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PETITIONER: RATTAN LAL GUPTA & ORS.  ETC.  ETC.

       Vs.

RESPONDENT: SURAJ BHAN & ORS.  ETC.  ETC.

DATE OF JUDGMENT29/11/1973

BENCH: GOSWAMI, P.K. BENCH: GOSWAMI, P.K. REDDY, P. JAGANMOHAN DWIVEDI, S.N.

CITATION:  1974 AIR  391            1974 SCR  (2) 555  1974 SCC  (1) 235

ACT: Motor  Vehicles Act, 1939-S.47(3)-If the Regional  Transport Authority  could  grantpermits  without  first  fixing   the strength.

HEADNOTE: There were two bus routes-the shorter and the longer routes- both being overlapping.  On the shorter route, the  strength of  the stage carriage permit was fixed at 17 in  1950.   In July 1958 the Regional Transport Authority decided to extend the  shorter route by about six miles (which is  called  the longer  route).  In March, 1959 the strength of the  shorter route  was  increased from 17 to 25.   The  State  Transport Appellate  Tribunal  approved the extension of  the  shorter route.   The  R.T A. advertised for eight vacancies  in  the shorter route and a number of application had been received. Certain  objections  were  raised to  the  increase  in  the strength  and  to the wrong description of  the  route.   In August  1961  the  RTA  decided that  the  only  route  that survived was the longer route.  The existing permits for the shorter  route were in the meantime converted  into  permits for the longer route When  appellants in the third group had applied  for permits on the shorter route,  objections  were raised   that  the  shorter  route  had  ceased  to   exist. Overruling the objections, the RTA granted eight permits  to the  appellants,  which decision was upheld’  by  the  State Transport Appellate Tribunal in August, 1967. The  High  Court held (i) that without fixing  the  strength first  on the longer route permits could not be granted  for it(ii) that the RTA should have first decided whether  there were  two routes or one and then fixed the strength  of  the route or routes and that not having been done in  accordance with  law there was no proper disposal of  the  applications for permits; (iii) that the reduction of the strength of  25 to 9 on the shorter route as done by the RTA was illegal. Dismissing  the appeals of the appellants in the  first  and second groups and allowing the appeal of the third group. HELD  : As the RTA had not fixed the number of  permits  for the  longer route the grant of permits for the longer  route was invalid. [560-G] in  March, 1959 the RTA had fixed the number of permits  for

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the  shorter  route at 25.  As 17 permits had  already  been granted, the RTA invited applications for eight vacancies in June,  1959.   So  the strength was fixed  long  before  the invitation  of applications for permits.  At one  stage  the RTA had taken the view that the shorter route had merged  in the longer route but later it rectified the mistake and held that  the  shorter  route  and  the  longer  route   existed separately.   The latter view of the RTA was correct in  the then prevailing circumstances. [560-H] A decision to extend the shorter route to a longer  distance under  the  U.P.  Motor  Vehicles  Taxation  Act  will   not automatically  merge the shorter route in the longer  route. For  that  purpose it was necessary for the RTA to  take  an independent  decision under the Motor Vehicles Act.  But  no such  decision was taken.  The RTA realised the mistake  and rectified  it in its meeting of May, 1965.  The decision  of the RTA dated May, 1965 that the shorter route still existed with  a strength of 25 stage carriages and that the  shorter route and the longer route were separate routes was correct. [561-C-D] The  RTA could not reduce the strength of the shorter  route from 25 to 9. There were, therefore, eight vacancies on  the shorter route and the RTA could validly grant eight  permits to  the appellants in the third group.  The High  Court  was wrong in quashing the grant of permits to the appellants  in the third group. [561-E-F] R.   Obilaswami  Naidu  v.  Transport  Appellate   Tribunal, Madras [1969] 1 S.C.R. 730, M/s Jaya Ram Motor Service v. S. Rajarathinan,  C.A.  No. 95 of 1965 decided  on  27-10-1967, Mohd.   Ibrahim etc. v. State Transport Appellate  Tribunal, Madras. 556 etc..  [1971]  1  S.C.R. 523, Abdul Mateen  v.  Ram  Kailash Pandey,  [1963] 3 S.C.R. 523 and Baluram v. State  Transport Appellate,  Authority,  M.P., C. A. No.  527/65  decided  on 22-3-1968, referred to.

