S.B. Majmudar, C.J.
1. These Writ Appeals and Writ Petitions project a common question centering-round the powers of the authorities functioning under the Motor Vehicles Act, 1939 and Motor Vehicles Act, 1988 in so far as they seek to compound the offences under Section 127-B of the Motor Vehicles Act of 1939 analogous to Section 200 of the 1988 Act, They further project a question as to under what circumstances the concerned motor vehicles plying under tourist vehicle permits issued under the aforesaid Acts can be seized and detained by those authorities in exercise of their powers under Section 129-B of the 1939 Act or under Section 207 of the 1988 Act. Writ Appeals 1132-1183 of 1993 are taken out by the State of Karnataka being aggrieved by the common Judgment rendered by Swami, J., (as he then was) in number of Writ Petitions. This Judgment of Swami, J., in case of MOHAMMED ILLYAS v. UNION OF INDIA is reported in : ILR1991KAR2804 . W.A.Nos. 1083-1127 of 1992 challenge another common Order of Swami, J., dated 12.12.1990 in batch of Writ Petitions following the Decision in MOHAMMED ILLYAS case, supra. While Writ Appeal Nos.3050-3054/91 are also filed by the State of Karnataka & authorities functioning under the Motor Vehicles Act being aggrieved by a common Judgment rendered by Swami, J., in another batch of Writ Petitions decided on.21.9.1990 following the very same Judgment in Mohammed Illyas case, supra. While Writ Petitions are filed by private operators plying tourist motor vehicles and who have felt aggrieved by the Notifications dated 13.11.1986 and 25.10.1990 issued by the State of Karnataka under Section 200 of the Motor Vehicles Act, 1988. They have also challenged the validity of Section 200 of the Act as well as Rule 81A of the Karnataka Motor Vehicles Rules, 1989. The Writ Petitions have been referred to the Division Bench in view of the fact that identical questions were raised in the aforesaid Writ Appeals which were already pending before the Division Bench and that is how all these matters have been placed for final hearing before us.
2. In order to appreciate the main grievance poised by the respective parties in these proceedings, it with be profitable to have a look at a few introductory facts leading to these proceedings. The original Writ Petitioners are operators of Tourist Vehicles or Stage Carriages. They obtained such permits from the authorities functioning under the Motor Vehicles Act, 1988. Earlier they had obtained such permits under the corresponding provisions of the Act of 1939. They sought for a declaration that provision of Section 200 of the Motor Vehicles Act, 1988 (hereinafter referred to as the 'Act') and Rule 259(2) of the Karnataka Motor Vehicles Rules, 1989 (hereinafter referred to as the Rules) are violative of Articles 14 & 19(1)(g) of the Constitution and for getting them struck-down. The original Writ Petitioners, operators of Tourist Vehicles have also sought for a declaration that the operation of the Tourist Vehicles for Countrywide operation between one terminus in home State and another terminus in another State are not liable to be seized and detained on the basis of the Entry 16 of the Notification guiding No. FTD.18 TMR.85 dated 13.11.1986 on the sole ground that the said Tourist Vehicles are operated as non-stop motor vehicles between any two points and carry in them passengers. They had also sought for quashing Entries Nos. 16 and 64 contained in that Notification. The original Writ Petitioners had also sought for appropriate directions to the authorities, which were functioning under the Motor Vehicles Act and who were joined as respondent Nos.2 to 4 in the Petitions and their subordinates to refund the compounding fee collected from the vehicle operators. They had also sought for quashing the check-reports issued on spot. One more declaration was sought for i.e., that Rule 259(2) of the Rules was unconstitutional so far as it covers Section 200 of the Motor Vehicles Act, 1988. The aforesaid Writ Petitioners succeeded before Swami, J., who delivered the Judgment reported in : ILR1991KAR2804 and were granted reliefs as indicated therein. That has resulted in Writ Appeals filed by the State of Karnataka and authorities under the Motor Vehicles Act. While the remaining Writ Petitioners have prayed for identical reliefs bringing in challenge the second Notification of 1990 issued by the State of Karnataka under Section 200 of the Motor Vehicles Act, 1988.
3. According to the Writ Petitioners, the authorities functioning under the Act force persons incharge of the Motor Vehicle which is plied as Stage Carriage or Tourist Vehicle to compound the offences on spot on the ground that the tourist vehicle is being run as a stage carriage in violation of the terms of the conditions of the permit or that the concerned motor vehicle is being run on a route not authorised by the permit. If they do not compound the offence, the vehicles are threatened to be seized and detained resulting in untold hardship to the operators of such motor vehicles and the passengers carried in them and consequently, Section 200 of the Act, under which they enforce such compounding of offence, is ultra vires the provisions of the Constitution and void. Swami, J., who heard these Petitions, took the view that the compounding of offence as contemplated by Section 200 read with Rule 259(2) of the Rules involves adjudication of the concerned offences by the authorities on spot and this provision would be unreasonable unless it is read-down and accordingly, the learned Judge read-down the provisions of Section 200. The learned Judge also took the view that the Notification No. FTD.18 TMR.85 dated 13.11.1986 issued under Section 200 involved a procedure which was oppressive in nature and therefore, it is violative of Article 14 of the Constitution and was liable to be struck-down. The learned Judge, as a consequence, also directed the authorities to refund the compounding fee, which might have been collected in exercise of powers under Section 200 read with the said Notification. As noted earlier, the aforesaid Decision of Swami, J., has resulted in the Appeals filed by the State of Karnataka and the officers functioning under the Motor Vehicles Act.
4. RIVAL CONTENTIONS:
Mr.Dattu, learned Counsel appearing for the State authorities in Writ Appeals and also appearing for them as respondents in Writ Petitions, submitted that the Decision rendered by Swami, J., reported in ILR 1981 KAR 2804 in the case of MOHAMMED ILLYAS v. UNION OF INDIA, is incorrect inasmuch as the learned Judge has erroneously assumed that Section 200 of the 1988 Act compels the offender to compound the offences. That on the contrary, that gives an option to the offender to compound the offences and if he chooses otherwise, he has to face prosecution. That it is equally incorrect to assume that final determination about compounding can only be done by the Court and that the officers are not competent to compound. That this view of Swami, J., runs counter to the Decision of the Supreme Court in THE TRANSPORT COMMISSIONER, ANDHRA PRADESH, HYDERABAD AND ANR. v. S.SARDAR ALI AND ORS., : [1983]3SCR729 In support of this contention he also invited our attention to other Decisions of the Supreme Court and this Court to which we will make a reference at an appropriate stage. He submitted that on a correct interpretation of Section 200, it has to be held that a mere option is given to the alleged offender to get his offences compounded if he so chooses, otherwise, the authorities can exercise their independent statutory powers on fulfilment of the conditions laid-down in relevant Sections like Section 207 of the Act. He next submitted that the Judgment rendered by Swami, J., amounts to re-writing Section 200 though the learned Judge seeks to undertake a process of reading-down. Mr.Dattu further submitted that offer for compounding an offence comes from the operator and not from the authority. It is for the authority to accept the said offer or not to accept. If such offer is not accepted, that by itself will not be a ground for effecting any seizure of the vehicle under Section 207. The power under Section 207 is to be independently exercised on relevant facts and on satisfaction of the conditions laid-down in the Section. At that stage, the question whether the offence was compounded or not would be totally an irrelevant aspect. Mr.Dattu, the learned Government Advocate, also made it clear that authorities will not seize any vehicle only on the ground that offence was not compounded on spot. Our attention was invited to various provisions of the Act for supporting the contention that if a tourist motor vehicle plying under a valid tourist permit, is found on spot to be carrying in it passengers, who have paid individual fares and if such passengers are not genuine tourists, there would be a clear breach of the condition of permit to ply the vehicle as a tourist vehicle. In such a case, authorities can exercise power under Section 207 of the Motor Vehicles Act for seizing and detaining the vehicle. Mr. Dattu, submitted in order to become a tourist vehicle, it must be shown that it is being plied to carry genuine tourists as Tourist permit is issued for promoting tourism and not for anything else. He further submitted that Entries 16 and 64 of 1986 Notification and 10 and 25 of 1990 Notification merely mention as to what are the offences for which the concerned officers are empowered to accept the proposal of composition which might move from the offender or his agent. That such officers while accepting the offer do not adjudicate upon the offences. Under these circumstances, there would be no occasion to read-down Section 200. In this connection, he submitted that Swami, J., has wrongly assumed that under Section 200 any spot fine was being imposed by the authorities,
5. The learned Standing Counsel for Central Government submitted that Section 200 is a beneficial provision. It gives an option to a defaulting party. There is no question of any oppression involved in the said provision.
6. in reply Mr.Narasimha Murthy, appearing for the original Writ Petitioners submitted that Point No. 3 which was raised for Decision before Justice Swami, should have been answered. He further submitted that observations of Swami.J., at page 2840 do not flow from Section 200, which has inbuilt safe-guard against oppression as it offers only an option to the offender. Therefore, there is no question of reading it down. That Section 200 nowhere says that if the offender does not compound his offences, his vehicle should be seized. He, further contended that only because of tourist vehicle plying under a valid tourist permit takes individual passengers, whose names are listed as per the prior contract between the operator of the tourist vehicle and the permit holder, it cannot be said that the vehicle is being plied as a Stage Carriage. In this connection, he relied upon various provisions of the Act and submitted that nowhere it has been laid down either under the Act or the Rules that the passenger should be a bonafide tourist. He contended that consequently, only because of such user, it cannot be said that the condition of the tourist permit is violated or that the vehicle is required to be seized and detained.
7. Mr.Datar, learned Senior Counsel appearing for the respondent No. 1 in Writ Petitions Nos.1132-1183/93 submitted that if the officer on spot insists on compounding and levies a fine on the spot, such compounding can be said to have involved an element of adjudication and to that extent, reading down of Section 200 by Swami, J., would be correct. He then invited our attention to Proviso to Section 207 and submitted that even if it is alleged that a vehicle has been plied in breach of a condition of permit, it is not compulsory for the officer to seize the vehicle. Placing reliance on the Decision of the Supreme Court in OLGA TELLIS AND ORS. v. BOMBAY MUNICIPAL CORPORATION AND ORS. ETC., : AIR1986SC180 , it was submitted that if compulsory fine is enforced upon the offender on spot, the procedure would be violative of Article 21 as it would be unreasonable and oppressive procedure. That this would be especially so, when the owner and the hirer are absent on spot. Mr.Datar, next contended that as per Section 93(1) and Karnataka Rule 113 read with Section 2(35) dealing with public service vehicle, licence to travel agents is permissible. He further contended that cancellation or suspension of permit is provided by Section 86 of the Act and it is not as if that Section 207 must necessarily be resorted to when there is allegation that the vehicle has been plied in violation of any condition of permit.
8. Mr.Aibal, learned Counsel appearing for some of the respondents submitted that looking to the definition of Contract Carriage under Section 2(7) and of Tourist Vehicle under Section 2(43), it is not indicated that individual passengers cannot travel in a contract carriage. That there is ample provision for cancellation of permit or registration certificate for misuse of a permit. That there is no question of seizing the vehicle in such a case. That Section 53(1)(b) empowers the authority to suspend the registration for plying the vehicle without permit for such use.
9. Mr.Narasimhachar, appearing for some of the respondents, submitted that before compounding any offence, there must be determination of facts by authority and that would certainly involve question of adjudication. That Section 320 Cr.P.C., lays down how the offences can be compounded. That Rule 259(2) of the Karnataka Rules is ultra vires the Rule making power. That Section 207(1) is found in a Chapter which does not provide for any Rule making power. That under the scheme of 1988 Act, every Chapter includes a Section authorising making of Rules for the matters covered in the Chapter. There is no such Rule in Chapter containing Section 207 and therefore, Rule 259(2J in so far as it covers Section 207 is ultra vires the rule making power of the State Government. He alternatively submitted that even otherwise no manner is prescribed for seizure of vehicle under Section 207 as no Rules are framed for the same. Consequently, that Section can never operate and ail that is left with the authorities in cases of alleged breach of tourist permit is to proceed for cancellation of registration of the vehicle. Mr.Narasimhachar, further contended that even in case of Stage Carriage, deviation of route is permissible under certain circumstances as laid down by Section 63(3)(m) of the Act. Therefore, merely because a Contract Carriage vehicle is found to be plying on a route not covered by the permit, that cannot be itself call for any drastic action under the Act. He also invited our attention to Swami,J.'s Judgment page 2843 paragraphs 27 & 28 for submitting that such a power has to be vested in a competent authority. He also submitted that in some cases even though the dispute is compounded under Section 200(2), still authorities want to proceed to cancel the registration under Section 86 of the Act.
10. Learned Counsel for the Writ Petitioners also submitted that on the same grounds on which Section 200 is challenged being violative of Article 14, Rule 81A of the Karnataka Motor Vehicles Rules 1989 is liable to be struck-down.
