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K.M. Viswanathan Pillai Vs. K.M. Shanmugam Pillai - Court Judgment

LegalCrystal Citation
SubjectMotor Vehicles;Constitution
CourtChennai High Court
Decided On
Case NumberSecond Appeal Nos. 1394 and 1532 of 1963 and C.R.P. No. 184 of 1964 and C.M.P. No. 10738 of 1965 in
Judge
Reported inAIR1967Mad100
ActsMotor Vehicles Act - Sections 42, 42(1), 59, 60, 61 and 123; Indian Easements Act, 1882 - Sections 52; General Clauses Act, 1897 - Sections 3; Road and Rail Traffic Act, 1963 - Sections 39
AppellantK.M. Viswanathan Pillai
RespondentK.M. Shanmugam Pillai
Cases ReferredAct. See Cooke v. Cooper
Excerpt:
motor vehicles act (iv of 1939)--plaintiff obtaining bus permits benami in defendant's name and carrying on business for number of years -- defendant first consenting to transfer permits but later withdrawing consent--plaintiff filing suit for mandatory injunction constraining defendant to make joint application for transfer--parties in pari delicto--no bar for pleading in defence that mandatory injunction would not issue ; the plaintiff and the defendant brothers and members of a joint hindu family which carried on business and acquired properties. on 29th june 1953, there was a partition evidenced by a registered deed. prior to that the defendant had purchased a motor but and applied for a stage carriage permit so that he could run this business. in partition this bus was allotted to..... (1) these two appeals and the related revision proceeding involve questions of considerable interest and significance, relating to the development of the law under certain provisions of the motor vehicles act. the facts are also of importance and they have to be stated precisely, and with some fullness, to clarify the situation in which the issues have arisen. in c.s.s. motor service tenkasi, v. madras state a bench of rajmannar, c.j. and venkataramaayyar, j., had occasion to consider at length, the rationale upon which the state sought to exercise the power of regulating motor transport, upon the permit system. the learned judges pointed out that the state held the public streets and roads, only as a trustee on behalf of the public, who were entitled as beneficiaries to use the roadways.....
Judgment:
(1) These two appeals and the related Revision Proceeding involve questions of considerable interest and significance, relating to the development of the law under certain provisions of the Motor Vehicles Act. The facts are also of importance and they have to be stated precisely, and with some fullness, to clarify the situation in which the issues have arisen. In C.S.S. Motor Service Tenkasi, v. Madras State a Bench of Rajmannar, C.J. and Venkatarama

Ayyar, J., had occasion to consider at length, the rationale upon which the state sought to exercise the power of regulating motor transport, upon the permit system. The learned Judges pointed out that the State held the public streets and roads, only as a trustee on behalf of the public, who were entitled as beneficiaries to use the roadways as of right. The right of a citizen to carry on business in motor transport on public streets was within the protection of Article 19(1)(g) of the Constitution. The regulation of this business, under the provisions of the Motor Vehicles Act, was valid to the degree that it imposed reasonable restrictions in the interests of the public.

In Krishnamurthy v. C.D.A Transport Co. Ltd. the

learned Judges (Satnarayanana Rao and Rajagopalan, JJ) pointed out that the Motor Vehicles Act was a self-contained Code, creating new rights and providing for the adjudication of disputes arising in respect of such rights: in such a case the remedy provided by the statute alone should be followed. In Saghir Ahmad v. State of U.P., their Lordships of the Supreme Court observed that the right of the public to use motor vehicles on the public road was not created by the Motor Vehicles Act, but existed anteriorly to legislation, as an accident of public rights over a highway. The State could only control and regulate this business for public benefit. In Veerappa v. Raman and Raman Ltd. the Supreme Court characterised the Motor Vehicles Act as a complete and precise scheme, for regulating the issue of permits and other matters. The remedies were to be found in the statute it self, and recourse should be had to them.

(2) This broad statement of certain landmarks in the law, provides the setting in which the issues arising in these proceedings might be clarified. From one point of view, a state-carriage permit has to be regarded as a creature of statute, and it is not a right which existed at common law. It had been characterised as a licence, and a licence is personal(Section 52 of the Indian

Easements Act, 1882); see also Joshi on Easements and Licences. Third Edition, page 252. But from another point of view and we shall presently examine the case-law from which this concept emerges, a stage carriage permit is a species of property, that is when regarded as composite with the motor vehicle to which it relates. Under prevalent modern conditions, it is very valuable property. That it is heritable and alienable, the latter characteristic with certain restrictions, has been recognised by the provisions of the Motor Vehicles Act, and in the case-law; it has been the subject of partition amidst members of a joint family, and of division of the assets in partnership.

