High Court of KeralaSingle Judge2013-10-09Writ petition allowed; no costs.

William Mohandas v. Joint Regional Transport Officer, Chittur; Joint Regional Transport Officer, Palakkad; State of Kerala; Kerala Motor Transport Workers' Welfare Fund Board

Case / Petition Number:WP(C).No.21304 of 2013 (K)

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: K. Vinod Chandran
Judgment Date: 2013-10-09
Court Decision / Holding: The writ petition is allowed. No costs. The petitioner is directed to approach the District Executive Officer, Palakkad, of the Welfare Fund Board with an application to determine whether the subject vehicle was liable to be covered under the Welfare Fund Act, and to produce all relevant materials within two weeks. The District Executive Officer shall consider the issue and pass a speaking order within three months from receipt of the application, after giving notice to the Company and providing an opportunity of personal hearing to the petitioner. In the meantime, the petitioner may operate the vehicle, and tax authorities shall either accept the tax or grant exemption, if an exemption is filed under law, without insisting on the clearance certificate under Section 8A of the Welfare Fund Act. The Court has not expressed any opinion on the Taxation Act exemption, but the Welfare Fund authority shall give due consideration to its observations.
Final Disposition: Writ petition allowed; no costs.

Parties to the Case

Appellants / Petitioners

William Mohandas

Respondents

The Joint Regional Transport Officer, Chittur
The Joint Regional Transport Officer, Palakkad
The State of Kerala represented by the Secretary to Government, Department of Transport, Government Secretariat, Thiruvananthapuram
Kerala Motor Transport Workers' Welfare Fund Board, represented by the Chief Executive, Palakkad

Legal Representation & Advocates

Counsels for Petitioners

• Sajan Varghese K. S.
• Liju M.P.

Counsels for Respondents

• M. Muhammed Shafi (Senior Government Pleader)
• K.S. Manu (Punukkonnoor) - Standing Counsel

Case Synopsis & Summary

The petitioner, William Mohandas, challenged the denial by the Joint Regional Transport Officers at Chittur and Palakkad, and the State, of a transfer of ownership of tractor KL-09/E-3311 from Co-operative Sugars Limited (subsequently reconstituted as Malabar Distilleries Limited) to him. The vehicle had been purchased by the petitioner after a tender process, evidenced by Exhibit P1 (tender confirmation), Exhibit P2 (cash receipt), and a gate pass. Registration transfer was refused unless the petitioner produced a Clearance Certificate from the Kerala Motor Transport Workers’ Welfare Fund Board under Section 8A of the Welfare Fund Act, and the related tax exemption under the Kerala Taxation Act was also not granted. The petitioner argued that since the vehicle served agricultural operations and Taxation Act Section 21 granted tax exemption for agricultural use, similar relief should be available under the Welfare Fund Act, with the argument that the vehicle’s primary use was agricultural and not for hire or reward, thus not falling within the Act’s ambit. The court noted that duties under Welfare Fund Act hinge on the definition of motor transport undertaking and recognized that prior precedents (including a Single Judge decision in Exhibit P6) held tractors used for agricultural purposes not to fall within the Act. It directed the petitioner to pursue coverage under Welfare Fund Act through the District Executive Officer, with a speaking order within three months, while allowing operation of the vehicle in the interim and not prejudging Taxation Act exemptions. The petition was allowed, with no costs.

Provisions of Law Cited

Motor Vehicles Act, 1988Kerala Motor Transport Workers' Welfare Fund Act, 1985Section 8A of Welfare Fund ActSection 2(h) of Welfare Fund ActSection 4 of Welfare Fund ActSection 21 of Kerala Taxation Act, 1976Taxation Act, 1976Employees' Provident Funds and Miscellaneous Provisions Act, 1952Payment of Gratuity Act, 1972

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioner contends that transfer of ownership should not be hindered by a clearance under the Welfare Fund Act where the vehicle is used for agricultural purposes and tax exemptions were granted under the Taxation Act for such use. He argues that the Welfare Fund Act’s definition of motor transport undertaking does not automatically include tractors used essentially for agriculture, and relies on precedents (including a prior Kerala High Court judgment) that tractors used for agricultural purposes are not covered by the Welfare Fund Scheme. Since the vehicle’s prior owner was a public sector undertaking, the petitioner asserts that the Board’s insistence on Section 8A clearance is improper in light of tax exemptions andEssentials of agricultural use. He seeks transfer despite the lack of Welfare Fund contributions by the previous owner and asks for registration to be transferred upon exemption or non-applicability of Welfare Fund dues.

