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CASE NO.:

Appeal (civil) 3700-3712 of 2001

PETITIONER:

A.P.S.R.T.C.

RESPONDENT:

Regional Transport Authority and Ors.

DATE OF JUDGMENT: 28/04/2005

BENCH:

N. Santosh Hegde & K.G.Balakrishnan & D.M. Dharmadhikari & Arun Kumar & B.N. Srikrishna

JUDGMENT:

JUDGMENT

Delivered by:

ARUN KUMAR, J.,

ARUN KUMAR, J.

These appeals along with connected appeals have been placed before the

Constitution Bench in view of an order of reference made by a Bench of

three Hon'ble Judges of this Court. For appreciating the point regarding

which reference has been made, it is necessary to state a few facts. The

appellant is a State Road Transport Corporation of the State of Andhra

Pradesh (hereinafter referred to as the `Corporation'). In public interest,

the Corporation framed Schemes for providing transport services in

different regions of the State. We are presently concerned with the West

Godavari District of the State. The Schemes framed by the Corporation were

subsequently approved by the State Government and notified in the official

Gazette. The scheme which is subject-matter of the present appeals cover

the route D.N.R. College (Bhimavaram) to Srinvavruksham. The route falls

within the mofussil service which was nationalized under the Scheme. The

effect of nationalization of the service is that all private operators on

the entire length of the service and overlapping routes are completely

excluded. No private operator can get permit to ply transport vehicles for

hire on routes falling within the service. However, the Scheme contains

five exceptions for which permits can be issued to private operators. One

of the exceptions is in favour of "the existing town services operating on

the notified routes". The main issue involved in these appeals is as to

whether under the said exception permits can be issued in favour of fresh

applicants for permits for town services routes falling on or overlapping

with the nationalised mofussil service.

Respondent No. 3 who is not an existing town service operator, submitted an

application to the Regional Transport Authority, West Godavari for

permanent stage carriage permit on the town service route. The appellant -

Corporation objected to the grant of permit on the ground that permit was

sought on a portion of notified route under the Scheme. The Regional

Transport Authority accepted the objection and rejected the application of

respondent No. 3 for grant of permit. Aggrieved by the said order

respondent No. 3 filed an appeal before the State Transport Appellate

Tribunal. The tribunal allowed the appeal and directed that a permit be

granted to respondent No. 3 on the town service route for which he had

applied. The appellant - Corporation challenged the said order by filing a

Writ Petition in the Andhra Pradesh High Court. The High Court constituted

a Full Bench to consider the issue in view of divergence of opinion between

different Benches of the court on the issue. The Full Bench of the High

Court took the view that town service routes were not automatically covered

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under the Scheme which was specifically for mofussil service. Therefore, it

was held that the Regional Transport Authority could grant permit on the

town service route. The Writ Petiton filed by the appellant - Corporation

was dismissed. The present appeals are directed against the said judgment

of the Full Bench.

The appeals raise two main issues :

(1) The Scheme covers mofussil service and provides for total exclusion

of private operators including operators on town service routes. Even

routes overlapping with the notified mofussil service stood covered. In

view of this is it permissible for the Regional Transport Authority to

grant permits to private operators on the notified town service routes or

portions thereof ?

(2) Exception 2 in the Note appended to the Scheme is : " the existing

town services operating on the notified routes". Does the exception relate

only to existing town services operating on the notified routes meaning

thereby that fresh or future applicants for grant of permit are excluded ?

When the appeals came up for hearing before a three Judge Bench of this

court, prima facie it was felt that there was merit in the contention that

only existing operators on town services notified routes could be issued

permits under the exception. But a judgment of this court in Andhra Pradesh

State Road Transport Corporation v. State Transport Appellate Tribunal and

Ors., [1998] 7 SCC 353 was brought to the notice of the Bench to support a

contrary view that under exception No. 2, it is permissible to grant

permits on town service routes to fresh or future operators. This led to a

reference being made to a larger Bench. Hence the matter has been placed

before this Bench.

