AJANTHA TRANSPORTS (P) LTD. COIMBATORE ETC. versus M/S. T. V. K. TRANSPORTS, PULAMPATTI, COIMBATORE, DISTT. ETC.

AJANTHA TRANSPORTS (P) LTD. COIMBATORE ETC. v.

M/S .. T. V. K. TRANSPORTS, PULAMPATTI, COIMBATORE, DISTT. ETC.

September 24, 1974 IH. R, KHANNA, M. H. BEG.AND v. R. KRISHNA IYER, JJ.]

Motor Vehicles Act 1939!-.S. 47-Scope df.

Decisions of this Court hav1~ made it clear that an exercise of the permit issuing power, under s. 47 of the Motor Vehicles Act, must rest on facts and · circumstances relevant for . decision on the question of public interest which has. to be always placed in the forefront in considering applications for grant of permits. Consideration of matters which are not relevant to ·or are foreign to the scope of powers conferred by s. 47 will vitiate the grant of the permit. fact which, in certain circumstances, is relevant for ·decision on what, the public interest demands may become irrelevant where in other circum· stances; it is not connected with such public interest. Every class of consideration specified in s. 47 (I) of the Act is correlated to the interests of public gene· rally. Section. 47(1 )(a) gives the dominant purpose and sub-els. (b) to (f) are only its sub-categories or illustrations. If any matter taken into considera· lion is not shown to be correlated to the dominant purpo_sc or, the relationship ot the effect of particular fact, which has operated in favour of grant is such; as to show that it is opposed, on the fa~ of it, to public interest, the grant will be bad. The power to grant permits under s. 47 of the Act is limited to the purpose for which it is meant to be exercised. Considerations which are relevant for applying Articles 14 and 19( 1 )(g) of the Constitution could not be foreign to the SCOPe of s. 47(1 )(a). [178 D-GJ

All powers conferred by the Act including those given by s. 47 must be deemed to be> confined to the limits· imposed by constitutional guarantees to citizen~. Hence, the manner in which grant would affect guaranteed funda• menta I rights Of citi~ns could also be considered. Even where powers to be exercised by authorities which are orpns of the State, are not clearly •fined, the Constitutional guarantees contained in Articles 14 and 19(1)(g) of the . Constitution would certainly limit the scope •nd regulate tho exercise of much powers. [177 C-D]

Maharashtra State Road Transport Corporation v. M4ngrulp/r Jt. Motor Service (P) Ltd. &: Ors. [1971] Supp. t: S.C.Jl. S6i @ 570; Patlala Bui (Slrhlnd) Pvt. L1d. v. Stat,~ Transport Appellate Tribunal Pun/ab & Ors. AIR 1974 SC 1174 @ 1177 folloWl:d.

Pal Singh v. State Transport Aut/1orlty Trib1ma/ rJ.P. and Ors. A.I.R. 1957 All p. 254 (ii! 256 referred to.

The obser\iations of Andhra Pradesh High Court in M /s. N: S. Ghouse Mia/1 & Abdullaha. Shariff v. Regional Transport A11thorit)', Cuddapah AIR 1963 A.P.

263 @. 266 to the effect that even matters not specified in the section .can be ta~en mto account must therefore, be understood to 111ean that powers con-tamed m. s. 47 of the Act as well as the rule-making powers of the State must be ex~rc1sed conformably with the Constitutional guarantees given to citizens by articles 14 and 19(1) (g) of the Constitution, and, if this is all that is meant by the observation, the view is unobjectionable. [177B; CJ

(.1) Therefore, the relevance of the previous possession or grant of permit appears only when other facts and circumstances, connectinl! it with, and show-ing either the adverse or beneficial effects of its impact, m particular case, on the interests o.f the public are shown to exist. Unless and until these other facts . and circumstances, indicating the nexus or connection with the public interest, appear, such fact, by itself, should not affect an application for permit : and [180 C-D] (2) the weight to be attached to such consideration will e>byiously depend upon the totality cif all such facts and circumstances viewed in proper pers-pective. [I SOD] ·In C.A. 1402 of 1974 the Regional Tran ;port Authority granted stage car-riage permit to ihe appellant. On appeal the State Appellate Tribunal set aside the claim of the respondent on the ground imer alia that the appellant was recent grantee and that it had three permits whereas the respondent had only single permit. The High Court rejected the revision petition of the appellant under s. 115 C.P.C.

Aliowing the appeal,

HELD : (I) Ordinance 4 and 6 of 1971. having been repealed by Motor Vehicles Tamil Nadu (Amen.dment) Acts, 10 and 16 of 1971, the provmons of s. 4i(l)(e) of the Motor Vehicles Act were applicable to the grant. [180G]

(2) Section 47(l)(a) is wide enough to include all categories of public interest including those laid down by valid rules. Clause '(f)' of sub-rule (3) of rule 155A, framed by the State Govt. under s. 133(1), should, therefore, have teen taken into account, and, unless there was good enough reason to depatt from it, the rule should have been followed. Had this been done every stage carriage upto four would give an applicant an additional mark so as to help him to make up the 'Viable Unit' of five. recent grant could not, considered by itself and singly, be converted into demerit as the Appel-late Tribunal seems to have done. In as much as the Appellate Tribunal acted in mechanical fashion, by ignoring clause (f) of sub-rule (3) of Rule !SSA and without showing the correlationship of facts mentioned by it to any Qf the categories of public interest found ins. 47(1) of the Act or to the Constitutional guarantee contained in Articles 14 and 19(1) (g) of the Constitution, . tho observance of whiCh must also be presumed to be in public interest, the order of the Appellate Tribunal was vitiated by. material irregi.llarity. The High Court should, therefore, have interfered even in the exercise ·of ita power under s. 115 C.P.C. which has been made applicable to such ca51ls. [181 E-0)

