INDIRA DEVI v. K. S. T. A. T. — 1982 DIGILAW 230 (KAR)

K. S. PUTTASWAMY, J. ( 1 ) A wealthy gentleman called K, P. Pandyaraja Ballal of Moodabidri Town, d. K. Dist. a Jain by religion, governed by Aliyasanthana law of succession, with a large number of children, one of whom was K. Jayaraja Ballal, started passenger transport business under the name and style of 'ballal Motor Service'. Before his death in July, 1968 Pandyaraja Ballal who owned as many as 24 passenger buses converted bis proprietary concern info a partnership concern under the firm name called 'ballal Motor Service' thereinafter referred to as the firm) with bis wife and children as partners of that firm. ( 2 ) ON 1-4-1972 the firm was re-constituted and Jayaraja Ballal, the eldest male member of the family was made its managing partner. On 18-7-1974, the firm was again re-constituted by inducting two more grand children of Pandyaraja ballal to the benefit of the firm with all the previous partners and Jayaraja ballal continuing as its managing partner as before (Annexure-R1 ). The firm considerably expanded its transport business and owned about 74 vehicles as on 18-7-1974. ( 3 ) ON an application made by Jayaraja Ballal, the Karnataka State Transport Authority, Bangalore thereinafter referred to as the STA) granted him an all India Tourist Permit bearing No. 4/77-78 under S. 63 (2) of the Motor vehicles Act of 1939 (Cen. Act No. 4 of 1939) (hereinafter referred to as the Act) which was covered by a Motor vehicle boaring registration No. MEG 5142. ( 4 ) SAME time in 1979 serious disputes arese among the partners. On 3-2-1986 the partners of the firm under aa agreement of that date (Annexur R2) voluntarily referred their disputes to a panel of arbitrators setting out in detail the terms of reference and the terms and conditions of their adjudication. One of the matters to be decided by the arbitrators is the aforesaid permit and vehicle No. MEG 5142. The panel of arbitrators have entered on the arbitration and are proceeding with their adjudication. ( 5 ) ON 31-12-1981 Jayaraja Ballal died leaving behind him, the petitioner who is his wife and his major and minor children, his mether, brothers and sisters. ( 6 ) ON 3-2-1982 the petitioner reported the death of Jayaraja Ballal and filed an application before the STA under S. 61 of the Act for transfer of the aforesaid permit to her name. ( 6 ) ON 3-2-1982 the petitioner reported the death of Jayaraja Ballal and filed an application before the STA under S. 61 of the Act for transfer of the aforesaid permit to her name. On 17-2-l?82 the firm also reported the death of Jayaraja Ballal to the STA and on 18-3-1982 made an application for transfer of the aforesaid permit and the vehicle covered in the said permit to the name of the then managing partner of the firm called Dr. K. Ratnaraja ballal ( 7 ) VERY rightly the STA considered the two applications together. Before the STA the petitioner and the firm- respondent No. 3-filed affidavits and documents in support of their respective cases for transfer. On an examination of the said claims, the STA by its resolution dated 21/22-6-82 on its subject No. 17 Sub-No. 13/82/83 (Annexure-B) allowed the application made by the petitioner and rejected the application made by respondent No. 3. ( 8 ) ON the basis ef the aforesaid order made by the STA, the petitioner wade an application for replacement of motor vehicle No. MEG 5142 by motor vehicle No. CAA 1695 which was allowed by the Secretary STA on 7-7 1982. ( 9 ) AGGRIEVED by the order of the sta dated 21/22-6-82 rejecting its application and granting the rival application of the petitioner, responded No. 3 filed an appeal under 8. 64 ef the Act in appeal No. in of 1982 with an application for stay before the Karnataka state Transport Appellate Tribunal, bangalore (hereinafter referred to as the tribunal ). Against the order of the secretary. STA dated 7-7-1982, respondent No. 3 filed a rovision petition under s. 64-A of the Act in Rev. Petn. No. 224 of 1982 before the Tribunal. ( 10 ) ON 16-7-1982, the Tribunal rejected the application made by respondent No. 3 for stay, the correctness of which was challenged by it before this court in WP. No. 21700 of 1982. On 36-7-1982 Chandrakantaraj Urs, J. rejected the said writ petition with a direction to dispose of the appeal filed by respondent No. 3 with expedition. ( 10 ) ON 16-7-1982, the Tribunal rejected the application made by respondent No. 3 for stay, the correctness of which was challenged by it before this court in WP. No. 21700 of 1982. On 36-7-1982 Chandrakantaraj Urs, J. rejected the said writ petition with a direction to dispose of the