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PETITIONER: P. VENKAIAH

       Vs.

RESPONDENT: G. KRISHNA RAO & OTHERS.

DATE OF JUDGMENT25/08/1981

BENCH: KOSHAL, A.D. BENCH: KOSHAL, A.D. DESAI, D.A. MISRA, R.B. (J)

CITATION:  1981 AIR 1910            1982 SCR  (1) 380  1981 SCC  (4) 105        1981 SCALE  (3)1263

ACT:      Andhra Pradesh  Motor Vehicles  Rules 1964 Rule 212(ii) (a) proviso-Scope  of-Whether  hit  by  article  19  of  the Constitution- new entrant meaning of.

HEADNOTE:      For evaluating  the merit  of various  applicants for a stage carriage  permit, rule 212 of the Andhra Pradesh Motor Vehicles Rules  1964 classifies  routes as short, medium and long routes.  In the  matter of  Grant of  permit for  short routes clause (ii) envisages preference being given to those applicants who  are "new  entrants". Clause  (iii)  provides criteria  for  weeding  out  undesirable  applicants,  while clause (iv)  provides for  marks being awarded for sector or residential qualifications.  If an  applicant possesses both residential and  sector qualifications  the proviso  to  sub clause (a)  to clause (iv) requires that he shall be awarded marks only  for one  of them  so that he is given credit for the qualification more advantageous to him marks-wise.      With the  nationalisation  of  road  transport  in  the State, the  appellant, respondent no. I and respondent no. S were deprived  of the stage carriage permits which they were holding before nationalisation.      Subsequently the  Regional Transport  Authority granted one permit to the appellant and another to respondent no. S. In appeal,  the  State  Transport  Authority,  holding  that respondent no.  1 was  a "new entrant" within the meaning of the rule  212(ii)(a) granted one permit to him and the other to respondent  no. 5  who was  held to have an edge over the appellant for another reason.      In  revision,   the  State  Government  held  that  the appellant and  respondent no.  5 were entitled to preference over respondent  no. 1  by reason of their longer experience in the  field of  motor transport, in spite of the fact that respondent no. 1 was a "new entrant".      A single  Judge of  the High Court held that respondent no. 1 who was a new entrant" was entitled to preference over the others  by reason  of rule  212(ii)(a). The second route was granted to respondent no. 5.      On further  appeal it  was contended  before a Division Bench of  the High  Court that  (1) the  proviso  to  clause

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(iv)(a) of  rule 212  imposed an unreasonable restriction on the right  of citizens  to carry  on business and was hit by article 19 381 Of the  Constitution; (2)  that the expression "new entrant" covered only  persons A  who took  up the  business of motor transport for the first time and (3) that even if contention (2) is not accepted, a "new entrant" would not mean a person not having  a permit  at  the  time  when  the  question  of granting a permit arose but would apply only to a person who never held any stage carriage permit.      All the  contentions, rejected  by the  Division Bench, were again raised before this Court.      Dismissing the appeal, ^      HELD: The  proviso to  sub clause (a) of clause (iv) of rule 212  is not  hit by the provisions of article 19 of the Constitution.  It   merely  states   that  if  an  applicant possesses both  residential and  sector qualifications he is to  be   given  credit  only  for  the  one  which  is  more advantageous to  him. The  rule is  salutary and is meant to avoid monopolies.  It is  reasonable that  an  applicant  is given an  option of  choosing either  the residential or the sector qualification  for the award of marks inasmuch as the merit accruing  to the  applicant by reason of being clothed with one  of them  would overlap that for which he might get credit by reason of the other. [389 C-D]      (2) From the context in which the term "new entrant" is used the  rule making authority clearly intended that a "new entrant" to the stage carriage business must have preference over the  existing operators in respect of short routes. The fact that  respondent No.  I had a public carrier permit was wholly irrelevant. Ho was undoubtedly a "new entrant" to the stage carriage business. [390 B]      S. Chinna  Narasa Reddy  v. D.  Jagadeeshwara  Rao  and others, [1972] 4 SCC 734= AIR 1972 SC 1536 followed.      (3) A  set of  things  which  is  different  from  that immediately preceding it may well be called new. A situation which once  existed and  then ceased  to exist  may properly attract the word ’new’ on re-appearance. The adjective ’new’ would be  applicable to a person who was once in the line of operators of  stage carriages  but who had long ceased to be so and who sought entry into that line afresh. [391 D]