Relevancy or otherwise of one or more grounds of grant or refusal of permit could be jurisd.ictional matter. grant or its refusal on tptally irre-levant grounds would be ultra vlres or case of excess of power. If ground which is irrelevant is taken into account with others which are relevant, or, relevant 11round. which exists, is unjustifiably ignored, it could be said to be case of exercise of power under s. 47 of the Act, which is quasi-judicial, in manner which suffers from material· irregularity. Both wilt be covered by s. 115 C.P.C. [!SOB]

In C.A. 2254 of 1968 the respondent was granred stage carriage perimt by t~e Regional Transport Authority on the ground that it was better acquainted with the routes and rejected the claim of the appellant that it was recent,' grantee of stage carriage permit. The State Transport Appellate Tribunaf

preferred the claim of. the appell~nt on the ground t~at it was local enter· prise of persons and did. not consider grant of permit on another route as. disqualification. The High Court remanded the case to the Tribunal for its reconsideration as to whether it would be consistent with the .Public interest to grant further permits to the aippellant.

Dismissing the appeal,

HELD : The High Court only held that the fact that an applicant is recent grantee may be relevant consideratio·n. As the order was not final one it was not case for certificlte under Art. 133(1 )(c). Further. it is not' fit case on merits for the grant of special leave under Article 136. Rele· •Vance or irrelevance of such considewtion will depend upon the totali•.y of facts and circumstances wh:c~ must correlate such ground to pubiic in-terest. [I 82El ·

In C.A. 1481-83 of 1970, the Regional Transport Authority granted stage carriage permit to the respondent. On appeal the State Tr:rnsport Appellate Tribunal granted to the appellant over-ruling the objection tha: he was rece~t grantee. The High Ccurt held !hat the Tribunal had not understood the rat~o of the decisions relating to the relev~ncy of ri ·:~µt grants :•3d there had m reality been no selection and remitted the mailer to the Tribunll.

Dismissing the appeals,

HELD : . The High Court h3s rightiy observed that, whe:·e the results of exercise of power to grant permit shows th\tt permits are, without sufficient ground for discrim:nation or p;-eference- based on an app;·aisement cf merits or requirements of public interest. beihg invariably granted to one particular party the powers are not fairly or impartially exercis.~d. Quasi-judicial powers have to be exercised fairly, reasonably and impartially. [l83B]

CIVIL APPELLATE JURISDICTION :

CIVIL APPEAL NO. 1402 OF 1974

(Appeal by special leave from the Judgment and order dated the 30th April 1974 of the Madras High Court in C. Revsn. Peto. No. 576 of 1974.

CIVIL APPEAL NO. 2254 OF 1969

Appeal from the Judgment ·and order dated the 17th September 1959 of the Madras High Court in Second Appeal No. 282 of 1969.

CIVIL APPEALS NOS. 1481 TO 1483 OF 1970

(Appeal by special leave from the Judgment and orde1 dated 9th October 1969, of the Madras High Court in· W. Appeal Nos. 437-439 of 1969).

SPECIAL LEAVE PETITION (CIVIL) NO. 1376 OF 1970

(From the Judgment and order dated 2nd September, 1969 of the Andhra Pradesh High Court in W. A. No. 312 of 1969).

Y. S. Chitale and Vineet Kumar,· for the Appellant (in CA No. 1402/74). .

T. S. Krishnamurthi Iyer, K. Jayaram and G. S .. Prakasrao for the Appellant in CA No. 2254/69.

K. Jayaram for the Appellant (in CAs. No. 1481-83/iO).

M. K. Ramamurthi, A. S. Nambiar and Vineet Kumar for the , Petitioner (In SLP 1376/70).

K. S. Ramamurthi and A. T .. M. Sampath for the Re~pondent in CA No. 1402/69). .

A. S. Nambiar for the Respondent (In CA No. 2254/69).

A. S. Nambiar for Respondents (In CAs. Nos. 1481-83/70).

M. K. Ramamurthi, Mrs. Shyama/a Pappu, A. S. Nambiar. Vi11eet Kumar, and S. Srinivasan for Respondent No. l (In CA No. 1481/ 70). -·

Thc'1udgment of the Court was delivered by

BEG, J. We wHI detail facts k.'.ding up to the 1<vc Civil Appeals, which were heard together,_ before iorm•Jlating and dccjj1:1g the com-mon questions of law raised hy them. Civil Appeal No .. 1402 of 19 7.+ arises out of fourteen applica-tions, includins.. that of the appellant b~fore us. Ajanth<: Transports (P) Ltd .. wlfich were considered en 29th D~ccrnber 197 i by the Regionar Ttanspori Authority. Coimbatore, for the grant M stage carriage permit to ply an additional bus on the route .from Coimbatore · to Sathyamangalam via Koilpalayam and. some Jther places. Five of these were rejected on the preliminary ground that the prescribed fees had not been paid. Qne was withheld from consideration for want· of Ineometax Clearance certificate. One applicant was found disqualified, under. Section 62(A)(c) of the Motor Vehicle Act as amen_ded by the Tamil Nadu Amendment Act 16 ,1f 1971. because he already had more than ten permits. Out of the remaining seven applicants, the highest scorer, according to the marking sy~tem adopted by the Regional Transport Authority of the region. was one Palaniappa Gounder who obtained nine marks. But, Gounder was "by-passed" in favour of the appellant who secured 8.69 marks because Gounder. had already been granted permit on 8th October 1971. Three ap- · peals, including one by Gounder were then preferred to th1t State Transport Aopellate Tribunal against the Regional Transport· Autho-rity's reso!ut!on. Only the appeal of P. V. K. Transports, desctibed as "the second appellant'', succeeded. although this party was awarded only 7.42 marks as against 8.69 of th~ ap1n1hnt before us. The break up of the marks allotted, in accordance with rule 155(A) of the Tamil Nadu Motor Vehicle Rules. was given as follows :

