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PETITIONER: KAN SINGH, ETC.

       Vs.

RESPONDENT: STATE TRANSPORT APPELLATE TRIBUNAL AND OTHERS, ETC.

DATE OF JUDGMENT27/10/1987

BENCH: MUKHARJI, SABYASACHI (J) BENCH: MUKHARJI, SABYASACHI (J) RANGNATHAN, S. VENKATARAMIAH, E.S. (J) SINGH, K.N. (J)

CITATION:  1988 AIR   18            1988 SCR  (1) 641  1987 SCC  Supl.  671     JT 1987 (4)   185  1987 SCALE  (2)838

ACT:      Motor Vehicles  Act-Renewal of  Stage carriage  permits under section 58 thereof-Grant of fresh permits.

HEADNOTE: %      The appellants  filed applications for renewal of their stage carriage  permits  on  a  route  in  Rajasthan,  under section 58  of the Motor Vehicles Act. At the same time, the Rajasthan   State    Road   Corporation(Corporation)   moved applications for  the grant  of fresh  permits to it for the same route. Both-the applications for renewal of permits and the applications  for fresh  permits, were heard together by the Regional Transport Authority (R.T.A.) which reserved its orders thereon.  The R.T.A.  passed orders  in  the  matters after  a   year  of   the  hearing,  rejecting  the  renewal applications of the appellants and granting fresh permits to the Corporation.  The R.T.A.  had,  during  the  intervening period of  one year,  held  several  other  proceedings  and meetings in  connected matters  of which  no notice  and  no opportunity had  been given  to the  appellants whereas  the Corporation  was   a  party   to  all   those  meetings  and discussions before the R.T.A.      Against the  orders of the R.T.A., the appellants filed appeals  before   the  State  Transport  Appellate  Tribunal (S.T.A.T.).  The   S.T.A.T.  dismissed   the  appeals.   The appellants moved  the High  Court by  writ petitions against the order  of the  S.T.A.T. The  High Court  (Single  Judge) dismissed  the   writ  petitions.  Further  appeals  by  the appellants to the Division Bench of the High Court were also dismissed. The appellants moved this Court by special leave.      Allowing the appeals, the Court, ^      HELD: The  principal issue  to be decided by the R.T.A. was whether  the claims of the Corporation for fresh permits had precedence  over the  claims of  the appellants  for the renewal of their permits. [643E] 642      The appellants  have not  had an opportunity of putting

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forward their  contentions and  of being  heard  before  the R.T.A. in  the various  proceedings  meetings  held  by  the R.T.A.  during   the  period   of  one  year  following  the reservation of  orders by  it on  the  applications  of  the Appellants and  the Corporation.  The principles  of natural justice were flouted by the R.T.A. by its failure to apprise the   appellants    of   what    had   transpired   at   the meetings/discussions held in their absence. [646D-F]      The appellants’  applications and  the applications  of the Corporation  require to  be considered  and disposed  of afresh by  the R.T.A.  in the light of the observations made by the Court. [648H, 649A]      Sher Singh v. Union of India, AIR 1984 SC 200, referred to.

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil  Appeal No.  2603- 2605 of 1987.      From the  Judgment and  order dated  8.12.1986  of  the Rajasthan High Court in D.B. Special Appeal No. 889, 975 and 1135 of 1986.      G.L. Sanghi and Mrs. Rani Chhabra for the Appellants.      Shanti Bhushan and S.K. Jain for the Respondents.      The Judgment of the Court was delivered by      RANGANATHAN, J.  Special  Leave  granted.  Appeals  are disposed of by this order.      The three  appellants had  been granted  permits  on  a route from Bhadra to Hissar via Adampur. This route lay both in the  State of  Rajasthan and  in the State of Haryana and was thus  an inter-State  route. When the permits were about to expire  the  petitioners  filed  applications  for  their renewal in  accordance with  the provisions of section 58 of the Motor  Vehicles Act  (hereinafter called  ’the Act’). At the  same   time,  the   Rajasthan  State   Road   Transport Corporation (hereinafter  referred to  as ’the Corporation’) also  moved   applications  before  the  Regional  Transport Authority, Bikaner,  for the grant of fresh permits to it on the same route. The applications for renewal of permits made by the petitioners as well as the applications for the grant of permits  by the Corporation were heard together by the Re gional Transport  Authority,  Bikaner  (R.T.A.)  on  several dates, the 643 last of  which was  the 6th of November, 1981. On that date, orders were  reserved by  the R.T.A.  The  R.T.A.,  however, passed its  order only  on 27th November, 1982, about a year after the  date of  the hearing.  It  rejected  the  renewal applications of  the petitioners  and granted permits to the Corporation in respect of the above route.      Aggrieved by  the orders of the R.T.A., the petitioners filed appeals  before the State Transport Appellate Tribunal (S.T.A.T.) The  STAT dismissed  the appeals preferred by the petitioners and  confirmed  the  order  of  the  R.T.A.  The petitioners filed  writ  petitions  in  the  High  Court  of Rajasthan, which  were dismissed  by a Single Judge on 2 1st July, 1986. Further appeals preferred by the petitioners and certain other  operators were  dismissed by a Division Bench of the  High Court  of Rajasthan  by its  judgment and order dated 8th December, 1986. These Special Leave Petitions have been preferred against the order of the Division Bench dated 8th December, 1986.      We have  come to  the conclusion  that the order of the R.T.A. (and consequently the orders of the STAT and the High