JUDGMENT: CIVIL  APPELLATE JURISDICTION : Civil Appeals Nos.  15921595 of 1971. From the Judgment and Decree dated the 30th September, 1969, of the Allahabad High Court in Civil Miscellaneous Writ Nos. 5210, 5246, 5398 and 5410 of 1964. CIVIL APPEALS No. 1628-1631 of 1971. From the Judgment and Decree dated the 30th September,  1969 of the Allahabad High Court in Civil Miscellaneous Writ Nos. 3216 3217, 3218 of 1967 and 12 of 1968. CIVIL APPEALS Nos. 1634-1639 OF 1971. From  the Judgment and Order dated the 30th September,  1969 of  the  Allahabad High Court in Civil  Miscellaneous  Writ. Nos. 3892, 3135, 3136 3137, 3138 and 3139 of 1967.                             AND SPECIAL LEAVE PETITIONS (CIVIL) Nos. 3094-3095 OF 1971. From  the Judgment and Order dated the 30th September,  1969 and  28th  July, 1971 of the Allahabad High Court  in  Civil Miscellaneous  Writ Nos. 3927 of 1967 and SCA No.  643-A  of 1969 respectively. Yogeshwar  Prasad,  S. K. Bagga, S. Bagga,  Rani  Arora  and Indira  Manchanda, for the appellants (in C. A.  Nos.  1592- 1595/71) and Petitioner in (SLPs Nos. 3094 & 3095/71). H.   K.  Puri, for respondent No. 1 (in C.A. No.  1593)  and respondent On C.A. nos. 1628, 1629 and 1630/7 1) R.   K. Garg and S. C. Agrawala, for respondent Nos.  1  (in

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C.A. No. 1594 and Appellants (in C.A. No. 1628-31 and  1634- 39/71) E.   C. Aggravala and A. T. M. Sampath, for respondents Nos. 1 and 2 (in    1595)  and  respondent  no. 3  (in  C.A.  No. 1634/71). J.   P.  Goyal and V. C. Parashar, for intervener  (in  C.A. Nos.  1592-  95  and  respondent  no.  4  (in  1634-37)  and respondent Nos. 4 and 5 (in C.A. Nos. 1638-39/71) The Judgment of the Court was delivered by GOSWAMI,   J.-There  are  three  groups  of   appeals   with certificate  directed against the judgment of the  Allahabad High Court of 20th September, 1969.  The first group  (Civil Appeals Nos. 1592-1595 of 1971) is by Rattan Lal Gupta,  Uma Sharan Sharma, Sewa Ram, Dharam Das Agarwal, Land Lines Pvt. Ltd.,  Smt.   Kusum Lata and Tribhuvan Kumar; the  last  two being  the widow and son of Madan Mohan Lal, deceased.   The second  group (Civil Appeals Nos. 16281631 of 1971)  is.  by Suraj  Bhan (in Civil Appeal No. 1628 of 1971)  and  others. The third group (Civil Appeals Nos. 1634-1639 of 1971) is by Harish  Chandra, Mahendra Kumar Tayal, Shanti  Swarup  Jain, Mitranand Kaushaik, Baru Mal Agarwal, Gur Prasad, Richpal 557 Singh  and Bhagwan Singh Sambi.  There are also two  Special Leave  Petitions Nos. 3094-3095 of 1971 which have not  been admitted  but by an order of this Court dated 7th  February, 1972,  the petitioners’ were allowed to intervene  in  these appeals. The facts relating to the appeals have got to be narrated in some detail.  On October 13, 1950, a route for stage carnage permit     described    as     Muzaffarnagar-Budhana-Kandhla (hereinafter the shorter route),was classified as ’B’  class route  and the strength of the permit was fixed at  17.   On July  18,  1958, the Regional Transport  Authority  (briefly RTA)  Meerut decided to extend the route by about six  miles upto Issupurteel ( hereinafter the longer route).  On March, 23,  1959,  the RTA increased the strength  or  the  shorter route  from  17  to  25 under section  47(3)  of  the  Motor Vehicles Act, 1939 (briefly the Act).  As there were already 17  permits  in  operation,  the  RTA  on  June  13,   1969, advertised  for 8 vacancies in the shorter route  and  fixed July   27,  1959,  as  the  last  date  for  receiving   the applications and it appears 1117 applications were received. The   State  Transport  Appellate  Tribunal  (briefly   STA) approved the extension of the route to Issupurteel on August 8,  1959.  The applications which were received in  response to the advertisement were published in the U. P. Gazette  of September  15, 1962.  There were some other applications  on June  16,  1963,  including a second application  of  M.  N. Kaushik.  These were also published in the U. P. Gazette  on June 16, 1963.  Mohds.  Ibrahim filed his objections to  the applications  published on September 15, 1962.  He  objected to  the  increase  in the strength and to  the  route  being wrongly  described  in  the advertisement.  On  2nd  to  4th August,  1961, the RTA had decided that there was  only  one route  upto  Issupurteel  and  that  applications  presented either upto Kandhla or upto issupurteel should be considered as  presented for the entire route viz., the  longer  route. The  RTA also held that Muzaffarnagar Budhana-Kandhla  route ceased  to  exist  in  1958  by  referring  to  its  earlier resolution No. 71 of 18th July 1958 and that thereafter  the only   route  that  survived  was  the  longer  route   upto Issupurteel.   It appears most of the existing  permits  for the  shorter route were in the meantime converted  into  the longer route under section 57 (8) of the Act.  Suraj  Bhan’s application for a permit was published on November 2,  1963.

