Rameshwar Prasad Vs. State of Uttar
Pradesh & Ors [1983] INSC 18 (24 February 1983)
VENKATARAMIAH, E.S. (J) VENKATARAMIAH, E.S.
(J) SEN, A.P. (J)
CITATION: 1983 AIR 383 1983 SCR (2) 418 1983
SCC (2) 195 1983 SCALE (1)152
CITATOR INFO :
D 1992 SC 443 (13,14)
ACT:
Motor Vehicles Act, 1939 as in force in the
State of Uttar Pradesh- S. 43-A as amended by U.P. Act 15 of 1976 read with s.
47 as amended by Central Act 47 of 1978 Interpretation of-State Government
cannot issue directions under sub-s. (1) of s. 43-A for grant of stage carriage
permits to an eligible applicants after amendment of s. 43-A by U. P. Act 15 of
1976-While issuing directions under sub- s. (1) of s. 43-A State Government
cannot ignore provisions contained in sub-ss. (1) and (1A) to (1H) of s. 47.
Interpretation - Rule of construction of an
amended provision.
Words and Phrases -`Public interest'-What it
means in the context of Motor Vehicles Act, 1939.
HEADNOTE:
A 'stage carriage' under the Motor Vehicles
Act, 1939 means a motor vehicle which carries more than six persons for hire or
reward at separate fares paid by or for individual passengers either for the
whole journey or for stages of the journey and for plying such a vehicle it is
necessary to obtain a permit from the appropriate Transport Authority. While
considering an application for such a permit, the Transport Authority must,
under cls. (a) to (f) of sub-s. (1) of s. 47, have regard to the interest of
the public generally, the advantages to the public of the service to be
provided, the adequacy of other passenger transport services operating between
the places to be served, the operation by the applicant of other transport
services, etc., and also take into consideration the representations made by
local or police authorities and by persons already providing passenger transport
facilities by any means along or near the proposed route or area. The State
Government may, under sub-s. (1) of s. 43, having regard to the advantages
offered to the public by the development of motor transport, the desirability
of preventing uneconomic competition among motor vehicles, etc., issue
appropriate directions to the Transport Authority The subject matter of
regulation of motor vehicles being within the scope of entry 35 of the
Concurrent List, the Act in its application to the State of Uttar Pradesh was
amended in 1972 by the U.P. Legislature by the introduction of s. 43-A which
was a new provision. While sub-s. (1) thereof conferred power on the State
Government to issue directions of a general character in public interest in
respect of any matter relating to road transport, sub-s.
419 (2) specifically conferred the power to
issue directions regarding grant of stage carriage permits to all eligible
applicants if the State Government was of the opinion that it was in the public
interest to do so. Further, under sub- s. (2) of s. 43-A, the provisions of s.
47 stood amended to the effect that while considering an application for
permit, it was no longer necessary for the Transport Authority to have regard
to the adequacy of other passenger transport services operating between the
places to be served or to the operation by the applicant of other transport
services; nor was the Transport Authority required to look into representations
made by anyone other than local or police authorities. The State Government,
acting under s. 43-A, issued directions in March, 1972 for grant of permits to
all eligible applicants without any restriction as to the number of permits to
be issued on any route. The validity of s. 43- A and the directions issued thereunder
were upheld by the Court in Hans Raj Kehar & Ors v. Srate of UP. & Ors
[1975] 1 S.C.R. 9l6. But, within a short time, the State Government realised
the necessity of reviewing the policy of issuing permits to all eligible
applicants and amended s. 43-A with retrospective effect by the Uttar Pradesh
Act 15 of 1976.
While sub s. (1) was retained as such, sub-s.
(2) was substituted by an entirely new sub-section. The Statement of objects
and Reasons appended to the Amending Act stated that it had become necessary to
reconsider the policy of granting bus permits liberally with a view to checking
unproductive capital expenditure and unnecessary consumption of fuel,
preventing elimination of small operators as a consequence of unreasonable
competition, etc. and authorising the State Government to issue necessary
directions from time to time in regard to the number of permits that may be
granted in respect of any route or area, the preference to be given to
specifically deserving categories, etc. The State Government thereafter issued
directions to the Transport Authorities to ensure that the operation of the
total number of stage carriages on any route was economically viable.
Section 47 was amended by the Central Act 47
of 1978.
The proviso to sub-s. (1) of s. 47 was
amended by providing that in addition to a registered cooperative society, an
application for a stage carriage permit from a person who has a valid licence
for driving transport vehicles shall he given preference over applications from
individual owners.
Parliament also introduced new sub-ss. (1A)
to (1H) in s. 47 providing for reservation of certain percentage of stage
carriage permits for the Scheduled Castes and Tribes and weaker sections of the
community and empowered the State Government to frame rules for implementing
sub-ss. (1A) to (1H) of s 47. These amendments came into force on January 16,
1979.
On January 10, 1981 the State Government
issued a notification directing the Transport Authorities to issue stage
carriage permits to all eligible applicants and specifying that there should be
no upper limit to the number of stage carriages for which permits might be
granted. On January 23, 1981, by another notification, of the Transport
Authorities were directed to have regard only to matters referred to in cls.
(a), (b), (d) and (f) of sub-s. (l) of s. 47 and to take into consideration
representations made by local or police authorities only. Tho appellants
challenged the notifications under Article 226.
420 The High Court dismissed the petitions
repelling the contention that in the absence of reservation of the required
percentage of permits for persons belonging to the Scheduled Castes, the
Scheduled Tribes and weaker sections as provided in s. 47 the grant of permits
would be vitiated.
According to the High Court the question of
reservation would arise only in those cases where the seats or articles are
limited for distribution or allotment but where there is no limit or no fixed
number, the question of reservation would not arise. The High Court said that
the Statement of objects and Reasons appended to the Amending Act 15 of 1976
cannot override the clear provisions of s. 43-A as amended by that Act and held
that though the two impugned notifications did not follow the procedure
prescribed by sub-s. (2) of s. 43-A, they could be sustained under sub-s.
(1) of s.43-A. It relied on the decision in
Hans Raj Kehar's case to hold that large number of buses operating on different
routes would be for the convenience and benefit of the travelling public.
