15 March 1956
Supreme Court
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RAMAN & RAMAN LTD. Vs THE STATE OF MADRAS AND ANOTHER.

Bench: BOSE, VIVIAN,JAGANNADHADAS, B.,SINHA, BHUVNESHWAR P.,IMAM, SYED JAFFER,AIYAR, N. CHANDRASEKHARA
Case number: Appeal (civil) 1 of 1956


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PETITIONER: RAMAN & RAMAN LTD.

       Vs.

RESPONDENT: THE STATE OF MADRAS AND ANOTHER.

DATE OF JUDGMENT: 15/03/1956

BENCH: IMAM, SYED JAFFER BENCH: IMAM, SYED JAFFER AIYAR, N. CHANDRASEKHARA BOSE, VIVIAN JAGANNADHADAS, B. SINHA, BHUVNESHWAR P.

CITATION:  1956 AIR  463            1956 SCR  256

ACT:        Road  Transport-Power of the State Government to  set  aside        orders  of  subordinate authorities-High  Court’s  power  to        interfere  by writ of certiorari-Motor Vehicles Act  (IV  of        1939),  as amended by the Motor Vehicles (Madras  Amendment)        Act (XX of 1948), s. 64-A Constitution of India, Art. 226.

HEADNOTE:        The appellant and respondent No. 2 along with others applied        for  stage-carriage permits for two routes and the  Regional        Transport  Authority granted a permit for one route  to  the        appellant  and for the other route to the respondent No.  2.        Both  appealed  to the Central Road Traffic  Board  but  the        appeals were dismissed.  Neither the Regional Authority  nor        the  Board recorded any finding as to which of them had  the        better facilities for transport operation or that they  were        of equal merit.  They applied to the State Government  under        s. 64-A of the Motor Vehicles Act of 1939 as amended by  the        Motor Vehicles (Madras Amendment) Act of 1948 and the  State        Government set aside the orders passed by the said  subordi-        nate  authorities and issued permits for both the routes  to        the  respondent  No.  2 on the ground  that  he  had  better        facilities for operation and would serve the public  better.        Against  this  order of the State Government  the  appellant        moved  the High Court for a writ of certiorari and a  single        Judge  issued  the writ.  On a Letters  Patent  appeal  that        decision  was set aside.  The appellant contended  that  the        State Government had acted in excess of its powers under  s.        64-A  of  the  Act  in  setting  aside  the  orders  of  the        subordinate  authorities  and that the  section  itself  was        invalid.        Held,  that  the State Government was within its  powers  in        passing the order it did and the appeal must be dismissed.        That  it was within the competence of the State  Legislature        to insert s. 64-A into the Act and its legality could not be        questioned and the clear intention of the legislation was to        empower  the  State  Government  to  decide  the   legality,        regularity  or  propriety  of  any  orders  passed  by   the        subordinate  authorities  in  the interest  of  the  general

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      public.        That the State Government was the final authority to  decide        which of the rival applicants had the better facilities  for        operation  of  the bus service and where it bad  come  to  a        decision  in favour of an applicant, its decision could  not        be interfered with under Art. 226 of the Constitution merely        because its view might be erroneous.        257

