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Kabilan Transports Private Ltd. Udumalpet and anr. Vs. Aswini Transports (P.) Ltd. - Court Judgment

LegalCrystal Citation
SubjectMotor Vehicles
CourtChennai High Court
Decided On
Reported in(1976)1MLJ439
AppellantKabilan Transports Private Ltd. Udumalpet and anr.
RespondentAswini Transports (P.) Ltd.
Cases ReferredK. Balasubramania v. N.M. Sambandamoorthy
- .....(kabilan transports private limited) has preferred c.r.p. no. 864 of 1972 in so far as the permit granted in its favour was set aside.3. kannan lorry service (private) limited, applicant no. 7 before the regional transport authority (appellant in appeal no. 715 of 1972) has filed c.r.p. no 1427 of 1972, and this is how these revisions have come up before me for hearing. it may be useful to refer to a few more facts for a proper appreciation of the case.4. messrs. kabilan transport (private) limited was awarded 11.53 marks by the regional transport authority, while messrs. kannan lorry service obtained 10 marks and aswini transports got 13.57 marks.5. mr. t. chengalvarayan, learned counsel appearing for the petitioner in c.r.p. no. 864 of 1972 raises the following submissions:6......

S. Mohan, J.

1. These two revisions relate to the grant of Stage Carriage Permit to ply one additional bus on the route Udumalpet to Coimbatore. In response to the invitation of applications, 25 operators preferred their applications. The Regional Transport Authority, Coimbatore, granted the permit to Applicant No. 17, before it, viz., Messrs. Kabilan Transports (Private) Limited, Udumalpet. This was by its proceedings, dated 18th March, 1971.

2. Five appeals were preferred against the said grant. The State. Transport Appellate Tribunal, by a common order, dated 18th March, 1972 set aside the grant made in favour of Messrs. Kabilan Transports (Private) Limited. The grantee before the Regional Transport Authority (Kabilan Transports Private Limited) has preferred C.R.P. No. 864 of 1972 in so far as the permit granted in its favour was set aside.

3. Kannan Lorry Service (Private) Limited, Applicant No. 7 before the Regional Transport Authority (Appellant in Appeal No. 715 of 1972) has filed C.R.P. No 1427 of 1972, and this is how these revisions have come up before me for hearing. It may be useful to refer to a few more facts for a proper appreciation of the case.

4. Messrs. Kabilan Transport (Private) Limited was awarded 11.53 marks by the Regional Transport Authority, while Messrs. Kannan Lorry Service obtained 10 marks and Aswini Transports got 13.57 marks.

5. Mr. T. Chengalvarayan, Learned Counsel appearing for the petitioner in C.R.P. No. 864 of 1972 raises the following submissions:

6. Though the respondent obtained higher marks than the revision petitioner, the Regional Transport Authority took into consideration that the respondent was not operating the Pollachi-Kaliapuram route regularly and the temporary permit was given on this route to the other operator as substitute. It also took into consideration that the respondent was already covering the entire sector. It would, in effect, mean that the Regional Transport Authority did not want the respondent's predominant influence. However, the State Transport Appellate Tribunal took a light-hearted view of the matter saying that the non-performance of service has not ended in any punishment, and therefore, that should not be considered as a de-merit. Even otherwise, it related only to a negligible period of three days and, as such, no weight should be given to that. This approach is wrong and in support of the same, reliance is placed on the unreported judgment in W.P. No. 14 of 1968. In addition, as seen above, the respondent was covering the full sector in which case, it would have a predominant influence almost amounting to monopoly, which was a relevant consideration which was taken into account by the Regional Transport Authority, but it was not considered in its proper perspective by the Appellate Tribunal.

7. Even with regard to viable unit, it would prefer the respondent as a three bus operator, in order to encourage and build up a viable unit, which was waiting since May, 1970. In doing so, it ignored the stagnation suffered by the revision petitioner. It is the further submission of the Learned Counsel that after the award of marks, before making the actual grant, the criteria mentioned under Section 47 of the Motor Vehicles Act (hereinafter referred to as the Act) should be borne in mind. But the Appellate Tribunal was purely guided by the higher marks and thereby ignored altogether the conditions adumbrated under Section 47 of the Act.

