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PETITIONER: D. NATARAJA MUDALLAR

       Vs.

RESPONDENT: STATE TRANSPORT AUTHORITY, MADRAS

DATE OF JUDGMENT06/09/1978

BENCH: KRISHNAIYER, V.R. BENCH: KRISHNAIYER, V.R. DESAI, D.A.

CITATION:  1979 AIR  114            1979 SCR  (1) 552  1978 SCC  (4) 290  CITATOR INFO :  R          1992 SC 180  (4)

ACT:      Constitution of India, Article 136, application, scope.      Motor Vehicles Act, 1939, 5. 50, unjustified refusal to renew permit, a breach of fundamental right.

HEADNOTE:        The appellant plied a luxury coach for public benefit under a  permit o  1971 for  five years,  in the  Tamil Nadu State. He  applied for  a renewal  of the  permit two months prior to  its expiry,  but was refused the same by the State Transport Authority,  on  the  ground  that  the  facilities provided by  tho public  sector undertakings  were adequate, and the renewal of the applicant’s permit would be redundant in  the   circumstances   and   also  result   in  unhealthy competition. Applications  for more permits were invited and some granted since the impugned refusal. On appeal u/s 64 of the  Motor  Vehicles  Act.  the  State  Transport  Appellate Tribunal affirmed  the rejection,  using the same reasoning. Thereafter the  High Court rejected the appellant’s revision application, refusing to go into questions of fact.      Allowing the appeal, the Court, ^        HELD: 1. If a small man, whose heavy investment in ll tourist coach is to be sterilised altogether, it is a social trauma, and  if fundamental  rights are disposed of as if by executive fiats,  this Court  must intervene under Art. 136, to uphold the credibility in the rule of law and prevent its derailment. The  touchstone is  not the  little man  and his little lis.  but the  large issue and the deep portent. [554 G-H]      2. The Authority must remember that a permit holder 1st has an  ordinary right  of renewal  unless it  is shown that outweighing reasons  of public  interest lead  to a contrary result. The  bare ipse  dixit that  the S.T.A. considers the facilities  provided   by  public  sector  undertakings  are adequate is  not intelligible,   without  some  basis.  Some objective assessment  to exclude  the petitioner,  based  on tangible data  is the  minimum for  a judicial negation of a fundamental right. Another circumstance effectively negating the story  of supernumerary  vehicles is  the admitted  fact

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that applications  for more  permits have  been invited  and some granted.  The basic  reason for  quashing the  order of refusal is  the untenable  reason assigned  to support   the order. [555 A, H, 556 A, D, F]

JUDGMENT:       CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1083 of 1978. Appeal by  Special Leave  from the Judgment dated 23-2-77 of the Madras High Court in C.R.P. No. 356 of 1977        Y.  S. Chitale, Vineet Kumar and A. K. Srivastava for the Appellant.      A. V. Rangam for the Respondent. 553      The Judgment of the Court was delivered by A         KRISHNA  IYER,  J.  Arbitrary  orders  and  mystical directions have  poor mileage in this Court when irrelevance and unreason are writ on their face even though the sanctity of concurrent error may give them some shelter.        To ply a contract carriage is a fundamental right hut it can  be restricted  reasonably as  has been  done by  the Motor Vehicles  Act, 1939.  The perspective  is that what is fundamental is  the right,  not the restriction . Here , one Mudaliar. the  appellant, owner a luxury coach, plied it for public benefit  under a  permit of  1971 for five years. The statutory criteria  for grant  of such permits is set out in S. 50  and renewals  of permits must be governed by the same considerations, the  procedure being  regulated  by  S.  58. There is  no grievance  made that  procedure violations  are involved here.  All that  we know  is that the permit was to expire in  March 1976  and so a renewal application was made two months  earlier.  The  State  Transport  Authority  (for short, S.T.A.) rejected the request for renewal on the score that the  ’ITDC has  expanded its activities’ and has in the field many  tourist vehicles.  Then the Authority added: ’lt is said  that the  utilization of  these vehicles  is in the range of  90 to  100 per cent during the tourist season only (November to  February) and  that it  is  just  60  to  70%" during" other  periods’. The  Tamil Nadu  State’s  transport system also  has vehicles  on the road and some spare buses. All told,  a few  hundred motor  vehicles, some of which arc stage carriages  and  some  contract  carriages,  serve  the travelling, public  on these  statements, the conclusion was reached: ’The  State Transport Authority therefore considers that  the   facilities  provided   by  these  public  sector undertakings are  adequate. Renewal of the applicants permit will not  only be  redundant in  the circumstances  but also result in  healthy competition’. The order does not indicate that anyone appeared and objected.        The  State Transport Appellate Tribunal (S.T.A.T., to use an  acronym ).  On  appeal  under  S.  64  affirmed  the rejection, using  the same  reasoning.  About  the  abundant transport facilities developed since 1971 the Tribunal said: ’The learned  counsel for  the appellant has no doubt stated that there  is no material to hold the details (occurring at para 2  of the  order) to  be correct.  The State  Transport Authority is  dealing with the provision of transport in the State level  and he  is expected  to be  in touch  with  the details  of  the  availability  of  service  from  different sources and  those particulars furnished by the S.T.A, could not also  be said  to be in anyway strange. As the authority is having these details readily available it was open to the authority, to

