Prajith and M/S Lama Travels (Petitioners) along with Siddique Pookkoth v. Sub Inspector of Police, Dharmadam Police Station, Kannur District; Transport Commissioner, Trans Towers, Vazhuthacaud, Thiruvananthapuram; Taxation Officer (Motor Vehicle Inspector), Motor Vehicle Check Post, Kiliyantara, Irity, Kannur District

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN** **FRIDAY, THE 25TH DAY OF OCTOBER 2019 / 3RD KARTHIKA, 1941** ## **WP(C).No.4943 OF 2017(P)** ## **PETITIONER/S:** |**1**|**PRAJITH,AGED 42 YEARS**| |---|---| ||**M/S LAMA TRAVELS, 105, NAVAB HYDER ALI KHAN**| ||**ROAD, KALASIPALAYAM BANGALORE-560 002.**| |**2**|**SIDDIQUE POOKKOTH**| ||**IYM BUILDING, MUNIYAPPA LAYOUT,**| ||**KALASIPALAYAM BANGALORE-560 002.**| **BY ADVS. SRI.G.HARIHARAN SRI.PRAVEEN.H.** ## **RESPONDENT/S:** - **1 SUB INSPECTOR OF POLICE DHARMADAM POLICE STATION, DHARMNADAM, KANNUR DISTRICT.** - **2 THE TRANSPORT COMMISSIONER TRANS TOWERS, VAZHUTHACAUD, THIRUVANANTHAPURAM-695 014.** - **3 THE TAXATION OFFICER, (MOTOR VEHICLE INSPECTOR), MOTOR VEHICLE CHECK POST, KILIYANTHARA, IRITTY, KANNUR DISTRICT, PIN-670 706.** ## **R1-2 BY GOVERNMENT PLEADER** ## **OTHER PRESENT:** ## **SRI K.P.HARISH- SENIOR GOVERNMENT PLEADER** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 25.10.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** -2- W.P.(C). No. 4943 of 2017 ## **JUDGMENT** The 1[st] petitioner is the registered owner of a Tourist Vehicle bearing registration No.KA-01/AG-0335 covered by Ext.P1 tourist permit, which is valid throughout India for the period from 01.09.2016 to 31.08.2021. The 2[nd] petitioner is the registered owner of another Tourist Vehicle bearing registration No.KA-01/AG5300 covered by Ext.P3 permit, which is valid throughout India for the period from 06.01.2017 to 05.01.2022. The petitioners have filed this writ petition under Article 226 of the Constitution of India, seeking a writ of mandamus commanding the 1[st] respondent Sub Inspector of Police, Dharmadam Police Station, Kannur District from interfering with the operation of services by the petitioners on the strength of Exts.P1 and P3 permits, while picking up passengers during their return journey to Bangalore, on payment of tax in the State of Kerala. The petitioners have also sought for a writ of mandamus commanding the 1[st] respondent to pay suitable compensation to them for effecting forcible cancellation of trips as evidenced by Ext.P7 press report appeared in Malayala Manorama daily, Kannur edition dated 31.01.2017. 2. The documents marked as Exts.P2 and P4 are receipts showing remittance of motor vehicle tax for the vehicles covered -3- W.P.(C). No. 4943 of 2017 by Exts.P1 and P3 permits, at the Motor Vehicle Check-post, Iritty, for the period from 01.01.2017 to 31.03.2017 (for vehicle covered by Ext.P1 permit) and for the period from 07.01.2017 to 31.03.2017 (for vehicle covered by Ext.P3 permit). Exts.P5 and P6 are notices dated 30.01.2017 issued by the 1[st] respondent to the drivers of the vehicles covered by Exts.P1 and P3 permits, asking them to produce the current records of the respective vehicles, alleging unauthorised stage carriage operation. 3. In paragraph 1 of the writ petition and also in the synopsis, the petitioners have stated that they are tourist bus operators conducting regular operation of trips between Bangalore and Kannur/Thalassery on the strength of All India Permits issued under sub-section (9) of Section 88 of the Motor Vehicles Act, 1988 (for brevity 'the MV Act'). On the strength of Exts.P1 and P3 All India Permits, the respective vehicles are conducting regular trips between Bangalore and Kannur/Thalassery. On 31.01.2017, while the vehicles were arranged to take their regular trips from Thalassery to Bangalore, the 1[st] respondent issued Ext.P5 and P6 notices alleging violation of permit conditions. 4. On 14.02.2017, when this writ petition came up for admission, the learned Government Pleader was directed to get -4- W.P.(C). No. 4943 of 2017 instructions and this Court granted an interim order as prayed for, in the meanwhile, i.e., an order restraining the 1[st] respondent from interfering with the operation of services by the petitioners on the strength of Exts.P1 and P3 permits, while picking up passengers during their return journey to Bangalore, on payment of tax in State of Kerala. 5. A counter affidavit has been filed by the 2[nd] respondent, opposing the reliefs sought for in the writ petition, contending that the drivers of the vehicles were issued with Exts.P5 and P6 notices in view of violation of permit conditions by picking up passengers from the State of Kerala to the home State, in violation of sub-rule (3) of Rule 85 of the Central Motor Vehicles Rules, 1989 (for brevity 'the CMV Rules'). Exts.P1 and P3 permits are granted under sub-section (9) of Section 88 of the MV Act to promote tourism. As per sub-rule (3) of Rule 85, a vehicle with All India Permit shall either commences its journey or ends its journey, circular or otherwise in the home State, provided that when the journey ends outside the home State, the vehicle shall not be used for hire except for return journey to the home State. The 2[nd] respondent would point out that the 1[st] respondent is a Police officer authorised to seize and detain a motor vehicle in exercise of the -5- W.P.(C). No. 4943 of 2017 powers under Section 207 of the MV Act. 6. Pursuant to the order of this Court dated 07.09.2018, the 1[st] respondent has also filed a statement, opposing the reliefs sought for in the writ petition. In the said statement, it is pointed out that, on 30.01.2017, the vehicles covered by Exts.P1 and P3 permits were being operated on the route Thalassery-Bangalore, picking up passengers from Illikkunnu (3 kilometers away from Thalassery), without any permit, which was objected to by the local tourist bus operators. 7. Heard the learned counsel for the petitioners and also the learned Senior Government Pleader for the respondents. 8. The issue involved in this writ petition is covered against the petitioners by the judgment of this Court in **Sanithjan S. v. State of Kerala and others [2019 SCC OnLine Ker 3212 : CDJ 2019 Ker HC 784]** . 9. Clause (7) of Section 2 of the MV Act defines 'contract carriage' 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 -6- W.P.(C). No. 4943 of 2017 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. Clause (35) of Section 2 defines 'public service vehicle' 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 motorcab, contract carriage, and stage carriage. 10. Clause (40) of Section 2 of the MV Act defines 'stage carriage' 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. Clause (43) of Section 2 defines 'tourist vehicle' to mean a contract carriage constructed or adapted and equipped and maintained in accordance with such specifications as may be prescribed in this behalf. Clause (47) of Section 2 defines 'transport vehicle' to mean a public service vehicle, a goods carriage, an educational institution bus or a W.P.(C). No. 4943 of 2017 -7- private service vehicle. 