# K. M. VISWANATHA PILLAI v. K. M. SBANMUGHAM PILLAI

- **Citation:** [1969] 2 S.C.R. 896
- **Court:** Supreme Court of India
- **Decided:** 1969-11-25
- **Bench:** S. M. Sjkri, K. S. Hegde
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/k-m-viswanatha-pillai-v-k-m-sbanmugham-pillai-4602
- **Pages:** 6

## Headnote

Motor Vehicles Act (4 of 1939), ss. 49(1) and 60(1) (c)-Persons
owning bwes benami-Whether bar for obtaining permit.
The appellant was the owner of 5 buses. The vehicles stood in the
name of the respondent, appellant's benamidar, and tbe stage carriage
permits were also obtained in the respondent's name. The appellant, who
was running the buses, filed a suit ·claiming the buses along with their
permits. It was decreed by the trial court, and the lower appellate court
confirmed the decree in respect of 4 buses. The Higb Court, in further
appeal, held that the appellant and the respondent together practised fraud
in contravention of ss. 41(1) and 60(1)(c) of the Motor Vehicles Act,
1939 in as much as the respondent representing himself to be the owner
falsely obtained the permits in his own name, and allowed the true
owner, who had no permit to conduct the actual business and dismissed
the suit in 1010.
In appeal this Court,
HELD : There is nothing in the Motor Vehicles Act, which expressly
or by implication bars benami
t'ransactions or persons
owning buses
benami and applying for pennits on that basis.
Section 42( 1) does not require that the owner himself should obtain
the permit; it only requires the owner to see that the transport vehicles
shall not be used except in accordance with the conditions of the permit.
The definition of 'permit' itself shows that all permits need not be in the
name of the owner because the latter part of the definition shows that
it is only in the case of a private carrier or a public carrier that a permit
has to be in the owner's name. The same inference follows from the
definitions of 'private carrier' and 'public carrier'.
[899 HJ
The amerided s. 60(1) (c) provides for one of the contingencies in
which permit can be cancelled. According to it, it is permissible for the
Transport Authority to cancel a permit if the holder of it ceases to own
the vehicle covered by the permit. It is only a permissive clause and the
Transport Authority has only been given a discretion to cancel the permit
in that contingency. It may or may not cancel it, even if the holder
of the permit ceased to own the vehicles eovered by it.
But it is by
no means necessary that cl. (c) should be
applicable to the case of
every permit holder. There may be permit holders who own the vehicle
covered by the permit and there may be permit holders who do not own
the vehicle. This clause appears to apply only to the former case and
not to the latter.
[900 B-H]
Veerappa Pillai v. Raman & Raman, [1952] S.C.R. 583, followed.
Khal/i/,.ul-Rahman Khan v. State Transport Appellate Tribunal, A.LR.
1963 All.
383, Gur Narayan v. Sheolal Singh.
(1919) 46 Cal. 566
(P.C.) and C.I.T. Gujarat v. Abdul Rahim
&
Co., 55
1.T.R. 651,
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approved.
H
Varadarcjulu Naidu v. Thavasi Nadar, (1963) 2 M.L.J. 20 and
Chavali Venkataswami v. Chavali Kotayya,
( 1959) 2 and W.R. 4-07,
disapproved.
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VISWANATHA v. SHANMUGHAM (Sikri, J.)
8 97
A

## Text

K. M. VISWANATHA PILLAI
v.
K. M. SBANMUGHAM PILLAI
November 25, 1969
[S. M. SJKRI AND K. S. HEGDE, JJ.J
Motor Vehicles Act (4 of 1939), ss. 49(1) and 60(1) (c)-Persons
owning bwes benami-Whether bar for obtaining permit.
The appellant was the owner of 5 buses. The vehicles stood in the
name of the respondent, appellant's benamidar, and tbe stage carriage
permits were also obtained in the respondent's name. The appellant, who
was running the buses, filed a suit ·claiming the buses along with their
permits. It was decreed by the trial court, and the lower appellate court
confirmed the decree in respect of 4 buses. The Higb Court, in further
appeal, held that the appellant and the respondent together practised fraud
in contravention of ss. 41(1) and 60(1)(c) of the Motor Vehicles Act,
1939 in as much as the respondent representing himself to be the owner
falsely obtained the permits in his own name, and allowed the true
owner, who had no permit to conduct the actual business and dismissed
the suit in 1010.