11. Mr. Dattu, learned Government Advocate, in rejoinder submitted that Section 200 makes an option available to the offender and that proposal to compound must come from the offender. Placing reliance on : AIR1986AP7 , V. Govindarajulu v. The Regional Transport Officer, Anantapur and Ors. especially paragraphs 8 & 14, he submitted that if individual passengers are carried in the vehicle, it would cease to be a Contract Carriage. Lastly, he contended that in case of tourist permit issued under Section 88(9) of the Act, the emphasis is on promoting the tourism and if that purpose is not served, the very permit would cease to be a tourist permit. In this connection, he invited our attention to the Decision of the Supreme Court in ASHUTOSH SWAIN AND ORS. v. STATE TRANSPORT AUTHORITY AND ORS., : [1985]3SCR1
12. POINTS FOR DETERMINATION;
In view of the aforesaid rival contentions, the following Points arise for our Determination:
1. Whether Section 200 of the Motor Vehicles Act, 1988 involves any adjudication of offences contemplated by the Section and whether it is required to be read-down for being sustained on the anvil of Article 14 of the Constitution of India?
2. Whether Notification No. FTD.18 TMR.85 dated 13.11.1986 and Notification No. FTD.18 TMR.89 dtd. 25.10.1990 are violative of Article 14 of the Constitution of India?
3. Whether Rule 81A of the Karnataka Motor Vehicle Rules 1989 is violative of Article 14 of the Constitution of India?
4. Whether Rule 259(2) of the Karnataka Motor Vehicles Rules 1989 is ultra vires in so far as it covers Section 200 & 207 of the Motor Vehicles Act, 1988?
5. Whether operators of the tourist vehicles are entitled to a declaration that the tourist vehicles under valid tourist permits for countrywide operation between one terminus in home State and another terminus in another State are not liable to be seized and detained under the provisions of Section 129-A of the Motor Vehicles, Act, 1939 or under Section 207 of the Motor Vehicles Act, 1988, on the sole ground that the said tourist vehicles are operated as non-stop motor vehicles plying between any two points and carry individual passengers whose names are listed as per the prior contract and who have paid separate fares to travel agent who engages the whole vehicle on contract with the permit holder on the allegation or opinion of the enforcing authority that these passengers are not genuine and bonafide tourists?
6. Whether the original Writ Petitioners are entitled to any reliefs?
7. What final order?
Our answers are as follows:-
Point No. 1 - Section does not involve adjudication of any offences and it is not required to be read down.
Point No. 2 - In the negative
Point No. 3 - In the negative
Point No. 4 - In the negative
Point no. 5 - In the negative
Point No. 6 - ln the negative
Point No. 7 - As indicated hereinafter.
13. STATUTORY SETTINGS:
Before proceeding to deal with the aforesaid points for determination, it will be apposite to have a bird's eye view of the relevant statutory provisions governing the controversy. We shall first refer to the relevant provisions of the Motor Vehicles Act, 1939. Section 2(29) defines a stage carriage to mean a motor vehicle carrying or adapted to carry more than six persons excluding the driver which carries passengers for hire or reward at separate fares paid by or for individual passengers, either for the whole journey or for stages of the journey. Tourist Vehicle is defined by Section 2(29A) to mean a contract carriage constructed or adapted and equipped and maintained in accordance with such specifications as the State Government may, by notification in the Official Gazette, specify in this behalf. Contract Carriage is defined by Section 2(3) as under:
'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.
(i) on a time basis whether or not with reference to any route or distance, or
(ii) from one point to another, and in either case without stopping to pick up or set down along the line of route passengers not included in the contract; and includes a motor cab notwithstanding that the passengers may pay separate fares;'
Section 42(1) lays down that no owner of a transport vehicle shall use or permit the use of the vehicle in any public place (whether or not such vehicle is actually carrying any passenger or goods) 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: As per Section 63(7) notwithstanding anything contained in Sub-section (1) but subject to any rules that may be made under this Act, any State Transport Authority may, for the purpose of promoting tourism, grant (permits valid for the whole or any part of India, in respect of such number of tourist vehicles) as the Central Government may, in respect of that State, specify in this behalf, and the provisions of Sections 49, 50, 51, 57, 58, 59 59A, 60, 61 and 64 shall, as far as may be, apply in relation to such permits. As per Section 127B (1) any offence [whether committed before or after the commencement of Section 26 of the Motor Vehicles (Amendment) Act, 1982] punishable under Section 112, Section 113, Section 113B, Section 114, Sub-sections (1) and (2) of Section 115, Section 116, Section 118, Section 120, Section 122, Section 123, Section 124, Section 125 or Section 127 may, either before or after the institution of the prosecution, be compounded by such officers or authorities and for such amount as the State Government may, by notification in the Official Gazette, specify in this behalf. Sub-section (2) thereof provides that where an offence has been compounded under Sub-section (1), the offender, if in custody, shall be discharged and no further proceedings shall be taken against him in respect of such offence. Section 129A deals with power to detain vehicles used without Certificate of Registration or permit and provides that any police officer authorised in this behalf or other person authorised in this behalf by the State Government may, if he has reason to believe that a motor vehicle has been or is being used in contravention of the provisions of Section 22 or without the permit required by Sub-section (1) of Section 42 or in contravention of any condition of such permit relating to the route on which or the area in which or the purpose for which the vehicle may be used, seize and detain the vehicle, and for this purpose take or cause to be taken any steps he may consider proper for the temporary safe custody of the vehicle.
(ii) We may now turn to the relevant provisions of the Motor Vehicles Act, 1988 which has repealed 1939 Act Section 2 is a definition Section. Sub-section (39) thereof defines a permit to mean a permit issued by a State or Regional Transport Authority or an authority prescribed in this behalf under this Act authorising the use of motor vehicle as a transport vehicle, Section 2(47) defines a transport vehicle to mean a public service vehicle, a goods carriage, an educational institution bus or a private service vehicle. Public service vehicle is defined by Sub-section (35) to mean any motor vehicle used or adapted to be used for the carriage of passengers for hire or reward, and includes a maxi-cab, a motor-cab, contract carriage, and stage carriage. Tourist vehicle is defined by Section 2(43) to mean a contract carriage constructed or adapted and equipped and maintained in accordance with such specifications as may be prescribed in this behalf, Contract carriage is defined by Section 2(7) to mean a motor vehicle which carries a passenger or passengers for hire or reward and is engaged under a contract, whether expressed or implied, for the use of such vehicle as a whole for the carriage of passengers mentioned therein and entered into by a person with a holder of a permit in relation to such vehicle or any person authorised by him in this behalf on a fixed or an agreed rate or sum
(a) on a time basis, whether or not with reference to any route or distance or
(b) from one point to another,
and in either case, without stopping to pick up or set down passengers not included in the contract anywhere during the journey, and includes-
(i) a maxi-cab; and
(ii) a motor-cab notwithstanding that separate fares are charged for its passengers.
(iii) Stage carriage is defined by Section 2(40) to mean a motor vehicle constructed or adapted to carry more than six passengers excluding the driver for hire or reward at separate fares paid by or for individual passengers, either for the whole journey or for stages of the journey. Section 66 is found in Chapter-V dealing with control of transport vehicles. Sub-section (1) thereof ordains that no owner of a motor vehicle shall use or permit the use of the vehicle as a transport vehicle in any public place whether or not such vehicle is actually carrying any passengers or goods save in accordance with the conditions of a permit granted or countersigned by a Regional or State Transport Authority or any prescribed authority authorising him the use of the vehicle in that place in the manner in which the vehicle is being used:
Provided that a stage carriage permit shall, subject to any conditions that may be specified in the permit, authorise the use of the vehicle as a contract carriage.
(iv) Section 70 deals with application for stage carriage permit. Section 74 deals with grant of contract carriage permit. Section 73 deals with application for contract carriage permit. Section 84 deals with general conditions attaching to all permits. Section 88(1) lays down that except as may be otherwise prescribed, a permit granted by the Regional Transport Authority of any one region shall not be valid in any other region, unless the permit has been countersigned by the Regional Transport Authority of that other region, and a permit granted in any one State shall not be valid in any other State unless countersigned by the State Transport Authority of that other state or by the Regional Transport Authority concerned. Sub-section (9) of Section 88 provides that notwithstanding anything contained in Sub-section (1) but subject to any rules that may be made by the Central Government under Sub-section (14), any State Transport Authority may, for the purpose of promoting tourism, grant permits in respect of tourist vehicles valid for the whole of India, or in such contiguous State not being less than three in number including the State in which the permit is issued as may be specified in such permit in accordance with the choice indicated in the application and the provisions of Sections 73, 74, 80, 81, 82, 83, 84, 85, 86 and 89 shall, as far as may be, apply in relation to such permits. Sub-section (14) thereof, empowers the State Government to make Rules for carrying out the provisions of the Section. Section 192 deals with using vehicle without registration or permit and ordains in Sub-section (1) that whoever drives a motor vehicle or causes or allows a motor vehicle to be used in contravention of the provisions of Section 39 or without the permit required by Sub-section (1) of Section 66 or in contravention of any condition of such permit relating to the route on which or the area in which or the purpose for which the vehicle may be used or to the maximum number of passengers and maximum weight of luggage that may be carried on the vehicle, shall be punishable for the first offence with fine which may extend the two thousand rupees and for any second or subsequent offence with imprisonment which may extend to six months or with fine which may extend to three thousand rupees, or with both.
(v) Next relevant provision is Section 200 which deals with composition of certain offences. It reads as under:
200. Composition of certain offences.- (1) Any offence whether committed before or after the commencement of this Act punishable under Section'177, Section 178, Section 179, Section 180, Section 181, Section 182, Sub-section (1) or Sub-section (2) of Section 183, Section 184, Section 186, Section 189, Section 191, Section 192, Section 194, Section 196 or Section 198, may either before or after the institution of the prosecution, be compounded by such officers or authorities and for such amount as the State Government may, by notification in the Official Gazette, specify in this behalf.
(2) Where an offence has been compounded under Sub-section (1), the offender, if in custody, shall be discharged and no further proceedings shall be taken against him in respect of such offence.
(vi) Section 207 refers to the power to detain vehicles used without certificate of registration permit, etc. it reads as under:
207. Power to detain vehicles used without certificate of registration permit, etc.,-(1) Any police officer or other person authorised in this behalf by the State Government may, if he has reason to believe that a motor vehicle has been or is being used in contravention of the provisions of Section 3 or Section 4 or Section 39 of without the permit required by Sub-section (1) of Section 66 or in contravention of any condition of such permit relating to the route on which or the area in which or the purpose for which the vehicle may be used, seize and detain the vehicle, in the prescribed manner and for this purpose take or cause to be taken any steps he may consider proper for the temporary safe custody of the vehicle:
Provided that where any such officer or person has reason to believe that a motor vehicle has been or is being used in contravention of Section 3 or Section 4 or without the permit required by Sub-section (1) of Section 66 he may instead of seizing the vehicle, seize the certificate of registration of the vehicle and shall issue an acknowledgment in respect thereof.
(2) Where a motor vehicle has been seized and detained under Sub-section (1), the owner or person in charge of the motor vehicle may apply to the transport authority or any officer authorised in this behalf by the State Government together with the relevant documents for the release of the vehicle and such authority or officer may, after verification of such documents, by order release the vehicle subject to such conditions as the authority or officer may deem fit to impose.
(vi) State of Karnataka has promulgated the Karnataka Motor Vehicles Rules, 1989 in exercise of the powers conferred by Section 28, 38, 65, 95, 107, 111, 138, & 178 read with Section 212 of the Motor Vehicles Act, 1988. The relevant Rules, with which we are concerned, are Rule 81A & Rule 259(2). Rule 81A provides under:
81 A. Recovery of money in lieu of cancellation or suspension of permit: (1) If the transport authority is of the opinion that it would be necessary or expedient to cancel or suspend the permit it may require the holder of such permit, if he is agreeable to pay compounding fee in lieu of cancellation or suspension of permit to execute an agreement in form KMV 64 stating that he is agreeable to pay such amount.Sub-Rule (2) of Rule 81A provides as under:
(2) The transport authority while determining the sum of money to be recovered in lieu of suspension or cancellation of permit shall have regard to the following:-
i) nature, gravity and frequency of offences committed;
ii) the quantum of punishment that would have been otherwise/imposed.
iii) the type of vehicle.
(vii) Rule 259 deals with powers of superior officers and lays down, notwithstanding anything contained in these Rules, any superior officer of the Motor Vehicles Department, may at any time perform any functions of the officer subordinate to him under these Rules. We are concerned with Sub-rule (2) which lays down that any officer of the Motor Vehicles Department of and above the rank of Inspector of Motor Vehicles shall exercise the powers under the provisions of Section 114, 130, 132, 133, 134, 136, 158, 200, 203, 204, 205, 206 and 207 of the Act.
(viii) The Central Government has framed Rules named and styled as Central Motor Vehicles Rules, 1989. Rule 85 of the said Rules deals with additional conditions of tourist permit and provides as under:
85. Additional conditions of tourist permit.- The following shall be the additional conditions of every tourist permit granted to a tourist vehicle other than a motor cab under Sub-section (9) of Section 88, namely:-
(1) The permit holder shall cause to be prepared in respect of each trip a list in triplicate of tourist passenger to be carried in the vehicle, duly attested by the Executive Magistrate, a Sub-Inspector of Police or Gazetted Officer of the State Transport Authority or Regional Transport Authority in this regard of the area from which the tour emanates giving full particular as under:-
(a) name of the passengers.
(b) address of the passengers.
(c) age of passengers.
(d) starting point and the point of destination.