11. Section 73 of the MV Act deals with application for contract carriage permit. As per Section 73, an application for a permit in respect of a contract carriage (referred to as a contract carriage permit in Chapter V) shall contain the particulars enumerated in clauses (a) to (c) thereof. Section 74 deals with grant of contract carriage permit. As per sub-section (1) of Section 74, subject to the provisions of sub-section (3), a Regional Transport Authority may, on an application made to it under Section 73, grant a contract carriage permit in accordance with the application or with such modifications as it deems fit or refuse to grant such a permit. As per the proviso to sub-section (1), no such permit shall be granted in respect of any area not specified in the application. As per sub-section (2) of Section 74, the Regional Transport Authority, if it decides to grant a contract carriage permit, may, subject to any rules that may be made under this Act, attach to the permit any one or more of the conditions enumerated in clauses (i) to (xiii) thereof. As per the proviso to sub-section (2) of Section 74, inserted by Section 33 of the Motor Vehicles (Amendment) Act, 2019 [with effect from 01.09.2019], the Regional Transport Authority may in the interest of last-mile -8- W.P.(C). No. 4943 of 2017 connectivity waive any such conditions in respect of any such types of vehicles as may be specified by the Central Government. 12. Section 88 of the MV Act deals with validation of permits for use outside the region in which it is granted. As per sub-section (1) of Section 88, 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. However, as per sub-section (9) of Section 88, 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 States 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, 62, -9- W.P.(C). No. 4943 of 2017 clause (d) of sub-section (1) of Section 87 and Section 89 shall, as far as may be, apply in relation to such permits. 13. As per clause (a) of sub-section (14) of Section 88 of the MV Act, the Central Government may make rules for carrying out the provisions of this section. As per clause (b) of sub-section (14), in particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the matters enumerated in sub-clauses (i) to (v) thereof. Sub-clause (i) deals with the authorisation fee payable for the issue of a permit referred to in sub-sections (9) and (12); sub-clause (iii) deals with the distinguishing particulars or marks to be carried or exhibited in or on the motor vehicle; sub-clause (iv) deals with the colour or colours in which the motor vehicle is to be painted; etc. Clause (b) of Explanation to Section 88 defines 'authorisation fee' to mean the annual fee, not exceeding one thousand rupees, which may be charged by the appropriate authority of a State to enable a motor vehicle, covered by the permit referred to in sub-sections (9) and (12) to be used in other States subject to the payment of taxes or fees, if any, levied by the States concerned. 14. The provisions under sub-section (7) of Section 63 of the MV Act, 1939 and sub-section (9) of Section 88 of the MV Act, -10- W.P.(C). No. 4943 of 2017 1989, which deals with grant of 'All-India Tourist Permits' to promote tourism came up for consideration before the Apex Court, the High Court of Karnataka and also this Court in the following decisions; 15. In **B.A. Jayaram v. Union of India [(1984) 1 SCC 168]** the Apex Court noticed that, prior to 1969 there was no concept of what may be termed as an 'All-India Permit' which would be valid for the whole of India and which would enable the holder of the permit to ply his contract carriage throughout India. Sub-section (1) of Section 63 of the MV Act, 1939 provides 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. The procedure prescribed for obtaining the countersignature of the transport authorities of other regions and States was cumbersome and was not conducive to the development of all-India or interstate tourist traffic. In order to remedy the situation and promote all-India and inter-state tourist traffic, the Parliament amended the -11- W.P.(C). No. 4943 of 2017 MV Act and introduced sub-section (7) of Section 63 by amending Act 56 of 1969. This new provision enables the State Transport Authority of every State to 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 that behalf. Preference is to be given, to applications for permits from the India Tourism Development Corporation, a State Tourism Development Corporation, a State Tourist Department and such operators and tourist cars or such travel agents as may be approved in that behalf by the Central Government. The Government of India in exercise of its power under sub-section (7) of Section 63 of the MV Act, issued notifications specifying the number and class of tourist vehicles in respect of which each of the State Transport Authorities of the States could grant All-India Tourist Permits. The last of the notifications specified that each State Transport Authority could issue 50 permits for tourist omnibuses. 16. In **B.A. Jayaram's case** , the Apex Court noticed that the scheme for grant of 'All-India Permits', designed to promote all-India and inter-state tourist traffic, soon fell into abuse at the hands of scheming transport operators. Transport operators from big and comparatively prosperous and advanced States, well versed in the -12- W.P.(C). No. 4943 of 2017 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. Once the permits were obtained and the vehicles were registered these small States saw the last of the operators. 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. There was no thought or question of undertaking all-India or inter-state tours and out went the worthy object of sub-section (7) of Section 63. In the counter affidavit filed on behalf of the State of Karnataka in some of the Writ Petitions it was stated that, though All-India Tourist Permits were obtained by the residents of other States, the permits were used by taking the vehicles and keeping them in the State of Karnataka. The operators run their tourist buses at fixed timings from particular places like the Stage Carriages operated by the Karnataka State Road Transport Corporation and other private stage carriage operators. On checking of the vehicles and verification of the passengers, it was found that the passengers found in the vehicle were not genuine tourists and the drivers or the persons in charge of the -13- W.P.(C). No. 4943 of 2017 vehicles were not in a position to produce the trip sheet name list with whom they entered into the contract. It was also found that the passengers found in the vehicles had boarded the buses from one point without any contract or otherwise and without they being tourists. The passengers found in the tourist buses are regular passengers going from one place to another for purposes other than tourism. These vehicles were found catering to the needs of general travelers who can make use of the stage carriages operated by the Karnataka State Road Transport Corporation or other private stage carriage operators. As a result of indiscriminate misuse of the vehicles as stage carriages even though the permits were obtained under sub-section (7) of Section 63 of the Motor Vehicles Act for tourism, the State Government has suffered considerable loss in Revenue. The very object of obtaining permits under sub-section (7) of Section 63 of the Act, which intended to promote tourism has been misused by these operators of the tourist buses by plying their vehicles regularly as stage carriages. Most of the permits obtained under sub-section (7) of Section 63 of the Act in the States other than the State of Karnataka are made use of for the purported use of running the tourist buses by actually the permits were misused to run the tourist vehicle either as stage carriages or as contract -14- W.P.