appeal filed by respondent No. 3 with expedition. ( 11 ) IN pursuance of the said order made by this Court, the Tribunal heard the parties and by its common order dated 30-8-1982 has allowed the appeal and the revision peiition filed by respondent No. 3 with a direction to the STA to transfer the permit to the name of the firm covering the same with motor vehicle MEG 5142. In these petitions under arts. 226 and 227 of the Constitution, presented on 25-9-1982, The petitioner has challenged the common order of the tribunal. On 3-9-1982 while issuing rule nisi, this Court has directed the stay of operation of the same. ( 12 ) THE petitioaer has asserted that the permit and the vehicle covered by that permit that stood in the name of her husband, was his exclusive and personal property and that on his death she and her children alone are entitled to their transfer as correctly accepted by the STA. On this premise she naturally challenges the findings of the Tribunal to the effect that the permit and the vehicle covered by the same was the property of the firm and seeks for the restoration of the order of the STA. ( 13 ) IN justification of the order of the Tribunal in its favour, respondent no. 3 has filed its return reiterating what had been urged by it before the Tribunal and supporting all its conclusions. ( 14 ) SRI N. Santosh Megde, learned counsel for the petitioner contesting the conclusions reached by the Tribunal, has contended that the Tribunal without finding as to who was the person that. had succeeded to the possession of the vehicle and the permit, on irrelevant considerations, had reversed the order of the STA that was legal and just. ( 15 ) SRI L. M. Pandurangaswarny learned High Court Govt. Pleader who has taken notice for respondents 1 and 2, at the direction of the Court, has produced their records and did not rightly take sides in the case. ( 15 ) SRI L. M. Pandurangaswarny learned High Court Govt. Pleader who has taken notice for respondents 1 and 2, at the direction of the Court, has produced their records and did not rightly take sides in the case. ( 16 ) SRI S. G. Sundaraswamy, learned counsel for respondent No. 3 in refuting the contentions of Sri Hegde, urged that the findings of the Tribunal being on questions of fact, cannot be interfered by this Court. ( 17 ) IN the course of its fairly lengthy order, the Tribunal has found that the permit and vehicle No. MEG 5142 though nominally stood in the name of Jayaraja Ballal, the firm was their real owner and possessor, on which finding it has accepted the appeal and the revision filed by respondent No. 3. In recording that finding the Tribunal had expressed that law recognises benami transactions under the Act. ( 18 ) IN para 18 of its order, the tribunal has found that the application made by the petitioner under S. 61 of the Act for transfer was not maintainable, on the ground that the real permit holder was the firm and not Jayaraja ballal. At this stage I will assume that the latter finding of the Tribunal is correct. ( 19 ) BEFORE the STA, the Tribunal or this Court, respondent No. 3 did not urge that the application made by the petitioner, though it seriously disputed her claim on merits and sought for the transfer in its own favour, was not maintainable. On what basis the Tribunal reached that conclusion is rather difficult to comprehend. ( 20 ) ON the death of the holder of a permit, more than one person claiming as having succeeded to such a permit and the vehicle, can seek for their transfer to his name. As to whose claim will be ultimately accepted by the original, appellate or other competent Court cannot be predicated before the original, appellate or other authority examines the rival claims and takes a decision on merits. The ultimate decision to be rendered does not touch on the maintainability, jurisdiction to entertain an application and the power to deal with the same. On any principle, it is not possible to uphold the view expressed by the tribunal on the maintainability of the application made-by the petitioner. The ultimate decision to be rendered does not touch on the maintainability, jurisdiction to entertain an application and the power to deal with the same. On any principle, it is not possible to uphold the view expressed by the tribunal on the maintainability of the application made-by the petitioner. But, fortunately the Tribunal did not reject the application made by the petitioner on that ground. In this view, it is necessary to examine the correctness of the other conclusions reached by the tribunal. ( 21 ) A permit issued under the Act is 'property'. A permit is transferable during the life time of