JUDGMENT:      CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1625 of 1970.      Appeal by  Special Leave  from the  judgment and  order dated the  28th October,  1969 of  the Andhra  Pradesh  High Court in Writ Appeal No. 412 of 1969.      TVR Tatachari and AVV Nair for the Appellant.      KR Chowdhary for Respondent No. l.      G. Narayana Rao for Respondent Nos. 2 to 4. 382      The Judgment of the Court was delivered by      KOSHAL, J.  The bone  of contention  in this  appeal by special leave consists of two stage carriage permits granted under the Motor Vehicles Act (hereinafter called the Act) in relation to  the route Chirala Railway Station to Vetapalem, the claimants  to which  now are  Venkaiah (the  appellant), Krishna Rao  (respondent No.  I) and  Nagendrudu (respondent No. S).  By the  impugned judgment  a Division  Bench of the High Court  of Andhra  Pradesh has dismissed an appeal under

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clause 15  of the Letters Patent and has upheld the judgment of a  Single Judge  of that  Court by which the order of the State Government  was reversed  and the permits were granted to respondents Nos. 1 and 5.      2.   Before we proceed to lay down the facts leading to the present  contest we may refer with advantage to rule 212 of the  Andhra Pradesh Motor Vehicles Rules, 1964 which have been framed under the Act and are hereinafter referred to as the Rules. The marginal note to that rule reads:           "Grant, Variation,  Suspension or  Cancellation of      stage carriage permit-Guiding principles"      The rule  is divided  into six  clauses out of which we are concerned  only with  clauses (i),  (ii), (iii) and (iv) and the  same, in  so far  as  they  are  relevant  for  the purposes of this appeal, are reproduced below:      "(i) Routes shall be classified as:-           (a)  Short routes  including shuttle services-This                class of route will cover a distance of up to                50 kilo meters.           (b)   Medium routes-This class of route will cover                a distance  varying from 50 kilometers to 120                kilo meters.           (c)   Long routes-This class of route will cover a                distance of more than 120 kilometers.      (ii) Other  things being  equal,  preference  shall  be           given to applicants as follows:           (a)   for short  routes including shuttle services                to new entrants, 383           (b)  for medium  routes to  applicants with I to 4                stage carriages (excluding spare buses).       (iii) The  Transport authorities  shall,  in  deciding           whether to  grant  or  refuse  to  grant  a  stage           carriage permit,  have  regard  to  the  following           matters in  addition to  those specified  in  sub-           section (1) of section 47.                The applicants  shall first  be screened  and           those who  are found  to be  unsuitable on  one or           more  of   the  following   principles  shall   be           disqualified, reasons being given for the decision           of the  transport authority when ever an applicant           is disqualified.           (1) Financial instability.........           (2) If the history sheet is not clean........           (3) If  there is  evidence that  the applicant has                been trafficking in permits, either benami or                otherwise.           (4) If the applicant has no workshop facilities or                other  arrangement   to  attend   to  repairs                efficiently:                ...          ...          ...                ...          ...          ...           (5)  If the applicant has no main office or branch                office on  the  route  or  resides  beyond  8                kilometers from  the  route  applied  for  to                control the service.           (6)   If the application is on behalf of others in                order to evade rules.      (iv) After  eliminating the  applicants in  the  manner           laid down  in clause  (iii) above,  marks shall be           assigned as  follows for  assessing the  different           qualifications of  the applicants for the grant of           permits-           (a)  Sector or residential qualifications-                (1)  Four  marks   may  be   awarded  to  the