Thus, two complementary ideas have evolved side by side the first dealing with a stage carriage permit purely as a licence all remedies and procedures in respect of which are circumscribed by the self-sufficient Code of the Motor Vehicles Act and the Rules framed there under. The ascend evolution is what may be termed the common law development of this permit together with the stage carriage to which it relates, and without which it practically has no value or validity forming the subject-matter of contracts of sale inter vivos, inheritance and succession, partition division of assets among partners. To what extent would such rights in respect of a stage carriage permit be enforced in a civil court and outside the remedies and procedures of the Motor Vehicles Act and Rules framed thereunder? This is the fundamental question which confronts us in the present appeals.

(3) In order to obtain a true perceptive of the basic issues involved, a statement if the precise facts is essential. The following facts will, however, be sufficient for our purpose, particularly as the second appeals are the major proceedings, and we are accepting the concurrent findings of the courts below on issues of fact.

(4) The plaintiff (K.M. Viswanathan) and the defendant (K.M. Shanmugam) are two out of six brothers, the sons of a certain named Manickam. The family had originally a very limited estate, but in 1938-1939, Lakshmanaswami (P.W.5), the brother-in-law of these individuals, went to Kuala Lumpur and opened a Maligai shop, Sri Ranga Vilasam, which appears to have prospered. The business was later transferred to the brothers and it was carried on under the name and style of "K.M. Shanmugam Brothers". It is conceded that this was a joint business of the brothers. The status of the family increased, and the prosperity of the brothers continued.

On 29-6-1953, the brothers entered into a partition of properties belonging to them, evidenced by a registered document-(Ex. A-35). Prior to this, the defendant had purchased a motor-bus MDH. 662, and applied for transfer of the stage carriage permit, so that he could run this business. Under Ex. A-35 this was allotted to the share of the plaintiff, and it was provided that, since the defendant had obtained the permit, it should be transferred to the plaintiff by appropriate proceedings. In September 1953, the defendant succeeded in getting the stage carriage permit in his name.

(5) In April 1954, the plaintiff negotiated and purchased more motor vehicles, namely, MDO 1106 and MDH, 730, relating to the routes Tanjore-Mannargudi(Ex. A-38). The relevant permits were obtained in the name of the defendant, in whose name also the vehicles were actually acquired. As the defendant desired to proceed to Kaula Lumpur on business, he executed a general power-of attorney(Ex. A-55) in favour of the plaintiff. In this he recited that the buses MDH. 662, MDH. 730 and MDO. 1106 actually belonged to the plaintiff, though they were reining on routes with permits in the name of the defendant, and with the vehicles ostensibly in the name of the defendant. On this part of the case, the plaintiff stated in paragraph 5 of the plaint as follows:

"Even though the partition had taken place and the plaintiff took possession and was running the bus, he found it expedient to run the service in the same name, viz., K.M.S. Transport, Tanjore and also continue the permit in the name of the defendant as certain proceedings were then pending before the Regional Transport Authorities. Further inasmuch as preferential claims for fresh permits were being considered, and depended on the qualifications, preferential claim experience etc., based on the first permit......... plaintiff found it expedient and applied for the fresh permits in defendant's name. Plaintiff got all the suit buses with permits and was running the buses exclusively himself."

(6) Thus, apart from the facts relating to one particular bus, which is the subject-matter of S.A.No. 1394 of 1963 by the plaintiff and which could be dealt with separately the broad case of the plaintiff was that of a benami business of motor transport, the buses and permits really belonging to plaintiff, who actually conducted the business, but with the stage carriages and permits in the name of the defendant the permits having been deliberately obtained on such false representatives. The plaintiff prayed for a declaration that the five buses referred to by him in paragraph 18(a) of his plaint belonged to him, as also the stage carriage permits, and he was entitled to run the same in terms of the power-of-attorney dated 28-10-1954, which was irrevocable. The plaintiff further averred that he had instituted certain proceedings in respect of a joint application for transfer of permits before the Regional Transport Authorities. Under the Rules framed under Section 59 of the Motor Vehicles Act, particularly Rule 199(A), the Transport Authority is constrained to drop further proceedings for recognising the transfer of a permit, if the connect of either party is withdrawn before the transfer is sanctioned.