the permit holder with the permission of the authority (vide S. 59 of the Act) and on his death is also heritable. A vehicle covered by a permit, which is also property, is transferable and heritable. ( 22 ) S. 61 of the Act, on the scope and ambit of which the case hinges reads thus :"61 (1) Where the holder of a permit dies, the person succeeding to the possession of the vehicles covered by the permit may, for a period of three months, use the permit as if it had been granted to himself: provided that such person has, within thirty days of the death of the holder, informed the transport authority which granted the permit of the death of the holder and of his own intention to use the permit: provided further that no permit shall be so used after the date on which it would have ceased to be effective without renewal in the hands of the deceased holder. (2) The transport authority may, on application made to it within three months of the death of the holder of a permit, transfer the permit to the person succeeding to the possession of the vehicles covered toy the permit". On the scope and ambit of this section, the Tribunal without a full and critical examination has expressed thus :"it is significant that S. 61 does not proyide that on the death of a permit holder, the permit may be transferred to his heirs at law but instead provides that after the death of the permit holder the person succeeding to the possession of the vehicle can use the same for a period of three months without even seeking for transfer. But within that date such a person succeeding to the possession of the vehicle has to apply for transfer and the concerned authority may permit such transfer. "let me now examine whether this construction placed by the Tribunal is correct or not. ( 23 ) THE heading of a section gives a clue to the understanding of the section though the same cannot control the plain meaning of the section. The beading of S. 61 reads ' i ransfer of permit on death of holder', according to which it is permissible to transfer the permit held by a person without reference to the vehicle covered by that permit to a person entitled for its transfer ( 24 ) S. 61 does not employ a non- obstante clause and does not provide for excluding the personal law of succession on the death of the holder of a permit. In the absence of an express prohibition the Court cannot exclude the personal law of succession to the permit and the vehicle on the death of the permit holder. ( 25 ) THE holder of a permit can also be the registered owner of a vehicle included in the permit, that is subject to a hire purchase or be its absolute and true owner also. ( 26 ) THE legal ownership of a vehicle that is subject. to hire purchase till all the instalments are paid and the option to purchase is exercised by the hirer and the nominal sale price is paid. continues to vest with the financier or the purchaser of the vehicle, who allows the hirer to use such vehicle as its registered owner. On the death 'of a hirer or the registered owner succession to that vehicle will only be to his interest in that vehicle and nothing more. But still the financier or the purchaser or the legal owner cannot claim the vehicle as its successor much less the permit of that vehicle. ( 27 ) ALMOST as a rule or in great majority of cases, motor vehicles covered by permits are subject to hire purchase and to protect the interests of the financier or the purchaser who is the real owner in law, the Act and the Rules framed thereunder provide for noting the endorsement of hire purchase in the registration certificate of every vehicle. ( 28 ) A permit held by one person can also be covered by a vehicle standing in the name of another person or owned by another person, vide K. M. Viswanatha pillai v. K. M. Shenmugham Filial (1 ). ( 29 ) ON or before the death of the permit holder, the possibility of that permit not being covered by a vehicle or the vehicle included in the permit completely destroyed in a riot or an accident of fire or other causes cannot altogether be ruled out. ( 30 ) IN interpreting S. 61 of the Act, the Court cannot be blind to the above and various other contingencies that cannot be comprehended or catalogued, and to the scheme and object of the Act. ( 31 ) S. 61 of the Act very advisedly uses two crucial words 'succeeding to the permit and the vehicle'. These words indubitably recognise succession in law to the permit and the vehicle, if any on the death of the holder of the permit. On the death of the holder of the permit, saccession opens to that and other properties and the same is regulated by his personal law of succession. The person entitled