Allowing the appeals,
HELD: Whenever a court is called upon to
interpret an amended provision it has to bear in mind the history of the
provision, the mischief which the legislature attempted to remedy, the remedy
provided by the amendment and the reason for providing such remedy. Section
43-A of the Act as in force in the State of U.P. was amended by the U.P. Act 15
of 1976. By the substitution of the former sub-s. (2) by the new sub-s (2) in
s. 43-A the legislature clearly expressed itself against the policy of granting
permits to all eligible applicants without any consideration to the needs of
any particular locality or route or to the qualifications of applicants. After
the amendment, sub-s. (1) of S. 43-A did not comprehend within its scope the
power to issue directions for issuing permits to all eligible applicants
without any sort of restriction relevant to the scheme of the Act. The
sub-section states that the State Government may issue such directions of a
general character as it may consider necessary in the public interest. 'Public
interest' under the Act does not mean the interests of the operators or of the
passengers only. It takes within its fold several factors such as, the maximum
number of permits that may be Issued on a route or in any area having regard to
the needs and convenience of the travelling public, the non- availability of
sufficient number of stage carriages in other routes or areas which may be in
need of running of additional services, the problems of law and order, availability
of fuel, etc. To say that larger the number of stage carriages in any route or
area more convenient it would be to the members of the public is an over-
simplification of a problem with myriad facets affecting the general public.
The Act itself contains provisions relating to licensing of drivers and
conductors, specifications of motor vehicles, co-ordination of road and rail
transport, prevention of deterioration of road system, prevention of Uneconomic
competition among motor vehicles, etc. Any direction given by the State
Government under s. 43-A should, therefore, be in conformity with all matters
regarding which the statute has made provision. In this situation to say that
any number of permits can be issued to any eligible operator without any upper
limit is to overstep the limits of delegation of statutory power. [444 A-H; 445
A-E] In the instant case, a reading of the two notifications shows that the
State Government ignored the legislative policy underlying the U.P. Act 15 of
421 1976 by which the new sub-s. (2) of s. 43-A was enacted in substitution of
the former sub-s. (2) with retrospective effect. The new sub-s. (2) was
introduced by the State legislature after it had realised the mistake committed
by the State Government in issuing the notification in the year 1972 directing
the issue of bus permits liberally in favour of all eligible applicants which
had resulted in investment of unproductive capital expenditure and
under-utilisation of capital and fuel and in unreasonable competition which
eventually eliminated small operators from business. [441 D-F] (ii) The State
Government also ignored the new policy governing the issue of permits
introduced by Parliament by amending s. 47 of the Act in 1978. The High Court
erred in not noticing that by issuing the notification containing a direction
to the Transport Authorities to issue limitless number of permits, the State
Government had attempted to circumvent sub-ss. (1) and (IA) to (IH) of a s. 47.
The observation of the High Court that preferences have to be shown and
reservations have to be made only when there is scarcity of permits and since
there were no restrictions on the number of permits to be issued there was no
necessity to make any such provision is shocking. Preference and reservations
have value only when there is a limit on the number of permits to be issued and
in the context of the Act there should necessarily be a limit on the issue of
permits to operate motor vehicles in respect of any route or area.
By the D method adopted by it the State
Government has virtually allowed the rich and well-to-do businessman - who can
bear the loss for some time to introduce any number of vehicles on a route or
in any area until all the small operators who also may take the permits to
leave the field owing to the inevitable loss that ensues by the operation of an
unlimited number of vehicles. The two notifications in question are clearly
outside the scope of the Act. [445 F-H; 446 A-E] (iii) The observations in Hans
Raj Kehar's case are inapplicable to the present cases. In that case the Court
was concerned with sub-s. (2) of s. 43-A as it stood then.
At that time, the sub-section contained a
clear legislative policy which considered that there could be no public
prejudice if all eligible applicants were granted permits.
Whatever the Court may have observed while
considering that provision would not apply now as There is a clear departure
made by the legislature from that policy when it enacted the new sub-s. (2) of
s. 43-A. In the face of this amendment by which the former sub-s. (2) of s.43-A
which specifically authorised the State Government when it was satisfied that
it was necessary to do so in the public interest to issue directions to the
Transport Authorities to grant permits to all eligible applicants was
deliberately taken away by the State legislature, the High Court was wrong in
holding that such power was still available under sub-s. (1) of s. 43-A which
was widely worded. [443 C-H] Hans Raj Kehar & Ors. v. State of U.P. &
Ors. [1975] 2 S.C.R. 916, held inapplicable.
CIVIL APPELLATE JURISDICTION: Civil Appeals
Nos. 1269- 71 of 1982.
422 Appeals by Special leave from the
Judgment and order dated 23rd the March, 1982 of the Allahabad High Court in
Civil Miscellaneous Writ Petition Nos. 2328, 2424 and 1998 of 1981.
Shanti Bhusan and R.R. Jain for the
Appellants.
Mrs. Shobha Dikshit for the Respondents.
The Judgment of the Court was delivered by
VENKATARAMIAH, J. In these appeals by special leave filed against the common
judgment dated March 23, 1982 of the Allahabad High Court, the validity of two
Notifications issued by the Government of Uttar Pradesh under section 43-A of
the Motor Vehicles Act, 1939 (Act IV of 1939) (hereinafter referred to as 'the
Act') as in force in the State of Uttar Pradesh arises for consideration. The
two impugned Notifications are reproduced below:
I. "Notification No. 68 T/XXX-4-15-KM/79
Dated: Lucknow: January 10, 1981.
Whereas, the Government of Uttar Pradesh is
of opinion that it is in the public interest to grant stage carriage permits
(except in respect of routes or areas for which schemes have been published
under section 68-C of the Motor Vehicles Act, 1939) to all eligible applicants:
Now. therefore, in exercise of the powers
under section 43.A of the Motor Vehicles Act, 1939, the Governor of Uttar
Pradesh is pleased to direct that the stage carriage permits (except in respect
of routes or areas for which schemes have been published under section 68-C of
the Motor Vehicles Act, 1939) shall be granted according to the provisions of
the Act to all eligible applicants and there shall be no upper limit to the
number of stage carriages for which permits may be granted.
By order Karnail Singh, Sachiv 423 II.