In appeal this Court,
HELD : There is nothing in the Motor Vehicles Act, which expressly
or by implication bars benami
t'ransactions or persons
owning buses
benami and applying for pennits on that basis.
Section 42( 1) does not require that the owner himself should obtain
the permit; it only requires the owner to see that the transport vehicles
shall not be used except in accordance with the conditions of the permit.
The definition of 'permit' itself shows that all permits need not be in the
name of the owner because the latter part of the definition shows that
it is only in the case of a private carrier or a public carrier that a permit
has to be in the owner's name. The same inference follows from the
definitions of 'private carrier' and 'public carrier'.
[899 HJ
The amerided s. 60(1) (c) provides for one of the contingencies in
which permit can be cancelled. According to it, it is permissible for the
Transport Authority to cancel a permit if the holder of it ceases to own
the vehicle covered by the permit. It is only a permissive clause and the
Transport Authority has only been given a discretion to cancel the permit
in that contingency. It may or may not cancel it, even if the holder
of the permit ceased to own the vehicles eovered by it.
But it is by
no means necessary that cl. (c) should be
applicable to the case of
every permit holder. There may be permit holders who own the vehicle
covered by the permit and there may be permit holders who do not own
the vehicle. This clause appears to apply only to the former case and
not to the latter.
[900 B-H]
Veerappa Pillai v. Raman & Raman, [1952] S.C.R. 583, followed.
Khal/i/,.ul-Rahman Khan v. State Transport Appellate Tribunal, A.LR.
1963 All.
383, Gur Narayan v. Sheolal Singh.
(1919) 46 Cal. 566
(P.C.) and C.I.T. Gujarat v. Abdul Rahim
&
Co., 55
1.T.R. 651,
A
B
c
D
E
F
G
approved.
H
Varadarcjulu Naidu v. Thavasi Nadar, (1963) 2 M.L.J. 20 and
Chavali Venkataswami v. Chavali Kotayya,
( 1959) 2 and W.R. 4-07,
disapproved.
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VISWANATHA v. SHANMUGHAM (Sikri, J.)
8 97
A
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1453 of
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1966.
Appeal from the judgment and decree dated September 14,
1965 of the Madras High Court in Second Appe&l No. 1394 of
1963.
A. K. Sen, R. M. Mehta and J. B. Dadachan;i, for the appellant.
R. Gopalakrishnan, for the respondent.
The Judgment of the Court was delivered by
Sikri, J. This appeal by certificate granted by the High Court
of Madras is directed against its judgment and decree modifying
the decree passed by the District Judge.
The relevant facts for the determination of the points raised
before us are as follows : The plaintiff, K. M. Viswanatha Pillai,
appellant before us and hereinafter referred to as the plaintiff,
and K. M. Shanmμgham Pillai, respondent before us and hereinafter referred to as the defendant, were originally members of
a Joint Hindu Family. On June 29, 1953, the six brothers who
constituted the Joint Hindu Family entered into a partition of the
properties belonging to the Joint Family, evidenced by a registered document Ex. A-35. A motor bus MDH 662 fell to the
share of the plaintiff.
At the time of partition the permit was
not in the name of the defendant and some proceedings for the
transfer of the permit to his name were pending. Accordingly it
was provided in the partition deed as follows :
"As soon as its route permit and registration etc.
are transferred in the name of Shanmugam Pillai, he
shall have the same transferred in the name of the 4th
individual of us, Viswanatha Pillai."
In September 1953, the permit was transferred in the name
of the defendant.
In April 1954, the plaintiff purchased two
more vehicles, namely, MDO
1106 and MDH 730, but
the permits were obtained in the name of the defendant in whose
name the vehicles were also actually acquired. As the defendant
was going to Kuala Lumpur on business he executed a general
power of attorney, Ex. A-55, in favour of the plaintiff. In this
power of attorney the defendant admitted that the three buses
above mentioned belonged to the plaintiff and were plying in his
name as requested by the plaintiff. Two more buses seem to have
been acquired since then.