to use the permit and the vehicle, before the Transport authority makes its order, is only the person that succeeds in law to the permit and the vehicle, if any, and not the person who has mere physical possession of the vehicle. Succession necessarily includes testamentary and intestate succession. ( 32 ) A case of a permit and the vehicle nominally standing in the name of a partner and the partnership firm being their real owner and an application made by the firm to specify its name in place of the deceased permit holder does not strictly fall within the purview of s. 61 of the Act: vide A. P. Ravi v. Mys. STAT (2 ). But, if there is an application by the firm as in the present case, the same has necessarily to be considered and decided along with an application for transfer can hardly be doubted and is concluded by Ravi's case (2 ). ( 33 ) ON the scope and ambit of S. 61 of the Act, Dhani Devi v. Sant Bihari sharma (3) case or other cases brought to my notice is not a direct authority. ( 33 ) ON the scope and ambit of S. 61 of the Act, Dhani Devi v. Sant Bihari sharma (3) case or other cases brought to my notice is not a direct authority. In that and other cases, the Supreme court considered S. 61 incidentally in examining other principal questions that arose for determination. ( 34 ) ON a conspectus of the above, s. 61 permits a transfer of a permit not covered by a vehicle to the legal heirs of the deceased permit holder according to his personal law of succession. The same is true when the deceased permit holder is the absolute owner of the vehicle covered by the permit. In cases where a permit is covered by a vehicle of another person, the permit by itself can be transferred to the legal heirs of the permit holder. S. 61 permits a transfer of a permit to a person succeeding to the vehicle also. From the above it follows that the construction placed by the Tribunal on S. 61 of the Act is too literal and is not very sound. ( 35 ) A decision by a Transport Authority with limited jurisdiction on succession can only be for the purposes of the Act. Any decision by a Transport authority in such matters is always subject to a decision by a civil court. Hence, in cases of disputes on questions of succession and if a civil Court or voluntary or compulsory arbitrators are seized of such a dispute, the proper course for the transport Authority would be to await the decision of the civil Court and the arbitrators and then regulate its decision in conformity with the same. ( 36 ) WITH the above analysis of S. 61 of the Act, it is now necessary to examine the correctness of the other questions decided by the Tribunal. ( 37 ) IN holding that the permit and the vehicle belonged to the firm and not to Jayaraja Ballal, the Tribunal has expressed that benami transactions are permissible under the Act on the ratio of the ruling of the Supreme Court in viswanatha Pillars case (1 ). ( 38 ) A Transport Authority or an appellate Tribunal constituted and functioning under the Act, unlike an ordinary civil Court, is not a Court or Tribunal of general jurisdiction, but is an authority with limited jurisdiction. ( 38 ) A Transport Authority or an appellate Tribunal constituted and functioning under the Act, unlike an ordinary civil Court, is not a Court or Tribunal of general jurisdiction, but is an authority with limited jurisdiction. Hence, it cannot decide all questions that can be decided by a Court of general and unlimited jurisdiction. ( 39 ) IN Viswanatha Pillai's case (1) the facts were these : Viswanatha Pillai and Shanmugam Pillai were brothers and were members of a Joint Hindu family. In respect of certain stage carriage permits issued by Transport Authorities under the Act in the name of Shanmugham pillai and the vehicles covered in the said permits. Viswanatha Pillai instituted a suit in a civil court for a declaration that the buses along with the stage carriage permits belonged to him and that he was entitled to operate them, which was resisted by Shanmughain pillai. ( 40 ) ON a consideration of the evidence placed by the parties, the trial court decreed the Plaintiff's suit in its entirety which however was modified by the District Judge in respect of one vehicle. On a second appeal by the defendant, the High Court of Madras expressing the view that the parties had played fraud on the authorities, benami transactions were impermissible, allowed the appeal of the defendant and dismissed the plaintiff's suit. ( 41 ) ON an appeal filed by the plaintiff, the Supreme Court reversing the judgment of the Madras High Court, ruled that the Act does not expressly or by implication bar benami transactions or