Notification No. 241 T/XXX-4-15-P/79 Dated: January 23, 1981 The Governor being
satisfied that it is expedient in the public interest so to do, is pleased to
direct in exercise of the powers under section 43-A of the Motor Vehicles Act,
1939 (Act No. 4 of 1939) that while considering applications for stage carriage
permits, the State Transport Authority or a Regional Authority:
(i) shall have regard only to matters
referred to in clauses (a), (b), (d) and (f) of sub-section (1) of section 47
of the said Act and shall also take into consideration representations made by
the local authority or police authority within whose jurisdiction any part of
the proposed route or area lies; and (ii) shall be deemed to have made
sufficient compliance of the provisions of section 57 of the said Act, if it
intimates the particulars of the applications to such local authority and
police authority for making representations, if any, within a period of fifteen
days from the date of despatch of the intimation with the stipulation that if
no representation is received with in the prescribed period of time, it shall be
presumed that they have no representation to make, and has considered any
representation made by such local authority and police authority.
By order Karnail Singh, Sachiv." The
appellants who are stage carriage operators challenged The validity of the above
Notifications in the writ petitions filed by them under Article 226 of the
Constitution before the High Court inter alia on the ground that they were
ultra vires the provisions of the Act under which they had been issued. The
High Court dismissed the writ petitions after negativing the contentions of the
424 appellants. Aggrieved by the decision of the High Court the appellants have
preferred these appeals by special leave as stated above.
It is necessary at this stage to give a
resume of the relevant statutory provisions to understand the rival contentions
of the parties. On finding that the Indian Motor Vehicles Act, 1914 which Was
brought into force at an early stage of development of motor transport was
inadequate to meet the new situation created by the growth of motor transport
by the year 1939, the Central Legislature passed the Act for the purpose of
regulating motor traffic in the interests alike of the safety and convenience
of the public and of the development of a coordinated system of transport.
The Act underwent major alterations in 1956
and 1969.
Broadly the Act provided inter alia for
registration of motor vehicles, licensing of drivers and conductors, grant of
permits to ply public service vehicles and public carriers, operation of road
transport service by State transport undertakings in any area or on any route
to the exclusion, complete or partial of other persons, construction, equipment
and maintenance of motor vehicles, control of traffic, insurance of motor
vehicles against third party risks and offences, penalties and procedure. The
State Governments were entrusted with the duty of framing rules on various
matters connected with the topics dealt with by the Act. The subject of
regulation of motor vehicles being within the scope of Entry 35 - mechanically
propelled vehicles including the principles on which taxes on such vehicles are
to be levied-in List III of the Seventh Schedule to the Constitution, various
amendments were made from time to time by several State Legislatures with the
assent of the President of India either adding to or modifying the provisions
of the Act. Chapter IV of the Act which includes section 42 to section 68
contains provisions pertaining to the control of motor vehicles. Section 42 of
the Act provides that no owner of a transport vehicle shall r use or permit the
use of the vehicle in any public place whether or not such vehicle is actually
carrying any passenger or goods save in accordance with the conditions of a
permit granted or countersigned by a Regional or State Transport Authority or
the Commission authorising the use of the vehicle in that place in the manner
in which the vehicle is being used. A 'transport vehicle' is defined in section
2(33) of the Act as a public service vehicle or a goods vehicle. A 'public
service vehicle' is defined in section 2(25) of the Act as any motor vehicle
used or adapted to be used for the carriage 425 of passengers for hire or
reward, and includes a motor cab, contract carriage and stage carriage. Section
2(29) of the Act states that a 'stage carriage' means a motor vehicle carrying
or adapted to carry more than six persons excluding the driver which carries
passengers for hire or reward at separate fares paid by or for individual
passengers, either for the whole journey or for stages of the journey. Section
45(1) of the Act prescribes that every application for a permit shall be made
to the Regional Transport Authority of the region in which it is proposed to
use the vehicle or vehicles. When the vehicle is to be used in two or more
regions, the applications for permits may be made as provided in the provisos
to section 45(1) or section 45(2) of the Act, as the case may be. The
constitution of the Regional Transport Authorities and the State Transport
Authorities is dealt with by section 44 of the Act. A State Transport Authority
or a Regional Transport Authority shall consist of a Chairman who has had
judicial experience or experience as an appellate or revisional authority under
any law relating to land revenue and in the case of a State Transport
Authority, such other officials and non-officials, not being less than two,
and, in the case of Regional Transport Authority such other persons (whether
officials or not) not being less than two, as the State Government may think
fit to appoint. An application for a stage carriage permit shall have to
contain the particulars mentioned in section 46 of the Act. Prior to its
amendment in 1978, section 47 as amended by Act 100 of 1956 read as follows:
"47. Procedure of Regional Transport
Authority in considering application for stage carriage permits.-(1) A Regional
Transport Authority shall, in considering an application for a stage carriage
permit. have regard to the P following matters, namely:
(a) the interest of the public generally;
(b) the advantages to the public of the
service to be provided, including the saving of time likely to be effected
thereby and any convenience arising from journeys not being broken;
(c) the adequacy of other passenger transport
services operating or likely to operate in the near future, 426 whether by road
or other means, between the places to be served.
(d) the benefit to any particular locality or
localities likely to be afforded by the service;
(e) the operation by the applicant of other transport
services, including those in respect of which applications from him for permits
are pending;
(f) the condition of the roads included in
the proposed route or area;
and shall also take into consideration any
representations made by persons already providing passenger transport
facilities by any means along or near the proposed route or area, or by any
association representing persons interested in the provision of road trans port
facilities recognised in this behalf by the State Government, or by any local
authority or police authority within whose jurisdiction any part of the
proposed route or area lies:
Provided that other conditions being equal,
an application for a stage carriage permit from a cooperative society
registered or deemed to have been registered under any enactment in force for
the time being shall, as far as may be, be given preference over applications
from individual owners.
(2) A Regional Transport Authority shall
refuse to grant a stage carriage permit if it appears from any timetable
furnished that the provisions of this Act relating to the speed at which
vehicles may be driven are likely to be contravened:
Provided that before such refusal an
opportunity shall be given to the applicant to amend the time-table so as to
conform to the said provisions.
