U.P.
State Road Transport Corporation Vs. State of U.P. and Another [2004] Insc 723 (29 November 2004)
CJI., R.C. Lahoti, G. P. Mathur & P.K. Balasubramanyan [with C.A. Nos. 6342-6343/2002, 6344-6345/2002, 6347-6348/2002,
6350-6351/2002, 6353-6354/2002, 8575/2002, 4196/2003, 5258/2003.
C.A No./2004 @ SLP(Civil) No. 21557/2002 & C.A No/2004 @ SLP (Civil) No.
19034/2003] G. P. MATHUR, J.
Civil Appeal No. 6341/2002
1. This appeal, by special leave, has been preferred against the judgment
dated 23.7.2002 of Allahabad High Court by which the scheme dated 13.2.1986
published under Section 68-C of the Motor Vehicles
Act, 1939 and the approved scheme published on 29.5.1993 was quashed.
2. In order to appreciate the contentions raised by learned counsel for the
parties, it is necessary to mention the essential facts, as the case has a long
history. The Uttar Pradesh State Road Transport Corporation (for short
'UPSRTC') prepared a draft scheme to nationalize Saharanpur-Shahdara- Delhi
route and the same was published on 29.9.1959 in accordance with Section 68-C
of the Motor Vehicles Act, 1939 (hereinafter referred to as the 'old Act'). The
scheme was challenged by a number of operators and the High Court by its
judgments dated 31.10.1961 and 7.2.1962 upheld the scheme as against 50
operators, but quashed the same as against 32 and 18 operators who had filed
two groups of writ petitions on the ground that they should be afforded an
opportunity of hearing. In appeal, the judgment of the High Court was upheld by
this Court in Civil Appeal No. 1616 of 1968 decided on 3.4.1968 (Jeewan Nath
Wahal vs. STAT). The hearing of the objections could not take place on account
of interim orders passed in various suits, which were filed by some of these
operators, and as a result, the scheme remained pending for over 20 years.
Finally, the matter again came up to this Court and a two-Judge Bench quashed
the scheme by the judgment dated 23.8.1985 on the ground that the delay of 26
years in disposing of the objections had resulted in violation of Articles 14
and 19(1)(g) of the Constitution. It was, however, left open to State Transport
Undertaking to publish a fresh draft scheme if it was necessary to do so.
The judgment is reported in 1985 (4) SCC 169 (Shri Chand vs. Govt. of U.P.).
3. The UPSRTC thereafter published a fresh scheme covering in all 39 routes
which was published on 13.2.1986 under Section 68-C of the old Act.
The scheme not only covered Sharanpur-Shahadara-Delhi route, but also 38
other routes. Objections were filed against the scheme and before they could be
finally decided, Motor Vehicles Act 1988 (for short '1988 Act') came into force
w.e.f. 1.7.1989 repealing the Motor Vehicles
Act, 1939. The competent authority thereafter held that the proposed scheme
had lapsed by virtue of Section 100 (4) of the 1988 Act. The UPSRTC preferred a
writ petition but the High Court also took the view that the scheme had lapsed
and accordingly upheld the order of the competent authority and dismissed the
writ petition. Some of the existing operators challenged the grant of permits
under Section 80 of the 1988 Act by filing writ petitions, but the same were
also dismissed. The appeal against the decision of the High Court was allowed
by this Court on 31.3.1992 and the grant of permits under Section 80 of 1988
Act to the respondents/private operators of Civil Appeal No. 1198 of 1992 and
others on the respective routes, parts or portions of the nationalized route of
the draft scheme dated 13.2.1986 was quashed. The competent authority was
directed to approve the draft scheme within a period of 30 days from the date
of receipt of the judgment and publish the same in the Gazette. The judgment of
this Court is reported in 1992 (2) SCC 620 (Ram Krishna Verma & Ors. vs.