At the outset, the learned counsel for the appellant - Corporation

submitted that the judgment in Andhra Pradesh State Transport Corporation

v. State Transport Appellate Tribunal and Ors., [1998] 7 SCC 353 cannot be

said to be an authority for the proposition that under exception No. 2 to

the Scheme future applicants for permits can be granted permits for the

town services on notified routes. He has taken us through the said judgment

and with due respect to the referring Bench we find merit in the submission

of the learned counsel for the appellant. The judgment in APSRTC Case is on

a totally different aspect, that is, interpretation of Rule 258 of the

Andhra Pradesh Motor Vehicles Rules. It has no bearing on the controversy

involved in the present case. The contention raised on behalf of the State

Transport Corporation in that case was that permission of the Transport

Commissioner was a condition precedent for filing an application for route

permit when there was a Scheme governing the route. This argument was

raised on the basis of Rule 258 (2) of the Andhra Pradesh Motor Vehicles

Rules, 1989. The court held that permission of the Transport Commissioner

was necessary in view of Rule 258(2) before applying for a route covered

under the Scheme. The second question involved in the case was regarding

the extent of powers of the Transport Commissioner under Rule 258 (2). This

Court answered the second question holding that the powers were not

unlimited and had to be exercised as per the Scheme. Now that we have heard

the learned counsel for the parties at length, we propose to dispose of the

appeals on merits.

Section 99 of the Motor Vehicles Act, 1988 (hereinafter referred to as the

`the Act') envisages preparation of schemes by the State Government for

rendering transport services in a State. First proposals are to be

formulated regarding a scheme, i.e., regarding services proposed to be

rendered in the area or the route proposed to be covered. Such a proposal

is to be published in the official gazette as well as in a regional

language newspaper circulated in the area. Under Section 100 any person is

authorised to file objections against the proposal within 30 days of its

publication. The State Government may give opportunity to the objector or

his representative to appear in person for being heard regarding objections

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and after considering the objections the proposal may be finalised.

Thereafter, it is to be published in the official gazette by the State

Government and thereupon it becomes final as a Scheme. Section 102 contains

provision regarding modification of an approved Scheme in public interest.

Section 103 deals with issue of permits as per the Scheme. Section 104

deals with restrictions on grant of permit in respect of notified area or

notified route. It specifically prohibits the Regional Transport Authority

from granting any permit except in accordance with the provisions of the

Scheme. It also envisages issuance of temporary permits during a period

when a regular permit is not issued. Section 88(8) authorises the Regional

Transport authority to grant special permits for convenience of public.

Such special permits are meant to cater to special requirements like

transportation of marriage parties, stage carriages used for purposes of

taking persons for pilgrimage etc. In the present case, it is not in

dispute that there is a valid Scheme with respect to the mofussil service

for the particular region of the State. It is also not disputed that a

permit can be issued only as per the approved Scheme and not otherwise. The

relevant provisions of the Scheme are reproduced as under :

SCHEME

1...................

2.....................

3. Whether town service or mofussil service or both.

4. Maximum and minimum number of vehicles proposed to be operated on each

route by the State Transport Undertaking to the exclusion, complete or

partial or otherwise of other persons.

(a)............

(b)............

(c).............

(d).............

5. Maximum and minimum number of trips proposed to be performed on each

route by the State Transport Undertaking to the exclusion, complete or

partial or otherwise of other persons.

(a)................

(b)................

6..................

7.................

8.....................

9.....................

10....................

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NOTE : This Scheme shall not affect :

1. The State Transport Undertaking.

2. The existing town services operating on the notified routes.

3. The holders of stage carriage permits for a distance not exceeding

5 Kms on the notified route.

4. The existing services operating on the Inter-state routes

incorporated in the concluded inter-state agreement u/s 63 (3-B) of M.V.

Act, 1939, and

5. The services opeated by Devasthanams."

The learned counsel for the appellant submitted that the Scheme covers the

entire mofussil service which means that all the routes falling within the

particular mofussil service are covered under the Scheme. This will cover

the overlapping routes and the town service routes. Unless it is so, the

object of the Scheme, which is to provide cheap and efficient service to

the commuters, will stand defeated. `Service' is a word having wider

connotation as compared to the word `route'. Route may mean a particular

route while service would include all the routes in a particular mofussil.

