Appeal No 1453 of 1966
Appeal from the judgment and decree dated September
14 1965 of the Madras High Court in Second Appeal No 1394 of 1963
A K Sen RM Mehta and JB Dadachanji for
the appellant
R Gopalakrishnan for the respondent
The Judgment of the Court was delivered by Sikri J
This appeal by certificate granted by the High Court of Madras is directed against its judgment and decree modifying the decree passed by the District Judge
The relevant facts for the determination of the points raised before us are as follows The plaintiff K 
M Viswanatha pillai appellant before us and hereinafter referred to as the plaintiff and KM Shanmugham Pillai respondent before us and hereinafter referred to as the defendant were originally members of a Joint Hindu Family
On June 29 1953 the six brothers who constituted the Joint Hindu Family entered into a partition of the properties belonging to the Joint Family evidenced by a registered document exhibit A 35
A motor bus MDH 662 fell to the share of the plaintiff
At the time of partition the permit was not in the name of the defendant and some proceedings for the transfer of the permit to his name were pending
Accordingly it was provided in the partition deed as follows As soon as its route permit and registration etc are transferred in the name of Shanmugam Pillai he shall have the same transferred in the name of the 4th individual of us Viswanatha Pillai In September 1953 the permit was transferred in the name of the defendant
In April 1954 the plaintiff purchased two more vehicles namely MDO 1106 and MDH 730 but the permits were obtained in the name of the defendant in whose name the vehicles were also actually acquired
As the defendant was going to Kuala Lumpur on business he executed a general power of attorney exhibit A 55 in favour of the plaintiff
In this power of attorney the defendant admitted that the three buses above mentioned belonged to the plaintiff and were plying in his name as requested by the plaintiff
Two more buses seem to have been acquired since then
The plaintiff s case in brief was that the defendant was carrying on business on his behalf as a benamidar
He accordingly prayed for a declaration that the five buses alongwith the stage 898 carriage permits belonged to him and that he was entitled to run the same in terms of the power of attorney which was irrevocable
The defendant had joined with the plaintiff earlier in filing a joint application for transfer of permits before the Regional Transport Authority
The defendant however withdrew his consent and the application was rejected
The plaintiff accordingly seeks a mandatory injunction directing the defendant to execute necessary documents required to effectuate the transfer of the permits
The suit was decreed entirely by the Trial Court but the District Judge confirmed the decree only with reference to four of the buses
With reference to Bus No MDU 4069 the decree was set aside
The High Court held that the plaintiff and the defendant practiced a fraud upon the authorities conjointly in contravention of the express provision of the 
The benamidar of the vehicles representing himself to be the owner falsely obtained the permits in his name and allowed the true owner who had no permit to conduct the actual business there cannot be a more flagrant violation of the basic requirements of the Act or of its scheme
 The High Court accordingly felt that they could not possibly grant mandatory injunction compelling the defendant to co operate in any further application for transfer since that would in effect give recognition to the fraudulent contrivance and effectuate rights on the very basis of that contrivance
The High Court also agreed with the District Judge that the plaintiff could not get a declaration as far as bus No MDU 4069 was concerned
The learned counsel for the appellant Mr AK Sen urges before us that no provision of the IV of 1939 hereinafter referred to as the Act has been contravened and that it is not necessary under the Act that a permit should be obtained only by the real owner of the bus
The relevant statutory provisions may now be noticed and they are as follows The Section 2
3 contract carriage means a motor vehicle which carries a passenger or passengers for hire or reward under a contract expressed or implied for the use of the vehicle as a whole at or for a fixed or agreed rate or sum and from one point to another without stopping to pick up or set down along the line of route passengers not included in the contract and includes a motor cab 899 notwithstanding that the passengers may pay Separate fares 19 owner means where the person in possession of a motor vehicle is a minor the guardian of such minor and in relation to a motor vehicle which
is the subject of a hire purchase agreement the person in possession of the vehicle under that agreement
 20 permit means the document issued by the commission or a State
or Regional Transport Authority authorising the use of a transport vehicle as a contract carriage or stage carriage or authorising the owner as a private carrier or public carrier to use such vehicle 22 private carrier means an owner of a transport vehicle other than a public carrier who uses that vehicle solely for the carriage of goods which are his property or the carriage of which is necessary for the purposes of his business not being a business of providing transport or who uses the vehicle for any of the purposes specified in sub section 2 of section 42
23 public carrier means an owner of a transport vehicle who transports or undertakes to transport goods or any class of goods for another person at any time and in any public place for hire or reward whether in pursuance of the terms of a contract or agreement or otherwise and includes any person body association or company engaged in the business of carrying the goods of persons associated with that person body association or company for the purpose of having their goods transported Section 421 on which the High Court has relied reads thus 421 No owner of a transport vehicle shall use or permit the use of the vehicle in any public place save in accordance with the
conditions of a permit granted or countersigned by a Regional or State Transport Authority or the Commission authorising the use of the vehicle in that place in the manner in which the vehicle is being used   This section does not in our view on the language require that the owner himself should obtain the permit it only requires the owner that the transport vehicle shall not be used except in accordance with the conditions of the permit