persons owning buses benami and applying for permits on that basis. In enunciating that principle, the Court also ruled that the Act does not prohibit a permit standing in the name of one person, being covered by a vehicle standing in the name of another person. ( 42 ) IN Viswanatha Pillai's case (1) or any other case brought to my notice, the Supreme Court or this Court has not ruled that a complicated dispute of benami transaction of a civil nature calling for recording of oral and documentary evidence can be decided by a Transport Authority constituted under the act. ( 42 ) IN Viswanatha Pillai's case (1) or any other case brought to my notice, the Supreme Court or this Court has not ruled that a complicated dispute of benami transaction of a civil nature calling for recording of oral and documentary evidence can be decided by a Transport Authority constituted under the act. ( 43 ) ON general principles, the const ruction of S. 61 or other provisions of the Act, it is difficult to hold that a transport Authority or an Appellate tribunal under the Act can decide a complicated question of benami transsction of a civil nature. In this view, the reliance placed by the Tribunal on viswanatha pillai's case (1) is not legal. ( 44 ) EARLIER, I have adverted to the pendency of a voluntary arbitration proceeding for the settlement of dispute of the very permit and also vehicle No. MEG 5142. ( 45 ) ASSUMING that a Transport authority or the Tribunal under the Act can examine complicated question of benami transaction, in that event also, it was not proper for the Tribunal to forestall the decision of the Arbitrators and decide the same one way or the other. On any principle, the proper course for the STA and the Tribunal was to defer the decision on the rival applications made by the petitioner and the firm and decide the same in conformity with the ultimate decision of the Arbitrators and the decree to be made by a civil Court thereon under Chap, II of the asbitration Act, 1940 (Cen. Act No. 10 of 1940 ). ( 46 ) QN the aforesaid conclusions, it is not proper for this Court to examine and decide them in this proceeding. In the circumstances, the proper course to adopt is to direct the STA to await the final decision of the Arbitrators and the decree to be made thereto by the Civil court and then regulate the matters in with the decree of the civil court ( 47 ) SRI Suodaraswamy has,how over, Urged that the decision of the Tribunal was in conformity with the interim award of the Arbitrators, affirmed by the civil Court and this Court in C. R. P. Nos 1982 and 2983 of 1980 (decided on 30-1-1981) which was not interfered by supreme Court that rejected the Special leave pitition of layaraja Ballal. ( 48 ) WHAITE the Arbitration proceedings were in progress or so, one Sri mahaveer Patil who had earlier agreed to be an Arbitrator, tendered his resignation or expressed his unwillingness to continue as an arbitrator. At that stage 15 partners made an application under s. 30 of the Arbitration Act, in Arbitration case No. 6/1980 before the Civil judge, Mangalore for appointment of one c. J. Pinto as Arbitrator in place of mahaveer Patil. In that case an interlocutory application was made by the applicants to restrain Jayaraja Ballal and rajavarma Ballal from alienating or in any way dealing with the vehicles of the firm including vehicle No. MEG 5142 and for various other reliefs. On an examination of that. application the learned Civil Judge by his order dated 22-9-1980 granted an injunction which was substantially affirmed by Swami J. On 20-8-1981 in C. R. Ps. Nos. 2982 and 2983 of 1980. On 15-5-1982 the arbitrators passed an interim award with reference to the permit and the vehicle in these terms :"subject to the final award the the permits standing in the name of late Sri K. Jayaraja Ballal, Managing Partner of Ballal Motor Service be got transferred in the name of the partnership firm Ballal Motor Service". With this brief back drop of the procedings and interim award, it is now necessary to examine the contention of Sri sundaraswamy. ( 49 ) THE temporary injunction issued by the learned Civil Judge, affirmed by this Court prohibits Jayaraj Ballal from alienating or encumbering Motor vehicle No. MEG. 5142. ( 50 ) SO far as the permit and the vehicle, the interim award stipulates that it is subject to final award which necessarily means that the same is subject to variation of modification as may be found necessary at the time of final award. ( 51 ) ON the very terms of the interim award, it is hazardous for the tribunal or the STA to rely on the same and finally dispose of the rival applications of the patties. By