(2) One copy of the list shall be sent by Registered AD Post to the Authority which issued the permit for record, the second copy shall be carried in the tourist vehicle and shall be produced on demand by the officers authorised to demand production of documents by or under the Act and the third copy shall be preserved by the permit holder.
(3) The tourist vehicle shall either commence its journey, or end its journey, circular or otherwise in the home State, subject to the condition that the vehicle shall not remain outside the home State for a period of more than two months. The permit holder shall see that every return of the tourist vehicle to the home State is reported to the authority which issued the permit;
Provided that where the contracted journey ends outside the home State, the vehicle shall not be offered to the hire within that State or from that State to any other State except for the return journey to any point in the home State.
(4) The tourist vehicle may operate circular tours of places lying exclusively in home State or in the home State and outside the State if such circular tours are in the list approved by tourist department of the home State to visit places of tourist, historical or religious importance and the tour is duly advertised before hand.
(5) The permit holder or his authorised agent shall issue a receipt to the hirer and the counterfoil of the same shall be kept available with him and produced on demand to the officers empowered to demand document by or under the Act.
(6) The tourist vehicle shall not be parked on any bus stand used by stage carriage and shall not operate from such bus stand.
(7) The tourist vehicle shall be painted in white colour with a blue ribbon of five centimeters width at the centre of the exterior of the body and the word 'Tourist' shall be inserted on two sides of the vehicle within a circle of sixty centimeters diameter.
(8) The permit holder shall display in the front top of the tourist vehicle a board in yellow with letters in black with the inscription 'tourist permit valid in the State(s) of...' in English and Hindi and also, if be so prefers, in regional language of the' home State.
(9) The permit holder shall not operate the tourist vehicle as a stage carriage.
(10) The permit holder shall maintain a day to day logbook indicating the name and address of the permit holder and the registration mark of the vehicle, name and address of the driver with the particulars of his driving licence and the starting and destination points of the journey with the time of departure and arrival and name and address of hirer.
(11) The permit holder shall furnish every 3 months the information contained in condition (10) to the State Transport Authority which granted the permit and the logbook shall be preserved for a period'of 3 years and shall be made available to the said authority on demand alongwith the records referred to in conditions (2) and (4).
14. In the back-ground of the aforesaid relevant statutory provisions, we now proceed to deal with the Points for Determination seriatim.
15. POINT N0.1:
A mere look at Section 200 of Motor Vehicles Act, 1988 shows that it does not involve any question of adjudication. All that it does is to give an option to the concerned offender if he so chooses to get the offences compounded. Acceptance of such an offer of deliquent who is found in the spot to having committed any of the offences listed in the Section can be made by such officers or authorities and for such amount as the State Government may, by Notification in the Official Gazette, specify in this behalf. That has been done by the State authority by issuing the Notifications dated 13.11.1986 as well as 25.10.1990. 13.11.1986 Notification is issued by the State of Karnataka in exercise of the powers conferred by Section 127B of the Motor Vehicles Act. 1939. For an offence of plying vehicle without a valid permit compounding fee proposed is Rs. 1,000/- as per Entry 16. As per Entry 64 for an offence of carrying persons or passengers without a valid permit the compounding fee is Rs. 50 per passenger. Such compounding can be done by officers of and above the rank of Inspector of Police in charge of Circles within their respective jurisdiction in the State or Officers of and above the rank of Sub-Inspector of Police (Traffic) in case of City of Bangalore, within their respective jurisdiction or officers of and above the rank of Inspector of Motor Vehicles of the Motor Vehicles Department within their respective jurisdiction. Coming to the Notification of 25.10.1990, we find that the same is issued in exercise of powers under Section 200 of the Motor Vehicles Act, 1988 by the State of Karnataka, and amongst others, officers of and above the rank of Inspectors of Motor Vehicles of the Motor Vehicle Department within their respective jurisdiction are conferred power to compound. Item 10 of the Schedule to said Notification deals with the offences for plying the motor vehicle as a transport vehicle without a valid permit and offence thereof is under Section 66(1) read with Section 192 and the compounding fee is Rs. 500/-. By Entry 25 a provision is made for compounding an offence of carrying persons or passengers for hire or reward without a valid permit and the compounding fee is Rs. 50 per passenger. We fail to appreciate how Section 200 can be said to be involving any adjudication of offence by the Officers authorised by the aforesaid Notifications. The provision like Section 200 of the Motor Vehicles Act, 1988 is found also in other statutes. Mr.Dattu, the learned Government Advocate appearing for the appellant State invited our attention to the Decision of the Supreme Court in SHAMRAO BHAGWANTRAO DESHMUKH v. THE DOMINION OF INDIA, 27 ITR 30. In that case, the Supreme Court was concerned with the question of compounding an offence under Section 53 of the Income-tax Act, 1922. Said section provided that a person shall not be proceeded against for an offence under Section 51 or Section 52 except at the instance of the Inspecting Assistant Commissioner and that the last mentioned Officer may, before or after the institution of proceedings, compound any such offence. Supreme Court observed that that Section does not say that the offence can only be compounded if it is proved to have been actually committed and it is, therefore, obvious that compounding an offence has nothing to do with its adjudication.
15.2. Mr.Dattu, learned Government Advocate also invited our attention to a Full Bench Decision of this Court in S.V. BAGI v. STATE OF KARNATAKA, : ILR1992KAR1123 . In that case, the Full Bench of this Court was concerned with Section 31 of the Karnataka Sales Tax Act, 1957. it read as under:
'31. Composition of Offences: The prescribed authority may accept from any person who has committed or is reasonably suspected of having committed an offence punishable under this Act, by way of composition of such offence-
(a) Where the offence committed is under Clause (d) of sub-section (1) of Section 29 or Clause (c) of Sub-section (2) of Section 29 in addition to the tax or amount not paid or evaded to be paid, a sum of money not exceeding one thousand rupees or double that amount of the tax or amount so remained unpaid or evaded to be paid whichever is greater, and
(b) In other cases, a sum of money not exceeding one thousand rupees'.
Interpreting the phraseology of the aforesaid Section the Full Bench held that the offer to compound must come from such person. There is no compulsion. He cam make it if he is assured of the possibility of being found guilty of the offence and upon satisfying himself that what he offers is within the prescribed parameters and that he to whom he makes the offer is the prescribed authority for the purpose. Once the offer is made it is for the prescribed authority to determine whether the offence should be compounded and, if so, whether it should be compounded for the amount offered. No doubt, it would be open to the prescribed authority to suggest such other sum as in its view would be appropriate, in which case it would be for such person to agree to pay such other sum or not. The process of compounding is completed only when the money that is agreed upon actually changes hands. There can never be a situation where the person who has committed an offence or reasonably suspected of having committed an offence under the Act can be aggrieved. The fact that he has made the payment would indicate beyond any doubt that he was a willing party to the compounding and he cannot object thereto. Until the process of compounding is completed by payment of the agreed compounding fee, the Sales Tax authorities would be entitled to lodge a prosecution, but not to recover the composition fee by coercive process.
15.3. The aforesaid Full Bench Decision also clearly lays down that in the process of compounding there is no coercion. On the contrary, an offer proceeds from the alleged offender and if the prescribed authority accepts it, there will be bilateral act by which the offence would get compounded. We may also in this connection, usefully refer to a Decision of the Supreme Court rendered under Section 129A of the Motor Vehicles Act, 1939 in The Transport Commissioner, Andhra Pradesh, Hyderabad and Anr. v. S. Sardar Ali and Ors. In that case, the Supreme Court had an occasion to consider the scheme of Section 127-B read with Section 129-A of the Motor Vehicles Act, 1939. As we have seen earlier, Section 129-A of the 1939 Act is almost parimateria with Section 207 of the 1988 Act. While Section 127-B of 1939 Act is parallel to Section 200 of the 1988 Act. Chinnappa Reddy, J., speaking for the Supreme Court, observed in connection with Section 129-A that the said Section contemplated three situations where the police officer or authorised person may seize and detain the vehicle. The three situations are, (i) where he has reason to believe that the motor vehicle has been or is being used in contravention of the provisions of Section 22, (ii) where he has reason to believe that the motor vehicle has been or is being used without the permit required by Section 42(1), and (iii) where he has reason to believe that the motor vehicle has been or is being used in contravention of any condition of such permit relating to the route on which or the area in which or the purpose for which the vehicle may be used. These are precisely the three situations contemplated by Section 123(1) of the Motor Vehicles Act and made punishable under that provision. Thereafter, referring to Section 127-B, which deals with power of composition of such offences, the following pertinent observations are made:
'Now, after detecting the commission of an offence punishable under Section 123(1) of the Motor Vehicles Act, the next appropriate step for the police officer or the authorised person would be to consider the question whether the offence should be compounded as provided by Section 127-B of the Motor Vehicles Act.......... Thereafter the next logical and appropriate step for the police officer or the authorised person would be to lay a complaint before the Court competent to take cognizance of the offence subject to the overriding provision of Section 132 of the Motor Vehicles Act which provides that no Court inferior to that of a Magistrate of the second class shall try any offence punishable under the Motor Vehicles Act or any rule made thereunder'.
The aforesaid observations of the Supreme Court on a pari materia Section of 1939 Act clearly indicates that there is no question of any adjudication involved at the stage of offer of compounding being received by the authorised officer and only when such compounding does not take place, question of laying a complaint before the Court competent to take cognizance would arise. In view of this settled legal position, it is difficult to appreciate how Swami, J., in Mohammed Illyas case, supra at page 2828 paragraph 14 persuaded himself to hold that composition of an offence can be permitted only on the basis that an offence is committed and that compounding is done if an offence is committed and the result of compounding is an acquittal of the person who has committed an offence. The reliance placed by the learned Judge on a Decision of this Court in T. NANJAPPA AND SONS v. ASSISTANT COMMISSIONER OF COMMERCIAL TAXES, MYSORE DIVISION, MYSORE AND ANR., 22 STC 277 is besides the point as it only laid down that once there is compounding of an offence according to the relevant provisions of the Code of Criminal Procedure, it is acquittal in the eye of law. These observations are made for highlighting the result of compounding. They have nothing to do with the actual adjudication of the offence at the stage of compounding. So far as that aspect is concerned, it is squarely governed by the Decisions of the Supreme Court in : [1955]27ITR30(SC) and : [1983]3SCR729 as well as Full Bench Decision of this Court in : ILR1992KAR1123 supra. Once the Supreme Court on the pari materia Section of 1939 has clearly ruled that at the stage of compounding there is no question of even filing a complaint before the Magistrate there would be obviously no occasion of adjudication at the stage of compounding. Consequently, the Decision rendered by Swami, J., on this aspect cannot be sustained and must be held to be not laying down good law, as Swami, J., proceeded on a wrong assumption that Section 200 involves compounding an offence by adjudication and therefore, such power cannot be delegated under Rule 259(2) to the State authorities, who are not competent, to adjudicate upon such offences. Similarly the further conclusion, to which he reached, that the Notification of 1986 is ultra vires the powers of the State Authorities, logically falls through and cannot be sustained because it is based on a wrong premise that Section 200 involved any adjudication of an offence. It is equally not possible to agree with the conclusion to which Swami, J., reached at page 2840 of the Report that if the offender does not compound, he has to leave his vehicle with the officer and he has no option but to pay fine and therefore, the procedure of Section 200 is oppressive. With respect, Swami, J., has assumed that the offender has necessarily to compound, otherwise he would lose his vehicle. Section 200 nowhere provides that if an offender does not offer to compound when detected on spot being involved in any offence of Motor Vehicles Act, authority can immediately seize the vehicle, in fact, power of seizure of vehicle is an independent power. It flows from Section 207 and it has to be exercised in the light of the conditions precedent as laid down in the said Section. There is no condition in Section 207 to the effect that if the offence is not compounded under Section 207, the vehicle can be seized. Therefore, with respect, Swami, J., has wrongly assumed that punishment for non-compounding an offence is the seizure and detention of vehicle. We have already noted the stand of learned Government Advocate for the State authorities that merely because an offence is not compounded under Section 200, the authorities cannot, and will not seize or detain the vehicle unless a case is made out for detention and seizure of such vehicle under Section 207 which confers an independent power. Upholding the powers under Section 129-A of the Motor Vehicles Act, 1939, Which was fore-runner of Section 207 of the present Act, the'Supreme Court in the aforesaid Decision, AIR 1983 SC 12251 supra, in terms observed that a pre-condition to the seizure and detention of the vehicle under Section 129-A is that the police officer or authorised person must have reason to believe that one or the other of the offences specified, punishable under Section 123, has been or is being committed. A motor vehicle regarding whose temporary custody arrangements have been made under Section 129-A of the Motor Vehicles Act by the police officer or the authorised person seizing the vehicle must be considered to have been produced before the Criminal Court as soon as a complaint is filed before the Court alleging the commission of an offence under Section 123 regarding the vehicle, in any case, the Court has ample power under Chapter VII of the Code, Section 91 in particular, to compel the production of the vehicle before the Court. Thus, if the provisions of the Motor Vehicles Act are read in conjunction with the provisions of the Code of Criminal Procedure - and there is no getting away from the provisions of both the laws - it is seen that there is no lacuna whatsoever in regard to the proper custody and disposal of the motor vehicle seized under Section 129-A of the Motor Vehicles Act. The custody of the vehicle in the hands of the police officer or the authorised person is but temporary and he is therefore, obliged to act and take all further steps in the matter with all expedition. If he releases the vehicle on being satisfied that no offence has been committed or if he releases the vehicle on the offence being compounded, no further question arises. If, instead, he lays a complaint before the Court, the Court acquires instant jurisdiction over the vehicle to pass suitable orders. In the remote event of the police officer or the authorised person not taking any further action after seizing and detaining the vehicle, the owner of the vehicle is not without remedy. Article 226 is always available but one does not have to presume that the police officer or the authorised person may not act according to law.
