AI Structured Summary
Not yet generated for this judgment
Judgment
Padmanabhan, J.—The above civil revision petition arises under the Motor Vehicles Act and has been preferred by one K. Janardhanan,
Proprieror of Sri Janardhanan Transports, Rasipuram against the judgment of the State Trasport Appellate Tribunal, Madras dated 1st October
1978.
The Regional Transport Authority, Salem called for application for the grant of stage carriage permit in respect of one bus to ply on the route
Rasipuram Belukurichi via Kakkavery Mungilpatti, Oduvankurichi, T. Jodarpalayam, Thoppapatty, T. Jodarpalayanm, Kalkurichi Vellalapatty and
Kalkurichi. There were five applicants and the Petitioner Janarthanam was applicant No. 5 before the Regional Transport Authority. The Regional
Transport Authority by his order dated 7th October 1972 granted the permit to the revision Petitioner and rejected all the other applications.
Against the order of the Regional Transport Authority one N. Ponnuswamy, the Respondent herein and who was applicant No. 3 before the
Regional Transport Authority preferred an appeal before the State Transport Appellate Tribunal Madias. The appellate authority by its impugned
order dated 18th October 1978 allowed the appeal, reversed the order of the Regional Transport Authority and granted the permit to the
Respondent herein. Hence, this civil revision petition.
The Regional Transport Authority preferred the revision petition on the ground that he was a town bus operator and that he had obtained the
various Mark of 10.21 and that he had got all the basic qualifications as required by Rule 155-A of the Tamil Nadu Motor Vehicles Rules, 1940.
The Respondent, applicant No. 3, was not granted the permit on the ground that he did not possess experience in operating town service, a spare
bus of his own, no branch office and no sector qualification on the routte in question.
The appellate authority found that the Respondent continued to be a single bus operator even as on 22nd December 1971, his experience as a
bus operator commenced from 1961 as omni bus operator from 23rd May 1968. He has a branch office at Namagiripet on the route in question.
His history sheet was absolutely clean on the date of hearing of the applications by the Regional Transport Authority. However, he had no sector
qualification and no experience as town bus operator. As against this, the appellate authority found that the Petitioner was a two bus operator on
the date of hearing before the Regional Transport Authority. The appellate authority also found that the Petitioner had admitted that he obtained the
permit as a third route permit, that he transferred the permit on the route Salem-Attur in his name from Rums (P) Ltd, Rasipuram, that he
transferred his permit on the route Rasipuram-Panamarathupatt to a third party by name Muthuswmy Go-under on 26th March 1974, that he again
transferred the permit on the route Salem-Attur to one Tirupathi on 16th April 1976, that in the meanwhile he has also surrendered the spare bus
permit, that in the year 1977 the Petitioner transferred the permit on the route Salem-Namagiri-pet to Rathinam on 19th September 1977 and that
on the date of the hearing he possessed only the permit which is the subject matter of the revision petition. The appellate authority also found as a
matter of fact that the Petitioner did not take any plea in his counter statement that during the period 26th March 1974 to 19th July 1977 when he
transferred three permit and surrendered his spare bus permit, he was laid up with fever and that he was prevented from looking after the transport
business. In other words, the appellate authority has found that the Petitioner was trafficking in permits. The appellate authority has equally found
that the Petitioner has admitted the transfer of the three permits and a spare bus to third parties for valuable consideration. On these grounds, the
appellate authority found that the Respondent was entitled to the permit in preference to the Petitioner.
On behalf of the revision Petitioner Mr. G. Ramaswami, the learned Counsel for the Petitioner, raised the following contentions. (1) While the
Petitioner was a town a bus operator, the Respondent was a new entrant. (2) The finding of the appellate authority that the Respondent was not a
single bus operator was erroneous. (3) The Respondent did not possess a spare bus and the sector qualification. (4) The appellate authority
committed an illegality in taking into account the subsequent transfers effected by the revision Petitioner. (5) The finding of the appellate authority
that the revision Petitioner was trafficking in permits is not supported by any legal evidence. (6) The finding of the appellate authority is vitiated by a
misreading of the evidence.
