1. Petitioner seeks to quash the order of the first respondent dated 15.5.2006 granting Mini Bus permit to the second respondent.

2. Brief facts necessary for disposal of the writ petition as stated in the affidavit in support of the writ petition are as follows.

(i) The second respondent was issued with a Mini Bus Permit (Stage carriage permit) to play between Gandhinagar and Pandu-kudi. Second respondent had raised loan from the TIIC and because of his incapacity to run the bus, he sustained huge loss and therefore the second respondent offered the transfer of permit to the petitioner.

(ii) Petitioner applied for transfer of Mini Bus Permit from the second respondents name to his name and the first respondent by proceeding dated 29.12.2005 approved and accepted the transfer of permit with effect from 28.12.2005 and issued necessary orders. Thus, the Stage Carriage Permit TN-65-B-8154 for the Mini Bus route Gandhinagar - Pandukudi stands transferred in the name of the petitioner with effect from 28.12.2005 and the second respondent is no longer the permit holder.

(iii) Petitioner replaced the vehicle TN-65-B-8154 with another vehicle with registration No. TN-65-E-9491 and it was also approved by the first respondent on 1.3.2006.

(iv) Petitioner further states that the second respondent was issued with the stage carriage permit by the first respondent on 7.12.2000. Petitioner purchased the permit at the cost of Rs.8,05,000/-, which includes loanamount of Rs.4,80,000/-. The transfer of Permit was effected as per the joint application submitted to the first respondent by the petitioner and second respondent on 21.11.2005 and in the application for transfer, the second respondent has stated that he finds it very difficult to run the vehicle efficiently and therefore he is transferring the permit in the name of the petitioner.

(v) It is averred in the affidavit that recently the second respondent approached the petitioner and stated that he has got fresh new Mini Bus Permit to ply between Pandukudy to Gandhinagar, which is the reverse direction of the existing Mini Bus Permit, which the petitioner is now having from 28.12.2005. Petitioner made enquiry in the first respondent office and came to know that the second respondent has applied for second permit even though he sustained loss while plying vehicle with the first permit and he suppressed the fact of his selling of the first permit to the petitioner and also the fact of incurring huge loss.

(vi) The first respondent rejected the second respondents request by order dated 29.1.2005 against which he filed appeal before the STAT in Appeal No.100 of 2005, suppressing the fact of sale of his permit to the petitioner. The Tribunal by order dated 23.12.2005 and remitted the matter to the Lower authority for fresh disposal according to law and the certified copy of the order was made ready and delivered to the second respondent on 30.1.2006. Thereafter the second respondent filed W.P. No.3142 of 2006 before the Principal Bench of this Court alleging that the first respondent has not passed orders implementing the order of STAT. The Principal Bench, by order dated 6.2.2006 directed the first respondent to pass orders as directed by the STAT, preferably within eight weeks from the date of receipt of copy of the order. Thereafter, the first respondent granted mini bus permit to the second respondent on 15.5.2006 and the same is challenged in the writ petition.

3. The first respondent filed a counter affidavit wherein it is stated that the second respondent herein applied for transfer of permit on 21.11.2005 and the same was ordered by the first respondent under Section 82(1) of the Motor Vehicle Act, 1988 read with Rule 208 of Tamil Nadu Motor Vehicle Rules, 1989. It is also stated that the second respondent applied for new mini bus permit on 27.6.2005 to ply in the same routs, for which he was already having permit and the application was pending and the Transport Commissioner by D.O.Letter dated 5.8.2004 instructed the first respondent to dispose of the Mini Bus Permit application according to merits. Second respondent submitted his willingness to proceed with action in his application and thereafter the Motor Vehicle Inspector Grade-I, Ramanathapuram verified the genuineness of the applicants address, etc. who in turn submitted a report stating that the entire route applied for by the second respondent is totally served by the Tamil Nadu State Transport Corporation buses and private buses and therefore the norms prescribed in G.O.Ms.No. 995 Home (Tr-III) Department, dated 30.7.1998 is not fulfilled. Hence the application was rejected on 13.1.2005. Thereafter the second respondent preferred appeal before the STAT and the Tribunal by order dated 20.12.2005 directed to consider the matter afresh and thereafter second respondent filed W.P.No.3142 of 2006 and by order dated 6.2.2006 direction was issued to the first respondent to pass orders in terms of the STAT orders. Thereafter only the second respondent issued fresh mini bus permit on 15.5.2006 under Rule 18 of the Motor Vehicle Rules, which is impugned herein and the second respondent was given three months time for collection of records and at this stage this writ petition is filed.

4. The learned counsel appearing for the petitioner, argued that the grant of impugned permit to the second respondent is contrary to Section 71 of the Motor Vehicles Act, 1988, wherein it is stated that the Regional Transport Authority, while considering the application for Stage Carriage Permit is bound to consider the financial stability of the applicant as per Section 71(3)(d)(i) and under Rule 167 of the Tamil Nadu Motor Vehicle Rules, 1989. The Learned counsel also argued that the petitioner is the owner of the permit which was originally given to the owner of the permit which was originally given to the second respondent and the second respondent is no longer a permit holder and under G.O.Ms.No.1475 Home (Transport-III) Department, dated 28.10.1998, the Tamil Nadu Government issued guidelines for the issue of mini bus permit under clause 6. Ultimately the learned counsel submitted that as the second respondent is no longer a permit holder, he is not entitled to get any additional permit and also not entitled to get new permit because his financial status is not sound and therefore the grant of permit to the second respondent is liable to be set aside.

