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PETITIONER: INTER STATE TRANSPORT COMMISSION, NEW DELHI

       Vs.

RESPONDENT: P.   MANJUNATH KAMATH & ORS.

DATE OF JUDGMENT02/08/1972

BENCH: RAY, A.N. BENCH: RAY, A.N. DUA, I.D. BEG, M. HAMEEDULLAH

CITATION:  1972 AIR 2250            1973 SCR  (1) 765

ACT: Motor  Vehicles Act, 1939, s. 63A (2)  (c)-Directions  under section    by   Inter-State   Transport    Commission    are administrative    in   character-Cannot    bind    Transport Authorities   in  the  exercise  of   their   quasi-judicial functions in granting permits etc.

HEADNOTE: The Inter-State Transport Commission issued directions under s.  63A (2) (c) of Motor Vehicles Act 1939 laying down  that permits  by the concerned authorities should be issued in  a certain  order  of  preference.  The  respondents  who  were applicants for permits for inter-State routes were adversely affected  and  in  writ petitions under  Art..  226  of  the Constitution challenged the competence of the Commission  to issue   binding  directions  under  s.  63A(2)  (c)   to   a subordinate  authority in respect of the exercise of  quasi- judicial  functions.   The  High  Court  allowed  the   writ petitions.  In appeal by the Commission to this Court. HELD  :  It  is important to notice that  the  Act  has  not conferred any power on the Commission to make Rules.  In the absence of any power to enact subordinate legislation by way of  rules  the  delegation of legislative  power  cannot  be lightly  inferred.   The  power  to  make  rules  has   been expressly  conferred  on  the Central  Government  under  s. 133(1) and is subject to procedural safeguards. [770 G] This   Court  in  Naidu’s  case  held  that  the   Transport Authorities  in  dealing with applications for  permits  and assessing  the  respective or rival claims  of  the  parties discharge  quasi-judicial  functions and  their  orders  are quasi-judicial   orders.  it  is  therefore   essential   to fundamentals  of fairplay in the administration of law  that the decision of these Transport Authorities in the matter of grant  of  permits  should  not  be  clogged  by  directions indicating  the  orders  of preference as  happened  in  the present case. [771 D] When  the  Act  itself  in  s.  55  provides  preference  to Cooperative  Societies,  as  far  as  possible,  it  is  not appropriate to hold that the Commission would have power  to do the identical things, in the present case, the Commission did not rest merely with giving the first preference to  Co- operative  Societies.  The Commission  thereafter  indicated

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the order of preference to Transport Cooperative  Societies, Limited  Companies, Registered firms and lastly to  others.. [771 F] It is apparent that the order of preference indicated in the garb  of  directions is an encroachment  upon  the  judicial discretion  of  the Transport Authorities in the  matter  of grant of permits. [771 G] The  power  of the Inter-State  Transport  Commission  under section  63A(2)(c)  of  the  Act  to  issue  directions   is referable only to directions of executive and administrative nature.,  The Commission has no power to entrench  upon  the quasi-judicial functions of the Transport Authorities in the matter of grant of permits.  The order of the High Court  in quashing the direction must therefore be upheld. [772 A] 766 B.   Rajagopala Naidu v. State Transport Appellate  Tribunal JUDGMENT:

