ORDER

This special leave petition arises from the order of the Division Bench of the Gujarat High Court, made on December 4, 1996 in LPA No. 1430/96. The Motor Vehicle Inspector had imposed penalty of Rs. 1,000/- etc. for violation of the conditions of the contract carriage permit. It was found that the vehicle was being as stage carriage in violation of the breach of the conditions of the permit inasmuch as petitioner was collecting individual fares @ Rs. 1.60 per passenger and was not using the vehicle as a tourist; vehicle hired to one group party. The petitioner filed writ petition in the High Court seeking the relief as under:

"To allow this petition and to issue appropriate writ, direction and order holding and declaring that the respondent authorities have no legal right or power or authority to either seize or detain the petitioner s vehicles shown at Annexure A to this petition in purported exercise of power under Section 207 of the Motor Vehicles Act, 1988 solely on the allegation of collection of individual fare from the passengers."

2. The learned single Judge and the Division Bench refused to grant the relief in the face of Section 207(1) read with proviso thereto, of the Motor Vehicle Act, 1988 (for short, the Act ). Section 207 of the Act postulates the power to detain vehicle used without certificate of registration etc. Sub-section (1) provides thus :"

"Any police officer or other person authorised in this behalf by the State Government may, if he has reason to believe that a motor vehicle has been or is being used in contravention of the provisions to Section 3 or Section 4 or Section 39 or without the permit required by sub-section (1) of Section 66 or in contravention of any condition of such permit relating to the route on which or the area in which or the purpose for which the vehicle may be used, seize and detain the vehicle, in the prescribed manner and for this purpose take or cause to be taken any steps he may consider proper for the temporary safe custody of the vehicle."

The proviso postulates thus :

"provided that where any such officer or person has reason to believe that a motor vehicle has been or is being used in contravention of Section 3 or Section 4 or without the permit required by sub-section (1) of Section 66 he may, instead of seizing the vehicle, seize the certificate of registration of the vehicle and shall issue an acknowledgment in respect thereof."

3. There is a power for compounding the offence provided in Section 206 of the Act. In the light of the sub-section (1) of Section 207, if the officer authorised in that behalf is of the opinion that the vehicle has been or is being used in contravention of any of the aforesaid provisions of the Act or conditions of the permit relating to the route on which or the area in which or the purpose for which the vehicle is used, he may seize and detain the vehicle or compound the offence. The statutory power given to the authorised officer under Section 207 is to ensure compliance of the provisions of the Act. Therefore, the mandamus sought for cannot be issued, as referred to earlier.

4. It is contended by Shri Arun Jaitley, learned senior counsel for the petitioner that the petitioner has taken the vehicle on hire basis from the owner of the vehicle who had the permit for contract carriage of the passengers from one destination to another. They are not collecting any individual fare en route by picking up or setting down the passengers. They are picking up passengers from one place and taking them for tour to the other destination and, therefore, it is a "contract carriage" within the meaning of Section 2(7) of the Act. It is not a State carriage permit but one of contract carriage and, therefore, the view taken by the High Court is not correct in law. It is true that if the holder of the vehicle obtains a contract carriage, the owner may carry a passenger or passengers for hire or reward on contract, whether expressed or implied, for the use of suc