State of U.P. & Ors). While the competent authority was hearing the
objections, the State Government published a notification on 29.5.1993 whereby
the draft scheme published on 13.2.1986 under Section 68-C of the old Act was
approved. The notification specifically mentioned that the same was being done
in view of the directions given by Supreme Court in Civil Appeal Nos. 1198,
1199, 1200 & 1201 of 1992 [Ram Krishna Verma's case (supra)]. The approved
scheme covered all the 39 routes, which were proposed in the draft scheme
published on 13.2.1986. Feeling aggrieved by the approved scheme dated
29.5.1993 several operators filed writ petitions in Allahabad High Court but
the same were dismissed on 19.11.1999 on the ground that the scheme stood
approved by the decisions of the Supreme Court in the case of Ram Krishna Verma
(supra) and also Nisar Ahmad vs. State of U.P. 1994 Supp (3) SCC 460. The appeals
preferred against the judgment of the High Court were allowed by this Court on
1.5.2001 and the judgment is reported in 2001 (5) SCC 762 (Gajraj Singh &
Ors. vs. State of U.P. & Ors). It was held that the decision in Ram Krishna
Verma's case (supra) was confined only to one route namely,
Shahranpur-Shahdara-Delhi route, and as a result of the said decision the draft
scheme stood approved only with regard to the said route.
The notification published on 13.2.1986 included not only the Shahranpur- Shahdara-Delhi
route, but also 38 other routes and consequently the scheme had not been
approved with regard to these 38 routes and objections filed thereto required
to be considered on merits. The operative portion of the judgment is being
reproduced below:
"12. The appeals are allowed. The impugned judgment of the High Court
dated 19.11.1999 is set aside. The writ petitions are partly allowed. It is
directed that the objections filed against the draft scheme dated 13.2.1986
insofar as they relate to the 38 routes listed at Serial Nos.
2 to 39 of the scheme, shall be heard and disposed of by the competent
authority on their own merits and in accordance with law for which purpose the
competent authority shall, within a period of four weeks from today, appoint
and notify a date for hearing. We make it clear that only such of the
objections shall be available to be heard and decided as were filed within 30
days of the date of publication of the draft scheme in the Official Gazette and
which are maintainable and available to be heard in accordance with Section
68-D of the 1939 Act read with sub-section (2) of Section 100 of the 1988 Act.
.............. If all the objections or any of them are allowed, the draft
scheme shall meet the fate consistently with the decision on objections and the
approved scheme dated 29.5.1993 shall be accordingly modified or annulled
insofar as the routes specified at Serial Nos. 2 to 39 are concerned. In the
event of the objections being dismissed, the approved scheme, as notified on
29.5.1993, shall continue to remain in operation. At the risk of repetition we
would like to make it clear that insofar as Saharanpur-Delhi route is
concerned, no objection in that regard shall be heard and the scheme as regards
the said route shall be deemed to have been approved and maintained in terms of
this Court's direction in Ram Krishna Verma case." 4. The competent
authority (Special Secretary Transport, U.P.
Government), after hearing the parties decided the objections by his order
dated 3.11.2001. Feeling aggrieved by the decision of the competent authority,
the UPSRTC and some private operators preferred writ petitions in the High
Court. The High Court formulated five questions for determination and one of
the questions was whether the scheme dated 13.2.86 has lapsed by efflux of time
in view of Section 100(4) of the New Act. The High Court held that the draft
scheme dated 13.2.1986 had lapsed under Section 100(4) of the 1988 Act and,
therefore, it could not be approved or modified and accordingly the draft
scheme dated 13.2.1986 and the approved scheme dated 29.5.1993 as modified by
the order dated 3.11.2001, passed by the competent authority, were quashed.
5. The learned Solicitor General, who was assisted by Shri Pramod Swarup,
appearing for UPSRTC, has submitted that the view taken by the High Court that
the draft scheme dated 13.2.1986 had lapsed by virtue of sub-section (4) of
Section 100 of 1988 Act, is patently erroneous as the said provision would
apply only to a scheme which had been published under sub-section (1)of Section
100 of the Act and can have no application to a scheme which was published
under Section 68-C of the old Act, as is the case here. Learned Solicitor
General has further submitted that a clear finding had been recorded in Ram
Krishna Verma's case that the draft scheme dated 13.2.1986 had not lapsed under
sub-section (4) of Section 100 of 1988 Act, and further in view of the
direction issued by this Court in the case of Gajraj Singh, only certain
objections were required to be heard by the competent authority and the already
approved scheme published on 29.5.1993 was to stand modified consistent with
the decision on the objections. It has thus been submitted that the scope of
the writ petitions which had been filed in the High Court challenging the
decision of the competent authority was a limited one, namely, to examine the
correctness or otherwise of the decision of the authority and it could not have
enlarged the controversy and thereafter to hold that the whole scheme had
lapsed.