(C). No. 4943 of 2017 carriages. The Transport Commissioner of Maharashtra submitted a report to the Government of Maharashtra, a copy of which was made available to the Apex Court, wherein it was stated that most of these buses for all practical purposes operate as stage carriage services masquerading as contract carriages. The All-India Tourist Buses, on the other hand, are exploiting the loopholes available in the law and operate point to point passenger services on routes where the volume of traffic is heavy, viz., routes like BombayKolhapur, Bombay-Mangalore (Bangalore), Bombay-Panaji, BombayBelgaum, Bombay-Ahmedabad and Bombay-Indore. On 9/10 April, 1983 the Transport Commissioner had personally visited the check Post bordering Gujarat on the Bombay-Ahmedabad road and found from the records of the check post that as many as 115 All-India Tourist Buses are regularly plying on this route. The petitioners, who are transport operators holding All-India Tourist Permits, denied that any of them was guilty of any malpractice or misuse of the permits held by them. But, notwithstanding the petitioners' denial, the Apex Court observed as follows; "we do not have the slightest doubt that the allegations of misuse and malpractice made in the counter affidavit, filed on behalf of the Karnataka Government are generally and substantially correct". The Apex Court noticed that complaints -15- W.P.(C). No. 4943 of 2017 about the abuse of the scheme have been made to the Central Government and also to the Transport Advisory Council. Paragraphs 3 and 4 of the said decision read thus; "3. 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 communications, 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 brother 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 cooperation of all 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 person holding all-India permits from some of these small States do not belong to these States at all but are -16- W.P.(C). No. 4943 of 2017 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 carriages having been nationalised no private contract carriage was available and there was therefore a great opportunity to ply the vehicles as contract carriages within the State. 4. 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. There was no thought or question of - undertaking all India or interstate tours and out went the worthy object of Section 63(7). Quick and easy money with the least trouble and in the shortest time, by whatever method was the only object. In the counter affidavit filed on behalf of the State of Karnataka in some of the Writ Petitions, it is stated; "Though the vehicles were registered outside the State of Karnataka and they have been permanently stationed in the State of Karnataka and particularly at Bangalore, and the vehicles were/are being plied as Stage Carriages. Though All-India Tourist Permits were -17- W.P.(C). No. 4943 of 2017 obtained by the residents of other States, the permits were used by taking the vehicles and keeping them in the State of Karnataka. The operators run their tourist buses at fixed timings from particular places like the Stage Carriages operated by the Karnataka State Road Transport Corporation (hereinafter called the KSRTC) and other private stage carriage operators. On checking of the vehicles and verification of the passengers, it was found that the passengers found in the vehicle were not genuine tourists and the drivers or the persons in charge of the vehicles were not in a position to produce the trip sheet name list with whom they entered into contract. It was also found that the passengers found in the vehicles had boarded the buses from one point without any contract or otherwise and without they being tourists. The passengers found in the tourist buses are regular passengers going from one place to another for purposes other than tourism. These vehicles were found catering to the needs of general travelers who can make use of the Stage Carriages operated by the KSRTC or other private stage carriage operators. The respondent produces herewith statements as Annexures 1 to 9 showing the clandestine operation of the vehicles covered by All-India Tourist Permits the remarks and irregularities, noticed by the Motor Vehicles Inspectors while checking the vehicles covered by All-India Tourist Permits the frequent detection of these vehicles, running as Stage Carriages by collecting individual fares and picking passengers from one point and setting down them at another point and bringing different passengers in the return -18- W.P.(C). No. 4943 of 2017 journey. From the statements enclosed, it is clear that the operators of the tourist buses covered by All-India Tourist Permits, have misused the Tourist Buses by running them as regular stage carriages competing with the KSRTC buses and other private stage carriages within the State. As a result of indiscriminate misuse of the vehicles as Stage Carriages even though the permits were obtained under Section 63(7) of the Central Act for Tourism, the State Government has suffered considerable loss in Revenue. These buses actually made use of the passengers which would have normally gone to the KSRTC buses and other private carriages. The very object of obtaining permits under Section 63(7) of the Central Act, which intended to promote tourism has been misused by these operators of the Tourist buses by plying their vehicles regularly as stage carriages. Most of the permits obtained under Section 63(7) of the Central Act in the States other than the State of Karnataka are made use of for the purported use of running the tourist buses by actually the permits were misused to run the tourist vehicle " either as stage carriages or as contract carriages. A survey made by the Transport Commissioner of Maharashtra revealed a similar state of affairs. The Transport Commissioner submitted a report to the Government of Maharashtra a copy of which has been made available to us. It is stated in the report: "Our estimate is that out of these 1300 permits anything between 300 to 406 buses are operating in Maharashtra with Bombay as the main centre. Most of these buses for all practical purposes operate as stage carriage services masquerading as contract carriages. -19- W.P.(C). No. 4943 of 2017 In Maharashtra the ordinary passenger transport by stage carriages and contract carriages has been completely nationalised. The All-India Tourist Buses on the other hand are exploiting the loopholes available in the law and operate point to point passenger services on routes where the volume of traffic is heavy, viz., routes like Bombay - Kolhapur, Bombay - Mangalore (Bangalore), Bombay - Panaji, Bombay -Belgaum, Bombay - Ahmedabad and Bombay -Indore....... On April 9/10, 1983 the Transport Commissioner had personally visited the Charoti Check Naka which is our border check Post bordering Gujarat on the BombayAhmedabad road. From the records of the check post he found that as many as 115 All-India Tourist Buses are regularly plying on this route. After making an analysis of these 115 All-India Tourist Buses he found that 41 permits had been issued by the State Transport Authority of Manipur. 17 had been issued by State Transport Authority Nagar Haveli, 8 by the State Transport Authority. Meghalaya and 5 by the State Transport Authority Nagaland, A large number of AllIndia Tourist Buses operating with their base in Bombay appear to have been issued by Manipur. Nagaland and the Union Territory of Dadra Nagar Haveli." The petitioners, who are transport operators holding all-India permits deny that any of them was guilty of any malpractice or misuse of the permits held by them. But, notwithstanding the petitioners' denial we do not have the slightest doubt that the allegations of misuse and malpractice made in the counter affidavit, filed on behalf of the Karnataka Government are generally and substantially correct. Complaints about the -20- W.P.