(3) A Regional Transport Authority may,
having regard to the matters mentioned in sub-section (1), limit the 427 number
of stage carriages generally or of any specified type for which stage carriage
permits may be granted in the region or on any specified area or on any
specified route within the region." The procedure in applying for and
granting permits is set out in section 57 of the Act. Section 48 of the Act
provides that subject to section 47, a Regional Transport Authority may, on an
application made to it under section 46, grant a stage carriage permit in
accordance with the application or with such modifications as it deems fit or
refuse to grant such a permit. If the Regional Transport Authority decides to
grant a stage carriage permit, it may attach to it all or any of the conditions
mentioned in section 48(3) of the Act. The proceedings before a Regional
Transport Authority are quasi judicial in character. While considering the
application for the grant of a stage carriage permit the Regional Transport
Authority has to consider all representations referred to in section 57(3).
Sub-section (5) of section 57 of the Act
provides that when any representation such as is referred to in sub-section (3)
thereof is made, the Regional Transport Authority shall dispose of the
application at a public hearing at which the applicant and the persons making
the representations shall have an opportunity of being heard either in person
or by a duly authorised representative. Representations can be made among
others by any person who is providing transport facilities on the route or in
the area, any rival applicant, police authorities and local authorities. Any
person who satisfies the qualifications mentioned in section 64 of the Act and
who is aggrieved by the resolution of the Regional Transport Authority may file
an appeal before the State Transport P Appellate Tribunal which should consist
of a wholetime judicial officer not below the rank of a District Judge. An
order of a Regional Transport Authority or of a State Transport Authority
against which no appeal can be filed is subject to revision by the State
Transport Appellate Tribunal under section 64-A of the Act. Subsection (1) of
section 43 of the Act which confers power on the State Government to control
transport reads thus:
"43. Power to State Government to
control transport- (1) A State Government having regard to:
428 (a) the advantages offered to the public,
trade and industry by the development of motor transport, (b) the desirability
of coordinating road and rail trans port.
(c) the desirability of preventing the
deterioration of the road system, and (d) the desirability of preventing
uneconomic competition among motor vehicles, may, from time to time, by
notification in the official Gazette, issue directions to the State Transport
Authority:
(i) regarding the fixing of fares and
freights (including the maximum and minimum in respect thereof) for stage
carriages, contract carriages and public carriers;
(ii) regarding the prohibition or
restriction, subject to such conditions as may be specified in the directions,
of the conveying of long distance goods traffic generally, or of specified
classes of goods, by private or public carriers, (iii) regarding the grant of
permits for alternative routes or areas, to persons In whose cases the existing
permits are not renewed in pursuance of the provisions of sub-section (1-D) of
section 68-F, or are cancelled or the terms thereof are modified in exercise of
the powers conferred by clause (b) or clause (c) of sub-section (2) of section
68-F;
(iv) regarding any other matter which may
appear to the State Government necessary or expedient for giving effect to any
agreement entered into with the Central Government or any other State Government
or the Government of any other country relating to the regulation of motor
transport generally, 429 and in particular to its coordination with A other
means of transport and the conveying of long distance goods traffic:
Provided that no such notification shall be
issued unless a draft of the proposed directions is published in the official
Gazette specifying therein a date being not less than one month after such
publication, on or after which the draft will be taken into consideration and
any objection or suggestion which may be received has, in consultation with the
State Transport Authority, been considered after giving the representatives of
the interests affected an opportunity of being heard." In the year 1972,
however, the Act was amended by the Legislature of the State of Uttar Pradesh
introducing a new section being section 43-A by the Motor Vehicles (U.P.
Amendment) Act, 1972 with the assent of the
President. The material part of section 43-A which was newly introduced by the
said amending U.P. Act read as under:
"43-A. (1) The State Government may
issue such directions of a general character as it may consider necessary or
expedient in the public interest in respect of any matter relating to road
transport to the State Transport Authority or to any Regional Transport
Authority, and such Transport Authority shall give effect to all such
directions.
(2) Without prejudice to the generality of
the fore going power, where the State Government is of opinion that it is in
the public interest to grant stage carriage permits (except in respect of
routes or areas for which schemes have been published under section 68(C) or
contract carriage permits or public carrier permits to all eligible applicants,
it may by notification in the Gazette issue a direction accor- dingly, and
thereupon all transport authorities as well as the State Transport Appellate
Tribunal constituted under section 64 shall proceed to consider and decide all
applications, appeals and. revisions in that behalf (including any pending applications,
appeals and revisions) as if- 430 (a) in section 47- (i) for sub-section (1)
the following sub- sections were substituted:
(ii) A Regional Transport Authority shall in
considering an application for a stage carriage permit, have regard to the following
matters, namely- (a) the interest of the public generally;
(b) the advantage to the public of the
service to be provided including the saving of time likely to be effected
thereby and any convenience arising from journeys not being broken;
(c) the benefit to any particular locality or
localities likely to be afforded by the service;
and shall also take into consideration any
representation made by any local authority or police authority within whose
jurisdiction any part of the proposed route or area lies; and sub-section (3)
were omitted The above U.P. Act was preceded by the U.P. Ordinance which
contained more or less the same provisions. The ordinance was substituted by
the said U.P. Act. The object of enacting section 43-A of the Act was set out
in the Statement of objects and Reasons attached to the relevant U.P. Bill
which read as follows:
"Objects and Reasons-operators engage in
the race for securing permits for stage carriage on non-nation alised routes.
Due to limitation on the number of permits this business is controlled by a few
persons.
Complaints in this regard are made every
other day.
Therefore, with a view to making it easier to
secure permits in respect of non nationalised routes and to introducing
simplicity in procedure and to providing greater employment and securing 431
equitable distribution thereof it was considered necessary to amend sections
47, SO, SS and 64 of the Motor Vehicles Act, 1939, suitably. Accordingly, in
the public interest and with the aforesaid object in view, the Motor Vehicles
(Uttar Pradesh Amendment) ordinance, 1972, was promulgated. This Bill is
introduced to replace the said ordinance.
Pursuant to the power conferred on it by section
43-A of the Act, the Government of the State of Uttar Pradesh issued the
following directions on March 30, 1972 by a Notification, the relevant part of
which reads as under:
"Whereas the State Government is of
opinion that it is in the public interest to grant stage carriage permits
(except in respect of routes or areas for which schemes have been published
under section 68-C of the Motor Vehicles Act, 1939) contract carriage permits
and public carrier permits to all eligible applicants.
Now, therefore, in exercise of the power
conferred by section 43-A of the Motor Vehicles Act, 1939 the Governor is
pleased to direct that stage carriage permits (except in respect of routes or
areas aforesaid) contract carriage permits and public carrier permits shall be
granted according to the provisions of the said Act to all eligible
applicants." The validity of section 43-A of the Act introduced by the U.