It appears, from the order of the State Transport Tribunal, that the parties did not dispute the correctness of the marks actually as-signed under various heads. The cont.~ntion of the second appellant

¥/s. P. V. K. Transports, before the State Tribunal, that two addi-tional marks should also have been allotted to it for its Branch Office, was rejected on the ground that the R.T.A. had rightly refused to grant additional marks for this reason as the Branch Office had not been functioning continuously and was meant only for buses plying under temporary permits. The Tribunal then observed that, if opera-tional qualifications only were taken into account, P. V. K. Trans-ports had secured 6.42 marks as against 5.69 of the Ajantha Trans-ports (P) Ltd. It pointed out that the respondent before it was given two additional marks under the heading 'Viable Unit' only be-cause it had three buses running as against one of P. V. K. Transports. It set aside the order of the Regional Transport Authority and pre-ferred the cl.aims of P. V. K. Transports on two grounds stated as follows:-

"The R. T. A. had not borne in mind the relevant considerations under Section 4 7 ( 1) of the M V Act in ~hoosing the best one for tbe permit. I am of the view that the claim of the 2nd appellant should be uphe.l<l as against the respondent on two substantial grounds. Firstly, the respondent was recent grantee on the date of meeting, it having obtained its third permit on 31st Julv 1971, about five months prior to it. The 2nd appellant's only permit was got by it on 8th December 1970. As already noticed, the R. T. A. has chosen to by pass applicant No. 6 (K. Palaniappa Gounder), the top scorer on the only ground that he was recent grantee. This is matter for surprise as tO why he did not apply the same test to the respondent, also recent grantee. That recent erant is relevant con-E sideration is beyon,d dispute. Secondly the 2nd appellant is single permit holder and the respondent is three permit holder. This being medium route, the claim of the former, whose qualifications are almost the same as . those of the latter should be preferred. In W P No. 1.i'0/71 and 2028171 the Madras High Court has upheld the judgment of the Tribunal prefe.rrin~ single permit holder as against two permit holder (vide also Judgment in WP No. 482/ 71). I therefore find that the 2nd appellant is best suited for the grant of the permit."

The High Court of Madras had rejected the Aiantha Transports' Revision Petition under Section 115 of the Civil Procedure Code which was made applicable to decisions of the Trib1mal by the Tamil Nadu Motor Vehicle Amendment Act 16 of 1971. It held that there was no error of jurisdiction or material irregularity in the exercise of jurisdiction since the Tribunal had based its decision on relevant con-siderations. Against this decision the appellant was granted special leave to appeal to this Co11rt.

Civil Appeal No. 2254 of 1969 arises out of twen~y one applica-tions which came up for c·.onsideration before the Regional Transport Authoritv. South Arcot, Cudda]ore, for !!rant of 5tage carriage per-mit for the route from Porto-Novo to Puliyangudi. The R. T. A.

rejected five applications on the ground that they were from new , entrants who had no previous experience of this bu5iness. One was rejei.:.ted on the ground that it was from dissolved company. An-e>ther was rejected because the applicant was dead. Six were elimi-nated because of bad entries ·on their permits during the preceding year. Five were rejected ori the ground that they hiid either no work-B r.hops or not sufficiently equipped workshops. Out· of the three re-mainir.g applicants, one was considered inferior in merit in comparison with the remaining two, as his knowledge of the route was not so good as of the oth-er two. The joint applicants Chettiar and Ariother at No. 6 were preferred to Natarajan, applicant No. 13, on two grounds : firstly, the applicants at No. 6 were considered as some-what better acquainted with the routes; and, m:ondly, the applicant No. 13 had secured recent grant of permit on another route. Hence, it was considered more equitable to drop him to as "not to·· inflict strain on the same operator by granting him more than one permit at time".A!!ainst the above mentioned decision of the R. T. .. there were three -appeals before the State Transport Appellate Tribunal, which elaborately considered the claims of each appellant vis-a-vis the suc-cessful respondents. It preferred the claim of Kannon Motor Trans-port (P) Ltd., principally on tbe ground that it was locJl enterprise of persons residing along the route. It seemed t" take the view that the mere fact that Kannon Motor Transport . (P) Ltd. had been granted permit on another route at the same me:::ting of the RT.A. was no disqualification. It did not actually hold such ground to be irrelevant. But, its remarks showed that recent grant of permit on another route was not considered by it to be really material. It, however, made it clear that the principal ground cif its preference was that Mis. Kannon Motor Transport (P) Ltd. was "a local enterprise" of persons who could be expected to be better acquainted with the needs of the locality.

learned Judge of the Madras High <;:ourt rdused to quash the order of the State Transport Appellate Tribunal because the main ground for the preference was that the local residence of the parties whose appeal had been allowed by the Tribunal gave them better· claim. In the course of his judgment, however, the learned Judge observed that the State Tribunal could not be compelled to take into account matters which were "external" or irrclcv~nt for the purposes of exercising the power of granting permits. Division Bench of the Madras High Court, disagreeing with this view, set aside the judgment of the learned Single Judge and remanded the case for reconsidcrntion to the Tribunal on the ground :

"The Tribunal could well have considered whether in all the circumstances, the first respondent before us, should, having regard to public interest, be .granted more than one permit at the same meeting of the Regional Transport Authority. That would be relevant question".

lt pointed out :

"The first respondent altogether got three permits at the hands of the Tribunal. Whether he having: got permit be-Jore the Regional Transport Authority it would be cousistcnt with public interest to grant further permits at the stage oi appeals was undoubtedly matter relevant to the considera-tion and that having not been decided by· the Tribunal, its order is vitiated".