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                   applicant who  has his place of business                     or residence  at either  terminus of the                     route applied  for, and two marks may be                     awarded to the applicant 384                     who resides  on the  route (but  not  at                     either terminus)  or within 8 kilometers                     from the route                (2)   Marks may  be awarded  to the applicant                     who  has  sector  qualification  on  the                     route applied for, as follows :-                     (i)  where the  sector qualification  is                          between I  per cent and 25 per cent                          of the  total distance of the route                          applied for-one mark;                     (ii) where  the sector  qualification is                          between 26 per cent and 50 per cent                          of the  total distance of the route                          applied for-Two marks;                      (iii) where the sector qualification is                          between 51  per cent and 75 percent                          of the  total distance of the route                          applied for-Three marks; and                     (iv) where  the sector  qualification is                          above 75  per  cent  of  the  total                          distance of  the route applied for-                          Four marks:                     Provided that  if the applicant has both                residential and sector qualifications, he may                be  given   marks  either   for   residential                qualification or  for  sector  qualification,                whichever is more advantageous to him.           (b)  ...        ...        ...         ...           (c)  ...        ...        ...         ...      It will  be seen  that the  rule lays down a scheme for the evaluation  of the  merit of  various applicants  for  a stage carriage permit and for that purpose classifies routes as short routes, medium routes and long routes. According to clause (ii)  preference has  to be given to those applicants in the  matter of  grant of  permit for short routes who are "new entrants".  Clause (iii)  provides criteria for weeding out undesirable applicants. After the elimination process is over, 385 the evaluation  of the  merit of  the  remaining  applicants starts under  A clause  (iv) which  provides for marks being awarded for  sector or  residential qualifications  as  laid down in paragraphs (1) and (2) of sub-clause (a) thereof. To sub-clause (a) has been added a proviso which states that if an applicant  is possessed  of both  residential and  sector qualifications he  shall be  awarded marks  only for  one of them  so,   however,  that   he  is  given  credit  for  the qualification more advantageous to him mark-wise.      3.   We may  now state  the relevant facts. In the year 1957 road  transport was nationalised in the State of Andhra Pradesh. Just  before that  the appellant,  respondent No. I and respondent  No. 5 held 1, 3 and 1 stage carriage permits respectively, but  on  nationalisation  they  were  deprived thereof. Subsequently  the appellant  and respondent  No.  S granted one such permit each while none was issued in favour of respondent No. 1.      For the  two routes  in question the Regional Transport Authority (hereinafter  referred to  as the  RTA) considered the claims  of 20  applicants out of which 16 appear to have been eliminated  in pursuance  of the  provisions of  clause

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(iii)  of   rule  212.  The  case  was  then  taken  up  for consideration under  clause (iv)  and out  of the  remaining four applicants,  each one  of the three present contestants was  awarded  S  marks,  i.e.,  one  mark  for  business  or technical  experience   and   4   for   residential   sector qualification. On  further consideration of the case the RTA granted one  permit  to  the  appellant  and  the  other  to respondent No  5. In  appeal the  State Transport  Authority hereinafter referred  to as  the STA)  noted the  fact  that respondent No.  I did  not hold any stage carriage permit at the time  of the  consideration of  the respective claims of the parties  and was,  therefore, a  new entrant  within the meaning of  that expression  as used  in sub-clause  (a)  of clause (ii)  of  rule  212,  while  the  appellant  and  the respondent No. S did not have that qualification as each one of them was holding one such permit at the relevant point-of time.  One   permit  was,   therefore,  granted  by  him  to respondent No.  1 and  the other to respondent No. 5 who was held to  have an edge over the appellant for the reason that although each  of them had to his discredit a conviction for an offence  under the  Act, the  offence brought home to the appellant was more serious than that of which respondent No. S was found guilty.      The third  round of  litigation took  place before  the State Government  in revision  under section 64A of the Act. The State 386 Government held that the appellant and respondent No. 5 were entitled to  preference over  respondent No.  1  because  of their longer  experience in the field of motor transport (in addition to  full sector  qualification possessed by each of them) in  spite of the fact that respondent No. 1 was a "new entrant".      The matter  was then agitated by the rival claimants in two petitions under article 226 of the Constitution of India filed before the High Court, a learned Single Judge of which held that  respondent No.  1  was  a  new  entrant  who  was entitled to  preference over the other contestants by reason of the  provisions of  sub-clause (a) of clause (ii) of rule 212. The other route was granted by the learned Single Judge to respondent  No. 5  on the same ground as had weighed with the STA in that behalf.      As already  stated the  judgment of  the learned Single Judge was upheld in the Letters Patent Appeal.      4.   Before the  Letters Patent Bench three contentions were raised:      A.   The proviso  to sub-clause  (a) of  clause (iv) of           rule 212  imposes an  unreasonable restriction  on           the right of citizens to carry on business and is,           therefore, hit  by article 19 of the Constitution.           It has  thus to  be disregarded  as being null and           void. Consequently  the appellant  and  respondent           No. 5 must be awarded 9 marks each as each of them           had   residential   as   well   as   full   sector           qualification.      B.    The  expression  "new  entrant"  above  mentioned           covers only  persons who  take up  the business of           motor transport  for the  first time  and  is  not           restricted to  persons who seek entry to the stage           carriage business.      C.   Even if contention is not accepted a "new entrant"           would not mean a person not having a permit at the           time when  the question of granting one arises but           would apply  only to  a person  who never held any           stage carriage Permit.

