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TMI Blog2003 (12) TMI 440X X X X Extracts X X X X X X X X Extracts X X X X ..... en managing director, namely, Mr. S. Ramasamy resigned and on his resignation, his share was purchased by the son of the deponent as well the son of Mr. S.R. Subramaniam. The said S.R. Subramaniam was elected as managing director. Mr. S.R. Subramaniam died on December 11, 2000. It is the claim of the deponent that after the demise of the said S.R. Subramaniam, he became the managing director. The wife and son of the deceased Subramaniam became the directors. Two more directors were also appointed to the company and in all, there were six directors including the deponent as managing director. 2. Since the company faced financial crisis and was not in a position to operate the vehicle, majority of the board of directors decided to transfer the permit in favour of one M. Thangamani, the second respondent. Based upon the decision of the majority of the board of directors, the company filed a joint application for transfer of permit with the first respondent, the Regional Transport Authority, Erode, on June 25, 2003. A notice of hearing dated August 18, 2003, fixing the date of hearing on August 25, 2003, was issued by the first respondent. The said notice was issued both to the tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company on January 24, 2003 and the first petitioner was appointed as managing director and the second petitioner was allotted 100 equity shares in the company on August 2, 2002. They have also filed W.V.M.P. No. 2207 of 2003 seeking to vacate the interim injunction. 5. Considering the fact that the matter pertains to transfer of permit and the same requires immediate disposal, by consent of all the respective learned counsels appearing for the parties, the writ petition itself is taken up for disposal. 6. Mr. M. Palani, learned counsel for the petitioner would submit that after the death of S.R. Subramaniam, the then managing director, one Mr. S. Rasool, the deponent became the managing director. On and after December 11, 2000, viz., after the death of the then managing director by name S.R. Subramaniam, following are the directors of the company: 1. S. Rasool Managing director 2. Syed Khaja Nivas Director 3. Tmt. S. Parvatham W/o S.R. Subramaniam Director 4. S. Panneerselvam S/o S.R. Subramaniam Director 5. N. Muthukani Director 6. S. Kamalasekar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 990] 67 Comp. Cas. 607; that even the legal representative has a right over the permit, as such right is devolved on the third respondent from her father. He would also submit that without reference to the third respondent and without even conducting mandatory meeting, the brother of the third respondent and her mother were alone made as directors. Further, four new directors were appointed again without following the mandatory requirements. He would also submit that the decision of the board of directors to transfer the permit was not unanimous. In the circumstances, the third respondent would be an aggrieved person and has locus standi to object to the transfer of permit on valid grounds. 10. I have also heard Mr. N. Muralikumaran, learned counsel appearing for the petitioners to implead petition in W.P.M.P. No. 39169 of 2003. According to the learned counsel, the petitioners are admittedly the directors of the company even according to the deponent. They objected to the transfer of permit in the board s meeting. Therefore, they are necessary parties to the writ petition and they should be also heard before any transfer of permit is effected. Similarly, Mr. V. Subramanian, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the possession of the vehicles covered by the permit: Provided that the transport authority may entertain an application made after the expiry of the said period of three months if it is satisfied that the applicant was prevented by good and sufficient cause from making an application within the time specified." 13. Following are the relevant rules under the Tamil Nadu Motor Vehicles Rules, 1989, relating to the transfer of permit and the same reads as under: "208. Permit-transfer of. When the holder of a permit desires to transfer the permit to some other person under sub-section (1) of section 82, he shall together with the person to whom he desires to make the transfer make joint application in writing to the Transport Authority by which the permit was issued, setting forth the reasons for the proposed transfer. Fee for transfer of permit shall be as prescribed in the Table under rule 279. 209. Particulars of premium, etc. On receipt of an application under rule 208 the Transport Authority may require the holder and the other party to state in writing whether any premium, or payment of other consideration arising out of the transfer, is to pass, or has passed be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... feror and transferee and the enquiry contemplated under the said section is with a view to ascertain the question relating to trafficking in permit or qualification of the transferee for grant of new permit. Under the said section, the transferor and for that matter the applicants in the joint application are entitled to the notice. 16. With the above law kept in mind, it should be now considered as to whether the third respondent is entitled to object to the transfer of permit. It must be kept in mind that the above orders, heavily relied upon by learned counsel for petitioner, were passed in respect of the case where the transferor in whose name the permit individually stood intended to transfer the permit in favour of the transferee. Only in that context this court held that a third party who is no more interested in the permit and is not a permit holder is not entitled to be heard. The permit in that case was in the individual name of one Muthusami Thevar. His decision to transfer the permit in favour of his daughter-in-law, was questioned by one M. Doraiswami claiming himself to be his son. In the revision petitions, objections were sought to be made by a third party being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vehicles Act." 18. Since the permit stands in the name of the petitioner-company and not in the individual names of either the managing director or any one of the directors, the right of the third respondent should be considered with reference to her claim on the ground that she is the daughter of the then managing director who held nearly 50 per cent of the total shares of the company. Right of a legal heir even to maintain an application under sections 397 and 398 of the Companies Act, 1956 came up for consideration before the Apex Court in World Wide Agencies (P.) Ltd. [1990] 67 Comp. Cas. 607 /AIR 1990 SC 737. That was a case relating to the transmission of shares of the company more particularly, with regard to the illegal operation of the bank accounts, etc. A petition was filed under sections 397 and 398 of the Companies Act and in the alternative for winding up of the company by the respondents therein. The issue as to the maintainability of the petition by the persons who are not members of the company, as their names were not recorded in the register of members, ultimately came up for consideration before the Apex Court in the said judgment. The Apex Court posed two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they were not members." (p. 619) 19. The above paragraph is the authority as to the law in issue. The claim of the third respondent that she is the daughter of S.R. Subramaniam, the then managing director who held 50 per cent of the shares of the company is not disputed. Therefore, a right has devolved on her on the death of her father. Mr. M. Palani, learned counsel for the petitioner would, however, submit that in the case before the Apex Court, the name of the deceased member remained in the register. Therefore, in that context the Apex Court held that the legal representatives are entitled to maintain the petition. On the contrary, in this case, name of the deceased member, viz., S.R. Subramaniam is not in the register and therefore that judgment is not applicable to the facts of this case. The said submission is totally misconstrued. For the purpose of filing an application under sections 397 and 398 of the Companies Act, of course, the name of the member should remain in the register. Only in that context the Apex Court held that the petition was maintainable by the persons who are not members but claim to be the legal heirs of the member whose name is still in the reg ..... X X X X Extracts X X X X X X X X Extracts X X X X
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