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CASE NO.: Appeal (civil)  1159-1170 of 2004

PETITIONER: VISHNU DUTT & ORS.

RESPONDENT: STATE OF RAJASTHAN & ORS.

DATE OF JUDGMENT: 15/12/2005

BENCH: ASHOK BHAN & C.K. THAKKER

JUDGMENT: J U D G M E N T WITH CIVIL APPEAL NO. 1172 OF 2004

C.K. THAKKER, J.

All these appeals have been filed against the orders  passed by the Division Bench of High Court of Rajasthan  in the D.B. Civil Special Appeal No. 662 of 2001 and  cognate matters by which the Division Bench dismissed  all appeals and confirmed the common order passed by  the learned single Judge in various Writ Petitions. The litigation has a chequered history. By a  Reciprocal Transport Agreement dated 5th/8th February,  1968 (hereinafter referred to as ’1968 Agreement’)  entered into between the State of Rajasthan and the  State of Haryana, Hanumangarh - Dabbwali via Sangaria  inter-State route opened to traffic with a view to  encourage movement of transport vehicles on such  routes and to regulate and control their operation. The  agreement stipulated that four return trips and eight  single services will be allowed to buses belonged to State  of Rajasthan and 13 permits will be granted. In  accordance with the said agreement, the Rajasthan State  Road Transport Corporation (’RSRTC’ for short) was  granted 13 stage carriage permits. On February 29,  1996, the Regional Transport Authority, Bikaner (’RTA’  for short) granted additional stage carriage permits to  private vehicle operators including the respondents in  the present appeals. There was a clear stipulation on the  permits that they were granted beyond the ceiling fixed  under 1968 Agreement. On July 14, 1997, the State of Rajasthan and the  State of Haryana entered into a fresh inter-State  agreement (hereinafter referred to as ’1997 Agreement’)  in supersession of 1968 Agreement for 13 permits with  16 single trips. Clause 4 (iv) clarified that all previous  stage carriage permits which were counter signed by  either State before the coming into force of 1997  Agreement shall remain in force till the valid period of  such permits. According to the appellants, under 1997  Agreement, the route was made open exclusively for  private operators. It was also their case that under 1968  Agreement, only RSRTC was granted permits which was  within the scope and ceiling fixed by that Agreement and  the respondents had no right to ply vehicles. After coming into force of 1997 Agreement, several  applications were made by private vehicle operators for

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grant of permits. RTA, however, vide its orders dated  April 25, 1998 and November 18, 1998 declined to grant  permit to any applicant under Section 88 of the Motor  Vehicles Act, 1988 on the ground that there was no  vacancy in existence for the grant of such permits. Being  aggrieved by the above orders passed by RTA, appeals  were filed before the State Transport Appellate Tribunal,  Rajasthan, Jaipur (’STAT’ for short) by the persons whose  applications were rejected. The main appeal was Appeal  No. 398 of 1998 titled Sohanlal v. RTA. STAT, vide its  order dated July 24, 1999 set aside the order passed by  RTA and remitted the matter to RTA with a direction to  reconsider all the applications under 1997 Agreement for  grant of 13 permits with 16 trips. Against the order  passed by STAT, RSRTC filed a Writ Petition in the High  Court of Rajasthan. A Writ Petition was also filed by  Sohanlal. The learned single Judge of the High Court  passed an interim order on September 9, 1999 and  stayed further proceedings before RTA consequent to the  order of remand made by STAT directing RTA to  reconsider applications and to pass orders in accordance  with law. It is, however, the case of the appellants that  the order of interim relief granted by a single Judge of  the High Court on September 9, 1999 was not  communicated immediately to RTA and RTA was not  made aware of any such interim order passed by the  High Court. Accordingly, on September 16, 1999, RTA  held a meeting in which appellants as well as  respondents participated and the parties were heard. By  an order dated November 2, 1999, RTA, considering the  case of the appellants on merits, was pleased to grant 11  permits to them and the remaining two permits were  granted in favour of other persons. According to the  appellants, they were not made parties in the  proceedings before the High Court in the writ petitions  and they were not aware of interim order dated  September 9, 1999. It was also asserted by the  appellants that neither RSRTC nor Sohanlal produced  the order of the High Court before RTA on September 16,  1999 when the hearing took place, nor on November 2,  1999 when the order was passed in favour of appellants  granting permits in their favour. According to the  appellants, therefore, the order dated November 2, 1999  was legal, valid, proper and in accordance with law. It is  the case of the appellants, that the interim order of the  High Court was communicated to RTA only on November  13, 1999 but by that time, the order dated November 2,  1999 had already been passed by RTA. In view of the  final order passed by RTA, RSRTC filed an application in  the writ petition pending in the High Court seeking  amendment of the petition, challenging the legality of the  order dated November 2, 1999 by which RTA had granted  11 permits in favour of the appellants. The said  application was made on November 29, 1999. The High  Court granted the application on December 13, 1999 and  vacated interim relief which was granted on September 9,  1999 in the light of the order dated November 2, 1999  passed by RTA but fixed the matter for final hearing. On  December 24, 1999, the competent authority  countersigned the permits in favour of the appellants  taking into account the fact that interim relief had been  vacated by the High Court. The matter was then heard by  the learned single Judge on January 27, 2000. During  the course of hearing, it was noticed by the learned  single Judge that as against 13 permits under 1997

