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PETITIONER: K.   BALASUBRAMANIA CHETTY

       Vs.

RESPONDENT: N.   M. SAMBANDAMOORTHY CHETTY

DATE OF JUDGMENT20/12/1974

BENCH: BHAGWATI, P.N. BENCH: BHAGWATI, P.N. MATHEW, KUTTYIL KURIEN UNTWALIA, N.L.

CITATION:  1975 AIR  818            1975 SCR  (3)  91  1975 SCC  (1) 242  CITATOR INFO :  D          1978 SC 349  (7)

ACT: Motor Vehicles Act. 1939-S. 64B-Criteria for allotting marks for  grant  of  permit-Public  interest-Considerations   for deciding-Extent  of Jurisdiction of the High Court under  S. 64B.

HEADNOTE: The  Regional Transport Authority granted a  stage  carriage permit  to  the respondent as against the appellant  on  the ground  that the former was a single bus operator while  the appellant  was  an  operator  having  four  stage   carriage permits,  including  a  stage  carriage  permit  which   was recently  granted  to him.  The  State  Transport  Appellate Tribunal,  on  the  other  hand,  took  the  view  that  the respondent  did  not have a pucca fire  proof  building  for workshop,.  that  it  was  immaterial  whether  the   sector experience  of the appellant was derived under  a  temporary permit  or  a  permanent  permit;  that  the  appellant  was entitled  to two marks even though the experience gained  by him was by operation of temporary permits, that the  history sheet of the appellant was clean without any adverse  remark and  that  since  a portion of the  route  fell  within  the interior roads it was desirable in public interest to prefer "an  experienced operator instead of single  bus  operator". The Appellate Tribunal,. therefore, found that the appellant had superior qualifications and was entitled to be preferred to others. On a revision application under s. 64B of the Motor Vehicles Act,  1939  a single Judge of the High Court took  the  view that public interest required that in the socialist  pattern of society monopoly should as far as possible be avoided and a smaller operator with one stage carriage permit should  be preferred  to a bigger operator having three or  more  stage carriage permits, that the appellant was a recent grantee of stage carriage permit; that a proper standard of  comparison of  the history sheets of the appellant and  the  respondent had  not been made; and that the respondent was entitled  to two marks on account of sector experience.  The order of the Regional   Transport  Authority  granting  permit   to   the

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respondent was, therefore, restored. Allowing the appeal, HELD  :  (1) The High Court was not right  in  refusing  two marks  to the appellant.  Clause 3(c) of rule 155A  provides that  two marks shall be awarded to the applicant,  who.  on the  date  of the consideration of the  application  by  the Regional  Transport  Authority,  has  been  plying  a  stage carriage  permit on the entire route.  It does  not  contain any  restriction that in order to be entitled’ to these  two marks the applicant should have been plying on the route  on the  basis of a permanent permit.  What is material is  that the applicant should have experience of plying on the  route and this experience would be there whether plying is done on a temporary permit or a permanent permit. [94G-H] (2)  The paramount consideration to be taken into account in determining as to which of the applicants should be selected for grant of permit always is public interest. [95 B-C] (3)  The  mere  fact  that an applicant has  more  than  one permit  or  he  is  a recent grantee  cannot  by  itself  be regarded  as a factor against him in the comparative  scale. Possession  of more than one permit also cannot, by  itself, divorced   from  other  circumstances,  be  regarded  as   a disqualification. [96 F; H] Ajantha Transports (P) Ltd. v. T. Y. K. Transports, [1975] 2 S.C.R. 166, followed. The  High Court was in error in rejecting the claim  of  the appellant to the grant of permit by mechanically relying  on the circumstance that the 92 appellant  was  a  multi  bus  operator  having  four  Stage carriage   permits   including  a   recent   grant   without considering  how  in  the  light  of  the  other  facts  and circumstances, it was correlated to the question of  public interest.’  The  four  stage  carriage  permits  which   the appellant  had were not on the same route and there  was  no question of any monopoly being created in his favour if  the permit  applied for by him was granted.  The  possession  of more than one permit by the appellant was a circumstance  in his.  favour because according to cl. 3(F) of rule  155A  an applicant operating more than four stage carriages would  be entitled to one mark. [97B-D] (4)  The  High Court was in error in holding that  the  same standard  was not applied by the State  Transport  Appellate Tribunal  in comparing the history sheets of  the  appellant and the respondents. [97H] (5)  In  the  instant case the, High Court  overstepped  the limits  of  the  revisional  jurisdiction  and  treated  the revision   application  as  if  it  were  an  appeal.    The jurisdiction  of the High Court under s. 64B is as  severely restricted  as  that  under  s. 115 of  the  Code  of  Civil Procedure  and  it is only where there is  a  jurisdictional error  or  illegality  or  material  irregularity  in   the- exercise  of jurisdiction that the High Court can  interfere under section 64B with an order made by the State  Transport Appellate Tribunal. [98D-E]

