RAMESHWAR PRASAD ETC., ETC. v. STATE OF UTTAR PRADESH & OTHERS

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 c High Court, the validity of two Notifications issued by the Gov~rn­ ment 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 :

D I. "Notification

No. 68 T/XXX·4-15-KM/79

Dated: Lucknow: January 10, 1981.

E Whereas, the Government of Uttar Pradesh is of opinion th&t 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: F 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 upp"r limit to the number of stage carri- ages for which permits may be granted.

H By Order Karnail Singh, Sachiv

• RAMESHWAR PD. v. U:P' STATE (Venkataramiah, J.) 423

A II. Notification

No. 241 T/XXX-4-15-P/79

Dated : January 23, 1981

The Governor being satisfied that it is expedient in the B 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 appli- cations for stage carriage permits, the State Transport Authority or a Regional Authority : c (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 considera· tion representations made by the local authority or police authority within whose jurisdiction any part of the proposed route or area lies; and D

(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 application> 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." G. 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 ' i1'ter alia on the ground that they were 11/tra vires the provisions H of the Act under which they had been issued. The High Court dismissed the writ petitions after ne¥ativing the contentions of thq

• 424 iUPREME COURT REPORTS (1983) 2 S,C,R.

A appellants. Aggrieved by the decision of the High Court the appel- lants have preferred thes1i 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 B 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 mo.tor. 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 c underwent major alterations in 1956 and 1969. Broadly the Act provided inter a/ia for registration of motor vehicles, licensing of drivers and conductors, grant of permits to ply public service vehicles and public earners, 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, D 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 B vehicles being within the scope of Entry 35 - mechanically pro- pelled 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 Legisla1tures with the assent of the President of India either adding to or modifying the provisions of the Act. F' Chapter IV of the Act which includes section 42 to section 68 con- tains provisions pertaining to the control of motor vehicles. Section 42 of the Act provides that no owner of a transport vehicle shall 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 counter- G signed by a Regional or State Transport Authority or the Commis- · sion 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 Ai:t as a public service vehicle or a goods vehicle. A 'public servic,e vehicle' is defined in section 2(25) of the Act as any motor vehicle used or adapted to be used for the carriage

RAMESHWAR PD. v. U.P. STATE (Venkataramiah, J,) 425

of passengers for hire or reward, and includes a motor cab, contract A ) carriage and stage carriage. Seption 2(29) of the Act states that a 'stage carriage' means a motor vehicle carrying or adapted to carry more tran six persons excluding the driver which carries passengers for hire or reward at separate fares paid by or for individual passen- gers, either for the whole journey or for stages of the journey. Section 45(1) of the Act prescribes that every application for a 8 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 constitu· tion of the Regional Transport Authorities and the State Transport c Authorities is dealt with by section 44 of the Act. A State Trans- port 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 D officials and non-officials, not being less than two, and, in the case of Regional Transport Authority such other persons (whether offi- cials or not) not being less than two, a~ 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 JOO E of 1956 read as follows :

"47. Procedure of Regional Transport Authority in considering application for stage carriage permits.-(!) A Regional Transport Authority shall, in considering an application for a stage carriage permit, have regard to the F -' following matters, namely :

(a) the interest of tbe public geuerally;

(b) the advantages to the public of the service to be pro· vided, including the saving of time likely to be effected G thereby and any convenience arising from journeys not being broken;

(c) the adequacy of other passenger transport services op~rating or likely to operate i~ th,e n~a,y future,

426 SUPREME COURT llBPOllTS (1983) 2 S.C.ll'.

A wh~ther 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; B (e) the operation by the applicant of other transport services, including those in respect of which applica- tions from him for permits are pending;

(f) the condition of the roads included in the proposed .-+' route or area; c and shall also take into consideration any representa- tions made by persons already providing passenger transport facilities by any means along or near the proposed route or area, or by any association represent- ing persons interested in the provision of road trans- D 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 appli- cation for a stage carriage permit from a cooperative society registered or deemed to have been registered under any enactment in for,~e 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 time- table furnished that the provisions of this Act relating to the speed at which vehicles may be driven are likely to be contravened : G 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.