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Meanwhile  7 renewal applications from the  existing  permit holders  were received between November 4, 1963 and May  18, 1964,  in  anticipation  of expiry of  their  permits.   The appellants in the first group objected to these renewals and prayed  for  grant of fresh permits to them for  the  longer route.   On June 13, 1964, their objections to the  renewals as  well  as those for fresh permits were published  in  the Gazette.   On  July  4, 1964  some  more  applications  were published for the longer route.  To give some more  details, thirteen applications for the longer route were published on July  1,  1961;  twenty seven on June 15, 1963  and  two  on November  2,  1963.   Mohd.  Ibrahim and his  union  of  the existing operators objected to these applications.  On  28th and  29th August, 1964, the RTA considered only  II  renewal applications   and   12   fresh   applications   and   other applications  were not even put up before the RTA.  The  RTA ordered renewal of 11 permits and rejected the objection  to the renewal of the appellants in --M602Sup CI/74 558 the  first  group as well as their  applications  for  fresh permits.   The ground given was that none of  the  objectors and 12 applicants for fresh   permits  had turned  up.   The appellants in the first group to the STA impleading 8 out of the  11 renewal permit holders. The STA by its  order  dated November 10, 1964, set aside the order  of  the  RTA   dated 28th /29th August, 1964.  Four writ petitions were filed  in 1964 against the order of STA dated November 10, 1964.   The appellants in the third group had applied for permits on the shorter  route.   Certain  persons-had  objected  to   their applications on the ground that the shorter route had ceased to   exist.   On  May  6-8,  1965,  their  objections   were overruled,  and  the  RTA  granted 8  permits  to  the  said appellants.  This order was upheld by the ’STA on August 29, 1967.   There were 19 other writ petitions of 1967 and  1968 be-’ fore the High Court which were also heard together.  Of these five petitions were directed against the order of  the STA  of  August  29, 1967.  Seven  petitions  were  directed against  the  orders  of both the RTA and of  the  STA  made respectively  on 6th to 8th May, 1965 [item 30 (a)]  and  on 29th  August,  1967.   Seven more  petitions  were  directed against the orders of the RTA of 6th to 8th May, 1965  [item (c)] and of the STA of 29th August, ’1967. With  reference  to the first group of writ  petitions,  the High  Court held that the strength of 25 had not been  fixed by  the RTA for the longer route.  It further held that  the grant  of  six  permits forthwith on the  longer  route  was illegal  that since the number of applicants for permits  on this  route  were in excess of the number of  permits  which could  be-granted,  no  grant could be  made  without  first fixing  the strength of the longer route.  The  High  Court, therefore, set aside the order of the STA dated November 10, 1964.   It also at the same time set aside that part of  the order  of the RTA of 28th/29th August, 1964, by which  their applications for fresh permits had also been rejected.   The High Court also quashed the orders of the RTA and STA  dated May  6-8, 1965 and August 29, 1967 respectively.   The  High Court  further  observed  that "until the  shorter  and  the longer  routes were held on legally relevant  considerations to  be  separate for purposes of granting permits,  all  the pending applications whether for the extended or  unextended route  should have been taken up together".  Since this  was not done by the RTA nor by the STA, the orders of both  were "vitiated  by patent illegality as regards applications  for fresh  permits".   The  High Court also noted  that  it  was