Contentions of Respondents

The respondents argue that Welfare Fund contributions are mandated for motor transport undertakings, and transfer cannot be effected without clearance under Section 8A. They emphasize that the vehicle belonged to a company and that the welfare fund regime cannot be bypassed by tax exemptions. They rely on the literal terms of the Welfare Fund Act and the need for due process (including hearing) before determining coverage, especially given that the owner was a public sector entity. They maintain that the Act’s ambit includes vehicles used for hire or reward and that exemptions under other Acts do not automatically exempt Welfare Fund dues. They also rely on doctrinal precedents that may require caution in extending exemptions beyond statutory criteria.

Cited Precedents (1)

Case Name	Citation	Treatment	Explanation
Hymavathi v. Special Deputy Tahsildar	2008 (3) KLT 807	Positive	Division Bench decision cited to support the proposition that certain agricultural-use tractors may not fall within the Welfare Fund Act’s ambit; the judgment is used to justify the potential non-applicability of Welfare Fund contributions in this context.

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Extracted Judgment Text

Exact text extracted from official judgment records.

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN WEDNESDAY, THE 9TH DAY OF OCTOBER 2013/17TH ASWINA, 1935 ## **W.P.(C).No.21304 of 2013 (K)** --------------------------------------------------- PETITIONER(S): -------------------------- WILLIAM MOHANDAS, S/O.LATE YOGAPPAN, GNANI HOUSE, PALANIYARPALAYAM, KOZHINJAMPARA P.O., PALAKKAD DISTRICT. BY ADVS.SRI.SAJAN VARGHEESE K. SRI.LIJU. M.P. ## RESPONDENTS:- - ---------------------------- 1. THE JOINT REGIONAL TRANSPORT OFFICER, CHITTUR - 678 101. 2. THE JOINT REGIONAL TRANSPORT OFFICER, PALAKKAD - 678 001. 3. THE STATE OF KERALA, REPRESENTED BY THE SECRETARY TO GOVERNMENT, DEPARTMENT OF TRANSPORT, GOVERNMENT SECRETRIAT, THIRUVANANTHAPURAM - 695 001. 4. KERALA MOTOR TRANSPORT WORKERS' WELFARE FUND BOARD, REPRESENTED BY THE CHIEF EXECUTIVE, PALAKKAD - 678 001. R1 TO R3 BY SENIOR GOVERNMENT PLEADER M.MUHAMMED SHAFI. R4 BY STANDING COUNSEL SRI.K.S.MANU (PUNUKKONNOOR). THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 09-10-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:- vku/ WP(C).No.21304 of 2013 (K) --------------------------------------- ## **APPENDIX** PETITIONER'S EXHIBITS:- -------------------------------------- - EXHIBIT P1. TRUE OF THE TENDER CONFIMATION LETTER DATED 8/2/2013 ISSUED BY MALABAR DISTILLERIES LTD., MENONPARA. - EXHIBIT P2. TRUE OF THE CASH RECEIPT DATED 27/3/2013 ISSUED BY MALABAR DISTILLERIES LTD. - EXHIBIT P3. TRUE OF THE GATE PASS DATED 28/3/2013 ISSUED BY MALABAR DISTILLERS LTD. - EXHIBIT P4. TRUE OF THE PAGES NO.2, AND 3 OF THE RC BOOK BELONGING TO THE VEICLE KL-9E-3311 IN THE NAME OF CO-OPERATIVE SUGARS LTD., CHITTUR. - EXHIBIT P5. TRUE OF THE JUDGMENT DATED 27/7/2010 PASSED IN WP(C).NO.179/2010 ON THE FILE OF THIS HONOURBLE COURT. - EXHIBIT P6. TRUE OF THE JUDGMENT DATED 9/3/2011 PASSED IN WP(C).NO.7285/2011 AND CONNECTED CASES. - EXHIBIT P7. TRUE OF THE JUDGMENT DATED 29/3/2012 PASSED IN WP(C).NO.7897/2012 ON THE FILE OF THIS HONOURABLE COURT. - EXHIBIT P8. TRUE COPY OF THE RC BOOK (PAGES NO.1 TO 21) OF KL-09 E 3311, TRACTOR. - EXHIBIT P9 TRUE COPY OF EXTS.P1 AND P2 IN WP(C).NO.7380/2011 ON THE FILE OF THIS HON'BLE COURT. - EXHIBIT P10 TRUE COPY OF EXTS.P1 AND P2 IN W.P.(C).NO.7285/2011 ON THE FILE OF THIS HON'BLE COURT. - EXHIBIT P11 TRUE COPY OF EXT.P1 IN WP(C).NO.3373/2011 ON THE FILE OF THIS HON'BLE COURT. - EXHIBIT P12 TRUE COPY OF THE DEED NO.716/1991 OF SRO, KOZHINJAMPARA. EXHIBIT P13 TRUE COPY OF DEED NO.722/1991 OF SRO, KOZHINJAMPARA. RESPONDENTS' EXHIBITS:- --------------------------------------NIL. ( TRUE COPY) K. Vinod Chandran, J. ------------------------------------- W.P.