H (3) A Regional Transport Authority may, having regard to the matters mentioned in sub-section (1), limit th~

itAMESHWAR PD· v. U.P ••STATE (Venkataramiah, J.) 427 A 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 B 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 per- mit 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 c 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 D 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 bearing at which the appli- cant and the persons making the representations shall have an oppor- tunity of being heard either in person or by a duly authorised repre- I sentative. 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 ap~eal before the State Transport Appellate Tribunal which should consist of a wholetime judicial officer not below the rank of a District Judge. An order ofa Regional ' Transport Authority or of a State Transport Authority against which no appeal can be filed is subject to revision by the State Transport App~llate Tribunal under section 64-A of the Act. Sub- section ( !) of section 43 of the Act which coofere power on the G State Government to control transport reads thus :

"43. Power to State Government to control transpo~t-

H . (I) A State Government having regard to :

428 SUPRBMB COURT REPORTS [1983) 2 S.C.R. A (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, B (c) the desirability of preventing the deterioration of the road system, and

(d) the desirability of preventing uneconomic com- c petition 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 D carriages and public carriers; ,_ (ii) regarding the prohibition or restriction, sub- ject to such conditions as may be specified in the directions, of the conveying of long- distance goods traffic generally, or of specifi- I ed 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 pur- suance of the provisions of sub-section (1-D) of sectio11 68-fl, 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;

G (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 Govern- ment or any other State Government or the H Government of any other country relating to the regulation of motor. transport generally, ·

RAMESHWAR PD. v. u.P. STATE Wenkataramiah, J.) 429 and in particular to its coordination with A other means of transport and the conveying of Jong distance goods traffic :

Provided that no such notification shall be issued unless a draft of the proposed directions is published in the B 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 objec- tion or suggestion which may be received has, in consulta- tion with the State Transport Authority, been considered after giving the representatives of the interests affected an C 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 D 43-A which was newly introduced by the said amending U.P. Act read as under :

"43-A. (I) The State Government may issue; ~uch directions of a general character as it may consider neces- sary or expedient in the public interest in respect of any E matter relating to road transport to the State Transport Authority or to any Regional Transport Author)ty, and such Transport Authority shall give effect to all such directions.

(2) Without prejudice to the generality of the fore- F going power, where ·the State Government is of opinion - that it is in the public interest to grant stage carriage per- mits (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- G 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 applica- , tions, appeals and revisions in that behalf (including any pending applications, appeals and revisions) as if - H

SUPREME COURT REPORTS (1983] 2 s.c.R.

• (a) in section 47 - (i) • for sub-section (I) the following sub-sections were substituted :

(ii) A Regional Transport Authority ·shall in consi· B dering 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 con- venience 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 represent&· lion made by any local authority or police authority within whose jurisdiction any part of the proposed route or area lies ; and

(ii) sub-section (3) were omittted"

F 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 aild Reasons attached to the relevant U.P. Bill which read as follows :

G "Objects and Reasons-Operators engage in the race for securing permits for stage carriage on non-nation- alised routes. Due to limitation OD the number of permits this business is controlled by a few persons. Complaints in this regard are made every other day. Therefore, with a H view to making it easier to secure permits in respect of non, nationalised routes and to introducing simplicity in pro- cedure and to providing greater employment and securing

l!.AMBSHWAR PD. v. U.P. STATE (Venkataramfah, J.) 431

equitable distribution thereof it was considered necessary to amend sections 47, 50, 55 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. pro- mulgated. This Bill is introduced to replace the said Ordinance.'' B

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 whi.ch 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 D 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 aJl eligible applicants."

The validity of section 43-A of the Act introduced · by the U. P. Legislature and of the Notification dated March 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 judg- ment in Hans Raj Kehar & Ors. v. The State of U.P. & Ors.(') G which was delivered on December 4, 1974. Within about three and half years from the date of the above said notification the Govern- ment of Uttar Pradesh realised that it was necessary to review the ., whole question of issuing permits to all eligible applicants. Accor· H (I) [197SJ 2 S.C.R. 916.