The plaintiff's case in brief was that the defendant was carrying on business on his behalf as a benamidar. He accordingly
prayed for a declaration that the five buses alongwith the stage
898
SUPREME COURT REPORTS
[1969] 2 S.C.R
carriage permits belonged to him and that he .was ent!tled to run
the same in terms of the power of attorney which was rrrevocable.
The defendant had joined with the plaintiff earlier in fil~g a
joint application for transfer of permits before
~e Region~
Transport Authority.
The defendant, however, withdrew his
consent and the application was rejected. The plaintiff, accordingly, seeks a mandatory injunction directing the defendant to
execute necessary documents required to effectuate the transfer of
the permits.
The suit was decreecl entirely by the Trial Court, but the
District Judge confirmed the decree only with reference to four
of the buses. With reference to Bus No. MDU 4069 the decree
was set aside.
The High Court held that "the plaintiff· and the defendant
practised a fraud upon the authorities, conjointly, in contravention of the express provision of the Motor Vehicles Act. The
benamidar of the vehicles, representing himself to be the owner,
falsely obtained the permits in his name, and allowed the true
owner, who had no permit, to conduct the actual business; there
cannot be a more flagrant violation of the basic requirements of
the Act, or of its scheme." The High Court, accordingly, felt
that they could not possibly grant mandatory injunction compelling the defendant to co-operate in any further application for
transfer, since that would, in effect, give recogIIition to the fraudulent contrivance and effectuate rights on the very basis of that
contrivance. The High Court also agreed with the District Judge
that the plaintiff could not get a declaration as far as bus No.
MDU 4069 was concerned.
The learned counsel for the appellant, Mr. A. K. Sen urges
before us that no provision of the Motor Vehicles Act, 1939 (IV
of 1939) hereinafter referred to as the Act has been contravened
and that it is not necessary under the Act that a permit should be
obtained only by the real owner of the bus.
The relevant statutory provisions may now be noticed, and
they are as follows:
"The Motor Vehicles Act, 1939
Section 2.
(3) "contract carriage" means a motor vehicle which
carries a passenger or passengers for hire or reward
under a contract expressed or implied for the use of the
vehicle as a whole at or for a fixed or agreed rate or
sum and from one point to another without stopping to
pick up or set down along the line of route passengers
not included in the contract; and includes a motor cab
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VISWANATHA v. SHANMUGHAM (Sikri, /.)
899
notwithstanding that the passengers may pay separate
fares."
(19) "owner" means, where the person in possession
of a motor vehicle is a minor, the guardian of such
minor, and in relation to a motor vehicle which is the
subject of a hire-purchase agreement, the person in possession of the vehicle under that agreement."
(20) "permit" means the document issued by the
commission or a State or Regional Transport Authority
authorising the use of a transport vehicle as a contract
carriage, or stage carriage, or authorising the owner as
a private carrier or public carrier to use such vehicle."
(22) "private carrier" means an owner of a transport vehicle other than a public carrier who uses that
vehicle solely for the carriage of goods which are his
property or the carriage of which is necessary for the
purposes of his business not being a business of providing transport, or who uses the vehicle for any of the
purposes specified in sub-section (2) of section 42.
(23) "public carrier" means an owner of a transport vehicle who transports or undertakes to transport
goods, or any class of goods, for another person at any
time and in any public place for hire or reward, whether in pursuance of the terms of a contract or agreement or otherwise, and includes any person, body, association or company engaged in the business of carrying
the g'oods of persons associated with that person, body,
association or company for the purpose of having their
goods transported."
Section 42(1) on which the
High Court has relied reads
thus:
"42(1) No owner of a transport vehicle shall use or
permit the use of the vehicle in any public place, save
in accordance with the conditions of a permit granted
or countersigned by a Regional or State Transport
Authority or the Commission authorising the use of the
vehicle in that place in the manner in which the vehicle
is being used; . . . "
This section does not, in our view, on the language require that
the owner himself should obtain the permit; it only requires the
owner that the transport vehicle shall not be used except in accordance with the conditions of the permit.
