Full Judgment Text
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PETITIONER:
T. N. RAGHUNATHA REDDY
Vs.
RESPONDENT:
MYSORE STATE TRANSPORT AUTHORITY
DATE OF JUDGMENT:
24/02/1970
BENCH:
SIKRI, S.M.
BENCH:
SIKRI, S.M.
BHARGAVA, VISHISHTHA
VAIDYIALINGAM, C.A.
CITATION:
1971 AIR 1662 1970 SCR (3) 780
1970 SCC (1) 541
ACT:
Motor Vehicles Act 4 of 1939-’Kolar Scheme’ approved
and published by Mysore State Government under s. 68-D of
Act-’Existing permit holder’ within meaning of cl. (d) of
scheme-Who is Agreement between Mysore and Andhra
Governments for counter-signing each other permits for
inter-state routes-Such agreement whether overrides Chapter
IV-A of Act.
HEADNOTE:
In 1959 the States of Mysore and Andhra Pradesh entered into
a reciprocal arrangement agreeing thereby that certain
permits issued by the Transport Authorities of one State
should be counter-signed by those of the other. Under s.
43(1) of the Motor Vehicles Act, 1939-the Government of
Mysore issued directions to the State Transport Authority to
give effect to the above arrangement. On April 25, 1968 the
Regional Transport Authority Cuddapah, Andhra Pradesh issued
a permit to the appellant for the Cuddapah-Bangalore inter-
State route under s. 63 of the Act, which was to be valid up
to May 13, 1971. The appellant then applied to the State
Transport Authority in Mysore for counter-signature of his
permit. By then the Government of Mysore had by its order
dated 25-1-1968 approved under s. 68-D of the Motor Vehicles
Act, a scheme called the ’Kolar scheme’. That scheme
provided for exclusive operation by the Mysore State
Transport Undertaking of stage-carriages on the notified
routes. Under the scheme existing permit holders’ could
continue to operate inter-State routes except that their
permits would be ineffective for the overlapping portions of
the notified routes. On March 1, 1968 the Mysore State
Transport Undertaking applied under s. 68F(1) to operate
buses on the notified routes. In December 1968 the Regional
Transport Authority resolved to give effect to the scheme
from 1-1-1969. Meanwhile the appellant’s application for
counter-signature came up before the Mysore State Transport
Authority on July 6, 1968. By that time, however, writ
petitions had been filed in the High Court, challenging the
’Kolar scheme’ and the Court had made interim orders staying
the operation of the, scheme. In that situation the State
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Transport Authority, Mysore granted to the appellant
counter-signature on his permit, expressly subject to the
decision of the High Court as to the validity of the scheme.
On October 7, 1968 the High Court dismissed the said writ
petitions and upheld the validity of the scheme. Thereupon
the State Transport Authority issued a notice to the
appellant to surrender the counter-signature slip and stop
running the buses. The appellant challenged this order in a
writ petition under Art. 226 of the Constitution. The
petition being dismissed he appealed by special leave to
this Court. The appellant contended inter alia that (i) the
counter-signature on the appellant’s permit could not be
cancelled as he was an ’existing permit holder’ under cl.
(d) of the scheme and for this purpose the crucial date was
1-1-1969 when the order under. 68F(2) came into effect; (ii)
Inter-State agreement overrides the provisions of Chapter
IV-A of the Act
HELD : (i) Assuming, without deciding, that the date
of publication is not the appropriate date, the date on
which the transport Undertaking
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applies under s. 68F(1) for a permit must be the date with
reference to which the expression "existing permit holder"
must be interpreted. The application by the State Transport
Undertaking in the present cases was made on March 1, 1968.
If this was the crucial date, the appellant was not an
"existing permit holder" because he did not obtain his
countersignature till July 1968. [785 C-D]
Abdul Gafoor v. State Mysore, [1962] 1 S.C.R. 909,
applied.
Sri Satyanarayana Transports (P) Ltd. Guntur v. Andhra
Pradesh
State Road Transport Corporation, C.A. No. 347 of 1961
dt. 30-10-1961, distinguished.
(ii) Even if the crucial date be taken as January 1,
1969 as contended by the appellant, he must still fail on
the ground that he was not a permit holder at all. His
counter-signature must be deemed to have lapsed when the
High Court on October 7, 1968 dismissed the writ petitions
in which the ’Kolar scheme’ bad been stayed. The order of
the Regional Transport Authority granting the counter-
signature "subject to the decision of the High Court of
Mysore about the validity of the Nationalisation Scheme of
the Kilar Pocket" in the context of the case meant that if
the writs failed the counter-signature would automatically
lapse. [786 A-B]
The Smarth Transport Co. v. The Regional Transport
Authority, [1961] 1, S.C.R. 631 at 639, referred to.