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554 rely upon those details before coming to conclusion bout the need for  renewal as  asked for  by  appellant.  It  is  not therefore proper to comment on the details made available in para 2  of the  order’. He  obscurely encored,  without  any facts, that  there would  be ’unhealthy competition. What is truly occult is the casual dismissal of unanswerable factor: ’The appellant  has stated  in his affidavit that in as much as applications  have been  called for, for the grant of 100 tourist cabs,  15 omni  buses and  10 omni tourist buses for the State  of Tamil  Nadu, the  comment about the absence of need for  renewing the permit as made by the State Transport Authority is not proper-.        The  Departmental Representative has filed a Memo. Of objection stating  that application  ave been called for the sinner of permits valid to ply throughout India and the same is not  relevant material,  as the  applicant’s permit is in respect of  the State  of  Tamil  Nadu  alone.  The  learned counsel for the appellant would contend that for the limited purpose of  making out  that there  is need  for  additional service, this  factor may  also be considered’. No doubt, it is admitted  that applications have been called for, for the issue of  permits  to  be  effective  all  over  India.  The appellant’s permit is having a restricted application within the State.  As such  as fact  that  applications  have  been called for  the grant  of All  India Permits does not in any way become  relevant  or  important  and  the  same  can  be ignored’. The  STAT has  countered the  appellants claim  of meritorious service  by reference  to past  infirmities  not adverted to anywhere in the order of the STA        The High Court, in revision, washed its hands off the case by  the observation:  ’It is  not  for  this  court  to traverse into  these questions  of fact And find out whether there  is   any  need  for  adequacy  under  the  revisional jurisdiction. How many permits the India Tourism Development Corporation should  have been  granted is  not  the  subject matter of  this revision petition. This concerns merely with the refusal  to renew the permit which, in my view, has been done on very valid and tenable reasons’.        The  whole issue  has been made more fishy by the STA granting  two   contract  carriage  permits  in  1978  after rejecting the renewal application holding there were already too many vehicles.      Should the court interfere under Art. 136 ? ordinarily, no. But if’ a small man, whose heavy investment in a tourist coach is  to be sterilised altogether it is a social trauma; ’and  if  fundamental  rights  are  disposed  of  as  if  by executive fiats,  this Court  must intervene  to uphold  the credibility hl  the rule  of law and prevent its derailment. The touch stone is not the little man and his little lis but the Large issue and the deep portent. 555       S.50 specifies the guidelines. The transport tribunals function      quasi-judicially   and   this   imports   some imperatives. You  must tell  the men whose fundamental right you propose  to negative  the materials  you may use in your decision. You  must act on relevant considerations, properly before you, not on rumour or hearsay, ex cathedra assertions or inscrutable hunch.        The Authority must, remember that a permit holder has an ordinary  right  of  renewal  unless  it  is  shown  that outweighing reasons  of public  interest lead  to a contrary result.  Permits   are  not  bounty  but  right,  restricted reasonably by the Motor Vehicles Act.        The  key criterion when a contract carriage permit is