(C). No. 4943 of 2017 abuse of the scheme appear to have been made to the Central Government and the Transport Advisory Council also. We are also told that the question of meeting the challenge owed by these abuses is receiving the attention of the Central Government." (underline supplied) 17. In **B.A. Jayaram's case** the Apex Court was dealing with the challenge made against the notification dated 31.03.1981 of the State of Karnataka, whereby the concession given to the holders of all-India permits, by way of exempting the all-India tourist vehicles registered in other States from payment of tax under the Karnataka Motor Vehicles Taxation Act, 1957, if tax had already been paid in the home State was withdrawn. In paragraph 8 of the judgment, the Apex Court observed as follows; "Taxes of a compensatory and regulatory character are outside the expanse of Article 301 of the Constitution. Regulatory measures and compensatory taxes far from impeding the free flow of trade and commerce, often promote such free flow of trade and commerce by creating agreeable conditions and providing appropriate services. All that is necessary to uphold a tax which purports to be or is claimed to be compensatory tax is 'the existence of a specific, identifiable object behind the levy and a nexus between the subject and the object of the levy' it is not necessary that the money realised by the levy should be put into a -21- ## W.P.(C). No. 4943 of 2017 separate fund or that the levy should be proportionate to the expenditure. There can be no bar to an intermingling of the revenue realised from regulatory and compensatory taxes and from the taxes of a general nature nor can there be any objection to more or less expenditure being incurred on the object behind the compensatory and regulatory levy than the realisation from the levy." In **Sharma Transport v. Government of A.P. [(2002) 2** **SCC 188]** , the Apex Court held that a mere claim that tax is compensatory would not suffice. To that extent, the observations in **Jayaram's case (supra)** do not reflect the correct position in law. Whether a tax is compensatory or not cannot be made to depend on the preamble of the statute imposing it. A tax cannot also be said not to be compensatory because the precise or specific amount collected is not actually used to providing any facilities. 18. In **Ashutosh Swain v. State Transport Authority [(1985) 2 SCC 636]** , in the context of sub-section (7) of Section 63 of the MV Act, 1939, which came into force on 01.10.1970 by the Amending Act 56 of 1969, the Apex Court held that, by the Amending Act 56 of 1969, a concept of a tourist permit for a tourist vehicle was introduced in the Act. Sub-section (7) of Section 63 was introduced enabling State Transport Authority of any State to grant -22- W.P.(C). No. 4943 of 2017 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 such applications have to be dealt with according to the provisions of Sections 49, 50, 51, 57, 58, 59, 59A, 60, 61 and 64. This scheme of law would manifestly reveal that a permit without the necessary countersignatures as hereinabove indicated, enabling the permit holder to have the whole of India as its area of operation was unknown to the Act. By introduction of sub-section (7) in Section 63, the concept of a permit to be granted by a State Transport Authority of a State within the limits of the quota prescribed by the Central Government which would enable the holder of the permit to operate in the whole of India, was introduced. 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 -23- W.P.(C). No. 4943 of 2017 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. Paragraphs 4 and 5 of the said decision read thus; "4. The scheme of the Motor Vehicles Act forbids an owner of a transport vehicle to use or permit the use of a 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 the authority therein mentioned authorising the use of the vehicle in the place and in the manner in which the vehicle is to be used. The expression 'transport vehicle' is defined in Section 2(33) of the Act to mean 'a public service vehicle or a goods vehicle'. 'Public Service Vehicle' is, defined in Section 2(25) of the Act to mean 'any motor vehicle used or adapted to be used for the carriage of passengers for hire or reward, and includes a motor cab, contract carriage, and stage carriage'. Thus the scheme of the Act envisages three kinds of permits in respect of a public service vehicle, namely, permit for the use of motor cab or a permit to use an omnibus for contract carriage or a permit to use the same as a stage carriage. Section 46 provides for application to be made for stage carriage permit. The holder of a stage carriage permit can use the vehicle to carry 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. The second kind of -24- W.P.(C). No. 4943 of 2017 permit in respect of a public service vehicle is the one contemplated by Section 49 and styled as 'contract carriage permit.' A vehicle in respect of which there is a contract carriage permit can be used for carrying passengers for hire or reward under a contract express or implied for the use of the vehicle as a whole at or for a fixed or agreed rate of 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. By the Amending Act 56 of 1969, a concept of a tourist permit for a tourist vehicle was introduced in the Act. 'Tourist vehicle' is defined in Section 2(29A) to mean 'a contract carnage constructed or adapted and equipped and maintained in accordance with such specification as the State Government may, by notification in the Official Gazette, - specify in that behalf.' By the same Amending Act, sub section (7) of Section 63 was introduced enabling State Transport Authority of any State to 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 such applications have to be dealt with according to the provisions of Sections 49, 50, 51, 57, 58, 59, 59A, 60, 61 and 64. Section 44 confers power on the State Government to set up such transport authorities in the State being State Transport Authority and Regional Transport Authority. The State Transport Authority will have its jurisdiction over the whole State and the State will be divided into various regions in respect of which a Regional Transport -25- W.P.(C). No. 4943 of 2017 Authority will be specified. Anyone desiring to obtain either a stage carriage permit or it contract carriage permit has to apply to the Regional Transport Authority in whose jurisdiction the vehicle is sought to be operated. Section 63 provides that permit granted by the Regional Transport Authority of any region, shall not be valid in any other region unless the permit has been countersigned by the Regional Transport Authority of that region and a permit granted in 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. This scheme of law would manifestly reveal that a permit without the necessary countersignatures as hereinabove indicated, enabling the permit holder to have the whole of India as its area of operation was unknown to the Act. By introduction of subsection (7) in Section 63, the concept of a permit to be granted by a State Transport Authority of a State within the limits of the quota prescribed by the Central Government which would enable the holder of the permit to operate in the whole of India, was introduced. For the sake of brevity, this permit is described as all-India tourist permit. 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 -26- W.P.