I shall first deal with Mr. G. Ramaswami''s contention that the finding of the appellate authority that the revision Petitioner was trafficking in
permits is not supported by any legal evidence. In paragraph 8 of its order the appellate authority has observed as follows:
In the counter-affidavit filed by the Respondent there is nothing to show that during this particular period he bad been laid up with fever and as
such he was not able to look after the transport business.
At the end of the paragraph again the appellate authority has observed as folllows:
As a matter of fact, the Respondent has not denied the specific contention of the Appellant in this direction in his counter affidavit filed in
Interlocutory Application No. 514 of 1978.
This observation of the appellate authority is factually in corrects In paragraph 3 of the affidavit filed in supoort of Interlocutory Application No.
514 of 1978, the Respondent has deal with the transfer of the permits by the revision Petitioner. The revision Petitioner has travereed this allegation
in paragraph 2 of his counter affidavit which is as follows:
With regard to the allegation that there was transfer of permits, I submit that there are subsequent events. Further I was bed ridden for nearly two
years and therefore I had to transfer the permits. This I submit was rather un-forseen circumstances.
In these circumstances, factually it is not correct to state that the revision Petitioner had not denied the averment of the Respondent that he had
been trafficking in permits. The appellate authority should have taken note of the allegation made by the Petitioner in his counter affidavit in
Interlocutory Application No. 514 of 1978 that he was laid up with fever for two years and was therefore compelled to transfer the permit and
herein stated whether it was accepting the case of the revision Petitioner that he was laid up with fever or was rejecting the case. On the other
hand, the entire question has been dealt with the appellate authority on tie basis that the revision Petitioner had not denied the allegations of
trafficking in permit in his counter affidavit. Before I deal with the question whether the tranfer of permits by the Petitioner in this case would
amount to trafficking in permits, it is necessary to refer to Rule 155-A of the Tamil Nadu Motor Vehicles Rules containing guiding principles for the
grant of stage carriage permits. Rule 155-A(2) states that:
The applicants for the grant of a permit shall first be screened and those who are found unsuitable on one or more of the following grounds shall be
disqualified, and the transport authority shall give reasons for such disqualification (1)...(ii)...(iii) Trafficking in permits (iv)....
Rule 155-A(3) states that after eliminating in the manner laid down in Sub-rule (2) the applicants who are unsuitable, mark shall be awarded for
assessing the different qualifications of the remaining applicants for the grant of permit as stated therein. If really the Petitioner had been trafficking
in permits, he should. have been screened in the very first instance itself. The very fact that the Regional Transport Authority did not screen the,
Petitioner at the very threshold itself shows that the contention that the Petitioner was trafficiking in permits warranting his being screened, at the
very beginning, was neither raised nor the Regional Transport Authority found that the Petitioner had been trafficking in permits. Once the revision
Petitioner had not been screened on any of the grounds mentioned in Rule 155-A(2), it will not be open to the authority to subsequently entertain a
petition that the applicant for a permit would not be eligible for a permit on any of the grounds which fell within Rule 155-A(2) of the Rules. Even
assuming that the Respondent was entitled to raise the question at a later stage, let me consider whether the Petitioner was guilty of trafficking in
permits.
Now turning to the question of trafficking in permits, the meaning of the words trafficking in permits have not been defined in the Motor Vehicles
Act or the rules made there under. In Murray''s New English Dictionary the meaning of the word trafficking is given as:
to carry on a trade in, to buy and sell; often with a sinister implication; used in disparaging sense, or is sense of dealing considered improper.
In Chamber Twentieth Centuary Dictionary, the meaning of the word to office is given as:
commerce; disgraceful trading: dealings; a trading voyage: to trade; to trade disgracefully; to intrigue.
