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PETITIONER:

K. BALASUBRAMANIA CHETTY

Vs.

RESPONDENT:

N. M. SAMBANDAMOORTHY CHETTY

DATE OF JUDGMENT20/12/1974

BENCH:

BHAGWATI, P.N.

BENCH:

BHAGWATI, P.N.

MATHEW, KUTTYIL KURIEN

UNTWALIA, N.L.

CITATION:

1975 AIR 818 1975 SCR (3) 91

1975 SCC (1) 242

CITATOR INFO :

D 1978 SC 349 (7)

ACT:

Motor Vehicles Act. 1939-S. 64B-Criteria for allotting marks

for grant of permit-Public interest-Considerations for

deciding-Extent of Jurisdiction of the High Court under S.

64B.

HEADNOTE:

The Regional Transport Authority granted a stage carriage

permit to the respondent as against the appellant on the

ground that the former was a single bus operator while the

appellant was an operator having four stage carriage

permits, including a stage carriage permit which was

recently granted to him. The State Transport Appellate

Tribunal, on the other hand, took the view that the

respondent did not have a pucca fire proof building for

workshop,. that it was immaterial whether the sector

experience of the appellant was derived under a temporary

permit or a permanent permit; that the appellant was

entitled to two marks even though the experience gained by

him was by operation of temporary permits, that the history

sheet of the appellant was clean without any adverse remark

and that since a portion of the route fell within the

interior roads it was desirable in public interest to prefer

"an experienced operator instead of single bus operator".

The Appellate Tribunal,. therefore, found that the appellant

had superior qualifications and was entitled to be preferred

to others.

On a revision application under s. 64B of the Motor Vehicles

Act, 1939 a single Judge of the High Court took the view

that public interest required that in the socialist pattern

of society monopoly should as far as possible be avoided and

a smaller operator with one stage carriage permit should be

preferred to a bigger operator having three or more stage

carriage permits, that the appellant was a recent grantee of

stage carriage permit; that a proper standard of comparison

of the history sheets of the appellant and the respondent

had not been made; and that the respondent was entitled to

two marks on account of sector experience. The order of the

Regional Transport Authority granting permit to the

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respondent was, therefore, restored.

Allowing the appeal,

HELD : (1) The High Court was not right in refusing two

marks to the appellant. Clause 3(c) of rule 155A provides

that two marks shall be awarded to the applicant, who. on

the date of the consideration of the application by the

Regional Transport Authority, has been plying a stage

carriage permit on the entire route. It does not contain

any restriction that in order to be entitled' to these two

marks the applicant should have been plying on the route on

the basis of a permanent permit. What is material is that

the applicant should have experience of plying on the route

and this experience would be there whether plying is done on

a temporary permit or a permanent permit. [94G-H]

(2) The paramount consideration to be taken into account in

determining as to which of the applicants should be selected

for grant of permit always is public interest. [95 B-C]

(3) The mere fact that an applicant has more than one

permit or he is a recent grantee cannot by itself be

regarded as a factor against him in the comparative scale.

Possession of more than one permit also cannot, by itself,

divorced from other circumstances, be regarded as a

disqualification. [96 F; H]

Ajantha Transports (P) Ltd. v. T. Y. K. Transports, [1975] 2

S.C.R. 166, followed.

The High Court was in error in rejecting the claim of the

appellant to the grant of permit by mechanically relying on

the circumstance that the

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appellant was a multi bus operator having four Stage

carriage permits including a recent grant without

considering how in the light of the other facts and

circumstances, it was correlated to the question of public

interest.' The four stage carriage permits which the

appellant had were not on the same route and there was no

question of any monopoly being created in his favour if the

permit applied for by him was granted. The possession of

more than one permit by the appellant was a circumstance in

his. favour because according to cl. 3(F) of rule 155A an

applicant operating more than four stage carriages would be

entitled to one mark. [97B-D]

(4) The High Court was in error in holding that the same

standard was not applied by the State Transport Appellate

Tribunal in comparing the history sheets of the appellant

and the respondents. [97H]

(5) In the instant case the, High Court overstepped the

limits of the revisional jurisdiction and treated the

revision application as if it were an appeal. The

jurisdiction of the High Court under s. 64B is as severely

restricted as that under s. 115 of the Code of Civil

Procedure and it is only where there is a jurisdictional

error or illegality or material irregularity in the-

exercise of jurisdiction that the High Court can interfere

under section 64B with an order made by the State Transport

Appellate Tribunal. [98D-E]

JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1672 of 1973.