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Agreement, 50 vehicles were plying on Hanumangarh -  Dabawali via Sangaria inter-State route as on January  27, 2000 on the basis of the permits granted by RTA,  which were outside the scope of the ceiling fixed by inter- State agreement. Under the circumstances, the learned  single Judge directed the Secretary, RTA to give exact  figures and details about the permits granted within the  quota and outside the ceiling fixed by 1968 Agreement as  well as 1997 Agreement. The RTA submitted two  separate Schedules marked ’A’ and ’B’. In Schedule ’A’,  the names of the persons who were granted permits  outside the scope and ceiling fixed by 1968 Agreement  was filed. In Schedule ’B’, the names of persons who  were granted permits within the scope and ceiling fixed  by 1997 Agreement were mentioned. In the light of the  query raised by the Court and information supplied by  RTA, the High Court finally disposed of the petitions on  Feburary 14, 2000, inter alia, observing as under: "In the facts and circumstances of the case, it  is desirable that the learned State Transport  Appellate Tribunal be requested to examine  the whole issue afresh and determine who are  13 permit-holders who have valid permits for  the aforesaid inter-State route under the  reciprocal agreement and who should be  allowed to ply vehicles on the said inter-State  route under such valid permits". (emphasis supplied)

       The Court noted that "with the consent of learned  counsel for the parties", the case was remitted to STAT  with the request to dispose of the matter expeditiously,  preferably within three months, keeping in view the  decision of this Court in Ashwani Kumar v. Regional  Transport Authority, Bikaner, (1999) 8 SCC 364 and the  decision of the High Court of Rajasthan in M/s  Zamindara Motor Transport Co-operative Society v.  Regional Transport Authority, (1999) 2 RLW 1329.  Till  the matter was to be decided by STAT, Jaipur, RTA,  Bikaner was restrained from granting any temporary or  permanent permit on the route in question to any  person. In pursuance of the order passed by the learned  single Judge, STAT issued notices to all 50 permit  holders. After hearing them, STAT, by an order dated  May 29, 2000, held that 13 permits issued in favour of  RSRTC were within the ceiling fixed by 1968 Agreement.  Those permits, however, were not countersigned by the  State of Haryana and hence they could not be said to be  valid permits. When 1997 Agreement came into force,  permits granted under 1968 Agreement in favour of  RSRTC were considered, but since the earlier permits  were not valid, the new permits also could not be said to  be valid permits and were not saved under Clause 4(iv) of  1997 Agreement. So far as the permits granted in favour  of respondents were concerned, according to STAT, they  were countersigned by the State of Haryana but those  permits were outside the ceiling fixed by 1968 Agreement  and, therefore, those permits also could not be said to be  valid in the light of the ratio laid down in Ashwani Kumar  as also M/s Zamindara Motor Transport Co-operative  Society.