The Civil Appeal No. 2254 of 1969 has come up before this Court after certification of the. case by the Madras High Court under Article 133 ( 1) ( c) of the Constitution as fit one for an appeal to this Court. · .

this to 42

Civil Appeals Nos. 1481-1483 of 1970 have resulted from 42 applications made for the grant of permit to ply on the route Chidambaram to Tirukoilur via Vedalur, Kadampuliyur, Panruti, and ~·ome other places, by the Ref!ional Transport Aut:iority, S~uth Arcor. It appears that, after the elimination of number of apphca-tions on various grounds of disqualification, the R. T. A. embarked, ultimately, on comparison of the r·~lative merits of three applicants :

I. M/s. P;·3bh~1 TranspJ:'.s (P) Ltd.:

2. Sri Dhanalakshmi Bus Service;

3. lv1. R. S. Motor Service.

The R. t. A. found, on 23rd December l %5. the 4ualifications of M/s. Prabhu Transports (P) Ltd., to be superior, to those of its rival; and ordered the grant of the permit to it. Fifteen appeals were filed against the order of the R.T.A. After setting out the qualifica-tions of .:~ch of the appellants before it elaborately, the State Trans-port Apptllate Tribunal considered the 1:ase of the ~1ppellant before us, M/s .. Kannan Motor Transports (P) Ltd., to be best and over-ruled the objection that recent grant on different route altogether should also be considered material. It said :

"The 9th appellant is M/s. Kannan Motor Transports (P) Ltd., Chidambaram. It owns 2 route buses. lts main office and residence are at Chidambaram. It has fully equipped workshop at that place and arrangements for effecting repairs have been made at the other end of the route i.e., Tirukoilur. Its experiem:e is from al'r.ut the beginning of 1961. Its history sheet is perfectly clean. Its route knowledge is limited to 7-1 /2 miles. This appellant is local enterprise who is trying to have viable unit. It has fully equipped workshop at one of the termini and at the other termini arrangements for effecting repairs haw been m3de. It has sufficient experience and some· knowledge of the route. It thus possesses basic qualifications for the grant. But then it was pointed out that this appellant is recent grantee of another permit. In W. P. No. 852 and 1049 of 1962. it has been held that where the recent grant relates to different route altogether uuJ if that is the onlv circumstance present that in itself may not be relevant as the

sole ground for declining the grant of permit. It is not the case of any of the appellants that grant for this appel!ant is in respect of this identical route. Thi:> appellunt who · has the basic qualifications and who is trying to build. up viable unit in my view. is the most suited person to receive this permit, for each 'of the remaining appellants owns more route buses than what he has". .·

Three connected writ petitions were filed in the l\fadras _High: Court against the judgment and order of the State Transport-·Appel-Jate Tribu11al preferring the appellant's claim over those of others on t.1ie ground that the appellant should have an opportunity to -build up viable unit as each of "the remaining appellants owns more route buses"· than what the appellant had. learned Single Judge. of the Madras High 'Court, after examining the ordt:r;; "f the State Tribunal in the light of~all the facts of cases of the claimants as set out by the Tribunal itself, concludect /and ordered :

"There has in reality been no selection, crnsidering the claims of the applicants together. comparative assessment with ref~rence to relevant and material facts is !Jcf:ing artd the ratio of the decisions relating to the rekvancy ot recent: grants not understood. In the circumstances,· the order of the State Transport Appellate Tribunal _cannot be sustained. JI; is, therefore, quashed.' The Tribunal has now to take up the matter and consider' the claims of the aggrieved appli-cants, the petitioners in the Writ Petitions and the 1st Res-pon~e!!t, afresh, in the light of the observations .contained herem ·.

· 1 he mattclr was then taken before· Division Bench of lthe Madras. High Court in these appeals. The Division Bench quoted :he follow-ing passage from the 'judgment of ihe learned Single fudge setting out the main grievan9e of the petitioners in the High Court : "Counsel pointed out that, in the instant case, it is ncit

"Counsel pointed out that, in the instant case, it is ncit even case of recent grant in favour of the common first respondent, and that, ignoring the salutary and e'ssential principle of giving equal opportunity to competeflt operators, the conimon 1st respondent has been made to build up his viable unit out of permits granted at the same ~ittfog of the Regional Transport Authority, one by the Regional Tranwort Authority and two by the Tribunal. It i~ sub-mitted that the petitioners have not been found to be unfit and if they were not otherwise disqualified their cl:iims to build up viable units along with the 1st respondent should have been considered and the permits· distributed."

lt then g<.:ve the !allowing justification of the view of .the learned'. / Single Judge and the dismissal in limine of the appeals before it.: ,

learned'.

· "Now it is pointed out to us that the .grant of the per-. mits for the routes Porto Novo to Puliyangudi and Chidam-

baram to Perambalur has been set at large for fresh consi-deration of the merits of the applicants, by the State Trans-port Appellate Tribunal. What the learned Judge has done in the present case, rel!lting to the grant of the permit for the route Chidambaram to Thirukoilur, is to set at large the grant of the permit for the route also, that the claims of the rival applicants can be considered bearing in mind also the circumstance mentioned above, which was consider~d as relevant circumstance for the grant of the permits more or less at the same time, for different overlapping routes as between competing operators. It is this reason which appears to have weighed priml!,rily with the learned Judge in ~etting aside the order of the State Transport Appellate Tnbunal and remanding the matter to the same Tribunal for fresh disposal. In our opinion the correctness of the principle relied on by the learned Judge for setting the matter at large in the present case cannot be seriously disputed. It was clearly necessary to have the matter regarding the grant of the permit for the route Chidambaram to Thirukoilur also considered afresh, since the grant of the permits for the other routes also has been set at large. The learned Judge in the order now impugned has also mtricted the scope of the lower Appellate Tribun11l's order to the claims of the petitioner and the 1st Respondent in the Writ petition. To this extent the scope of the fresh enquiry has been narrowed and this will be an advantage to the appellant. In the above circumstances, we see no ground to interfere with the order of the learned Judge in the Writ Petition in these writ appeals which are dismissed in /imine".