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1672 of 1973. Appeal  by special leave from the judgment and  order  dated the 9th January, 1973 of the Madras High Court in C.R.P. No. 2486 of 1972. Y.   S. Chitale, C. S. Prakasa Rao and A. T. M. Sampath, for the appellant.

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K.   S. Ramamurthy, V. Subramanian and Vineet Kumar, for the respondent. The judgment of the Court was delivered by BHAGWATI   J.-There  were  fifteen  applicants  before   the Regional  Transport  Authority, Chingleput for  grant  of  a stage carriage permit to ply a bus on the route Red Hills to Kancheepuram.  This route covers a distance of 501 miles  of 81.27 kilometers and is a ’long :route,’ within the  meaning of  that  expression  as  used in rule  155A  of  the  Motor Vehicles  Rules, 1940.  Out of fifteen applicants, only  two are  before  us, namely, the appellant and  the  respondent. The appellant was applicant No. 7, while the respondent  was applicant  No.  6. The Regional Transport  Authority,  after considering the applications, made an order dated 19th June, 1971  granting  the  permit to  the  respondent,  though  on marking according to the provisions contained in clause  (3) of  rule  155A, the respondent obtained only 7.40  marks  as against  9.00  marks obtained by the  appellant.   The  main ground ,on which the Regional Transport Authority  preferred the respondent to the appellant was that the respondent  was a  single bus operator, while the appellant was a multi  bus operator  having  four stage carriage  permits  including  a stage carriage permit recently granted to him. The appellant and seven other applicants, who were aggrieved by  the  decision  of  the  Regional  Transport   Authority, granting  a  permit  to the  respondent,  preferred  appeals before the State Transport Appellate Tribunal impleading the respondent as the opposite party in the appeals.  The  State Transport  Appellate  Tribunal took the. view that  at  tile date  of  the  consideration  of  the  applications  by  the Regional Transport 93 Authority,  the respondent had a workshop but it was  housed only  in  a  thatched shed and not in  a  pucca  fire  proof building and the respondent was, therefore, not entitled  to two  marks under clause (3) (E) of rule 155A and  his  total marks  should, therefore, have been 5.40 and not  7.40.  The Regional Transport Authority had refused to grant two  marks to  the appellant on account of sector qualification on  the ground that he had been plying only on temporary permits but this  view  did  not find favour with  the  State  Transport Appellate  Tribunal which held that under clause (3) (C)  of rule  155A it was immaterial whether sector  experience  was derived  by  an  applicant under a  temporary  permit  or  a permanent permit and the appellant was, therefore,  entitled to  two  marks  under  that  clause  on  account  of  sector experience  even  though gained by  operation  on  temporary permits.  So far as the past record was concerned, the State Transport Appellate Tribunal relied heavily on the fact that the  history  sheet of the appellant was clean  without  any adverse entry while the respondent had one adverse entry  in the history sheet relating to his single stage carriage  and four  adverse entries in the history sheet relating  to  his lorry  operation.   The State Transport  Appellate  Tribunal also pointed out that a portion of the route fell within the interior  roads and it was, therefore, desirable  in  public interest  to  prefer  "an experienced  operator  instead  of single bus operator".  Having regard to these considerations the  State Transport Appellate Tribunal set aside the  order of  the Regional Transport Authority granting permit to  the respondent.   The  State Transport Appellate  Tribunal  then proceeded  to consider who amongst the appellants before  it deserved to be granted permit.  After considering the  claim of  the appellants before it, the State Transport  Appellate Tribunal  took the view that since the appellant had  higher