P. Legislature and of the Notification dated March P 30, 1972 issued by the
Government of Uttar. Pradesh pursuant to that section was questioned in some
writ petitions filed by some motor operators in the High Court of Allahabad.
Those petitions were dismissed. On appeal
this Court upheld the validity of section 43-A of the Act as well as the
Notification by its judgment in Hans Raj Kehar & Ors. v. The State of U.P.
& Ors.(1) which was delivered on December 4, 1974. Within about three and
half years from the date of the above said notification the Government of Uttar
Pradesh realised that it was necessary to review the whole question of issuing
permits to all eligible applicants. Accor- 432 dingly the State Government
issued a Notification on September 24, 1975 which ran as follows:
"Whereas, in exercise of the power
conferred by Section 43-A of the Motor Vehicles Act, 1939 the State Government
was by notification No. 1188-T/XXX-4, dated March 30, 1972, pleased to direct
that stage carriage permits (except in respect of routes or areas aforesaid)
contract carriage permits and public carrier permits shall be granted according
to the provisions of the said Act to all eligible applicants:
And whereas, on further consideration the
State Government is of opinion that the policy of granting such permits to all
eligible applicants requires review with a view to:
(a) Preventing unproductive expenditure and
under utilization of capital and fuel.
(b) Preventing elimination of small operators
due to unfair competition resulting from the issue of more permits than
required for a route.
(c) Facilitating long term planning of
passenger road transport services.
And whereas, such review is likely to take
some time and in the mean time it is necessary to stay the disposal of all
pending applications for permits or entertainment of fresh applications.
Now, therefore, in exercise of the powers
conferred by the said Section 43-A of the Motor Vehicles Act, 1939, read with
Section 21 of the U.P.
General Clauses Act, 1904, the Governor is
pleased to direct that:
1. The Notification No. 1198 T/XXX-4, dated
30th March, 1972 be and is hereby rescinded with immediate effect.
433
2. The consideration of applications for
stage carriage permits pending with any Transport Authority shall stand postponed
until further directions are issued in this behalf by the State Government.
3. No fresh applications for such permits
shall be entertained until further directions are issued in this behalf by the
State Government." The above Notification shows that as a consequence of
the policy of granting permits to all eligible applicants, necessity had arisen
to take measures (i) to prevent unproductive expenditure and under utilisation
of capital and fuel, (ii) to prevent elimination of small operators due to unfair
competition resulting from the issue of more permits than required for a route;
and (iii) to embark upon long term planning of passenger road transport
services.
It is stated that by U.P. Ordinance 35 of
1975, Section 43-A was amended. This ordinance was replaced by the Uttar
Pradesh Act 15 of 1976. By this Act, sub-section (2) of section 43-A. which had
been added in 1972 was substituted with retrospective effect from the date of
its original enactment. Section 43-A after it was amended by the U.P. Act 15 of
1976 read as under:
"43-A. Power of State Government to
issue directions to Transport Authorities-(1) The State Government may issue
such directions of a general character as it may consider necessary or
expedient in the public interest in respect of any matter relating to road
transport to the State Transport Authority or to any Regional Transport
Authority, and such Transport Authority shall give effect to all such
directions.
(2) Without prejudice to the generality of
the provisions of sub-section (1) such directions may be given in respect of
any of the following matters, namely:
(a) the number of stage carriage or contract
carriage permits that may be granted in respect of any route or area.
434 (b) the preference or the order of
preference to be given to or the quota to be fixed for, specially deserving
categories, such as Ex. Army personnel, educated unemployed persons, such
persons holding driving licences as are members of cooperative societies formed
for passenger transport business, persons belonging to the Scheduled castes and
Scheduled Tribes.
(c) the procedure for grant of permits, and
for selection from among the applicants, including selection by drawing of lots
from among persons belonging to the same category.
(3) Any direction under sub-section (1) may
be issued with retrospective effect.
(4) Where any direction is issued under sub-
section (1) to any Transport Authority, then any appeal or revision pending
before the State Transport Appellate Tribunal shall also be decided in such
manner as to give effect to such directions.
(5) Where any direction is issued under sub-
section (1) with retrospective effect then (a) any Transport Authority or the
State Transport Appellate Tribunal may review any order passed earlier by it
with a view to making it conform to such direction and may for that purpose
cancel any permit already issued.
(b) any Transport Authority may apply to the
High Court earlier with a view to enabling such authority to comply with such
direction.
(6) The provisions of this section shall have
effect not withstanding anything contained in sections 47, 50 and 57." The
policy behind the above amendment was stated in the Statement of objects and
Reasons placed before the State Legislature as follows:
435 "(5) In 1972 the State Government
had accepted a policy of granting bus permits liberally.
Reconsideration of the said policy however,
became necessary with a view to checking unproductive capital expenditure and
unnecessary consumption of fuel and preventing the elimination of small
operators as a consequence of unreasonable competition and to removing
difficulties in the implementation of long term plans pertaining to passenger
road transport services. It was accordingly considered necessary to amend the Motor
Vehicles Act, 1939, to authorise the State Government to issue directions from
time to time in regard to the number of permits that may be granted in respect
of any route or area, the preference to be given to specially deserving
categories and the procedure for grant of permits." Pursuant to the said
amended section 43-A of the Act, the Government of Uttar Pradesh issued a
Notification containing directions on March 12, 1976 in the following terms:
"Whereas, in exercise of the powers
conferred by section 43-A of the M.V. Act, 1939, the State Government had by a
notification No. 4251-T/XXX-4-9P/72 dated September 24 1975, as amended by
notification No. 4530-T/ XXX-4-75 dated October 6,1975 postponed the
consideration of applications for permits by any transport authority in respect
of non-notified routes until further directions in this behalf of the State
Government.
Now, therefore, in exercise of the powers
conferred by the said section 43-A (2) of the M.V. Act, 1939 read with section
21 of the General Clauses Act, 1904, the Governor is pleased to direct:
(1) That the S.T.A. and R.T. As. while fixing
the number of Additional Stage Carriage permits to be issued at a given time on
non-notified routes, shall in addition to the consideration of the matter
mentioned in sub-section (1) of section 47 of the M.V. Act, ensure that the
operation of the total number of stage carriages on any route, taking 436 into
consideration the existing as well as the additional permits proposed to be
issued, would be economically viable on the existing fare-structure as per the
norms as laid down by the State Government from time to time ............................."
