http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 14

PETITIONER:

MITHILESH GARG ETC. ETC.

Vs.

RESPONDENT:

UNION OF INDIA AND ORS. ETC. ETC.

DATE OF JUDGMENT22/11/1991

BENCH:

KULDIP SINGH (J)

BENCH:

KULDIP SINGH (J)

MISRA, RANGNATH (CJ)

KANIA, M.H.

CITATION:

1992 AIR 443 1991 SCR Supl. (2) 428

1992 SCC (1) 168 JT 1991 (4) 447

1991 SCALE (2)1088

CITATOR INFO :

D 1992 SC1888 (13)

ACT:

Motor Vehicles Act, 1988/1939:

Sections 71, 72,80,88/47,5 7---Grant of permits--Libera-

lised procedure envisaged in the new Act--New permits irre-

spective of number of persons already in the route--Rights

of existing operators--Whether affected--Different criteria

provided for inter-region, intra-region and inter-State

permits--Whether violative of the Constitutional guarantee

under Article 14--Factors to be taken into consideration by

Regional Transport Authority before grant of permit.

Constitution of India, 1950:

Articles 14 and 19(1)(g)--Provisions of Motor Vehicles

Act, 1988 Liberalised procedure for issue of permits--Grant

of more permits in the same route-Different criteria for

inter-region, intra-region and interState permits--Whether

violative of.

HEADNOTE:

These Writ Petitions filed before this Court challenged

the liberalisation for private sector operations in the Road

Transport field, under the Motor Vehicles Act, 1988. The

petitioners were the existing operators on different routes.

On behalf of the petitioners, it was contended that the

issue of more permits on the same route adversely affected

their rights guaranteed under Articles 14 and 19 of the

Constitution of India. It was further contended that though

imposition of limit for grant of inter-State permits was

permissible under Section 88(5) of the Act, it was not so in

respect of intra-region permits and hence it is discrimina-

tory; that in public interest the grant of intra-region

permits should be limited.

Dismissing the Writ Petitions, this Court,

HELD: 1.1. Restricted licensing under the old Act led to the

429

concentration of business in the hands of few persons there-

by giving rise to a kind of monopoly, adversely affecting

the public interest. The apprehensions of the petitioners,

that too many operators on a route are likely to affect

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 14

adversely the interest of weaker section of the profession,

is without any basis. The transport business is bound to be

ironed-out ultimately by the rational of demand and supply.

Cost of a vehicle being as it is the business requires huge

investment. The intending operators are likely to be con-

scious of the economics underlying the profession. Only such

number of vehicles would finally remain in operation on a

particular route as are economically viable. In any case the

transport system in a State is meant for the benefit and

convenience of the public. The policy to grant permits

liberally under the new Act is directed towards the said

goal. [438 A-C].

1.2 The petitioners are in the full enjoyment of their

fundamental right guaranteed to them under Article 19(1)(g)

of the Constitution of India. There is no threat of any kind

whatsoever from any authority to the enjoyment of their

right to carry on the occupation of transport operators.

There is no complaint of infringement of any of their statu-

tory rights. More operators mean healthy competition and

efficient transport system. Over-crowded buses, passengers

standing in the aisle, persons clinging to the bus-doors and

even sitting on the roof-top are some of the common sights

in this country. More often one finds a bus which has noisy

engine, old upholstery, uncomfortable seats and continuous

emission of blacksmoke from the exhaust pipe. It is, there-

fore, necessary that there should be plenty of operators on

every route to provide ample choice to the commuter-public

to board the vehicle of their choice and patronise the

operator who is providing the best service. Even otherwise

the liberal policy is likely to help in the elimination of

corruption and favouritism in the process of granting per-

mits. [437 EH; 438-A].

Hans Raj Kehar & Ors. v. The State of U.P. and Ors.,

[1975] 2 SCR 916, followed.

Jasbhai Desai v. Roshan Kumar & Ors., [1976] 3 SCR 58;

,Saghir Ahmad v. The State of U.P. and Ors., [1955] 1 SCR

707, relied on.

Rameshwar Prasad & Ors. v. State of Uttar Pradesh &

0rs.[1983] 2 SCC 195, distinguished.