The High Court would add the words to him after the words permit granted 900 but in our view there is no justification for inserting those words
The definition of the permit itself shows that all permits need not be in the name of the owner because the latter part of the definition shows that it is only in the case of a private carrier or a public carrier that a permit has to be in the owner s name
The same inference follows from the definitions of private carrier and public carrier
This Court came to the same conclusion in Veerappa Pillai vs Raman  Raman1
Some reliance was placed on the amendments made in section 60 1  c
The section as  amended reads  60 1 The transport authority which granted a permit may cancel the permit or may suspend it for such period as it thinks fit c if the holder of the permit ceases to own2 the vehicle or vehicles covered by the permit 
There has been a conflict of opinion between the different High Courts as to the inference following that amendment
It seems to us that the High Court of Allahabad in Khalil ul Rahman Khan vs State Transport Appellate Tribunal3 rightly gives the effect of the amendment
Srivastava J observed A reference was however made to cl
c of sub section 1 of Section 60 of the Act and on the basis of that clause it was urged that it assumed that the permit holder should be the owner of the vehicle
That clause provides for one of the contingencies in which a permit can be cancelled
According to it it is permissible for the Transport Authority to cancel a permit if the holder of it ceases to own the vehicle covered by the permit
It is only a permissive clause and the Transport Authority has only been given a discretion to cancel the permit in that contingency
It may or may not cancel it even if the holder of the permit ceases to own the vehicle covered by it
But it is by no means necessary that el
c should be applicable to the case of every permit holder
There may be permit holders who own the vehicle covered by the permit and there may be permit holders who do not own the vehicle
This clause appears to apply only to t he former case and not to the latter
On its basis therefore it cannot be held to be a requirement of the 1  2 Substituted by section 54 of the Motor Vehicles Amendment Act 1956 100 of 1956 for possess wef 16 2 1957
AIR 1963 All 383 388
901 Act that in each case the person in whose favour a permit has been issued should necessarily be the owner of the vehicle covered by it
 We agree with these observations
The contrary view held in Varadarajulu Naidu vs Thavasi Nadarx that section 421  contemplates that only an owner will have a permit is erroneous
The decision of the Andhra High Court in Chavali Venkataswami vs Chavali Kotayya2 that section 601c of the Act envisages the grant of a permit to the owner alone must also
be dissented from
The learned counsel for the respondent says that at any rate the Act does not contemplate persons applying for permits benami
In India benami transactions are recognised and not frowned upon
see Gut Narayan vs Sheolal Singha
In CIT Gujarat vs Abdul Rahim  Co 4 it was held by this Court that the registration of the partnership deed under section 26A of the Indian Income Tax Act 1922 could not be refused on the ground that K was the benamidar of V We see nothing in the Act which expressly or by implication bars benami transactions or persons owning buses benami and applying for permits on that basis
In the result the appeal is allowed the decree of the High Court set aside and the decree passed by the District Judge restored
We may mention that Mr Sen did not press the claim regarding the fifth bus MDU 4069
The appellant will have half costs in this Court
The parties
will bear their own costs in the High Court
Appeal allowed


Summary:
The appellant was the owner of 5 buses
The Vehicles stood in the name of the respondent appellant s benamidar and the stage carriage permits were also obtained in the respondent s name
The appellant who was running the buses flied a suit claiming the buses along with their permits
It was decreed by the trial court and the lower appellate court confirmed the decree in respect of 4 buses
The High Court in further appeal held that the appellant and the respondent together practised fraud in contravention of as
411 and 601c of the in as much as the respondent representing himself to be the owner falsely obtained the permits in his own name and allowed the true owner who had no permit to conduct the actual business and dismissed the suit in toto
In appeal this Court HELD There is nothing in the  which expressly or by implication bars benami transactions or persons owning buses benami and applying for permits on that basis
Section 421 does not require that the owner himself should obtain the permit it only requires the owner to see that the transport vehicles shall not be used except in accordance with the conditions of the permit
The definition of permit  itself shows that all permits need not be in the name of the owner because the latter part of the definition shows that it is only in the case of a private earner or a public carrier that a permit has to be in the owner s name
The same inference follows from the definitions of private carrier  and public carrier 
899 H The amended section 601c provides for one of the contingencies in which permit can be cancelled
According to it it is permissible for the Transport Authority to cancel a permit if the holder of it ceases to own the vehicle covered by the permit
It is only a permissive clause and the Transport Authority has only been gyen a discretion to cancel the permit in that contingency
It may or may not cancel it even if the holder of the permit ceased to own the vehicles covered by it
But it is by no means necessary that cl
c should be applicable to the case of every permit holder
There may be permit holders who own the vehicle covered by the permit and there may be permit holders who do not own the vehicle
This clause appears to apply only to the former case and not to the latter
900 Veerappa Pillai vs Raman  Raman   followed
Khallil ul Rahman Khan vs State Transport Appellate Tribunal AIR 1963 All 383 Gut Narayan vs Sheolaf Singh and CIT Gujarat vs Abdul Rahim  Co  approved
Varadarajulu Naidu vs Thavasi Nadar 1963 2 MLJ 20 and Chavali Venkataswami vs Chavali Kotayya 1959 2 and WR 407 disapproved