Orissa High CourtUdayanath Pani vs State Transport Authority, Orissa, ... on 28 April, 1992Equivalent citations: AIR1993ORI14, AIR 1993 ORISSA 14Author:G.B. PatnaikBench:G.B. Patnaik,A. PasayatJUDGMENT

 

 G.B. Patnaik, J.1. The appellate order of the State Transport Appellate Tribunal in M.V. Appeal No. 4 of 1992,  annexed as Annexure 3, is the subject-matter of challenge in this writ application.2. The petitioner is a stage-carriage operator and applied for the inter-State route Paradeep to Jamshedpur via Jamsola for grant of a stage-carriage permit. The State Transport Authority in its meeting dated 10-12/1991 considering the merits and demerits of the different applicants granted two permits in favour of the petitioner for the route in question. While granting the aforesaid permits, the State Transport Authority took into consideration the fact that the petitioner is operating on the route on the basis of temporary permits and there has been no complaint against him and his operation has been considered as smooth and not detrimental to the interest of the travelling public and there is no tax arrear against him. Opposite party No. 2 being aggrieved by the aforesaid decision of the State Transport Authority filed an appeal before the State Transport Appellate Tribunal which was registered as M.V. Appeal No. 4 of 1992. The Tribunal by the impugned judgment came to the conclusion that the fact that the petitioner was operating on the route on the basis of a temporary permit might be a consideration in favour of the petitioner, but could not be the sole consideration in this regard, and being of the opinion that the conduct of the petitioner seeking transfer of a permanent permit on the route Puri to Tata in favour of his son on the ground of better management would be a matter which would weigh with deciding the operational efficiency of the petitioner and the said fact having not been brought to the notice of the State Transport Authority, held that the consideration made by the granting authority had been vitiated and accordingly remitted the matter for re-consideration of the State Transport Authority to judge the efficiency of the petitioner in view of his earlier case of transfer of a permanent permit on the route Puri and Tata in favour of his son. It is this judgment of the Appellate Tribunal which is under challenge.3. Mr. Rath, the learned counsel for the petitioner, submits with emphasis that the transfer of the permit in favour of the petitioner's son having been allowed by the permit granting authority in the interests of the travelling public and for proper and smooth functioning of the route Tata to Puri and the said act cannot be said to be trafficking of permit and consequently cannot be said to be a germane consideration for deciding the operational efficiency of the petitioner, therefore, the Tribunal was not justified in remitting the matter to the State Transport Authority for fresh consideration.Mr. Parija appearing for opposite party No. 2, on the other hand, submits that the fact that petitioner had transferred a permit on the route Puri to Tata in favour of his son would be vital and germane consideration for deciding the operational efficiency of the petitioner on the route in question and such a vital consideration not having been taken into account by the State Transport Authority, the Tribunal was fully justified in remitting the matter to the State Transport Authority for fresh consideration.4. In view of the rival submissions made at the Bar, the sole question that arises for our consideration is whether the transfer of a permit by the petitioner in favour of his son on the route Puri to Tata would be a germene consideration for deciding the operational efficiency of the petitioner for the applied for route or not?5. The procedure for the authority in considering an application for stage carriage permit has been provided inSection 71of the Motor Vehicles Act, 1988 (hereinafter referred to as the "Act").Section 71(3)(d)provides that in considering an application, the State Transport Authority shall have regard to the financial stability of the applicant, satisfactory performance as a stage carriage operator including the payment of tax if the applicant is or has been an operator of a stage carriage service and such other matter as may be prescribed by the State Government. The expression "prescribed" has been defined inSection 2(32)to mean, "prescribed by rules made under this Act". There has been no further prescription under the Rules providing considerations to weigh with the permit granting authority while considering an application for stage carriage permit. Therefore, the two vital considerations as provided inSection 71(3)(d)are the financial stability and the satisfactory performance as a stage carriage operator including the payment of tax.Section 71of the Act is similar toSection 47of the Motor Vehicles Act, 1939. In considering an application for permit, interest of the public generally and advantages to the public by the service to be provided are the paramount considerations, several factors can weigh with the permit granting authority in deciding the rival claims with the object of finding out who can serve the interest of the public better. It is in this context, the question of transferring of petitioner's permit in favour of his son with permission of the authority has to be considered.6. The courts have considered the case of "trafficking of permits" and have held that a person found to be trafficking in permits will not be entitled to get a fresh permit applied for as he has abused the permits granted to him earlier. The expression "trafficking" in connection with permits has not been defined in the Act or the Rules framed thereunder, but the ordinary dictionary meaning of the expression is to carry on a trade in, to buy and sell; often with a sinister implication; used in disparaging sense, or any sense of dealing considered improper. Transfer of a permit is permissible in law and if such a transfer is made in the normal circumstances of business or through the exigencies of the death of the operator, it will be a bona fide transfer and thus cannot be held to be trafficking in permit. But whom transfer of permit is resorted to repeatedly when the normal course of business of the operator 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 permit and such act would attract the stigma of trafficking in permit. The question of trafficking in permit has been considered in three decisions, one by the Madras High Court in the case ofN. Sathianathan v. B.K.P.M. Amaravathi Ammal, AIR 1965 Mad 308; second by the Andhra Pradesh High Court in the case ofG. Satyanarayana Murthy v. The Govt. of A. P.represented by its Secretary, Home Transport III Dept. Hyderabad, Andhra Pradesh Law Journal, 168 (sic), and also in yet another decision of the Andhra Pradesh High Court in the case ofK. Narasinainga