As the defendant withdrew his consent the joint application was rejected by the Regional Transport Authority; the plaintiff preferred an appeal to the State Transport Appellate Tribunal(see C.M.P. No. 10738 of 1965), but it is now clear(additional documentary evidence) that this was dismissed as withdrawn. The plaintiff hence prayed, in addition to the declamatory reliefs already referred to, for a mandatory injunction directing the defendant to execute the necessary documents required to effectuate the transfer of the permits. The suit was decreed entirely by the trial court, but the learned District Judge of West Thanjavur, in first appeal, confirmed the decree only with reference to four of the buses. With reference to bus MDU. 4069, which has a separate history the decree was set aside. It is in this situation of facts, that the somewhat intricate issues now confronting us have arisen, based upon development of the case-law in two different directions firstly under the Act and the Rules framed thereunder, and secondly under the common law.

(7) We shall now proceed to summaries the arguments of Mr. M.K. Nambiar for the defendant in his second appeal(S.A. No. 1532 of 1963), which may be taken as the main appeal. The stage-carriage permit is a creature of the statute and the Motor Vehicles Act is a self-contained Code; all rights and remedies with respect to it must necessarily be brought within the frame-work of the authorities provided under the Act. The jurisdiction of civil courts is therefore barred, and while the court may be free to grant a declaration in respect of property rights, in motor vehicles(stage carriages), it cannot do so in respect of permits, in order to constrain a party to make a joint application for the transfer of a permit by means of a mandatory injunction. A permit is a licence and it is personal; it transfer can be obtained only under Section 59 of the Act and the Rules framed thereunder. It is further stressed that in the present case what has really happened is a continued course of fraud practiced upon the authorities by plaintiff equally with defendant. Under Section 42(1) of the Act, the owner of a transport vehicle cannot use the vehicle save in a accordance with the conditions of a permit.

under Section 60 of the Act, if the holder of the permit uses or allows the vehicle to be used in a manner nor authorised by the permit, the permit may be cancelled or suspended. Under Section 61 of the Act, which is relevant here only for the sake of comparison, there is provision for the transfer of permit on the death of the holder, within the framework of that section. The transfer inter vivos of a stage carriage permit is prohibited, and is invalid unless it is permitted by the authorities under S. 59, and in terms of the Rules under that section. Section 123 of the Act provides for punishments, for using a motor vehicle without registration or permit. In the present case, the finding of fact is that the motor vehicles belonged to the plaintiff, and that the transport business relating to the vehicles was really conducted by the plaintiff. But the defendant was the ostensible owner of the vehicles, and all the permits had been obtained in his name. Thus, both the plaintiff and the defendant were deliberately contravening Section 42 of the Act, as well as Section 60(1)(b) of the Act. In others words, because of certain conveniences and strategic consideration, these brothers deceived the authorities, and obtained the permits by such modes of deception.

Mr. V.K. Thiruvenkatachari for the plaintiff does not address any argument to the contrary; he does not contend that the scheme of the Act and the rules framed thereunder furnish any ground for the recognition of a benami business in stage carriage permits or motor transport to any extent. Under those circumstances, the real question is how far does the case-law which has to some extent recognised a stage carriage permit as a species of property, heritable alienable and partible, furnish a justification for the grant of the mandatory injunction constraining the defendant to make a joint application now with the plaintiff for transfer of the permits? As we stated earlier, it is not in dispute that the stage carriages themselves belong to the plaintiff, with one exception that we shall separately discuss.

(8) The following authorities may be here taken up and discussed in the context of Mr. Nambiar's arguments in the main appeal. In Immani Appa Rao v. Ramalingamurthi , the Supreme Court held that where both the transferor and the transferee were on equal fraud, and the fraud contemplated had been carried out but the buses remained with the transferor, in a suit by the transferee for possession, it was open to the transferor to plead the fraud. In other words, the circumstance that the parties may be in pari delicto will not prevent the defendant here from pleading that he cannot be now constrained to make any joint application. In any event under R. 199 (a) that we earlier cited one of the two parties can always withdraw before the transfer is permitted under Section 59. In the present case there was such a withdrawal, and even the appeal to the State Transport Appellate Tribunal was dismissed as withdrawn.

