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CASE NO.:

Appeal (civil) 7085-7088 of 2001

PETITIONER:

JAGDIP SINGH

Vs.

RESPONDENT:

JAGIR CHAND AND ANOTHER

DATE OF JUDGMENT: 10/10/2001

BENCH:

M.B. SHAH & R.P. SETHI

JUDGMENT:

Shah, J.

Leave granted.

Despite the legislative intent under the Motor Vehicles Act,

1988 to increase the number of buses on different routes for the

convenience and benefit of travelling public, there is reluctance on the

part of the authorities to implement the same. Having reached at a

saturation point wherein Permit Raj caused lot of inconvenience to the

bus operators as well as to the general public to a large extent, the

same is sought to be continued. There cannot be any doubt that there

can be certain restrictions on the bus operators for providing facilities

to the passengers, but when Legislature provides that permit should

not, ordinarily, be refused and has brought about a complete change

in the policy of granting permit, it would be unreasonable and unjust

on the part of the State Authorities to continue their old practice.

Further, in these days of liberalization in all fields, that too when we

are talking of globalization, it would be unjust to put fetter on the

exercise of fundamental rights of those persons who intend to carry on

the business as transport operators.

In these appeals, the order passed by the High Court of Punjab

and Haryana at Chandigarh setting aside the orders passed by the

State Transport Appellate Tribunal granting permits to operate mini

buses on certain routes to the appellants, is challenged. Orders passed

by the State Transport Appellate Tribunal were not challenged by the

State Transport Undertaking or the State Government but were

challenged by the Permit Holders who were running mini buses. It is

true that those who are having permits to operate on certain routes

would object to the grant of permit to other operators as it is likely to

affect their monopoly. This is bound to be there in all fields of

industry or business. At the same time, grant or refusal of such

permits is required to be governed by the provisions of law.

The objects and reasons of the Motor Vehicles Act, 1988 inter

alia provides that to take care of:-

(a) the fast increasing number of both commercial vehicles

and personal vehicles in the country; and

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(b) simplification of procedure and policy liberalizations

for private sector operations in the road transport field;

the provisions are made under the Act.

This legislative policy is reflected in Section 80 (2) of the

Motor Vehicles Act, 1988 (hereinafter referred to as the Act) which

inter alia provides that a Regional Transport Authority shall not

ordinarily refuse to grant an application for permit of any kind made

at any time under the Act.

As early as 1974, this Court in case of Hans Raj Kehar v. State

of U.P. [(1975) 1 SCC 40] emphasised the need of having more and

more buses for the public convenience and observed thus: -

.The notification removes the bar created by

the limit on the number of permits for buses which could

be issued and facilitates the issue of such permits to fresh

applicants if they satisfy the requirement of eligibility. It

hardly needs much argument to show that the larger

number of buses operating on different routes would be

for the convenience and benefit of the travelling public

and as such would be in the public interest. Any measure

which results in larger number of buses operating on

various routes would necessarily eliminate or in any case

minimise long hours of waiting at the bus stands. It

would also relieve congestion and provide for quick and

prompt transport service. Good transport service is one

of the basic requirements of a progressive society.

Prompt and quick transport service being a great boon for

those who travel, any measure which provides for such

an amenity is in the very nature of things in the public

interest.