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admitted by all the parties that the strength of 25 had been fixed  for the unextended route and that no strength of  the extended  route  had  been fixed at  all.   That  being  the position,  following  the  decisions of  this  Court  in  R. Obilaswami Naidu v. Transport  Appellate Tribunal, Madras(1) and ,Ills Jaya Ram Motor Service v. S. Rajarathinan (2), the High  Court held that without fixing the strength  first  on the  longer route permits could not be granted for  it.   On the question of routes, the High Court observed that the RTA should  have first decided whether there were two routes  or one route and then fixed the strength of the route or routes and that not having so done, in accordance right law,  there was no proper disposal of the applications for permits.  The High  Court  further pointed out that the reduction  of  the strength of 25 to (1)  [1569] 1 S. C. R. 730. (2) C. A. No. 95 of 1965 decided on 27-10-67. 559               9  in the shorter route in the manner done  by               the  RTA was illegal. The High  Court  finally               decided as follows               "In  our opinion, the applications of all  the               petitioners   and  the   contesting   opposite               parties  could be properly considered  by  the               Transport Authorities only after deciding  the               following questions on relevant considerations               contained in sections 47 (1) of the Act               (a)   Whether  it is necessary  to  nationally               separate the whole route into two  overlapping               routes for the purposes of granting permits               (b)   What should be the strength on the whole               route, or, if it is decided to fix two routes,               one within the other, the respective strengths               of the two routes" ? The High Court gave also other appropriate directions in the decision. The  learned  counsel, Mr. Yogeshwar Prasad, at  first  made some  submissions  with  regard to  abatement  of  the  writ applications  before  the  High Court  on  account  of  non- substitution  of  the  heirs and  legal  representatives  of deceased, Madan Mohan Lal.  But he finally did not press the same.   The learned counsel, however, submitted  that  there was  no defect or lack of jurisdiction in the order  of  the STA  to  merit interference by the High Court.   He  further submitted  that the strength of the longer route  was  fixed and  the  longer  route was in existence  and  the  STA  was perfectly  justified in granting the permits by their  order of November 10, 1964. Mr.  Garg,  on the other hand, submitted that  there  was  a shorter route and its strength was rightly reduced. to  nine and  the  nine permits were validly  granted.   His  further contention  is  that in the absence of  the  strength  being fixed  for the longer route and of consideration of all  the applications  for  the  longer route, grant  of  permits  to Rattan  Lal  Gupta and others was bad.  Mr. Goyal  drew  our attention to the fact that in the absence of special orders. of  this Court his client was granted permits by the RTA  on June  3,  1973, on the longer route.  The  learned  counsel, therefore, supports the judgment of the High Court. The  controversies  in these appeals centre round  grant  of stage  carriage  permits appertaining, as  claimed,  to  two routes,  one shorter and the other longer,  mentioned  above and  both being admittedly overlapping.  At first  we  shall consider  the appeals relating to the longer route.  It  has been  held  in  Mohd.   Ibrahim  etc.  v.  State   Transport

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Appellate  Tribunal, Madras, etc.,(1) following the  earlier decisions  in  Adbul Mateen v. Ram Kailash Pandey  (2),  M/s Jaya  Ram  Motor  Service (3), Baluram  v,  State  Transport Appellate  Authority M.P.(4) and R. Obliaswami Naidu (5)  as follows               "The    next   question   which   falls    for               determination is the               point  of  time  when  a  Regional   Transport               Authority will               (1) [1971] 1 S.C.R. 474.               (3)   C.A. No. 9511965 decided on 27-10-1967.                (5)  [1969] 1 S.C.R. 730.                (2)  [1963] 3 S.C.R. 523.                (4) C.A. 727/65 decided on 22-3-68.               560               under  section 47(3) of the Act fix the  limit               of  number  of stage carriage  permits.   This               Court in Abdul Mateen’s case (4) said that the               general   order  by  the  Regional   Transport               Authority  under section 47 (3) of the Act  in               regard  to  the  limit  of  number  of   stage               carriage  permits can be modified only by  the               Regional  Transport authority when  exercising               the  jurisdiction under section 47(3)  of  the               Act.   The Regional Transport Authority  while               acting  under section 48 of the Act in  regard               to  the grant of permits has  no  jurisdiction               and  authority to modify any order  passed  by               the Regional Transport Authority under section               47  (3) of the Act. in other words, the  limit               fixed  by  the  Regional  Transport  Authority               under  section  47(3)  of the  Act  cannot  be               altered by the Regional Transport Authority at               the   time  of  grant  of  permits.   It   is,               therefore, established that the  determination               of  limit of number of permits is to  be  made               before  the  grant of permits.   That  is  why               section  48  of the Act is prefaced  with  the               words "subject to the provisions of section 47               of the Act" meaning thereby that the jurisdic-               tion  of the Regional Transport  Authority  to               grant permits is subject to the  determination               of  the  limit  of  number  of  permits  under               section 47 (3) of the Act.  This Court  stated               the  legal  position  in M/s  Jaya  Ram  Motor               Service’s  case(2) and said ’It  is  therefore               clear that the authority has first to fix  the               limit  and after having done so  consider  the               application   or   the   representations    in               connection  therewith in accordance  with  the               procedure laid down in section 57 of the Act’.               Again  in the case of R. Obilaswami Naidu  (1)               this  Court considered the submission in  that               case  as  to whether  the  Regional  Transport               Authority  could decide the number of  permits               while  considering applications  for  permits.               This  Court did not accept the submission  be-               cause such a view could allow an operator  who               happened to apply first to be in a  commanding               position  with  the result that  the  Regional               Transport Authority would have no  opportunity               to  choose  between  competing  operators  and               public  interest  might suffer.  In  the  same               case  it is again said that the  determination               of  the  number of stage carriages  for  which