431 SUPREME COURT REPORTS {!983) 2 S.C.l\

A dingly the State Government issued a Notification on September 24, I 975 which ran as follows :

"Whereas, in exercise of the power conferred by Section 43-A of the Motor Vehicles Act, 1939 the State Govern· ment was by notification No. 1188-T/XXX-4, dated March B 30, 1972, pleased to direct that stage carriage permits (except in respect of routes or areas aforesaid) contract carriage permits and public carrieir permits shall be granted accord· ing to the provisions of the said Act to all eligible applicants : c 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:

D (a) Preventing unproductive expenditure and under utiliza· tion 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. E (c) Facilitating long term planning of passenger road A - 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 F 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 G Governor is pleased to direct that :

I. The Notification No. 1198 T/XXX-4, dated 30th · March, 1972 be and ;_is hereby rescinded with immediate effect. JI

llAMBSHWAR PD. v. U.P. STATB (Venkataramiah, J,) 433

2Copy pinpoint2. The consideration of applications for stage carri- A age permits pending with any Transport Authority shall stand postponed until further directions are issued in this behalf by the State Government.

3Copy pinpoint3. No fresh applications for such permits shall be B 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 c under utilisation of capital and fuel, (ii) to prevent elimination of small operators due to unfair competition res!llting 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 D 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:. lil "43·A. Power of State Government to issue directions to Transport Authorities-()) The State Government may issue such directions of a general character as it may consi- der "necessary or expedient in the public interest in respect of any matter relating to road transport to the State Trans- port Authority or to any Regional Transport Authority, and such Transport Authority shall giv~ effect to all such directions.

(2) Without prejudice to the generality of the provi- sions of sub-section (1) such directions may be given in res· G pect of any of the following matters, namely :

(a) the n~mber of stage carriage or contract carriage permits that may be granted in \respect of any route or area. H

434 SUPilEMB COURT REl'ORTS [1983} 2 s.c.a. A ' (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 unempl.oyed persons, such persons hol- ding driving licences as are members of cooperative societies formed for passenger transport business, 8 persons belonging to the Scheduled castes and Scheduled Tribes.

(c) the procedure for grant of permits, and for selec- tion from among the applicants, including selection c by drawing of lots from among persons belonging to the same category.

(3) Any direction under sub-section (l) may be issued with retrospective effect. D (4) Where any direction is issued under sub-section (l) to any Transport Authority, then any appeal or revision pending before the State Transport Appellate Tribunal shall also be decided in su·ch manner as to give effect to such directions. E (5) Where any direction is issued under sub-section (I) with retrospective effect then .A -

(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 G Court earlier with a view to enabling such autho- rity .to comply with such direction.

'(6) The provisions· of this section shall have effect not- withstanding anything contained in sections 47, 50 and 57."

ff The policy behind the above amendment was stated in the Statement of Objects and Reasons placed befor.e the State Legis- lature as follows :

RAMESHWAR PD. v. U.P. STATE (Venkataramiah, J.) 435

"(5) In 1972 the State Government had accepted a 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 competi- B tion and to removing difficulties in the implementation of long. term plans pertaining to passenger road transport ser· vices. 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 ma{ be granted in respect of any route or area, the preference to be given to specially c deserving categories and the procedure for grant of per· mits."

Pursuant to the said amended section 43-A of the Act, the Government of Uttar Pradesh issued a Notification containing direc· D tions on March 12, 1976 in the following terms :

"Whereas, in exercise of the powers conferred by sec- tion 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 considera- tion of applications for permits by any transport authority in respect of non-notified routes until further directions in · this behalf of the State Government. F Now, therefore, in exercise of the powers conferred by the sai.d 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 (I) of section 47 of the M.V. Act, ensure that the operation of !'1• total number of stage carriages on any route, takin9

436 SUPREME COURT REPORTS (1983] 2 S,C.R.

A into consideration the existing as well as the additional per- mits proposed to be iissued, 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 B principle to be foJ!owed irn determining the number of permits that could be issued and reservation of permits for operators displaced • by nationalisation, educated unemployed, mem"ers belonging to the Scheduled Castes, the Scheduled Tribes and other backward classes, unemployed army drivers and cooperative societies.