15.4 In view of this settled position therefore, it cannot be said that merely because offer for compounding an offence is not accepted by the authorities or there is no such offer and the offender does not exercise his option of suggesting to compound an offence, his vehicle would be automatically seized. Once the conclusion to which Swami, J., reached is found to be based on a wrong premise, it would be erroneous to hold that Section 200 would be oppressive and violative of Article 14 of the Constitution of India unless it is read-down in the way Swami, J., suggested in the said Decision. It is equally difficult to appreciate how in para 27 at page 2843, Swami, J., took the view that the power of compounding under Section 200 is a Judicial power. It has to be appreciated that Section 200 contemplates that even before institution of the prosecution, an offence can be compounded. On the reasoning adopted by Swami, J., this part of the Section would be rendered totally otiose. If compounding can be done by parties, who otherwise would be parties to a future prosecution, it can easily be visualised that at the stage of compounding, there would be no occasion for adjudicating upon any offence, nor would it amount to exercise of any judicial power. With respect, therefore, it must be held that the Decision of Swami, J., in Mohammed Illyas case does not lay-down correct law and it is required to be reversed. We may mention, in this connection, that though a faint attempt was made by the learned Counsel for the Writ Petitioners to sustain that Decision by adopting the reasoning, which appealed to Swami, J., they could not sustain it on any possible ground. We must, therefore, accept the contention of the learned Government Advocate, Mr. Dattu, that Section 200 does not involve any adjudication of offence contemplated by the Section nor it is required to be read-down for being sustained on the anvil of Article 14 of the Constitution. Our answer to Point No. 1, therefore, is in the negative.
16. POINT NO. 2:
We have already seen that the Notifications in question only authorise the officers of and above the rank of Inspectors of Motor Vehicles of the Motor Vehicles Department to accept compounding of offences if an offer by the concerned offenders is made as per Section 200 of the Act. As Mr.Justice Swami has taken a view that Section 200 involves exercise of an adjudication and it is a Judicial process, he found the Notification dated 13.11.1986 not in conformity with the interpretation placed on Section 200 and therefore, consequently he held that the Notification involved a procedure which is oppressive in nature and that Notification is violative of Article 14 of the Constitution. Once the very basis of the finding of Swami, J., in connection with the nature of compounding contemplated by Section 200 is found to be wrong and erroneous, it logically follows that the Decision rendered by him about the Notification 13.11.1986 would also not survive and would fall through. Even otherwise, it is difficult to appreciate as to how this Notification can be considered to be in any way incompetent. Section '200 in terms authorises the State Government to specify by a Notification in the Official Gazette stating the officers or authorities who may compound the offences under the Section. As compounding does not involve any process of adjudication, any officer functioning under the Motor Vehicles Act can legitimately and validly be entrusted with the task of compounding an offence under Section 200. We do not see any flaw underlying such an exercise. Swami, J., persuaded himself to take contrary view because he, with respect, wrongly assumed that Section 200 involved a process of adjudication and therefore only a competent Court can do the said exercise and not such officers, who would not be equipped with the capacity to adjudicate upon such offences. The said premises, as we have seen, earlier is without any basis and hence the Decision of Swami, J., finding fault with the Notification of 13.11.1986 cannot be sustained. On the same reasoning the subsequent Notification dated 25.10.1990 also can be sustained as it is on the same lines of prior Notification dated 13.11.1986. The only difference between them is that earlier Notification is issued by the State of Karnataka in exercise of its powers under Section 127-B of the Motor Vehicles Act, 1939, while the latter one is issued under Section 200 of the 1988 Act. As we have seen earlier, Section 127-B of 1939 Act is analogous to Section 200 of 1988 Act and therefore, once Notification dated 13.11.1986 is held to be valid, it must logically follow that similar Notification dated 25.10.1990 under Section 200 also cannot be found fault with. It is difficult to appreciate the contention of the learned Counsel for the Writ Petitioners that these Notifications are violative of Article 14 of the Constitution. They only facilitate the working-out of an offer of composition which may proceed from the offender under Section 200. Once it is held that there is no compulsion for the concerned offender to offer for compounding and it is at his option, it must be held that there is no procedural unreasonableness or arbitrariness underlying the said Notifications. The Notification and the Section can stand together. Swami, J., held the Notification to be bad because, in his view even the Section was bad unless read down.
16.2. Before parting with Point No. 2, we may mention one submission of Mr.Narasimha Murthy. He submitted placing reliance on A.B. CHINAGI v. REGISTERING AUTHORITY & RTO., ILR 1988 KAR 60, that jf it is alleged that vehicle has been used, contrary to the condition of the valid permit, Section 60 of Motor Vehicles Act, 1939 would be applicable and that Section 33(1)(b) will apply only when vehicle is driven without permit. The aforesaid Decision of the Division Bench of this High Court was concerned with interpretation of the Section 33(1)(b) of the Motor Vehicles Act, 1939. That provision deals with suspension of Registration and provides that:
'If any registering authority or other prescribed authority has reason to believe that any motor vehicle within its jurisdiction -
(b) has been, or is being, used for hire or reward without a valid permit for being used as such,
the authority may, after giving the owner an opportunity of making any representation he may wish to make (by sending to the owner a notice by registered post acknowledgment due at his address entered in the certificate of registration), for reasons to be recorded in writing, suspend the certificate of registration of the vehicle.....'
The aforesaid provision clearly indicates that if the allegation is that though there is a permit for using the vehicle for hire or reward, the condition of the valid permit is violated, then on express language of Section 33(1)(b) no action can be taken. In such contingency, Section 60(1)(b) would be attracted, and it reads as follows:-
'60. CANCELLATION AND SUSPENSION OF PERMITS:
(1) The transport authority which granted a permit may cancel the permit or may suspend it for such period as it thinks fit
(b) if the holder of the permit uses or causes or allows a vehicle to be used in any manner not authorised by the permit......'
Placing reliance on this Judgment, it was submitted by Sri. Narasimha Murthy that if a tourist permit vehicle is used as a stage carriage it cannot be said that the vehicle was used without a permit. It is obvious that a contract carriage permit is contemplated by Section 74 of the 1988 Act while a tourist permit is contemplated by Section 88(9) of that Act. Therefore, even if a vehicle is covered by a valid tourist permit, if it is alleged to have been plied at a given point of time not as a tourist vehicle permit but as a contract carriage or even as a stage carriage, it can be said that the said user was not covered by any valid permit for plying that vehicle for the purpose for which it was actually being plied. Under these circumstances, the aforesaid Decision cannot be of any avail to Mr.Narasimha Murthy.
16.3. We also fail to appreciate as to how this Judgment is of any assistance to Sri Narasimha Murthy on the facts of the present case. In the present case, on the language of the Notification under Section 200, compounding of offences can be made by duly authorised officer when he finds that the vehicle in question is plied as a transport vehicle without a valid permit. Under the scheme of the Act a transport vehicle will also include a tourist vehicle. Therefore, if it is found to be plying without a valid permit covering its use at a given point of time, the offence under Section 66(1) read with Section 192 would get attracted and for such offences composition can be made by duly authorised officer as per the Notification. The Entry No. 10 in the Notification is seen to be differently worded when compared to Section 33(1) (b) of the 1939 Act with which this Court was concerned in ILR 1988 KAR 60, supra. It must, therefore, be held that the impugned Notifications do not suffer from any Constitutional infirmity nor are they violative of Article 14 of the Constitution as tried to be suggested by the learned Counsel for the Writ Petitioners. Point No. 2, therefore, will have tq be answered in the negative.
17. POINT NO.3:
So far as this Point is concerned, none of the Advocates appearing for the original Writ Petitioners have seriously pressed this point. However, as it figures as one of the prayers in the Writ Petitions, we thought it fit to deal with the same.
17.1. As we have seen earlier Rule 81A refers to recovery of money in lieu of cancellation or suspension of permit. Cancellation or suspension of permit is provided by Section 86 of the Act. The said cancellation or suspension for a period can be effected by a Transport Authority on breach of any conditions contained in the permit or if the holder of the permit is found to be guilty of any of the acts or omissions mentioned in the said Section. It is easy to visualise, once such an eventuality happens, it is for the Transport Authority to take a decision about the cancellation or suspension of the permit. Before it does so, the Rule making authority has given an option to the concerned offender to pay compounding fee in lieu of suspension of permit. Thus it is purely optional for the offender to compound the matter so that he can save his permit from being cancelled or suspended. There is no oppression involved in such compounding. To that extent, Rule 81A runs almost parallel to Section 200 of the Act. It is not as if compounding is not done then almost automatically action under Section 86 would follow. Action under Section 86 would follow only on the fulfillment of the statutory conditions laid-down in the said Section for its operation. Therefore, it is not possible to agree with the broad proposition that Rule 81A would be violative of Article 14 of the Constitution of India inasmuch as it involves an oppressive procedure or it lays down a scheme of imposition of compulsory fine on the alleged offenders. We do not find any flaw or Constitutional infirmity in Rule 81A. On the same reasoning, on which we have found that Section 200 is not violative of Article 14, present Rule 81A must be held not to be violative of Article 14 of the Constitution of India. Point No. 3 is, therefore, answered in the negative.
18. POINT NO.4:
So far as Rule 259(2) is concerned, as we have noted earlier, it deals with powers of certain officers mentioned therein in connection with exercise of powers under various provisions listed therein. Two of the provisions mentioned are Sections 200 and 207. So far as reference to Section 200 is concerned, none of the learned Counsel appearing for the Writ Petitioners tried to support the reasoning adopted by Swami, J., in Mohammed Illyas case supra by which he held that inclusion of Section 200 in Rule 259(2) is ultra vires of the rule making power of the State Government. We, on our own, do not find any infirmity in the said Rule 259(2) so far as it refers to Section 200. The reason is obvious, Section 200 authorises the State Government to empower officers or authorities for the purpose of compounding offences listed in the Section and that may be published in Official Gazette. Now it is obvious that such Notification can be a special Notification confining to only Section 200 or can be a Notification by way of Rules. In the present case, Rule 259(2) which has been duly notified in the Official Gazette, has indicated certain officers who are empowered to compound the offences under Section 200. By the express language of the Section itself, the Legislature has permitted the State Government as a delegatee to undertake the exercise of conferring powers to specialised officers for acting under Section 200. It is not as if that the empowered officer under Section 200 can further delegate his powers to somebody else. It is difficult to appreciate, the reasoning adopted by Swami, J., to the effect that power under Section 200 to specify the officers and authorities to compound an offence mentioned therein and for the amount specified therein, is the power which cannot be delegated. In fact, the Legislature has thought it fit to delegate such power by making express provision in the Section. If the State in exercise of the delegated function authorises an officer, as permitted by the Section, it cannot be said, with respect, that it would amount to an impermissible exercise. It is equally not possible to agree with the observation of Swami, J., in this connection that Section 200 if read as part of Rule 259(2), it does not give any meaning. In order to find out as to who are the officers or authorities who may be entrusted power to compound under Section 200, we have necessarily to turn to the Notification which the State Government may issue in the Official Gazette and it is that permissible exercise under the Section that has been undertaken by the State by enacting Rule 259(2). Under these circumstances, to make effective the Legislative intention underlying Section 200, it has to be read with Rule 259(2) with a view to finding out as to who are the officers or authorities empowered by the State Govt. to compound the offences mentioned in Section 200. Without the operation of Rule 259(2) exercise contemplated by Section 200 by Legislature would remain incomplete and truncated. Only on a conjoint reading of Section 200 Sub-section (1) and Rule 259(2) we can find put as to how Section has to be operated in practice. Therefore, with respect, it is incorrect to say that Section 200 if read as a part of Rule 259(2), does not give any meaning. On the contrary, Rule 259(2) will have to be read with Section 200 and both provisions can operate harmoniously, so that the Legislative intent underlying Section 200 can fructify. We must, therefore, hold that the Decision rendered by Swami, J., in Mohammed Illyas case when it holds that Rule 259(2) in so far as it includes Section 200 is required to be struck-down cannot be sustained.
18.2. We now turn to the other facet of the attack mounted by the learned Counsel for the original Writ Petitioners on Rule 259(2) with reference to Section 207. This part of the challenge was highlighted by Sri Narasimhachar, learned Counsel appearing for some of the Writ Petitioners. He firstly, submitted that Rule 259(2) is ultra vires the rule making power of the State Government in so far as Section 207 is concerned. He alternatively contended that even assuming that it is within the rule making power, even then Section 207 cannot be of any assistance to the authorities acting under the Motor Vehicles Act on the basis of the said Rule inasmuch as Section 207 powers can be exercised in the prescribed manner and as no rules are framed by the State Government in connection with the manner in which the powers under Section 207 can be exercised by the concerned authorities, Section itself cannot operate and therefore, Rule 259(2) in so far as it refers to Section 207 can be of no assistance to the authorities. We will deal with these twin submissions seriatim.