JUDGMENT:        CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1 of 1956.        On appeal from the judgment and order dated the 2nd/21st day        of  September 1955 of the Madras High Court in  Writ  Appeal        No. 65 of 1955 arising out of the order dated the 5th day of        May 1955 of the said High Court in Writ Petition No. 158  of        1955.        G.S. Pathak, B. Ganapathy Iyer and G. Gopalakrishan,  for        the appellant.        M. O. Setalvad, Attorney-General for India, B.K.B. Naidu and        Naunit Lal, for respondent No. 2.        1956.  March 15.  The Judgment of the Court was delivered by        IMAM J.-This appeal comes before us on a certificate granted        by  the  Madras High Court that the case was a fit  one  for        appeal to this Court as it involved two important questions,        namely,  the powers of the Government under section 64-A  of        the  Motor  Vehicles  Act, 1939, as  amended  by  the  Motor        Vehicles  (Madras  Amendment)  Act, 1948 for  the  State  of        Madras  (hereinafter referred to as the Act),  to  interfere        with the orders of subordinate Transport Authorities on  the        ground of propriety and the limits of judicial review  which        the  courts  have under article 226 of the  Constitution  of        India.        The  appellant and respondent No. 2, had applied for  stage-        carriage permits in the Mayuram Town Service for routes Nos.        1  and  2.  These  applications,  along  with  others,  were        considered by the Regional Transport Authority, Tanjore.  By        its  order dated the 31st of May, 1954, it granted a  permit        for  route  No. 1 to the appellant and for route  No.  2  to        respondent  No. 2. Both the appellant and respondent  No.  2        being  dissatisfied appealed under section 64 of the Act  to        the  appropriate authority, the Central Road  Traffic  Board        (hereinafter referred to as the Board), but the appeals were        dismissed  by its order dated the 18th of August, 1954.   As        section  64-A  conferred upon the State  Government  certain        powers, which have        258        been  described  in  this case  as  revisional  powers,  the        appellant   and  respondent  No.  2  filed   representations        thereunder before the State Government against the orders of        the  Regional Transport Authority and the Board.  The  State        Government  set  aside the orders passed  by  the  aforesaid        authorities  and directed that permits for both  the  routes        Nos.   1 and 2 be issued to respondent No. 2.  Against  this        order, the appellant filed an application under article  226        of  the  Constitution in the High Court for the issue  of  a        writ  of certiorari.  The application was heard by a  single        Judge  who issued the requisite writ.  Against his  decision        there was a Letters Patent appeal by respondent No. 2, which        was  allowed  and the decision of the single Judge  was  set        aside.        The  ground  upon  which the  Regional  Transport  Authority        granted  the  appellant  and respondent No.  2  permits  for        routes  Nos.   1  and  2 respectively  was  that  they  were

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      experienced  and  were operating town buses  at  Kumbakonam.        This  opinion was approved by the Board which  also  thought        that a certain amount of healthy competition was required in        the  Mayuram  Town  routes.  It  also  considered  that  the        Regional  Transport Authority was within its rights  in  not        considering the aspect of sector coverage by muffassil buses        of  the  appellant  and respondent No. 2.  It  appears  that        respondent No. 2 was covering the entire route No. 1 and the        appellant  was covering a portion of route No. 2. The  State        Government  in  setting  aside the orders  of  the  Regional        Transport  Authority  and  the Board  passed  the  following        order:        "As  between  the claims of Sri Raman & Raman Ltd.  and  Sri        Sathi  Vilas  Bus Service, the Government consider  that  it        will  be  in the interest of the public to  grant  both  the        permits to Sri Sathi Vilas Bus Service, Poryar, since he has        better  facilities for operation and will be able  to  serve        the public better.  The Government of Madras therefore  sets        aside  as  improper the order of the  Central  Road  Traffic        Board No. R 27792/A2/54 dated the 18th of August, 1954 in so        far  as  it  confirms the order of  the  Regional  Transport        Authority, Tanjore granting one permit of route        259        No.  1  to Sri Raman & Raman Ltd. and directs that  the  two        permits  in  question  be granted to  Sri  Sathi  Vilas  Bus        Service, Poryar".        Before  dealing with the submissions made on behalf  of  the        appellant,  it  would  be desirable  to  make  reference  to        certain  provisions  of  the Act  concerning  the  grant  of        permits.   Section  42 of the Act prohibits an  owner  of  a        transport vehicle from using or permitting it to be used  in        any public place save in accordance with the conditions of a        permit  granted by a Regional Transport Authority.   Section        43  gives certain powers to the State Government to  control        road transport.  Section 44 authorises the State  Government        to  constitute  a  State Transport Authority as  well  as  a        Regional  Transport Authority to perform  certain  functions        mentioned  therein.  Section 47 sets forth  certain  matters        which  a Regional Transport Authority shall bear in mind  in        deciding  to  grant or to refuse a  stage  carriage  permit.        Section  64 enables a person aggrieved by the order  of  the        Regional  Transport Authority, with respect to matters  men-        tioned  therein,  to  appeal to  the  prescribed  authority.        Section  64-A states: "The State Government may, of its  own        motion or on application made to it, call for the records of        any  order passed or proceeding taken under this Chapter  by        any authority or officer subordinate to it, for the  purpose        of  satisfying  itself  as to the  legality,  regularity  or        propriety  of such order or proceeding and  after  examining        such  records, may pay pass such order in reference  thereto        as it thinks fit".        Mr. Pathak, for the appellant, contended that having  regard        to the terms of section 64-A, there were two stages for  the        exercise  of power thereunder by the State Government.   The        first  stage was the condition precedent for  assumption  of        jurisdiction  for the exercise of that power.  A  collateral        fact  had to be decided, namely whether the order passed  by        any authority or officer subordinate to the State Government        was in fact illegal, irregular or improper.  If the decision        was  in the affirmative, then and then only would the  State        Government have jurisdiction to revise the        260        order  complained  against.   The  decision  of  the   State        Government  both with respect to questions of fact  and  law        could  be examined by a court in a proceeding for the  issue