5. The learned counsel for the first respondent relying on the statement contained in the counter affidavit submitted that pursuant to the direction issued by the STAT and the directions in the earlier writ petition, the first respondent issued the impugned permit to the second respondent.

6. The learned counsel for the second respondent submitted that even though the second respondent transferred his earlier permit in favour of the petitioner, that is not a bar to apply for fresh permit and the first respondent is justified in issuing new permit to the second respondent.

7. I have considered the rival submissions made by the learned counsels appearing on either side.

8. This fact of grant of earlier permit to the second respondent, which was transferred to the petitioner due to financial strain of the second respondent and the grant of approval by the first respondent on 29.12.2005 are not disputed by the respondents. The Government of Tamil Nadu issued guidelines for the grant of Mini Bus Permit to the private operators in the rural areas in G.O.Ms.No. 1475 Home (Transport-III) Department, dated 28.10.1998 and in clause 6 of the said Government Order, it is stated as under.

6. The Government direct that the following guidelines be followed by all Regional Transport Authorities in the State in the matter of regulating mini bus permits.

(a) If the State Transport Undertakings operate four singles, two singles in the morning and two singles in the evening in a day in a particular route, for the purpose of school going children but not operating in other times, that route can be treated as unserved sector for the purpose of grant of permit for operation of mini buses on that route.

(b) If the State Transport Undertakings have operated their stage carriages previously, but now stopped the service for various reasons, that route can be declared as unserved sector for the purpose of operation of mini buses. If the State Transport Undertakings who were granted permit for a particular route but not operating their services within a period of three months that route can also be treated as unserved sector.

(c) Not more than three permits for mini buses can be granted for an operator.

(d) A person holding three permits for operation of mini buses can be allowed one spare mini bus.

(e) There shall not be any alteration of wheel base in the same type of vehicle.

(f) The respondent department should assess the potential of each and every route and fix the ceiling of the number of mini buses that may be operated depending on the traffic. The ceiling should be based on encouraging healthy competition.

(g) Other things being equal, preference shall be given to the applicants with the following qualifications or/and combination of qualification while granting permit for operation of mini bus.

(i) unemployed graduates

(ii) S.S.L.C. Passed and other higher qualifications.

(iii) Persons who are involved in social service.

(h) In the case of mini bus permit to ply in Hill areas, the overlapping distance of 4 Kms. In the approved route scheme can be extended upto 8 kilo meters.

(i) Six months time now allowed for the production of records for the issue of mini bus permit shall be reduced to 3 months.

(j) If the permits are granted for operation of mini bus, but not actually operated within three months from the date of issue of permit, the permit will automatically be treated as cancelled.

The above clause in the Government Order clearly says that not more than three permits for a Mini Bus Operator can be granted.

9. The second respondent having transferred the earlier permit issued in his favour to the petitioner, cannot be treated as an Operator on the date when his application for the second permit was considered/granted. Therefore the second respondent is not entitled to get new permit on the basis of existing Mini Bus permit holder.

10. The contention of the learned counsel for the petitioner that even if the grant of impugned permit is treated as new permit, the second respondent is not entitled to get the said permit in view of his financial instability as the same is a mandatory requirement for the grant of permit as per Section 71(3)(d)(i) of the Tamil Nadu Motor Vehicles Act, 1988 and Rule 167. At this juncture, I feel it is useful to extent the relevant portions of Section 71(3)(d)(i) and Rule 167, which read thus,

Section 71(3) - After reserving such number of permits as is referred to in clause (c), the Regional Transport Authority shall in considering an application have regard to the following matters, namely:-

(i) financial stability of the applicant.

Rule 167 - Stage carriage - grounds on which application can be rejected. - The Regional Transport Authority or the State Transport Authority, as the case maybe, may reject an application for the grant of a stage carriage permit on one or more of the following grounds, namely :-

(i) Financial instability as evidenced by insolvency or decree remaining unsatisfied as on thirty days prior tot he date of consideration of the application of failure to produce :

(a) In the case of a new entrant, a solvency certificate from an officer of the Revenue Department not below the rank of a Tahsildar for a sum of Rs.30,000 (Rupees thirty thousand only) :

Provided that purchase of a motor vehicle from money borrowed or under hire purchase agreement shall not be a disqualification by itself;

(b) in the case of others, a current clearance certificate in respect of income-tax and Motor Vehicles Tax :

Provided that this clause shall not apply in cases where the applicant is a State Transport Undertaking.

(ii) .

11. The second respondent in his application for transfer dated 21.11.2005 stated that he finds it very difficult to run the vehicle efficiently (as he was having a loan of Rs. 4.80 lakhs to the TIIC) and therefore he has sold the permit to the petitioner, which was also approved, by the first respondent by order dated 29.12.2005. Therefore the second respondents financial condition is not sound and that is the reason why the second respondent transferred his earlier permit to the petitioner. The sale of the earlier permit to the petitioner and the financial status of the petitioner was not appraised before the STAT and the order passed in the appeal has been obtained by the second respondent by suppression of facts. Therefore, I hold that the grant of permit by the first respondent in favour of the second respondent is without taking note of the sale of earlier permit in favor of the petitioner due to financial instability and non-consideration of the said fact before granting the subsequent permit by the first respondent vitiates the grant of impugned permit in favour of the second respondent.

12. In the result, the impugned permit dated 15.5.2006 granted in favor of the second respondent is quashed and the writ petition is allowed. No costs. Connected miscellaneous petitions are closed.