The above notification also contained directions regarding the principle to be
followed in determining the number of permits that could be issued and
reservation of permits for operators displaced by nationalisation, educated
unemployed, members belonging to the Scheduled Castes, the Scheduled Tribes and
other backward classes, unemployed army drivers and cooperative societies.
These directions were superseded by the issue
of a fresh notification under section 43-A by the State Government on October
12, 1977 which was superseded by a Notification dated October 15, 1978.
Within a fortnight from the date of the last
Notification referred to above Parliament amended the Act by enacting The Motor
Vehicles (Amendment) Act, 1978 (Act 47 of 1978) which inter alia amended the
proviso to subsection (1) of section 47 of the Act and inserted sub-sections
(1A) to (1H) in that section. After this amendment, the proviso to sub-section
(1) of section 47 of the Act reads thus:
"47. (1).............
Provided that other conditions being equal,
an application for a stage carriage permit from a co- operative society
registered or deemed to have been registered under any enactment in force for
the time being and an application for a stage carriage permit from a person who
has a valid licence for driving transport vehicles shall, as far as may be, be
given preference over applications from individual owners." The new
sub-sections (1A) to (1H) of section 47 of the Act read:
"47. (1) ............
437 (1A) The Government of a State shall
reserve in that State certain percentage of stage carriage permits for the
Scheduled Castes and the Scheduled Tribes.
Explanation-In this section and in sections
55 and 63, 'Scheduled Castes,' and 'Scheduled Tribes' have the meanings
respectively assigned to them in Article' 366 of the Constitution.
(1B) The reservation of permits under
sub-section (1A) shall be in the same ratio as in the case of appointments made
by direct recruitment to public services in the State.
(1C) The Government of a State may, having
regard to the extent to which persons belonging to economically weaker sections
of the community have been granted stage carriage permits in that State:- (a)
reserve in that State such percentage of stage carriage permits, as may be
prescribed, for persons belonging to economically weaker sections of the
community, or (b) notwithstanding anything contained in the proviso to
sub-section (1), give preference, in such manner as may be prescribed, to
applications for stage carriage permits from such person Explanation I-In this
section and in sections 55, 63 and 68, a person shall be deemed to belong to
economically weaker section of the community, if and only if, on the prescribed
date:- (a) the annual income of such person together with the annual income, if
any, of the members of his family; or G (b) the extent of land (whether in one
class or in different classes), held by such person together with that, if any,
held by the members of his family, or 438 (c) the annual income and the extent
of land aforesaid, does, or do not exceed such limit as may be prescribed.
Explanation II.- For the purposes of
Explanation I, "family", in relation to an individual, means the wife
or husband, as the case may be, of such individual and the minor children of
such individual.
(1D) The number of permits reserved under
sub- section (1B) and clause (a) of sub-section (1C), shall not exceed fifty
per cent of the total number of stage carriage permits granted during a
calendar year.
(1E) In giving effect to the provisions of
sub- section (1B) and clause (a) of sub-section (1C) the Regional Transport
Authority or the State Transport Authority may, if it considers necessary or
expedient so to do, group the various routes within its jurisdiction.
(1F) Where any stage carriage permit is to be
granted from the quota reserved under sub-section (1B) or clause(a) of
sub-section (1C) to any cooperative society registered or deemed to have been
registered under any enactment in force for the time being or any firm to which
the provisions of the Indian Partnership Act, 1932 (9 of 1932), apply, no
permit shall be granted to such society or firm unless the members of the
co-operative society or the partners of the firm belong to the Scheduled
Castes, the Scheduled Tribes or economically weaker sections of the community:
Provided that where the members of such co-
operative society or the partners of such firm are partly from the Scheduled
Castes, partly from the Scheduled Tribes and partly from the economically
weaker sections of the community, or from any two of these categories, any
permit under this sub-section shall be granted to such society or firm only
from the quota reserved for the category to which the largest number of members
of the co-operative society, or as the case may be, partners of the firm
belong:
439 Provided further that where no
reservation has been made in the State for economically weaker sections of the
community under clause (a) of sub-section (1C), no permit under this sub-section
shall be granted to a co-operative society or firm unless the members of such
society or partners of such firm belong to the Scheduled Castes or the
Scheduled Tribes or partly to the Scheduled Castes and partly to the Scheduled
Tribes and the permit to such society or firm shall be granted only from the
quota reserved for the Scheduled Castes or the Scheduled Tribes according as to
whether the larger number of the members of the co-operative society, or
partners of the firm, belong to the Scheduled Castes or the Scheduled Tribes.
(1G) The circumstances under which, the
manner in which, and the extent to which, reservation under sub- section (1A)
and clause (a) of sub-section (1C) may be carried forward shall be such as may
be prescribed.
(1H) Notwithstanding anything contained in
this section, an application for stage carriage permit from a State transport
undertaking for operating in any inter-State route shall be given preference
over all other applications: Provided that the authority shall not grant a
permit under this sub-section unless it is satisfied that the State transport
undertaking would be able to operate in the inter-State route without detriment
to its responsibility for providing efficient and adequate road transport
service in any notified area or notified route as is referred to in sub section
(3) of section 68D where the undertaking operates the service.
Explanation.-For the purposes of this
sub-section, 'inter-State route' means any route Lying continuously in two or
more States." By the amendment of section 47 of the Act as stated above,
Parliament directed that the Regional Transport Authority while considering
applications for stage carriage permits should, provided that other conditions
being equal? give preference to an application 440 from a person who has a
valid licence for driving transport vehicles over applications from individual
owners.