18.3. So far as submission that Rule 259(2) is ultra vires the rule making power of the State Government qua Section 207, is concerned, we may note that Mr.Narasimhachar submitted that under the scheme of the Motor Vehicles Act, 1988 for every Chapter there is a special rule making power. Mr.Narasimhachar invited our attention to Chapter II of the Act which deals with licensing of drivers of motor vehicles. That Section 28 in the said Chapter deals with the power of the State Government to make Rules for the purpose of carrying into effect the provisions of the Chapter. Then he took us to Chapter III which deals with licensing of Conductors of Stage Carriages. In that Chapter there is Section 38 which deals with the power of the State Government to make Rules for the purpose of carrying into effect the provisions of that Chapter. Chapter IV deals with registration of Motor Vehicles. In that Chapter is found Section 64 which deals with power of the Central Government to make Rules, while Section 65 deals with the power of the State Government to make Rules for the purpose of carrying into effect the provisions of that Chapter other than the matters specified in Section 64. He then took us to Chapter V which deals with control of transport vehicles. There also it is found that Section 96 which deals with the power of the State Government to make Rules. Our attention was then invited to Chapter VI which deals with special provisions relating to State Transport Undertakings. Section 107 in the said Chapter deals with the power of the State Government to make Rules for the purpose of carrying into effect the provisions of the Chapter. Then comes Chapter VII which deals with construction, equipment and maintenance of motor vehicles. We find Section 111 in that Chapter which deals with power of the State Government to make Rule regulating the construction, equipment and maintenance of motor vehicles and trailers with respect to all matters other than the matters specified in Sub-section (1) of Section 110. This follows Chapter VIII which deals with control of traffic. Section 138 of that Chapter deals with the power of the State Government to make Rules for the purpose of carrying into effect the provisions of that Chapter. Chapter IX deals with motor vehicles temporarily leaving or visiting India. Section 139 in the said Chapter deals with power of Central Government to make Rufes, by notification in the Official Gazette, for all or any of the purposes listed therein. He then took us to Chapter 11 which deals with Insurance of Motor Vehicles against third party risks. Section 164 in the said Chapter deals with the power of Central Government to make Rules for the purpose of carrying into effect the provisions of the Chapter. Chapter XII deals with claims Tribunals. Section 176 of the said Chapter deals with the power of the State Government to make Rules for the purpose of carrying into effect the provisions of Sections 165 to 174 found in the said Chapter. Then follows Chapter XIII dealing with offences, penalties and procedure. It is this Chapter, with which we are directly concerned as in this Chapter Section 200 & 207 are found. No Section is found in this Chapter which empowers the State Government to frame Rules for the purpose of the said Chapter. Then follows Chapter 14 which deals with miscellaneous provisions. Under Section 213 found in that Chapter, a provision is made for appointment of motor vehicles officers. Sub-section (3) of Section 213 lays down that the State Government may make Rules to regulate the discharge by officers of Motor Vehicles Department of their functions and in particular and without prejudice to the generality of the foregoing power to prescribe the uniform to be worn by them, the authorities to which they shall be subordinate, the duties to be performed by them, the powers (including the powers exercisable by police officers under this Act) to be exercised by them, and the conditions governing the exercise of such powers.
18.4. Mr.Narasimhachar, learned Counsel, submitted that as per the scheme of Motor Vehicles Act, as seen above, every Chapter in the Act is equipped, whenever necessary with a Section which empowers the State Government to frame Rules for the purpose of the Chapter. When we come to Chapter 13 where Sections 200 & 207 are found, the Legislature has not conferred any rule making power to the State Government for the purpose of that Chapter. Consequently, Rule 259(2) in so far as it seeks to empower the officers of Motor Vehicles Department to exercise powers under Sections 200 & 207 would be totally ultra vires the rule making power of the State as there is no such rule making power for any of the provisions found in Chapter 13. It is not possible to agree with this contention.
18.5. It is true that as per the scheme of the various Chapters, there are separate rule making powers conferred on the State Government for the purpose of the concerned Chapters. There is no such rule making power in Chapter 13. However, we have seen Chapter XIV which deals with miscellaneous provisions and it does contain Section 213(3) which expressly authorises the State Government to make Rules to regulate the discharge by officers of Motor Vehicles Department of their functions which would include duties to be performed by them and the powers exercisable by police officers under the Act, to be exercisable by them. Section 207 in terms provides that any police officer or any other person authorised in this behalf by the State Government may exercise the power of detaining vehicle and seizing it. When Section 207 is read with Section 213(3), it becomes clear that the State Government can authorise any person or officers of the Motor Vehicles Department to exercise powers of police officer under Section 207. It is true that while enacting Karnataka Motor Vehicles Rules, 1989 in which we find Rule 259(2), there is no express mention of rule making power under Section 213(3) but that would make no difference. It is now well settled that if there is any power with an authority, non mentioning of the source of power while exercising that power will not make the exercise invalid. Secondly, mentioning a wrong Section like 212 instead of 213(3) while enacting the Rules, will have no effect on the validity of the Rules. As noted earlier, the State Government has power to enact Rules for the purpose of Section 207 and consequently, it cannot be said that Rule 259(2) is ultra vires the rule making power of the State Government while it makes provision relating to entrustment of power under Section 207 of the Act to officers of Motor Vehicles Department to detain and seize the Motor Vehicles.
18.6. In this connection, we may usefully refer to the Constitutional Bench Decision of the Supreme Court in P. BALAKOTAIAH v. UNION OF INDIA AND ORS., : [1958]1SCR1052 , which has ruled that no exception could be taken to the proposition that when an authority passes an order which is within its competence, it cannot fail merely because it purports to be made under a wrong provision if it can be shown to be within its powers under any other rule, and that the validity of an order should be judged on a consideration of its substance and not its form. We may also in this connection, refer to a Full Bench Decision of Madhya Pradesh High Court in PREMSHANKAR SHARMA v. COLLECTOR, EAST NIMAR, KHANDWA AND ORS., : AIR1962MP262 , wherein the Full Bench of Madhya Pradesh High Court was concerned with authority of rule making power under the provisions of C.P. and Berar Municipalities Act. Relying on Decision of the Supreme Court in AIR 1958 SC 252 supra, it has held that in determining the validity of the Rules, what is material is their substance and not the form or the heading. It is well settled that a Rule made under an enactment cannot be declared ultra vires unless it is found that the enactment does not confer any power at all to make the Rule. A Rule purported to have been made under a wrong provision of an Act would nonetheless be valid if it is shown to be within the four corners of the power conferred by any other provision of the Act.
18.6. We respectfully agree with the said view on the facts of the present case. Therefore, there is no escape from the conclusion that Rule 259(2) of the Karnataka Motor Vehicles Rules in so far as it refers to Section 207 is intra vires the power of the State Government for making such Rules as permitted by Section 212(3) of the Act. The main ground of attack of Mr.Narasimhachar on the vires of Rule 259(2) therefore, fails.
18.7. We may now deal with the alternative submission. He contended that Section 207 cannot be utilised by the authorities functioning under Motor Vehicles Act who are empowered to act under Section 207 as the said Section can operate only after prescribed procedure for detaining and seizing the vehicle is laid down by the State by enacting the requisite Rules. Now it is true that the authorised officer acting under Section 207 on satisfaction of the conditions mentioned in the Section may seize and detain a vehicle in the prescribed manner. Therefore, the Legislature expects the State Government to prescribe the manner of seizing and detaining the vehicle under that Section. It is also not in dispute that such manner can be prescribed by Rules. It is not in dispute between the parties that no such Rules are framed by the State Government prescribing the manner of seizing and detaining the vehicles under Section 207 by the authorised officers. Even so, a moot question remains whether the operation of the Section would not be possible in the absence of such prescribed Rules. We find that this question is squarely covered by the Decision of the Supreme Court, to which, we have made reference earlier, : [1983]3SCR729 . In that case, the Supreme Court was concerned with the question of exercise of powers under Section 129A of the Motor Vehicles Act, 1939 representing a provision which was parallel to present Section 207 of 1988 Act. The only difference is that under Section 129-A of 1939 Act, there is no reference to any prescribed manner of seizure and detention. While under the present Section 207, there is reference to the manner of seizure and detention to be prescribed by the rule making authority. But it is obvious that if such manner of seizure and detention is not prescribed under Section 207 the result would be as if there is no manner prescribed and at that stage the situation that existed under Section 129-A of 1939 Act can be said to exist in connection with operation of Sections 200 & 207 also. Noting an argument that Section 129-A does not prescribe for any procedure for seizure and detention of vehicle and therefore that Section would become unreasonable, the Supreme Court in Transport Commissioner v. S.Sardar Ali's case speaking through Chinnappa Reddy, J., while repelling that contention made the following pertinent observations at paragraphs 5 & 6 of the Report:
'5. The Andhra Pradesh High Court appeared to think that Section 129-A of the Motor Vehicles Act was an unreasonable restriction on the fundamental right guaranteed by Article 19(1)(g) of the Constitution because (i) there was the provision in the Act providing for confiscation of the vehicle, (ii) there was no provision in the Act indicating what should be done after seizing and detaining the vehicle, (iii) the seizure by the police officer or the authorised person was based on his subjective satisfaction, (iv) there was no discernible purpose behind the seizure, (v) there was no obligation on the seizing authority to produce the vehicle in Court, (vi) nor was there any purpose to be served by producing the vehicle before the Court as the Court did not possess the power to confiscate the vehicle or to pass any orders regarding the vehicle or to pass any orders regarding its temporary custody, (vii) no appeal was provided against the seizure, and (viii) no maximum period was prescribed for detention of the vehicle.
6. None of these reasons bears any scrutiny, if properly examined in the light of the provisions of both the Motor Vehicles Act and the Code of Criminal Procedure, as we are bound to. Indeed, whenever an offence under a law other than the Penal Code is committed and that law does not itself regulate the procedure to be followed, there is no option but to look to the provisions of the Criminal Procedure Code for further action and to weave into a single texture the provisions of the Code and the special law. The High Court has totally ignored are provisions of the Criminal Procedure Code and the judgment stands vitiated on that account. It has therefore, to be set aside. We have explained the context of Section 129-A in the scheme emerging from the interlacing of the provisions of the Motor Vehicles Act and the Criminal Procedure Code. We do not have the slightest hesitation in rejecting the contention that there is any infringement of the fundamental right guaranteed by Article 19(1)(g) of the Constitution and in upholding the vires of Section 129-A of the Motor Vehicles Act.'
In our view, the aforesaid Decision of the Supreme Court clearly meets the grievance made by Mr.Narasimhachar in the present case. It is always open to the authorities to fall back upon the procedure of Criminal Procedure Code while effecting detention and seizure of a vehicle in the absence of any prescribed procedure by the State authorities. It is obvious that if the procedure is prescribed by the State Government by Rules, then that procedure has to be followed. But in its absence, the general provisions of Criminal Procedure Code can be pressed in service for operating Section as authoritatively ruled by the Supreme Court as aforesaid.
Second ground of attack put-forward by Mr.Narasimhachar, the learned Counsel against Section 207 read with Rule 259(2) also therefore, fails. 4th Point, therefore, also will have to be answered in the negative.
19. POINT NO.5:
Now we come to the most hotly contested Point for Determination. The contention of the original Writ Petitioners is that when a vehicle which is covered by a valid tourist permit plies on road, only because individual passengers are carried therein, who have paid individual fares to the tourist operator, who has chartered the whole vehicle from the permit holder owner of the vehicle under an earlier contract and when the list of passengers is already furnished in advance, the tourist vehicle cannot be said to be used as a stage carriage nor can it be said that there is any breach of any condition of permit as tourist vehicle. Therefore, the authorities have no right to proceed under Section 207 for detaining and seizing the vehicle. It is also contended by Counsel for some of the stage carriage permit-holders that if stage carriage is found plying on a road not necessarily covered by that permit due to emergent circumstances as permitted by the Motor Vehicles Act, it cannot be said that the stage carriage is plied contrary to the condition of the permit and therefore, drastic action under Section 207 in such a case is uncalled for. Mr.Dattu, learned government Advocate, on the other hand, contended that it has been found in many cases that vehicles covered by tourist permit are being misused and in substance are being used and run as stage carriage and therefore, the authorities are perfectly justified in proceeding to detain such vehicles under Section 207 and that if fare is charged by a tourist operator from individual passengers and they are carried in the vehicle, the vehicle ceases to be a contract carriage, but becomes a stage carriage.
19.2. In order to appreciate these rival contentions, it is necessary to recapitulate the relevant definitions of contract carriage and the stage carriage. As noted earlier, a tourist vehicle is a contract carriage as defined by Section 2(43) of the Act. Contract carriage is defined by Section 2(7) to mean a vehicle which carries a passenger or passengers for hire or reward and is engaged under a contract, whether expressed or implied, for the use of such vehicle as a whole for the carriage of passengers mentioned therein and such contract must be entered into between holder of the permit and the hirer of the vehicle and it would be for a fixed or agreed sum or rate and it may be on time rate basis or for plying the vehicle from one point to another. It becomes very clear that contract carriage is the genus while tourist vehicle is a species. In order that the contract carriage can become a tourist vehicle, it must be covered by a valid tourist vehicle, permit as granted under Section 88(9) and that permit can be granted for the purpose of promoting tourism. Stage carriage, on the other hand, means a motor vehicle constructed or adapted to carry more than six passengers excluding the driver for hire or reward to separate fares paid by or for individual passengers, either for the whole journey or for stages of the journey as laid down by Section 2(40) of the Act. Therefore, the basic difference between a stage carriage and contract carriage would be based on the following circumstances:
(i) In a stage carriage passengers must be carried for hire or reward by separate fares paid by or for them to the permit holder or his agent. While in contract carriage, the passengers carried for hire or reward in the vehicle have not to pay separate fares to the permit holder or his agent.
