Indian Kanoon - Search engine for Indian Law

No permission was sought for by Defendant as per Clause 27 of Agreement from RTA, under such circumstance, it cannot be said that, Agreement entered into between the parties is void.

(3) Hon'ble High Court of Karnataka proceeded on mistaken impression of facts while passing orders in W.P.No.7759-7760 of 2010. Hon'ble High Court did not take notice of Clause 27 of Agreement.

(4) Holding Issue No.1 in favour of Defendant by Arbitral Tribunal is without finding out whether Rule 127 of Karnataka AS.122/2014 Motor Vehicles Rules prohibits entering into agreement for advertisements on vehicles. Tribunal failed to take note of the fact that Rule 127 does not contemplate the prior permission being obtained for entering into advertisement agreement, under such circumstance, findings of learned Arbitrator that agreement is void ab-initio is vitiated and unsustainable in law.

AS.122/2014 REASONS

14) POINT NO.1 : This suit came to be filed by Plaintiff challenging the arbitral award dated 11.08.2014 passed by sole Arbitrator, whereby, learned Arbitrator was pleased to direct Plaintiff to pay a sum of 30,92,138/- towards due amount and Rs.26,13,661/- towards interest to Defendant.

15) Plaintiff's contention is that, arbitral Tribunal has erred in holding that Agreement dated 18.08.2008 is void ab initio in the absence of permission from the Regional Transport Authority (for brevity 'RTA'). It is contended that, Rule 127 of the Karnataka Motor Vehicles Rules only regulates the procedure to be followed in displaying the advertisement on the vehicles. It no way prohibits advertisements on the vehicles. But Defendant was trying to take advantage of the resolution made by RTA rejecting the application dated 12.08.2008. Rejection of application has nothing to do with Agreement dated 18.08.2008. No permission was AS.122/2014 sought for by Defendant as per Clause 27 of Agreement dated 18.08.2008 and under such circumstances, it cannot be said that contract entered into between the parties is void.

23) Hence, it is crystal clear that, learned Arbitrator was pleased to consider all these aspects in a perspective manner and having due AS.122/2014 regard to all these materials placed before him, has held that, 'in view of refusal of permission by RTA, agreement entered into between Plaintiff and Defendant being incapable of performance and same is void ab-initio.'

24) Contentions as raised by Plaintiff is that, Rule 127 of the Karnataka Motor Vehicles Rules only regulates the procedure to be followed in displaying the advertisement on vehicles and it does not prohibit advertisements on vehicles itself. Further contention is that, unless it is held that contract itself was against to Public Policy, same could not have been characterized as void.

27) Rule 127(1) bars any advertising device, figure, or writing on any transport vehicle. If RTA permits by general or special order, then only it is permissible to display advertisement on vehicle. Under Ex.P.3, RTA specifically resolved to reject the application of Plaintiff seeking permission to AS.122/2014 display advertisement on vehicle. Under such circumstances, it cannot be said that, Rule 127 merely regulates the procedure to be followed in displaying advertisement on vehicles and it does not prohibit advertisement on vehicles. It was mandatory for Plaintiff to obtain permission from RTA under Rule 127 of the Karnataka Motor Vehicles Rules at the time of entering into Agreement for displaying advertisement on buses being the owner of buses. Even though agreement binds Defendant to seek permission from RTA to display advertisement on vehicles, it was the bounden duty of Plaintiff to obtain permission from RTA being the owner of buses. Having conceded the fact of mandates of Rule 127, Plaintiff had filed application for permission to display advertisement by Defendant and same got rejected as per Ex.P.3; whether permission sought for by Plaintiff or Defendant, it makes no difference. Under Section 127 of the Karnataka Motor Vehicles Rules, it is AS.122/2014 mandatory to obtain permission before advertising device on vehicles.