Parliament also provided for reservation of
certain percentage of permits for state carriages in favour of persons
belonging to the Scheduled Castes and the Scheduled Tribes in the same ratio as
in the case of appointments made by direct recruitment by a State Government to
public services in that State. Since it was considered necessary to promote the
well being of economically weaker sections of the community, the State
Government was empowered under certain circumstances either to reserve certain
percentage of permits for stage carriages for persons belonging to economically
weaker sections of the community or to give preference to them in the
prescribed manner. It was however, provided that the number of permits reserved
under section 47(1B) and (1C)(a) of the Act should not exceed fifty per cent of
the total number of stage carriage permits granted in a calendar year. It was
also provided that if a State Transport Undertaking applied for a stage
carriage permit operating in any inter-State route, such application should be
given preference over all other applications provided the authority we
satisfied that the Undertaking would be able to operate in the inter-State
route without detriment to its responsibility for providing efficient and
adequate road transport service in any notified area or notified route as is
referred to in sub section (3) of section 68-D of the Act where the Undertaking
operated its service. By the very same amending Act of 1978 Parliament also
amended section 68 of the Act by inserting clauses (ci), (cii), (ciii) and
(civ) enabling the State Governments to frame rules for implementing
subsections (1A) to (1H) of section 47 of the Act. The above said amendments
made to sections 47 and 68 came into force on January 16, 1979. It is conceded
by the learned Attorney General who appeared for the State Government that
these amendments which were made by Parliament would have an overriding effect
on section 43-A of the Act introduced earlier by the State Legislature and that
section 43-A should be read subject to those later amendments made by
Parliament. Curiously the State Government issued on January IO, 1981 and
January 23, 1981 the impugned notifications which are set out at the
commencement of this judgment. By the first notification, the State Government
directed the Regional Transport Authorities of the State of Uttar Pradesh to
issue stage carriage permits (except in respect of routes or areas for which
schemes had been published under section 68-C of the Act) to all eligible
applicants and that there should be no upper limit to the number of stage
carriages for which permits might be 441 provided. By the second impugned
notification dated January 23, 1981, the State Government directed the State
Transport Authority and the Regional Transport Authorities to have regard only
to matters referred to in clauses (a), (b), (d) and (f) of sub-section (1) of
section 47 of the Act and should also take into consideration representation
made by the local authority or police authority within whose jurisdiction any
part of the proposed route or area lay. It also directed that section 57 should
be deemed to have been complied with if the Transport Authority concerned
intimated the particulars of the applications to such local authority and
police authority for making representations, if any, within a period of fifteen
days from the date of despatch of the intimation with the stipulation that if
no representation was received within the prescribed period of time, it would
be presumed that they had no representation to make and considered any
representation made by such local authority and police authority;
A reading of these two notifications shows
that the State Government ignored, first, the legislative policy underlying the
Uttar Pradesh Act 15 of 1976 by which the new sub-section (2) of section 43-A
was enacted in substitution of the former sub section (2) with retrospective
effect. As stated earlier, the State Legislature introduced the new sub-section
(2) of section 43-A after it realised the mistake committed by the State
Government in issuing the notification in the year 1972 directing the issue of
bus permits liberally in favour of all eligible applicants which had resulted
in investment of unproductive capital expenditure and under utilisation of
capital and fuel and in unreasonable competition which eventually eliminated
small operators from business. The State Government also ignored the new policy
governing the issue of permits introduced by Parliament by amending section 47
of the Act. It was argued on behalf of the State Government before the High
Court that the State Government d not contravened either section 43-A, or the provisions
of section 47 as amended in the year 1978.
The High Court dismissed the writ petitions
observing that the Statement of objects and Reasons attached to the Bill which
was ultimately enacted as the U.P. Act 15 of 1976 could not over-ride the clear
provisions of section 43-A as amended by that Act. The High Court upheld the
notification dated January 10, 1981 and further observed that since the schemes
of grant of free permits had been upheld by it 'the State Government had the
power to prescribe the procedure to be followed in 442 granting the same which
has been provided for by the Notification dated January 23, 1981'. Repelling
the contention of the writ petitioners that in the absence of reservation of
the required percentage of permits for persons belonging to the Scheduled
Castes, the Scheduled Tribes and weaker sections as provided in section 47 as
amended by Parliament in 1978, the grant of permits would be vitiated, the High
Court observed as follows:
"The question of reservation, however, arises
only in those cases where the seats or articles are limited for distribution or
allotment but where there is no limit or no fixed number, the question of
reserved on will not arise. In that event, everybody would be served according
to his need and aspiration. Hence, if under section 43-A a direction has been
made for grant of stage carriage permit to all eligible applicants without
putting any fixed number for the vehicles to ply, the interest of the Scheduled
Castes and Scheduled Tribes would be sufficiently safeguarded. A member of the
Scheduled Caste or Scheduled Tribe as well as economically weaker section of
the community would as much be entitled to get a permit to run his vehicle as a
member of any other community. It is where the seats are limited that the
legislature thought of making a provision to reserve the grant of permits in
their favour to the extent of 25 per cent. The principle behind reservation in
the grant of stage carriage permits employed by the Parliament appears to be
the same as in reserving appointment in the Government service. If today
government services are available in abundance, the question of reservation
would not arise.
It is only on account of the posts being
limited that the question of reservation has arisen. So we are not able to
agree with the submission of the petitioner's learned counsel that there is a
conflict between section 43-A, as inserted by the U.P. Legislature and the
amendments made in section 47 by Parliament in the Motor Vehicles Act ."
The High Court further proceeded to observe that though the tow impugned
notifications did not follow the procedure prescribed 443 by sub-section (2) of
section 43-A as it is now in force in the State of Uttar Pradesh, they could be
sustained under sub-sec. (1) of section 43-A which authorised the State
Government to issue such directions of a general character as it might consider
necessary or expedient in the public interest in respect of any matter relating
to road transport to the State Transport Authority or to the Regional Transport
Authority and which required such authority to give effect to any such
directions. The High Court also relied upon the decision of this Court in Hans
Raj Kehar's case (supra) to hold that larger number of buses operating on
different routes would be for the convenience and benefit of the travelling
public.