8. Mr. K.K. Venugopal, Learned Counsel for the revision petitioner in C.R.P. No. 1427 of 1972 strenuously urges that though his client secured only 10 marks, in fact, he would be entitled to 4 additional marks, as the owner of four permits. But, those marks were not awarded by the Regional Transport Authority on the ground that the permit-holders, who have surrendered the permit and became non-viable, need not be granted marks for viable units and this concept has been upheld by the Appellate Tribunal. In case this tendency is not cured, the operators will always try to manoeuvre by giving out unremunerative units from viable ones.' The approach of the State Transport Appellate Tribunal was that the revision petitioner claimed the permit with a view to compensate for the loss of the permit on the unremunerative unit voluntarily surrendered by him without any consideration to the interests of the public on the sectors served. To buttress this finding, it is stated that no material had been placed with the Regional Transport Authority for dropping the route or the route for which the permit was surrendered as unnecessary.

9. The finding is attacked by the Learned Counsel on two grounds (1) surrender per se is not a disqualification and it has been categorically laid down so in W.P. No. 1048 of 1966. As laid down in that decision, it ought to have gone into the circumstances which led to the surrender of the permit. But, it did not do so. Added to this, I.A. No. 1205 of 1971 was filed to call for certain records, which would establish the circumstances under which the surrender was made and the order passed by the Regional Transport Authority thereon. This interlocutory application was allowed and the respondents were directed to file their objections by an order, dated 13th October, 1971. The failure to advert to the records, which were directed to be sent for, is a material irregularity vitiating the order. If the records were perused, that would clearly establish that the route for which the permit was surrendered, viz., Pallachi to Anamalai, was a non-remunerative route on account of poor collection. In such a case, it would be a national waste on the part of the operator to run the route. The order of the authorities in refusing the four marks, which his client would be entitled to under Rule 155-A(3)(f) is, therefore, incorrect. If the said marks had been awarded, his client would have secured the highest number of marks, viz., 14, which undoubtedly would have made the authorities concerned, to grant the permit in his favour.

10. Mr. G. Ramaswami, Learned Counsel for the respondent, viz., the grantee by the State Transport Appellate Tribunal, meets the above arguments in the following manner.

11. As regards the non-performance of the revision petitioner in C.R.P. No. 864 of 1972, the Tribunal held in paragraph 12 of its order, after referring to the various orders and the circumstances under which there was non-performance by the 4th appellant before it, that the 4th appellant had obtained permission from the concerned authority to run a spare bus for the month of December, 1970 and January, 1971 and was maintaining the spare bus excepting for three days and even during those three days, the respondent could not place materials to show, operation by any other operator on that route. This is a factual finding' and in support of this finding the Interlocutory Application was taken to produce the relevant document, and therefore, no exception could be taken to this finding.

12. As regards sector qualifications, that is one of the relevant considerations under Section 47(1)(e) of the Act. It will depend on each case as to whether by the grant of a permit to an operator, who was already covering the full sector on the route in question, it would constitute a predominant influence, as laid down in Rama Vilas Service v. Raman and Raman Limited : [1959]37ITR204(Mad) . In the instant case the State Transport Appellate Tribunal took, that into consideration and found that the predominant influence was not a ground urged by any of the objectors.

13. In reply to the contention of the revision petitioner in C.R.P. No. 1427 of 1972, the Learned Counsel urges that the proposal to open the route in question was on 15th April, 1970 and the surrender was on 30th April, 1970. This itself will clearly show that the surrender was mala fide with a view to secure the 4 marks for a viable unit. Even this apart, where an operator surrendered because it was a non-remunerative route, certainly it would cause inconvenience to the public and on the ground of public interest, it is well open to the authorities charged with the function of granting permit, to prefer another operator and that was what was done by the Tribunal.

14. Concerning the failure to advert to the records, the approach of this Court may be in either of the two ways. If the records were there and if it had failed to advert to the records, it would have been a different matter. But, notwithstanding the order, dated 13th October, 1971, the records which were filed in Appeal No. 1130 of 1970, were not before it when this appeal was argued. Therefore, no question of failing to advert to the records would arise, in which case, there is no material irregularity or failure to exercise its jurisdiction. Even the grounds of revision proceed on this basis.

15. The other approach is, that even the so called records merely disclosed that the route for which the permit was surrendered need not be reopened since a longer route covering the said area was in contemplation. That again, in any event, cannot be held to be in favour of the revision petitioner so as to claim the 4 marks on the ground of viable unit. The factual finding is that there is a transfer of permit.