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      of  a  writ of certiorari and such court in doing  so  could        decide  whether  the order which was revised  by  the  State        Government  was or was not illegal, irregular  or  improper.        In the present case, there was no question of illegality  or        irregularity  in  the  orders  of  the  Regional   Transport        Authority  and  the  Board.  The only  question  was  as  to        whether  these  orders were improper.  The propriety  of  an        order  does  not necessarily mean that it  must  be  correct        order.  There must be something extraneous to the order  it-        self  which  made  it improper.  Merely  because  the  State        Government took a different view of the facts to that of the        authority  or officer subordinate to it would not  make  the        order  of  such authority or officer improper.   The  second        stage,  namely,  the  passing  of  an  order  as  the  State        Government  thought  fit,  ’could only be  reached  after  a        decision  had  been arrived at on  the  condition  precedent        conferring jurisdiction on the State Government to revise an        order.    The  substantial  ground  upon  which  the   State        Government revised the order of the authority subordinate to        it  was  that  respondent No. 2 had  better  facilities  for        operation and would, therefore, be able to serve the  public        better.    The   authorities  subordinate   to   the   State        Government,   however,  had  the  representations   of   the        appellant and respondent No. 2, as well as other applicants,        which fully stated all material particulars in this  respect        and  it  could  not  be said that  these  matters  were  not        considered   by  them.   The  orders  of   the   subordinate        authorities accordingly must be read to mean that as between        the appellant and respondent No. 2 both bad equal facilities        for  operation and that things being equal between  them  in        every way, one permit should be granted for one route to the        appellant and another for another route to respondent No. 2.        There  could  be nothing improper in  this.   The  condition        precedent  to  the exercise of jurisdiction  to  revise  the        order was therefore absent and the State Government acted in        excess of its        261        jurisdiction  in  revising  the orders  of  its  subordinate        authorities.        Mr. Pathak further contended that there was an error on  the        face  of  the  record  in the  order  passed  by  the  State        Government  as  it  had refused  to  consider  seniority  or        experience  in motor transport as a factor for the  granting        of  a  permit  and  it thought that it  could  come  to  any        conclusion it liked and reference was made to paragraph 8 of        the affidavit filed on behalf of the State Government in the        High  Court.   On  the  basis of  that  affidavit  and  that        paragraph,  it was also urged that the error on the face  of        the  record  was that the Government acted on  an  erroneous        idea of its own jurisdiction.        He  further  contended  that section  64-A  was  an  invalid        provision.        In  the alternative, he urged that a court or authority,  in        the  exercise  of  its  revisional  powers,  cannot  take  a        contrary view of the facts to that taken by the  subordinate        court or authority.  Exercise of such revisional power could        only  be  made  in  cases where  the  subordinate  court  or        authority  had  taken a perverse view of the facts  and  had        arrived  at  a conclusion which no reasonable  person  could        have arrived at.        In  support of his first contention, Mr. Pathak relied  upon        Paragraph  116  at page 59 of Halsbury’s  Laws  of  England,        third  edition, Vol. 11.  It appears from an examination  of        that  paragraph  and paragraph 117 at page 60  of  the  same        Volume that there may be cases where the jurisdiction of  an

