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1987 DIGILAW 422 (KER)

HASSANKUTTY v. S. T. A. T.

1987-08-25

PARIPOORNAN, SREEDHARAN

body1987
Judgment :- 1. The 4th respondent in OP No. 6039 of 1987 is the appellant in this writ Appeal. The petitioner in the Original Petition is the 4th respondent in this Writ Appeal. Respondents 1 to 3 are the State Transport Appellate Tribunal, the Regional Transport Authority, Palghat and its Secretary. The Original Petition was filed to quash Ext. P4 judgment of the State Transport Appellate Tribunal dated 21-7-1987, rendered in M. V. A. A. No. 183 of 1987. The appellant and the 4th respondent are rival applicants for a temporary permit for 4 months in the newly introduced route Marayamangalam Athirkad. The Regional Transport Authority, by Ext. PI proceedings, preferred the 4th respondent to the appellant. The appellant was screened since he did not produce the motor vehicle tax clearance certificate as per the Rules. By Ext. P4 judgment, the State Transport Appellate Tribunal set aside Ext P1. The period of the temporary permit expired on 27-7-1987. Since Ext. P4 judgment was delivered a week before the date of expiry, the Appellate Tribunal allowed the 4th respondent to conduct the service till the expiry of the period. Bhat, J. quashed Ext. P4 judgment of the RTAT and restored Ext. P1 proceedings of the RTA. It was held that the 4th respondent failed to produce the tax clearance certificate relating to KRF 2241 and so failed to conform to R.177A(3B)(a) of the Kerala Motor Vehicles Rules. Aggrieved by the said decision, the 4th respondent in the OP has filed this writ appeal. The judgment of Bhat, J is reported in 1987 (2) KLT 314. 2. We heard counsel for the appellant, Mr. S. Easwara Iyer. The only question that arises for consideration is whether the appellant failed to conform to the requirements of R.177A(3B)(a) of the Motor Vehicles Rules. The said rule is as follows: "Clearance certificate relating to payment of income-tax or Agricultural Income Tax and motor vehicle-tax including arrears of vehicle tax, if any, in respect of vehicles owned by or in the possession of the applicant." A plea was taken before the Appellate Tribunal that besides KRF 3664 the appellant had another vehicle KRF 2241 and he failed to produce the motor vehicle tax clearance certificate relating to the said vehicle and in this view the rejection of his application by Ext. P1, by the RTA is justified. P1, by the RTA is justified. The R. C. particulars regarding this vehicle was produced before the Tribunal as Ext. R3. The Tribunal found that the said vehicle belonged to the partnership firm of which the appellant is the Managing Partner. Ext. R3 also showed that the appellant, Managing Partner, Ameena Timber and Saw Mills, Pathiripala had purchased the vehicle from the registered owner, K. M. Ummer. However, the Appellate Tribunal took the view that the appellant applied for the permit in his individual capacity and so he was not obliged to produce the tax clearance certificate of the vehicle which belonged to the firm. On this score, the rejection of the appellant's application was found to be illegal, by the Appellate Tribunal. Bhat, J referred to the passages from Lindley on Partnership, Fourteenth Edition, at pages 29 and 30, Law of Partnership in India by S. D. Singh and J. P. Gupta, Second Edition, at page 19 and also the decision of the Supreme Court in CIT v. A. W. Piggies and Co. [(1953) 24 ITR 405] and held that the firm is not a legal entity. It is not a juristic person and what is called the property of the firm is the property of the partners. After referring to S.25 of the partnership Act and the decision of the Supreme Court in Sahu Rajeshwar v. ITO (AIR 1969 SC 667), the learned Single Judge held that as a partner, the Appellant has no exclusive ownership over the partnership assets; but he is a "part owner" of such assets. As managing partner of the firm, he is in possession of the vehicle. The liability to pay motor vehicles tax is on the partners, and as managing partner, the appellant cannot escape from the liability to pay motor vehicles tax. In this view, the learned Single Judge held that the appellant was bound to produce the tax clearance certificate relating to the vehicle, which forms part of the assets of the firm of which he is a partner and so the appellant failed to conform to R.177A(3B)(a) of the Rules. On the basis of the above reasoning, Ext. P4, passed by the Appellate Tribunal, was quashed. The 4th respondent in the O. P has come up in writ appeal. 3. Mr. On the basis of the above reasoning, Ext. P4, passed by the Appellate Tribunal, was quashed. The 4th respondent in the O. P has come up in writ appeal. 3. Mr. Easwara Iyer, appellant's counsel, vehemently contended that the view of the learned Single Judge that all partners are joint owners or co-owners of the entire partnership property, that a partner is a part-owner of the partnership assets, and so when a partner, like the appellant, applied for a permit in his individual capacity, he is bound to produce the tax clearance certificate relating to the vehicle which forms part of the assets of the firm etc. is erroneous. It was argued that the above view is unsustainable in law. Counsel argued that the vehicle belonged to the firm and the individual partner has no transferable interest during the continuance of the firm. The individual partner cannot be called as a co-owner or joint owner or part owner of the vehicle. The learned Single Judge was wrong in holding so. Counsel read a few passages from Lindley on Partnership, Fourteenth Edition and the Pollock and Mulla on the Indian Partnership Act. 4. We are of the view that the judgment of Bhat, J. does not require any interference. It is settled law that the firm is not distinct from the partners composing it. The firm as such has no legal recognition. What is called 'the property of the firm' is the property of the partners. The firm is not an entity or 'person' in law but is merely an association of individuals who constitute the firm. As stated by Krishna Iyer, J. in CIT v. R.M. Chidembaram Pillai (106 ITR 292 - AIR 1977 SC 489), a firm is a unit of assessment in Income tax law and other laws, where It has been specifically so provided, and "that although for the purpose of those special legislations, the firm has certain attributes simulative of personality, the partnership Is not a person, but a plurality of persons " What is called the property of the firm is the property of the partners. In this view, it cannot admit of any doubt that all partners are "joint owners" or "part owners", or "co-owners" of the entire partnership property. Every partner is liable, jointly with all other partners and also severally for all acts of the firm done while he is a partner. In this view, it cannot admit of any doubt that all partners are "joint owners" or "part owners", or "co-owners" of the entire partnership property. Every partner is liable, jointly with all other partners and also severally for all acts of the firm done while he is a partner. On these premises, it cannot admit of any doubt that the appellant, Managing Partner of the firm, is in possession of the vehicle belonging to the firm and the liability to pay motor vehicles tax being on the partners, the appellant cannot escape from the liability to pay the motor vehicles tax. So, the appellant was bound to produce the tax clearance certificate relating to the vehicles of the firm which forms part of the assets of the firm of which he m a partner. He failed to do so. So, he did not conform to R.177A(3B)(a) of the Rules The learned Single Judge was right in holding so and in quashing Ext. P4 judgment of the State Transport Appellate Tribunal which held to the contrary. 5. We concur with the reasoning and conclusion of the learned Single Judge. This writ appeal is without merit. It is dismissed, in limine.