1963 Supreme(Mad) 377

Madras High Court
S. RAMACHANDRA IYER,RAMAKRISHNAN
N.Sathianathan - Appellant
Versus
B.K.P.M.Amaravathi Ammal - Respondent
Decided On : 10/30/1963

The transfer of permits with profit motive amounts to trafficking and the decision of the Regional Transport Authority recognizing the transfer of a permit, is not conclusive on the question of the bona fides of the transfer.

Headnote:

MOTOR VEHICLES ACT - S. 59 - TRANSFER OF PERMIT - TRAFFICKING IN PERMITS - MEANING OF - WHETHER TRANSFER OF PERMITS WITH PROFIT MOTIVE AMOUNTS TO TRAFFICKING - WHETHER REGIONAL TRANSPORT AUTHORITY'S DECISION ON TRANSFER OF PERMIT IS CONCLUSIVE ON THE QUESTION OF BONA FIDES OF THE TRANSFER - WHETHER STATE TRANSPORT APPELLATE TRIBUNAL CAN RE-EXAMINE THE CIRCUMSTANCES OF THE TRANSFER AND REACH ITS OWN FINDING ON THE POINT.

Fact of the Case:

The Regional Transport Authority, Salem, invited applications for stage carriage permits for the route Hosur to Tiruvannamalai. The Regional Transport Authority granted two permits to S. B. Sri Ranga Vilas (P) Ltd., and Sri B.K. Periamunusami Gounder respectively. Several appeals were filed by the disappointed applicants to the State Transport Appellate Tribunal, Madras. The State Transport Appellate Tribunal confirmed the grant of one permit to S.B Sri Ranga Vilas (P) Ltd., but set aside the grant of the other permit to Sri B. K. Periamunuswami Gounder, and allotted it to N. Sathianathan the proprietor of NT. S. Motor Service, Salem. Sri Balasubramania Bus Service (P) Ltd., one of the disappointed appellants, filed a writ petition before the Madras High Court, challenging the decision of the State Transport Appellate Tribunal on the ground that the finding of trafficking in permits against the company was based on an erroneous conception of what trafficking meant and also the extent of the Regional Transport Authority's power to go into a question which must be considered to have been concluded on the earlier occasion, when the Regional Transport Authority had approved the transfer of the permits.

Finding of the Court:

The Madras High Court held that the State Transport Appellate Tribunal had taken an erroneous view of what trafficking meant, and upon the scope of its powers to enter into a question which had been already decided by the appropriate authorities on the proper occasion. The court held that the mere fact of the transfer of permit as such, without further evidence, may not carry any stigma to satisfy the test of trafficking. However, when sales of buses along with the transfer of the permits are resorted to repetitively 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 an 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 be desirable to prefer him, as he had shown himself to be a person who as abused the permits granted to him. The court further held that the decision of the Regional Transport Authority recognizing the transfer of a permit, is not conclusive on the question of the bona fides of the transfer and the question of bona fides of the transfer would directly arise, before the Regional Transport Authority at a subsequent time, when the alleged trafficker is screened along with other applicants for the grant of new permit.

Issues: 1. Whether the transfer of permits with profit motive amounts to trafficking? 2. Whether the Regional Transport Authority's decision on transfer of permit is conclusive on the question of bona fides of the transfer? 3. Whether the State Transport Appellate Tribunal can re-examine the circumstances of the transfer and reach its own finding on the point?

Ratio Decidendi: 1. The court held that the transfer of permits with profit motive amounts to trafficking. The court observed that when sales of buses along with the transfer of the permits are resorted to repetitively 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 an 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 be desirable to prefer him, as he had shown himself to be a person who as abused the permits granted to him. 2. The court held that the decision of the Regional Transport Authority recognizing the transfer of a permit, is not conclusive on the question of the bona fides of the transfer. The court observed that the Regional Transport Authority at the time of recognizing the transfer of a permit might not have had the facilities for making a detailed investigation or might have failed to make it for one reason or other. Therefore, the question of bona fides of the transfer would directly arise, before the Regional Transport Authority at a subsequent time, when the alleged trafficker is screened along with other applicants for the grant of new permit. 3. The court held that the State Transport Appellate Tribunal can re-examine the circumstances of the transfer and reach its own finding on the point. The court observed that the onus was on the objectors to place before the Tribunal the circumstances under which the transfer was made to show that it amounted to trafficking in permits, that it was not the duty of the Tribunal to embark on such an enquiry, and that the condonation of delay involved no error which could justify interference by a writ of certiorari.

Final Decision: The court allowed the appeals and dismissed the writ petitions. The court held that the order of the State Transport Appellate Tribunal granting the first permit to Sri Ranga Vilas Motors (P) Ltd. and the second permit to Sathianathan, the appellant herein, will be left unaffected.