(ii) In a stage carriage there is no pre-existing contract between the hirer of the vehicle on the one hand and the permit holder on the other. While in case of contract carriage, there is a pre-existing contract between the hirer on the one hand and the permit holder on the other under which contract, the entire vehicle is hired as a whole. In case of stage carriage, individual passengers pay their fare and there will be separate contracts between individual passengers on the one hand and the person incharge of the vehicle acting on behalf of the permit holder on the other hand. In case of contract carriage, passengers carried in the vehicle have no individual separate contracts with the permit holder or his agent, but the hirer enters into a direct contract with the owner or permit holder and the passengers are carried in the vehicle not because they pay separate fares to the permit holder for their journey, but because hirer has chartered the entire sitting space in the vehicle from the permit holder owner of the vehicle under a pre-existing contract.
(iii) In the stage carriage there is no occasion for individual passengers' names being supplied to the owner of the vehicle for the simple reason that individual passengers on payment of individual fares enter into a separate contracts either with the owner of the vehicle or with his agent who is plying the vehicle on his behalf. In case of contract carriage the names of passengers carried under the contract have to be mentioned because the hirer on behalf of these group of passengers as a whole and for their benefit enters into the contract with the owner and permit holder of the vehicle.
(iv) In stage carriage individual passengers who have paid individual fares either pay fare for the whole journey or for stages of the journey meaning thereby they can board the vehicle on way or can equally alight on way from the vehicle and to extent to which they travelled in the vehicle, they pay separate fares. While in a contract carriage as the vehicle as a whole is chartered under a pre-existing contract between the hirer on the one hand and the owner of the permit holder on the other, the vehicle can be utilised on a fixed time basis or from day to day basis, week to week etc., or from one starting point to another and during the course of contract, the vehicle cannot pick up passengers on way nor can it permit passengers to get down on way, if these passengers are not covered by the pre-existing contract, for whose benefit the entire bus is chartered.
19.3. In view of this analysis of the definitions of stage carriage and contract carriage, it becomes very clear that if individual passengers pay separate fares to the permit holder or his agent and travel in a vehicle at a given point of time, they can be said to be travelling not in a contract carriage, but in a stage carriage. In fact, in contract carnage there is no clear-cut privity of contract between the passengers on the one hand and the owner of the vehicle permit-holder on the other. The privity of the contract, if any, is between the hirer of the vehicle namely, the tourist operator on the one hand and the permit-holder owner of the vehicle on the other. Passengers who are listed in advance and whose names are furnished to the owner of the vehicle are mere beneficiaries of the contract. There can also be a contract by a group of passengers directly with the permit holder agreeing to take the vehicle as a whole for the purpose of transporting the group of passengers from one place to another. That is not the case with the stage carriage where individual passengers on payment of individual separate fares travel in the vehicle and they can be said to be separately individually contracting with the owner of the bus or for that matter with the agent of the owner for carrying such passengers from one place to another on the route on which the vehicle is plying. There is a privity of contract between individual passengers on one hand and the permit holder on the other, either directly or through his agent who is incharge of running of the vehicle. One additional aspect may be noted namely, that for a contract carriage to become a tourist vehicle, entitled to be covered by a valid tourist permit, not only the vehicle must meet all the requirements of a contract carriage as aforesaid, but additionally it must be chartered for carrying passengers who are tourists. Therefore, contract must be between the hirer of the tourist vehicle on the one hand, and the owner of the vehicle on the other, who is a permit holder and the hirer must give the list of tourist passengers who are to be carried in the vehicle. They are not ordinary passengers, but tourists who are concerned with sight seeing or excursion. It is possible that they may travel in one group or two groups or number of groups, but they must travel as tourists. It is easy to visualise that a tourist permit is granted as per Section 88(9) for promotion of tourism. It is not granted for carrying marriage parties or parties going to attend some conference or persons travelling in a group for attending some religious functions, festivals or even for remaining present on social occasions like attending to after death ceremonies of some persons or visiting relatives on an occasion of mourning. These groups of passengers may be considered to be passengers who are carried for hire or reward under a pre-existing contract between hirer of the vehicle and the owner, but they cannot be called tourists who are moving from place to place for sight seeing or for excursion and therefore, vehicle which carries them may be styled as a contract carriage under special contract, but cannot be styled as tourist vehicle covered by a valid tourist permit issued under Section 88(9) of the Act.
19.4. In this connection, we may usefully refer to two Decisions of the Supreme Court. In B.A. JAYARAM AND ORS. v. UNION OF INDIA AND ORS., : [1983]3SCR624 , the Supreme Court was concerned with the nature of permits granted under Section 63(7) of the Motor Vehicles Act, 1939. We have already extracted the said provision earlier. Under that provision State Transport Authority, for the purpose of promoting tourism, grants permits valid for the whole or any part of India, in respect of such number of tourist vehicles, as the Central Government, may, in respect of that State may specifiy. That tourist permit issued under Section 88(9) of the 1988 Act. Explaining the scope and ambit of such tourist permit under Section 63(7), it has been pointed out by Chinnappa Reddy, J., speaking for the Supreme Court in para 3 of the Report that:
'this scheme for the grant of 'All India Permits' designed as it was to promote all India and Inter-State tourist traffic, soon fell into abuse at the hands of scheming transport operators. Within the scheme itself lay the seeds for abuse. The scheme enabled the State Transport Authority of each State to issue fifty all India Permits,. uniformly, irrespective of the size of the State, its resources, its accessibility, its communication, its facilities, the availability of transport services and operators in the State with the necessary expertise, experience and finance to operate all India tourist services and a host of such other factors. Apparently it was thought undesirable to make a distinction between State and State on what were perhaps thought to be elusive criteria and possibly the scheme was expected to give a boost to the transport business in the smaller and less advanced States. And, of course, it was necessary to obtain the agreement and co-operation of ail the States. But the result was that transport operators from big and comparatively prosperous and advanced States, well versed in the intricacies of the transport business very soon flocked to small and comparatively poor and less advanced States like Manipur and Nagaland to apply for and obtain all India permits from the State Transport Authorities of those States. It is conceded before us that a large number of persons holding all-India permits from some of these small States do not belong to these States at all, but are transport operators coming from far off States. Another factor which appears to have influenced the flocking of transport operators from other States to States like Nagaland and Manipur is the nationalisation of contract carriage service in States like Karnataka. Once the permits were obtained and the vehicles were registered these small States saw the last of the operators. Having obtained the permits, the operators with their vehicles flocked back to the parent State of the operators (not of the vehicles) or to a State like Karnataka where all contract carriage was available and there was therefore a great opportunity to ply the vehicles as contract carriages within the State. States like Karnataka were swamped by tourist vehicles from all over the country, registered in other States. These tourist vehicles practically 'colonised' Karnataka and like States and started operating more or less as stage carriages within the particular State, never and rarely if ever, moving out of the State.'
We may also in this connection, refer to Constitutional Bench Decision of the Supreme Court in ROSHAN LAL GAUTHAM v. THE STATE OF UP AND ORS., : [1965]1SCR841 Considering the perimeter definitions of contract carriage and stage carriage under 1939 Act, the Supreme Court, speaking through HIDAYATULLAH, J., has made the following pertinent observations:
'The distinction between the two is this: the contract carriage is engaged for the whole of the journey between two points for carriage of a person or persons hiring it but it has not the right to pick up other passengers en route. The stage carriage on the other hand, runs between two points irrespective of any prior contract and it is boarded by passengers en route who pay the fare for the distance they propose to travel.'
It therefore, becomes clear that in order to become a genuine contract carriage, there must be a prior contract between the hirer on the one hand and owner who is the permit holder on the other for hiring the entire vehicle as a whole and as the hirer has to pay a fixed contracted amount to the permit holder, he is entitled to carry passengers in the vehicle, who are the beneficiaries of the contract of hirer and whose names are listed in advance. Therefore, in that sense, the passengers can be said to be carried for hire or reward in the vehicle as the hiring charges are paid on their behalf of the hirer in advance to the permit holder owner. But these passengers do not pay individual fares for their journey to the owner permit holder. In the case of INDIAN TELEPHONE INDUSTRIES, DOORAVANI NAGAR, BANGALORE AND ORS. v. REGIONAL TRANSPORT OFFICER, BANGALORE AND ORS., : AIR1975Kant211 , a Division Bench of this High Court had an occasion to deal with a question whether Omnibus maintained by the owner of the factories, for transporting the employees of the factory from their houses to the factory is a contract carriage within the meaning of Section 2(3) of 1939 Act. Answering the question in the negative, the learned Judge of the Division Bench in paragraph 27 of the Report observed that it has not been shown that the entire body of employees of each of the Companies, represented by the trade union or any other association, has entered into a contract with that Company and had been paying the Company a consolidated fare for the use of each vehicle as a whole. Nor had it been shown that the entire body of employees using each of such vehicles had been paying such consolidated fare. On the other hand, each of the employees who avail himself of such transport facility paid to the Company the fare for himself only, such payment being made by deduction from his salary or wages. Hence, the implied contract is between the company and each individual employee who avails himself of such transport facility and there is no contract between the Company and the entire body of employees traveling in a vehicle for the use of that vehicle as a whole. Thus one of the essential ingredients of a contract carriage that contract should be for the use of the vehicle as a whole, is absent in the cases of these vehicles run by the Companies. It follows that these vehicles cannot be regarded as a contract carriage as defined in Section 2(3) of the Motor Vehicles Act. It has to be appreciated that in that case there was no independent contract between the hirer on the one hand and the Company on the other. There were only two contracting parties, company on the one hand and its individual employees on the other hand. A Full Bench of the Andhra Pradesh High Court in V.Govindarajulu & Etc. v. The Regional Transport Officer, Anantapur And Ors, had also an occasion to consider the difference between contract carriage and stage carriage under the Motor Vehicles Act, 1939. In that case contract carriage was found carrying 49 adult passengers in all from Tadipatri to Anantapur. It was stopped and checked by the Motor Vehicles Inspector, Anantapur on 25.9.1984 at 4 p.m. near Singanamala tank on Anantapur-Tadipatri Road. All the passengers boarded the vehicle at Tadipatri bus stand. They paid an individual fare of Rs. 5/- each. All the passengers did not belong to a single party and each was travelling on his own work. The trip sheet maintained in the bus did not indicate any contract, express or implied between the passengers and the owner of the contract carriage. Therefore, the Motor Vehicles Inspector came to the conclusion that the vehicle was misused as a stage carriage by collecting individual fares. On the basis of the check report submitted by the Motor Vehicles Inspector, Anantapur, the Regional Transport Officer issued a show-cause notice to the registered owner of the contract carriage to show cause within seven days from the date of receipt of the said notice as to why the maximum tax of Rs. 11,500/- applicable to a stage carriage should not be collected from him for the quarter ending with 30.9.1984.
In the background of the aforesaid facts situations, the Full Bench of the Andhra Pradesh High Court had to consider whether at the relevant time when the vehicle was checked it was being run as a contract carriage or stage carriage. Answering the question against the petitioner it was held that the vehicle in question at the relevant time was being run as a stage carriage. The conclusions to which the Full Bench reached at para 22 of the Report are worth-noting, They are as follows:
'22. To sum up our conclusions:
(1) The definition of 'contract carriage' under Section 2(3) of the Act is plain and the language is not so elastic and wide so as to bring within its sweep a situation never intended by the Legislature.
(2) The dominant factor under the definition that determines whether a transport vehicle is used as a contract carriage or as a stage carriage is whether the vehicle is hired as a whole for a fixed or agreed sum under a prior contract, express or implied, by a single person or party with the owner of the vehicle.
(3) If once a single contract is entered into expressly or impliedly for the use of the vehicle as whole, from the mere fact that the leader of the contracting party or one of the persons in the party collected fares from the passengers, which is very often in vogue, the vehicle cannot be said to have been used as a stage carriage.
(4) If there was no single contract with the owner in respect of the vehicle and if no person or leader of the party could exercise full control over the vehicle and several passengers had separately contracted for the use of the vehicle and paid individual fares, the transport vehicle used in such manner falls within the definition of 'stage carriage' and not 'contract carriage.
(5) Tax is levied on the basis of the use of the transport vehicle and not on the nature of the permit held by the owner in respect of the vehicle and the power contained in Section 3 with Section 4 of the Taxation Act is sufficient to enable the State Government to levy the tax from time to time when the nature of the use of the vehicle is changed and the class of the motor vehicle is thereby altered, and
(6) There is no prohibition in the Act for the levy and collection of tax as authorised under Section 3(1) of the Taxation Act in cases where action is taken for the breach of any of the conditions of the permit against the holder of the permit under Section 60 of the Act. The two actions are quite different - one for the user of the vehicle and the other for the breach of the conditions of the permit.'