Further in Mithilesh Garg and Others v. Union of India and

others [(1992) 1 SCC 168], the existing bus operators challenged the

validity of Section 80 of the Motor Vehicles Act, 1988 on the ground

that they were adversely affected in exercise of their right under

Articles 14 and 19 of the Constitution of India. The Court negatived

the said contention by holding that it is only the State which can

impose reasonable restrictions within the ambit of Article 19(6) of the

Constitution of India on the guaranteed rights of every citizen whether

rich or poor, to take up and carry on, if he so wishes, the motor

transport business. Further, after considering the provisions of the

Repealed Act with regard to the grant of permit and sections 71, 72

and 80 of the new Act, the Court observed thus: -

The scheme envisaged under Sections 47 and

57 of the old Act has been completely done away with

by the Act. The right of existing operators to file

objections and the provision to impose limit on the

number of permits have been taken away. There is no

similar provision to that of Sections 47 and 57 under the

Act. The Statement of Objects and Reasons of the Act

shows that the purpose of brining in the Act was to

liberalise the grant of permits. Section 71(1) of the Act

provides that while considering an application for a

stage carriage permit, the Regional Transport Authority

shall have regard to the objects of the Act. Section

80(2), which is the harbinger of liberalization, provides

that a Regional Transport Authority shall not ordinarily

refuse to grant an application for permit of any kind

made at any time under the Act. There is no provision

under the Act like that of Section 47(3) of the old Act

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and as such no limit for the grant of permits can be fixed

under the Act. There is, however, a provision under

Section 71(3)(a) of the Act under which a limit can be

fixed for the grant of permits in respect of the routes

which are within a town having population of more than

five lakhs.

The learned counsel for the respondent bus operators relied

upon the provisions of Section 99 of the Act and submitted that under

scheme framed by the State Government, the competent authority can

restrict grant of permits to the bus operators and therefore, the

Transport Authority was justified in rejecting the application for grant

of permit to mini buses operators on a particular route.

Hence, the question iswhether the State Government has

framed any such scheme. It is true that under Chapter VI, there are

Special provisions relating to State Transport Undertakings.

Section 98 also provides that the provisions of Chapter VI and the

rules and orders made thereunder shall have effect notwithstanding

anything inconsistent therewith contained in Chapter V which

includes Section 80. Thereafter sub-section (1) of Section 99 reads as

under: -

99. Preparation and publication of proposal

regarding road transport service of a State Transport

Undertaking.(1) Where any State Government is of

opinion that for the purpose of providing an efficient,

adequate, economical and properly co-ordinated road

transport service, it is necessary in the public interest that

road transport services in general or any particular class

of such service in relation to any area or route or portion

thereof should be run and operated by the State Transport

Undertaking, whether to the exclusion, complete or

partial, of other persons or otherwise, the State

Government may formulate a proposal regarding a

scheme giving particulars of the nature of the services

proposed to be rendered, the area or route proposed to be

covered and other relevant particulars respecting thereto

and shall publish such proposal in the Official Gazette of

the State formulating such proposal and in not less than

one newspaper in the regional language circulating in the

area or route proposed to be covered by such scheme and

also in such other manner as the State Government

formulating such proposal deem fit.

From the aforesaid section, it is apparent that before framing the

scheme, the State Government should arrive at a conclusion that: -

(1) for the purpose of providing an efficient, adequate,

economical and properly co-ordinated road transport

service;

(2) it is necessary in the public interest;

(3) that the road transport services in general or in

particular class of such service in relation to any area or

route or portion thereof should be run and operated by

the State Transport Undertaking;

(4) to the exclusion, complete or partial of other persons or

otherwise;

(5) the State Government is required to formulate a

proposal regarding the scheme giving particulars

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(a) nature of services proposed to be rendered,

(b) the area or route proposed to be covered and;

(c) other relevant particulars respecting thereto.

(6) and the State shall publish such proposal

(a) in the Official Gazette of the State

formulating such proposal;

(b) in not less than one newspaper in the

regional language circulating in the area or

route proposed to be covered by such

scheme; and

(c) in such other manner as the State

Government formulating such proposal

deem fit.

Main purpose of the aforesaid section is to have some

routes/area reserved for the State Transport Undertaking, that too, for

the purpose of providing an efficient, adequate, economical and

properly coordinated Road Transport service. Further, such scheme

must be in public interest, that is to say, larger number of buses

operating on different routes for the convenience and benefit of

travelling public at a cheaper rate. In such a scheme, some routes can

be reserved exclusively or partially for the State Transport

Undertakings.

In the rejoinder affidavit it has been pointed out that in the State

of Punjab, the State Transport Undertakings are not running mini

buses linking one village with another and as the State Transport

Undertaking is not running any mini bus linking the villages, the

Regional Transport Authority is bound by the provisions of Section 80

to grant permit.

