AIR 1978 MP 116
(liability of a partner for bad reputation)
The scope for the grant of a carriage permit along a certain fixed route was declared. Earlier to this, the permit was granted to Motor Transport Worker (MT), but was cancelled due to non-operation. In response to the declaration, the petitioner (Janta Transport Co-operative Society, JT), MT and Harban Singh (R3) applied for the grant of the permit.
The applications were published, inviting objections. JT filed objection against the application of R3 and MT and succeeded in obtaining the permit. R3 filed an appeal against this in the State Transport Appellate Tribunal. Before the Tribunal JT established that the MT, whose permit on the route was cancelled earlier, was, in fact, a partnership firm, consisting of four partners, the petitioner(JT) being one of them, and that the partnership firm had been dissolved before JT filed the application for the route in question. Therefore, any bad reputation of the main firm (MT) could not be associated with them. JT also showed that R3 was not a suitable person for the grant. The Tribunal, however, granted the permit to R3.
Issues: Is the petitioner (JT) as an individual different from the firm of which he was once a partner?
- Tribunal wrongly took the petitioner to be the proprietor of the MT which, in fact, was a partnership firm.
- The past bad record of that partnership could not be taken into consideration against the petitioner as he had applied for the permit in his individual capacity.
- Section 127-A of the Motor Vehicles Act is applicable.
R3, Harban Singh
- JT was the proprietor of MT. It was the lapses on the part of JT in his individual capacity which had resulted in the cancellation of the permit.
High Court (S.S. SHARMA, J.)
- Section 127-A, even though applicable, goes against the petitioner.
- The main basis on which the permit is granted is interest to the public. The bad operational record of a partnership firm is a relevant fact when any of the partners of that firm applies for a grant of permit.
The case was placed before the division bench.
 if the person contravening any provisions of the Act is a company, then every person who, at the tune the offence was committed, was incharge of and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly.