Locus standi in permit transfer disputes: a direct derivative interest can justify objections in company-held transport permits.

A proposed transfer of a stage carriage permit standing in a company's name may be open to objection by a person with a direct derivative interest, not only by the transferor and transferee. The Madras HC noted that section 82(1) of the Motor Vehicles Act, 1988 and the Tamil Nadu Motor Vehicles Rules generally contemplate notice and enquiry between the parties to the transfer, but that position is different where the permit is held by a company and the objector claims an inherited interest linked to a deceased director's substantial shareholding. Because the transfer and sale could affect company assets and the value of the share interest, the third respondent was entitled to be heard and had locus standi to object.

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Issues: Whether the third respondent had locus standi to object before the Transport Authority to the proposed transfer of a stage carriage permit standing in the name of a company.

Analysis: Section 82(1) of the Motor Vehicles Act, 1988 and the relevant Tamil Nadu Motor Vehicles Rules contemplate notice and enquiry primarily between the transferor and transferee, but that position applies where the permit stands in the name of an individual permit-holder and the objection is by a stranger to the permit. Here, the permit stood in the name of the company, and the third respondent claimed a direct derivative interest as the legal heir of a deceased director who had held a substantial shareholding. The right asserted by her was not a remote or unrelated claim, because the proposed transfer of the permit and sale of the bus could affect the company's assets and the value of the inherited share interest. The Court also noted the pending dispute regarding corporate control and the prior agreement concerning the deceased director's share value.

Conclusion: The third respondent was entitled to be heard and had locus standi to raise objections in the enquiry under section 82(1) of the Motor Vehicles Act, 1988.

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