& CIVIL  APPELLATE  JURISDICTION : Civil Appeals Nos.  1084  & 1091 of 1967 and 1081 of 1970. Appeal by certificate from the Judgment and order dated  the 9th  June 1966 of the Mysore High Court in W.Ps.  Nos.  442, 884 and 441 of 1964. M.   K. Ramamurthi and S. P. Nayar, for the appellant in all the appeals. Respondent did not appear. The Judgment of the Court was delivered by Ray,  J.--These  three appeals are by certificate  from  the judgments dated 9 June, 1966, 10 December, 1964 and 19 July, 1966 of the High Court of Mysore. The  only  question which falls for consideration  in  these appeals  is the interpretation of section 63A(2)(c)  of  the Motor  Vebicles  Act, 1939 (hereinafter referred to  as  the Act). Civil  Appeal  No. 1084 of 1967  concerns  applications  for grant  of  permits  on  specified routes  in  the  State  of Maharashtra.   On  8  April, 1963,  the  Regional  Transport Authority, South Kanara issued a notification under  Section 57(2) of the Act inviting applications from public  carriers permit  holders  (if  South  Kanara  District  intending  to operate  their  vehicles in the State of  Maharashtra.   The permits  were under reciprocal agreement between  the  State Governments  of  Mysore  and  Maharashtra.   There  were  28 vacancies  for  permits. 39 applications were made  for  the same.   The  respondent Kamath in Civil Appeal No.  1084  of 1967  submitted an application for permit.  His  application was rejected by the Regional Transport Authority, Mangalore. He  preferred  an appeal to the  State  Transport  Appellate Tribunal.   The State Transport Appellate Tribunal  rejected the appeal. The  Inter-State Transport Commission issued certain  direc- tions   to  the  Regional  Transport   Authorities.    These directions  were issued under section 63A(2)(c) of the  Act. These  directions laid down the order of preference  in  the grant  of permits.  The Transport Authorities kept  in  view those  directions The principal point for  consideration  in these appeals is whether the InterState Transport Commission was competent to do so. Section 63A(2) of the Act deals with functions of the Inter- State Transport Commission.  One of the principal  functions is  regulation of the operation of transport vehicles in  an inter-State  region.   Section  45 of  the  Act  deals  with

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application where it is  767 proposed to use the vehicle in two or more different States. Section  63 of the Act requires a permit granted in any  one State  to be countersigned by the State Transport  Authority or  the  Regional Transport Authority of  the  other  State. Section  63 further provides that it shall not be  necessary to  follow  the procedure laid down in section  57  for  the grant  of counter-signatures of permits, where  the  permits granted in any one State are required to be countersigned by the  State  Transport Authority of another State or  by  the Regional  Transport Authority concerned as a result  of  any agreement arrived at between the States after complying with the  requirements of sub-section (3A), or for the  grant  of counter-signatures of permits in pursuance of any  direction issued by the Commission under clause (c) of subsection  (2) of  section  63A.   Section 63  further  provides  that  the agreement  between the States shall be published by each  of the States concerned in the Official Gazette together with a notice   of  the  date  before  which   representations   in connection  therewith  may be submitted, and the  date,  not being   less  than  thirty  days  from  the  date  of   such publication,   on   which  the   representations   will   be considered.               Section 63A(2)(c) of the Act is as follows               "63A.   (2)  The  Commission   shall   perform               throughout  an inter-State region all or  such               of  the  following  functions  as  it  may  be               authorised to do by the Central Government  by               notification   in   the   Official    Gazette,               namely:--               (c)   to   issue  directions  to   the   State               Transport  Authorities or  Regional  Transport               Authorities  interested regarding  the  grant,               revocation  and suspension of permits  and  of               permits  and of counter-signatures of  permits               for  the operation of transport  vehicles  in-               respect of any route or area common to two  or               more States." The   directions   issued  by  the   inter-State   Transport Commission under section 63A (2) (c) were inter alia these :               (i)   Preference   will   be  given   in   the               following order in the grant of the permits.               (a)   A Co-operative Society               (i)   at  least 50 per cent of the members  of               which are       not related to each other;               (ii)  75 per cent of the members of which  are               also employees and               768               (iii) the  main  business  of  which  is   the               provision of transport services.               (b)   Transport  Co-operative Societies  other                             than the above.               (c)   A limited company or a registered  firm.               (d) Others. The respondent Kamath made an application under Article  226 of  the  Constitution to the Mysore High  Court.   The  res- pondent  Kamath  challenged the decision  of  the  Transport Authorities.   The  main grounds for challenge  were  these. The InterState Transport Commission issued directions to the Transport Authorities indicating the order of preference for grant of permits.  The Transport Authorities became bound by and  kept  in  view  these  directions.   These   directions invaded,  infringed  and  impinged  on  the  authority   and jurisdiction  of the Transport Authorities for the grant  of