Appeal by special leave from the judgment and order dated

the 9th January, 1973 of the Madras High Court in C.R.P. No.

2486 of 1972.

Y. S. Chitale, C. S. Prakasa Rao and A. T. M. Sampath, for

the appellant.

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K. S. Ramamurthy, V. Subramanian and Vineet Kumar, for the

respondent.

The judgment of the Court was delivered by

BHAGWATI J.-There were fifteen applicants before the

Regional Transport Authority, Chingleput for grant of a

stage carriage permit to ply a bus on the route Red Hills to

Kancheepuram. This route covers a distance of 501 miles of

81.27 kilometers and is a 'long :route,' within the meaning

of that expression as used in rule 155A of the Motor

Vehicles Rules, 1940. Out of fifteen applicants, only two

are before us, namely, the appellant and the respondent.

The appellant was applicant No. 7, while the respondent was

applicant No. 6. The Regional Transport Authority, after

considering the applications, made an order dated 19th June,

1971 granting the permit to the respondent, though on

marking according to the provisions contained in clause (3)

of rule 155A, the respondent obtained only 7.40 marks as

against 9.00 marks obtained by the appellant. The main

ground ,on which the Regional Transport Authority preferred

the respondent to the appellant was that the respondent was

a single bus operator, while the appellant was a multi bus

operator having four stage carriage permits including a

stage carriage permit recently granted to him.

The appellant and seven other applicants, who were aggrieved

by the decision of the Regional Transport Authority,

granting a permit to the respondent, preferred appeals

before the State Transport Appellate Tribunal impleading the

respondent as the opposite party in the appeals. The State

Transport Appellate Tribunal took the. view that at tile

date of the consideration of the applications by the

Regional Transport

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Authority, the respondent had a workshop but it was housed

only in a thatched shed and not in a pucca fire proof

building and the respondent was, therefore, not entitled to

two marks under clause (3) (E) of rule 155A and his total

marks should, therefore, have been 5.40 and not 7.40. The

Regional Transport Authority had refused to grant two marks

to the appellant on account of sector qualification on the

ground that he had been plying only on temporary permits but

this view did not find favour with the State Transport

Appellate Tribunal which held that under clause (3) (C) of

rule 155A it was immaterial whether sector experience was

derived by an applicant under a temporary permit or a

permanent permit and the appellant was, therefore, entitled

to two marks under that clause on account of sector

experience even though gained by operation on temporary

permits. So far as the past record was concerned, the State

Transport Appellate Tribunal relied heavily on the fact that

the history sheet of the appellant was clean without any

adverse entry while the respondent had one adverse entry in

the history sheet relating to his single stage carriage and

four adverse entries in the history sheet relating to his

lorry operation. The State Transport Appellate Tribunal

also pointed out that a portion of the route fell within the

interior roads and it was, therefore, desirable in public

interest to prefer "an experienced operator instead of

single bus operator". Having regard to these considerations

the State Transport Appellate Tribunal set aside the order

of the Regional Transport Authority granting permit to the

respondent. The State Transport Appellate Tribunal then

proceeded to consider who amongst the appellants before it

deserved to be granted permit. After considering the claim

of the appellants before it, the State Transport Appellate

Tribunal took the view that since the appellant had higher

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marks which reflected his superior qualifications and was an

experienced operator with a clean history sheet, he was

entitled to be preferred to the other appellants and in this

view, the State Transport Appellate Tribunal, by an order

dated 23rd September, 1972, granted permit to the appellant.