In Balakrishna v. Madras Corporation (FB) the Full

Bench held that though the ouster of jurisdiction of civil court may not be lightly inferred there exists a class of cases where an inference of that kind could and must be made. Following a passage in Maxwell of Interpretation of Statutes(Tenth Edition) page 129, the learned judges pointed out that where a liability not existing at common law is created by a statute, which at the same time gives the subject a particular remedy for enforcing it, the remedy provided by the statute must be followed. It is claimed that in the present context this will imply that the civil court cannot constrain the defendant to take some step to obtain a transfer of the permit, which under Section 59, the Regional Transport Authority alone is empowered to permit, and without which permission to transfer the transfer itself is prohibited by law.

(9) In Gujja Nagamma v. Secretary of State 42 Mad LJ 318: (AIR 1922 Mad 106 (1)) a Bench of this court held that the Rules under Section 11 of the Salt Act prohibited transfer of the licence, without permission, and that a transfer by way of mortgage was therefore not binding on the authority. In Venkata Subbayya v. Attar Sheik Mastan, 1948-2 Mad LJ 198: (AIR 1949 Mad 252) an agreement in contravention of the Madras Abkari Act was held to be illegal and unenforceable between the parties. The parties were in pari delicto, and the Court would not render assistance in enforcing the contract, Ganesa v. Arumugha, is a decision that relates to the infringement of a

darkhast grant, namely, alienation without the consent of the Revenue Authorities. Such a contract to alienate was held opposed to public policy, and tantamount to a fraud on the Government, and hence it was concluded that the plaintiff could not succeed in getting back the site on the ground that the transaction was benami.

In Seeni Chettiar v. Santhanathan Chettiar, (1897) ILR 20 Mad 58 an early decision of this Court, observation occurs that a plaintiff who asks for an injunction must be able to satisfy the Court that his conduct has been free from taint of fraud or illegality; he must come with clean hands". Again, the Court will not grant a declaration which will be useless or infructuous, vide observations in Gulzar Ahmad v. U.P. Government, , also see the observations in

Muhammad Israil v. Patna City Municipality, AIR 1943 Pat 34 at p. 39. In the present case such a mandatory injunction would be without avail, as the court is powerless to authorise the transfer of the permit, that is the exclusive prerogative of the Regional Transport Authority.

(10) In Venkata Siva Rao v. Rama Krishnayya, 50 Mad LJ 148: (AIR 1926 Mad 246 a case which related to the jurisdiction of the civil court with respect to a civil suit challenging the validity of an election under the Madras Village Courts Act I of 1899, the observed that when a public body had been created by statute, and that statute empowered the Government to frame Rules, it was open to the Government to establish a forum for deciding disputes as to election under the statute and thereby exclude the jurisdiction of the ordinary civil courts. On the strength of these authorities Mr. Nambiar advances the following propositions. The civil court in this case has no jurisdiction at all to try any claim with regard to property rights in stage carriage permits per se. He concedes that the Civil Court may certainly come to its own findings upon property rights in the stage carriages themselves, which are movable properties. No declaration could hence be granted that the permits as distinguished from the stage carriages, are the property of the plaintiff, even if this any event no mandatory injunction could be granted, constraining the defendant to make the joint application. Such an application had been made already and it had failed; even the appeal to the State Transport Appellate Tribunal had been dismissed. The court can give no direction in the matter, as the permit is not transferable without the authorisation of the authority under the Act namely, the Regional Transport Authority. In any event the courts must refuse relief where the claim itself is founded upon a fraudulent contrivance as in this case. Even a benami transaction could be enforceable, only if it did not contravene the law; vide Gur Narayan v. Sheolal Singh, ILR 46 Cal 566 at p 574: (AIR 1948 PC 140 at p. 143). See also the observations in Ganesa v. Arumugha . A

licence cannot be held by the grantee for another unknown person. Where the relief or right claimed is illegal and the parties are in pari delicto, Courts can render no assistance in enforcing the right, 1948-2 Mad LJ 198: (AIR 1949 Mad 252).

(11) We must now turn to the arguments of Mr. V.K. Thiruvankatachari for the plaintiff, who has pressed upon us the contrary view that it would be sustained equity, on the facts of the present case, if we were to sustain the decree for the declaration and the injunction as granted by the Lower appellate Court, which is question in the main appeal. The argument certainly deserves careful examination and we shall here set it forth as it was developed.

