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PETITIONER: GANDHARA TRANSPORT CO. LTD.,

       Vs.

RESPONDENT: THE STATE OF PUNJAB AND OTHERS

DATE OF JUDGMENT: 31/10/1962

BENCH: SHAH, J.C. BENCH: SHAH, J.C. SINHA, BHUVNESHWAR P.(CJ) GAJENDRAGADKAR, P.B. WANCHOO, K.N. GUPTA, K.C. DAS

CITATION:  1964 AIR 1245            1963 SCR  Supl. (1) 800  CITATOR INFO :  R          1987 SC 731  (7)

ACT: Stage  Carriage-Temporary  permit-Application  for  renewal- Grant of regular permit-Validity-Motor Vehicles Act, 1939 (4 of 1939), 1947, 57, 58, 62.

HEADNOTE: By  an  order  of the Minister in charge  of  the  Transport Department, Punjab State, a temporary permit was granted  to M for plying vehicles on the route indicated in the  permit. When the period of the temporary permit expired M applied to the Regional Transport Authority for renewal of the  permit. The  Regional Transport Authority issued a  notice  inviting objections "regarding the further renewal of the permits for a  period of three years on regular basis in favour  of  M." The appellants and others filed objections but M was granted a  regular permit for a period of three years.   On  appeal, the Provincial Transport Controller quashed the order on the ground  that  M  had  merely  applied  for  renewal  of  the temporary permit, that the procedure adopted for granting  a permit  to M did not conform to the provisions of;  the  law and  that, therefore, the order renewing a temporary  permit and  making  it a permit to ply a stage carriage  for  three years   was  invalid.   But  the  order  of  the   Transport Controller  was  set  aside  by  the  Secretary,   Transport Department.   The  appellants then moved the High  Court  of Punjab  by a petition under Art. 226 of the Constitution  of India for quashing the order of the Secretary, but the  High Court  rejected  the  application  on  the  view  that   for adjudicating on the merits of the claims for and against the grant of the permit the authorities under the Motor Vehicles Act were the proper authorities. Held,  that  the order of the Regional  Transport  Authority granting  a  regular  permit to M was  unlawful  as  it  was vitiated  by  grave  errors  of  procedure.   The  Transport Authority  (1) had entertained an application for a  renewal of  a  temporary permit which was not  contemplated  by  any provision  of the Motor Vehicles Act, 1939, (2) had  invited

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objections  to the application as one for renewal for  three years on regular basis, thereby misleading parties  desiring to enter into competition, and  801 (3)had  failed to apply its mind to matters which had to  be considered under s. 47 of the Act. Held,  further,  that  the order passed by  the  High  Court should be set aside and the order of the Transport Authority declared  unlawful, though the period of the regular  permit had  expired in the meantime, because otherwise when  making fresh  applications  for  permit, M  would  be  getting  the benefit  of  the proviso to s. 58 (2), which  was  available only to those having lawful permits.