c These directions were superseded by the issue of a fresh noti- fication 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 refer- D red to above Parliament amended the Act by enacting 1he Motor Vehicles (Amendment) Act, 1978 (Act 47 of 1978) which inter a/ia amended the proviso to sub section (I) of section 47 of the Act and inserted sub·sections (IA) to (IH) in that section. After this amend- ment, the proviso to sub·section (!J of section 47 of the Act reads thus: E "47. (!) ...................... .

Provided that other conditions being equal, an appli- cation 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 applica- tion 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 indivi- dual owners." G The new sub-sections {IA) to (IH) of section 47 of the Act read:

RAMESBWAR PD. v. U.P. STATE (Venkataramlah, J.) 437 A (I A) 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 mean- B ings respectively assigned to them in Article 366 of the Constitution.

(IB) The reservation of permits under sub·section (IA) shall be in th.e same ratio as in the case of appointments made by direct recruitment to public services in the State. c (IC) 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:- D (a) reserve in that State such percentage of stage car- riage permits, as may be prescribed, for persons belonging tQ. economically weaker sections of the community; or

(b) notwithstanding anything contained in the proviso B to sub-section (I), 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 th'e prescribed date:-

(a) the annual income of such person together with the annual income, if any, of the members of bis family; or G. " (b) the extent of land (whether in one class or in diffe- • 1 rent classes), held by such· person together with that, if any, held by the members of his · fa~ily; or H

438 SUPRBI03 COURT REPORTS [1983] 2 s.c.R.

(c) the annual income and the extent of land afore- said, does, or do not exceed such limit as may be prescribed.

Explanation 11.-For the purposes ·of Explanation I, "family'', in relation to an individual, means the wife or B husband, as the case may be, of such- individual and the minor children of such individual.

, (ID) The number of permits reserved under sub-section (I BJ and clause (a) of sub-section (IC), shall not exceed c fifty per cent of the total number of stage carriage permits granted during a calendar year.

(IE) In giving effect to the provisions of sub-section (IB) and· clause (a) of sub-section (IC) the Regional Transport Authority or the State Transport Authority may, D if it considers necessary or expedient so to do, group the various routes within its jurisdiction.

(IF) Where any stage carriage permit is to be granted from the quota reserved under sub-section (IB) or clause(a) of sub-section (IC) 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 F 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

G 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 cate· gory to which the largest number of members of the co- ' ) 8 operative society, or as the case may be, partners of the firm belong :

RAMBSHWAR . . PD. v. U.P. STATE (Venkataramiah, J.) ~ 439

Provided further that where no reservation _has been made in the State for economically' weaker sections of the- commu~ity Under clause (a) of sub-section (i C), 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 ihe' Scheduled Castes B or the Scheduled Tribes or partly to the Scheduled Castes and partly -to. the Scheduled Tribes and the permit to such socieiy ~r firm· shall be granted only from the quota reserved for the Scheduled Castes or the Scheduled Tribes according as to whether the larger nu_mb~r of the members of tije co-operative society, or partners of the firm, belong c ·to the Scheduled Castes or the Scheduled Tribes,

(I.(}) The circumstances under Which, t' e manner in which, and the extent to- which, reservation under sub· section (IA) and clause (a) of sub-section (IC) may be carried forward shall be such as niay be prescribed. D

_,(!HY Notwithstanding anything contained in this _ - section, an application for siage Qarriage jler::iit from a siat; transpurt undertaki~g ·ror operating in any inter-State route shall be gi;veii pre~erence over all other applications : E Provided that the authority shall not grant a permit _ under this sub-section unless it is satisfied ~hat the State : transport undertaking would be able to operat~ in the inter-State route witho11t detriment to its respol)sibility for providing efficient and adequate rqad··_transport service in any notified area or notified route as is referred to in sub' -- : section (3) of section 68_D where lhe undertaking ~-, ' . operates ·. the service. _ '