6. Shri Abhishek Singhvi, learned senior counsel, who has appeared for
private operators who have been granted permits after 1.7.1989 under the 1988
Act has, on the other hand, submitted that by virtue of Section 217(2)(e) of
the said Act, a scheme framed under Section 68-C of the old Act which was in
force and was pending immediately before the commencement of the 1988 Act, had
to be disposed of in accordance with the provision of Section 100 of the 1988
Act and, consequently, sub-section (4) of Section 100 of the said Act was
clearly applicable. The draft scheme published on 13.2.1986 having not been
approved within one year of the enforcement of the 1988 Act i.e. by 30.6.1990,
the said scheme lapsed.
Reliance has also been placed on Krishan Kumar vs. State of Rajasthan
1991(4) SCC 258 in support of the proposition that a scheme framed under
Section 68-C of the old Act had to be approved within one year from the date of
enforcement of the 1988 Act i.e. by 30.6.1990, otherwise it would lapse.
7. We have given our careful consideration to the submissions made by
learned counsel for the parties. In our opinion, having regard to the earlier
litigation and the decisions of this Court rendered with regard to the scheme
in question, i.e. which was published under Section 68-C of the old Act on
13.2.1986, the view taken by the High Court that the same had lapsed is wholly
erroneous in law.
8. As mentioned earlier, the competent authority had at an earlier stage
held that the scheme had lapsed by virtue of sub-section (4) of Section 100 of
the 1988 Act and the writ petition filed by UPSRTC against the said decision
had been dismissed by the High Court on 16.3.1990. The aforesaid decision of
the High Court holding that the scheme had lapsed was challenged in Ram Krishna
Verma's case (supra) and the Court specifically considered the question as to
whether the draft scheme dated 13.2.1986 had lapsed under sub-section (4) of
Section 100 of the 1988 Act. A clear finding was recorded that the scheme had
not lapsed and the relevant part of paragraph 11 of the said report is being
reproduced below:
"11.The hearing authority, therefore, wrongly concluded that the draft
scheme stood lapsed. The High Court also equally committed illegality following
its earlier view, which now stood overruled by this court in Krishan Kumar
case. Accordingly it must be held that the view of the High Court and the
hearing authority is clearly illegal.
In paragraph 15 of the reports, it was reiterated that the fresh draft
scheme dated February 13, 1986 had not lapsed and would continue to be in
operation and further that it would be confined only to 50 operators. The
relevant part of operative portion of the order (paragraph 17 of the report) is
being reproduced below:
"17. The appeals are accordingly allowed. The grant of permits to all
the respondents/private operators and respondents 7 to 285 in C.A. No. 1198 of
1992 (SLP No.
9701 of 1990) under Section 80 of the Act or any others on the respective
routes, parts or portions of the nationalized routes of February 13, 1986 draft
scheme are quashed. The hearing authority shall lodge the objections of the 50
operators including the appellants herein. The competent authority shall
approve the draft scheme of 1986 within a period of 30 days from the date of
receipt of the judgment; and publish the approved scheme in the gazette."
This very scheme again came up for consideration in Nisar Ahmad's case (supra)
and a similar contention was raised that the scheme had lapsed under
sub-section (4) of Section 100 of the 1988 Act. The challenge was repealed and
the relevant part of the judgment reads as under:
"3. ..What is required by the proviso to sub-section (3) of Section 100
is a scheme proposed under the Act. The present one is not a scheme proposed
under the Act and that, therefore, the prior approval of the Central Government
under the Act is not necessary. It is also to be seen that sub-section (4) of
Section 100 is clearly inapplicable in the facts of this case. The scheme
published by the State Government on 13.2.1986 was under the Act 4 of 1939. The
draft scheme was pursuant to the directions issued by this Court, in
consequence to the closing of hearing directed by this Court in Jeewan Nath
Wahal case became final. The hearing was delayed due to dilatory tactics
adopted by the operators and as per the directions of this Court in Ram Krishna
Verma case the draft scheme was approved. In view of that matter and since this
Court has already approved the draft scheme not only dated 26.2.1959 but also
of 13.2.1986, the question of the lapse under sub-section (4) of Section 100
does not arise. The appeals are accordingly dismissed with costs of Rs. 1
lakh."