JUDGMENT: CIVIL,  APPELLATE   JURISDICTION: Civil Appeal  No.  200  of 1962. Appeal from the judgment and order dated March 15, 1960,  of the Punjab High Court, Chandigarh, in Civil Writ No. 315  of 1960. Bishan  Narain,  Daya Swarup Nehra and Naunit Lal,  for  the appellant. K.L. Gosain, S. K. Mehta and K. L. Mehta, for  respondent No. 3. 1962.  October 31.  The judgment of the Court was  delivered by SHAH,  J.-By  order  dated October 23,  1956,  the  Regional Transport  Authority,  Patiala,  granted  a  permit  to  one Manohar  Singh for plying a stage carriage on  the  Bhatinda Khera (Via Bajekhanna)jaitu-Kot-Kapura route which was about 55 miles long.  This route covered 35 miles of the Bhatinda- Kot-Kapura-Faridkot  route  for which the  appellants,  M/s. Gandhara  Transport Co. Ltd., held permits for plying  their vehicles.   In  appeal  against  the  order  passed  by  the Regional   Transport  Authority,  the  appellate   authority cancelled  the  permit in favour of Manohar Singh,  but  the order  of  the  Appellate Authority was  set  aside  by  the Minister  in-charge  of  the  Transport  Department,  Punjab State,  in  revision,  and  it was  directed  that  a  fresh temporary  permit  be granted to Manohar  Singh  for  plying vehicles on the route for which he had been given a  permit. The appellants then preferred a petition under Art. 226 802 of  the  Constitution  before  the  High  Court  of  Punjab, Challenging  the  validity  of  the  order  passed  by   the Minister.   Before  this writ petition could  be  heard  the period  of  the temporary permit expired and  Manohar  Singh applied  to the Regional Transport Authority for renewal  of the  permit.   The Regional Transport  Authority  issued  on April’16, 1958, a notice inviting objections "regarding, the further renewal of’ the permits for a period of three  years on  regular  because"  in favour of  Manohar  Singh  on  the Bhatinda-Khera  (via  Bajekhanna)--  Jaitu-kot-Kapura.   The appellants  and others filed objections to the " renewal  of the permits for three years on regular basis".  The regional Transport  Authority  posted the objections for  hearing  on July  30, 1958.  In the mean time the appellants applied  to the High Court of Punjab for an interim order directing  the Regional  Transport Authority to stay pronouncement  of  the order  on the application submitted by ’Manohar  Singh  till the disposal of their petition in the High Court.  By  order dated July 29, 1958, the High Court rejected the application observing  that  it was open to the appellants to  move  the

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Regional Transport Authority to postpone announcement of its order  on  the application of Manohar Singh.   The  Regional Transport Authority declined to postpone announcement of its orders and on August 1, 1958, directed that a regular permit for  three years be granted to Manohar Singh for  the  route notified.   On  August 7, 1958, the writ  petition  of  ’the appellants was heard by the High Court and it was  dismissed The  High Court observed that by the petition before it  the issue of a Temporary permit in favour of Manohar Singh alone was  challenged  and the period for which  the.  permit  was issued having expired, it was not possible for the Court  to grant  any relief to the appellants, and the remedy  of  the appellants  against  the  order of  the  Regional  Transport Authority  granting  fresh permitlay  before  the  Transport Authorities under the Motor  803 Vehicles Act.  The high Court observed "it is possible  that the fact, that Manohar Singh was the holder of a  temporary permit may have influenced the Regional Transport  Authority in  granting him a permanent permit," but it is open to  the petitioner-Companies  to  agitate  that  matter  before  the Appellate and the Revisional Authorities in  proceedings and if no relief is given by the aforesaid authorities then this Court   can   be  approached  under  article  226   of   the Constitution,  if  proper  grounds exist  for  invoking  its extraordinary  powers under the aforesaid Article. x x  x  x The  mere fact that respondent No. 4 (Manohar Singh) held  a temporary  permit  is  not  the only  ground  on  which  the permanent  permit has to be granted to him.  While  granting the  permanent  permit the authorities have  to  follow  the provisions  of the statute and take into  consideration  the various matters that are provided for by the Motor  Vehicles Act". The  appellants  then  appealed against  the  order  of  the Regional  Transport  Authority.   The  Provincial  Transport Controller,-  Punjab,  by  his order  dated  May  29,  1959, quashed  the  order of the  Regional  Transport  Authority., because  in  his view Manohar Singh had merely  applied  for renewal  of  his  temporary  permit,  and  that  before  the Regional Transport Authority there was no application for  a regular permit and that the procedure adopted for granting a permit  to Manohar Singh, did not conform to the  provisions of  the  law and therefore the order  renewing  a  temporary permit  and making it a permit to ply a stage  carriage  for three   years   was  invalid.   The   Provincial   Transport Controller  directed  "that  the question  of  allotment  of permits  may,  if necessary, be taken up  afresh  after  the requisite  formalities are observed." But the order  of  the Transport  Controller  was  set  aside  by  the   Secretary, Transport  Department,  State  of  Punjab,  in  exercise  of revisional authority 804 under  s.  64(h)  of the Motor Vehicles Act  as  amended  by Punjab Act 28 of 1948. The  appellants  then moved the High Court of  Punjab  by  a petition under Art. 226 of the Constitution for quashing the order of the Secretary, Transport Department, on the  pleas, inter  alia,  that  the order passed by  the  Secretary  was illegal  because  it ignored the ’effect  of  the  temporary permit which was the basis on which the permanent permit was granted’  to Manohar Singh, that the security had failed  to note  that the Regional Transport Authority had not  invited applications  from the public for granting permit%  for  the route and had merely notified the application for renewal of the  permit  of  the  third  respondent  and  that  the  Act