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      inferior  tribunal  may depend upon the fulfilment  of  some        condition precedent or upon the existence of some particular        fact.  Such a fact is collateral to the actual matter  which        the  inferior tribunal has to try, and the determination  of        whether it exists or not is logically and in sequence  prior        to  the  determination  of the  actual  question  which  the        inferior tribunal has to try.  In such a case, in certiorari        proceedings, a court can enquire into the correctness of the        decision of the inferior tribunal as to the collateral  fact        and may reverse that decision if it appears to it, on the        262        materials  before  it,  to  be  erroneous.   There  may   be        tribunals,   however,  which,  by  virtue   of   legislation        constituting them, have the powers to determine finally  the        preliminary  facts  on which the further exercise  of  their        jurisdiction depends.  With respect to them, in such  cases,        their  decision  even  if wrong on facts or  law  cannot  be        corrected by a writ of certiorari.  In cases where the  fact        in  question is a part of the very issue which the  inferior        tribunal has to enquire into, a court will not issue a  writ        of  certiorari,  although  the inferior  tribunal  may  have        arrived  at an erroneous conclusion with regard to  it.   In        the present case, if there was at all any collateral fact to        be decided, it was whether the appropriate authority had  in        fact  passed  any  order in respect of  which  powers  under        section 64-A could be exercised.  It is not disputed that in        fact orders were passed by the Regional Transport  Authority        and   the  Board,  authorities  subordinate  to  the   State        Government, and that these orders existed when the appellant        and  respondent No. 2 moved that Government to exercise  its        powers under section 64-A.  The condition precedent and  the        existence of a collateral fact in that way for the  exercise        of powers under that section were therefore present when the        State Government exercised its powers.  In order to  satisfy        itself  whether the order of an authority subordinate to  it        was  legal, regular or proper, the State Government was  not        deciding  the existence of a collateral fact but  the  issue        itself  as to the legality, regularity or the  propriety  of        the order.  The satisfaction of the State Government in this        respect  would be an expression of its opinion and  not  the        determination of a fact upon which depended its jurisdiction        to exercise its powers under section 64-A.        What is the nature of the functions performed under the  Act        by the Regional Transport Authority, the Board and the State        Government in the matter of granting or refusing to grant  a        permit  may now, be considered.  That they are not  judicial        is  accepted, but, it is said, they are  not  administrative        but   quasi-judicial   and   therefore   amenable   to   the        jurisdiction of        263        a court possessing the power to issue a writ of  certiorari.        In  proceedings  under sections 47, 64 and 64-A of  the  Act        there  is  no determination of any individual’s  rights  and        from  that point of view the functions of these  authorities        may  be  regarded as executive or  administrative.   On  the        other hand, it may be said that a person has the fundamental        right to carry on his business of plying buses and therefore        has  the  right  to have the statutory  functions  of  these        authorities  properly exercised in which case they would  be        quasi-judicial  functions.  Assuming this to be so,  it  has        yet to be seen whether the State Government acted in  excess        of  its  legal authority.  Chapter IV of  the  Act  contains        provisions  concerning  the control of  transport  vehicles.        The  Act  authorises the State Government  to  constitute  a        State    Transport   Authority   and   Regional    Transport

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      Authorities,   and   under  section  43,  subject   to   its        provisions,  it  can control road transport.  In  the  first        instance, the authority to grant or refuse to grant a permit        is vested in the Regional Transport Authority, but its order        is not final as a dissatisfied party can appeal against  the        order under section 64 to the appropriate authority.  Before        section  64-A  was inserted into the Act by an  Act  of  the        legislature  of  the  State of Madras, it  might  have  been        possible  to contend that the order of a Regional  Transport        Authority which bad not been appealed against and the  order        of  the  appropriate authority under section  64,  where  an        appeal bad been made, were incapable of interference by  the        State  Government  for  lack  of  statutory  authority.   By        enacting section 64-A, the legislature clearly intended that        should  not be so and that the State Government should  have        the powers to intervene, if it was satisfied that the  order        in  question was either illegal, irregular or improper.   In        clothing   the   State  Government  with  such   power   the        legislature clearly intended the State Government to  decide        the  issue as to whether any order in question was  illegal,        irregular  or  improper.  It would not be open  to  a  court        exercising  the power of certiorari to intervene merely  be-        cause it might be of the opinion that the view taken        264 ]           by the State Government was erroneous.        The  word "propriety" has nowhere been defined in   the  Act        and  is  capable of a variety of meanings.   In  the  Oxford        English Dictionary (Vol.  VIII), it has been stated to mean.        "fitness;     appropriateness;     aptitude     suitability;        appropriateness   to   the  circumstances   or   conditions;        conformity  with requirement, rule or principle;  rightness,        correctness,  justness, accuracy".  If the State  Government        was  of  the  opinion  that  respondent  No.  2  had  better        facilities  for  operation  than  the  appellant  and  their        service  to the public’ would be more beneficial,  it  could        not be said that the State Government was in error in think-        ing that the order of the Board confirming the order of  the        Regional  Transport  Authority was improper.  It  is  to  be        remembered  that  under  section 47 of the  Act  a  Regional        Transport  Authority  in  deciding whether to  grant  or  to        refuse a permit shall have regard, amongst other things,  to        the  interest of the public generally and the advantages  to        the public of the service to be provided.  Assuming that  in        the  matter of experience there was nothing much  to  choose        between   the  appellant  and  respondent  No.   2,   better        facilities  for  operation of the bus service  possessed  by        respondent  No.  2, would be to the interest of  the  public        generally  and an advantage to the public Of the service  to        be  provided  and therefore was an  overriding  factor  when        other  things  were  equal.  As between  the  appellant  and        respondent  No. 2 neither the Regional  Transport  Authority        nor the Board recorded a finding as to which of them had the        better facilities for transport operation or that such faci-        lities  as  existed between them were of equal  merit.   The        State  Government did not have, therefore, the advantage  of        knowing,  on  the face of the orders of  these  authorities,        what  view they took of this matter.,Even if it  is  assumed        that their orders meant that the facilities for operation as        between  the  appellant and respondent No. 2 were  of  equal        merit,  still the State Government was not in a position  to        know on what material this opinion was based or that it  was        a reasonable view.  In order to satisfy itself the State        265        Government  examined the materials available to it and  came        to  the  conclusion  that respondent No. 2  bad  the  better