16. In W.P. No. 65 of 1970, more or less under similar circumstances, this Court has held that on this factual finding, the order of the authority should not be interfered with. After the award of the marks, public interest is the prime consideration and after all in a case of this kind, it is well open to the authorities to prefer an operator securing 13.57 marks as against an operator securing 14 marks (even assuming that the said operator is entitled to the 4 additional marks), and need not be solely guided by the higher number of marks alone. In support of this submission, the Learned Counsel relies on K. Balasubramania v. N.M. Sambandamoorthy : [1975]3SCR91 .

17. I will now advert to the merits of the various contentions advanced by the respective counsel.

18. As regards the non-performance of the respondent for three days, there has been an elaborate discussion in paragraph 12 of the order of the Tribunal and ultimately it came to the conclusion that on that ground it should not be held that the respondent was not entitled to the permit since no great weight should be given to the non-performance for these three days. I am unable to agree with Mr. T. Chengalvarayan, Learned Counsel for the revision petitioner in C.R.P. No. 834 of 1973 that what operated in the mind of the Tribunal was the failure to take action against the non-performance. It merely puts it, as one of the circumstance, but that was not the sole basis. In W.P. No. 14 of 1968, I find that the action for non-performance proposed under Rule 160-K of the Madras Motor Vehicles Rules was dropped. Therefore, it was contended that the lapse which constituted the basis for the proposed action ought not have been taken into account for setting aside the order of the Regional Transport Authority. Ismail, J., held therein that the facts and circumstances which constituted the basis for taking action under Rule 160-L are not wiped out and are not erased by the simple fact that the contemplated action under Rule 160-L has been dropped, and those facts and circumstances can certainly be taken into account for coming to a conclusion that an operator, who is guilty of such lapses, is not a person to be awarded with a further grant of permit. This is exactly what has happened in the present case.

19. Apart from the factual distinction available in the case, as I said above, in paragraph 12, very many documents are referred to and the factual finding is that the respondent produced a certificate from the President, Mettupalayam Panchayat and the receipt for the bus stand fee issued by the Pallachi Municipality showing that from 29th December, 1970 to 31st December, 1970, the bus stand fee was paid by the respondent's spare bus MDB 4849, and as such the A.B.T. Private Limited were not plying on these three days. Though an attempt was made to disprove this, the Tribunal did not accept that evidence. However, Mr. Chengalvarayan would refer me to pages 172 to 179 of the State Transport Appellate Tribunal's file D.Dis. No. 11288 of 1971, and would contend that, the 'attakshi' and the tickets enclosed should not be accepted. I am unable to appreciate this argument. It is well open to the Tribunal to accept this evidence. In any event, this is a factual finding.

20. Regarding the question of predominant influence, the finding of the Tribunal is, that none of the parties took any abjection to the grant of the permit to the 4th appellant (the respondent in C.R.P. No. 864 of 1972) on the ground that the 4th appellant is likely to get predominant influence. It has also been further found that the other operators were operating on different portions of this route. As rightly contended by Mr. G. Ramaswami, each case will have to be decided on its own facts and there can be no hard and fast rule concerning this. The following passage in Rama Vilas Service v. Raman and Raman Limited : [1959]37ITR204(Mad) supports the respondent.

It is obvious that in one sense the scheme of grant of permits under the Motor Vehicles Act involves a monopoly to a certain extent. On a particular route only the person who has obtained a permit from the transport authorities can ply a stage carriage. Others cannot. But at the same time, it cannot be denied that it is open to the transport authorities to grant another permit to another person to ply on the same route. The person who had been enjoying so to say a monopoly on that route cannot complain of any legal injury to his right. In that sense there is no question of monopoly Vide : G.S.S. Motor Service v. State of Madras : AIR1953Mad96 . It appears to us that when the word 'monopoly' is used in the orders of the State Transport Appellate Tribunal and the arguments before us, what is meant is that factually a particular operator is the sole operator running several buses on a particular route without there being any competitor. The operator enjoys this favourable position not because he has an indefeasible right to such enjoyment but because it happens that he holds all the permits on that particular route for a particular period. It may be that at the end of the period when he applies for renewal of the permit he may not be able to secure a renewal because there are other applicants more qualified who may be granted the permit. We need not embark on a discussion of the merits and defects of monopoly from the point of view of economic development. In certain circumstances monopoly in a particular kind of trade or business may be in the interest of the public but in other circumstances it may have a contrary effect and may be destructive of individual enterprise, and free competition is the life of business. Having regard to the present system in vogue relating to the grant of stage carriage permits, if monopoly in the strict sense should be avoided, then there should not be grant of a single permit to one operator on any particular route, for that would mean that the State has conferred on such operator a monopoly in the carrying on of the business on that route. Monopoly, therefore, should be understood as undue concentration of a number of permits in the hands of a single operator on any route, excluding competition from other operators.