Explanation.-for the purposes -of this sub-sectiop, ' 'inter-State route' means any route lying, -conliiluously in G ,, .t_wo or more States,",_ ,. as By the amendment of section 47- of the Act stated abovr, ' Parliament directed, that the Regional-·Transport Authority while considering applica lions for stage carriage permits should, provided _that other conditions b~in~ equal, give rir~fereqce to an application

., 440 SU~RBMB COURT REPORTS . (1983) 2 S,C.R. A from a person who has a valid licence for driving. transport vehicles . ov!r applica1ions from ind.ividual owners. Parliament also provided for reservation of certain percentage of permits for stage carriages in favour of perso.ns belonging "to the Scheduled Ca8'1es and the Scheduled Tribes in the same ratio as in the case of appointments ma<)e by direct recruitment by a State Government to public servi~es B in that State. Since it was considered necessary to promote the well being of economically weaker sections of the community, the · Stat.e 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 c -or to give preference to them in the 'prescribed manner. It was, • however, provided that the nurnber of permits reserved under section. '47(1B) and (IC)(a) of the Act should not exceed fifty per cent of the total number of stage carriage permits granted in a cralendar year. It was also provided that if a State.Transport' Undertaking applied for a stage carriage permit operating in 3ny inter-State route, such D application should be given preference over all other applications . ' provided the authority was satisfied that the Undertaking would be able to ·operate in the inter.State route without detriment to its res)lonsibility 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 t.he very same amending Act of 1978 ·- Parliament also amended section ,68 of (he Act by inserting clauses (ci) , (cii), (ciii) and (civ) enabling . the State Governments to frame rules for implementing sub-sections (IA) to (IH) of section 47 of the Act. The above said ·amendments. made to sections 47 and 68 came --4- .· into force on January 16, 1979. It is conceded by the learned Attar· ney General.who. appeared for the. State Gove(l)ment that these amendments which were made . by Parliament would have an over: riding effect on section 43-A of the Act introduced earlier by the State Legislature a'.nd that section 43-A should be read subject to tho.se later amendments made by· Parliament. Curiously the State Government-issued on January. 10, 1981 and January 23, 1981 the G impugned notificaiions 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 · H the Act) to all eligible applicants and that there should be no upper ~limit to the number of sta{le carria$es for; which permits might be

RAMESHWAR PD. v. u.p, STATE (Venkataramiah, J.) 4 41

A 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 re gard only to matters referred to in clauses (a), (b), (d) and {f) of sub-section ll) of section 47 of the Act and should also take into consideration re­ presentation made by the local authority or police authority within B 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 c representation was received within the prescribe_ d period of time, it \_Vould 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 D Government ignored, first, the legislative policy underlying the Uttar Pradesh Act 15 of 1976 by which the new sub-section(�) of section 43-A was en::cted 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 . E year l 972 directing :he issue of bus permits liberally in favour of all eligible applicants which had resulted in in vestment 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 F policy governing the issue of permits introduced by Parliament by amending s�ction 47 of the Act. It was argued on behalf of the State Government before the High Court that the State Government bad 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 G attached to the Bill which was ultimately enacted as the U.P. Act 15 of 1976 conld not over-ride the clear provisions of section 43-A as amended by that Act. The High Court upheld the notification dated J�nuary JO, 1981 and further observed that since the schemes of grant of free permits bad been upheld by it 'the State Govern­ H m�I h?.d the power to prescribe t11e procedure to be follow�d in

p. 442 Copy page pinpoint

granting the same which has been provided for by the Notification dated January 23, 1981'. ReP,elling the contention of the writ peti­ tioners 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 questiqn of reservation, however, arises only in those cases where the seats or articles are li mited for dis­ tribution or allotment but where there is no limit or no c fixed number, the question of reservation will not arise. ' rn that event, every body 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 D 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 appolntment in the Government service. If today government services are availa . ble 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 H to1A lm11ugMd notit\catious did nQt follow the procedure prescribeq

