Full Judgment Text
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 7
PETITIONER:
INTER STATE TRANSPORT COMMISSION, NEW DELHI
Vs.
RESPONDENT:
P. MANJUNATH KAMATH & ORS.
DATE OF JUDGMENT02/08/1972
BENCH:
RAY, A.N.
BENCH:
RAY, A.N.
DUA, I.D.
BEG, M. HAMEEDULLAH
CITATION:
1972 AIR 2250 1973 SCR (1) 765
ACT:
Motor Vehicles Act, 1939, s. 63A (2) (c)-Directions under
section by Inter-State Transport Commission are
administrative in character-Cannot bind Transport
Authorities in the exercise of their quasi-judicial
functions in granting permits etc.
HEADNOTE:
The Inter-State Transport Commission issued directions under
s. 63A (2) (c) of Motor Vehicles Act 1939 laying down that
permits by the concerned authorities should be issued in a
certain order of preference. The respondents who were
applicants for permits for inter-State routes were adversely
affected and in writ petitions under Art.. 226 of the
Constitution challenged the competence of the Commission to
issue binding directions under s. 63A(2) (c) to a
subordinate authority in respect of the exercise of quasi-
judicial functions. The High Court allowed the writ
petitions. In appeal by the Commission to this Court.
HELD : It is important to notice that the Act has not
conferred any power on the Commission to make Rules. In the
absence of any power to enact subordinate legislation by way
of rules the delegation of legislative power cannot be
lightly inferred. The power to make rules has been
expressly conferred on the Central Government under s.
133(1) and is subject to procedural safeguards. [770 G]
This Court in Naidu’s case held that the Transport
Authorities in dealing with applications for permits and
assessing the respective or rival claims of the parties
discharge quasi-judicial functions and their orders are
quasi-judicial orders. it is therefore essential to
fundamentals of fairplay in the administration of law that
the decision of these Transport Authorities in the matter of
grant of permits should not be clogged by directions
indicating the orders of preference as happened in the
present case. [771 D]
When the Act itself in s. 55 provides preference to
Cooperative Societies, as far as possible, it is not
appropriate to hold that the Commission would have power to
do the identical things, in the present case, the Commission
did not rest merely with giving the first preference to Co-
operative Societies. The Commission thereafter indicated
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 7
the order of preference to Transport Cooperative Societies,
Limited Companies, Registered firms and lastly to others..
[771 F]
It is apparent that the order of preference indicated in the
garb of directions is an encroachment upon the judicial
discretion of the Transport Authorities in the matter of
grant of permits. [771 G]
The power of the Inter-State Transport Commission under
section 63A(2)(c) of the Act to issue directions is
referable only to directions of executive and administrative
nature., The Commission has no power to entrench upon the
quasi-judicial functions of the Transport Authorities in the
matter of grant of permits. The order of the High Court in
quashing the direction must therefore be upheld. [772 A]
766
B. Rajagopala Naidu v. State Transport Appellate Tribunal
JUDGMENT:
&
CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 1084 &
1091 of 1967 and 1081 of 1970.
Appeal by certificate from the Judgment and order dated the
9th June 1966 of the Mysore High Court in W.Ps. Nos. 442,
884 and 441 of 1964.
M. K. Ramamurthi and S. P. Nayar, for the appellant in all
the appeals.
Respondent did not appear.
The Judgment of the Court was delivered by
Ray, J.--These three appeals are by certificate from the
judgments dated 9 June, 1966, 10 December, 1964 and 19 July,
1966 of the High Court of Mysore.
The only question which falls for consideration in these
appeals is the interpretation of section 63A(2)(c) of the
Motor Vebicles Act, 1939 (hereinafter referred to as the
Act).