The respondent thereupon preferred a revision application to

the High Court under section 64B of the Madras Vehicles Act,

1939. The learned Single Judge, who heard the revision

application, held that the State Transport Appellate

Tribunal had acted with material irregularity in exercise of

its jurisdiction in preferring the appellant to the

respondent for the grant of permit. There were in the main

five reasons which prevailed with the learned Single Judge

in taking this view in favour of the respondent. First, the

learned Single Judge held that though according to the

provisions for marking contained' in clause (3) of rule 155A

the appellant had admittedly more marks than the respondent,

that was not' a determinative factor because rule155A was

itself subject to the overriding consideration of public

interest emphasised in section 47(1) of the Act and public

interest required that in the socialist pattern of society

which we had adopted monopoly should as far as possible be

avoided and a smaller operator with one stage carriage

permit should be preferred to a bigger operator having three

or more stage carriage permits. This important consi-

deration was ignored by the State Transport Appellate

Tribunal in

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preferring the appellant to the respondent. Secondly, the

State Transport Appellate Tribunal had over looked the, fact

that the appellant was a recent grantee of a stage carriage

permit though it was a relevant circumstance which weighed

against the appellant in the process of comparison with the

respondent. Thirdly, a proper standard of comparison was

not applied in considering the rival claims of the appellant

and the respondent. Though the history sheet of the res-

pondent in regard to his performance, as a lorry operator

was scanned by the State Transport Appellate Tribunal over a

period of ten years, no such scrutiny was made in the case

of the appellant of the history sheet relating to his stage

carriage operation for the past ten years and this vitiated

the order of the State Transport Appellate Tribunal.

Fourthly, the respondent was entitled to two marks on

account of workshop under clause (3) (E) of rule 155A and

these had been wrongly denied by the State Transport

Appellate Tribunal, and lastly, the appellant was not

entitled to two marks on account of sector experience under

clause (3) (C) of rule 155A since the sector experience

claimed by him was on the basis of operation on temporary

permits. The learned Single Judge accordingly allowed the

revision application and set aside the order of the State

Transport Appellate Tribunal granting permit to the

appellant. The result was that the order of the Regional

Transport Authority granting permit to the respondent was

restored. The appellant was obviously aggrieved by this

order made by the learned Single Judge and he accordingly

preferred the present appeal with special leave obtained

from this Court.

We will first dispose of the last two reasons which

prevailed with the learned Single Judge in interfering with

the order of the State Transport Appellate Tribunal. So far

as the claim of the respondent 'for two marks in respect of

workshop under clause (3) (E) of rule 155A is concerned, we

agree with the learned Single Judge that the 'State

Transport Appellate Tribunal was in error in refusing that

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claim. 'The Regional Transport Officer under instructions

from the Regional Transport Authority inspected the workshop

of the respondent and found that it was in a pucca fire

proof building and the respondent was accordingly entitled

to two marks under clause (3) (E) of rule 155A. But that

would not make any difference because even with these two

marks, the total number of marks of the respondent would not

exceed 7.40 as against 9 marks of the appellant. Moreover,

,these 9 marks, do not include two marks on account of

sector experience under clause (3) (C) of rule 155A. The

State Transport Appellate Tribunal gave two marks to the

appellant on account of sector experience but the learned

Single Judge took a different view. We do not think the

learned Judge was right in refusing two marks to the

appellant on this count. Clause (3) (C) of rule 155A

provides that two marks shall be awarded to the applicant

who on the date of consideration of the application by the

Regional Transport Authority has been plying a stage

carriage on the entire route:. It does not contain any

restriction that in order to be entitled to these two marks

the applicant should have been plying on the route; on the

basis of a permanent permit. It is immaterial whether the

applicant has been plying ton the route on a temporary

permit or a permanent permit. What is

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material is that the applicant should have experience of

plying on the route and this experience would be there

whether plying is done on a temporary permit or on a

permanent permit. The appellant was, therefore, entitled to

two marks on account of sector experience under clause

(3)(C) of rule 155A and that would raise his total number of

marks to 11. The position, therefore, was that the

appellant was entitled to 11 marks as against 7.40 of the

respondent.

But that by itself would not be determinative of the

controversy. The paramount consideration to be taken into

account in determining as to which of the applicants should

be selected for grant of permit always is public interest.

Section 47(1) provides in so many words that the Regional

Transport Authority shall, in considering an application for

a stage carriage permit have regard inter alia, to "the

interest of the public generally", and this is a

consideration which must necessarily outweigh all others.