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Court) should be set aside and the matter should be remitted back to  the R.T.A.  for fresh  consideration on  the  short ground that  the petitioners have not had a fair opportunity of putting  forward and  being heard  on  their  contentions relevant to the issue before the R.T.A.      The principal  issue that  had to  be considered by the R.T.A. was  whether the  claims of  the Corporation  for the grant of  a permit  had precedence  over the  claims of  the petitioners for renewal. This issue had to be decided in the context of  two statutory  provisions. The  first is section 47( 1H) of the Act which reads as follows:           Notwithstanding   anything   contained   in   this           section,  an  application  for  a  stage  carriage           permit from  a  State  transport  undertaking  for           operating in  any inter-State route shall be given           preference over all other applications:                Provided that the authority shall not grant a           permit  under   this  sub-section   unless  it  is           satisfied that  the  State  transport  undertaking           would be  able to operate in the inter-State route           without  detriment   to  its   responsibility  for           providing efficient  and adequate  road  transport           service in  any notified area or notified route as           is referred  to in  subsection (3)  of section 68D           where the undertaking operates the service. 644           Explanation-For the  purposes of this sub-section,           "inter  State   route"  means   any  route   lying           contiguously in two or more States. The second  relevant provision is the third proviso inserted in section  58(2) of  the Act  by an amendment applicable to the State  of Rajasthan.  This sub-section,  in so far it is material for our present purposes, reads: .           "(2) A permit  may be  renewed on  an  application                made  and  disposed  of  as  if  it  were  an                application for a permit:                     Provided further  that, other conditions                being  equal,   an  application   for   stage                carriage  permit   by   a   State   transport                undertaking  as  defined  in  section  68(A),                shall be  given preference  over applications                from  individual   owners   and   cooperative                societies."      The arguments  before the R.T.A. primarily ranged round the question  whether the  terms of  the proviso  to section 47(1H) were  fulfilled in  the  present  case  or  not.  The petitioners (as  well as  operators on  several other routes whose requests  for renewal  had also  - been  countered  by applications for permits by the Corporation) con tended that the Corporation  was not  in a  position to  operate in  the inter-State routes  in question  without  detriment  to  its responsibility for  providing efficient  and  adequate  road transport  service   in  routes   which  had   already  been nationalized under  Chapter IV-A  of the Act. The R.T.A. has applied its mind to this contention in what may be described as a piecemeal manner. This was because applications made by several private  operators and  the corporation in regard to various routes  came up  for consideration by it in separate meetings held at different places on different occasions. In fact it is this which also explains the delay in the passing of its order by the R.T.A. in the present case. In course of the hearing  before us,  we called  upon the  respondents to produce the  original records.  These show  that the mat ter relating to  renewal of  permits of six operators (including the preG sent petitioners) was heard on 6.11.1981 and orders