(iii) An inter-State agreement cannot over-ride the
provisions of Chapter IV-A. The inter-State agreement is
not law and to hold that an inter-State agreement over-rides
Chapter IV-A would be to completely disregard the provisions
of s. 68-B of the Act. Articles 162 and 298 of the
Constitution had no relevance in this connection. Assuming
that a State hits power to enter into agreement with another
State in exercise of its executive powers under Art. 162 and
under Art. 298 it can carry on trade or business, the facts
did not throw any bight on the question for decision. [786
H-787 A]
JUDGMENT:
CIVILAPPELLATE JURISDICTION : Civil Appeal No. 1564 of 1969.
Appeal by special leave from the judgment and order
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dated April 15, 1969 of the Mysore High Court in Writ
Petition No. 1112 of 1969.
P.Ram Reddy, P. Parameswara Rao and A. V. V. Nair, for
the appellant.
Niren De, Attorney-General, R. Gopalakrishnan and S. P.
Nayar, for respondent No. 1.
Shyamala Pappu and Vineet Kumar, for respondent No. 2.
The Judgment of the Court was delivered by
Sikri, J. This appeal by special leave is directed
against the judgment of the High Court of Mysore dismissing
Writ Petition No. 1112 of 1969 filed by T. N. Raghumatha
Reddy, appellant be-fore us, against the Mysore State
Transport Authority. The
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appellant had prayed to the Court to quash the
order/endorsement of the respondent, dated March 5110, 1969.
In order to appreciate the points raised before the
High Court and before us it is, necessary to give a few
facts. In 1959 the States of Andhra Pradesh and Mysore
appear to have entered into a reciprocal arrangement
regarding inter-State road transport. In exercise of the
powers conferred by-sub-s.(1) of S. 43 of the Motor Vehicles
Act, 1939 (Central Act IV of 1939) the Government of Mysore
issued a direction to the State Transport Authority to take
necessary action to give effect to the above arrangement.
On October 8, 1964, the State of Mysore published under cl.
(d) s. 68-C of the Motor Vehicles Act, 1939hereinafter
referred to as the Act-what is called the "Kolar Scheme".
Clause (d) of the scheme reads as follows :
"(d) Whether the services are The state Transport Undert-
to be operated by the State taking will operate service
State Transport to the excl- on all the routs to the co-
usion,complete or partial of mplete exclision of other
other persons or otherwise persons except that:-
(a) that existing permit holders on the
inter-State routes may continue to operate
such inter-State routes, subject to the
condition that their permit shall be rendered
ineffective for the over-lapping portions of
the notified routes".
It is the case of the appellant that in March 1967 on a
proposal made by the State of Mysore, the States of Andhra
Pradesh, and Mysore entered into an agreement for counter-
signing a second inter-State permit on the route Cuddapa to
Bangalore, and on April 4, 1967, the Transport Commissioner
of Andhra Pradesh showed willingness to countersign a second
permit. On April 13, 1967 the Transport Commissioner of
Mysore State expressed willingness to countersign the second
permit. It is further the case of the appellant that
although the State of Andhra Pradesh carried out the
agreement and countersigned the second permit on the
Bangalore-Cuddapa route in favour of a Mysore operator the
Mysore State refused to carry out this agreement. On
January 25, 1968, the Kolar Scheme, as approved, was
published in the Gazette under s.68-D(3) of the Act. On
March 1, 1968, the Mysore undertaking applied under s.68F(1)
to operate buses from January 1, 1968, or a later date. On
April 25, 1968, the Regional Transport Authority, Cuddapah
issued a permit to the -appellant for Cuddapah-Bangalore
route, an inter State route, under S. 63 of the Act. This
permit is valid uptil May 13, 1971. On May 16, 1968, the
appellant applied to the State Transport Authority, Mysore,
for counter-signature under s.63 of
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the Act, and on May 20, 1968, the Transport Commissioner,
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Andhra Pradesh, requested the Transport Commissioner,
Mysore, to countersign the appellant’s permit under the
agreement.
In the meantime the Kolar Scheme had been challenged in
the High Court and the High Court stayed the Kolar Scheme
pending the decision of the writs.