The High Court
would add the words "to .him" after the words "permit granted",
900
SUPREME COURT REPORTS
[1969} 2 S.C.R.
but
in our view, there is no justification for inserting those
wo;ds. The definition of the "permit" itself shows that all pennits
need not be in .the name of the owner because the latter part of
the definition shows that it is only in the case of a private carrier
or a public carrier that a permit has to be in the owner's name.
The same inference follows from the definitions of "private carrier" and "public carrier".
This Court came to the same conclusion in Veerappa Pillai v. Raman & Raman(').
Some reliance was placed on the amendments made ins. 60(1)
(c). The section as amended reads:
"60 (1) The transport authority which granted a permit may cancel the permit or may suspend it for such
period as it thinks fit-
(c) if the holder of the permit ceases to (own)( 2 )
the vehicle or vehicles covered by the permit, .... "
There has been a conflict of opinion between the different High
Courts as to the inference following that amendment. It seems
to us that the High Court of Allahabad in Khalil-ul-Rahman
Khan v. State Transport Appellate Tribunal(") rightly gives the
effect of the amendment. Srivastava, J., observed :
"A reference was, however, made to cl. (c) of
sub-section (1) of Section 60 of the Act and on the
basis of that clause it was urged that it assumed that
the permit holder should be the owner of the vehicle.
That clause provides for one of the contingencies in
which a permit can be cancelled. According to it, it
is permissible for the Transport Authority to cancel a
permit if the holder of it· ceases to own the vehicle
covered by the permit. It is only a permissive clause
and the Transport Authority has only been given a
discretion to cancel the permit in that contingency. It
may or may not cancel it, even if the holder of the
permit ceases to own the vehicle covered by it. But it
is by no means necessary that cl. (c) should be applicable to the case of every permit holder. There may be
pennit holders who own the vehicle covered by the
permit and there may be permit holders who do not
own the vehicle. This clause appears to apply only to
the former case and not to the latter.
On its basis,
therefore, it cannot be held to be a requirement of the
(1) [1952] S.C.R. 583.,
(2) Substituted by s. 54 of the Motor Vehicles (Amendment) Act, 1956 (100 of
1956) for "possess" (w.e.f. 16-2-1957).
(3) A.I.R. 1963 All. 383, 388.
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VISWANATHA V. SHANMUGHAM (Sikri, J.)
901
Act that in each case the person in whose favour a
permit has been issued should necessarily be the owner
of the vehicle covered by it."
We agree with these observations. The contrary view held in
Varadarajulu Naidu v. Thavasi Nadar(') thats. 42(1) contemplates that only an owner will have a permit is erroneous.
The decision of the Andhra High Court in Chavali V enkataswami v. Chavali Kotayya( 2 ) thats. 60(1) (c) of the Act envisages the grant of a permit to the owner alone must also be dissented
from .
The learned counsel for the respondent says that at any rate
the Act does not contemplate persons applying for permits benami.
In India benami transactions are recognised and not
frowned upon. (see Gur Narayan v. Sheolal Singh) (3 ). In C.l.T.
Gujarat v. Abdul Rahim & Co. (') it was held by this Court
that the registration of the partnership deed under s. 26A of
the Indian Income Tax Act, 1922, could not be refused on the
ground that K was the benamidar of V.
We see nothing in the Act which expressly or by implication
bars benami transactions or persons owning buses benami and
applying for permits on that basis.
In the result the appeal is allowed, the decree of the High
Court set aside and the decree passed by the District Judge restored.
We may mention that Mr. Sen did not press the claim
regarding the fifth bus, MDU 4069.
The appellant will have
half costs in this Court. The parties will bear their own costs
in the High Court.
Y.P .
(I) (1963) 2 M.L.J. 20.
(2) (1959) 2 Andh. W. R. 407.
(3) (1919) 46 Cal.566 (PC).
(4) 55 I.T.R. 651.
Appeal allowed.