this I should not be understood as saying that the Tribunal or the STA could not rely on the same if there was no dispute between the parties. By this I should not be understood as saying that the Tribunal or the STA could not rely on the same if there was no dispute between the parties. ( 52 ) WHEN the arbitrators have reserved for themselves the power to modify the interim award, the proper course for the Tribunal and the STA is to await the final award and the decree of a Civil Court thereon. By adopting such a course, the interests of both the parties would not be jeopardised. On the other hand the decision of the Transport Authority will be satisfactory and complete and will be in conformity with the decree of the Civil Court. ( 53 ) BUT, Sri Sundaraswamy placing stong reliance on the ruling of the Supreme Court in Satish Kumar v. Surinder kumar (4) urged that the interim award cannot be ignored by the Tribunal or by this Court. ( 54 ) IN Vatishkumar's case (4) the court was dealing with the legal effect of an award conveying title to immovable property of the value of Rs. 100 that had not been registered under the Indian registration Act and its admissibility in evidence. In my view, Satishkumar's case is not an authority for dispensing with the requirements of a decree by a Civil court under Chap. II of the Arbitration act Even otherwise the Supreme Court in Satishkumars's case, had not held that a Tribunal of limited jurisdiction should not await the final decision of the Arbitrators and a decree of a Civil Court which is the precise question that arises for determination in this case. For these reasons, I see no merit in this contention of Sri Sundaraswamy and I reject the same. ( 55 ) ON the above discussion, it follows that the order of the Tribunal suffers from manifest errors of law and calls for interference under Arts. 226 and 227 of the Constitution. ( 56 ) ON the above conclusion, it follows that the STA also should have awaited the final award of the Arbitrators and a decree by a Civil Court thereon. 226 and 227 of the Constitution. ( 56 ) ON the above conclusion, it follows that the STA also should have awaited the final award of the Arbitrators and a decree by a Civil Court thereon. Even otherwise, the STA in allowing the application made by the petitioner and rejecting the application made by respondent No. 3 has over-simplified the matter and has not really addressed itself to the controversy and the necessity to await the final award of the arbitrators and a decree of a Civil Court in that behalf. In this view, the order of the STA also cannot be upheld. ( 57 ) WHEN the order made by the sta on the applications for transfer is quashed, it necessarily follows that the order of the Secretary dt. 7-7-1982 directing the replacement of vehicle no. MEG. 5142 with another vehicle has necessarily to be quashed. ( 58 ) BEFORE applications for transfer are adjudicated afresh by the STA,, the party that was operating motor vehicle" no. MEG. 5142 as on the day the STA made its order, can and is entitled to operate the same as before that date in accordance with law, till the Matter is decided afresh. ( 59 ) IN the light of my above discussion, I make the following orders and directions: (a) I quash the order dt. 30-8-1982 of the Karnataka State Transport appellate Tribunal, Bangalore -respondent No. 1 in Appeal No 588 of 1082 and Revision Petition No. 224 of 1982 (Annexure c) and the order dt. 21/12-6-1982 of the karnataka State Transport Authority, bangalore-respondent No. 2 on its subject No. 13/82-83. (Annexure B ). (b) I direct the Karnataka State transport Authority, Bangalore respondent No. 2 to restore the applications made by the petitioner and respondent no. 3 to their original file and dispose of them in conformity with the final award of the Arbitrators and the decree of the civil Court under Chap. II of the arbitration Act of 1940. But, till then the person who was operating motor vehicle no. MEG. 5142 as on 21-6-1982 is entitled to operate the same in accordance with law. ( 60 ) WRIT Petitions are disposed of in the above terms. But in the circumstances of the cases, I direct the parties to bear their own costs. But, till then the person who was operating motor vehicle no. MEG. 5142 as on 21-6-1982 is entitled to operate the same in accordance with law. ( 60 ) WRIT Petitions are disposed of in the above terms. But in the circumstances of the cases, I direct the parties to bear their own costs. ( 61 ) SRI L. M. Pandurangaswamy, learned High Caurt Government Pleader is permuted to file his memo of appearance for respondents 1 and 2 within 15 days from this day. --- *** --- .