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             stage carriage permits may be granted for  the               route  is  to  be done  first  and  thereafter               applications    for   permits   are   to    be               entertained". As  the  R. A. had not fixed the number of permits  for  the longer route, we agree with the High Court that the grant of permits  for  the longer route is invalid.   But  the  legal position  in regard to the grant of permits on  the  shorter route is different.  Admittedly, on March 23, 1959, the  RTA had fixed the number of permits for this route at 25.  As 17 permits   had   already  been  granted,  the   RTA   invited application  for eight vacancies on June 13, 1959.   So  the strength   was   fixed  long  before   the   invitation   of applications  for permits. it is true that at one stage  the RTA had taken the view that the shorter route had merged  in the longer route; but later it rectified the mistake 561 and held that the shorter route and the longer route existed separately.   We think that the second view of the  RTA  was correct  in the then prevailing circumstances.  On July  18, 1958,  the RTA resolved that  "Muzaffarnagar-Budhana-Kandhla route  be extended to Gangeru-Issupurteel".   The  extension was made under the U.P. Motor Vehicles taxation Act.  At  no time the RTA has taken a decision for abolishing the shorter route.   In its meeting on August 2-4, 1961, the RTA  upheld the  objection that the shorter route had ceased  to  exist. The RTA said, "Originally Muzaffarnagar-Budhana-Kandhla  was the  name  of the route.  Subsequently about  six  miles  of kachcha  route was considered motorable and then the RTA  on 18-7-1958 declared that Muzaffarnagar-Budhana-Kandhla  route be  extended  upto  Issupurteel.  After  this  decision  the Muzaffarnagar-Budhana-Kandhla route could not ’have separate existence  but was merged in the longer route".  As  already pointed  out,  a decision to extend the shorter route  to  a longer  distance under the Motor Vehicles Taxation Act  will not  automatically  merge the shorter route  in  the  longer route.   For  that purpose it was necessary for the  RTA  to take  an independent decision under the Motor Vehicles  Act. But  no  such  decision was taken.   The  RTA  realised  the mistake  and rectified it in its meeting on May  6-8,  1965. The RTA then decided: "We have considered the entire  matter carefully  and have perused all earlier resolutions  of  the RTA.   We  are of the  opinion  that  Muzaffarnagar-Budhana- Kandhla (the shorter route) still exists with a strength  of 25 stage carriages and that the shorter route and the longer route  are separate routes.  Even after the approval of  the longer  route  by the STA, the RTA had  offered  permits  to displaced  operators on the shorter route".  We  think  that this resolution states the correct position. It may be mentioned at this place that in the August meeting the RTA reduced the strength of shorter route from 25 to  9. That  could not be done.  In the result, there would  remain eight  vacancies on the shorter route for which the RTA  bad already  invited  applications.  So the  RTA  could  validly grant  eight permits to the appellants in the  third  group. The STA rightly affirmed this decision of the RTA.  The High Court,  in our view, was not right in quashing the grant  of permits to the appellants in the third group. in  the result, the appeals in the first and  second  groups are  dismissed.  The appeals in the third group are  allowed and the judgment of the High Court qua these appeals is  set aside.   The permits granted to the appellants in the  third group  of appeals, if already cancelled in pursuance of  the order  of  the High Court, will be restored to  them.   Shri Garg,  counsel for the appellants, has given an  undertaking

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that  the appellants will surrender permits granted to  them for the longer route.  The Special Leave Petitions Nos. 3094 and  3095 of 1971 are admitted, and the appeals arising  out of them are dismissed.  Parties will bear their own costs. P.B.R.            Appeals dismissed. 562