Against the Division Bench judgment and order we have three :appeals Nos. 1481-1483 of 1970 before us by grant of Special leave. The questions which fall for consideration upon the facts set out ~bove are:

(1) Is possession by at recent grant of another permit to an .a,Pplica.nt for stage carriag~ permit, either by itself, or, in conjunc-tion with other facts· and circumstances relevant con£ideration in either refusing or granting permit to a;1 applicant 7

(2) If it is, in any particular set of circumstances relevant consideration, 'what is the weight to be attached to it in the assess1nent of the comparative merits of rival claims ?

( 3), Does the High ~ourt's, judgment or order in any or thG> cases dealt with by it call for 1nterfercnce by us in a1ty respect in exercise <>f our .powers under Article 136 of the Constitution ?

Tl1e. questions .P~sed a~ve , must, we think, be •lnswered hav1n regard tn the prov1s1o~s of Sectton 4 7 of the Motor Vehicles Act anS such relevant and valid rules as mav be framed for laying down the

mode 0f exercising power to grant of per:uits. Section 4 7 (1) of the Act reads as follows : .

"A ~e~ional Transport Authority shall. in considering an apphca~1on for stage carriage permit, have regard to the followmg matters, namely : -

(a) the interests of the public generally;

( b) the advantages to the public of the service to be provided, including the saving of time likely to be effected thereby and any cnnvenicnce arising from journeys not being broken;

1( c) the adequacy of other passenger transport services operating or likely to operate .in the near. future, whether by road or other mean~, between the places to be served;

(d) the benefit to any particular locality or localities Iikelv to be affected by the service; . '

( e) the operation by the applicant cf other transport services, including those in respect of which applica-tions from him for permits are pending;

( f) the condition of the roads included in the proposed _ route or area;

and shall also take into consideration any representations made by persons already providing passenger transport faci-lities. by any means along or near the proposed route or area, or by any association representing persons interested in the provision of road transport facilities recognised in this behalf by. the State Government, •>r by any loc~l authority or polict' authority within whose jurisdiction any part of the proposed route or area lies :

Provided that other conditions being equal, an applica-tion for a. stage carriage permit from cooperative society · registered or deemed to have beeri registered under any · enactment in force for the time being shall, as far as may be, be given preference over applications from individual owners".

One of the submissions before us was that the Regional Transport Authority can act on considerations falling cren outside the purview of Section 47 of the Motor Vehicles Act. But, no case decided by this Court, where such view may have been tHken, wns placed before us. Reliance was, however, placed on M/s.' N. S. Gho11se Miah and Abc/111/aha She1·lff v. Regional Transport utlrorlty, Cudtlapah,(I) and, Pal Singh v. State Transport Authority Trl/lunal U.P, and Ors.(a)

(2) AIR 1957 All p, 254 ~ 256,

(I) AIR 1963 A. P. 263@ 266.

In Glwuse Miah's case (!;upra) the Andhra Pradesh High Court had while considering the validity of rule observed (at page 266) :

"The State Government is surely competent to lay down by way of general guidance certain fundamental principles, which will be according to them in the interests of the pub-lic generally. The heading will 'cover any grQund which might noi. have been expressly mentioned in Section 4 7. It is neither possible nor is it desirable 'to restrict the discre-tion of the Regional Transport Authority to grant or refuse stage carriage permit o'n consid~ration of public iuterest."

It went on to express (at page 266) :

"Even otherwise we do not think that the scope of the section is limited to the factors to be taken into consideration while granting stage carriage permit mentioned in Section 4 7. It not correct to say that Section 4 7 of the Act forms complete code or that the factors mentioned therein are exhaustive. · in our view that is clear from the words 'shall have regard to' in Section 4 7. The requirement of the section that thf~ matter specified in the section may not [l; be taken into consideration. In other words, the primary duty of the Regional Transport Authority is lo take into consideration the matters specified but it does not follow that the hands of the Regional Transport Authority are . tied to the ccnsideration of these matters alone and they must shut the.ir eyes to everything e)se".

In Pal Sim~h's case (supra), the Allah2bad High Court had observ-ed (at page 256) :

"The law on the subject is not exhaustively contained in . Secl!on 4 7; any direction given by the State Trans port Authority in its appellate jurisdictio11 is also to be complied with by the Regional Transport Authority. If the State Transport Authority has jurisdiction to pass an order, it must be complied with by the Regional Transport Authority. Therefore our learned brother GopaJji Mehrotra was not correct when he observed that an application for renewal cannot ht' dismissed except on any of the grounds mentioned in Section 4 7, and that when permit had been granted to the petitioner the renewal application cannot be refused on the ground that the original permit itself was illegal".

Pal Singh's case (supra) was decided before this Court held, in Ml s. Ramw1 & Raman Ltd. v. The State of Madras allll Ors. (1) that the administrative directions issued under Section 43A of the Motor Vehicles Act, I 939, as amended by the Motor \'chicles (Madras Amendment) Act, 1948, did not have the force of law in regulating the rights of parties. In Ghouse Miah's case (supra), the Andhra Pradesh Hil!h Court had. after indicating the amplitud1: of the ''intere6t of the public generally", mentioned in Section 47(1 )(a), held that

(I) [ 19S91 2 Sup~!· S. C. R. 227.

the use of the words "shall have regard to in Section 4 7" meant that the Section did not exhaustively specify every kind of matter which may be takeu fo account. The High Court had then .tested the rules framed under the Act by the norms provided by Articles 19 ( 1) (g) and 14 of the Constitution. It struck down part of Rule 153 (d) for violating Article 14.