(C). No. 4943 of 2017 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 he suitably removed by this provision." (underline supplied) 19. In **State of A.P. v. Noorulla Khan [(2004) 6 SCC 194]** , in the context of clause (f) of sub-rule (6) of Rule 297A of the Andhra Pradesh Motor Vehicles Rules, 1989, which provides for the execution of a written contract between the hiring party or its authorised representative containing the essential particulars and stipulations contained in sub-clauses (i) to (viii) thereof, while hiring a public service vehicle, the Apex Court held that the contract may be express or implied as contemplated by sub-section (7) of Section 2 of the Motor Vehicles Act, but the names of the passengers to be carried have to be settled prior to undertaking the journey. Clause (f) of sub-rule (6) of Rule 297A does not go beyond the purview of the Act. Rather it carries out the purpose of the Act. Essentially it provides for settling the names of the passengers undertaking the journey under an agreement for hiring a public service vehicle. -27- W.P.(C). No. 4943 of 2017 Passengers who are to be carried are to be known prior to the journey as the definition of contract carriage in sub-section (7) of Section 2 includes the words 'for the carriage of passengers mentioned therein'. These words clearly show that there must be a prior contract and the passengers shall also be settled in advance. Therefore, the High Court erred in striking down clause (f) of subrule (6) of Rule 297A. The Apex Court held that clause (f) of subrule (6) of Rule 297A of the Andhra Pradesh Motor Vehicles Rules to be intra vires and the finding to the contra recorded by the High Court was set aside. Paragraphs 17 to 19 of the said decision read thus; "17. High Court has struck down Rule 297A(6)(f) as it provides for the execution of a written contract between the hiring party and the agent while hiring a public service vehicle. According to the High Court the contract can be in writing as well as an implied contract. Under Section 2(7) a contract could be either express or implied and therefore it was not mandatory to have a written contract only. It could be an oral contract as well. The Rule providing to have a written contract mandatorily goes beyond the purview of the Act and therefore bad in law. Contract could be implied also as the definition of the contract carriage contemplates express as well as an implied contract. 18. Rule 297A(6)(f) provides for drawing up of an agreement in writing, providing therein the list of all the members of the -28- W.P.(C). No. 4943 of 2017 hiring party giving particulars of their names, father's/husband's name, age, full address, the period for which the vehicle is engaged, places to be visited etc. and "the nature of the common purpose of the journey". This Court in Brijendra Kumar Chaudhari & Anr. (supra) while interpreting Section 2(7) of the Act has held that the contract entered between the parties shall be prior and persons who are to be carried shall also be known prior to the journey. Similarly, in Nirmala Jagdish Chandra Kabra case (supra) it has been held that the permit which grants the contract for carriage of the passengers should contain the names of the passengers to be carried from one destination to another without picking up or dropping the passengers en-route. Contract may be express or implied as contemplated by Section 2(7) but the names of the passengers to be carried have to be settled prior to undertaking the journey. Rule 297A(6)(f) does not go beyond the purview of the Act. Rather it carries out the purpose of the Act. Essentially it provides for settling the names of the passengers undertaking the journey under an agreement for hiring a public service vehicle. Passengers who are to be carried are to be known prior to the journey as the definition of contract carriage in Section 2(7) includes the words "for the carriage of passengers mentioned therein". These words clearly show that there must be a prior contract and the passengers shall also be settled in advance. High Court erred in striking down Rule 297A(6)(f). 19. For the reasons stated above both the Rules 297A(1)(c) and 297A(6)(f) are held to be intra vires of the Act and the findings recorded by the High Court to the contrary are set aside." -29- W.P.(C). No. 4943 of 2017 20. In **Noorulla Khan's case** , after holding clause (c) of sub-rule (1) of Rule 297A and clause (f) of sub-rule (6) of Rule 297A of the Andhra Pradesh Motor Vehicles Rules to be intra vires of the Motor Vehicles Act, the Apex Court dealt with the challenge made against the finding of the High Court that the rules framed by the Central Government under sub-section (14) of Section 88 of the Motor Vehicles Act alone would be applicable to All-India Tourist Permit and not the Rules framed by the State Government. The Apex Court held that under subsection (9) of Section 88, the State Transport Authority has been empowered to grant All-India Tourist Permit for the purpose of promoting tourism, notwithstanding anything contained in sub-section (1) of Section 88 and subject to the Rules to be made by the Central Government under subsection (14) of Section 88. From the conjoint reading of subsections (9), (11) and (14) of Section 88 of the Motor Vehicles Act, it is abundantly clear that it is the Central Government alone which has been authorised to frame the Rules as well as to prescribe the conditions for the purposes of all-India tourist vehicles. The power to make rules under Sections 95 and 96 would not include the power to frame rules applicable to All-India Tourist Permit which is exclusively vested in the Central Government. The power to frame -30- W.P.(C). No. 4943 of 2017 rules and prescribe conditions for the All-India Tourist Permit is exclusively vested in the Central Government and the High Court was right in holding that the State Government would have no jurisdiction to either frame the Rules or prescribe conditions for AllIndia Tourist Permits. Paragraphs 20 to 23 of the said decision read thus; "20. Coming to the last point wherein the High Court has held that the rules framed by the Central Government under Section 88(14) would alone be applicable to all-India tourist permit and not the Rules framed by the State Government, it was contended by the learned counsel for the appellants that all-India tourist permits were basically contract carriages. 'Tourist vehicle' is defined under Section 2(43) to mean a contract carriage. The permits granted under Section 88(9) enable these vehicles to be used in more than one State but only for tourist purposes. Apart from this difference in the actual area of operation there is no other difference between a contract carriage and an all-India tourist vehicle. An all-India tourist vehicle has to comply with the norms of a contract carriage. The vehicle in any case has to be restricted for the journey as a whole from one end to the other without picking up any passenger in between. The journey is one contract of a round trip for the whole journey to and from with one common purpose. On checking it was found that all-India tourist vehicles were indulging in illicit operation as stage carriages and not as contract carriages. 21. We do not find any force in this submission. Section 88 -31- W.P.(C). No. 4943 of 2017 provides 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) which provides for the grant of all-India tourist permits, which reads as: "88(9) Notwithstanding anything contained in subsection (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 States 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, clause (d) of sub-section (1) of Section 87 and Section 89 shall, as far as may be, apply in relation to such permits." 