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sought, is  to ask  oneself  whether  an  extra  vehicle  is unnecessary or  undesirable  in  the  public  interest,  and whether, further, the permits already granted are sufficient for or  in excess  of the  needs of the region. After all, a few  hundred  vehicles  admittedly  ply-  and  one  contract carriage operator  is asking for a single permit. What makes it unnecessary  or undesirable  in  the  public  interest  ? ordinarily, having  regard  to  the  explosive  increase  in traffic in  our country, more vehicles are needed. Of course if the  roads are  in a  precarious condition or competitive racing or  reckless driving on the roads make for hazards or if the operator is otherwise disqualified one may reduce the number of  vehicles and refuse permit or renewal. Nothing of the sort  is mentioned  in any  of the  orders rejecting the permit. Assuming there are around 300 or 400 motor vehicles, how does  one more  become too  many ?  It is a preposterous proposition to  say so,  in the absence of some evidence. If there is no evidence to warrant such a conclusion. the right to the permit must prevail.        Is  there any  evidence in  this case ? The Authority asserts that  the utilisation of existing vehicles is of the order of  ’90 to  100 per  cent’ during  the tourist season. This indicates  that at  least during the tourist season one more tourist  coach will  be welcome  to relieve congestion. The Authority  further states  that it is said .... "just 60 to 70  per cent" Is utilised during the other period. "It is said"-by whom,  to whom,  when, how,  and was  it put to the applicant ?  All this  is shrouded  in mystery.  Whatever is said by someone, somewhere, is not material here. It must be on the  record. While  the STA  may know the total number of vehicles on  the road  it must have made a study of specific materials to  ascertain whether  there is  unused  vehicular potential. Merely  to rely  on ’it  is said’ ’in the passive voice is  not judicial.  Moreover, not  to  put  it  to  the applicant before rejecting his renewal is not fair. The bare ipse dixit that the ’State Transport Authority considers the facilities  provided   by  public  sector  undertakings  are adequate’, is 556 not intelligible,  without  some  basis.  Nor  does  ’public sector’  and   ’private  sector’  enter  the  picture.  Some objective assessment  to exclude  the  petitioner  based  on tangible data  is the  minimum for  a judicial negation of a fundamental right.  The reference to ’unhealthy competition’ is baffling.  If there are 300 or more buses and one more is sought to  be added,  what is  the ill-health in the traffic system that  will be  injected by  this addition  ? We  must remember that  the tourist  coach of  the petitioner  is  to travel all round Tamil Nadu and so the image of a particular route overcrowded  with too many buses making for cut-throat competition  and  imperilling  passenger’s  lives  does  not arise.        The  STA has  no research  staff to  investigate  the untapped transport  or traffic  potential and if it has any, such report must be put to the applicant.        Moreover.,  it is  obvious that  the State  Transport Authority should  have granted  one permit less to the ITDC, if its  case of redundancy were true. For, the appellant had a current permit then       Another circumstance effectively negating the story of super-  numerary   vehicles  is   the  admitted   fact  that applications for  more permits  have been  invited and  some granted. And  before us  two  orders  granting  permits  for contract carriages  since the  impugned  refusal  have  been filed. And yet Mudaliar goes to the wall, on a cavalier ‘no’

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to his application for renewal.       Fair consideration of his claim has been denied to the appellant; his  huge investment has gone to waste because of non-renewal.        We see no relevant ground justifying the order; there is breach  of natural  justice; there is importation of non- materials;  there   is  unawareness   of  the  fact  that  a fundamental right  is involved  and that  a costly  coach is condemned to  non-use. The  basic reason  for  quashing  the order of refusal is the untenable reason assigned to support the order.  We allow  the appeal,  set aside  the refusal of renewal and  having regard to the ’long delay and absence of disqualifications direct  the State  Transport Authority  to reconsider the  grant or renewal within two weeks of receipt of this order.        We  repeat for emphasis that ordinarily this Court is loath to  reinvestigate questions  relating to motor vehicle permits; but  every rule has an exception even as every case has a martyr. M.R.                                         Appeal allowed. 557