. What the Andhra Pradesh High Court seems to havt: meant was that powers contained in Section 4 7 of the Act as well as the ·rule making powers of the State must be exercised conformably with the Constitutional guarantees given to· citizens by Articles 14 and 19 ( 1 ) (g) of the Constitution which are certainly not, mentioned specifically anywhere in the Act. All powers conferred by the Act, including . thos~ given by Section 4 7, must be deemed to be confined to the limits imposed by Constitutional guarantees to citizens. Hence,. the manner in which grant would affect guaranteed fundamental rights of citizens could also be considered. If this is all that is meant by laying down that even matters not specified in Section 4 7 of the Act can be taken into account, we think that the view is unobjectionable. · Even where powers to be exercised by authorities, which arc organs o[ the State, are not clearly defined, the Constitutional guarantc.es contained in .D Articles 14 ·and 19 ( 1 )(g) of the Constitution would certainly limit the scope and regulate the exercise of such powers.

This Court recently, in Maharashtra State Road Transport Cor-poration v. Mangrulpir Jt. Motor Service (P) Ltd. & Ors.(1'), after setting out the provisions of Section 4 7 of the Act, observed about the manner in which the Regional Transport Authority has to function (see p. 570) : .

"It is statutory body. It is to exercise statutory powers in the public interest. Such public interest would have to be considered with regard to particular matters en-umerated in Section 4 7 of the Act and the particulars of an application are to be judged with reference to sections 46 and 4 7 in particular of the Act" .. More recently, in Patiala Bus (Sirhind.) Pvt. Ltd. v. State Trans· port Appellate Tribunal Punjab & Ors.([2 ]) this .Court said with regard to the provi~ions of•Section 47 of the Act (at p. 1177) :

"The main considerations required to be taken into account are the interest of the public in general and the advantages to the public of the service to be provided, and these would include inter alia consideration of factors such as the experience of the rival claimants, their past perform-ance, the availability Of stand-by vehicles with them, their financial resources, the facility of well equipped workshop possessed by them etc; The State Transport Appellate Tri-bunal, however, failed to take into account any of these considerations and proceeded as if the stage carriage permits / H. were largesse to be divided fairly and equitably amongst the rival claimants. We do not find in the order of the State Transport Appellate Tribup,al any discussion of the U97lJ Supp. S. C.R. 561 @ 570. (2) A. I. R. 1974 S. C. 1174@ 1177. 13-1251-'fop.CI/75question as to what the interest of the public in general requires and who from amongst the rival claimants would be able to provide the most efficient and satisfactory service to the public. None of the relevant factors is considered, Cir even adverted to, by the State Transport Appellate Tri-bunal. The State Transport Appellate Tribunal merely seems to have considered what would be fair as between the appellant: and the third respondent and thought that it would be most fair if one stage carriage permit with return trip were granted to the appellant and one stage carriage permit with return trip were granted to the third respondent. That is wholly erroneous approach. The question that has to be considered is not as to what would be fair as be-tween the appellant and the third respondent, but what does the interest of the public, which is to be provided with an efficient and satisfactory service, demand. The order of the State Transport Appellaite Tribunal; therefore, suffered from an infirmity, in that it failed to take into account relevant considerations and proceeded on the basis of an irrelevant consideration."

Thus, decisions of this Court have made it clear that an exercise of the permit issuing power, under Section 4 7 of the Act, must rest on facts and cir~umstances relevant for decision on the question of public interest, which has to be always placed in the fore-front in considering applications for grant of permits. Consideration of matters which arc not relevant to. or are foreign to the scope c;f powers con-ferred by Section 4 7 will vitiate the grant of permit under Section 4 7. fact which, in ce1tain circumstances, is relevant for decision cin what the public interest demands may. become irrelevant where it is not connected with such public interest. . Instead, every class of consideration specified in Sec:tion 4 7 (1) of the Act seems correlated to the interests of the public generally. tt appears that Section 47 ( 1) {a) gives th.e dominant purpose and Section 47{1)(b) to (f) are only its sub-c::itegories or illustrations. If any matter taken into con-sideration i£ not shown to be correlated to t!ie dominant purpose or, the relationship or the effect of particular fact, which has o.perated in favour of grant is such as to show that it is opposed, on the face of it, to public interest, the grant will be bad. The power to grant permits under Section 4 7 of the Act i.s limited to the purposes for which it is meant to be exercised. Considerations which are relevant for cpplying Articles 14 and 19(1) (g) of the Constitution could not be foreign to the scope of Section 47(1) (a) which is fairly wide.

Where the power to grant permits shows that its exercise is meant to be judged on the touchstone of the interests of the public generally. the test being broad enough to take in applications of Articles 14 and 19(1 )(g), read with the relevant proviso, which rrt.quire just and reasonable balancing and rec:o. ncillation of general nnd Individual Interests, wo think that it would not be correct to hold thnt the power contained In Section 4 7 cnn go beyond it or again.st it, because, to take such view, would make the provision itself Constitutionally invalid. Therefore, we hold that permit issuing· power under Sectibn

4 7 is restricted to service of interests of the public generally in broad enot~gp sense to include ~ue res~ect for guaranteed fundamental ~ights of c1llzens. Indeed, service of mterests of the public generally 1s the expressed object of even Section 68C in Chapter IVA of the Act authorising framing of schemes of nationalisation of transport services. Such an object underlies the whole mac.hinery of r1-gulation by issue of permits for plying . motor vehicles on hire.