At this stage we would refer to the alleged scheme upon which

reliance is placed by the learned counsel for the respondents. As such,

the State Government or the bus operators have not produced on

record properly modified scheme, but they have referred to the

Notification dated 21st October, 1997 which seeks to modify the

previous Scheme which was framed on 9th August, 1990 by

substituting some clauses. The relevant parts of the said clauses are as

under:-

(2). All Inter-state routes shall be operated by the State

Transport Undertakings and operations or private

operators whose permits were valid for a period of three

years from the date of the publication of the scheme,

shall remain unaffected.

Provided that the route operated by a private

operator, which became Inter-state route as a result of

reorganization of the State of Punjab in the year 1966,

shall not be affected by the Scheme.

Provided further that the operations of any State

other than State of Punjab or any Union Territory

including their private operators operating on any route

by virtue or the reciprocal agreement or permits granted

by such other states and countersigned by the State

Transport Authority or by the Regional Transport

Authority concerned as the case may be, shall remain

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unaffected.

Provided further that a permit may be granted to a

private operator for operations of Air-conditioned buses

from the District Headquarter and important towns in the

State of Punjab to the Union Territory, Chandigarh.

(4). All future operations on monopoly routes shall be

operated by the State Transport Undertakings:

Provided that a private operator may be allowed to

operated on a portion of twenty per cent of the monopoly

route or up to the distance of fifteen kilometers of the

said route, whichever is less, where it is necessary or is in

public interest to do so:

Provided further that the permits granted by the

Regional Transport Authority before coming into force of

the scheme to the private operators for operating on

monopoly routes, wholly or on portion thereof or on the

routes in which the monopoly routes fall, shall remain

unaffected.

(7-A) While granting permits for operations on routes,

linking one village with another village without any city

or a town or municipality, in between the aforesaid two

villages, or a route linking a village with the block

headquarter or a municipality or city the use of the mini

buses may be allowed on the basis of passenger road

transport needs as assessed by the State Transport

Commissioner, Punjab from time to time.

Provided that: -

(e ) The total length of each such route does not exceed

25 kilometers and the total operation per bus, does

not exceed 250 kilometers per day.

(f) Not more than half of the total routes length runs

across a National Highway or State Highways.

(g) At least one of the terminal of the route shall be a

village and shall not include more than one

municipality except on a local route falling within

the municipal limits of a town, municipality or city

wherein both the starting and the terminating

points may be the same or may fall within the

same town, municipality or city, as the case may

be, and

(h) It shall be ensured that the interest of the State

Transport Undertakings are not affected adversely

on such routes.

For the purpose of these appeals, clauses 2 and 4 are not at all

relevant. Clause (2) provides for all Inter-state routes and clause (4)

provides for future operators on monopoly routes which are to be

operated by the State Undertakings. Relevant clause is clause (7-A)

and it nowhere reveals that it is in conformity with Section 99 of the

Act. Under Section 99 of the Act if the State Transport Undertaking

is to operate on a particular route, then only the scheme could be made

applicable. The aforesaid Scheme does not provide that the routes

mentioned in Clause 7(a) are to be covered and operated completely

or partially by the State Transport Undertaking. In such cases,

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Section 80(2) would be applicable as under Section 99, the State

Government is not empowered to provide that only few private

operators would operate on a particular route/routes and Regional

Transport Authority or other prescribed authority cannot ordinarily

refuse to grant an application for permit of any kind made at any time

under the Act.

It is to be stated that in the present case, the order passed by the

Appellate Tribunal was not challenged by the State Government or by

the State Transport Undertaking, but was only challenged by the

private bus operators. However, in these appeals, it is not necessary

to consider whether they were having any locus standi to file petitions

before the High Court.

In the result, the appeals are allowed. Impugned orders passed

by the High Court are set aside. Orders passed by the Presiding

Officer, State Transport Appellate Tribunal, Punjab are restored.

There shall be no order as to costs.

J.

(M.B. Shah)

J.

October 10, 2001. (R.P. Sethi)