. . RAMESHWAR PD. v. ti.P. STATE (Venkataramiah, l) 443

by sub-section (2) of section 43-A as it•is now in force in the State of A Uttar Pradesh, they could lie sustained under sub-sec. (1) of section 43·A which authorised the State Government to issue such pfrecti_ons . of a general character as it might consider necessary or expedient in the public interest in respect of any matter relating to road.trans-. port to the State Transport Authority or to the Regional Transport Authority and which required such authority to give-elfect to any B such directions. The High Co.urt al~o relied upon t4e 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 arid benefit of the travelling public. c . , We may here state that any observations made in Hans Raj Kehar',s case (supra) would be inapplicable so far as these cases 'pr~s.en!J,J!l before us are concerned. In that case the Court was boncerned 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 ihe generality. of the \ power c-Ontained in section 43·A(I). of the Act where the. State Government was of opinidn that it was in public interest to grant stage carriage permits (except) in re~pect of routes or areas for which · schemes have been published under sectiOn ~8 (C) or.~contract carriage permits or public carrier permits• to all eligible applicants it may E issue appropriate directions as· stated therein. That S'ub·section . . contained a clear legislative policy which considered that theiii'. could. be no public prejµdice if iii! eligible applicants lferC.grant~d permits. Without saying anything more on the point, itr .may be stated that whitever this Court may have observed while consider· iDg tliat provision WOUid Dot aJYply DOW as ther~ is a clear depar· ., ture made by the Legislature from that policy when it,nacted th~. · ·' new sub<sectjon (2) of section 43·A. _ In the face of this 'l\tnendment by which the former sub-section (2) of section 43·A which ·specifi· cally authorised he State Government when it was ~tisfied that it was necessary to do so in· lhe- public. interest to issue directions to the 'Transport i\llthorities to grant permits 1 to .. all'·. eligible applicants was deliberately taken 11way by the. State Legislature, the High Court. was wrong in holding that such power wa~ stin 11vailable under , s11b·section (J) of section 43·A. " of the Act which was wiqely .worded. The High Coutt shut its eyes'to the realities of the situation when it observed that in

p. 444 Copy page pinpoint

A this case the contents of the Statement of Objects and Reasons 'were . irrelevant as the provisions of section 43-A (I) were very clear. Even . without the aii! of the Statement of Objects and Reasons it ])as 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 B ' expressed itself against the policy of granting permits to all eligible ariplicants without any consideq1tion to the needs of any particular loc.ality or route or to the qualificatio~s of applicants. It is a well settled rule of construction of statutes that whenever a court is calle'd upon to interpret an amended provision it has to bear in mind the history of the provision, the mischief which the Legis- c lature 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 (!) of section 43~A of the Act did ·not comprehend within its scope the power to issue directions for issuing permits to all eligible applicants without any sort of restriction rel~vant to the scheme otthe Act. What does seotion 43-A(lj after all say ? It says that_ the State · Government may issue such directions of a general character as it may consicfer necessary in the public interest. What is the mean- ing of the term 'public interest'? In the.context of the Act, it takes within its _fold several factors snch as, the maximum nnmber of a . permits that may be issued on rollte or in any area having regard . E to the needs and convenience ~ the travelling public, the non- availability of sufficient number of stage carriage services in other : tbutes or areas which may be fa need of running of additional servi- ces, the problems of law and order, availability of fuel, problems arising out of 11tmospheric pollution caused by a' large number of motor vehicles operating in anyroute or area, the condition of roads and· bridges on the routes, uneconomic running of stage carriage services leading to elimination of small operators and employment of more c~ital than necessary in any sector leading to starvation - of capital investment in other sect.ors etc. Public interest under the Act: does not mean the interest of the operators or of the passen· gers only. We have to bear in mind that like every ~ther economic G activity the running: of stage carriage service is an activity which in· volve~ use of scarce or limited productive resources. Motor Transport involves a huge capital investment on motor vehicles, training of competent drivers a!ld mechanics establishment of workshops, cons- truction of safe roads and bridges: deployment of' sufficient number of H