9. In Gajraj Singh's case (supra), the Court noticed the earlier decisions
rendered in Nisar Ahmad and Ram Krishna Verma, and also the finding recorded
therein that the scheme had not lapsed under sub-section (4) of Section 100 of
the 1988 Act. Keeping in view the said finding and also the provisions of sub-section
(4) of Section 100 of the Act, the Court gave a right to the operators to be
heard under sub-section (2) of Section 100 of the Act. The notification issued
on 29.5.1993 by which the draft scheme dated 13.2.1986 had been approved was
not quashed, but merely a direction was issued that if the objections are
allowed, the draft scheme shall meet the fate consistent with the decision on
the objections and the approved scheme dated 29.5.1993 shall be modified
accordingly. These decisions clearly hold that the scheme had not lapsed under
sub-section (4) of Section 100 of the Act.
10. In Daryao & others vs. State of U.P. & others AIR 1960 SC 1457,
a Constitution Bench considered the application of rule of res judicata in writ
petitions. It was held that if a writ petition filed by a party under Article
226 is considered on the merits as a contested matter and is dismissed, the
decision thus pronounced would continue to bind the parties unless it is
otherwise modified or reversed by appeal or other appropriate proceedings
permissible under the Constitution. Similarly, in Devilal Modi vs. Sales Tax
Officer AIR 1965 SC 1150, which is also a decision by a Constitution Bench, it
was held that it would not be right to ignore the principle of res judicata
altogether in dealing with writ petitions filed by citizens alleging the
contravention of their fundamental rights. It was further held that
considerations of public policy cannot be ignored in such cases, and the basic
doctrine that judgments pronounced by the Supreme Court are binding and must be
regarded as final between the parties in respect of matters covered by them
must receive due consideration. In Direct Recruit Class II Engineering
Officers' Association vs. State of Maharashtra and others 1990 (2) SCC 715, the
Constitution Bench emphasized that the binding character of judgments of courts
of competent jurisdiction is in essence a part of the rule of law on which the
administration of justice, so much emphasized by the Constitution, is founded
and a judgment of the High Court under Article 226 passed after a hearing on
the merits must bind the parties till set aside in appeal as provided by the
Constitution and cannot be permitted to be circumvented by a petition under
Article 32.
11. The principle of res judicata is based on the need of giving a finality
to judicial decisions. The principle which prevents the same case being twice
litigated is of general application and is not limited by the specific words of
Section 11 of Code of Civil Procedure in this respect. Res judicata applies
also as between two stages in the same litigation to this extent that a court,
whether the trial court or a higher court having at an earlier stage decided a
matter in one way will not allow the parties to re-agitate the matter again at
a subsequent stage of the same proceedings. (See Satyadhan vs. Smt. Deorajin
Devi AIR 1960 SC 941).
12. This Court having specifically considered the question in two earlier
decisions as to whether the draft scheme dated 13.2.1986 had lapsed under
sub-section (4) of Section 100 of the Act and having recorded a clear finding
that the scheme had not lapsed, it was not at all open to the High Court to
examine the said question all over again and to hold that the draft scheme had
lapsed. The decision rendered by this Court concluded the controversy and it
was not permissible to any party or to any authority/tribunal or court,
including the High Court to re-open the issue and to record a contrary finding.
We are clearly of the opinion that the High Court committed manifest error of
law in re-examining the question and recording a finding, which is totally in
variance with the earlier decisions of this Court.