       As to order dated November 2, 1999 passed by RTA  granting permits in favour of the appellants, STAT held  that the said order was in violation of interim order dated

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September 9, 1999 passed by the High Court in writ  petitions. STAT noted that the interim order was vacated  by the High Court on December 13, 1999 keeping in view  the order passed by RTA on November 2, 1999 but such  vacation would not make order dated 2nd November,  1999 valid and would not cure the defect as the writ  petition was finally allowed by the High Court. According  to STAT, when the order dated July 24, 1999 passed by  STAT remanding the matter to RTA was set aside by the  High Court, no order could have been passed by RTA  considering the applications and granting permits in  pursuance of the order passed by STAT since that order  was quashed by the High Court. No party, hence, could  get benefit of an order dated November 2, 1999. The  appellants, therefore, could not claim the benefit under  the said order. STAT, therefore, by an order dated May  29, 2000, again remanded the matter to RTA directing it  to consider the applications which were decided on  November 2, 1999. A direction was also issued to RTA  not to consider any application filed prior to July, 1997  i.e. before coming into force of 1997 Agreement.         The order dated May 29, 2000 passed by STAT was  challenged by RSRTC by filing a writ petition. The  learned single Judge, however, held that a finding had  been recorded by STAT that the permits granted in  favour of RSRTC had never been countersigned by the  State of Haryana and hence RSRTC had no right to ply  its vehicle on the said route. So far as 1997 agreement  was concerned, permits were to be granted to private  vehicle operators and hence, RSRTC had no right to  claim any permit under the said agreement.  The Court  accordingly dismissed the petition filed by RSRTC.         The order dated May 29, 2000 passed by STAT was  also challenged by the appellants as well as by  respondents by filing writ petitions. The learned single  Judge heard the parties and disposed of all writ petitions  by a common order. The learned single Judge, inter alia,  held as under: 1. Permits granted on November 2, 1999 in  favour of the appellants cannot be said to  be legal and valid.

2. 11 permits granted in favour of private  operators (respondents herein) on February  29, 1996 had never been challenged on any  ground whatsoever before any forum and it  was only because an order was passed by  learned single Judge on February 14, 2000  in the light of the fact that as against 13  operators, 50 vehicles were plying, STAT  was directed to find out as to who those 13  persons were who held legal permits and  had right to ply vehicles.

3.      As the respondents-private vehicle  operators were holding valid permits,  which were countersigned by the State of  Haryana, their permits were legal and  valid.

4. Mere stipulation in the permits that they  were over and above the ceiling under the  Agreement would not disentitle private  operators from continuing operation as the  said provision had to be read in accordance

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with the agreement. Once it was held that  13 permits granted in favour of RSRTC  were not countersigned, they could not be  said to be legal permits under 1968  Agreement and hence they were required to  be excluded.

5. In view of exclusion of 13 permits issued in  favour of RSRTC, permits issued in favour  of respondents-private operators, counter- signed by the State of Haryana, must be  treated as legal.

6.  The respondents were permit-holders and  plying their vehicles since March 16, 1963  and they could not be thrown out on any  technical ground.  

       Resultantly, writ petitions filed by appellants came  to be dismissed and the writ petitions filed by  respondents were allowed. Two batch of original side appeals were filed by the  appellants being aggrieved by the order passed by the  learned single Judge. In one set of appeals, it was  contended that the learned single Judge had committed  an error of law in dismissing the writ petitions filed by  the appellants as after considering the applications filed  by the appellants in accordance with 1997 Agreement,  their cases were considered by the RTA and permits were  granted in their favour. The order which was passed on  November 2, 1999 without any knowledge as to interim  order passed by a single Judge of the High Court was  legal and valid and could not have been invalidated by  the learned single Judge. Their appeals were, therefore,  required to be allowed. Regarding writ petitions filed by respondents, it  was contended by the appellants before the Division  Bench that admittedly they were holding permits over  and above the ceiling fixed by 1968 Agreement. An  express stipulation was made in the Agreement that they  were in excess of quota under the said Agreement. It was  submitted that it was the case of RSRTC that 13 permits  were granted in favour of Corporation and as under 1968  Agreement only 13 permits could be granted, even if it is  held that those permits were not as per the Agreement,  the respondents could not claim benefit of the fact- situation that the permits, in favour of RSRTC were held  illegal, they must get the benefit and permits issued in  their favour should be held legal. The learned single  Judge, therefore, was in error in granting relief in favour  of the respondents. The Division Bench considered the question in  detail and held that the learned single Judge was right in  dismissing the writ petitions filed by the appellants- petitioners and also in allowing the petitions filed by the  respondents (petitioners before the High Court). The  Division Bench observed that since RTA was not aware  of interim order dated September 9, 1999 passed by the  learned single Judge in the writ petition, consideration of  applications of the appellants on September 16, 1999  and grant of permits on November 2, 1999 might not be  treated as an order passed by RTA in disobedience of  interim order passed by the learned single Judge of the  High Court. But the fact remained that the order of STAT  remanding the matter to RTA and the direction to

