P. Venkaiah Vs. G. Krishna Rao &
Ors  INSC 146 (25 August 1981)
MISRA, R.B. (J)
CITATION: 1981 AIR 1910 1982 SCR (1) 380 1981
SCC (4) 105 1981 SCALE (3)1263
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.
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 (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,  4 SCC 734= AIR 1972 SC
(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]
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 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
"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 whenever 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 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
(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 (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
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
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.
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
... ... ... ...
... ... ... ...
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
"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 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
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
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 (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' 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.