We may here state that any observations made
in Hans Raj Rehar's case (supra) would be inapplicable so far as these cases
presently before us are concerned. In that case the Court was concerned with
sub-section (2) of section 43-A of the Act as it stood then which was a
provision enacted by the Legislature. That sub- section provided that without
prejudice to the generality of the power contained in section 43-A(1) of the
Act where the State Government was of opinion that it was in public interest to
grant stage carriage permits (except) in respect of routes or areas for which
schemes have been published under section 68 (C) or contract carriage permits
or public carrier permits to all eligible applicants it may issue appropriate
directions as stated therein. That sub-section contained a clear legislative
policy which considered that there could be no public prejudice if all eligible
applicants were granted permits. Without saying anything more on the point, it
may be stated that whatever this Court may have observed while considering that
provision would not apply now as there is a clear departure made by the Legislature
from that policy when it enacted the new sub-section (2) of section 43-A. In
the face of this amendment by which the former sub-section (2) of section 43-A
which specifically authorised he State Government when it was satisfied that it
was necessary to do so in the public interest to issue directions to the
Transport Authorities to grant permits to all eligible applicants was
deliberately taken away by the State Legislature, the High Court was wrong in
holding that such power was still available under sub-section (1) of section
43-A of the Act which was widely worded. The High Court shut its eyes to the
realities of the situation when it observed that in 444 this case the contents
of the Statement of objects and Reasons were irrelevant as the provisions of
section 43-A (1) were very clear. Even without the aid of the Statement of
objects and Reasons it has to be held that by the substitution of the former
sub-section (2) by the new sub- section (2) in section 43-A the Legislature
clearly expressed itself against the policy of granting permits to all eligible
applicants without any consideration to the needs of any particular locality or
route or to the qualification of applicants. It is a well settled rule of
construction of statutes that whenever a court is called upon to interpret an
amended provision it has to bear in mind the history of that provision, the
mischief which the Legislature attempted to remedy, the remedy provided by the
amendment and the reason for providing such remedy.
Therefore, after the amendment at any rate it
has to be held that sub-section (1) of section 43-A of the Act did not
comprehend within its scope the power to issue direction, for issuing permits
to all eligible applicants without any sort of restriction relevant to the scheme
of the Act. What does section 43-A(1) after all say ? It says that the State
Government may issue such directions of a general character as it may consider
necessary in the public interest What is the meaning of the term 'public
interest' ? In the context of the Act, it takes within its fold several factors
such as, the maximum number of permits that may be issued on a route or in any
area having regard to the needs and convenience of the travelling public, the
non-availability of sufficient number of stage carriage services in other
routes or areas which may be in need of running of additional services, the
problems of law and order, availability of fuel, problems arising out of
atmospheric pollution caused by a large number of motor vehicles operating in
any route or area, the condition of roads P and bridges on the routes,
uneconomic running of stage carriage services leading to elimination of small
operators and employment of more capital than necessary in any sector leading
to starvation of capital investment in other sectors etc. Public interest under
the Act does not mean the interest of the operators or of the passengers only.
We have to bear in mind that like every other economic activity the running of
stage carriage service is an activity which involves use of scarce or limited
productive resources.
Motor Transport involves a huge capital
investment on motor vehicles, training of competent drivers and mechanics
establishment of workshops, construction of safe roads and bridges, deployment
of sufficient number of 445 policemen to preserve law and order and several
other matters. To say that larger the number of stage carriages in any route or
area more convenient it would be to the members of the public is an over
simplification of a problem with myriad facts affecting the general public. If
we run through the various provisions of the Act it becomes clear how much
attention is given by it to various matters affecting public interest. There
are provisions relating to licensing of drivers on the basis of their
competence, licensing of conductors, specifications to which the motor vehicles
should conform, coordination of road and rail transport, prevention of
deterioration of the road system, prevention of uneconomic competition among
motor vehicles, fixation of reasonable fare, compliance by motor vehicles with
the prescribed time table, construction of bus stands with necessary amenities,
maintenance of standards of comfort and cleanliness in the vehicles,
development of inter-State tourist traffic and several other matters with the
object of making available adequate and efficient transport facilities to all
parts of the country. Any direction given by the State Government under section
43-A of the Act should therefore, be in conformity with all matters regarding
which the statute has made provision. In this situation to say that any number
of permits can be issued to any eligible operator without any upper limit is to
overstep the limits of delegation of statutory power and to make a mockery of an
important economic activity like the motor transport.
It is surprising that the High Court has
reached the conclusion that the preferences and reservations to be observed
while granting permits as stated in the proviso to sub-section (1) to section
47 and in sub sections (1A) to (1H) of section 47 have not been contravened as
there is no restriction on the number of permits to be issued. The observation
of the High Court that preferences have to be shown and reservations have to be
made only when there is scarcity of permits and since there are no restrictions
on the number of permits to be issued there is no necessity to make any such
provision really shocks us. The High Court erred in not noticing that it was
dealing with a vital economic activity which could be carried on at a huge cost
both to the operator and to the Government and that by issuing the notification
containing a direction to the Transport Authorities to issue limitless number
of permits, the 446 State Government had attempted to circumvent sub-sections
(1) and (1A) to (1H) of section 47 of the Act. Preferences and reservations
have value only when there is a limit on the number of permits to be issued and
in the context of the Act there should necessarily he a limit on the issue of
permits to operate motor vehicles in respect of any route or area. By the
method adopted by it the State Government has virtually allowed the rich and
well-to-do businessman who can bear the loss for some time to introduce any
number of vehicles on a route or in any area until all the small operators who
also may take the permits to leave the field owing to the inevitable loss that
ensues by the operation of an unlimited number of vehicles. The learned
Attorney General while conceding that the amendment made in 1978 to section 47
of the Act should prevail contended that they had not been violated by the
impugned notifications. We do not agree with the above submission. We are
clearly of the view that the State Government has transgressed the provisions
contained in sub-section (1) and sub-sections (1A) to (1H) of section 47. It
has failed to comply with the duty imposed on it by those provisions.
We are of the view that the two notifications
are clearly outside the scope of the Act. The first notification which directs
that all eligible applicants shall be granted permits and that there shall be
no upper limit to the number of permits to be issued for stage carriages and
the second notification which says that the Transport Authorities shall have
regard only to matters referred to in clauses (a), (b), (d) and (f) of
sub-section (1) of section 47 of the Act and thereby precludes the Transport
Authorities to take into consideration matters contained in the proviso to
section 47(1) and in sub-section (1A) to (1H) of section 47 of the Act are
ultra vires the Act and they are liable to he struck down.
We, therefore, allow these appeals, set aside
the judgment of the High Court in each of these cases and declare that the
Notification No. 68 T/XXX-4-15 KM/79 dated January 10, 1981 and the
Notification No. 241 T/XXX-4-15- P/79 dated January 23,1981 issued by the
GoverDmeDt of the State of Uttar Pradesh under section 447 43-A of the Act are
ultra vires and, therefore, void and, ineffective.
In the circumstances of the case. there will
be no order as to costs.
H.L.C. Appeals allowed.
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