It is ultimately on the touchstone of public interest that

selection of an applicant for grant of permit must be

justified. Clause (3) of rule 155A undoubtedly provides for

giving of marks to the rival applicants but the number of

marks obtained by each applicant can only provide a guiding

principle for the grant of permit. It can never override

the consideration of public interest which must dominate the

selection in all cases. In fact clause (4) of rule 155A

concedes that after the applicants are ranked according to

the total marks obtained by them the applications shall be

disposed of in accordance with the provisions of section

47(1). The fact that the appellant had 11 marks as against

7.40 of the respondent would certainly be a factor in favour

of the appellant, but notwithstanding his higher marks, if

public interest so requires, he may have to yield place to

the respondent in the matter of selection for grant or

permit.

Now, two circumstances were relied upon by the learned

Single Judge for outweighing the higher marks obtained by

the appellant and justifying the grant of permit to the

respondent in public interest. The first was that the

respondent was a single bus operator while the appellant was

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a multi bus operator having four stage carriage permits and

the second was that one of the stage carriage permits was

recently granted to the respondent and hence he was in terms

of the 'motor vehicle jurisprudence' a "recent grantee".

Both these circumstances by themselves are not sufficient to

constitute such requirement of public interest as to

outweigh the higher marks obtained by the appellant. This

Court had occasion to consider in Ajantha Transports (P)

Ltd., Coimbatore v. M/s. T. V. K. Transport, Pulampatti,

Coimbatore Dist.(1) the relevance of possession of more than

one permit as also recent grant in selecting an applicant

for grant of permit and Beg, J., speaking on behalf of the

Court, stated the law on the subject in the following words

:

"It should be clear when the main object, to

which other considerations must yield in cases

of conflict, of the permit issuing powers

under sec. 47 of the Act is the service of

(1) [1975] 2 S.C.R. 166.

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interest of the public generally, that any

particular fact or circumstances, such as a

previous recent grant in favour of an

applicant or the holding of other permits by

an operator, cannot by itself, indicate how it

is related to this object. Unless, there are

other facts and circumstance which link it

with this object the nexus will not be

established. For instance, an applicant may

be a recent grantee whose capacity to operate

a transport service efficiently remains to be

tested so that a fresh grant to him may be

premature. In such a case, another applicant

of tested efficiency may be preferred. On the

other hand, a fresh grantee may have within a

short period, disclosed such superiority or

efficiency or offer such amenities to

passengers that a recent grant in his favour

may be no obstacle in his way at all. Again,

the fact that an applicant-is operating other

motor vehicles on other permits may, in one

case, indicate that he had excee

ded the

optimum, or, has a position comparable to a

monopolist, but, in another case, it may

enable,- the applicant to achieve better

efficiency by moving towards the optimum which

seems to be described as a "viable unit" in

the rules framed in Madras in 1968. Thus, it

will be seen that, by itself, a recent grant

or the possession of other permits is neither

a qualification nor a disqualification

divorced from other circumstances which could

indicate low such a fact is related to the

interests of the public generally. It is only

if there are other facts establishing the

correlationship and indicate its advantages or

disadvantages to the public generally that it

will become a relevant circumstance. But, in

cases where everything else is absolutely

equal as between two applicants, which will

rarely be the case, it could be said that an

application of principle of equality of oppor-

tunity, which could be covered by Article 14,

may enable a person who is not a fresh grantee

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to obtain a preference."