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contained  no  provision for renewal of a  temporary  permit into  a  regular  permit.   The  High  Court  rejected  this application. In  the  view.  of  the  High  Court   "every possibleargument"   was  advanced  before  the   Regional. Transport Authority and I was considered by that  authority, and  that for adjudicating on the merits of the  claims  for and  against the grant of the permit the  authorities  under the Motor Vehicles Act were "the proper authorities.’ Section  62  of the Motor Vehicles Act, 1939,  empowers  the Regional Transport Authority to grant without following  the procedure laid down in s. 57 of the Act and subject to  such conditions  as  it  thinks  fit to  impose,  permits  to  be effective  for a limited Period (not in any  case  exceeding four months) authorising the use of a transport  vehicle-(a) for  the conveyance of passengers on special occasions  such as  to and from fairs and religious gatherings, or  (b)  for the  purpose  of  a  seasonal business, or  (c)  to  meet  a particular  need, or (d) pending decision of an  application for  the renewal of a permit.  By the amendment made by  Act 100  of 1956 two restrictions were placed on this power  (i) that the temporary  805 permit  shall in no case be granted in respect of any  route or  area specified in an application for the grant of a  new permit  under  s. 46 or s. 54 during the   pendency  of  the application and (ii) that the temporary permit shall, in  no case,  be granted more than once in respect of any route  or area specified in an application for the renewal of a permit during  the  pendency  of  such  application  for   renewal. Permits under s. 62 arc undoubtedly intended to meet  tempo- rary  needs of the nature specified in the section, and  the formalities  which arc ’prescribed by s. 57 of the  Act  are not required to be followed before such permits are granted. It appears that it was the practice followed in the State of Punjab  to issue all permits for plying stage  carriages  as temporary  permits, and not to issue regular permits at  all under s.  57  of the Act.  This is pointed out in its  order by  the  Regional Transport Authority in this case,  and  on that point there is no dispute.   The permit granted to Manohar Singh pursuant to the  order of  the  Minister,  Transport Department,  was  a  temporary permit.   After  the expiry of the period of  the  temporary permit  in  his  favour, Manohar Singh  applied  not  for  a regular  permit under s. 57, but for renewal of a  temporary permit.   The Act, however, does not contemplate renewal  of temporary  permits  : only regular permits  may  be  renewed under  s. 58 of the Act.  The Regional  Transport  Authority invited objections to the application of Manohar Singh  ’for renewal of the permit for a period of three years on regular basis’..  without  indicating  that Manohar  Singh  was  the holder  of a temporary permit.  As we have already  observed there  were  on the route specified in  the  application  no regular  permits   issued under s. 57 and  all  the  permits which  were issued by the Authority were  temporary  permits under s.62.  The  Regional   Transport  Authority   had, therefore for the first time to issue regular permits  under s.57 of the Act and 806 that   authority   might  well  have,   before   censidering applications  submitted  by holders  of  temporary  permits, invited  applications  from persons who were  interested  in applying  for  permits  for  the  route  in  question.    In considering an application for a permit for a stage carriage normally  the Regional Transport Authority has  to  consider matters  set out in clauses (a) to (f) of s. 47 such as  the