(12) With regard to unreported decisions of this court the following have been referred to. In A.S. Nos. 170 of 1956 and 115 of 1957 (Mad), Rajmannar, C.J., observed:

"A permit does not have any of the essential attributes of property. You cannot run a rice-mill in a municipal area without a licence from the municipality. But to speak of such a licence as property is unreal and misleading. A permit without a vehicle has no meaning. The Face that a permit is in a sense personal to the grantee does not carry the matter any further.............."

But subsequently, at least in the sense of a permit and a stage carriage to which it relates, being regarded as composite property, this property has come in for recognition by Courts, in a variety of modes. This is a development of the common law which cannot now be possibly disregarded. As we have already seen, the Act itself recognise that a permit is heritable and alienable but subject to the limitations imposed. The rights and obligations of Receivers, with regard to stage carriage permits, have obtained recognition and specific mention, in the judgement in L.P.A. Nos. 67 to 70 of 1955 (Mad). In W.A. No. 43 of 1961 (Mad) a judgement to which one of us was a party it has been pointed out that the mere preparation of a contract to transfer a permit is not prohibited under S. 59(1) of the Act; on the contrary this may well form an ordinary and essential per-requisite to the application for permission. In W.P. No. 134 of 1960 (Mad), Srinivasan, J., had occasion to deal with the circumstances under which a trafficking in permits may be inferred; but the learned Judge recognised that the permit itself is a species of property.

In Kuppuswami Chettiar v. Ramachandran , there has

again been specific recognition of this common law development. In Taj Mahal Transports (P) Ltd. v. Secretary, R. T. Authority, the heritable and alienable nature of the permit, of course in relation to the motor vehicle, has been recognised. Mrs. Chandnee Widya Vatti v. Dr. C.L. Katilal, is of

particular interest on the argument now advanced. That was a case in which there was a contract to sell between the parties subject to the obtaining of the necessary permission from Government, before the sale. The vendor made an application but withdrew the same. In a suit filed by the vendees for specific performance of the contract, or alternatively for damages, it was held that the contract was not contingent, and that the court was bound in equity to enforce the terms. The Court should even enjoin upon the vendor to make the necessary application for permission. In Salmond's Jurisprudence(10th Edition) page 504, upon the maxim ubijus ibi remidium it is observed:

"Whenever there is a right, there should also be an action for its enforcement. That is to say, the substantive law should determine the scope of law or procedure, and not vice versa. Legal procedure should be sufficiently elastic and comprehensive to afford the requisite means for the protection of all rights which the substantive law seed fit to recognise".

In Sagir Ahmad's case, the observations of Mukherjea, J., do appear to imply that the right to ply a bus could be treated as right to property. In W.P. No. 134 of 1960 (Mad.) Srinivasan, J., recognised that the sale of a bus and the accompanying permit would neither be opposed to law nor the provisions of the Motor Vehicles Act and the Rules framed thereunder.

(13) Mr. V.K. Thiruvankatachari has referred to certain provisions under various enactments, which would clearly indicate that the common law development, which we have earlier noted, namely of a permit with the motor vehicle pertaining thereto being regarded s a species of heritable, alienable and partible property, indeed a most valuable right to property in many cases is strictly in conformity with the modes in which property has been defined or classified under the law. The General Clauses Act, 1897, defines 'immovable property' in S. 3 sub-clauses (26), and defines 'movable property in section 3, sub-clause (36), in a residuary manner, as comprising property of every description, except immovable property. Under section 6(d) of the Transfer of Property Act, an interest in property restricted in its enjoyment to the owner personally, cannot be transferred by him. As we have seen the argument of Mr. Nambiar has been that a stage carriage permit approximates to this definition and would hence be inalienable. But the truth is that the permit, taken with the motor vehicle to which it is attached, in relation to a specified route, has a twofold aspect, as property, in one sense it is a business, with the motor vehicle authorised to ply on that route, as the crux or core of the business; in that sense, it is particle heritable and alienable property of a valuable kind. In another sense it is a licence which is personal to the grantee, and to which an heir can succeed by inheritance, or which could be transferred inter vivos only in accordance with the specific provisions of the Motor Vehicles Act.