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      facilities, in other words, it would be unreasonable to hold        that  respondent No. 2 had not the better  facilities.   The        learned single Judge. of the High Court more than once  held        that he could not find that there was no material before the        State Government to justify its finding that respondent  No.        2 had the better facilities, and he further held that was  a        factor  which restricted the jurisdiction of the High  Court        under  article  226 of the Constitution.  That  should  have        concluded the matter so far as the High Court was concerned.        He,  however,  thought that it could not be  said  that  the        conclusion  reached  by the State Government  was  the  only        conclusion   possible  and  a  mere  disagreement   on   the        conclusions to be drawn from the available materials,  where        either  view  was  a  reasonable  one,  was  not  enough  to        establish  that  the  orders passed by  the  Board  and  the        Regional  Transport  Authority  were  improper  within   the        meaning of section 64-A.  The State Government had therefore        acted in excess of its jurisdiction,.  It seems to us,  that        the  order  of the State Government as it stands  cannot  be        said to be in excess of its jurisdiction nor can it be  said        that  in recording a finding that respondent No. 2  had  the        better  facilities for operation and would serve the  public        better,  it  went  beyond its powers, in the  absence  of  a        finding  to the contrary by the authorities  subordinate  to        it.  The interests of the public and the advantages to it of        the  service  to  be provided were very, it  not  the  most,        important  factors  to be taken into  consideration  in  the        matter  of granting or refusing- to grant a permit.  In  the        conflicting  claims  of the appellant and respondent  No.  2        concerning the facilities available to them for operation of        the  bus service, the State Government was bound to  decide,        in the interests of the public generally, which of these had        the  better  facilities.  It was within the  scope  of  it’s        authority   to  decide  this  and  a  court  in   certiorari        proceedings  ought not to interfere with that decision.   To        hold  that the opinion of the Regional  Transport  Authority        and the        266        Board  that  the  facilities for  operation  were  equal  as        between  these  persons was a reasonable view  would  be  to        constitute the court as the final authority in a matter,  in        which,  by  the  provisions of the Act,  that  function  was        accorded  to  the  State Government.  We  are  not  prepared        therefore  to say that the State Government acted in  excess        of its statutory authority.        There  is no error on the face of the record so far  as  the        order of the State Government is concerned and reference  to        paragraph 8 of the State Government’s affidavit in the  High        Court does not establish any such thing.  That paragraph was        in  answer  to  paragraphs  13 and  14  of  the  appellant’s        affidavit  and  it  set out the  contentions  of  the  State        Government  as  to  its powers.  There is  nothing  in  that        paragraph to establish that in fact the State Government had        declined  to consider seniority or experience in the  matter        of selection.        No  substantial  ground was put forward for  supposing  that        section  64-A was an illegal provision.  It was  within  the        competence  of the State Legislature to insert section  64-A        into the Act.  It was a reasonable provision in keeping with        the  entire scheme of the Act concerning transport  vehicles        and control of road transport.        As  to  the  extent  of powers of revision  in  a  court  or        authority  we do not intend to express any opinion  in  this        case having regard to the view we take that the order of the        State Government cannot be interfered with by the issue of a

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      writ of certiorari.        As  regards the limits of judicial review which  the  courts        have under article 226 which is one of the grounds on  which        the certificate was issued by the High Court, that  question        has  since been considered in the various decisions of  this        Court, which do not require recapitulation.        In  our  opinion, this is not a case in which  it  would  be        reasonable to hold that the State Government acted in excess        of  its jurisdiction.  The appeal is  accordingly  dismissed        with costs to be paid to respondent No. 2.        267