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interest  of  the public generally, the  advantages  to  the public  of the service to be provided, including the  saving of  time  likely to be effected thereby, adequacy  of  other passenger transport services operating or likely to  operate in  the near future, benefit to any particular  locality  or localities likely to. be afforded by the service., operation by the applicant of other transport services including those in  respect of which applications from him for  permits  are pending  and  the  condition of the roads  included  in  the proposed  route or areas.  The Regional Transport  Authority has  also to consider whether the number of stage  carriages generally or of any specified type for which permits may  be granted  should be limited in any specified area or  on  any specified route within the region.  When there is already  a transport  service  maintained on the route in  question  by operators  holding regular permits, the  Regional  Transport Authority may, having regard to the previous  investigations made,  proceed  on results of enquiries or surveys  made  in respect   of  some of the  matters detailed in s. 47 but  it has still to consider, all those matters.  Further by virtue of  the proviso to sub-s. (2) of s. 58 if  other  conditions are  equal  an  application  for renewal  has  to  be  given preference over new applications for permits’ Manifestly  in dealing  with applications for issue of  temporary  permits, regular  permits  and renewal of regular  permits  different considerations  come into play.  A temporary permit  may  be issued  to meet purely temporary needs.  In considering  the issue  of regular permits an elaborate procedure has  to  be followed,   including   a  hearing  demanding   a   judicial consideration 807 of  the claims of the individual applicants inter Se in  the context  of the wider interest of the. general public  ;  in considering  an  application for renewal of  a  permit,  the authority has to afford to an existing operator a preemptive opportunity, if other conditions Were equal.  As there  were no  existing  operators  with regular  permits,  a  detailed enquiry   under  s.  57  with  special.  attention  to   the requirements  had  to be made.  But the  Regional  Transport Authority  committed  an  error  at  the  threshold  of  his proceeding  :  it entertained an ;application which  is  not contemplated by any provision of the Act, invited objections thereto  in  terms which were somewhat  misleading,  thereby preventing  other applicants from coming forward  to  apply, and  failed  to apply its mind to matters which  had  to  he considered under s. 47 of the Motor Vehicles Act.  Therefore by  entertaining an application for renewal of  a  temporary permit  and  inviting objections against  such  renewal  the Regional  Transport  Authority  entertained  an  application which   was  not  in  law  maintainable,  and  by   inviting objections  to the application as one for renewal for  three years  on  regular  basis in substance  misled  the  parties desiring to enter into competition into desisting from  sub- mitting   their   applications.    Its   proceedings   were, therefore,  in  our judgment, vitiated on account  of  grave errors of procedure. But  Mr.  Gosain  appearing on  behalf  of  the  respondents submits  that even the period of the regular permit  granted to  Manohar  Singh by the Regional Transport  Authority  has expired  and  the Regional Transport Authority  has  now  to consider   fresh  applications  for  permits  and   whatever irregularities  may have occurred in the issue of permit  in favour  of Manohar Singh they cannot now be  rectified,  and any  declaration which this Court may make in regard to  the irregularities  would be academic.  But it is  necessary  in

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our judgment to declare the true position in law, so that in the consideration of the fresh applications 808 the  mistakes  originally  committed may  not  be  repeated. Again  by making an order affirming the decision  passed  by the High Court we would be giving to Manohar Singh a benefit to  which he is not lawfully entitled.  If the permit  which was granted by the Regional Transport Authority on August 1, 1958,  was not lawfully granted, Manohar Singh would not  be entitled  to the benefit of the proviso to sub-s. (2) of  s. 58 and his application for permit would have-to be one under s.  57 and would have to be considered in  competition  with other claimants for permits on the route.  We do not  think, therefore,  that the consideration of the objections to  the validity of the procedure followed by the Regional Transport Authority has become academic as submitted by Mr. Gosain. We accordingly set aside the order passed by the High  Court and  declare  that  the  order  of  the  Regional  Transport Authority granting a permit in favour of Manohar Singh  was, for  reasons already set out, unlawful.  The appellant  will be entitled to the costs of this appeal.                           Appeal allowed. 809