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reconsider the applications of all applicants on merits  was finally quashed and set aside by the High Court.  Hence, the order passed by RTA could not be said to be  valid in the eye of law and, hence, could not operate or  be implemented. The appellants, therefore, could not  base their claim on the said order. The order passed by  the learned single Judge dismissing the petitions of the  appellants-petitioners, therefore, could not be held  contrary to law and accordingly their appeals were liable  to be dismissed. As far as the petitions of the respondents and grant  of relief in their favour, which was objected by the  appellants, the Division Bench observed that the learned  single Judge was right in allowing their petitions. The   Bench noted that under 1968 Agreement, only 13  permits could be granted. As per the Agreement, the  permits could be said to be valid and effective only if they  were countersigned by either State. Though it was the  case of RSRTC that 13 permits were granted to the  Corporation, admittedly, they were not countersigned by  the State of Haryana. The said permits, therefore, rightly  held to be not as per the Agreement. Obviously,  therefore, 13 permits which were issued in favour of  respondents and countersigned by the State of Haryana  must be held legal and valid irrespective of mentioning of  the fact in the permits that they were in excess of quota.  Once it was held that permits granted in favour of  RSRTC were not in accordance with agreement, permits  issued to respondents countersigned by the State of  Haryana must be held valid. If it is so, the learned single  Judge was right in granting the relief in favour of  respondents, ruled the Division Bench. In view of the  said findings, the Division Bench disposed of all Appeals. Being aggrieved by the said orders, the appellants  have approached this Court. Notices were issued by this  Court on November 18, 2002 and after hearing the  parties, leave was granted. The matters have been placed  before us for final hearing. We have heard learned counsel for the parties. Two questions, which were raised before the  learned single Judge as well as before the Division Bench  of the High Court, were raised before us by the learned  counsel for the appellants. Firstly, it was contended that  in pursuance of inter-State Agreement of 1997 entered  into between the State of Haryana and State of  Rajasthan, applications were invited from private  operators and the appellants submitted applications. In  accordance with the Agreement, applications of the  appellants were considered by the RTA, Bikaner along  with other applications and permits were granted in their  favour which were duly countersigned by the State of  Haryana. Those permits, therefore, were legal and valid  and could not have been declared illegal. The High Court  ought to have granted relief to the appellants rejecting  the contention of RSRTC and of the respondents. Since  the High Court did not grant relief in favour of the  appellants, the orders deserve to be quashed and set  aside. Secondly, it was submitted that the High Court was  in error in granting relief to the respondents. Under 1968  inter-State Agreement, only 13 permits could have been  granted. Admittedly, those 13 permits under the  Agreement were granted in favour of RSRTC. The said  fact was neither disputed before the authorities, nor  before the High Court. It is true that 11 permits were