13. There is another aspect of the matter. The competent authority heard the
objections in view of the directions issued by this Court in Gajraj Singh's
case. It was clearly provided in the judgment that the draft scheme shall meet
the fate consistent with the decisions on objections and the draft scheme dated
29.5.1993 shall be accordingly modified. In the writ petitions which was filed
in the High Court, what was assailed was the decision of the competent
authority. Therefore, the scope of the writ petition was very narrow and the
High Court could only examine whether the competent authority had considered
the objections in accordance with the directions issued by this Court. In such
a writ petition, the High Court could not have gone into the question as to
whether the scheme had lapsed under sub- section (4) of Section 100 of the Act.
The view taken by the High Court that the scheme had lapsed is, therefore,
wholly uncalled for and beyond the scope of the writ petition.
14. Krishan Kumar's case (supra) which has been strongly relied upon by Shri
Singhvi for urging that the draft scheme dated 13.2.1986 had lapsed by virtue
of sub-section (4) of Section 100 of the Act can be of no assistance to him. In
the said case, it was observed that if the period of one year from the date of
publication of the proposed scheme is applied to the pending schemes under
Section 68-C of the old Act, the purpose and object of saving the old schemes
under clause (e) of Section 217(2) of the 1988 Act would be frustrated. It was
also observed that the scheme published under Section 68- C of the old Act
pending on the date of commencement of the new Act would be a scheme proposed
under sub-section (1) of Section 100 and, therefore, the rigour of period of
one year as applicable to a scheme proposed under sub-section (1) of Section
100 would not apply to a scheme under Section 68-C pending on the date of
commencement of the Act.
However, after observing that it was not meant that a scheme under Section
68-C of the old Act pending on the date of commencement of the new Act may be
approved or finalized at leisure without any time limit, the Court, applying
the principle of harmonious construction, held that it would be legitimate to
hold that in the case of a scheme under Section 68-C of the old Act pending on
the date of enforcement of the new Act, namely, July 1, 1989, the period of one
year as prescribed under Section 100(4), should be computed from the date of
commencement of the new Act. Therefore, according to this decision, a draft
scheme made under Section 68-C of the old Act would lapse after 30.6.1990. But
in the present case, the competent authority long before 30.6.1990 held that
the scheme had lapsed and the writ petition preferred against the said decision
was also dismissed on 16.3.1990 on the same finding. The decision of the High
Court was then reversed by this Court in Ram Krishna Verma's case (supra) and a
specific direction was issued to the competent authority to approve the draft
scheme and publish the same. Therefore, on the facts of the present case, it
cannot at all be held that the scheme had lapsed.
15. Shri Dinesh Dwivedi, learned senior counsel for some of the operators,
who have been granted permits under 1988 Act has submitted that principle of
res judicata can have no application if there is a statutory prohibition, and
in support of his submission he has relied upon Municipal Committee, Amritsar
and others vs. State of Punjab and others 1969(1) SCC 475, Mathura Prasad Bajoo
Jaiswal and others vs. Dossibai N.B.Jeejeebhoy 1970 (1) SCC 613, Nand Kishore
vs. State of Punjab 1995(6) SCC 614 and Allahabad Development Authority vs.
Nasiruzzaman and others 1996 (6) SCC 424. The principles laid down in these
decisions can have no application here having regard to the factual position
discussed above that the scheme was declared to have lapsed much before the expiry
of period of one year and the said decision was ultimately reversed by this
Court in Ram Krishna Verma's case (supra), wherein a direction was issued to
publish the approved scheme, and also the fact that in Gajraj Singh's case
(supra), the matter was remitted to the competent authority for a very limited
purpose.
16. Shri A. Singhvi has also submitted that the UPSRTC cannot provide
transport facility to the people in the area and, therefore, the
nationalization of the routes is not in public interest. During the course of
hearing an additional affidavit has been filed by Shri Arvind Dikshit, one of
the respondents in Civil Appeal Nos. 6350-51/2002 wherein it is averred that
though the population in the area has greatly increased in the last about 15 years
resulting in proportionate increase in traveling public, the number of buses
being operated by UPSRTC has considerably gone down and many of such buses are
over-age and in extremely bad condition. The UPSRTC has suffered a loss of Rs.
282.75 crores during the period 1996-97 to 2000-01.