When the entire service in the mofussil area is nationalized, all the

routes falling within the mofussil automatically get nationalized, which

will cover the town service routes also. As a result of nationalisation of

the service no permits can be issued for operating transport vehicles in

favour of private operators. He has drawn our attention to the definition

of the word `permit' contained in sub-section (31) of Section 2 of the Act

according to which permit means a permit issued by a State or Regional

Transport Authority or authority prescribed in this behalf under this Act

authorising the use of motor vehicle as a transport vehicle. In view of

this definition of the word `permit', it is submitted, it means that no one

can ply a motor vehicle as a transport vehicle without a valid permit. The

net effect of nationalisation of the service is that the private operators

become disentitled to obtain permits for plying vehicles for hire.

At this stage, we may also quote the definition of the word `route' and

`stage carriage' as contained in sub-sections (38) and (40) of Section 2 of

the Act.

"Section 2 :

***************

Sub-section (38) : "route" means a line of travel which specifies the

highway which may be traversed by a motor vehicle between one terminus and

another.

(39)......................

(40) "stage carriage" means a motor vehicle constructed or adapted to carry

more than six passengers excluding the driver for hire or reward at

separate fares paid by or for individual passengers, either for the whole

journey or for stages of the journey."

Respondent No. 3 applied for permit with respect to a town service route

from D.N.R. College (Bhimavaram) to Srinvavruksham. The application of

respondent No. 3 was rejected by the Regional Transport Authority.

According to respondent No. 3 he fell within exception No. 2 to the note

appended to the Scheme and, therefore, he was entitled to get a permit for

the town service route. The learned counsel appearing for respondent No. 3

submits that the Scheme applies only to mofussil service and town service

routes are not affected by the Scheme. Respondent No. 3 staked his claim to

the permit on two grounds :

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(1) that the town service routes are not covered under the Scheme and

(2) the exception regarding town service route will include not only

the existing operators but also those who apply for fresh permits.

Regarding the first point urged on behalf of respondent No. 3, one needs to

consider the Scheme, particularly clauses 3, 4 and 5 of the Scheme, which

have been quoted hereinbefore. Under clause 3, the entire mofussil service

is covered. "Service", as already stated, is a term of wider connotation.

Then, with reference to clauses 4 and 5 of the Scheme, it would be seen

that there is complete exclusion of all other persons holding stage

carriage permits on the proposed route as well as those holding stage

carriage permits on the routes overlapping completely or partially with the

proposed route. Likewise, clause 5, dealing with number of trips to be

performed on each route by State Transport Undertaking to the exclusion of

other persons, provides for complete exclusion of others holding stage

carriage permits on the overlapping routes as well. The only exception has

been made with respect to the five categories mentioned in the note to the

Scheme.

The object of the Scheme appears to be to nationalise the entire service.

Through nationalisation of the service effort is to provide better service

to the commuters at cheaper cost. One of the exceptions to the Scheme is

for existing town services operating on the notified routes. The reason for

which appears to be that the existing town services need not be disturbed

so that the commuters do not suffer.

The question for consideration is, whether mofussil service will cover town

services operating on notified routes? A combined reading of clauses 3, 4,

and 5 of the Scheme reproduced hereinbefore shows that the Scheme excludes

all private operators. These clauses provide for complete exclusion of all

other persons holding stage carriage permits. There is no scope for any

doubt. All private operators including those operating on town service

routes are excluded, subject, however, to the exceptions. Looking at the

issue from a different angle, it will be seen that if the existing town

services operating on the notified routes were not to be affected by the

Scheme, there was no need for the exception. This also answers the argument

that since town service has not been mentioned in clause 3 of the Scheme,

the town service has been left free. Clauses 3, 4 and 5 have to be read

together to find out the real purport of the Scheme.