It should be clear, when the main object, to which other consi-derations must yield in cases of conflict, of the permit issuing powers under Section 4 7 of the Act is the service of interests of the public · generally, that any particular fact or circumstances, such as pre-vious recent grant in favour of an applicant of the holding of other permits by an operator, cannot, by itself, indicate how it is related to this object. Unless, there> are other facts :md circumstance which link it with this object the nexus will not be established. For in-stance, an applicant may be recent grantee whose capacity to operate transport ~ervice efficiently remains to be tested so that fresh grant to him may be pre-mature. In such case, another applicant of tested efficiency may be preferred. On the other hand, fresh grantee may have, within short period, disclosed such superiority or efficiency ·or offer such amenities to passengers that recent grant in his favour may be no obstacle in his way at all. Again, the fact that an applicant is operating other motor vehicles on other permits may, in one case, i.ndicate that he had exceeded the optimum, or, has position com-parable to monopolist, but, in another case, it may enable the ap1;>li-cant to achieve better efficiency by movin~ towards the optimum which seems to be described as "Viable "Viable Unit" m the the rules framed framed in Madras in 1968: Thus, it will be seen that, by itself, recent grant or the pos-. session of other permits is neither qualification nor disqualification divorced from other circumstances which could indicate how such fact is related to the interests of the public generally. It is only if there are other facts establishing the correlationship and indicate its advantages or disadvantages to the public generally that it will become· relevant r circumstance, But, fo cases where everything else is absolutely equal as between two applicants, which will rarely be the case, it could be said that an application of principle of equality of opportunity, which could be covered by Article 14, may enable ~erson who is not fresh gran-tee to obtain preference. Such consideration, as we have indicated above could not be said to be outside the broad view of the interest of the public generally which we are taking so as to include within its pur-G view application of tests underlyfog provisions giving fundamental rights to citizens under Articles 14 and 19 of the Constitution.

seems to be described as "Viable "Viable Unit" m the the rules framed framed in Madras ·

We think that the Madras High Court while rejecting the application for certificate of fitness of the case for appeal to this Court in cases which form tTfe subject matter of Civil Appeals Nos. 1481-1483 of 1970 rightly observed :

"Whether particular circumstance Is relevant or not has to depend on the facts of each case. What is not relevant in

particular circum.;tances of grant or refusal of permit may be relevant in anoth1<r set of circumstances".

Relevancy or otherwise of one or more grounds of grant or refusal of permit could be jurisdictional matter. A-grant or its refusal on totally irrelvant grounds would be ultra vires or case of excess of power. If ground which is irrelvant is taken into account with others which are relevant, or, relevant ground, which exists, is unjustifiably ignored, it could be said to be case of exercise of power under Sec. 4 7 of the Act, which is quasi-judicial, in manner which suffers from material irregularity. Both will be covered by Sec. 115 Civil Procedure Code. ·

Therefore, our answers to the three questions formulated above are :

( 1) The relevance of the previous possession or grant of permit appear, only when ot~er facts and circumstances, connecting it with and showing either the adverse or beneficial effects of its impact; in padcular case, on the interests of the public, are shown to exist. Unless and until these other facts and circumstances, indicating the nexus or connection with public interest, appear, such fact, by itself, should not affect an application for permit.

(2) The weight to be attached to such consideration' will, obvi-ously, depend upon the totality of all such facts and circumstances viewed in proper perspective.

(3) The answer to the third question has been indicated already by the broad and general propositions which we now proceed to ·apply to each case before us.

. In Civil Appeal No. 1402 of 1974, Mr. Chitaley, appearing for the · appellant, contended that, as Section 4 7 ( 1) ( e) ·was omitted altogether by Madras State amendment, at the relevant time, the State Appellate Tribunal should not have taken into account the alleged disadvantage, almost raised to the level of disqualification, of recent or previous grant of permit

We, therefore, examined the provisions of the Motor Vehicles Tamil Nadu (Amendment) Acts 10 and 16 of 1971 and found that they do not omit Section 1? ( 1) ( e) at all, although there were two ordinances Nos. 4 and 6 of b71 which had substituted amended provisions of Sec-tion 47 from which Sec. 47(1) (e) was omitted. But, the ordinances were repealed by the Tamil Nadu Acts 10 and 16 of 1971 so that the provisions of Se<:tion 4 7 ( 1) ( e) of the Act in their application to Madras were intact at the .time of the grant. The contention was~ therefore, unsound.

It was then contended, in Civij Appeal No. 1402 of 1974, that the State Transport Appellate Tribunal had held· two extraneous or irrele-vant circumstances to· be decisive. These were : that the respondent grantee before it was a. recent grantee and that he held three permits altogether whereas the second appellant before it, to which the permit was granted by it, held only one pennit. It was urged that these considera-tions were applied mechanically without showin3 their correlationship

at all with the interests of the public generally as though the Appellate Tribunal was entrusted with the task of distribution favours and had to do this equitably on grounds which, however, laudable, are extraneous to the purposes of Section 4 7 of the Act. Furtherll}ore, it was pointed out that, at the relevant time, certain rules had been validly framed by the State Govt. under Section 13 3 (1) of the Act the effect of which was, inter-alia, that possession of more than one vehicl\: was, an item, so to say, on the credit side instead of an item on the debit Side of the balance sheet prepared on the basis of marks. The grievance was. that the Tribunal had converted into demerit what was, according to. the rules, an additional ground to support grant. The relevant sub-rufo (3) of Rule 155A, providing for giving the marks, contains the provision: "(F) Viable Unit : The applicant who operates not

"(F) Viable Unit : The applicant who operates not more' than four stage carriages excluding spare buses, shall be awarded marks at the rate of one niark for each stage carriage in order to have viable unit of five carriages excluding spare buses". ·