It has thus been urged that the UPSRTC is not at all in a position to cater
to the needs of the people in the area by providing an efficient transport
service. Learned counsel has further submitted that nearly 500 operators who
have been granted permits after 1.7.1989 had taken loans from banks and finance
companies at a very high rate of interest to purchase buses and in case the
scheme of nationalization is enforced now, they will be completely thrown out
of business landing them in serious financial trouble.
The drivers, conductors and other staff employed by them will also be thrown
out of employment. An affidavit in reply has been filed by Shri H.N.
Aggarwal, General Manager, UPSRTC, Ghaziabad, wherein it is averred that
though earlier UPSRTC was sustaining losses, but subsequently stringent
measures have been adopted and in the year 2002-03 it earned a profit of Rs. 92
lakhs and in a period of five months i.e. from April to August, 2004, it has
earned a profit of Rs.52.10 crores. It has also been averred that 2262 new
buses have been inducted by UPSRTC in the last 2- 1/2 years.
17. The contention sought to be raised by Shri Singhvi on the basis of the
additional affidavit filed by Shri Arvind Dikshit, cannot be accepted for
several reasons. As discussed earlier, the draft scheme covering 39 routes was
published on 13.2.1986 and the same was approved on 29.5.1993. In view of the
decision in Gajraj Singh (supra), the competent authority was required to hear
only such objections which were filed within 30 days of the publication of the
draft scheme and the approved scheme as notified on 29.5.1993 was to stand
modified consistent with the decision on the objections. No such plea as is
sought to be raised now, was raised when the cases of Ram Krishna Verma
(supra), Nisar Ahmad (supra) and Gajraj Singh (supra) were decided by this
Court. It has been also submitted on behalf of the UPSRTC that it did not put
in many buses on the routes in question on account of illegal running of buses
by private operators who have been granted permits subsequent to 1.7.1989 and
after such illegal running of buses is stopped, more buses will be inducted on
the routes. Therefore, the contention of Shri Singhvi that the traveling public
will suffer great hardship if the scheme is allowed to stand on account of the
fact that UPSRTC does not have sufficient number of buses to run on the routes
in question, does not appear to have any substance, in view of the clear stand
of UPSRTC that it is now making profit and will induct more buses on the routes
in question. By virtue of Section 103(1-A) of the Motor Vehicles Act (as
amended in the State of U.P.), the UPSRTC can enter into agreements with bus
owners to ply their buses on the nationalized routes. Such an arrangement may
be beneficial to the existing private operators. On overall consideration of
the matter, we are clearly of the opinion that the factors sought to be
highlighted by Shri Singhvi cannot be taken into consideration to have the approved
scheme annulled and nullified.
18. In view of the discussion made above, the appeal is allowed with costs
and the impugned judgment dated 23.7.2002 of the High Court is set aside.
The writ petition preferred by UPSRTC against the decision of the competent
authority and connected writ petitions shall be heard afresh by the High Court
in the light of the direction issued by this Court in the case of Gajraj Singh
(supra) after impleading all such parties who have been granted relief by the
competent authority.
Civil Appeal Nos. 6342-43/2002, 6344-45/2002, 6347-48/2002, 6350-51/2002,
6353-54/2002, 8575/2002 & 4196/2003
19. In view of the decision in Civil Appeal No. 6341of 2002 (UPSRTC vs.
State of U.P. & Anr), the appeals are allowed and the impugned judgment
dated 23.7.2002 of the High Court is set aside..
Civil Appeal No.5258 of 2003
20. The appellants were granted permits on 11.2.1991 after the High Court
had held on 16.3.1990 that the Scheme had lapsed. In view of our finding that
the Scheme had not lapsed, the appellants are not entitled for renewal of their
permits. The appeal is accordingly dismissed.
Civil Appeal No./2004 @ S.L.P. (Civil) No.21557/2002 and Civil Appeal No/2004
[@ S.L.P.(Civil) No. 19034/2003] 21. Leave granted.
In view of the decision in Civil Appeal No. 6341 of 2002, the appeals are
allowed and the impugned judgment dated 23.7.2002 of the High Court is set
aside.
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