kAMESHWAR Pb.~. t11P. STATE (Venkaiaramiah, J.). 44S

""' policemen to prc&Fve Jaw and order and several other matters. To say that larger. the number of stage carriages· in any route or.area A ' more convenient it would be to .the members of the public is an over \ simplification of a problem with myriad facts affecting the general . pµblic. lf we run through the various provisions Of the Act it becomes cle!ir how much attpntion is given by it to various matters affecting public intere'st. There!are provisions relating to licensing of drivers B on the basis of thei~ competenceflicensing of condnctors; specifica· . lions to which ,the motor vehicles should conform,, coordination of 't road and rail ·transport, prevention of deterioration ·ofl 'the ·road . system.-prevc!n~op of uneconomic competition among motor vehicles, : fixation of re'asonabl~. fare, compliance by motor vehicles with the :';. '';~ prescribed time. table; construction of bus st:fods with. neces,ary c }-(

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 U> all parts of the country. Any direction ·given by the State Gover11ment under ·section 43·A of the.Act D should, therefore, be in conformity with all matters regarding which . the statute has mad~ provision. . In this situation '.to say that any number of permits can be issued to any efigible operator without any upper limit _is to overstep the limits of delegation c:>f statutory ·power and to. make a ·mockery of an ·important eco,nomic ac1ivity like the motor transport. E '\ ' 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-si:ction (I) to section 47 and in ~uh-sections (IA) to (lH) of section 47 have not been contravened· as there is no. restriction on the number of, permits to be issued. F The observation of the High Court that preferences. )lave· to be - 1 shown and reservations have to bimade .only when there js 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 provi· sion really .shocks us .. The High Court erred in not noticing that it G was dealing with a vital economic activity which could be carried on at a huge cost jloth to the' operator and to the Government and that by issuing the notification containing a direction ·io the Transport Authorities. to issue lii;nitless number of permits, the H

446 ~\J~REME cdultt RSPoRts [1~83) i S.C.R.

-~-~ ... State Government had attempted to circumvent sub-sections (I} and.(IA) to (lH) of section 47 of the Act. Preferences and reservations have value only when there ls a limit on '!he number of permits to be· issued and in the context of the Act tlicre should necessarily be a limit on the issue of permits to operate motor vehicles in respect of any -·route or area. By the B method adopted by it the State Government h~s virtually allowed the .rich. and well-to~do businessman who can bear the ·loss for some time to introduce ' . any number . of vehicle~ on a .route or in any are11 until all the small operators who also may take the permits to leave the field owing to the i11evitable Joss that; ensues by the operaiion of an unlimited number of vehicles. The learned Attorney deneral while conceding' that ·the. amendment made in 1978 to section 47 of the Act-should prevail contended that they bad 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- D section (f} and sub-sections (IA) to (IH) of sectio11 47. It has failed to comply with the duty imposed on it by those provi· sions.

We a.re ofthe view that the two notifications are clearly outside the scope of the Act. The first notification which directs that all. eli- I gible' applicants shall be granted permits and that there shall be no upper limii to the ·number of permits to be issued for stage carriages and the secon.d notification which says that the Transport Authorities shall have regard only to matters referred to in clauses (a), Sb), ..J '. . (d) and (f) of sub-section (I) of section 47 of the Act and thereby precludes the Transport Authorities to_ take into consideration matters contained in the Noviso to section 47(1) and in sub-section {IA) to {IH) of section 47 of the Act are ultra vire3 the Act and they are liable_ to be struck _down. '

G , We, therefore, allow these appeals, sef aside the judgment of the High Court in each of these cases and declare that the Notifica- tion No. 68 T/XXX-4-15 KM/79 dated January I0,1981 and the Notification No. 241 T/XXX-4-15-P/79 dated January 23,1981 issued H by the Government of the State· of Uttar Pradesh under section

. \ . . RAllESHWAR PD. v. U.P. STATE (Venkatai:amiah, J.) 447 ,.- .1,

43'A ()f the.Act are ultra Vires and, therefore,. void and ineffec- A tive.

'" '1n the circum:stances of the case, there will be 'no· order as to cos'fs:

H;L,C. Appeals allowed. B