What exactly is the import of the words trafficking in permits under the Motor Vehicles Act arose for consideration before a Bench of this Court in
N. Sathianathan Vs. B.K.P.M. Amaravathi Ammal and Others, . One of the contentions that was advanced before the Bench consisting of
Ramachandra Iyer C.J., and Ramakrishnan, J., was that when once the transfer of a permit is approved and recognised by the Regional Transport
Authority u/s 59 of the Motor Vehicles Act, it would be conclusive to show that the transfer was bonafide. This argument was rejected by the
learned. Judges. Ramakrishnan J., held that the fact that all the transfers had been approved and recognised by the Regional Transport Authority
u/s 59 previously did not debar the consideration of the question of bona fides of the transfers at a subsequent time when it is brouhght up either by
the objections raised by the rival applicants u/s 59(4) or is made apparent on the basis of the usual enquiry that is made through departmental
channels, for the purpose of satisfying about the position of the various applicants, while considering the applications for permits and determining
the rival claims, bearing in mind the principles laid down in Section 47 of the Act. At the same time, Ramakrishnan J., speaking for the Bench
observed as Follows:
Now the word traffickking in connection with permits has not been defined, either in the Motor Vehicles Act or in the rules framed thereunder. The
ordinary dictionary meaning of the word trafficking given a fairly accurate idea of its import. Murray''s New English Dictionary defines it as; to
carry on a trade in, to buy and sell; often with a sinister implication; used in disparaging sense, or in sense of dealing considered improper. We may
also refer to the use of pharases 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 allow for transfer of stage carriage permits in certain contingencies.
Therefore, the mere fact of the transfer of permit as such without further evidence, may not carry any stigma to satisfy the test of trafficking. Now if
a transfer is made in the normal circumstances of business, of 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 resorted to repectively when the normal course of business of the operators
does not demand it, and the sales are effected with the clear motive of making a profit by such transfers it is obvious that the operator is taking as
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
desirable to prefer him, as be bad shown himself to be a person who has abused the permits granted to him.
The learned Judge referred to the judgment of this Court in Writ Appeal No. 138 of 1957which reversed the judgment of Raja Gopala Aiyangar
J., in Writ Petition No. 25 of 1957 Rajagopala aiyangar J. (as he then was) had taken the view that the onus was on the applicant to prove that the
transfer was bonafide. The appellate Bench reversed the decision of the single Judge Ramakrishnan J., has distinguished the judgment of this Court
in the writ appeal on the basis that there was no allegation in that case that the State Transport Appellate Tribnal put the onus of establishing the
bona fides of the transfer on the applicant Sri Balasubramania Bus Service (P) Ltd., and that the question whether the transfer amounted to
trafficking was decided on a question of fact on the date placed before it including the income tax statements and auditors'' report without
reference to the onus of proof.
In Narasinga Rao v. Government of A.P. (1966) 2 And.W.R. 320. Kumakayya J., (as he then was) observed as follows:
Mere transfer of a permit without more, if the permission was fully obtained will not amount to trafficking of permit The concept of trafficking is not
defined in relation to permits in the Motor Vehicles Act. Its meaning in common parlance however is well known to one and all. The ordinary
dictionary meaning of the word trafficking is to carry on trade, to buy and sell ten with a sinister implication, used in disparaging sense or said of
dealing considered improper.
In S.A. Sattar Vs. State of Andhra Pradesh and Others, . Ekbote C.J., after referring to two earlier decisions observes as follows:
In order to prove the charge of tiafficking not only sales and purcases of permits for more than once is necessary but such transactions must have
been indulged in with a profits motive. Further the motive must be improper whereby a stigma is attached to such transactions. It is only when all
these things co-exist that a person can be said to have indulged in trafficking in permits within the meaning of Rule 212(1)(iii) and not otherwise.
From the above authorities the following principles Could be culled out. In order to characrterise a transaction as trafficking in permitsthere
should be sale and purchase of permits for more than once. The transaction must have been entered into with a motive of profit. The intention must
be improper, so as to attach a stigma to the transaction. It is only when all these things co-exist that a person can be said to have-indulged in
trafficking. There should be definite evidence before the Regional. Transport Authority from which it can held that the Appellant has been indulging
in trafficking in permits. The burden of proof, lies heavily on the objector to prove that a transaction in question amounts to trafficking in permits.