Next it was contended on behalf of respondent No. 3 that the second

exception covers all town services and should not be confined to existing

services. This means fresh applicants for town service routes should be

given permits. In our view this submission is not tenable in view of clear

wordings of the exception. The exception refers to existing town services

operating on notified routes. The words `existing' and `operating' have to

be given their due meaning. These words make it clear that the exception

applies to only those who were already operating the service and not to

future applicants like respondent No. 3. To illustrate, reference may be

made to exception No. 2 contained in the Scheme which was subject matter of

APSRTC v. State Transport Appellate Tribunal and Ors., [1998] 7 SCC 353 .

There the exception is for "the holders of stage carriage permits in

respect of town services." Expression "holders of stage carriage permits"

has a wider connotation. Even future applicants can be said to be holders

of permits and thus eligible for grant of permits. In contrast the

exception to the Scheme in the present case refers to existing town

services operators only. In C. Kasturi and Ors. v. Secretary, Regional

Transport Authority and Anr., [1996] 8 SCC 314 the exception runs as under

:

"1. ............

2. The holders of the existing stage carriage permits in respect of

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town service routes.

3. The holders of the future stage carriage permits in respect of town

service routes having an over-lapping of not more than 8 Kms on the

notified routes.

4. ...........

5. ............."

Thus the exception clearly spells out that existing as well as future

operators will be eligible for permits. By referring to the language used

in different schemes what we want to show is that the framers of the

schemes are fully aware of what they want and they specify clearly whatever

is intended in a particular Scheme. Wherever they want to include future

applicants, they say so. The exceptions are worded accordingly. In the

present case, the exception applies only in case of existing operators on

town services. Thus, we find no merit in the contention of respondent No. 3

that he is entitled to a permit by virtue of the exception No. 2 contained

in the relevant Scheme. This also answers the argument that the Scheme is

lacking in clarity.

Mr. M.N. Rao, learned senior counsel appearing for the future applicants

for town service routes submitted that if future applicants are to be

excluded, 1998 (7) SCC 353 [Andhra Pradesh S.R.T.C. v. State Transport

Appellate Tribunal and Ors.,] has to be overruled. In our view, this

argument is totally misconceived. Firstly, we have already referred to the

said judgment which in our view is no authority for the proposition that

future applicants are not to be barred. Secondly, we feel that everything

depends on the language of the Scheme in a given case. We have already

referred to provisions in different Schemes in order to illustrate the

point. The language of the Scheme including exception No. 2 to the Scheme

in the present case is very clear and does not admit any doubt.

Lastly, it was submitted by Mr. M.N.Rao, learned senior counsel that if

future applicants are excluded, town services will suffer resulting in

inconvenience to the public. This argument is wholly untenable. It is for

the State Government to consider what is suitable for public service. The

State Government has the power to modify a Scheme in case of need. After

all the Schemes are intended for the benefit of the public and if any step

is required to be taken for the purpose, the State Government can always do

so by modifying the Scheme. The Act permits modification of a Scheme.

The Full Bench of the High Court noted in its impugned judgment that the

Regional Transport Authority's reason for rejection of applications for

permits by private operators was that the route applied for by them

overlaps the notified mofussil route which was meant for the State

Transport Corporation as per the Scheme approved by the Government. The

Full Bench also noted that a Division Bench of the same Court in W.A.No. 56

of 1992 had vide judgment dated 14th October, 1992 taken the view that

mofussil service includes town service and that merely because town service

route is not mentioned in the notified public scheme, that is not a ground

to grant a permit for town service route. Another Division Bench of the

same High Court had in Rajappa Kawati v. G.Hanumantha Rao and Anr. taken a

contrary view according to which permits could be issued for town service

routes even when the scheme nationalised the entire mofussil service and

town service route overlapped with the mofussil service. It was on account

of this divergence of opinion of the Division Benches of the High Court

that the reference had been made to the Full Bench. The question for

consideration before the Full Bench was, when prohibition had been imposed

in the Scheme approved by the Government as per which private operators of

stage carriages were completely excluded from the mofussil service, what

would be the fate of applicants for permits for running on the town

service? Rule 258 of the A.P. Motor Vehicles Rules, 1989 makes it clear

that no route shall be determined as both town and mofussil service route.