The application of the appellant, dated May 16, 1968,
for the grant of counter-signature of the permit came up for
consideration before the Mysore State Transport Authority on
July 6, 1968.- The learned counsel for the appellant urged
before it that "counter-signature may be given with any
timings found suitable by the Authority for their service
which is an express service and does not stop in all
stations as the shuttle services of the (in the case of)
objectors." He also urged that "counter-signature may be
considered and granted as there is a stay order of the High
Court of Mysore in W.P. No. 1390 of 1968 against the
operation of the Kolar Nationalisation Scheme and that his
permit was granted before the Scheme was approved and that
the permit is issued under reciprocal agreement." The grant
of counter-signature was opposed by a number of objectors.
The Law Officer of the Mysore State Undertaking argued that
though there was ,a stay order against the Kolar Scheme and
its implementation it did not authorise any Transport
Authority to grant any fresh permits for counter-signature.
The Transport Authority observed:
"After considering the elaborate arguments
of the counsels for the petitioner and
objectors and taking all aspects of the matter
and facts as disclosed from the records and
the large number of existing services on the
route or sectors of the route, the S.T.A.
resolved to grant the counter-signature
subject to the decision of the High Court of
Mysore about the validity of the
Nationalisation Scheme of Kolar Pocket and
with the following modification to the timings
already granted by the R.T.A. Cuddapah."
In pursuance of this resolution actual counter-
signature was granted on July 6, 1968. On October 7, 1968,
the High Court dismissed the writs relating to the Kolar
Scheme and the Regional Transport Authority its meeting on
December 30, 1968, passed a series of orders which it deemed
fit consequent on the implementation of the Kolar Scheme.
On March 10, 1969, the State Transport Authority, Mysore,
issued a notice to the appellant to surrender the counter-
signature slip and stop running the buses. On March 15,
1969, the appellant filed writ petition No. 1112 of 1969
challenging this order.
784
Before the High Court two points were raised on behalf
of the appellant; (1) That the State Transport Authority
should have heard the appellant before calling upon him to
surrender the counter-signature and the Secretary of the
State Transport Authority had no power to issue the impugned
endorsement; (2) As the permit had been granted to the
petitioner in pursuance of an inter-State agreement, the
State Transport Authority in Mysore had rightly granted the
counter-signature and the counter-signature could not be
revoked later.
The first point is not raised before us. Regarding the
second point the High Court held that "a scheme under
Chapter IV-A (of the Act)will override any agreement
including an inter-State agreement. Unless such scheme
itself exempts permits granted in pursuance of inter-State
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agreements such permits will also be subject to the scheme."
The High Court further held that "as the Kolar Scheme does
not exempt permits granted in pursuance of inter-State
agreements, the petitioner cannot claim countersignature of
his permit when the operation, of his stage carriage in this
State is inconsistent with the scheme."
Before us the learned counsel for the appellant, Mr.
Ram Reddy, has raised four points : (1) As the appellant is
an existing permit holder within clause (d) of the Scheme,
the counter-signature cannot be revoked; (2) Assuming that
the appellant does not come under clause (d); the counter-
signature should not be revoked. it could only be modified
with the condition that the appellant should not pick up or
drop passengers on the overlapping portion of the route; (3)
that inter-State agreements override the provisions of
Chapter IV-A of the Act, and (4) that the scheme imposing
total exclusion of private carriers offends the provisions
of Art. 301 of the Constitution.
Regarding the first point, the learned counsel urges
that the expression "existing permit holder" in clause (d)
of the Scheme has to be interpreted as if the scheme is read
on January 1, 1969 when orders under S. 68F(2) of the Act
came into effect. He refers to the following passage in the
order of the Regional Transport Authority, dated December
30, 1968 :
"Further we have resolved to give effect
to the Approved Scheme of Kolar Scheme with
effect from 1-1-1969 in accordance with
Section 68F(2) and resolved to take the
following action under Section 68F(2) of the
M.V. Act 1939 (as appended hereto)."