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marks which reflected his superior qualifications and was an experienced  operator  with a clean history  sheet,  he  was entitled to be preferred to the other appellants and in this view,  the State Transport Appellate Tribunal, by  an  order dated 23rd September, 1972, granted permit to the appellant. The respondent thereupon preferred a revision application to the High Court under section 64B of the Madras Vehicles Act, 1939.   The  learned Single Judge, who  heard  the  revision application,   held  that  the  State  Transport   Appellate Tribunal had acted with material irregularity in exercise of its   jurisdiction  in  preferring  the  appellant  to   the respondent for the grant of permit. There were in the  main five  reasons which prevailed with the learned Single  Judge in taking this view in favour of the respondent.  First, the learned  Single  Judge  held that though  according  to  the provisions for marking contained’ in clause (3) of rule 155A the appellant had admittedly more marks than the respondent, that  was not’ a determinative factor because rule155A  was itself  subject  to the overriding consideration  of  public interest  emphasised in section 47(1) of the Act and  public interest  required that in the socialist pattern of  society which  we had adopted monopoly should as far as possible  be avoided  and  a  smaller operator with  one  stage  carriage permit should be preferred to a bigger operator having three or  more  stage  carriage permits.   This  important  consi- deration  was  ignored  by  the  State  Transport  Appellate Tribunal in 94 preferring  the appellant to the respondent.  Secondly,  the State Transport Appellate Tribunal had over looked the, fact that the appellant was a recent grantee of a stage  carriage permit  though it was a relevant circumstance which  weighed against the appellant in the process of comparison with  the respondent.   Thirdly, a proper standard of  comparison  was not applied in considering the rival claims of the appellant and  the respondent.  Though the history sheet of  the  res- pondent  in regard to his performance, as a  lorry  operator was scanned by the State Transport Appellate Tribunal over a period  of ten years, no such scrutiny was made in the  case of the appellant of the history sheet relating to his  stage carriage operation for the past ten years and this  vitiated the  order  of  the  State  Transport  Appellate   Tribunal. Fourthly,  the  respondent  was entitled  to  two  marks  on account  of workshop under clause (3) (E) of rule  155A  and these  had  been  wrongly  denied  by  the  State  Transport Appellate  Tribunal,  and  lastly,  the  appellant  was  not entitled to two marks on account of sector experience  under clause  (3)  (C) of rule 155A since  the  sector  experience claimed  by him was on the basis of operation  on  temporary permits.   The learned Single Judge accordingly allowed  the revision  application and set aside the order of  the  State Transport   Appellate  Tribunal  granting  permit   to   the appellant.   The result was that the order of the  Regional Transport  Authority granting permit to the respondent was restored.   The  appellant was obviously aggrieved  by  this order  made by the learned Single Judge and  he  accordingly preferred  the  present appeal with special  leave  obtained from this Court. We  will  first  dispose  of  the  last  two  reasons  which prevailed with the learned Single Judge in interfering with the order of the State Transport Appellate Tribunal.  So far as the claim of the respondent ’for two marks in respect  of workshop under clause (3) (E) of rule 155A is concerned,  we agree  with  the  learned  Single  Judge  that  the   ’State Transport  Appellate Tribunal was in error in refusing  that