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granted to private operators-respondents herein, and  they were countersigned by the State of Haryana, but it  was expressly stipulated in those permits that they were  in excess of quota and hence no right would flow from  those permits. Hence, even if it is held that 13 permits  issued in favour of RSRTC were not legal and valid, since  they were not countersigned by the State of Haryana,  private operators-respondents could not get the benefit  as their permits were in excess of quota under the  Agreement. The High Court was, therefore, in error in  granting relief in their favour. It was, therefore,  submitted by the learned counsel for the appellants that  the orders require interference by declaring the permits  issued in favour of respondents as illegal and by  granting relief in their favour declaring the permits  issued by RTA, Bikaner in their favour and  countersigned by the State of Haryana as legal and valid. The learned counsel for the contesting  respondents, on the other hand, submitted that the High  Court was right in dismissing the writ petitions filed by  the appellants and allowing the writ petitions of the  respondents and in granting benefit in their favour.  According to the counsel, under 1968 Agreement, 13  permits could be granted. They were required to be  countersigned by the State of Haryana. True it is that 13  permits were granted by RTA, Bikaner to RSRTC, but  admittedly they were not countersigned by the State of  Haryana. On the other hand, permits granted to  respondents were countersigned by the State of  Haryana. Therefore, only those permits were legal and  valid and could be said to be ’under the Agreement’.  A  statement to the effect that permits granted in favour of  respondents were in excess of quota, therefore, had no  relevance. Once it is held that permits issued in favour of  RSRTC were not valid, other permits issued in favour of  respondents and countersigned by the State of  Rajasthan, must necessarily be treated as valid and in  accordance with the terms of the Agreement. The High  Court was, therefore, justified in granting relief to the  respondents. The learned counsel for the State of Rajasthan also  supported the respondents and submitted that the  orders passed by the High Court are legal and proper  and no interference is called for.  Having heard the learned counsel for the parties, in  our opinion, the orders of the High Court are legal, valid,  proper and do not deserve interference by this Court  under Article 136 of the Constitution. As is clear from the facts enumerated hereinabove,  under 1968 Agreement, 13 permits were granted in  favour of RSRTC, but as has been rightly held by the  High Court, those permits could not be termed valid  permits inasmuch as they were not countersigned by the  State of Haryana. Since 13 inter-State permits could be  granted under 1968 Agreement, the High Court was  justified in taking into account permits granted in favour  of respondents which were countersigned by the State of  Rajasthan. To us, the High Court was right in observing  that the fact that in those permits, it was stated that  they were in excess of quota under 1968 Agreement, was  of no consequence since those permits were not in  excess of quota if invalid permits issued in favour of  RSRTC were to be excluded and ignored. It is settled law  that inter-State permits must be countersigned by the  other State. In this connection, the High Court relied on

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Ashwani Kumar wherein this Court expressly held that  reciprocal agreement is a condition precedent for grant of  permits and if such agreement provides for  countersignature of the other State, obviously that  condition has to be fulfilled. Reference was also made to  T.N.R. Reddy v. Mysore State Transport Authority, (1970)  1 SCC 541 : AIR 1971 SC 1662. The High Court was,  therefore, fully justified in granting relief to the  respondents and no grievance can be raised by the  appellants against such relief granted to the  respondents. Regarding permits granted in favour of the  appellants and countersigned by the State of Haryana, it  is clear that the same was issued by RTA in accordance  with the direction issued by STAT vide its order dated  July 24, 1999. By the said order, STAT quashed the  orders passed by RTA on April 25, 1998 and November  18, 1998 and directed RTA to reconsider the applications  submitted by various private parties. But it has come on  record that the order of STAT was challenged by RSRTC  as also by other parties in the High Court of Rajasthan  by filing writ petitions. The learned single Judge, not  only entertained writ petitions, but even granted  prohibitory interim orders on September 9, 1999 and  RTA was restrained from considering the applications as  directed by STAT. It is true that the said interim order  had not been communicated immediately to RTA and  RTA was not made aware of the interim order passed by  the learned single Judge. Though it was stated by the  learned counsel for the respondents that the interim  order was passed by the learned single Judge in  presence of the learned counsel appearing for RTA and  as such RTA must be deemed to be aware of the interim  order and the learned single Judge has also taken into  account the said fact, we may not enter into larger  question since in our opinion, the Division Bench was  right in observing that even if it is held that RTA was not  aware of interim order passed by the learned single  Judge and hence it could consider the applications  submitted by the appellants and other applicants, when  the petitions were allowed and the order of STAT  remitting the matter to RTA for reconsideration was  quashed and set aside, the action taken by RTA had no  effect in the eye of law.  On STAT direction being set  aside, there could not be said to be an order of  reconsideration of applications by RTA.  Hence, an order  granting applications and issuing permits in favour of  the appellants had no legal effect whatsoever and the  appellants cannot derive any benefit under the said  order of November 2, 1999.  In this connection, we may refer to a decision of  this Court in Mulraj v. Murti Raghunathji Maharaj, (1967)  3 SCR 84: AIR 1967 SC 1386. In that case, execution  proceedings were pending in the Executing Court. Stay  was granted against execution by the appellate Court  but the said order was not communicated to the  Executing Court. A question which came up for  consideration before this Court was whether further  proceedings before the Executing Court, after the order  was passed by the appellate Court, staying the execution  had any sanctity in law? This Court, after drawing the  distinction between ’stay’ and ’injunction’, observed: "An order of stay  in an  execution  matter is  in our opinion in the nature  of  a prohibitory   order  and is addressed to the  court  that  is