Civil Appeal No. 1084 of 1967 concerns applications for
grant of permits on specified routes in the State of
Maharashtra. On 8 April, 1963, the Regional Transport
Authority, South Kanara issued a notification under Section
57(2) of the Act inviting applications from public carriers
permit holders (if South Kanara District intending to
operate their vehicles in the State of Maharashtra. The
permits were under reciprocal agreement between the State
Governments of Mysore and Maharashtra. There were 28
vacancies for permits. 39 applications were made for the
same. The respondent Kamath in Civil Appeal No. 1084 of
1967 submitted an application for permit. His application
was rejected by the Regional Transport Authority, Mangalore.
He preferred an appeal to the State Transport Appellate
Tribunal. The State Transport Appellate Tribunal rejected
the appeal.
The Inter-State Transport Commission issued certain direc-
tions to the Regional Transport Authorities. These
directions were issued under section 63A(2)(c) of the Act.
These directions laid down the order of preference in the
grant of permits. The Transport Authorities kept in view
those directions The principal point for consideration in
these appeals is whether the InterState Transport Commission
was competent to do so.
Section 63A(2) of the Act deals with functions of the Inter-
State Transport Commission. One of the principal functions
is regulation of the operation of transport vehicles in an
inter-State region. Section 45 of the Act deals with
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 7
application where it is
767
proposed to use the vehicle in two or more different States.
Section 63 of the Act requires a permit granted in any one
State to be countersigned by the State Transport Authority
or the Regional Transport Authority of the other State.
Section 63 further provides that it shall not be necessary
to follow the procedure laid down in section 57 for the
grant of counter-signatures of permits, where the permits
granted in any one State are required to be countersigned by
the State Transport Authority of another State or by the
Regional Transport Authority concerned as a result of any
agreement arrived at between the States after complying with
the requirements of sub-section (3A), or for the grant of
counter-signatures of permits in pursuance of any direction
issued by the Commission under clause (c) of subsection (2)
of section 63A. Section 63 further provides that the
agreement between the States shall be published by each of
the States concerned in the Official Gazette together with a
notice of the date before which representations in
connection therewith may be submitted, and the date, not
being less than thirty days from the date of such
publication, on which the representations will be
considered.
Section 63A(2)(c) of the Act is as follows
"63A. (2) The Commission shall perform
throughout an inter-State region all or such
of the following functions as it may be
authorised to do by the Central Government by
notification in the Official Gazette,
namely:--
(c) to issue directions to the State
Transport Authorities or Regional Transport
Authorities interested regarding the grant,
revocation and suspension of permits and of
permits and of counter-signatures of permits
for the operation of transport vehicles in-
respect of any route or area common to two or
more States."
The directions issued by the inter-State Transport
Commission under section 63A (2) (c) were inter alia these :
(i) Preference will be given in the
following order in the grant of the permits.
(a) A Co-operative Society
(i) at least 50 per cent of the members of
which are not related to each other;
(ii) 75 per cent of the members of which are
also employees and
768
(iii) the main business of which is the
provision of transport services.
(b) Transport Co-operative Societies other
than the above.
(c) A limited company or a registered firm.
(d) Others.
The respondent Kamath made an application under Article 226
of the Constitution to the Mysore High Court. The res-
pondent Kamath challenged the decision of the Transport
Authorities. The main grounds for challenge were these.
The InterState Transport Commission issued directions to the
Transport Authorities indicating the order of preference for
grant of permits. The Transport Authorities became bound by
and kept in view these directions. These directions
invaded, infringed and impinged on the authority and
jurisdiction of the Transport Authorities for the grant of
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 7
perpmits. Therefore the decisions of the Transport
Authorities were vitiated.
The High Court came to the conclusion that the directions
issued by the Inter-State Transport Commission encroached on
the quasi-.judicial jurisdiction of the Regional Transport
Authority.
Civil Appeal No. 1091 of 1967 concerns the grant of inter-
State. permit under the reciprocal agreement between the
Governments of Mysore and Maharashtra. The Regional
Transport Authority, Belgaum on 20 September, 1963 invited
applications under section 57(2) of the Act from operators
holdig substantive public carrier permits issued by that
Authority for variation of the conditions of permit by the
inclusion of three new straight inter-State routes between
the places in Belgaum District, connecting with places lying
in Maharashtra State in the said permit and for grant of
counter-signature by the State Transport Authority,
Maharashtra under the reciprocal agreement between the two
States. The respondent Jaknur submitted an application.