22. It is clear from the reading of this provision that the State Transport Authority has been empowered to grant all-India tourist permit for the purpose of promoting tourism, notwithstanding anything contained in subsection (1) of Section 88 and subject to the Rules to be made by the Central Government under sub-section (14) of Section 88, for the whole of India or such contiguous States not less than three in -32- W.P.(C). No. 4943 of 2017 number including the State in which the permit is issued. Further the provisions of Sections 73, 74, 80, 81, 82, 83, 84, 85, 86, clause (d) of sub-section (1) of Section 87 and Section 89 are applicable as far as may be in relation to such permits. Sub-section (11) reads as under: "88(11) The following shall be conditions of every permit granted under sub-section (9), namely:- (i) every motor vehicle in respect of which such permit is granted shall conform to such description, requirement regarding the seating capacity, standards of comforts, amenities and other matters, as the Central Government may specify in this behalf; (ii) every such motor vehicle shall be driven by a person having such qualifications and satisfying such conditions as may be specified by the Central Government; and - (iii) such other conditions as may be prescribed by the Central Government." Sub-section (11) provides that every motor vehicle to which all-India tourist permit has been granted shall conform to the description, requirement of seating capacity, standards of comforts, amenities and other matters, as specified by the Central Government in this behalf. Further, such vehicles have to be driven by persons having such qualifications and satisfying such conditions as may be specified by the Central Government. Other such conditions have also to be prescribed by the Central Government. 23. Sub-section (14) reads as under: "88(14)(a) The Central Government may make rules for carrying out the provisions of this section. - (b) In particular, and without prejudice to the -33- W.P.(C). No. 4943 of 2017 generality of the foregoing power, such rules may provide for all or any of the following matters, namely.- (i) the authorisation fee payable of the issue of a permit referred to in sub-sections (9) and (12); (ii) the fixation of the laden weight of the motor vehicle; (iii) the distinguishing particulars or marks to be carried or exhibited in or on the motor vehicle; (iv) the colour or colours in which the motor vehicle is to be painted; (v) such other matters as the appropriate authority shall consider in granting a national permit. Explanation.- In this section, xxx xxx" This sub-section empowers the Central Government to frame Rules for carrying out the provisions of this Section as well as for providing for all or any of the matters mentioned in clause (b) of this Section. From the conjoint reading of sub-sections (9), (11) and (14), referred to above, it is abundantly clear that it is the Central Government alone which has been authorised to frame the Rules as well as to prescribe the conditions for the purposes of all-India tourist vehicles. The power to make rules under Sections 95 and 96 would not include the power to frame rules applicable to all-India tourist permit which is exclusively vested in the Central Government. The power to frame rules and prescribe conditions for the allIndia tourist permit is exclusively vested in the Central Government and the High Court was right in holding that the State Government would have no jurisdiction to either frame the Rules or prescribe conditions for the all-India tourist permits. Such permits would be exclusively governed by the -34- W.P.(C). No. 4943 of 2017 Rules framed by the Central Government or the conditions prescribed by the Central Government. The judgment of the High Court in so far as it has held that it is the Rules framed by the Central Government only which would be applicable to all-India tourist permits and not the Rules framed by the State Government is upheld." 21. In **Satish N. Narayan and others v. State of Karnataka and others [2017 ILR (Kar.) 735 : AIR 2017 (NOC)** **376 (KAR.)]** , a learned Judge of the Karnataka High Court held that a permit issued under sub-section (9) of Section 88 of the MV Act, 1988 is only for those vehicles which shall be used 'solely or exclusively for transporting tourists'. Hence, called 'Tourist Vehicles'. Therefore, tourist vehicles cannot carry commuters. The use of the word 'Tourist' which precedes the word 'Permit' cannot be ignored. The use of the said word harks back to the Statement of Objects and Reasons for amending Section 63 of the MV Act, 1939: the vehicle must be 'used solely or exclusively for tourists'. Thus, the permit under sub-section (9) of Section 88 of the MV Act, 1988 is meant for those vehicles which are used 'only for the tourists'. Hence, the permit under Section 74 and sub-section (8) of Section 88 of the Act also differ with regard to the status of the passenger. 22. The term 'tourist' means a person, who is visiting a place -35- W.P.(C). No. 4943 of 2017 for pleasure and interest, especially when he is on holiday. The term 'tourism' means the business of providing service to people on holidays, for examples, hotels, restaurants and trips. [Collins Cobuild English Dictionary] 23. In **B.A. Jayaram's case [(1984) 1 SCC 168]** the Apex Court noticed that prior to 1969 there was no concept of 'All-India Permit', which would be valid for the whole of India and which would enable the holder of the permit to ply his contract carriage throughout India. The procedure prescribed for obtaining the countersignature of the transport authorities of other regions and States was cumbersome and was not conducive to the development of all-India or inter-state tourist traffic. In order to remedy the situation and promote all-India and inter-state tourist traffic, the Parliament amended the MV Act, 1935 and introduced sub-section (7) of Section 63, by the Motor Vehicles (Amendment) Act, 1969. In the said decision, the Apex Court noticed further that the scheme for grant of 'All-India Permits', designed to promote all-India and interstate tourist traffic, soon fell into abuse at the hands of scheming transport operators. 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 -36- W.P.(C). No. 4943 of 2017 if ever, moving out of the State. There was no thought or question of undertaking all-India or inter-state tours and out went the worthy object of sub-section (7) of Section 63 of the MV Act, 1939. 24. As already noticed, in **B.A. Jayaram's case** , in the counter affidavit filed on behalf of State of Karnataka, it was contended that the operators run their tourist buses at fixed timings from particular places like the stage carriages operated by the Karnataka State Road Transport Corporation and other private stage carriage operators. On checking, it was found that the passengers in the vehicles were not genuine tourists and the drivers or the persons in charge of the vehicles were not in a position to produce the trip sheet with list of passengers. The passengers boarded the vehicles from one point without any contract or otherwise and without they being tourists. They are regular passengers going from one place to another for purposes other than tourism. These vehicles were found catering to the needs of general travelers who can make use of the Stage Carriages operated by the Karnataka State Road Transport Corporation or other private stage carriage operators. As a result of indiscriminate misuse of the vehicles as stage carriages even though the permits were obtained under subsection (7) of Section 63 of the MV Act for tourism, the very object W.P.