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carrying out  execution.          It is not of the  same nature as  an  order allowing an appeal  and quashing execution proceedings.     That kind  of  order takes effect immediately it is  passed,  for such an order takes away the  very jurisdiction of the  court executing  the  decree as there is nothing left  to  execute  thereafter.  But a mere order of stay of  execution does   not take away the jurisdiction  of the court.  All that it      does is to prohibit  the court from proceeding with the execution  further,  and the court unless it knows of the  order  cannot be  expected  to carry it out.  Therefore,  till  the  order comes  to  the  knowledge of the court  its  jurisdiction  to  carry  on  execution is not affected by a stay  order  which must  in  the  very  nature of  things be  treated  to  be  a prohibitory  order   directing  the  executing  court   which  continues to have jurisdiction to stay its hand  till further orders.      It  is  clear  that as  soon as  a  stay  order  is withdrawn,  the  executing  court is entitled  to  carry  on  execution  and there is no question of fresh   conferment  of jurisdiction  by  the  fact that  the  stay  order  has   been withdrawn.  The  jurisdiction of the court  is  there all along.  The only effect of the stay order is to prohibit  the executing  court from proceeding further  and that  can only take  effect when the  executing court has knowledge  of the order.  The executing court may have knowledge of  the  order on  the order being communicated  to it by the court  passing the stay order or  the executing court may be informed of the  order by one party or the other with an  affidavit in support of  the information or in  any other way.  As soon  therefore as the  executing court has come to know of the order   either by communication from the court  passing the stay order or by an affidavit from  one party or the other or in any other way the  executing court cannot proceed further and if  it does so it acts illegally.  There can be no  doubt that no action for contempt  can  be  taken against an executing  court,  if  it  carries  on execution in ignorance of the  order of stay and this  shows the necessity of  the knowledge of the  executing court before  its jurisdiction can be affected by the  order.  In effect therefore a stay order is more or less  in the same position as an order of injunction  with one difference.      An order of injunction is  generally issued to a party and it is forbidden  from doing certain acts.  It is well-settled    that in  such  a  case  the party  must  have   knowledge  of    the injunction order before it  could be penalized for disobeying it.  Further  it is equally well-settled that the  injunction  order  not  being  addressed  to the  court,  if   the  court proceeds  in  contravention  of the   injunction order, the proceedings are not a  nullity.        In the case of a stay order, as  it is   addressed to the court  and      prohibits  it  from proceeding  further, as soon as the court

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has  knowledge  of the order it is bound to  obey it and if it does not, it acts illegally, and  all proceedings taken after the knowledge  of  the  order would be a nullity.  That in our  opinion  is  the only  difference between, an  order of injunction to a  party and an order of  stay to a court.  In both cases knowledge of  the party concerned or of the court is   necessary        before the prohibition takes effect.   Take the case where a stay order has been  passed but it is never brought to the notice of  the court,      and the court carries in proceedings  ignorance thereof. It can hardly be said that  the  court  has lost jurisdiction because of   some order of  which   has  no knowledge.   This to our mind clearly follows from the   words of O. XLI R. 5 of the Code of Civil  Procedure which  clearly lays down that mere  filling of an appeal does not operate as stay  of  proceedings in execution, but the  appellate   court has  the  power stay  of  execution.     Obviously when the appellate court orders the  stay of execution the order can have affect   only when it is made known to  the  executing  court. We cannot agree that an order staying  execution is similar to an order allowing an   appeal and quashing execution  proceedings.  In the case where the execution proceeding is  quashed, the order takes effect in immediately  and there is nothing left to execute. But  where a stay order is passed, execution still  stands and can go on unless the court  executing the decree has knowledge of the  stay order.  It is only when the executing  court has knowledge  of  the stay order that  the court must  stay its hands and anything it  does thereafter would be a nullity  so long as  the stay order is in force".