(C).No.21304 of 2013-K -------------------------------------Dated this the 09[th] day of October, 2013 ## **JUDGMENT** The petitioner is aggrieved by the denial of the Registering Authority under the Motor Vehicles Act, 1988 (for brevity “M.V.Act, 1988”), refusing transfer of the tractor bearing registration No.KL-09/E-3311 from the name of Co-operative Sugars Limited, to his name. The tractor was owned by the Co-operative Sugars Limited, which later was reconstituted as “Malabar Distilleries Limited”; the Company being a public sector undertaking substantially owned by the Government of Kerala. The Company, which was the registered owner of the vehicle, published a tender for the sale of the same by Exhibit P1 and the petitioner purchased the vehicle, evidenced by Cash Receipt, Exhibit P2, and the Gate Pass issued by the Company for taking the vehicle out of the premises of the Company. However when the petitioner approached the Registering Authority for transfer of ownership in the Registration Certificate, the petitioner was informed that unless a Clearance Certificate issued by the Kerala Motor Transport Workers' Welfare Fund Board (hereinafter referred to as “the WP(C).No.21304/2013 **==> picture [28 x 12] intentionally omitted <==** Board”) under Section 8A of the Kerala Motor Transport Workers' Welfare Fund Act, 1985 (for brevity “Welfare Fund Act”) is produced, the transfer of registration will not be effected. The request of the petitioner to accept the tax for the vehicle under the provisions of the Kerala Motor Vehicles Taxation Act, 1976 (for brevity “Taxation Act”) was also declined on the very same ground. Hence, the petitioner's vehicle is garaged and he is unable to use the same. 2. I have heard the learned counsel for the petitioner Sri.Sajan Varghese.K. and the learned Standing Counsel for the 4[th] respondent-Board Sri.K.S.Manu as also the learned Government Pleader Sri.M.Muhammed Shafi. 3. Admittedly the vehicle was never assessed under the Welfare Fund Act and no contributions were paid by the Company also, which was owning the vehicle from the year 1997 onwards. In fact after the purchase of the vehicle, it is seen that the Company had not paid any tax, under the Taxation Act, since it was granted an exemption from such payment of tax under Section 21 of the Taxation Act with effect from 31.01.1998. The exemption granted is evident from page 9 of the Registration Certificate, produced as Exhibit P8 in the writ petition. The exemption is for the reason that the vehicle is used for agricultural operation relating to food crops. WP(C).No.21304/2013 - 3 - 4. The exemption granted under Section 21, is for any tractor, trailer, or tractor-trailer combination solely used for agricultural operations. It is the contention of the petitioner that if the tax itself has been exempted for reason of the use of the vehicle solely for agricultural purposes, then there is no reason why a similar exemption should not be granted under the Welfare Fund Act, going by the definition of the “motor transport undertaking” and the binding precedents on the subject. It is to be noticed that the petitioner herein, is not claiming exemption from payment of tax in respect of the vehicle, but from payment of the alleged Welfare Fund dues that too by the former owner of the vehicle. Under the Welfare Fund Act, “motor transport undertaking” is defined under Section 2(h) as a 'motor transport undertaking engaged in carrying passengers or goods or both by road for hire or reward and includes a private carrier'. A learned Single Judge of this Court has interpreted the provisions of the M.V.Act as also the Welfare Fund Act and has held so, in Exhibit P6 judgment: “It has therefore to be necessarily held that the drivers engaged by the petitioners to operate their tractors which are essentially used for agricultural purposes and are not used to carry goods or passengers for hire or reward cannot be said to be covered by the - 4 - WP(C).No.21304/2013 provisions of the Kerala Motor Transport Workers Welfare Fund Act, 1985”. In such circumstance, if the tractor is used essentially for agricultural purposes and is not used to carry goods or passengers for hire or reward, the same cannot be covered by the Welfare Fund Scheme, is the submission of the petitioner. 