(C). No. 4943 of 2017 -37- of obtaining permits under sub-section (7) of Section 63 of the Act, which intended to promote tourism has been misused by these operators of the tourist buses by plying their vehicles regularly as stage carriages. Though the petitioners before the Apex Court, who are transport operators holding All-India Permits, denied that any of them was guilty of any malpractice or misuse of the permits held by them, notwithstanding that denial, the Apex Court observed as follows; "we do not have the slightest doubt that the allegations of misuse and malpractice made in the counter affidavit, filed on behalf of the Karnataka Government are generally and substantially correct". 25. In **Ashutosh Swain's case [(1985) 2 SCC 636]** , in the context of sub-section (7) of Section 63 of the MV Act, 1939, the Apex Court held that, by introduction of subsection (7) in Section 63, the concept of a permit to be granted by a State Transport Authority of a State within the limits of the quota prescribed by the Central Government which would enable the holder of the permit to operate in the whole of India, was introduced. 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 -38- W.P.(C). No. 4943 of 2017 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. The impediment in the free flow of tourist traffic was sought to be suitably removed by this provision. 26. In **Noorulla Khan's case [(2004) 6 SCC 194]** the Apex Court held that, under sub-section (9) of Section 88, the State Transport Authority has been empowered to grant All-India Tourist Permit for the purpose of promoting tourism, notwithstanding anything contained in sub-section (1) of Section 88 and subject to the Rules to be made by the Central Government under sub-section (14) of Section 88. 27. In **Satish N. Narayan's case [2017 ILR (Kar.) 735]** the Karnataka High Court held that a permit issued under subsection (9) of Section 88 of the MV Act, 1988 is only for those vehicles which shall be used 'solely or exclusively for transporting tourists'. Therefore, tourist vehicles cannot carry commuters. A contract carriage permit under Section 74 and tourist permit issued sub-section (8) of Section 88 of the MV Act differ with regard to the status of the passenger. 28. In **Sanithjan S. v. State of Kerala and others [2019** -39- W.P.(C). No. 4943 of 2017 **SCC OnLine Ker 3212 : CDJ 2019 Ker HC 784]** this Court held that the legal principles that can be culled out from the decisions referred to supra are as follows; (i) The provisions under sub-section (7) of Section 63 of the MV Act, 1935, introduced by the Motor Vehicles (Amendment) Act, 1969, and that under sub-section (9) of Section 88 of the MV Act, 1988 for grant of 'All-India Tourist Permits' are designed to promote all-India and inter-state tourist traffic; and (ii) A tourist vehicle covered by 'All-India Tourist Permit shall carry only genuine tourist passengers and shall not carry regular passengers/commuters going from one place to another for purposes other than tourism. 29. In **Sanithjan's case** this Court held that, a 'contract carriage' is meant for those who want to hire the vehicle collectively or individually for a group or a party having the same purpose, for their transport from one place to another. The vehicle has to be hired as a whole for the carriage of passengers mentioned in the contract, i.e., the whole vehicle will be at their disposal. On the other hand, a 'stage carriage' is intended to meet the requirements of the general public travelling from one place to another having different purposes. Therefore, an agent or a group of persons/individuals cannot hire a 'contract carriage' for going from one place to another with passengers having different purposes. If -40- W.P.(C). No. 4943 of 2017 individual passengers having different purposes are picked up in a 'contract carriage', at the starting point of the journey or en route, even if such passengers are included in the contract, it is virtually a 'stage carriage' with corridor restriction. In view of the provisions under the CMV Rules and the Motor Vehicles (All-India Permit for Tourist Transport Operators) Rules, 1993 (for brevity, 'All-India Permit for Tourist Operators Rules, 1993') made by the Central Government, in exercise of the rule making powers under subsection (14) read with sub-section (9) of Section 88 of the MV Act, 1988 a tourist vehicle covered by All-India Tourist permit shall carry only tourist passengers. Such a vehicle cannot be used to conduct regular service between two points, either as a stage carriage or as a contract carriage, carrying one set of passengers for the onward journey and another set of passengers for the return journey. 30. In **Sanithjan's case** it was contended that the power to suspend an All-India Tourist Permit issued under sub-section (9) of Section 88 of the MV Act by any Transport Authority other than the Transport Authority which granted the permit can be exercised only when power in this behalf has been delegated under sub-section (5) of Section 68 of the MV Act. Repelling the said contention, this Court held that, a rule made under Section 96 of the MV Act is required -41- W.P.(C). No. 4943 of 2017 only for delegation of the powers of the State Transport Authority and any Regional Transport Authority and no such rule is required for any Transport Authority exercising the powers exercisable under sub-section (1) of Section 86 (other than the power to cancel a permit) by the Transport Authority which granted the permit, in relation to a permit referred to in sub-section (9) of Section 88. 31. In **Sanithjan's case** it was contended that the power under Section 206 of the MV Act to impound documents can be exercised only by police officers and not by the Assistant Motor Vehicle Inspectors in the Motor Vehicles Department. After referring to the provisions under Section 213 of the MV Act and Rules 228, 231, 348 and 351 of the Kerala Motor Vehicles Rules, 1989 this Court repelled that contention by holding that the power under Section 206 of the MV Act to impound document can be exercised by officers of the Motor Vehicles Department not below the rank of Assistant Motor Vehicle Inspector. 32. In **Sanithjan's case** it was contended that the power under Section 207 of the MV Act to detain vehicles used without certificate of registration, permit, etc. can be exercised only by police officers and not by the Assistant Motor Vehicle Inspectors in the Motor Vehicles Department. After referring to the provisions -42- W.P.(C). No. 4943 of 2017 under Section 207 of the MV Act and Rule 351 of the Kerala Motor Vehicles Rules this Court held that the power under Section 207 of the MV Act to detain vehicles used without certificate of registration, permit, etc. can be exercised by officers of the Motor Vehicles Department not below the rank of Assistant Motor Vehicle Inspector. 33. In **Sanithjan's case** it was contended that, as held by the Apex Court in **Noorulla Khan's case [(2004) 6 SCC 194]** the Rules framed by the Central Government under sub-section (14) of Section 88 of the MV Act alone would be applicable to vehicles covered by All-India Tourist permits and not the rules framed by the State Government under Sections 95 and 96 of the MV Act. Repelling the said contention, this Court held that, as per clause (b) of sub-section (14) of Section 88 of the MV Act, the rules made by the Central Government may provide for all or any of the matters enumerated sub-clauses (i) to (v) thereof. Therefore, in respect of matters the matters enumerated in sub-clauses (i) to (v) of clause (b) of subsection (14) of Section 88 of the MV Act, the power to frame rules and prescribe conditions for All-India Tourist Permit is exclusively vested in the Central Government and the State Government would have no jurisdiction to either frame the Rules or prescribe conditions for All-India Tourist Permits. The law laid down -43- W.P.