When the facts of this case arc tested in the light of the principles stated above the finding of the appellate Tribunal that the Petitioner has been
guihy of trafficking in permit cannot be justified. As rightly contended by Mr. G. Ramaswami, the appellate Tribunal committed a serious and a
factual error in stating that the Petitioner had not denied the allegation of the Respondent that the Petitioner was guilty of trafficking in permits. The
allegation in paragraph 2 of the affidavit filed by the Respondent in Interlocutory Application No. 514 of 1978 is to the effect that the Petitioner
was guilty of transfer of permit for huge profits and that he was guilty of trafficking in permits. In paragraph 2 of the counter affidavit filed by the
Petitioner it is clearly stated that since the Petitioner was bad-ridden for nearly two years he had transferred the permits and that it was due to
unforeseen circumstances. As regards the spare bus the Petitioner had stated that the vehicle was a 1961 year old model and that he had applied
for a fresh permit and that by proceedings in R. No. 85139/ A3/77, dated 27th February 1978 the Regional Transport Authority granted the spare
bus permit. In view of this I shall be. taking too narrow a view of the matter if 1 were to accept the statement of the Tribunal that the allegation of
the Respondent, regarding trafficking in permits on the part of the Petitioner had not been countered. The allegations in paragraph 2 of the counter-
affidavit read as whole leaves no room for any doubt that the allegations regarding trafficking made by the Respondent have been denied by the
Petitioner. The observation of the Tribunal that there was nothing to show that during the particular period the Petitioner had been laid up with
fever and as such he was not able to look after the transport business does not lead to the conclusion that the Petitioner had been trafficking in
permits. No doubt, the appellate Tribunal has observed that the Petitioner had admitted the transfer of three route permits and a spare bus permit
to third parties for valuable consideration. In this connection, it is necessary to refer to a judgment of Veeraswami J. (as he then was) in Writ
Petition No. 311 of 1962 (Vimala Devi v. S. Pasupatji and two Ors.). The learned Judge has held that a permit is property and that Section 59
proceeds on the assumption that it is capable of transfer, though the learned Judge has taken care to observe that trafficking in permit is not
permitted. The learned Judge has also observed as follows:
That a stage carriage permit is property can, in my opinion admit of no doubt. If one looks at the permit in the abstract, it may appear as if it is only
a privilege conferred upon the owner of a transfer vehicle to use it.
But the substance of the matter is that the vehicle itself will be of no use without the permit which enables the owner to use it. That way a permit
acquires a value, a value measurable in terms of money. It is true thai trafficking in permits is not permitted. But that is another matter. In fact,
Section 59 itself proceeds on the assumption that permit is capable of transfer. Though it is common knowledge that, in application for transfer no
consideration is shown for the transfer of a permit as distinct from conveyance of the relative transport vehicle, in reality transfer of a permit is for a
consideration. This is what a Division Bench of this Court observed in G. Vijayaranga Mudaliar Vs. Commissioner of Income Tax, Madras, .
Buses have little value shorn of their permits to ply on particular routes. It is an open secret that when buses are transferred, the consideration paid
by the purchaser of the vehicle is only commensurate with their earning capacity which is intimately connected with the routes on which they
operate. But, nevertheless no transfer or admits having received any consideration for transfer of the permits and the transferee also never
acknowledges that he paid any amount for annexing the routes along with the buses. We must observe that this pretence of nonpayment of
consideration for transfer of permits is nothing short of sheer hepocrisy. We can almost take judicial notice of the fact that whenever a bus with a
permit is transferred a fair portion of the consideration would represent the value attributable to the pecuniary gain derived by operating on the
route.