The Court then stated;

"Though the court which is carrying on  execution is not deprived       of the jurisdiction  the moment a stay order is passed, even  though it has no knowledge of it, this does not mean  that when the court gets knowledge of  it is  powerless to  undo any possible injustice  that might have been  caused to  the party in  whose favour the stay  order was  passed   during  the period till the court has  knowledge of the stay order. We are of opinion  that section 151 of the Code of Civil  Procedure would always be available to the  court executing the decree, for in such a case,  when the stay order is brought to its notice it  can always act under Section 151, and set  aside steps taken between the time the stay  order was passed and the time it was brought  to its notice, if that is necessary in the ends of  justice and the party concerned asks it to do  so. Though, therefore, the  court  executing  the decree cannot  in our opinion be  deprived   of its jurisdiction to carry on execution till it  has knowledge  of the  stay order, the court  has the power in our view to set aside the

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proceedings taken between the time when the  stay order  was  passed and the time when it  was brought to its notice, if it is asked to do  so and it considers that it  is necessary  in   the interests of justice that the interim  proceedings should be set aside"  

An interesting question came up for consideration  before this Court in Nawabkhan Abbaskhan v. State of  Gujarat (1974) 2 SCC 121 : AIR 1974 SC 1471. In that  case, an externment order was passed against N on  September 5, 1967 under the Bombay Police Act, 1951.  In contravention of the said order, N entered the  forbidden area on September 17, 1967 and was,  therefore, prosecuted. During the pendency of the  criminal proceedings, however, the externment order  passed against N was challenged in the High Court  under Article 226 of the Constitution and was set aside  on July 16, 1968. Taking note of the said fact, the trial  Court acquitted N but an appeal filed by the State  against the order of acquittal came to be allowed by the  High Court holding that when the contravention took  place in September, 1967, the order was very much  operative and hence N was liable for committing breach  of that order. He was, therefore, convicted by the High  Court.  N approached this Court.  Allowing the appeal and reversing the decision of  the High Court, this Court held that once the externment  order was declared illegal, it was of no effect, and N  could never be held guilty of flouting such order.  Rubinstein was quoted by the Court who stated;         "How does the validity or nullity of the  decision affect the rights and liabilities of       the persons concerned? Can the persons    affected by an  illegal act ignore and disregard  it with impunity?  What are the remedies  available to the aggrieved  parties? When  will   the courts recognize    a  right  to compensation  for damage occasioned by an illegal act ?        All  these questions revert to the  one  basic     issue;  has the  act  concerned  ever had  an  existence or is it merely a nullity ?

             Voidable acts are those that, can be  invalidated in certain proceedings; these  proceedings are, especially formulated for the  purpose of directly challenging such       acts...... On the other hand, when an act is        not merely voidable but void, it is a nullity        and can be disregarded and impeached in any  proceedings, before any court or tribunal and  whenever it is relied upon. In other words, it  is subject to ’collateral attack’."

Kelson’s pure theory of law was also considered  who stated that when a Court holds an act as nullity, it  is not merely a declaration of nullity, "it is true  annulment, an annulment with retroactive force".  Though, no final opinion was expressed on wide  ranging problems in public law of illegal orders and  violations thereof by citizens, the Court ruled that in the  facts and circumstances of the case, when the order of  externment was held illegal by a competent Court on the  ground that it was passed in violation of the principles of  natural justice, it was of no effect. The Court quashed

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the order\027not killed it then but performed the formal  obsequies of the order which had died at birth. "The legal  result is that the accused was never guilty of flouting an  order which never legally existed".   (emphasis supplied) In the instant case, admittedly, the order passed by  STAT was finally set aside by the High Court in writ  petitions. Therefore, even if the contention of the learned  counsel for the appellants is held to be well founded that  RTA, Bikaner was not made aware of interim order  passed by the learned single Judge and hence it could  consider the applications and pass appropriate orders  thereon, since the order of STAT remitting the matter to  RTA was finally quashed and set aside, all consequential  actions must be held illegal and of no effect.  In our  opinion, the High Court was perfectly right and wholly  justified in ignoring the directions issued by STAT and  grant of permits by RTA in favour of the appellants. For the foregoing reasons, all the appeals deserve  to be dismissed and they are accordingly dismissed. In  the facts and circumstances of the case, however, there  shall be no order as to costs.