(C). No. 4943 of 2017 by the Apex Court in **Noorulla Khan's case** was in the context of clause (c) of sub-rule (1) of Rule 297A and clause (f) of sub-rule (6) of Rule 297A of the Andhra Pradesh Motor Vehicles Rules (extracted hereinbefore at Para. 10), whereby certain further conditions were prescribed in addition to the permit conditions prescribed in Section 74 of the MV Act. Section 68 of the MV Act authorises the State Government to constitute Transport Authorities. Sub-section (5) of Section 68 deals with delegation of powers of the State Transport Authority and Regional Transport Authority in terms of the Rules made under Section 96 of the MV Act. Any rule framed by the State Government in this regard, does not prescribe any conditions of the All-India Tourist Permits. Moreover, as per sub-section (3) of Section 213 of the MV Act, the State Government may make rules to regulate the discharge by officers of the Motor Vehicles Department of their functions, the duties to be performed by them, the powers (including the powers exercisable by police officers under this Act) to be exercised by them, the conditions governing the exercise of such powers, etc. The Rules framed by the State Government in this regard are applicable to tourist vehicles covered by All-India Tourist Permit. 34. In **Sanithjan's case** on the question of inspection of -44- W.P.(C). No. 4943 of 2017 vehicles covered by All-India Tourist Permit by the officials of the Motor Vehicles Department in State of Kerala this Court held as follows in paragraph 18 of the judgment; “18. Inspection of vehicles covered by All-India Tourist Permit by the officials of the Motor Vehicles Department in State of Kerala:- 18.1. As already noticed hereinbefore, the officers of the Motor Vehicles Department not below the rank of Motor Vehicle Inspector have the power to impound documents under Section 206 of the MV Act and also to detain vehicles used without certificate of registration, permit, etc. under Section 207 of the said Act, in view of the provisions under Rules 228, 229, 231, 348, 351, etc. of the KMV Rules, which are made in exercise of the rule making power of the State Government under sub-section (3) of Section 213 of the MV Act. As per the provisions under sub-section (1) of Section 192A of the MV Act, whoever drives a motor vehicle or causes or allows a motor vehicle to be used in contravention of the provisions of sub-section (1) of Section 66 or in contravention of any conditions of permit relating to the route on which or the area in which or the purpose for which the vehicle may be used, shall be liable to be punished as provided in sub-section (1). When any contravention of the conditions of permit relating to the purpose for which the vehicle may be used is noticed, it is for the officers authorised in this regard, including the officers of the Motor Vehicles Department not below the rank of Assistant Motor Vehicle Inspector to inspect the vehicle and collect necessary materials to initiate -45- W.P.(C). No. 4943 of 2017 prosecution against the offender. As per sub-section (1) of Section 231 of the KMV Rules, the authorised officer is entitled to call upon the driver of a public service vehicle to stop the vehicle and keep it at rest for such time as may be necessary to enable him to make reasonable examination of the number of passengers and other contents of the vehicle so as to satisfy himself the provisions of the MV Act and the Rules made thereunder and also the provisions and conditions of the permit in respect of that vehicle are being complied with. 18.2. In **Ajithkumar v. Director General of Police [2003 (1) KLT 671]** , this Court noticed direction No.17/2002 dated 17.10.2002 issued by the Director General of Police for safeguarding the convenience and interest of the travelling public as well as the operators at the time of inspection of public service vehicles. The Transport Commissioner, Kerala, has also issued Circular No. 8/2010 dated 30.09.2010 in this regard. Therefore, the officers of the Motor Vehicles Department shall ensure that the inspection of public service vehicles, including vehicles covered by All-India Tourist Permits are conducted causing least inconvenience to the travelling public and also the operators.” 35. In the instant case, as already noticed, going by the averments in the writ petition, the petitioners are conducting regular operation of trips between Bangalore and Kannur/ Thalassery on the strength of Exts.P1 and P3 permits granted under sub-section (9) of Section 88 of the MV Act. In view of the law laid down in the -46- W.P.(C). No. 4943 of 2017 decisions referred to supra, a tourist vehicle covered by All India Tourist Permit shall carry only genuine tourist passengers and shall not carry regular passengers/commuters going from one place to another for purposes other than tourism. Since the grant of All India Tourist Permits are designed to promote all-India and inter-State tourist traffic, a vehicle covered by All India Tourist Permit cannot be used to conduct regular service between two points, either as a stage carriage or as a contract carriage, carrying one set of passengers for the onward journey and another set of passengers for the return journey. In view of the provisions under sub-section (1) of Section 207 of the MV Act, the 1[st] respondent is duly authorised to detain a motor vehicle used in contravention of any conditions of the permit relating to the route on which or the area in which or the purpose for which that vehicle may be used. Since the vehicles covered by Exts.P1 and P3 tourist permits were being operated by the petitioners in violation of permit conditions, the 1[st] respondent rightly issued Exts.P5 and P6 notices. 36. In the result, the petitioners are not entitled for any of the reliefs sought for in this writ petition. The writ petition fails and the same is accordingly dismissed. No order as to cost. 37. Consequently, the interim order granted on 14.02.2017 is -47- W.P.(C). No. 4943 of 2017 hereby vacated. It is for the competent among the respondents to initiate further proceedings against the petitioners pursuant to Exts.P5 and P6 notices. Sd/- **ANIL K. NARENDRAN JUDGE** **das** ## **APPENDIX** ## **PETITIONER'S/S EXHIBITS:** |**EXHIBIT P1**|**TRUE COPY OF THE ALL INDIA PERMITS ISSUED BY**| |---|---| ||**THE STATE TRANSPORT AUTHORITY, BANGALORE ON**| ||**06-01-2017 AND VALID UPTO 05-01-2022.**| |**EXHIBIT P2**|**TRUE COPY OF THE TAX TAKEN ISSUED BY THE 3RD**| ||**RESPONDENT IN THE NAME OF THE 1ST PETITIONER**| ||**EVIDENCING PAYMENT OF RS.1/- LAKHS AS MOTOR**| ||**VIHICLE TAX.**| |**EXHIBIT P3**|**TRUE COPY OF THE ALL INDIA PERMIT ISSUED BY**| ||**THE STATE TRANSPORT AUTHORITY, BANGALORE ON 5-**| ||**1-2017 AND VALID UPTO 04-01-2022.**| |**EXHIBIT P4**|**TRUE COPY OF THE TAX TOKEN ISSUED BY THE 3RD**| ||**RESPONDENT IN THE NAME OF THE 2ND PETITIONER**| ||**EVIDENCING PAYMENT OF RS.1,20,000/- AS MOTOR**| ||**VIHICLE TAX.**| |**EXHIBIT P5**|**TRUE COPY OF THE NOTICE DATED 30-01-2017**| ||**ISSUED BY THE 1ST RESPONDENT TO THE DRIVER OF**| ||**THE 1ST PETITIONER.**| |**EXHIBIT P6**|**TRUE COPY OF THE NOTICE DATED 30-01-2017**| ||**ISSUED BY THE 1ST RESPONDENT TO THE DRIVER OF**| ||**THE 2ND PETITIONER.**| |**EXHIBIT P7**|**TRUE COPY OF THE NEWS ITEM REPORTED IN LOCAL**| ||**MALAYALAM DAILY MALAYALA MANORAMA KANNUR**| ||**EDITION DTED 31-01-2017.**|