That was as income tax case in which, on a question of allowing deperciation, allocation of value to the permit as well as to the bus transferred was
upheld'': It may be stated that the learned Judge was dealing with a writ petition which had been filed against an order of the State Transport
Appellate Tribunal setting aside the order of the Regional Transport Authority holding that no permission for the transfer of a permit could be
granted in public interest. The learned Judge reversed the judgment of the appellate Tribunal on the ground that the object before the Regional
Transport Authority to the application filed for permission for the transfer of a permit could not be an aggrieved person. In view of the above
decision of Veeraswami J., (as he then was) with which I very respectfully agree, I am unable to subscribe to the view of the appellate Tribunal that
merely because a permit has been transferred by the Petitioner to a third party for valuable consideration it must necessarily follow that there has
been a trafficking in permits. There is absolutely no evidence to show that the Petitioner has been trading in the sale of permits with improper
motive to such an extent the it casts a stigma on him. The only proof that is available is that the Petitioner had transferred three permits. This
without more will not be sufficient to draw any inference that the Petitioner has been trafficking in permits. I have therefore no hesitation in setting
aside the finding of the appellate Tribunal that the Petitioner has been trafficking in permits which according to me is vitiated by a material
irregularity.
When once I come to the conclusion that there is no evidence that the Petitioner has been trafficking in permits the finding of the appellate Tribunal
that the Petitioner has proved, by his conduct that he is a person who is not in any way evincing interest in the transport field has to be held to be
untenable and is liable to be set aside and is set aside.
In view of the conclusiosn reached by me it is unnecessary for me to deal with the contention of Mr. G. Ramaswami that the appellate Tribunal
Commixed an illegality in taking into account the subsequent transfers made by the revision Petitioner.
The next question for consideration is whether the Petitioner is entitled to any preference on the ground that he is a town bus operator while the
Respondent is a new entrant. It was strenuously contended by Mr. M.N. Rangachari that the experience as a town bus operator cannot be counter
at all. In this connection, a reference was made to the judgment of Ramakrishkan J., in Writ Petition No. 3718 of 1967 (The Ana-malais Bus
Transports P. Ltd. v. R.T.A. Coimbatore). It was contended before the learned Judge on the basis of the observations of the Supreme Court in
Jagannathan & Bros. v. Sow-dambigai Motor Service (1964) 2 M.L.J. 81 that an operator even though he might have experience of running buses
on certain routes if he has no recent experience of running buses in a town, he should be considered as a new entrant so far as a town service is
concerned. The learned Judge observed:
All that the aforesaid Supreme Court decision lays down is that in the case of applicants for a town route, applicant without any prievious
experience of a town route may be treated as a new exteant, but it lays down no rule prohibiting the grant of a permit for a person thus viewed a
new entrant, if other grounds exist justifying such a grant.
A similar question arose before Ismail J., (as he than was) in Writ Petition No. 3880 of 1967 (Dharmalinga Mudaliar, Prop) S. D. Lingant Pts.
Thanjavur v. Messrs. Swami Motor Transports P. Ltd. Thanjavur and three others). After referring to the observation of the appellate Tribinal with
regard to the decision of the Supreme Court in Jagannathan & Bros. v. Sowdambigai Motor Service (1964) 2 M.L.J. 81, Ismail J., (as he then
was) observed as follows:
No doubt this observation of the Tribunal gives the impression that the Tribunal understood the decision of the Supreme Court to lay down that the
possession of town service experience is an indispensable qualification for the grant of a town service permit. However, notwithstanding this
erroneous appreciation of the decision of the Supreme Court the Tribunal had not actually committed any error in the actual application of the
principle in question. All that the Tribunal ultimtely held and did was that so long as an operator with a town service experience is available there is
no justification for prefering an operator without such town service experience. This is clear from the following sentence occurring in the order of
the Tribunal itself. ''The 1st Appellant and the 2nd Respondent are already existing town service operators. Even the 2nd Appellant is plying on
some of the routes in Thanjavur town. Threfore, it cannot be contended that there is paucity of the operator and a person with experience in plying
mofussil buses could be easily chosen for this route''. Then Mr. T. Chengalvarayan pointed out that there is really no difference between a town
service and mofussil service. I am of the opinion that it is too late in the day to advance such an argument. The rules do contemplate a distinction
between a town service route and mofussil service route and the decision of the Supreme Court as well as this Court have taken note of the
distinction between the two service. As a matter of fact, the decision of the Supreme Court referred, to already did. take info account the
difference between the two service. Consequently I am unable to accept the argument of Mr. T. Chengalvarayan that the Petitioner ought to have
been preferred even though he did not have experience of town service as such, though he actually covers a considerable sector in the present
route in question.