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perpmits.    Therefore  the  decisions  of   the   Transport Authorities were vitiated. The  High Court came to the conclusion that  the  directions issued by the Inter-State Transport Commission encroached on the  quasi-.judicial jurisdiction of the Regional  Transport Authority. Civil  Appeal No. 1091 of 1967 concerns the grant of  inter- State.  permit  under the reciprocal agreement  between  the Governments   of  Mysore  and  Maharashtra.   The   Regional Transport  Authority, Belgaum on 20 September, 1963  invited applications  under section 57(2) of the Act from  operators holdig  substantive  public carrier permits issued  by  that Authority  for variation of the conditions of permit by  the inclusion  of three new straight inter-State routes  between the places in Belgaum District, connecting with places lying in  Maharashtra  State in the said permit and for  grant  of counter-signature   by   the  State   Transport   Authority, Maharashtra  under the reciprocal agreement between the  two States.   The  respondent Jaknur submitted  an  application. The total number of applications was 25.  The application of respondent  Jaknur  was  rejected.   The  respondent  Jaknur thereupon  made  an  application under Article  226  of  the Constitution  to  the  Mysore High  Court.   The  respondent Jaknur  impeached the decision of the  Transport  Authority, Belgaum   on  these  grounds.   The  Inter-State   Transport Commission  on 3 October, 1963 issued directions  indicating the  order of preference in the matter of grant of  permits. These directions were the same as in the other appeal.   The respondent Jaknur challenged the directions as violative  of and infringing the quasi-judicial jurisdiction and authority of  the  Transport Authorities.  The grounds  for  challenge were similar to those in Civil Appeal No. 1084 of 1967.  The contentions  of the respondent Jaknur found favour with  the High Court.                769 Civil Appeal No. 1081 of 1970 concerns grant of  inter-State permit  for  the  plying of vehicles  on  certain  specified routes between the State of Mysore and the State of  Kerala. The  Regional  Transport  Authority on  26  September,  1963 called from owners of carriers who had been granted  permits applications  for grant of counter-signature by  the  Kerala State Transport Authority. for plying of vehicles on  routes between  the States of Mysore and Kerala.  There was  inter- State  agreement  between the two States for the  plying  of such  vehicles.  The respondent Hegde made  an  application. His  application  was, rejected.  The principal  ground  for rejection  of the application was that the respondent  Hegde was  not in a position to command facilities to the  public. The  respondent Hegde thereupon filed an  application  under Article  226  of  the Constitution before  the  Mysore  High Court.  The respondent Hegde challenged the decision of  the Transport  Authority  on grounds similar to those  in  Civil Appeal No. 1084 of 1967, that the decision of the  Transport Authority  was invaded by the direction of  the  Inter-State Transport Commission indicating the order of preference. Counsel  for  the  appellant contended  that  under  section 63A(2)  (c) of the Act the Inter-State Transport  Commission was  competent  to.  issue directions to the  State  or  the Regional  Transport Authorities regarding grant of  permits, and, therefore, the indicating of order of preference in the directions  amounted  only  to laying down  criteria  to  be applied in dealing with permits. This Court in B. Rajagopala Naidu v. State Transport  Appel- late  Tribunal & Ors.(1) construed section 43A of the  Motor Vehicles  Act as inserted by the Madras Amending Act  20  of

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1948.  Section 43A was as follows :               "The  State Government may issue  such  orders               and  directions of a general character  as  it               may  consider  necessary, in  respect  of  any               matter relating to road transport to the State               Transport  Authority or a  Regional  Transport               Authority; and such Transport Authority  shall               give   effect   to   all   such   orders   and               directions." In Naidu’s(1) case the State Government under section 43A of the  Act gave directions prescribing criteria for  selection and  devised  a marking system for applicants.   This  Court held that the power of the State Government to issue  orders and  directions  in respect of any matter relating  to  road transport to the State or Regional Transport Authorities did not  embrace  any  power of the  State  Government  to  give directions in respect of matters which had been entrusted to the Tribunals constituted under the Act and. which are to be dealt  with by those Authorities in  quasi-judicial  manner. The words "orders and directions" (1)  [1964] 7 S.C. R.I. 770 were  held in that case to be equivalent to executive  acts. Those  words  could cover only the field  of  administrative orders  and directions.  This Court said that the  structure of  the  Act indicated that section 43A of the Act  did  not include  "the  area  which  is  the  subject-matter  of  the exercise   of  quasi-judicial  authority  by  the   relevant Tribunals". Counsel  for the appellant contended that the  reasoning  in Naidu’s  case (supra) could not apply to the  interpretation of  section  63A(2)(c)  of  the  Act  which  spoke  only  of "directions"  and  not  of "orders  and  directions".   This contention is unsound both on logic and principle. Section  63A  of  the Act speaks of various  powers  of  the InterState  Transport Commission.  First, there is power  to prepare  schemes  for  the  development,  co-ordination   or regulation  of the operation of transport and in  particular of  goods vehicles in an inter-State region.  Secondly,  the Commission  has power to settle all disputes and decide  all matters on which differences of opinion arise in  connection with  the  development, co-ordination or regulation  of  the operation  of  transport vehicles in an  interState  region. Thirdly, the Commission has power to issue directions to the State  Transport  Authorities  or  the  Regional   Transport Authorities  interested regarding the grant, revocation  and suspension of permits and ’counter-signatures of permits for the operation of transport, vehicles in respect of any route or  area  common  to  two or  more  States.   Fourthly,  the Commission  ha.-,  power  to grant, revoke  or  suspend  any permit  or countersign any permit for the operation  of  any transport  vehicles in respect of such route or area  common to two or more States as may be specified in this behalf by, the Central Government.  These four powers are separate  and distinct. It is important to notice that the Act has not conferred any power  on the Commission to make Rules.  In the  absence  of any  power to enact subordinate legislation by way of  rules the  delegation  of  legislative  power  cannot  be  lightly inferred.   Under  section 133(1) of the Act power  to  make rules is conferred on the Central Government.  Further more, the  power  to make rules is subject to  the  condition,  of rules  being made after previous publication.  The rules  so made  are  also  to be published in  the  Official  Gazette. Again,  rules  made by the Central Government or  the  State