In para 23, the Full Bench has observed as under:
'23. Now turning to the facts, it is the clear and categorical finding of the Transport Authorities that there was no single contract carriage for the use of the vehicle as a whole and individual fare was collected from each passenger. On such a finding, the only right conclusion, applying the aforesaid principles, that can be reasonably reached is that the contract carriage was unauthorisedly used as a stage carriage and thereby attracted the levy of tax as a stage carriage.'
19.5. We respectfully, agree with the aforesaid view of the Full Bench Decision of Andhra Pradesh High Court. It becomes, therefore, clear that if hirer of a tourist vehicle enters into a prior contract with the owner of the vehicle permit-holder to carry certain passengers for a fixed period of time or from one point to another and gives an advance list of passengers to the owner of the vehicle, who will be the beneficiaries of the contract, and then carries these named passengers in the vehicle from point tc point as agreed to under the contract or for a fixed period of time as the case may be, it would be a case of genuine contract carriage. Whether individual passengers who are carried in this vehicle as beneficiaries pay separate fares to the hirer or the transport operator or they do not pay, will not be a relevant consideration for deciding whether the vehicle has ceased to be a contract carriage or not. These beneficiaries of the contract may give individual fare to the hirer namely the transport operator, but there should not be any privity of contract between the individual passengers carried in the vehicle on the one hand and the owner of the bus or the permit holder on the other. The privity of contract is only between the owner of the vehicle permit holder and the hirer tourist operator on the other. If this prior contract is established between those contracting parties, then whether beneficiaries individual passengers pay separate fare to the tourist operator hirer or not is a circumstance which pales into insignificance and even in a case individual fares are collected from individual passengers beneficiaries by the tourist operator, hirer of the bus which go to his pocket, the vehicle when piled cannot be said to have ceased to be a contract carriage. But it will cease to be contract carriage if it is found to have plied for individual passengers and that individual passengers have paid separate fares to the owner tourist permit holder or to his agent, who acts on behalf of the owner, while carrying these passengers in the vehicle meaning thereby there are separate contracts between the passengers carried for hire or reward on the one hand and the owner of the vehicle on the other. In such cases, vehicles would cease to be contract carriages and would become stage carriages.
But, there is one more additional aspect which has to be kept in view. It is not enough that a tourist vehicle is being plied as a contract carriage at a given point of time complying with all the conditions of contract carriage permit and the requirements of the definition namely that there is a prior contract between the hirer on the one hand and the owner of the vehicle who is a permit holder on the other and the names of the beneficiaries are given in advance to the permit-holder and for whose benefit this contract is entered into. In order to become a genuine tourist vehicle covered by a tourist vehicle permit issued under Section 88(9), it has to be further shown that the vehicle at a relevant time is plied for carrying genuine tourists for hire or reward meaning thereby they should not be ordinary passengers going for their personal work, but they must be travelling in the tourist vehicle as genuine tourists who are interested in sight-seeing. As we have seen earlier Section 88(9) deals with grant of permit in respect of tourist vehicle for the purpose of promoting tourism subject to Rules that may be made under Sub-section (14) of Section 88. As per that provision, the Central Government framed Rules called Central Motor Vehicles Rules, 1989. Chapter 4 of the Rules deals with control of transport vehicles tourist permits. Under Rule 85 of the Rules, additional conditions of tourist permit are laid down. They are already extracted earlier. These conditions clearly indicate that the permit-holder has to cause to be prepared in respect of each trip a list in triplicate of tourist passengers to be carried in the vehicle, duly attested by the concerned authorities. Therefore, the hirer who has once hired the entire tourist vehicle for carrying passengers for hire or reward, has to furnish said list to the permit-holder who could in turn make available the list for scrutiny of the authorities by sending one copy by Registered Post to the authority which issued the permit, second copy is carried in the tourist vehicle and it has to be made available on demand by officers authorised to demand production and the third copy has to be preserved by the permit holder. It becomes, therefore, clear that in order to become a tourist vehicle covered by a valid tourist permit issued under Section 88(9) there should be a prior contract between the hirer on the one hand and the permit holder on the other and that contract must be for the benefit of genuine tourists. They should be tourist passengers and not ordinary passengers as required by Condition No. 1 of Rule 85 of the Central Rules. It is also clearly provided that the permit-holder shall not operate the tourist vehicle as stage carriage as expressly mentioned in Condition No. 9 of Rule 85 of the Central Rules. Therefore, if it is found that a permit-holder having a valid tourist vehicle permit has allowed his vehicle to be plied or operated as stage carriage at a given point of time, he would be guilty of committing breach of one of the essential conditions of the tourist permit and would become liable to be proceeded against in accordance with the relevant provisions of the Motor Vehicles Act.
19.6 It is true that there is no definition of a 'tourist' either in the Act or the Rules as submitted by the learned Counsel for the Writ Petitioners. But if we turn to the meanings of word 'tourist' as found in the Concise Oxford Dictionary one of the meanings is a person who makes a tour and the term tour is to mean journey through a Country from place to place for the purpose of excursion. Even if in a broad sense, it can be said that a tourist is a person who moves from place to place, in the context of tourist permit, which has to be granted under Section 88(9) and the Central Rules, the term 'tourist' would assume a special connotation for the simple reason that the tourist permits are to be issued for promoting tourism meaning thereby for encouraging movement of passengers from place to place in the Country who would be interested to travel as a genuine tourists, who want to see Country side and to enjoy its surroundings, meaning thereby it should be an excursion trip or sight seeing trip for them. It is easy to visualise that if a passenger goes from place 'A' to 'B' for meeting his relatives or for a special purpose connected with his service or social obligations though he is travelling as a passenger, he is not a tourist. Because he does not go on an excursion tour. His purpose of travelling is to arrive at a destination rather than to see that place. While for a genuine tourist, purpose of travel is not only to arrive at a destination, but to see that place or to enjoy its surroundings. His purpose must not be to visit the place for any of his personal requirements like meeting friends or relatives or for discharging any social or service obligations at the place of destination. This connotation of the word 'tourist' clearly flows from the settings of Section 88(9) read with Rules requiring furnishing of advance copy of the tourist passengers to the permit-holder before the journey begins. It is difficult to appreciate the contention of the learned Counsel for the Writ Petitioners that list of tourist passengers can include names of passengers who may not be genuine tourists who may be going from one place to another on some independent purpose of their own, like meeting friends or relatives or even on health grounds to get them treated at the place of destination. Those passengers may be styled as passengers, but they cannot be styled and said to be 'tourist passengers' as required by one of the conditions of the tourist permit as laid down by Rule 85(1) of the Central Rules., It must, therefore, be held that in respect of each trip of the vehicle plying under a tourist permit, if advance list of passengers is furnished and in that list any passenger is found to be not a tourist passenger, then there would be clear breach of additional Condition No. 1 as imposed by Rule 85 of he Central Rules, exposing the operator of the tourist vehicle and the permit-holder to the rigour of the relevant provisions of the Motor Vehicles Act attracting penal consequences as contemplated by those provisions even in cases where the vehicle is shown to have been plied as a contract carriage.
19.5. In this connection, we may also usefully refer to a Decision of the Supreme Court, to which our attention was invited by Mr.Dattu, learned Government Advocate for the appellants in the case of Ashutosh Swain and Ors. v. State Transport Authority and Ors. The Supreme Court was concerned with scope and ambit of All India tourist permit issued under Section 63(7) of the Motor Vehicles Act, 1939, which as we have noted earlier, is a fore-runner of the provision for granting tourist permit under Section 88(9) of 1988 Act. In paragraph 5 of the Report, D.A.Desai, J., speaking for the Supreme Court has made the following pertinent observations:
'5. Sub-section (7) of Section 63 provides that for obtaining such a permit as envisaged therein which enables the holder of such a permit to ply vehicle as a tourist vehicle in the whole of India has to make an application to the State Transport Authority constituted for the State under Section 44. The underlying object for creating this new class of permit was to promote tourism. If a tourist vehicle is hired by a tourist party for moving from State to State, the vehicle cannot be taken to another State from the place of commencement of journey unless a valid contract carriage permit of that State is obtained or the existing permit is countersigned, this would impede tourism causing inconvenience to the tourists. To remove this barrier, Parliament introduced Sub-section (7) in Section 63 envisaging a new kind of permit to be granted by the State Transport Authority of the State within the prescribed quota which would enable the holder of the permit to ply the tourist vehicle in the whole or any part of India. The impediment in the free flow of tourist traffic was sought to be suitably removed by this provision.'
The aforesaid Decision of the Supreme Court makes it clear that a tourist vehicle covered by a valid tourist vehicle permit, must carry passengers who are genuine tourists and such permits are issued for promoting tourism in the Country and such vehicles should carry tourist parties moving from place to place. Therefore, passengers who are carried for hire or reward must belong to tourist party or parties and must not be travelling to their destination as separate passengers interested in reaching a destination for their own private purpose divorced from the purpose of enjoying the journey and reaching the spot as a genuine tourist having tourist interest in visiting the place of destination. Therefore, even if such individual passengers have paid separate fares for their journey in the tourist vehicle and said fares have been paid not to the permit-holder but to the hirer who has hired the entire vehicle under a contract and if such passengers are shown in the advance list as beneficiaries for whose benefit the contract of hire is entered into, still, if any of these passengers are found not to belong to tourist party and not travelling in the vehicle as genuine tourists or, even if the passenger is travelling on his own and even though his name is entered in the list of passengers which is given in advance, if he is found not to be a genuine tourist, the vehicle cannot be said to have been plied as a tourist vehicle under a valid tourist permit at the time when it is plied. It can be said to have been plied without a valid permit for a tourist vehicle.
19.8. Mr. Albal, learned Counsel appearing for some of the original Writ Petitioners submitted that in order to remain a contract carriage, it is not necessary that there should be an express contract between the entire body of passengers on the one hand and the permit holder on the other. But if the hirer tourist operator who interposes himself between the two has chartered the whole vehicle for the use of the said vehicle as a whole or even has an implied contract for the use of the said vehicle as a whole, the vehicle would remain a contract carriage. The term implied was emphasised by Mr.Albal to submit that individual passengers ought not to have entered into contract with the hirer as such, but by their conduct, contract can be implied. We fail to appreciate how this distinction can be drawn on the language of the definition of contract carriage. All that the provision requires is that the vehicle must carry passengers for hire or reward and the vehicle must be engaged under a contract as a whole for the carriage of passengers mentioned in the contract and that such contract can be express that is, in writing between the hirer on the one hand and the permit holder on the other or it can be implied by the conduct of parties whereby on the receipt of a list of passengers in advance by the permit-holder and on fixation of an agreed amount of consideration the vehicle as a whole is entrusted to the hirer by the permit holder for carrying these listed passengers from one place to another on time rate basis or otherwise. By the conduct of such contracting parties such contract for hiring the vehicle as a whole can be inferred. It is true that individual passengers in such a case would not have a direct privity of contract between themselves and the owner of the vehicle permit holder and therefore contract may be only with the hirer to whom either they may pay individual fares or even otherwise in a lumpsum for a group of passengers, whose carriage in the vehicle may be allowed by the hirer and still the vehicle may remain a contract carriage. But in order to become a tourist vehicle, a further fact must be established that the passengers who are travelling in the vehicle are genuine tourists and they may form part of a group or even they may be individual tourists, but they must be tourists all the same and not non-tourist passengers.
19.9. It is not possible to agree with the extreme contention of the learned Counsel for the appellants that moment it is shown that individual passengers have paid fare to the hirer and even though their names are already submitted in advance to the permit holder or hirer who has hired the vehicle under a contract, the vehicle would still be treated as a stage carriage. As we have discussed earlier, once conditions for plying a vehicle as a contract carriage are fulfilled then whether individual passengers are carried free of charge- in the vehicle or they have paid separate fares to the hirer would be circumstance which would be innocuous and cannot be a clinching circumstance to show that such a vehicle is being plied as a stage carriage. It all depends on facts and circumstances of each case whether the vehicle in question is in fact being plied as a stage carriage and whether individual passengers who have paid separate fares have in substance paid fares not to an independent hirer but who is an agent of the permit-holder who has collected the fare in substance on behalf of the permit-holder. If such circumstance is established then only the vehicle would cease to be a contract carriage and would be treated as a stage carriage as it would then fall within the definition of stage carriage under Section 2(40) meaning a motor vehicle constructed or adapted to carry more than six passengers excluding the driver for hire or reward at separate fares paid by or for individual passengers, either for the whole journey or for stages for the journey. However, as discussed earlier, even though the motor vehicle may be plied as a contract carriage it may cease to be a tourist vehicle if at the time when it is actually plied it is found to be carrying passengers who may have paid separate fare to the hirer or tourist operator if these passenger either individually or in a group are not found to be travelling as genuine tourists, but are travelling for reaching destinations for different purpose of their own other then the purpose of sight seeing or excursion.