It would, therefore, be seen that the mere fact that an

applicant has more than one permit or he is a recent grantee

cannot by itself be regarded as a factor against him in the

comparative scale. It would all depend on the facts and

circumstances of each case. As 'pointed out by Beg, J., in

the case just cited : "an applicant may be a recent grantee

whose capacity to operate a transport service efficiently

remains to be tested so that a fresh grant to him may be

premature on the other hand. a fresh grantee may have within

a short period disclosed such superiority or efficiency or

offer such amenities to passengers that a recent grant in

his favour may be no obstacle in his way at all--a recent

grant could not, considered by itself and singly, be,

converted into a demerit". Similarly, possession of more

than one permit also cannot by itself, divorced from other

circumstances, be regarded as a disqualification. It may in

a given case show that the applicant has already reached the

viable unit of five stage carriages contemplated under

'clause (3) (F) of rule 155A or that the effect of granting

permit to him would be to make him a monopolist on the

route--a result disfavoured by the decision of this Court in

Sri Rama

97

Vilas Service (P) Ltd. v. C. Chandrasekharan & Ors.(1) as

being inconsistent with the interest of the general public-

or, on the other hand, it may be a circumstance in his

favour enabling him to achieve greater efficiency by moving

towards the optimum of viable unit. The learned Single

Judge, was, therefore, in error in rejecting the claim of

the appellant to the grant of permit by mechanically relying

on the circumstance that the appellant was a multi bus

operator having four stage carriage permits, including a

recent grant without considering how in the light of the

other facts and circumstances, it was correlated to the

question of public interest. There was nothing to show that

this circumstance would have, any prejudicial or adverse

impact on public interest, if permit were granted to the

appellant notwithstanding it. The four stage carriage,

permits which the appellant had were not on the same route

and there was no question of. any monopoly being created in

his favour if the permit applied for by him were granted.

In fact, possession of more than on& permit by the appellant

was a circumstance in his favour, because according to

clause (3)(F) of rule 155A an applicant operating in more

than four stage carriages would be entitled to one mark for

each stage carriage in order to have a viable unit of five

carriage. The principle laid down in clause (3) (F) of rule

155A proceeds on the hypothesis that an applicant would be

able to achieve greater efficiency if he has a larger number

of stage carriages, but it sets a limit of five stage

carriages as it was thought that that would be sufficient to

constitute a viable unit which could legitimately be

permitted to an applicant, consistently with the requirement

of a socialistic pattern of society that there should be

distributive or social justice and no undue economic

disparities. So long, therefore, as an applicant has not

more than four stage carriages, it cannot by itself be

regarded as a factor against him and, as pointed out by Beg,

J., in the case cited above, the rule in clause (3) (F) of

rule 155A providing for giving of one mark to the applicant

for each stage carriage operated by him should be taken into

account unless there is good enough reason to depart from

it. "Every additional stage carriage upto four would give

an applicant an additional mark so as to help him to make up

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a viable unit of five". The State Transport Appellate

Tribunal was, therefore, right, in the circumstances of the

case, in not regarding possession of four stage carriage

permits by the appellant, including a recent grant, as a

circumstance against him, but treating it as a circumstance

in his favour by adding four marks under clause (3) (F) of

rule 155A, and the learned Single Judge acted erroneously in

upsetting this view taken by the State Transport Appellate

Tribunal.

The learned Single Judge was also in error in holding,

thatthe same standard was not applied by the State

Transport AppellateTribunal in comparing the history sheets

of the appellant and therespondent. The history sheet of

the appellant related only to hisperformance as stage

carriage operator and the entire history sheetwas before

the State Transport Appellate Tribunal and it showedthat

the appellant had a clean record. On the other hand,

the respondent

(1) [1964] 5 S.C.R. 869.

-L379 Sup.CI/75

98

had two history sheets, one relating to his performance as

stage carriage operator and the other relating to his

performance as lorry operator and both the history sheets

showed adverse entries. It can hardly be disputed that this

comparison with reference to the past performance of the

appellant and the respondent was relevant to the question as

to who between the two should be selected for grant of

permit. It may be that the history sheet of the respondent

as lorry operator related to a period of ten years while

that of the appellant as a stage carriage, perator covered a

shorter period, but that cannot be helped. The comparison

has to be made on the basis of the available material and if

the history sheet of the respondent, which may be for a

longer period, shows that the past performance of the

respondent 'was not satisfactory while the history sheet of

the appellant, though for a shorter period, shows that he

has had a clean record of performance, that would certainly

be a relevant circumstance to lie taken into ;account. The

State Transport Appellate Tribunal was plainly right in

relying on this circumstance, amongst others, for the

purpose of preferring the appellant to the respondent.

Before we part with this case we may point out that the

learned Single, Judge overstepped the limits of his

revisional jurisdiction and treated the revision application

before him as if it wore an appeal. That was clearly

impermissible as the revisional jurisdiction of the High

Court under section 64B is as severely restricted as that

under section 115 of the Code of Civil Procedure and it is

only where there is a jurisdictional error or illegality or

material irregularity in the exercise of jurisdiction that

the High Court can interfere under section 64B ,with an

order made by the State Transport Appellate Tribunal.

We must, therefore, set aside the judgment of the learned

Single Judge and restore the order made by the State

Transport Appellate Tribunal granting permit to the

appellant. The appeal is accordingly allowed. The

respondent will pay the costs to the appellant.

P.B.R. Appeal allowed.

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