Apart from the fact that the observation of the learned Judge is binding on me, I am in complete agreement, if I may say so with respect, with the
views expressed by the learned Judge. Undoubtedly, the motor vehicles rules contemplate a definite distinction between a town service and a
moffussil route. An operator having experience of plying a bus on town service route will be in a much better position to carry on the town service
more efficiently than one who has no such experience. In this view, the observation of the Tribunal that the experience in town service, operation is
not an essential qualification for the grant of town service route permit is not only not correct but in violations of the principles laid down by Ismail,
J. (as he then was) in Writ Petition No. 3880 of 1967.
The view of the appellate Tribunal that the possession of sector qualification is not a material consideration is erroneous. Section 47 of the Act
provides that in deciding the grant or to refuse stage carriage permit regard is to be had to the interest of the public generally, the advantageous to
the public, the adequacy of the road passenger benefit to any particular locality, the operation by the applicant of other transport services and the
condition of the roads. In taking a decision in respect of these matters the fact that the applicant has experience of a particular route over which the
stage carriage bus to be run should be a material consideration. In Veerappa Pillai v. Rathnaswami Nadar (1933) 1 M.L.J.46 (S.N.). Bench of this
Court held:
It should be a material consideration to take into account that the Appellant has experience of a particular route over which the stage carriage has
to be run and that such a consideration is not out of place in deciding to whom in the intrest of the public, the stage carriage permit should be
granted.
This decision has been followed by a Bench of the Andhra Pradesh, High Court in Ramayya v. State of Andhra AIR 1956 And. 217 wherein
Satyanarayana Raw J., has stated the ratio thus.
Coming to reason No. 2 Counsel for the Appellant contended that the fact that the person is an exsiting operator having a permit in respect of a
portion of the route in question is not a ground to the grant of permit and should not be taken into account and that herefore the order of the
Government is vitiated. We consider that the fact of the Respondent is an existing operator in respect of a part of the route in question is not
extraneous or irrelevant consideration.
In Hunuman Transport Co. v. State of Madras, AIR 1959 Mys. 72. as Gupta C.J., and Somnath Iyer J., (as he then was) have observed that the
sector qualification as well as the consideration that a bus owner should be made a fleat owner are consideration as to the interest of the public
generally and would fall within the purview of Section 47.
Similarly there cannot be any two opinion on the question that an applicant who has a spare bus as a stand by will be entitled to preference
other things being equal as be will he able to serve the interests of the travelling public with greater efficiency.
The contention urged by the learned Counsel for the Petitioner that the Respondent is not a single bus operator is not substantiated by any
evidence. Even the Regional Transport Authority has proceded on the basis that the Respondent was a single bus operator. However, this does
not in any way materially affect the conclusion 1 have arrived at.
I have already demonstrated how the appellate Tribunal committed a serious erior in not giving due weight to the fact that the Petitioner has
experience in operating town service and to the further fact that the Respondent has no spare bus of his own and sector qualification. I have equally
found that there is no merit in the finding of the appellate Tribunal that the Petitioner has been trafficking in permits. The Regional Transport
Authority has approached the question in proper perspective and has found that the Petitioner is entitled to the grant of the permit in public interest.
In the result, I set aside the order of the appellate Tribunal and restore that of the Regional Transport Authority. The revision petition is
allowed. There will be no order as to costs.