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claim.   ’The Regional Transport Officer under  instructions from the Regional Transport Authority inspected the workshop of  the  respondent and found that it was in  a  pucca  fire proof  building and the respondent was accordingly  entitled to  two marks under clause (3) (E) of rule 155A.   But  that would  not make any difference because even with  these  two marks, the total number of marks of the respondent would not exceed 7.40 as against 9 marks of the appellant.   Moreover, ,these  9  marks,  do not include two marks  on  account  of sector  experience under clause (3) (C) of rule  155A.   The State  Transport  Appellate Tribunal gave two marks  to  the appellant  on account of sector experience but  the  learned Single  Judge took a different view.  We do not  think  the learned  Judge  was  right  in refusing  two  marks  to  the appellant  on  this  count.  Clause (3)  (C)  of  rule  155A provides  that two marks shall be awarded to  the  applicant who  on the date of consideration of the application by  the Regional  Transport  Authority  has  been  plying  a   stage carriage  on  the entire route:.  It does  not  contain  any restriction that in order to be entitled to these two  marks the  applicant should have been plying on the route; on  the basis  of a permanent permit.  It is immaterial whether  the applicant  has  been  plying ton the route  on  a  temporary permit or a permanent permit.  What is 95 material  is  that the applicant should have  experience  of plying  on  the  route and this experience  would  be  there whether  plying  is  done  on a temporary  permit  or  on  a permanent permit.  The appellant was, therefore, entitled to two  marks  on  account of sector  experience  under  clause (3)(C) of rule 155A and that would raise his total number of marks  to  11.   The  position,  therefore,  was  that   the appellant  was entitled to 11 marks as against 7.40  of  the respondent. But  that  by  itself  would not  be  determinative  of  the controversy.   The paramount consideration to be taken  into account in determining as to which of the applicants  should be  selected for grant of permit always is public  interest. Section  47(1) provides in so many words that  the  Regional Transport Authority shall, in considering an application for a  stage  carriage permit have regard inter  alia,  to  "the interest   of   the  public  generally",  and  this   is   a consideration  which must necessarily outweigh  all  others. It  is ultimately on the touchstone of public interest  that selection  of  an  applicant for grant  of  permit  must  be justified.  Clause (3) of rule 155A undoubtedly provides for giving  of marks to the rival applicants but the  number  of marks obtained by each applicant can only provide a  guiding principle  for the grant of permit.  It can  never  override the consideration of public interest which must dominate the selection  in  all cases.  In fact clause (4) of  rule  155A concedes  that after the applicants are ranked according  to the  total marks obtained by them the applications shall  be disposed  of  in accordance with the provisions  of  section 47(1).  The fact that the appellant had 11 marks as  against 7.40 of the respondent would certainly be a factor in favour of  the appellant, but notwithstanding his higher marks,  if public  interest so requires, he may have to yield place  to the  respondent  in  the matter of selection  for  grant  or permit. Now,  two  circumstances  were relied upon  by  the  learned Single  Judge for outweighing the higher marks  obtained  by the  appellant  and justifying the grant of  permit  to  the respondent  in  public  interest.  The first  was  that  the respondent was a single bus operator while the appellant was

