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1963 Supreme(AP) 171
Andhra Pradesh High Court
Judges : NARASIMHAM, P.CHANDRA REDDY
Tekumalla Rama Rao - Appellant
Versus
Durga Suryanarayana - Respondent
Decided On : 09-17-63
An agreement to transfer a route permit in respect of a bus is unenforceable if it contravenes Section 59 (1) of the Motor Vehicles Act, 1939.
Headnote:
MOTOR VEHICLES ACT - TRANSFER OF PERMIT - AGREEMENT TO TRANSFER ROUTE PERMIT - ENFORCEABILITY - SECTION 59 (1) OF THE MOTOR VEHICLES ACT, 1939 - PUBLIC INTEREST - PROHIBITION AGAINST TRANSFER - AGREEMENT OFFENDING PUBLIC POLICY - UNENFORCEABLE.
Fact of the Case:
The plaintiff and the defendant were partners in a stage carriage business. The defendant held the route permit for one of the buses. The partnership was dissolved, and the plaintiff agreed to take over the bus and run it on the same route. The defendant executed a letter of agreement or undertaking stating that he would execute the necessary documents to effect the transfer of the permit and the registration certificate on demand by the plaintiff. The plaintiff brought an action to enforce the transfer undertaken by the defendant.
Finding of the Court:
The Courts below held that the agreement was void and unenforceable as contravening Section 59 (1) of the Motor Vehicles Act (Act IV of 1939) and the rules made thereunder.
Issues: Whether the agreement to transfer the route permit was enforceable.
Ratio Decidendi: The Court held that the agreement was unenforceable as it was forbidden by law within the meaning of Section 23 of the Indian Contract Act. The Court reasoned that Section 59 (1) of the Motor Vehicles Act expressly prohibits the transfer of a permit except with the permission of the transport authority. This prohibition was enacted in public interest and as a matter of public policy. The Court further held that the agreement was not saved by the fact that the defendant had agreed to execute the necessary documents to effect the transfer of the permit and the registration certificate. This was because the agreement itself was void and unenforceable.
Final Decision: The Second Appeal was dismissed with costs.
( 1 ) THE plaintiff is the appellant herein, the Second Appeal arises out of a suit filed for enforcing the transfer of a route permit of a Bus (A. D. S. 471) plying on the route line from Vizianagaram to Chodavaram, pursuant to an agreement in that behalf entered into by the plaintiff and the first defendant on 3-12-1955. The suit was dismissed by the Courts below and that is how the appeal arises. The following are the undisputed, facts which require to be noticed here to appreciate the point Involved in this case, viz. , the enforceability of such an agreement to transfer a route permit in respect of the Bus. (A. D. S. 471 ).
( 2 ) THE plaintiff (hereinafter referred to as the appellant) and the first defendant (hereinafter referred to as the respondent) were partners In the business of running stage carriage under the name and style of "sri Sad guru Bus Service". The respondent held the route permit. A. D. S. 471 was one of the buses forming partnership property. While so, a creditor of the respondent filed " suit against him and attached the buses. That suit was compromised. Subsequent thereto, the partnership of running the stage carriages came to be dissolved by a deed of dissolution dated 3-12-1955, Ex. A-4. Under the terms of the said deed of dissolution, the appellant shall be the owner of the bus in question and run the said bus on the route line from Vizianagaram to Chodavaram Via. Saroalkot with all rights thereto, and the respondent shall have no right thereto. The deed recites that the appellant has taken possession of the bus, A. D. S. 471. Contemporaneously, the respondent executed a letter, Ex. A-5, in favour of the appellant. what is termed a letter of agreement or undertaking stating inter alia that Inasmuch as the route permit and the registration certificate pertaining to the Bus (A. D. S. 471) was standing in the respondents came, he would execute the document which has to, for effecting the transfer of the permit and the registration certificate on demand by the appellant. The transfers not having been effected as undertaken by the respondent, the appellant brought this action to enforce the transfer undertaken by the respondent. In the suit he prayed for a mandatory injunction, directing the respondent to sign the applications for transfer of the permit and the registration certificate relating to the Bus, A. D. S. 471.
( 3 ) THE respondent raised various pleas in defence, but the one which found favour with the Courts below was that the agreement was void and unenforceable as contravening Section 59 (1) of the Motor Vehicles Act (Act IV of 1939) and the rules made thereunder.
( 4 ) THE trial Court held that the agreement entered into for the transfer of the permit was true, but void. The finding was affirmed by the first appellate Court.
( 5 ) THE Second Appeal came on for hearing before Seshaehajapathi, J. and he appears to have thought that there was a conflict of judicial opinion and so referred the case to a Bench.
( 6 ) WE would now proceed to examine the question of enforceability of the agreement to transfer the route permit to the plaintiff (appellant), as it has been held by the Courts below concurrently that the agreement was void as offending Section 59 (1) of the Motor Vehicles Act and the Rules thereunder. It is undisputed that the appellant and the respondent were partners in the business of running stage carriages under permit and that the permit itself was issued to the respondent. We would at the outset notice the relevant provisions of the Motor Vehicles Act of 1939 (hereinafter referred to as the Act ). "section 59 (1) save as provided In Section 61, 3 permit shall not be transferable from one person to another except with the permission of the transport authority which granted the permit and shall not without such permission operate to confer on any person to whom a vehicle covered by the permit is transferred any right to use that vehicle in the manner authorized by