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reserved. On  30 .11.8  1, the  counsel for  the Corporation made a  request to  the R.T.A.  that certain  other  matters pertaining to renewals of permits in the Bikaner region were coming up for consideration on 16.12.81 and that, therefore, the orders  in the  instant cases may be deferred till after the other matters were also heard by the R.T.A. This request of the  counsel for  the Corporation  was  accepted  by  the R.T.A. The other 645 matters referred to could not be heard on 16.12.1981 but got adjourned from  time to  time. The order sheet of the R.T.A. in the  present case  shows that the decision in the present cases  was  deferred  on  three  subsequent  occasions  upto 22.03.1982.  The-records   do  not  indicate  what  happened thereafter but it appears that the decision was postponed on subsequent occasions also for the same reason and ultimately announced by the R.T.A. On the 27th of November, 1982, after the connected matters had been heard. This is clear from the order  of  the  R.T.A.  which,  in  arriving  at  its  final decision, has  followed the orders passed by it on 15.9.82 & 24.11.82 in  certain other  matters and the orders passed by the R.T.A.,  Jaipur on  7.4.82 &  10.9.82 in relation to two routes falling within its jurisdiction.      The short  grievance of  the petitioners  was that,  by adopting the  above procedure,  the R.T.A. has imported into its final  decision and  order various  transactions, facts, events and  arguments of  which they had no notice and which they had  not been  given a proper opportunity to rebut. The STAT dealt  with the  argument by simply observing that "for considering the  obtainable facts  a  fresh  opportunity  to appellants in  my opinion  was not  very much  required,  as there would  not be any end to it." The learned Single Judge in the  High Court recognised that: "If such long spell time has lapsed and such new material has come into existence the proper course  for the  RTA should have been to get the case listed back  for comments  of both  the parties  but did not think that  "the case  warranted any  interference  on  this aspect." The Division Bench observed:           "It was urged on behalf of the appellants that the           Regional Transport  Authority  took  into  account           events after hearing and closing the cases without           giving any  opportunity to the appellants to rebut           that material.  It was  also urged  that out of 83           documents  filed  by  the  appellants  before  the           Regional Transport  Authority in  rebuttal of this           material, only 2 were accepted, while remaining 81           were  rejected.   There  is   no  merit   in  this           contention. The  mere  fact  that  the  appellants           filed these  documents out of which two were taken           into account  shows that they had the knowledge of           the subsequent material being used for the purpose           of deciding  these cases and it is for this reason           that they  filed these  documents out of which two           were  also   taken  into  account.  Moreover,  the           subsequent events relate only to matters of record           pertaining to  operation of the existing routes by           the 646           State Transport  Undertaking.  There  is  thus  no           prejudice to  A the  appellants. This argument is,           therefore devoid of any merit.      In our  opinion the approach of the STAT as well as the High Court  was erroneous. There is no doubt that the R.T.A. in deciding  the present case has been influenced not merely

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by the  discussions which  took place  during the hearing of the applications  of these  petitioners and  the Corporation but  also   the  facts  circumstances,  and  arguments  that surfaced at  the meetings  held by it in relation to various other permits  in the  State. It is true that the point that arose for  consideration viz.  whether the  Corporation  had placed sufficient  material on  record to satisfy the R.T.A. concerned that  the grant  of a  further permit  or  further permits  to   it  would   not   prejudicially   affect   the nationalised services  already run  by it was, in a sense, a point common to all the meetings. Nevertheless, the grant of a permit  in each  case is a separate issue to be decided on the facts  and circumstances placed on record in relation to that case.  In support  of their  claims  for  permits,  the petitioners had  placed some  material before the R.T.A. and so also  the Corporation.  If, in reaching its decision, the R.T.A. desires  to take into account circumstances and facts placed by  other petitioners  or by the Corporation at other meetings,  the   petitioners  should  atleast  have  had  an opportunity of  knowing what  that material  was. This could have  been  done  either  by  allowing  the  petitioners  to participate at the other meetings or by giving the substance of that  material to  the petitioners,  and giving  them  an opportunity of  rebutting it before passing the final order. In this  context  it  is  important  to  remember  that  the Corporation was a party at all the meetings and was aware of all the  materials that  had been  placed on record by other operators as well as by themselves thereat. On the contrary, the  petitioners  were  handicapped  in  that  they  had  no knowledge of  the material  placed at the other meetings. In our  opinion,  the  requirements  of  natural  justice  were flouted  by   the  failure   of  the   RTA  to  apprise  the petitioners, atleast  broadly, of what had transpired at the other meetings.      The High  Court has  observed that  the petitioners had not been  prejudiced as  is seen from the fact that they had placed several  documents  on  record  in  rebuttal  of  the Corporation’s case.  It may  be, as  pointed out by the High Court, that the petitioners were vaguely aware of the nature of the  general contentions  urged as  well as  the evidence placed by  the Corporation  and also  tried to  put in  some documents to controvert the material placed on record by the Corporation but they 647 had no  direct knowledge  of  such  material.  Further,  the petitioners’ grievance is that out of 83 documents placed by the petitioners only two were considered. We are not able to appreciate the High Court’s answer to this contention in the extract we have quoted above. We could have understood it if the other 81 documents which the petitioners relied upon had been found  to be  irrelevant. The  R.T.A. has not discussed this evidence.  Nor does  the STAT appear to have considered the  material  or  given  the  petitioners  an  opportunity, atleast at  the appellate  stage to  attempt to substantiate its contentions  by reference  to these  documents.  In  the Special Leave  Petitions before  us,  the  petitioners  have catalogued   several   circumstances   to   substantiate   a contention that  the Corporation  was not  in a  position to undertake the  plying of  buses on  the routes  in  question without prejudice  to the  efficiency  of  the  nationalised services already  being run  by it. We express no opinion on the correctness  of these  averments or  the effect they can have on  the satisfaction  to be  reached  by  the  Regional Transport  Authority   but  it  appears  manifest  that  the impugned order  rejecting the  renewal applications  of  the