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a multi bus operator having four stage carriage permits  and the  second was that one of the stage carriage  permits  was recently granted to the respondent and hence he was in terms of  the  ’motor vehicle jurisprudence’ a  "recent  grantee". Both these circumstances by themselves are not sufficient to constitute  such  requirement  of  public  interest  as   to outweigh  the higher marks obtained by the appellant.   This Court  had  occasion to consider in Ajantha  Transports  (P) Ltd.,  Coimbatore v. M/s.  T. V. K.  Transport,  Pulampatti, Coimbatore Dist.(1) the relevance of possession of more than one  permit as also recent grant in selecting  an  applicant for  grant of permit and Beg, J., speaking on behalf of  the Court, stated the law on the subject in the following  words :               "It  should be clear when the main object,  to               which other considerations must yield in cases               of  conflict,  of the  permit  issuing  powers               under sec. 47 of the Act is the service of (1)  [1975] 2 S.C.R. 166. 96               interest  of  the public generally,  that  any               particular  fact or circumstances, such  as  a               previous   recent  grant  in  favour   of   an               applicant  or the holding of other permits  by               an operator, cannot by itself, indicate how it               is related to this object.  Unless, there  are               other  facts  and circumstance which  link  it               with  this  object  the  nexus  will  not   be               established.   For instance, an applicant  may               be a recent grantee whose capacity to  operate               a transport service efficiently remains to  be               tested  so  that a fresh grant to him  may  be               premature.  In such a case, another  applicant               of tested efficiency may be preferred.  On the               other hand, a fresh grantee may have within  a               short  period, disclosed such  superiority  or               efficiency   or   offer  such   amenities   to               passengers  that a 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,   indicate  that  he  had  excee ded   the               optimum,  or, has a position comparable  to  a               monopolist,  but,  in  another  case,  it  may               enable,-  the  applicant  to  achieve   better               efficiency by moving towards the optimum which               seems  to be described as a "viable  unit"  in               the rules framed in Madras in 1968.  Thus,  it               will be seen that, by itself, a recent grant               or the possession of other permits is  neither               a   qualification   nor   a   disqualification               divorced from other circumstances which  could               indicate  low  such a 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 a relevant circumstance.  But,  in               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 oppor-               tunity, which could be covered by Article  14,               may enable a person who is not a fresh grantee

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             to obtain a preference." It  would,  therefore, be seen that the mere  fact  that  an applicant has more than one permit or he is a recent grantee cannot by itself be regarded as a factor against him in  the comparative  scale.   It would all depend on the  facts  and circumstances of each case.  As ’pointed out by Beg, J.,  in the case just cited : "an applicant may be a recent  grantee whose  capacity to operate a transport  service  efficiently remains  to  be tested so that a fresh grant to him  may  be premature on the other hand. a fresh grantee may have within a  short period disclosed such superiority or efficiency  or offer  such amenities to passengers that a recent  grant  in his  favour may be no obstacle in his way at  all--a  recent grant  could  not,  considered by  itself  and  singly,  be, converted  into a demerit".  Similarly, possession  of  more than  one permit also cannot by itself, divorced from  other circumstances, be regarded as a disqualification.  It may in a given case show that the applicant has already reached the viable  unit  of  five stage  carriages  contemplated  under ’clause (3) (F) of rule 155A or that the effect of  granting permit  to  him  would be to make him a  monopolist  on  the route--a result disfavoured by the decision of this Court in Sri Rama 97 Vilas  Service (P) Ltd. v. C. Chandrasekharan &  Ors.(1)  as being inconsistent with the interest of the general  public- or,  on  the  other hand, it may be a  circumstance  in  his favour enabling him to achieve greater efficiency by  moving towards  the  optimum of viable unit.   The  learned  Single Judge,  was, therefore, in error in rejecting the  claim  of the appellant to the grant of permit by mechanically relying on  the  circumstance  that the appellant was  a  multi  bus operator  having  four stage carriage permits,  including  a recent  grant  without considering how in the light  of  the other  facts  and circumstances, it was  correlated  to  the question of public interest.  There was nothing to show that this  circumstance would have, any prejudicial  or  adverse impact  on  public interest, if permit were granted  to  the appellant  notwithstanding  it.  The  four  stage  carriage, permits  which the appellant had were not on the same  route and there was no question of. any monopoly being created  in his  favour if the permit applied for by him  were  granted. In fact, possession of more than on& permit by the appellant was  a  circumstance  in his favour,  because  according  to clause  (3)(F) of rule 155A an applicant operating  in  more than four stage carriages would be entitled to one mark  for each  stage carriage in order to have a viable unit of  five carriage.  The principle laid down in clause (3) (F) of rule 155A  proceeds on the hypothesis that an applicant would  be able to achieve greater efficiency if he has a larger number of  stage  carriages,  but it sets a  limit  of  five  stage carriages as it was thought that that would be sufficient to constitute  a  viable  unit  which  could  legitimately   be permitted to an applicant, consistently with the requirement of  a  socialistic pattern of society that there  should  be distributive  or  social  justice  and  no  undue   economic disparities.   So long, therefore, as an applicant  has  not more  than  four  stage carriages, it cannot  by  itself  be regarded as a factor against him and, as pointed out by Beg, J.,  in the case cited above, the rule in clause (3) (F)  of rule 155A providing for giving of one mark to the  applicant for each stage carriage operated by him should be taken into account  unless there is good enough reason to  depart  from it.   "Every additional stage carriage upto four would  give an applicant an additional mark so as to help him to make up