This is also a relevant consideration as adumbrated in Section 47(1)(e) of the Act. Where a Tribunal chooses to prefer a three bus operator as against a four bus operator for the purpose of viable unit, I am unable to hold that the order is, in any way, vitiated.

21. Turning to C.R.P. No. 1427 of 1972, no doubt surrender or per se is not a disqualification. To that extent, Mr. K.K. Venugopal is correct in his submission. It has been laid down in W.P. Nos. 1048, 1419 and 1484 of 1956, by Rajagopala Ayyangar, J. that surrender by itself would not be a disqualification, and it depends upon the circumstances in which the surrender was effected viz., whether by surrendering the permit inconvenience was caused to the travelling public or whether he had thereby or otherwise manifested his unwillingness or inability to operate effectively the permit granted to him. This would be a pure question, of fact to be based on all the relevant material.

22. In the instant case, I see no justification for the attack made by Mr. Venugopal that the records which were directed to be sent for in I.A. No. 1205 of 1971 under order, dated 13th October, 1971 were not adverted to by the Tribunal. Notwithstanding the order, these records were not before the Tribunal at the time of hearing. Therefore, there is no failure to exercise the jurisdiction. Where the Tribunal finds that the surrender of the permit was to enable the operator to gain more marks under the heading 'viable unit' certainly, it can take into consideration that fact in public interest. What is urged before me is that it was non-remunerative as far as the operator was concerned. The unremunerativeness may be due to ever so many circumstances and may even include the failure of the operator to provide an efficient service

23. As rightly pointed out by the Tribunal in the matter of grant of permit 'the interest of the public' is a paramount consideration and not the interest of the particular applicant, like the second appellant who is an existing operator plying vehicles. Even assuming that the revision petitioner will be entitled to 4 additional marks, that cannot be the sole criterion on which the permit could be granted. In my view, that would not be conclusive of the issue.

24. On identical circumstances, their Lordships of the Supreme Court held in K. Balasubramania v. N.M. Sambandamoorthy : [1975]3SCR91 as follows at pages 821-822:

But that by itself would not be determinative of the controversy. The paramount consideration to be taken into account in determining as to which of the applicants should be selected for grant of permit always is public interest. Section 47(1) provides in so many words that the Regional Transport Authority shall, in considering an application for a stage carriage permit have regard inter alia, 'to the interest of the public generally', and this is a consideration which must necessarily outweigh all others. It is ultimately on the touchstone of public interest that selection of an applicant for grant of permit must be justified. Clause (3) of Rule 155-A undoubtedly provides for giving of marks to the rival applicants but the number of marks obtained by each applicant can only provide a guiding principle for the grant of permit. It can never override the consideration of public interest which must dominate the selection in all cases. In fact Clause (4) of Rule 155-A concedes that after the applicants were ranked according to the total marks obtained by them the applications shall be disposed of in accordance with the provisions of Section 47(1). The fact that the appellant had 11 marks as against 7.40 of the respondent would certainly be a factor in favour of the appellant, but notwithstanding his higher marks, if public interest so requires, he may have to yield place to the respondent in the matter of selection for grant of permit.

This decision, in my view, affords the complete answer to the argument of Mr. Venugopal. Since the basis of the attack in grounds Nos. 3, 4 and 5 of the Memorandum of grounds for the revision, was that the Tribunal acted with material irregularity in not referring to the records, I myself perused those records. They do not, in any way, advance the case of the revision petitioner. As pointed out by Rajagopala Ayyangar, J., in W.P. Nos. 1048, 1419 and 1484 of 1956, the examination of the facts has to be done. Such an examination here reveals that on account of poor collection, which the bus was getting, the operators proposed to surrender the permit and if the surrender is accepted, the new route as proposed for T.P. may be opened pending finalisation of the arrangements to open the new route. On this, the following order was passed:

The orders of the Regional Transport Authority could not be implemented because of the amendment to Section 48 of the Motors Vehicles Act which has since been published in the Gazette, dated 8th April, 1970. To overcome the difficulty the operator surrendered the permit of the original route and has applied for the grant of a T.P. for the very same route for which T.P. was sanctioned by the Regional Transport Authority. The T.P. applied for may be issued pending observance of the formalities to issue a pucca permit.