In this context we may also refer to the definitions of 'property' (S. 2(11)) and 'specific goods' (S. 2(14)) under the Indian Sale of Goods Act. Mr. V.K. Thiruvankatachari has furnished us with a table of cases under three categories. One category relates to any property interest of right, the transfer of which is totally barred, that is the kind of cases dealt with under Section 6(d) of the Transfer of Property Act; instances might be a registration to carry on a vocation, such as that of a physician or lawyer, or a licence the alienation of which is barred under the law. Another category of cases relates to partnership. We could furnish an immediate instance of the Full Bench decision of this court in Kanniappa Nadar v. Karuppiah Nadar,

(FB). The learned Judges of the Full Bench observed that the running of a business in the manufacture and sale of safety matches, after obtaining a licence under the Central Excises and Salt Act, 1944, would be perfectly lawful. We may set forth here tersely certain other precedents which were cited before us in relation to this category; Natta Bapiraju v. Achuta Rajalu, (1910) 20 Mad LJ 337; Padmanabhan v. Badrinath Sarda, (1911) 21 Mad LJ 425; Ganapathi Brahmayya v. Ramiah,38 Mad LJ 123: (AIR 1920 Mad 270); Appadurai Mudali v. Murugappa Mudali, 51 Mad LJ 12: (AIR 1926 Mad 772); Ramanayudu v. Seetharamayya, 68 Mad LJ 570: (AIR 1935 Mad 440)(FB);Satyala Sanyasi v. Bhogavali Sanyasi, 69 Mad LJ 490: (AIR 1935 Mad 895); Narasimhulu Naidu v. Naga Reddi, 1940-2 Mad LJ 694: AIR 1941 Mad 64; Italia v. Cowasjee, 1944-1 Mad LJ 97: (AIR 1944 Mad 295); Velu Padayachi v. Sivasooriam Pillai, (FB); Maniam Hiria Gowder v. Jaga Maistry,

; Gangadara v. Swaminadha, AIR 1926 Mad 218;

Narayanamurty v. Subramanyam, AIR 1928 Mad 1197 and Vazhmuni v. Nathamuni, AIR 1930 Mad 361.

(14) These precedents need be discussed in further detail, as there is a very large volume of case-law which has recognised this business, appertaining to motor transport viz., of a stage carriage permit with the vehicle attached thereto authorised to ply on a particular route as a perfectly valid and legal species of partnership. Indeed, it is indisputable that an application for a stage carriage permit may be a firm or Corporation, as much as by individual or even a minor represented by a guardian vide Section 2 (19) of the Act. The last category of cases referred by Mr. Thiruvankatachari consists of precedents where transfers have been recognised with permission. It is certain of these precedents in particular that they deserve some detailed scrutiny. There are at least certain instances mostly precedents of the United Kingdom, where in some regulation or law has been contravened by the parties to a contract, but nevertheless Courts have enforced the transfer, as between the parties, or have enforced rights flowing from such transfer. In brief, the thesis of Mr. Thiruvenkatachari here it that while the plaintiff may be liable as much as the defendant if not more, to the penalties provided in Ss. 60 and 123 of the Motor Vehicles Act and may be in pari delicto with the defendant,the ought not to prevent the Court now from compelling the defendant to make a joint application for transfer under Sec. 59. The previous application failed, because the defendant utilised Rule 199-A, that we have earlier referred to, for the purpose of withdrawing his consent, which he ought not to have done. In the interests, of equity and justice, the defendant should not be compelled by a mandatory injunction to make an application. It is conceded that the Regional Transport Authority alone has the power to sanction the transfer of the permits and that without such a transfer the motor vehicles are practically of on use to the plaintiff, apart from their value as goods.

(15) In Gordhandas Kessowji v. Champsey Dossa, Air 1921 Pc 137, it was held by the Judicial Committee that a licence of salt manufacture does not contravene the terms of his license, which is in terms inalienable simply because he admits the members of his family as partners. The emphasis here is that, in the present case also, the parties are brothers. In Maneckji Pestonji v. Wadilal Sarabhai and Co., AIR 1926 PC 38, it was pointed out that, in cases of sale of share contracts, as soon as the seller hands over the certificates and blank transfers and the buyer accept them and gives the seller the cheque, the goods become ascertained goods, and the property passes. Under the Indian Contract Act, chooses in action are classified as goods. We may now proceed to consider the precedents of the United Kingdom, as according to the learned counsel for plaintiff, they have particular significance in the present context of facts.

