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The firm behind Europe's first fleet of tuk-tuks has had a £13,500 fine quashed on appeal.

The penalty for taking the vehicles off the road without warning was described by the Transport Tribunal as "grossly disproportionate"

as it overturned the fine.

The three-wheelers had operated in Brighton and Hove for almost two years before being withdrawn suddenly last September.

The firm was called to a public inquiry which was told it had broken the conditions of its public service vehicle licence by retiring the fleet without giving the statutory 56-day notice.

TucTuc Ltd director Dominic Ponniah told the hearing his insurance company had suspended its cover on August 30 following an accident in 2006.

Bus compliance officer Lance Cheetham visited Brighton on August 29 and September 4, 2007. On his first visit he only observed one vehicle on the road. On September 4, the booking office at Brighton Marina was no longer there.

The Traffic Commissioner imposed the £13,500 fine after ruling TucTuc Ltd had breached the regulations.

Mr Ponniah appealed and the London-based Transport Tribunal overruled the decision.

The tribunal's report reads: "The Traffic Commissioner seems to have considered a penalty was to be paid for the company's failure to give early notice of cancellation and to cooperate with the traffic area office.

"Unlike the previous appeal when the issue was failing to comply with registered particulars, in this case a penalty was only payable if there had been a failure to operate a local service' and if this was without reasonable excuse'. The former was unchallenged.

"We think tuk-tuks should be viewed as the provision of tourist services rather than public passenger carriage and the penalty imposed was punitive and unnecessary for any regulatory purpose."

This is the second time Mr Ponniah has been handed a hefty fine only for it to be cut on appeal.

The first was a £16,000 bill, halved on appeal, after the service failed to meet its timetable.

Mr Ponniah said: "I am elated by this decision.

"The Traffic Commissioner has made yet another extremely poor decision and that has been recognised by the tribunal.

"This decision enshrines the new case law we have laid down that our service is unique and cannot be treated as a traditional public transport service."

A spokesman for the Traffic Commissioner said: "The Transport Tribunal has simply taken a different view from the Traffic Commissioner with regard to the financial penalties, which is the purpose of such an appeal."

1:33pm Tuesday 13th May 2008

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