Rao v. The Government of Andhra Pradesh, (1966) II Andhra Weekly Reporter 320. Their Lordships of the Andhra Pradesh High Court have held that in order to hold that an operator is trafficking in permits it must be established that he was indulging often in the habit of transferring and purchasing permits for profit which amounts to running a business in the sale or purchase or lease of permits. Applying the ratio of the aforesaid three cases to the fact of transfer of permit by the petitioner on Puri-Tata route in favour of his son, it is difficult for us to hold that the petitioner was involved in trafficking in permits. Even Mr. Parija appearing for opposite party No. 2 and learned Standing Counsel for the Department also concede to the position that it would not amount to trafficking in permits.7. Both the learned counsel for the opposite parties, however, submit before us that it would be a germane consideration to hold the inefficiency on the part of the operator and thereby he would be ineligible to get the route applied for. In other words, according to the learned counsel for the opposite parties, the conclusion of the Tribunal to the effect that the grant in favour of the petitioner is likely to be affected by his own conduct when he himself sought for transfer of a permanent permit on the route Puri to Tata on the sole ground of better management by his son who is looking after operational service aspect on the route, cannot be said to be an extraneous consideration or consideration not germane to the issue of efficiency of the operator and, therefore, this Court should not interfere with the order of remand passed by the Appellate Tribunal. Before examining this aspect, it will be appropriate for us to notice the circumstances under which the petitioner transferred his permit on Puri-Tata road in favour of his son after being duly authorised by the permit-granting authority.Section 82of the Act puts an embargo on the transfer of a permit from one person to another except with the permission of the Transport Authority which granted the permit. Sub-section (1) ofSection 82, therefore, authorises transfer of permit, but with the permission of the Transport Authority and on what grounds such permission would be granted have not been indicated therein. The petitioner had a permit from Puri to Tata via Jamsola and as it was an inter-State route. His son had also been granted a permit on the same route. In other words, two permits have been granted one in favour of the father and other in favour of the son, one operating from Puri to Tata and the other operating from Tata to Puri. The petitioner made an application to the permit-granting authority that convenience of travelling public would be better served if his permit was transferred in favour of his son, as otherwise lot of difficulties were experienced by the public. The said application has been annexed as Annexure-4 to the writ application. On consideration of the aforesaid application, the permit granting authority being of the opinion that the transfer would subserve the convenience and interest of the travelling public and there being nothing against the prayer for tranfer, allowed the same by order dated 2-4-1990, The question thus arises as to whether such transfer would be a vital consideration while considering the merit of the petitioner's application for grant of a stage carriage permit on the route Paradeep to Jamshedpur via Jamsola ? Our answer to the aforesaid question must be in the negative. Undoubtedly, the petitioner is an existing operator on different routes and from 1990 on the route in question namely Paradeep to Jamshedpur, he has been operating on the basis of temporary permits. The State Transport Authority has considered his financial ability, his experience as a stage carriage operator as well as his experience on the very route in question which he has been operating on the basis of temporary permits to the satisfaction of the travelling public as well as the fact that there has been no tax arrear against him, The Appellate Tribunal, however, while deciding the appeal has not considered the respective merits of the petitioner and opposite party No. 2 though he has the full power of considering the respective merits. As has been indicated earlier, solely on the ground that the fact of earlier transfer of petitioner's permit on Puri-Tata route in favour of his son has not been considered and as he thought it was a germane consideration, he has remitted the matter to the State Transport Authority for fresh consideration. The circumstances under which the application for transfer of permit by the petitioner in favour of his son was applied for and was allowed, we are persuaded to hold that the said transfer was a bona fide transfer made in accordance with law on getting permission from the competent authority in the interest of the travelling public and such a transfer, therefore cannot be construed to stand as a bar on petitioner getting a fresh permit on a fresh route, nor can it be held to be an inefficiency on the part of the petitioner in operating a major portion of the route applied for and thereby would adversely affect his right of consideration for the appliedf or route. Consequently, we hold that the conclusion of the State Transport Appellate Tribunal is based on an obvious misinterpretation of the provisions of theMotor Vehicles Actand the ultimate conclusion is founded on reasons which are unsupporlable in law and, therefore, the said conclusion has to be corrected by a writ of certiorari.8. The sole ground of non-consideration by the State Transport Authority the fact of transfer of permit by the petitioner in favour of his son on Puri-Tata route which weighed with the Appellate Tribunal to remit the matter having been held by us not to be a germane consideration in the facts and circumstances as indicated earlier, the impugned order of the Tribunal cannot be sustained. We accordingly quash the said order of the Appellate Tribunal. But since the Tribunal has not considered the respective merits of the petitioner and opposite party No. 2 on the question of financial stability as well as satisfactory performance as a stage carriage operator including the payment of tax and since it is open for the Tribunal to re-appreciate the entire materials and come to a different conclusion than the conclusion arrived at by the permit granting authority, we would remit the appeal to the State Transport Appellate Tribunal (opposite party No. 3) to re-dispose of the appeal in accordance with law by giving opportunity of hearing to both parties concerned. The parties through their counsel are directed to appear before the Tribunal on 11-5-92 when the tribunal shall fix the next date of hearing and thereafter proceed in accordance with law.The    writ application    is    accordingly allowed. There will be no order as to costs.A. Pasayat, J.9.    I agree.