It seems to us that this is not a correct way of
interpreting the Scheme. The scheme as approved, was
published in the Government Gazette under s. 68D(3) on
January 25, 1968, and
785
on March 1, 1968, the Mysore undertaking applied under s. 68
F(1) to operate buses from January 1968 or a later date. As
held by this Court in Abdul Gafoor v. State of Mysore(’)
"when a scheme prepared and published under s. 68-C has been
approved and an application has been made in pursuance of
the scheme and in the proper manner as specified in Ch. IV
nothing more remains to be, decided by the Regional
Transport Authority and it has no option to refuse the grant
of the permit" and "when taking action under s. 68-F(1) the
Regional Transport Authority does not exercise any quasi-
judicial function and acts wholly in a ministerial
capacity." It seems to us that even if the date of
publication may not be the appropriate date-we do not decide
that it is not an appropriate date-atleast the date on which
the transport undertaking applies under s. 68F(1) for a
permit must be the date with reference to which the
expression "existing permit holder" must be interpreted. If
this is the crucial date, then it is quite clear that the
appellant was not an existing permit holder because he did
not obtain his countersignature till July 1968.
The observations of Raghubar Dayal, J. in Sri
Satyanarayana Transports (P) Ltd. Guntur v. Andhra Pradesh
State Road Transport Corporations(’) do not assist the
appellant. In that case the Court was dealing with the
objection that it was the duty of the Road Transport
Corporation to furnish the date of implementation of each
scheme as a part of the proposal, the date being a material
particular. In this connection the Court observed
"The question whether the State
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Government can fix a date or not is not for
determination in this appeal and we do not
express any opinion on that point. Suffice it
to say that the Regional Transport Authority
has the power to fix a date after the scheme
has been approved by the State Government, as
it is that authority which has, under s. 68F,
to issue a permit to the State Transport
Undertaking for plying motor vehicles and to
cancel existing permits. The date up to which
the existing permits are to continue and the
date for the State Transport Undertaking to
commence plying motor vehicles should be such
that there be a continuity of transport
services on the notified route and that there
be no dislocation of transport arrangements."
The Court was not considering the crucial date for the
purpose of interpreting the expression "existing permit
holder in a scheme.
(1) [1962] 1 S.C.R. 909.
(2) Civil Appeal No. 347 of 1961 judgment on October 3,
1961.
786
Apart from that the appellant must fail on the ground that
he was not a permit holder at all even if the crucial date
be January 1, 1969. His counter-signature must be deemed to
have lapsed when the High Court dismissed the writ petitions
in which the Kolar scheme had been stayed on October 7,
1968. In our opinion the order of the Regional Transport
Authority granting the counter-signature "subject to the
decision of the High Court of Mysore about the validity of
the Nationalisation Scheme of Kolar Pocket," in the context
which we have reproduced -above, means that if the writs
failed the, counter-signature would automatically lapse. It
will be recalled that this Court held in The Samrath
Transport Co. v. The Regional Transport Authority(-) that
the Regional Transport Authority is within its rights not to
entertain an application if the Scheme had been approved and
published. This Court observed :
"The Regional Transport Authority is
authorized for the purpose of giving effect to
an approved scheme to refuse to entertain an
application for renewal of any other permit.
This power does not depend upon the
presentation of an application by the State
Transport Undertaking for a permit. This
power is exercisable when it is brought to the
notice of the Authority that there is an
approved scheme and, to give effect to it, the
application for renewal cannot be
entertained."
The Regional Transport Authority must have been aware
of this and it must be because of the stay order that the
counter-signature was granted to the appellant by it.
In view of our decision that the appellant’s counter-
signature lapsed when the writ petitions were dismissed, the
second point does not arise.
Regarding the third point, we were unable to appreciate
how an inter-State agreement overrides the provisions of
Chapter IV-A. The inter-State agreement is not law and to
hold that an inter-State agreement overrides Chapter IV-A
would be to completely disregard the provisions of s. 68 B
of the Act which provides that "the provisions of this
Chapter and the rules and orders made thereunder shall have
effect notwithstanding anything inconsistent therewith
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contained in Chapter IV of this Act or in any other law for
the time being in force or in any instrument having effect
by virtue of any such law." In this connection reference was
made to Art. 162 and Art. 298 of the Constitution. But we
were unable to appreciate what relevance these articles
(1) [1961] 1 S.C.R. 631 at 639.
787
have to the point at issue. Assuming that a State has power
to enter into agreement with another State in exercise of
its executive powers under Art. 162, and under Art. 298 it
can carry on trade or business, we are unable to see what
light these facts throw on the question before us.
We stopped the learned counsel from developing the
fourth point because this point was not taken up in the High
Court.
In the result the appeal fails and is dismissed. In
the circumstances there will be no order as to costs in this
Court.
G.C. Appeal dismissed..
788