to interfere with that decision in these writ proceedings.

(13) We therefore allow the appal (W. A. No. 222 of 1962) set aside the order of the learned Judge and dismiss W. P. No, 1168 of 1959. In the remaining writ petitions, the learned Judge has agree with the State Transport Appellate Tribunal on the merits of the finding against the petitioner. The connected writ appeals are also allowed and the connected writ petitions Nos. 892 of 1959, 233 of 1960 and 673 of 1960 are dismissed.

(14) Sri Chengalvarayan appearing for Sri Ranga Motors (P) Ltd,., the grantee of the other permit, pointed out that he position of Sri Ranga Vilas Motors (P) Ltd, should be left unaffected. We agree. There has-been no attack on the validity of the permit before us. The result of our allowing the appeals and the dismissal of the writ petitions, is that he order of the State Transport Appellate Tribunal granting the first permit to Sri Rang Vilas Motors (P) Ltd, and the second permit to Sathianathan the appellant herein, will be left unaffected. The appellants to get their costs form the respondents.

(15) Order accordingly.


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