10.10. It is difficult to agree with the contention of Sri Narasimha Murthy that even though Section 88(9) of the Motor Vehicles Act, 1988 requires that such permit is to be issued for promoting tourism, it would not mean that permitted vehicle should carry only tourists. In fact, that would be its only meaning especially when read in the light of Rule 85(1) of the Central Rules which enjoins, as noted earlier, an advance submitting of a copy of list of tourist passengers for whose benefit and for carrying whom from place to place, as agreed to in the previous contract, as a whole the vehicle is chartered. It is equally not possible to agree with him that the tourist permit does not say that passenger must be a bonafide tourist. In fact reading Section 88(9) of the Act with Rule 85(1) of the Central pules it logically follows that such permit is issued for vehicle which has to carry passengers who are bonafide tourists. It would be a condition of a tourist permit on a conjoint reading of Section 88(9) and Rule 85(1) of the Central Rules. We may, in this connection, refer to one submission of Mr.Datar, learned Senior Counsel appearing for some of the Writ Petitioners. He submitted that even if a tourist vehicle is alleged to have been plied qn spot in breach of the condition of the valid tourist permit, namely that it is being run either as a stage carriage or that is not carrying genuine tourists and some of the passengers are not genuine tourists and still are being carried in the vehicle, it is not as if that Section 207 must necessarily be attracted. To recapitulate, Section 207 provides that any police officer or other person authorised in this behalf by the State Government may, if he has reason to believe that a motor vehicle has been or is being used in contravention of the provisions of Section 3 or Section 4 or Section 39 or without the permit required by Sub-section (1) of Section 66 or in contravention of any condition of such permit relating to the route on which or the area in which or the purpose for which the vehicle may be used, can seize and detain the vehicle. Therefore, if duly authorised person finds on spot that at the relevant time the vehicle is being plied without a valid permit required under Sub-section (1) of Section 66 meaning thereby the owner of the motor vehicle can be said to have used or permitted the use of the vehicle as transport vehicle in any public place not in accordance with the condition of the permit granted laying down the manner in which the vehicle is to be used under the said permit, action under Section 207 can be taken by such person. If the vehicle is a tourist vehicle said to be plying under a valid tourist vehicle permit it must be shown to have been plied as such and not as a stage carriage or for that matter as an ordinary contract carriage which would be beyond the four-corners of the tourist permit. Section 207 also can be applied if the vehicle is shown to have run in contravention of any condition of the permit relating to the purpose for which the vehicle may be used. If a tourist vehicle covered by a valid tourist permit is being run not as a tourist vehicle as it is found to have carried non tourist passengers Section 207(1) would get attracted. However, Mr.Datar, learned Senior Counsel, for some of the Writ Petitioners, submitted that there is a Proviso to Section 207(1) under which in case where the vehicle is found to have plied without the permit required by Sub-section (1) of Section 66 then there is a discretion with the authority that it may. instead of seizing the vehicle seize the certificate of registration of the vehicle. That may be so. But in case where it is alleged that the vehicle covered by a valid tourist permit is being run in contravention of any condition of such permit relating to the purpose for which the vehicle may be used namely a tourist vehicle is being used for the purpose of carrying persons who are not tourists though the tourist permit is issued for the purpose of carrying tourist passengers, then only Section 207 Sub-section (1) would apply and proviso would not apply. In short, it will all depend on the facts and circumstances of each case for finding out whether action of the authorities on spot while intercepting the vehicle in detaining or seizing the vehicle is justified or not in law. If the condition precedent under Section 207 is found to be wanting, then obviously such seizure would be set aside by the Court. Even the Magistrate, before whom such vehicle is placed, can pass appropriate order and even Civil Courts and then High Court before whom such question is raised can give appropriate relief to the owner of the vehicle in case it is established that the condition precedent to exercise powers under Section 207 did not exist on the facts of a given case. But no universal principles can be laid down that when the authorities have reason to believe that such condition precedent to exercise power under Section 207 did exist on spot on detection of the vehicle on road, they cannot exercise the powers of detention and seizure and must necessarily in lieu of detention and seizure only seize the Certificate of Registration under proviso to Section 207. The reliance placed by Mr.Datar, learned Senior Counsel on a Decision of the Supreme Court in Olga Tellis v. Bombay Municipal Corporation, is also of no assistance for it is not compulsory for the offender to compound the offences. If the offender offers to compound offences under Section 200 he agrees to pay composition fee of his own choice and volition. He is not paying any fine. Therefore, there is no question of Section 200 or for that matter Section 207 being opposed to Article 21 of the Constitution as involving an oppressive procedure. Whether the owner and the hirer are absent or present on spot is also irrelevant for deciding this question.
19.11. Mr.Datar's next contention that as per Section 93(1) of the Karnataka Motor Vehicles Act, 1988 read with Rule 113 of the Karnataka Rules and as per Section 2(35) defining a public service vehicle, granting of licence to travel agents is permissible is also of no avail as even if there are travel agents who can validly function under the Act, still if it is found that these travel agents while hiring the vehicle and plying it as tourist vehicle have infracted any of the conditions of a tourist permit, drastic consequence contemplated by the Act would follow including the power of detention and seizure as contemplated by Section 207 which will be available to the concerned authorities under that Section on their subjective satisfaction about the existence of such condition precedent.
19.12. Mr.Narasimha Murthy, learned Counsel invited our attention to a learned Single Judge's Decision of this Court in R.A. JAYARAM v. STATE OF MYSORE, 1974(1) KLJ 158. In that case learned Single Judge of this Court, Justice Malimath (as he then was), had to deal with certain conditions of contract carriage permit. As per Sub-section (5) of Section 51 of 1939 Act, certain conditions could be attached to the permit for contract carriage for plying of contract carriage. The tenth condition narrated in Sub-section (2) referred to other conditions as they may be prescribed by the State of Karnataka, In exercise of that Rule making power the State prescribed some other statutory conditions for contract carriage permit as per Rule 111. Sub-rules (5) to (8) of Rule 111 were brought in challenge before the learned Single Judge. Sub-rule (5) provided that:
'(5) The holder of the permit shall, before the commencement of a journey prepare or cause to be prepared a list containing the name, address and signature of the person or persons who have entered into a contract, express or implied, for the use of the vehicle as a whole for the concerned trip and the name and address of the person or persons included in the contract and to be carried by the vehicle and furnish a copy of such list to the Secretary of the RTA concerned and another copy of such list duly attested by the said Secretary shall be carried by the driver in the vehicle and shall be produced on demand for the inspection by any police officer not below the rank of a Sub-Inspector of Police or by any officer of the Motor Vehicles Department not below the rank of an Inspector of Motor Vehicles, provided that where the contract is entered into and the journey is commenced either after office hours or on a holiday an unattested copy of such list shall be carried in the vehicle and another copy thereof shall be delivered to the Secretary of the RTA concerned on the next working day following the day of the commencement of the journey.'
The underlined part of the Rule was held to be unreasonable and was struck-down. Similarly, Sub-rule (7) of Rule 111 to the effect that:
'Neither the holder of the permit nor the person or person who have entered into a contract for the use of the vehicle as a whole shall enter into or cause or allow to enter into contract with individual passengers in respect of individual seats, or book or permit individual passengers to book individual seats in the vehicle.'
was held to be illegal as it violated petitioners' Fundamental Right to carry on business guaranteed under Article 19(1)(g) of the constitution.
19.13. Keeping in view the definition of a contract carriage as found in 1939 Act, the following observations were made by the learned Single Judge for voiding aforesaid Rule. In connection with the said Rule, it was observed as under: -
'If a person has entered into a contract for the use of the vehicle as a whole with a permit holder for carrying a group of persons included in the contract, he cannot in turn enter into contract with individual passengers in respect of individual seats to carry whom alone the contract was entered into with the permit holder. It follows that if a person enters into a contract with the permit holder to carry a group of persons included in the contract., he cannot thereafter collect fare from individual passengers for carrying them in the vehicle in accordance with the contract entered into by him. If for example the headmaster of a school enters into a contract with the permit holder to carry 50 students of his school for excursion, he will be precluded from entering into a contract with his students for giving seats in the said vehicle on payment of particular amount. Similarly, a travelling agent who has entered into a contract with the permit holder hiring the vehicle as a whole for taking a group of tourists included in the contract to a place of sight seeing, cannot, after he has entered into the contract with the permit holder, enter into a contract with the tourists included in the contract and give seats on payment of a particular amount as consideration. If the prohibition contained in Sub-rule (7) of Rule 111 is given effect to, neither the headmaster nor the travelling agent in the illustrations given above, would be able to reimburse themselves from the students or tourists carried by them in the vehicle. The prohibition contained in Sub-rule (7) is directed against 'lose who are included in the contract as well as those who are not included in the contract. As there are specific provisions in Sub-rules (6) and (8) prohibiting carrying of persons who are not included in the contract, the prohibition contained in Sub-rule (7) really operates against persons who are included in the contract. A person will be precluded from booking a seat in the vehicle hired as a whole, even though the contract was entered into to carry him along with others. If the headmaster of a school hires a contract carriage as a whole to take the students of his school for excursion to a particular place, and only some students of the school are actually carried by the vehicle, it cannot be said that the students carried were not included in the contract merely because the contract refers to the students of the school without mentioning the names of the particular students. The headmaster in such a case is prohibited by the rule from giving seats to the students of his school on payment of a particular amount. Even if in the contract entered into by the headmaster with the permit holder the names of the students to be carried in the vehicle are specifically included, the headmaster is prohibited by the rule from entering into contracts with those students for giving seats to them on payment of a particular amount. It is unreasonable to expect that the headmaster should first enter into contract with the students and thereafter only enter into a contract with the permit holder. The restriction imposed is clearly unreasonable which affects the petitioner's business.'
In our view the aforesaid Decision is also of no avail to Mr.Narasimha Murthy, in the light of the definition of the contract carriage of which tourist vehicle is a specis. It can be visualised that if the names of ndividual passengers for whose benefit the contract as a whole is entered into by the tourist-operator with the tourist permit holder are furnished in advance, then there will be no prohibition for the tourist-operator, hirer of the vehicle as a whole, against collecting individual fare from the passengers for his own purpose and not for passing on the amount to the permit-holder. There is no provision like Rule 111(7) in the Karnataka Motor Vehicles Rules 1989 or in the Central Rules. Consequently, the aforesaid Decision is also not applicable to the facts of the present case. However, the said Decision is relevant in so far as it holds that it is open to a hirer of a contract carriage under a contract as a whole to collect individual fares from passengers for whose benefit he has entered into contract and has given the list of these passengers to the permit-holder.
19.14. Before parting with Point No. 5, we may mention that Counsel for some of the petitioners who are stage carriage permit holders, submitted that some time the stage carriage has to deviate from the notified route in the permit on account of exigencies of the situation like disruption of the traffic in the permitted route etc., and under these circumstances, merely because a stage carriage has left its route and might have plied on the nationalised route, it would not amount to breach of the terms and conditions of the permit to run the vehicle as a stage carriage. This grievance on the face of it shows that it is connected with facts. Therefore, it will be for the concerned person whose vehicle is found on spot to have deviated from the notified route to show to the authorities that such deviation was permitted under the relevant provisions of the Act at the given point of time and there is no breach of terms and conditions of the permit. Such aspects cannot be the subject matter of a general declaration. It will depend upon facts and circumstances of each case and in that light, the action of the authorities will have to be judged on its own merits. Consequently, even this submission cannot be of any avail at this stage. We may also mention that condition No. 4 of Rule 85 of the Central Rules also shows that tourist vehicle permit has to be given to cover that vehicle which has to carry tourists who are interested in visiting place of tourist, historical or religious importance. If circular tours are arranged for the aforesaid purpose, it is obvious that even regular tourist vehicle also has to cater to the needs of such type of tourists and not mere passengers who have to move from place to place for their personal work. Thus Sub-rule (4) of Rule 85 also supports the view which we were inclined to take on this point.
19.15. As a result of the aforesaid discussion, it must be held that when to first vehicle under a valid permit for Countrywide operation between one terminus in home State and another terminus in another State is operated as non-stop motor vehicle plying between any two points and carry individual passengers, whose names are listed as per the prior contract and who have paid separate fares to travel agents, who engage the whole vehicle on contract with the permit-holder, it could be seized and detained under the provisions of Section 129-A of the Motor Vehicles Act 1939 or under Section 207 of 1988 Act, if checking authorities on spot have reasons to believe that such vehicle has carried passengers whose names are either not given in advance to the permit holder before the journey begins or even if their names are so given, any of them are not genuine and bonafide tourists. Point No. 5, also, therefore, will have to be answered in the negative.
20. POINT NO.6:
As a result of our answers to Points Nos. 1 to 5, this Point will have to be answered against the Writ Petitioners and it must be held that the original Writ Petitioners, who are respondents in the State Appeals as well as original Writ Petitioners, whose Writ Petitions are placed for orders before us, are not entitled to any of the reliefs nor are they entitled to refund of compound fee, which they might have paid while compounding their offences, and check-reports prepared by the authorities on spot are also not required to be quashed. The Judgment and Orders of Swami, J., under Appeal are required to be quashed, and set aside.
21. POINT NO.7:
In the result, the Appeals filed by the State of Karnataka and me State Motor Vehicles authorities are allowed.
ii) Common Judgment and Orders rendered by Swami, J., which are impugned in these Appeals are set aside, and
iii) The original Writ Petitions filed by the petitioners shall stand dismissed. The Writ Petitions which are placed for Orders before us, shall also stand dismissed.
iv) There will be no order as to costs in Writ Appeals as well as Writ Petitions.