The total number of applications was 25. The application of
respondent Jaknur was rejected. The respondent Jaknur
thereupon made an application under Article 226 of the
Constitution to the Mysore High Court. The respondent
Jaknur impeached the decision of the Transport Authority,
Belgaum on these grounds. The Inter-State Transport
Commission on 3 October, 1963 issued directions indicating
the order of preference in the matter of grant of permits.
These directions were the same as in the other appeal. The
respondent Jaknur challenged the directions as violative of
and infringing the quasi-judicial jurisdiction and authority
of the Transport Authorities. The grounds for challenge
were similar to those in Civil Appeal No. 1084 of 1967. The
contentions of the respondent Jaknur found favour with the
High Court.
769
Civil Appeal No. 1081 of 1970 concerns grant of inter-State
permit for the plying of vehicles on certain specified
routes between the State of Mysore and the State of Kerala.
The Regional Transport Authority on 26 September, 1963
called from owners of carriers who had been granted permits
applications for grant of counter-signature by the Kerala
State Transport Authority. for plying of vehicles on routes
between the States of Mysore and Kerala. There was inter-
State agreement between the two States for the plying of
such vehicles. The respondent Hegde made an application.
His application was, rejected. The principal ground for
rejection of the application was that the respondent Hegde
was not in a position to command facilities to the public.
The respondent Hegde thereupon filed an application under
Article 226 of the Constitution before the Mysore High
Court. The respondent Hegde challenged the decision of the
Transport Authority on grounds similar to those in Civil
Appeal No. 1084 of 1967, that the decision of the Transport
Authority was invaded by the direction of the Inter-State
Transport Commission indicating the order of preference.
Counsel for the appellant contended that under section
63A(2) (c) of the Act the Inter-State Transport Commission
was competent to. issue directions to the State or the
Regional Transport Authorities regarding grant of permits,
and, therefore, the indicating of order of preference in the
directions amounted only to laying down criteria to be
applied in dealing with permits.
This Court in B. Rajagopala Naidu v. State Transport Appel-
late Tribunal & Ors.(1) construed section 43A of the Motor
Vehicles Act as inserted by the Madras Amending Act 20 of
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 7
1948. Section 43A was as follows :
"The State Government may issue such orders
and directions of a general character as it
may consider necessary, in respect of any
matter relating to road transport to the State
Transport Authority or a Regional Transport
Authority; and such Transport Authority shall
give effect to all such orders and
directions."
In Naidu’s(1) case the State Government under section 43A of
the Act gave directions prescribing criteria for selection
and devised a marking system for applicants. This Court
held that the power of the State Government to issue orders
and directions in respect of any matter relating to road
transport to the State or Regional Transport Authorities did
not embrace any power of the State Government to give
directions in respect of matters which had been entrusted to
the Tribunals constituted under the Act and. which are to be
dealt with by those Authorities in quasi-judicial manner.
The words "orders and directions"
(1) [1964] 7 S.C. R.I.
770
were held in that case to be equivalent to executive acts.
Those words could cover only the field of administrative
orders and directions. This Court said that the structure
of the Act indicated that section 43A of the Act did not
include "the area which is the subject-matter of the
exercise of quasi-judicial authority by the relevant
Tribunals".
Counsel for the appellant contended that the reasoning in
Naidu’s case (supra) could not apply to the interpretation
of section 63A(2)(c) of the Act which spoke only of
"directions" and not of "orders and directions". This
contention is unsound both on logic and principle.