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The words "mofussil service" suggest that the service covers a long

distance having several stages (points) on the route. Long routes are

divided into various stages for purposes of fixing fares from one stage to

the next stage and the carriages which run on the routes for hire are

called stage carriages. A route or a service may have several stages. Each

stage will be the distance on the route from the preceding stage to the

next stage. The stages are fixed in order to fix the fare for convenience

of the passengers from the preceding point to the next point. Passengers

have to pay fare only for the particular distance travelled by them and not

for the entire route. Town service, on the other hand, as the words

suggest, is normally a shorter route since it operates within the town

itself.

One of the reasons which weighed with the Full Bench in the impugned

judgment is that if the Scheme was to cover both mofussil service and town

service it could have been stated so in the Scheme itself in unmistakable

terms. With due respect this reasoning does not appeal to us. There is no

scope for thinking that the Scheme does not say what it is intended to say.

We must not overlook the language used against clauses 4 and 5 of the

Scheme which provide for complete exclusion of all other persons holding

stage carriage permits on the proposed route and on the overlapping routes

except for the exceptions contained to the Scheme itself. There is yet

another reason which militates against the view of the Full Bench on the

point. A reference to the language of the exception would show that only

existing town services operating on the notified routes have been

permitted. In some of the other Schemes to which reference has been made in

this judgment for purpose of illustration it will be seen that wherever the

scope of the exception was to be widened so as to cover more categories of

operators, it has been specifically provided for. In one of the Schemes the

holders of future stage carriage permits in respect of town service routes

have been allowed under the exception while in another case instead of

existing town services, the words used are `holders of permits'. Holders of

permits can include those who happen to hold permits in future. It is in

the scheme in the present case that exception No. 2 has been worded

restrictively so as to cover only existing town services operating on the

notified routes. Thus we are unable to accept the conclusion of the Full

Bench contained in the impugned judgment that the town services operating

on the route, even though overlapping with mofussils services, are entitled

to permit under the Scheme which is subject matter of the present appeal.

Reliance placed by the Full Bench in the impugned judgment on Achyut

Shivram Gokhale v. Regional Transport Officer and Ors., [1988] Suppl. SCC

696 in support of the observation that a scheme cannot be given a wider

application than intended to by its maker does not appear to be correct so

far as facts of this case are concerned. In the cited case this Court was

considering the grant of special permits on routes covered under notified

schemes. It was noted by this Court that special permit is meant for

special occasions like marriage parties or pilgrimage and the State

authorities had the power to issue such permits even when the routes were

otherwise notified under Schemes. This judgment cannot be said to an

authority for the proposition suggested in the impugned judgment that "a

scheme, although has to be read in the context of Section 104 of the Act,

but the same cannot be given a wider application than intended by the maker

thereof." The permits sought for by the private operators in the present

case cannot be equated with special permits envisaged under Section 88 (8)

of the present Act which is equivalent of Section 63 (6) of the old Act.

The object of granting special permits is totally different. Special

permits are meant to cater to special needs on special occasions like

marriage parties, pilgrimage etc.

The impugned Full Bench decision further draws on the principle of

purposive interpretation for upholding the view that permits can be granted

for town service even if mofussil service is nationalized. For invoking the

principle of purposive interpretation the Bench felt that there was some

ambiguity in the scheme or something was not clear. We have carefully gone

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through the scheme which is subject matter of the present appeals and we do

not find any ambiguity or lack of clarity in the Scheme so as to invoke the

principle of purposive interpretation.

For all these reasons we are unable to agree with the view taken by the

Full Bench in the impugned judgment. In our view, under exception 2

contained in the Note appended to the Scheme, subject matter of the present

appeals, permits can be issued only to existing town services operating on

the notified routes. This means only existing operators on the notified

routes are eligible for permits. Fresh applicants or future applicants are

totally ineligible for getting permits for town services operating on

notified routes. These appeals are accordingly allowed. The impugned

judgment of the Full Bench of the High Court is set aside. In the facts and

circumstances of the case there will be no order as to costs.

Hearing of this matter was confined to the legal issue referred to a Bench

of five Judges as per the order of Reference dated 7th August, 2002.

Through the above judgment we have answered the Reference. Let the

remaining cases be placed before an appropriate Bench for final disposal.