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petitioners has  been passed  without there being reasonable opportunity given to the petitioners to counter the case put forward by  the Corporation.  On this  short ground that the procedural requirements  of natural  justice have  not  been complied with,  we think,  the impugned  order should be set aside and  the R.T.A.  directed to  pass a fresh order after giving the  opportunity to  the Petitioners  to put  forward their contentions.      Shri  Shanti   Bhushan,   learned   counsel   for   the Corporation, raised two contentions. He urged, firstly, that the present  case was  governed by  section 58(2) and not by section 47( 1H) and that the Corporation was rightly granted precedence over  the private  operators. We  are  unable  to accept this  contention for  two reasons. In the first place the grant  of a  permit for an inter-State route is governed by the  special provision  contained in  section 47( lH) and not by  section 58  which is  a general provision. Secondly, even under  Section 58, the Corporation is not entitled to a permit automatically  by reason  of the  fact that  it is  a State Road  Transport  Undertaking.  It  is  entitled  to  a priority over  private operators only on "other things being equal". In  other words, even if section 58 is to apply, the RTA has  to apply  its mind  to the  relative merits  of the private operators on the one hand and the Corporation on the other and  it is  only if  both of  them stand  on the  same footing  that   the  Corporation  would  be  entitled  to  a preference. This  would necessarily involve a hearing by the RTA of the merits of both the contending parties. 648      The  second  contention  of  counsel  is  based  on  an interpretation of  A s.  47(1-H). The principle and ratio of this provision has been discussed and approved by this Court in Sher  Singh v.  Union of  India, A.I.R. 1984 SC 209. This provision  no  doubt  enables  the  Corporation  to  have  a preference over  private operators  and individuals but this is subject  to a  condition precedent that it should satisfy the Authority that it E3 would be able to operate the inter- State route  for which permit is sought without detriment to the efficiency  and adequacy of the nationalised services it is already  running in  the State. Shri Shanti Bhushan would contend  that  this  is  a  matter  on  which  the  Regional Transport Authority  has to  reach a subjective satisfaction in the  light of  such material  as it may be able to gather and that  it is  not necessary  that it should be arrived at after giving  an opportunity  to all  the persons  appearing before the  Authority. We cannot accept this interpretation. Like analogous  provisions  contained  in  several  statutes which require  or permit  certain action  to be taken on the satisfaction  of   a  particular  specified  authority,  the provision in  section 47(  lH) also  requires the  R.T.A. to arrive at  its  satisfaction  not  subjectively  but  on  an objective   consideration   of   the   various   facts   and circumstances placed  before it.  It will at once be obvious that such  a satisfaction cannot be reached by the Authority without hearing  the various  operators. The matter comes up before the Authority on a contest between an application for a permit  or a renewal application of a private operator and an application for permit by the Corporation. Naturally, the Corporation will place before the Authority some material to satisfy the  Tribunal that  the condition  mentioned in  the proviso to  section 47(1H)  is satisfied.  The R.T.A. On its own can have no method of assessing the merits of this plea. It is  only the  private operators,  who are seeking permits for themselves  that may  be in a position to place material which would  show that  the Corporation  does not  have  the

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capacity  to  take  up  this  additional  responsibility  of running buses  on the inter-State route for which it seeks a permit. It is clearly the duty of the R.T.A. to consider the evidence placed  by both  the parties,  allow each  party an opportunity to  rebut the  material placed  by the other and arrive at  its  satisfaction  one  way  or  the  other.  The satisfaction  contemplated   under  section  47(  lH)  is  a satisfaction to  be arrived at on the basis of such a quasi- judicial enquiry  conducted by  the R.T.A. It is, therefore, not possible  to accept  the contention that the petitioners were not  required to be heard before the R.T.A. reached its conclusion in favour of the Corporation.      For the  reasons discussed  above,  we  hold  that  the petitioners’ applications  for renewal of permits as well as the Corporation’s appli- 649 cation for  fresh permits on the inter State route Bhadra to Hissar via  Adampur require  to be  considered  afresh.  We, therefore,  set   aside  the  order  of  Regional  Transport Authority dated 27.11.1982, the order of the State Transport Appellate Tribunal  dated 20.1. ]983 as well as the order of the Single Judge of the High Court dated 21st July, 1986 and the order  of the  Division Bench  of the  High Court  dated 8.12.1986. The matter will stand remanded to the file of the R.T.A., Bikaner,  for being  disposed of afresh in the light of the above observations.      The appeals  are allowed  but in  the circumstances  we make no order as to costs. S.L.                                        Appeals allowed. 650