(16) In Denning v. Edwardes, 1961 AC 245, the facts were that the Crown Lands Ordinance of Kenya provided that no evidence of a charge upon registered land shall be receivable unless created by an instrument in writing, itself registered. The respondents claimed specific performance of an agreement to sell certain land by the appellant held by the appellant under a registered crown lease. The appellant contended that the money passed in circumstances which gave rise to a charge and that in consequence, the unregistered agreement evidencing the contract was in admissible. The judgement was delivered by Viscount Simonds, who pointed out that the agreement preceded the actual sale and that the successful negotiation would be impossible without it, even before the consent of the Government was obtained. "The legal consequence that ensued was that the agreement was inchoate, till that consent was obtained". The case is relied upon as in pari materia with the percent facts; here also, the partition and subsequent mutual undertakings between the parties were valid subject to the recognition of the transfers of the permits in the name of the plaintiff by the relevant authority.

(17) In Archbold's (Freightage) Ltd. v. Spamglett, 1961 (2) WLR 170 the defendants had a 'C' licence under an Act, and the plaintiffs, believing that the vehicle of the defendants had the 'A' licence, because of a telephone representation employed that vehicle for carriage of a load. On a claim by the plaintiffs for damages for loss of the goods carried on the vehicle due to theft, defendants pleaded the illegality of the contract as their van did not have a 'A' licence as required by the Road and Rail Traffic Act 1963. It was held that the contract was not ex facie illegal, and that public policy did not constrain the court to refuse aid to the plaintiffs. But it has to be noted in the context of the facts, that the plaintiffs had no knowledge that the van of the defendants had only a 'C' licence. In Kiriri Cotton Co. Ltd. v. Ranchoddas Keshavji Dewani, 1960(2) W.L.R. 127 the facts were that the appellant company in consideration of the grant to the respondent of the sub-lease if a flat, asked for and received a premium contrary to the provisions of the Uganda Rent Restriction Ordinance, 1949. Neither party had the consciousness that anything illegal was being done. The respondent occupied the flat under the lease, and thereafter claimed a return of the advance. It was held that the duty of observing the law was firmly placed by the Ordinance on shoulders of the landlord, and hence as the appellant company and the respondent were not in pari delicto the respondent was entitled to recover, as for money had and received and that the omission of a statutory remedy did not disentitle him.

In Sajan Singh v. Sardara Ali, 1960 (2) WLR 180, we have a case which is curiously similar to the facts of these appeals, in the sense that there was a lorry owned and operated by the plaintiff for carriage of goods, but registered in the name of the defendant, described as his with the haulage permit in the name of the defendant. There was thus a deception on the public administration of Malaya, carried out in pursuance of an agreement that had been made as part of the contract between the plaintiff and the defendant. In, 1955, the defendant removed the lorry from the possession of the plaintiff without his consent and declined to return it. The claim by the plaintiff against the defendant was for the return of the lorry or its value. The following passage at the conclusion of the judgement has been stressed as of particular significance in this case:

"Their Lordships would only add this: if the law were not to allow the plaintiff to recover in this case, it would leave the defendant in possession of both the lorry and the money he received for it. Their Lordships are glad to have been able to reach the conclusion that on the facts of the present case, this is not the law".

On this aspect, we may finally add that Mr. Thiruvankatachari has also strongly relied upon Section 55 of the Specific Relief Act, as it originally stood and the illustrations thereto; it may be noteworthy here that the present Act 1963 enacts that section as Section 39 but omits the Illustrations. Illustrations (e), (f) and (g) show that a mandatory injunction could be granted to restrain an act in the future, or to compel the production of goods.

(18) After careful consideration, we are convinced that none of the precedents cited by learned counsel for plaintiff, inclusive of 1960 (2) WLR 180, which is nearest on the facts, would justify the grant of the mandatory injunction in the present case compelling the defendant to make a joint application for transfer. All the cases, it must be noticed, are distinguishable from the present case in one vital sense. Either the parties were not in pari delicto of one party was genuinely ignorant of the contravention of the law, or, as in 1960 (2) WLR 180 the claim itself related to recovery of the goods, apart from the license, which is an inchoate right unless the transfer is authorised. In the present case, the most noteworthy fact is that the plaintiff and the defendant practiced a fraud upon the authorities, conjointly, in contravention of the express provisions of the Motor Vehicles Act. The benamidar of the vehicles representing, himself to be the owner, falsely obtained the permits in his name, and allowed the true owner, who had no permit to conduct the actual business; there cannot be a more flagrant violation of the basic, requirements of the Act, or of its scheme. This was done with the full consciousness of the legal infringement, for a considerable period, and for strategic advantages. Ultimately, one of the parties withdrew the consent to the proposed transfers, the Regional Transport Authority declined the authorisation, and the State Transport Appellate Tribunal also dismissed the appeal as withdrawn.