5. As noticed above, the essential use of the vehicle is revealed from the exemption granted by the Taxation Authority under the Taxation Act under Section 21 of that Act. Hence, it is the contention that there is a presumption that even when the vehicle was being used by the Company, the same was used solely for agricultural purposes and was not used for carrying goods or passengers for hire or reward and, hence, an exemption has to be granted under the Welfare Fund Act also, going by the binding precedent of this Court. Since the authority under the Welfare Fund Act has not considered the issue, it would be premature for this Court to enter into a finding, since then necessarily the facts would have to be looked at and a roving enquiry is necessary into the use of the vehicle which was carried on by the Company at the respective time for which the Welfare Fund contributions are now said to be in default. This exercise is not possible in the present proceedings under - 5 - WP(C).No.21304/2013 Article 226 of the Constitution. 6. Further it is also to be noticed that the prior owner of the vehicle is a public sector undertaking and may not come within the definition of a “motor transport undertaking” as defined under the Act. Moreover, contributions to the fund are stipulated by sub-sections (1) and (2) of Section 4 of the Welfare Fund Act and by provisos to the said sub-sections exemption is provided to a motor transport undertaking covered under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (for brevity “EPF Act”) and Payment of Gratuity Act, 1972 (for brevity “Gratuity Act”), respectively. This issue is no longer res integra, and the position is declared by the Division Bench decision of this Court in **Hymavathi v. Special Deputy Tahsildar [2008 (3) KLT 807]** . The Company was not made a party when the writ petition was filed and though an impleading petition is filed, today the matter itself was heard. In any event, in the context of this Court remanding the matter to the original authority, there is no purpose served in hearing the Company in the writ proceedings. 7. In such circumstance, there shall be a direction to the petitioner to approach the District Executive Officer, Palakkad, of the 4[th] respondent-Board with an application for considering whether the - 6 - WP(C).No.21304/2013 subject vehicle was liable to be covered under the Welfare Fund Act and shall produce all relevant materials in support of his case, within a period of two weeks from the date of receipt of a copy of this judgment. The District Executive Officer shall consider the issue and pass a speaking order within a period of three months from the date of receipt of the application, after issuing notice to the Company and giving an opportunity of personal hearing to the petitioner. In the meanwhile, it is deemed fit that the petitioner shall be permitted to operate the vehicle and the taxation authorities under the Taxation Act shall either accept the tax or grant exemption; if an application for exemption from payment of tax is filed, in accordance with law; without insisting for the clearance certificate under Section 8A of the Welfare Fund Act. It is made clear that this Court has not expressed any opinion on the exemption under the Taxation Act, but the authority under the Welfare Fund Act shall give due consideration to the observations of this Court under the Welfare Fund Act. The writ petition is allowed. No costs. Sd/- K.Vinod Chandran Judge. vku/- ( true copy )