In reply, it was pointed out that, although Rule 4 required that the applicants shall be ranked according to the total numbers of marks ob-tained by them, yet, "the application shall be disposed of in accordance with the provisions of sub s. (1) of Section 4 7". This eontention pre-supposes an indication of the relevance of any fact taken into account to matters all o( which seem to us to be covered by the broad class of "interests of public generally''. On the view we are adopting, Section 4 7 (1 ) (a) is wide enough to include all categories of public interest in-E cluding those laid down by valid rules. Clause (F) of sub-rule (3) of rule 155-A, set out bove, should, therefore, have been taken into account, and, unless there was good enough reason to depart from it, the rule should have beeh followed. Had this been done, it is clear that ~very additional stage carriage upto four would give an applicant an ad-ditional mark so as to help him to make up the "Viable Unit" of five. recent grant could not, considered by itself and singly, be converted. into demerit as the Appellate Tribunal seems to us to have done. In· asmuch as disposal of the claims before the Appellate. Tribunal seems to us to have taken place in rather mechanical fashion by ignoring clause (F) of sub-rule (3) of Rule 155A and without showing the correlationship of facts mentioned by it to any of the categories of public interest found in Section 4 7 ( 1 ) of the Act or to t~e Constitu-tional guarantees contained i'n Articles 14 and 19 ( 1 ) (g) of the Consti-G tution, the observance of which must also be presumed to be in public interest, the order of the Appellate Tribunal was, in our opinion, vitated by material irregularity. The High Court should, tl1erefore, have interfered even in the exercise of its power under Section 115 .Civil Procedure Code which has been made appliacble to such cases. In Civil Appeal No. 2254 of 1969, preliminary objection -:vas

In Civil Appeal No. 2254 of 1969, preliminary objection -:vas taken to the grant of certificate of fitness of the case under Article. 13 3 ( 1) ( c) of the Constitution in such case When there was no final order passed by the High Court. Reliance was placed upon Mis.

Raman & Raman (Private) Ltd. Kumbakonam v. Sri Rama Vilas Ser· vice Ltd. Kumbakonam & Ors.,(l) where this Court said:

"We are of the view that the High Court was in error in granting the certificate when nothing was decided by their judgment. The order was not final. The order of the High Court did not determine the rights and obligations of tlie par-ties : it merely set aside the order of the Appellate Tribunal and directed the Tribunal to deal with and dispose of the ques-tion according to law. The appeal is liable to fail on that limited ground alone".

No satisfactory answer has been given to the preliminary objection. But, as we could, if the case deserved its grant special leave to appeal, even at this stage, we will refer tci the merits also.

In this case, we find that the Division Bench of Madras High. Court had only sent back the case to the Tribunal for disposal after determin-ing the impact of considerations placed before the Tribunal on public interest. The relative merits of rival claimants must be compared after testing the very criterion of merit adopted on the anvil of public interest. The High Court only held that the fact that an applicant is recent grantee may be relevant consideration. As we have pointed out, the relevance cir irrelevance. of such consideratien will depend upon the totality of facts and circumstances which must correlate such ground to public interest. It was contended, not without force, that the Appel-late Tribunal had discussed all the relevant facts and circumstances suffi-ciently to indicate the impact of each of these upon public interest with-out expressly saying so and that the Division Bench need have done no more than to have pointed out that the observation of the learned Single Judge, to the effect that "th(: question of recent grant of permit in favour of an applicant was extraneous to the considerations contained in Section 4 7 of the Act was incorrect, or, to have explained that what this really meant was that, without showing other facts and circumstances connecting recent grant with public interes.t, recent grant of permit was not material. However, as the Division Bench had sent back the case to the Appellate Tribunal, without determining the rights of the parties, we think that the mere fact that two views could be taken on the advisibility of such course. would not, justify interference by us under Article 136 of the Constitution. Therefore, we are not disposed to grant special leave at this stage on the question raised. The question whether the order is final one determining the rights· of the parties. is material even when considering the question of propriety of interfer-ence under Article 136 of the Constitution. We have no' doubt that, in view of the clarification of the law by us here, the Tribunal will dispose of the case in accordance with law and deal with all the facts and cir-cumstances which have bearing on public interest, including facts and circumstance~ which may' have come into existence between the time when the grant was made and the time when the Tribunal reconsiders the claims to which the case is: confined.

(I) C. A. No. 995 of 1965-iccided on 3·5· 1968.

In Civil Appeals Nos. 1481-1483 of 1970, we find that the High Court has given good enough grounds to justify reconsideration of the claims by the State Transport Appellate Tribunal. The High Court seems to ~to ha ye rightly hinted that, where the results of exercise of power to grant permit shows that permits are, without sufficient grounds for discrimination or preference based on an appraisement of merits or requir.ements of public interest, being invariably granted to one parti-B cular party the powers are not fairly or impartially exercised. Quasi-powers have to be exercised. fairly, reasonably, and impartially. Cap-ricious or di.shonest preferences on purely personal grounds are neces-sarily excluded here. We have no doubt that the Tribunal will recon-sider claims in conformity with needs of public interest as they exist at the time ot reconsideration by the Tribunal. We do not think that these cases justify interference by this Court in exercise of its power under Article 136 of the Constitution.

The result is: We allow Civil Appeal No. 1402 of 1974 and set aside the order and judgment of the High Court as well as of the State Appellate Tribunal.and direct it to reconsider the cases of the parties concerned in the light of the law on the subject as laid down· and ex-plained by us. Civil Miscellaneous Petition No. 6852 of 1974 for an interim order has become infructuous . and is hereby dismissed. The parties will bear their own costs throughout.

We dismiss Civil Appeals Nos. 2254 of 1969, and Nos. 1481-1483 of 1970 with costs. ·

C. A. 1402 of 1974 allowed. C. .• 2254 of 1968 dismissed. C.As. 1481-83 of 1970 dismissed.

ORDER

In view of the law laid down by us in Civil Appeals Nos. 1481-1483 of 1970 by judgment delivered today, we dismiss the Special Leave Petition. We make no order as to costs.

Petition dismissed.