The further order is in R. No. 38654-BI/70, runs as follows:

Messrs. K.L.S. (P). Ltd., Pollachi were operating their bus MED 5021 on the route Pollachi to Anamalai via Samathur, Arasur, Angalakurichi, Kottur and Somandurai, Chittur with shuttle trips between Pollachi and K. Vallankundapuram via Samathur, Arasur and Devanurpudur touching Arthanaripalayam. Proposal was initiated to sanction a T.P. to some operators to ply on the route Pollachi to Chellappampalayam. On account of the recent Motor Vehicles Amendment Act the T.P. could not be sanctioned.

Therefore Messrs. Kannan Lorry Service (Private) Limited, Pollachi surrendered the permit stating that the route was unremunerative, that the route was a circuitous one and that the collection of the bus was very poor. Therefore the surrender was accepted and the permit was cancelled under Rule 193 of the Motor Vehicles Rules with effect from 30th April, 1970. Thereafter the route was modified as Pollachi bus stand to Chellappampalayam and a T.P. was also issued in this office R. No. 10488/B2/69 to Kannan Lorry Service (Private) Limited, Pollachi and a proposal to open a new town service route as Pollachi bus stand to Chellappampalayam has also been notified under Section 47(1) of the Motor Vehicles Act. As the route has been modified and as it is proposed to issue pucca permit for the modified route, there is no need to fill up the vacancy of the route surrendered.

Regional Transport Authority: I agree.

25. It is impossible for me to hold that having regard to the proximity of the surrender, viz., the route in question having been proposed on 15th April, 1970 and the surrender having been done on 30th April, 1970, the Tribunal was not correct in concluding that this was done only to gain the marks for viable unit. In fact, the petitioner seems to be more aggrieved because this fact of surrender seems to have weighed against him with regard to the other grants also. This is clear from ground No. 6 of the Memorandum of Grounds for the revision, which is as follows:

The learned Appellate Tribunal acted illegally and with material irregularity in not applying its mind to the very salient feature, namely, that the petitioner would have obtained the highest marks for the routes (1) Sethumalai to Coimbatore, (2) Anamalai to Palani, (3) Coimbatore to Amaravathinagar, (4) Udumalpet to Coimbatore (route in question), (5) Alamalayam to Coimbatore, (6) Kanniyur to Coimbatore, (7) Mettupalayam to Pollachi (appeal pending), (8) Udmalpet to Coimbatore (appeal pending), (9) Rudrapalayam to Coimbatore, namely, 14, 10.68, 13.5, 14, 13.77, 13.86, 13.04, 14, 13.98, marks respectively as against the marks of 11.67, 10, 12.22, 11.53, 8.64, 13.386, 12.46, 8.16, 13.74, obtained by the grantee, if it were not for the fact that these 4 marks had been deleted and that as a result they had been in fact deprived of their right to as many as 9 permits, so that the refusal of these 4 marks would he punitive in character to permanently deprive the petitioner of his right to obtain any permit in future.

26. Whatever that may be, as I held above, where an authority charged with the grant of permit, takes this in to consideration and holds that it may not be in public interest to grant a permit to such an operator, the order cannot be hold to be, in any way, vitiated.

27. In W.P. Nos. *2657, **3399, ***3603 of 1970, a Division Bench of this Court held that in a case where out of six permits, two were transferred in favour of the brothers of the operator, notwithstanding the earlier order of the Tribunal on a review of the circumstances, the Tribunal in the instant matter was of the view that the reduction was possible to get advantage of being a non-fleet owner and thus get weightage for building up a viable unit, the matter was a factual one and they declined to interfere with that finding.

28. Even earlier, I have referred to the factual finding of the Tribunal that in the present case the permit was surrendered to compensate for the loss of the permit on the non-remunerative route voluntarily surrendered by him without consideration of the interest of the public on the sector served.

29. Exercising revisional jurisdiction and following the ratio laid down in the above ruling, I necessarily decline to interfere. I see no merit in either of these revisions, and in the result, they will stand dismissed with costs.

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