P. Ramakrishnan, 3, 8th St, Ashok Nagar, Chennai 83 and 2 others vs The Motor Vehicles Inspector Valasaravakkam Unit Office, Valasaravakkam., Chennai and another

Jagadeesan, J.—Since the issue involved in these writ petitions are common, the writ petitions are taken up for joint disposal.

The prayer in the writ petition is for the issue of a writ of mandamus forbearing the respondents from demanding or collecting compounding fee

in respect of the petitioners vehicles.

It is the case of the petitioners that their vehicles have been checked by the checking Squad and the charge memo has been issued for the

contravention of the conditions mentioned in the charge memo in the respective cases. After furnishing the charge memo, without passing any final

orders as required u/s 86 of the Motor Vehicles Act the respondents are compelling the petitioners to pay the compounding fee.

The Learned Government Pleader, on behalf of the respondents submitted that the petitioners have paid the compounding fee in respect of one

of the charge memos and further agreed to pay the compounding fee in respect of other charge memos. The conduct of the petitioners will amount

to the acceptance of their guilt in respect of the offences or the contraventions mentioned in the charge memos and as such there is no need for the

respondents to issue show-cause notice and pass final orders, as contemplated u/s 86 of the Motor Vehicles Act.

I carefully considered the contention of both the counsel. Section 86 of the Motor Vehicles Act deals with the cancellation or suspension of

permits. Under the said provision the Transport Authority is empowered either to cancel or suspend the permit of the vehicle on the breach of any

of the conditions specified in Section 84 of the Motor Vehicles Act or any of the conditions contained in the permit. The proviso to Section 86(1)

of the Motor Vehicles Act contemplates that the permit holder should be given an opportunity to furnish his explanation before ever the permit is

suspended or cancelled. Sub-section (5) of Section 86 empowers the authority to levy the compounding fee instead of cancelling or suspending the

permit u/s 86(1)(a) or (b) or (c) of the said Act. In view of this provision, there is no doubt that when the charge memo had been issued in respect

of the contravention of the condition to the permit or the contravention of the conditions specified in Section 84 of the Act, then the authorities have

to issue a show- cause notice to the permit holder, requesting him to submit his explanation. After the receipt of such explanation from the permit

holder the authorities are duty bound to consider the explanation and if they are satisfied with the explanation they can refrain from pursuing the

matter. If the authorities are not satisfied with the explanation of the permit holder then necessarily they have to take action u/s 86(1) of the Act

either to cancel or to suspend the permit, depending upon the nature of the contravention made by the permit holder. Only in lieu of the suspension

or cancellation of the permit, the authority can collect the compounding fees.

The Government Pleader produced the files in all the cases. Except the statement of the petitioners that they are paying the compounding fee in

respect of one or the other charge memo and seeking for further time to pay the compounding fee in respect of the remaining charge memos. There

is nothing on record to show that the procedure laid down u/s 86 of the Motor Vehicles Act had been followed. Merely because the petitioners

have agreed to pay the compounding fee, it cannot be said that they have admitted their guilt especially when the compounding, fee has been, paid

subsequent to the filing of the writ petition.

When there is no unequivocal admission on the part of the petitioners, the respondents are expected to discharge their functions in accordance

with the procedure laid down under the Statute. Admittedly in these cases no show-cause notice has been issued to the petitioners and the

petitioners did not submit any explanation and no final order with regard to the cancellation or suspension of the permit has been made by the

respondents. In the absence of any final orders regarding the suspension or cancellation of the permit the compounding fee itself cannot be levied

or collected.

Further it could be seen from sub-section (5) of Section 86 of the Act, that only after coming to the conclusion that the permit is to be cancelled

or suspended the authority can fix the compounding fee as agreed upon. Hence before ever any final orders are passed subsequent to the charge

memo, it is not open to the authorities to demand the compounding fee unless and until the permit holders in unequivocal terms admit their guilt of

contravention of the conditions of the permit and agreed to pay the amount immediately on receipt of the charge memo.

For the reasons stated above, I am of the view that the respondents cannot be permitted to demand the compounding fee merely on the basis of

the charge memo served on the petitioners. Hence the writ petitions are allowed and the respondents are directed to proceed with the charge

memo by issuing a show-cause notice, as required under the proviso to Section 86(1) of the Motor Vehicles Act and thereafter pass final orders

and demand the compounding fee. There will be no order as to costs.