After these events, there can be no mandatory injunction compelling the defendant to co-operate in any further application for transfer, since this would, in effect give recognition to the fraudulent contrivance, and effectuate rights on the very basis of that contrivance. It is true that a permit or licence does not end with the death of the licence-holder, and become void for instance, it may be said to remain in existence for the further purposes of Section 61 of the Act. See Cooke v. Cooper, 1912-2 KB 248. But that does not help the plaintiff on the facts of the present case. The main second appeal (S.S. No. 1532 of 1963) must therefore succeed to the limited extent that, while the motor vehicles may well be the properties to the plaintiff, as expressly found, and he may be the true beneficiary in respect of all incomes from the transport business to which the permits relate, the injunction cannot be granted and must be declined. It is for the authorities under the Motor Vehicles Act, now to consider what steps have to be taken, when the established facts are that the ostensible permit-holder is not the owner of the vehicles, and is not conducting the business, but is a mere name-lender or benamidar. S.A. No. 1532 of 1963 has to be allowed to this extent.

(19) We may very briefly deal with S.A. No. 1394 of 1963 and the related C.R.P. No. 184 of 1964, as the facts here are special and peculiar. These concern one bus, MDH. 730, which was also acquired by the plaintiff in the name of defendant, with a permit in the name of the defendant. Subsequently, Ex. A-121 came into existence as between the parties and the learned District Judge, in first appeal has set forth the Tamil text of two passages of this document. Under this document, MDH. 730 was valued at Rs. 19,000 and conveyed to the defendant(benamidar) for Rs. 19,000, of which Rs. 5,000 was paid in cash for the defendant, and the rest of the consideration was covered by an undertaking to discharge debts and to make a future payment. One clause of the agreement stated that if there was default in the obligations undertaken by the defendant, the plaintiff had a right to take the bus back into his possession. Hence, as and from 1-1-1957 the defendant became the actual owner of the bus; he was already the benamidar, and had the route permit in his name. Later, by virtue of the clause that we have referred to the plaintiff seized the motor vehicle, but it was converted into MDU. 4069, another vehicle, such substitution being allowed under the Act. The learned District Judge differing from the Court below, thought that the plaintiff could not be heard to urge that he was entitled either to the finally substituted bus, or to the transfer of the route permit. Hence, the learned District Judge vacated the decree of the trial court as far as MDU. 4069 was concerned, in respect of the declaration and injunction.

(20) C.R.P. No. 184 of 1964 is against the order of the learned District Judge allowing the application of the defendant to amend the appellate decree by substituting MDF. 2123 for MDU. 4069. This was because of a final replacement of the vehicle. The plaintiff urges, in the revision proceeding, that this amendment after the disposal of the appeal ought not to have been allowed. This apart the true argument of Mr. Thiruvankatachari for the plaintiff is that the learned District Judge, in effect, has wholly negatived the rights of the plaintiff in respect of this bus, even if the seizure of the bus by the plaintiff under the clause in Ex. A-121 makes him a mortgagee. There having been successive replacements, and MDF. 2123 is the latest substitute, it may be far more valuable than MDH. 730. On this part of the case, even in minimal view, the plaintiff is entitled to retain possession of the bus, pending full settlement of the claims and counter claims as between the parties, namely, what amounts the plaintiff could claim, on the security of the vehicle and how the profits derived by the business of this permit have to be dealt with, in terms of the legal rights of parties etc. We are segregating this matter altogether from the scope of these proceedings, and relegate these claims and counter-claims for determination, as between the parties in an appropriate litigation. We may observe that a detailed accounting procedure seems called for, which is entirely beyond the ambit of the present litigation. S.S. No. 1394 of 1963 of the plaintiff and the related C.R.P. No. 184 of 1964 suceed to this limited extent.

(21) The parties will bear their own costs.

(22) Order accordingly.


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