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    Contention A  was repelled  by the  Division Bench with the following observations: 387           "The Rule-making  Authority must have thought that      as   both    the   residential    and   common   sector      qualifications will  serve the  same purpose  it is not      necessary to  award marks  for both  the qualifications      and  if   marks  were   to  be  awarded  for  both  the      qualifications it would be putting  unnecessary premium      on the  applicants having  both the  qualifications  as      against the  applicants having  only one  of those  two      qualifications and  thus putting  unnecessary  restric-      tion on  equality of  opportunity. We  do not think the      policy of  the Rule-making  Authority in  adopting that      rule for awarding marks for one or the other of the two      qualifications, whichever  is more  advantageous to the      applicant, can be questioned.      ...         ...         ...         ...      ...         ...         ...         ...           We are  satisfied that  the provision contained in      clause (iv)  (a) of  rule 212  read  with  the  proviso      thereunder providing  for awarding  of marks either for      common  sector   qualification   or   for   residential      qualification whichever  is more  advantageous  to  the      applicant is  made in  order to  achieve the objects of      both efficiency  of service and equality of opportunity      both of  which are  needed in the best interests of the      public. It  incidentally discourages  tendency  towards      monopoly. Therefore,  it is  not possible  to hold that      the proviso  in question  works out in any way to be an      unreasonable restriction.  We hold  that it  cannot  be      struck down on the ground of unreasonable restriction."      In  turning   down  contentions   and  the  High  Court observed:           "The expression  "new  entrant’’  is  not  defined      either  in  the  Act  or  in  the  Rules.  It  must  be      understood in  the con  text of clause (ii) of rule 212      where it  appears. As provided therein for short routes      preference should  be given  to "new entrants" and with      regard  to   medium  routes   preference  be  given  to      applicants with  I to  4  stage  carriages.  Thus  with      regard to  medium routes  to have preference the appli-      cants must  be having  some stage  carriages. Viewed in      this context,  it appears that when it is said that for      short routes  preference should  be given  to the  "new      entrants" it 388      means preference  should be given to the applicants not      having any stage carriages at that time If the argument      of Sri  Babul Reddy  that "new entrants" means an appli      cant who  is for the first time entering into the field      of transport  business is  to be accepted the applicant      who is  not having  any stage  carriage permit  at that      time on  account of  his having  some  stage  carriages      previously will be placed in a disadvantageous position      so as not to get medium routes as also short routes. It      would practically  amount  to  ousting  that  class  of      applicants getting  either the  short route  permits or      medium route  permits which  could not  have  been  the      intention of  the Rule-making  Authority. If the provi-      sion made  in sub-rule  (ii) of  rule 212  is read as a      whole the  intention appears  to be clear. namely, that      for  short   routes  the  applicants  having  no  stage      carriages are  to be  preferred and  for medium  routes      applicants having  some stage  carriages up to four are

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    to be  preferred. Sri  Babul Reddy has also argued that      if a  person who  had a  stage carriage  previously but      whose permit  was cancelled  for gross violation of the      conditions of  the permit  would still  be entitled  to      preference for  short routes on the ground of his being      a "new  entrant" merely  because he possessed no permit      at the  time when  the applications were considered. It      might be  so. But  we fail to understand how that would      be a  startling result as contended by Sri Babul Reddy.      If a permit is cancelled for any gross violation of the      conditions of  a permit  if it is so required it may be      considered as  a disqualification  and so long as it is      treated as a disqualification whether that applicant is      having a  stage carriage  permit or not his application      will not  be considered  at  all  on  account  of  that      disqualification. As  a matter  of fact  it is provided      under clause  (iii) of  rule 212  that if  the  history      sheet is  not clean  and contains more than six entries      relating  to  the  offences  mentioned  therein  within      twenty four  months preceding  the date of grant of the      permit such applicants shall be first screened and they      should be  disqualified whatever  the other  merits  of      those applicants  may be.  They  do  not  come  up  for      consideration at  all on  account  of  such  exclusion.      Therefore, this  argument of  Sri Babul  Reddy does not      appear to  be of  much substance.  It is  clear to  our      minds that  the expression  "new entrant"  in the  rule      means an  applicant who  possessed no stage carriage at      the time 389      when  the   applications   are   considered   and   not      necessarily an  applicant who  is entering the business      of transport for the first time. Accordingly this point      also goes against the appellant."      5.   The contentions  raised before the High Court have been reiterated  before us and we also find ourselves unable to accept  any of  them for more or less the same reasons as weighed with the Division Bench.      6.    We  do not  see how the proviso occurring in sub- clause (a)  of clause  (iv)  of  rule  212  is  hit  by  the provisions of  article 19  of the  Constitution.  It  merely states that  if an  applicant possesses both residential and sector qualifications he is to be given credit only for that one of  them which  is more  advantageous to him. As pointed out by  the High Court the rule contained, in the proviso is salutary and  is obviously  meant to  avoid  monopolies.  It appears to  us to  be eminently reasonable that an applicant is given  the option  of choosing  either the residential or the sector  qualification for the award of marks inasmuch as the merit  accruing to  the applicant  by  reason  of  being clothed with  one of  them would  overlap that  for which he might get  credit by  reason of the other We need not pursue the matter  further as  we find  ourselves in full agreement with the views of the Division Bench on the point.      7.   In relation  to contentions  and  again  we  agree fully with  the opinion  expressed in the impugned judgment, which we may add, finds full support from the dictum of this Court in  S. Chinna  Narasa Reddy v. D. Jagdeeshwara Rao and others  (1),  wherein  Hegde,  J.  speaking  for  the  Court observed  thus   while  interpreting   the  expression  "new entrant" occurring in the relevant part of rule 212 :           ’In our  opinion, the  Appellate  Bench  erred  in      coming to  the conclusion  that the  expression "a  new      entrant" in  the rule  in question means new entrant to      the motor  transport field. The marginal note to Rule 2