Section 63A of the Act speaks of various powers of the
InterState Transport Commission. First, there is power to
prepare schemes for the development, co-ordination or
regulation of the operation of transport and in particular
of goods vehicles in an inter-State region. Secondly, the
Commission has power to settle all disputes and decide all
matters on which differences of opinion arise in connection
with the development, co-ordination or regulation of the
operation of transport vehicles in an interState region.
Thirdly, the Commission has power to issue directions to the
State Transport Authorities or the Regional Transport
Authorities interested regarding the grant, revocation and
suspension of permits and ’counter-signatures of permits for
the operation of transport, vehicles in respect of any route
or area common to two or more States. Fourthly, the
Commission ha.-, power to grant, revoke or suspend any
permit or countersign any permit for the operation of any
transport vehicles in respect of such route or area common
to two or more States as may be specified in this behalf by,
the Central Government. These four powers are separate and
distinct.
It is important to notice that the Act has not conferred any
power on the Commission to make Rules. In the absence of
any power to enact subordinate legislation by way of rules
the delegation of legislative power cannot be lightly
inferred. Under section 133(1) of the Act power to make
rules is conferred on the Central Government. Further more,
the power to make rules is subject to the condition, of
rules being made after previous publication. The rules so
made are also to be published in the Official Gazette.
Again, rules made by the Central Government or the State
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 7
Government shall be laid for not less than 14 days before
Parliament or the State Legislature as the case may be,.
These safeguards are provided when power to make subordinate
legislation has been conferred on the Central Government or
the State Government.
771
The provisions, contained in section 63A(4) of the Act are
that where the Commission in the exercise of discharge of
powers and functions under section 63A(2)(c) issues
directions to the State or the Regional Transport
Authorities, those authorities shall give effect and will be
guided by such directions. Orders or directions which have
the force of law by reason of statutory power bind the
authorities by reason of sustenance from the statute. It is
only when orders of directions are in the nature of
administrative orders and directions and they do not have
the force of statutory rules that. it is not inappropriate
to provide that orders or directions shall be followed by
the authorities. This Court applied this reasoning to the
interpretation of section 43A of the Act in Naidu’s case
(supra) and held that the provisions in section 43A that the
Transport Authorities "shall give effect to all such orders
and directions" indicated that the directions were of a
general character in respect of administrative matters.
This Court in Naidu’s case (supra) held that the Transport
Authorities in dealing with applications for permits and
assessing the respective or rival claims of the parties
discharge quasijudicial functions and their orders are
quasi-judicial orders. It is, therefore essential to
fundamentals of fair-play in the administrative of law that
the decision of these Transport Authorities in the matter of
grant of permits should not be clogged by directions
indicating the order of preference as happened in the
present case.
Section 55 of the Act which deals with applications for the
public carriers permit states that other conditions being
equal an application for a public carrier’s permit from a
Co-operative Society, shall, as far as may, be given
preference over the applications for grant of permits. When
the Act provides preference to Co-operative Societies, as
far as possible, it is not appropriate to hold that the
Commission would have power to do the identical things. In
the present case, the Commission did not rest merely with
giving the first preference to Co-operative Societies. The
Commission thereafter indicated the order of preference to
Transport Co-operative Societies, Limited Companies,
Registered firms and lastly to others.
It is apparent that the order of preference indicated in the
garb of directions is an encroachment upon the judicial
discretion of the Transport Authorities in the matter of
grant of permits.
The High Court was correct in holding that the Commission
was not vested with any power to issue "directions which may
have the effect of fettering the Regional Transport
Authorities or the State Transport Authorities concerned in
performance of their quasi-judicial functions under the
provisions of the Act"’.
772
The power of the Inter-State Transport Commission under
section 63A(2)(c) of the Act to issue directions is
referable only to directions of executive and administrative
nature. The Commission has no power to entrench upon the
quasi-judicial functions of the Transport Authorities in the
matter of grant of permits. The order of the High Court in
quashing the direction is upheld.
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 7
The appeals therefore fail. The respondents did not appear.
Therefore, there will be no order as to costs.
G.C. Appeals dismissed.
773