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a  viable  unit  of five".  The  State  Transport  Appellate Tribunal was, therefore, right, in the circumstances of  the case,  in  not regarding possession of four  stage  carriage permits  by  the appellant, including a recent grant,  as  a circumstance against him, but treating it as a  circumstance in  his favour by adding four marks under clause (3) (F)  of rule 155A, and the learned Single Judge acted erroneously in upsetting  this view taken by the State Transport  Appellate Tribunal. The learned Single Judge was also in error in  holding, thatthe  same  standard  was  not  applied  by  the   State Transport AppellateTribunal in comparing the history sheets of the appellant and therespondent.  The history  sheet  of the appellant related only to hisperformance   as    stage carriage operator and the entire history sheetwas before the State Transport Appellate Tribunal and it showedthat the  appellant had     a clean record.  On the  other  hand, the respondent (1) [1964] 5 S.C.R. 869. -L379 Sup.CI/75 98 had  two history sheets, one relating to his performance  as stage  carriage  operator  and the  other  relating  to  his performance  as lorry operator and both the  history  sheets showed adverse entries.  It can hardly be disputed that this comparison  with  reference to the past performance  of  the appellant and the respondent was relevant to the question as to  who  between  the two should be selected  for  grant  of permit.  It may be that the history sheet of the  respondent as  lorry  operator related to a period of ten  years  while that of the appellant as a stage carriage, perator covered a shorter  period, but that cannot be helped.  The  comparison has to be made on the basis of the available material and if the  history  sheet of the respondent, which may  be  for  a longer  period,  shows  that the  past  performance  of  the respondent ’was not satisfactory while the history sheet  of the  appellant, though for a shorter period, shows  that  he has had a clean record of performance, that would  certainly be a relevant circumstance to lie taken into ;account.   The State  Transport  Appellate Tribunal was  plainly  right  in relying  on  this  circumstance,  amongst  others,  for  the purpose of preferring the appellant to the respondent. Before  we  part with this case we may point  out  that  the learned   Single,  Judge  overstepped  the  limits  of   his revisional jurisdiction and treated the revision application before  him  as  if it wore an  appeal.   That  was  clearly impermissible  as  the revisional jurisdiction of  the  High Court  under section 64B is as severely restricted  as  that under section  115 of the Code of Civil Procedure and it  is only where there is a jurisdictional error or illegality  or material  irregularity in the exercise of jurisdiction  that the  High  Court can interfere under section  64B  ,with  an order made by the State Transport Appellate Tribunal. We  must, therefore, set aside the judgment of  the  learned Single  Judge  and  restore  the order  made  by  the  State Transport   Appellate  Tribunal  granting  permit   to   the appellant.    The  appeal  is  accordingly   allowed.    The respondent will pay the costs to the appellant. P.B.R.  Appeal allowed. 99