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    (l)  (ii)   says;  "Grant,   variation,  suspension  or      cancellation   of    stage   carriage    permit-guiding      principles". This  note indicates  that the rule making      authority was  only  considering  the  grant  of  stage      carriage permits.  Sub-clause(a) of clause (ii) of rule      212 (i) 390      does not  refer to  motor transport  business. When  it      comes to  business or  technical  experience  the  rule      specifically speaks of business or technical experience      in motor  transport. But  when  it  speaks  of  "a  new      entrant",  it   does  not   refer  to  motor  transport      business. From  the context  it is clear that the rule-      making authority  intended that  a R new entrant to the      stage carriage business must have a preference over the      existing operators in respect of short routes. The fact      that the  appellant had  a public  carrier  permit  was      wholly irrelevant.  He is  undoubtedly a new entrant to      the stage carriage business.           In our  opinion the policy behind rule 212 is that      in the  matter of  short routes  preference  should  be      given to  new entrants  so that  more persons  may have      employment and  there may  be better  competition.  But      when it  comes to  routes of  longer distance  the rule      provides for  viable units.  If we  consider the policy      behind rule 212 it becomes obvious that the rule-making      authority had  in view  new entrants  to stage carriage      business. Further,  in our  opinion the language of the      rule, if considered in the context in which it is used,      clearly indicates  that the  new entrants  referred  to      therein  are   new  entrants   to  the  stage  carriage      business.           Mr.  Natesan,   learned  counsel   for  the  first      respondent,  contended   that  if   we  read  the  rule      regarding new  entrants as well as the rule relating to      business or technical experience together then it would      be clear that "new entrant" referred to in rule 212 (1)      (ii) (a)  is a  new  entrant  to  the  motor  transport      business. We  are unable  to accept  that contention as      correct. If  Mr Natesan’s  contention is  correct  then      even  an  operator  of  a  scooter  rickshaw  would  be      deprived of  the benefit  of the rule. This could never      have been the intention of the rule-making authority.      With respect  we  fully  endorse  this  view  and  that disposes of contention B.      8.   In relation  to contention learned counsel for the appellant has  drawn our attention to the dictionary meaning of the  word "new."  The oxford English Dictionary lists the following, amongst others, against that word: 391           "not existing  before, now  made, or  brought into      existence, for  the first time... not previously known;      now known for the first time."      If these  were the  only  meanings  of  the  word,  the contention might have considerable force. But the word ’new’ is also stated in the same dictionary to mean:           "Coming as  a resumption  or  repetition  of  some      previous act  or thing;  starting afresh  ...  restored      after demolition, decay, disappearance, etc...... other      than the former, or old, different from that previously      existing, known, or used,"      Thus a  set of  things which  is  different  from  that immediately  preceding   it  may   well   be   called   new. Furthermore, a  situation which once existed and then ceased to exist  (disappeared) may  properly attract the word ’new’

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on reappearance.  Seen in  this light  the  adjective  ’new’ would certainly  be applicable  to a  person who was once in the line  of operators  of stage  carriages but who has long ceased to  be so  and who seeks entry into that line afresh; and in  our opinion  this connotation  of the  word  is  not excluded by  the context  in which the word has been used in rule 212.  We have,  therefore, no  reason to depart from or qualify the  observations made  by the Division Bench on the point.      In the  result the  appeal fails  and is  dismissed but with no order as to costs. P.B.R.                                      Appeal dismissed. 392