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Government  shall be laid for not less than 14  days  before Parliament  or  the State Legislature as the case  may  be,. These safeguards are provided when power to make subordinate legislation has been conferred on the Central Government  or the State Government.  771 The  provisions, contained in section 63A(4) of the Act  are that  where the Commission in the exercise of  discharge  of powers   and  functions  under  section   63A(2)(c)   issues directions   to   the  State  or  the   Regional   Transport Authorities, those authorities shall give effect and will be guided by such directions.  Orders or directions which  have the  force  of  law by reason of statutory  power  bind  the authorities by reason of sustenance from the statute.  It is only  when  orders  of  directions  are  in  the  nature  of administrative  orders and directions and they do  not  have the  force of statutory rules that. it is not  inappropriate to  provide that orders or directions shall be  followed  by the  authorities.  This Court applied this reasoning to  the interpretation  of  section 43A of the Act in  Naidu’s  case (supra) and held that the provisions in section 43A that the Transport Authorities "shall give effect to all such  orders and  directions"  indicated that the directions  were  of  a general character in respect of administrative matters. This  Court in Naidu’s case (supra) held that the  Transport Authorities  in  dealing with applications for  permits  and assessing  the  respective or rival claims  of  the  parties discharge  quasijudicial  functions  and  their  orders  are quasi-judicial  orders.   It  is,  therefore  essential   to fundamentals of fair-play in the administrative of law  that the decision of these Transport Authorities in the matter of grant  of  permits  should  not  be  clogged  by  directions indicating  the  order  of preference  as  happened  in  the present case. Section 55 of the Act which deals with applications for  the public  carriers permit states that other  conditions  being equal  an application for a public carrier’s permit  from  a Co-operative  Society,  shall,  as  far  as  may,  be  given preference over the applications for grant of permits.  When the  Act provides preference to Co-operative  Societies,  as far  as  possible, it is not appropriate to  hold  that  the Commission would have power to do the identical things.   In the  present case, the Commission did not rest  merely  with giving the first preference to Co-operative Societies.   The Commission  thereafter indicated the order of preference  to Transport   Co-operative   Societies,   Limited   Companies, Registered firms and lastly to others. It is apparent that the order of preference indicated in the garb  of  directions is an encroachment  upon  the  judicial discretion  of  the Transport Authorities in the  matter  of grant of permits. The  High Court was correct in holding that  the  Commission was not vested with any power to issue "directions which may have   the  effect  of  fettering  the  Regional   Transport Authorities or the State Transport Authorities concerned  in performance  of  their quasi-judicial  functions  under  the provisions of the Act"’. 772 The  power  of the Inter-State  Transport  Commission  under section  63A(2)(c)  of  the  Act  to  issue  directions   is referable only to directions of executive and administrative nature.   The Commission has no power to entrench  upon  the quasi-judicial functions of the Transport Authorities in the matter of grant of permits.  The order of the High Court  in quashing the direction is upheld.

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The appeals therefore fail.  The respondents did not appear. Therefore, there will be no order as to costs. G.C.                     Appeals dismissed. 773