2. It is only the State which can impose reasonable res-

tric-

430

tions within the ambit of Article 19(6) of the Constitution

of India. Section 47(3) and S7 of the old Act were some of

the restrictions which were imposed by the State on the

enjoyment of the right under Article (19)(1)(g) so far as

the motor transport business was concerned. The said re-

strictions have been taken away and the said provisions have

been repealed from the Statute Book. The new Act provides

liberal policy for the grant of permits to those who intend

to enter the motor transport business. The provisions of the

Act are in conformity with Article 19(1)(g) of the Constitu-

tion of India. When the State has chosen not to impose any

restriction under Article 19(6) of the Constitution of India

in respect of motor transport business and has left the

citizens to enjoy their right under Article 19(1)(g) there

can be no cause for complaint. [440 B-D].

3. The three categories of permit-seekers in respect

of interegion, intra-region and inter-State permits cannot

be considered to be belonging to the same class. Different

criteria have been provided under the Act for granting

permits in respect of each of the categories. It is not the

case that Section 80 brings about discrimination in the

matter of grant of permits between applicants belonging to

the same class. [442-B]

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 14

Hans Raj Kehar & Ors. v. The State of U.P. and Ors.

[1975] 2 SCR 916, relied on.

4. Matters such as conditions of roads, social status

of the applicants possibility of small operators being

eliminated by big operators, conditions of hilly routes,

fuel availability and pollution control are supposed to be

within the comprehension of the transport authorities. The

legislative policy under the Act cannot be challenged on

these grounds. It is not disputed that the Regional Trans-

port Authority has the power under the Act to refuse an

application for grant of permit by giving reasons. It is for

the authority to take into consideration all the relevant

factors at the time of quasi-judicial consideration of the

applications for grant of permits. The statutory authorities

under the Act are bound to keep a watch on the erroneous and

illegal exercise of. power in granting permits under the

liberalised policy. [444 D-F]

JUDGMENT:

ORIGINAL JURISDICTION: Writ Petition (Civil) No. 1345 of

1989.

(Under Article 32 of the Constitution of India).

431

WITH

WRIT PETITION (Civil) 1110/89, 869/90, 740/90, 1100/90,

194/91, 195/91, 265/90, 327/91, 337/91, 334/91, 333/91,

330/91, 329/91, 322/91, 432/91, 420/91, 431/91, 573/91,

181/91, 316/91, 381/91, 390/91, 238/91, 686/91, 687/91 &

167/91)

R.K. Garg, R.K.Jain, Govind Mukhoty, Ved Prakash Gupta,

Suresh Chand Garg, Ms. Bharti Sharma, Rani Chhabra, B.S.

Chauhan, Gaurav Jain, N.K. Goel, D.B. Vohra, Ms. Abha Jain,

Vijay Hansaria, A.K. Tiwari and C.K. Ratnaparkhi for the

Petitioners.

Yogeshwar Prasad, Mrs. S.Dixit, G.V.Rao, A.V.Rangam,

B.Parthasarthy and Ms. A. Subhashini for the Respondents.

The Judgment of the Court was delivered by

KULDIP SINGH, J. The liberalization for private sector

operations in the Road Transport field - under Section 80

and other provisions of The Motor Vehicles Act, 1988 - has

been challenged in these bunch-petitions under Article 32 of

the Constitution, filed by the existing-operators, primarily

on the ground that they have been adversely affected in the

exercise of their rights under Articles 14 and 19 of the

Constitution of India.

It is necessary to notice the statutory provisions

operating in the field of motor transport business prior to

and after the coming into force of The Motor Vehicles Act,

1988 (hereinafter called 'the Act') The Motor Vehicles Act,

1939 (hereinafter called 'the old Act was enacted and en-

forced with the object of having closer control to establish

a coordinated system of transport. The subject of 'Mechani-

cally Propelled Vehicles' being in List-Ill of the VIIth

Schedule to the Constitution, various amendments were made

from time to time by several State Legislatures either

adding to or modifying the provisions of the old Act. Chap-

ter IV of the old Act consisted of sections 42 to 68 provid-

ing "control of transport vehicles". Sections 47 and 57, to

the relevant-extent, are re-produced as under:-

"47.Procedure of Regional Transport Authority

in considering application for stage carnage

permit- (1) A Regional Transport Authority

shall, in considering an application for a

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 14

stage carriage permit, have regard to the

following matters, namely:-

(a) the interest of the public generally;

(b) the advantages to the public of the serv-

ice to be provided,

432

including the saving of time likely to be

effected thereby and any convenience arising

from journeys not being broken;

(c) the adequacy of other passenger

transport services operating or likely to

operate in the near future, whether by road or

other means, between the places to be served:

(d) the benefit to any particular locali-

ty or localities likely to be afforded by the

service;

(e) the operation by the applicant of

other transport services, including those in

respect of which applications from him for

permits are pending;

(f) the condition of the roads included

in the proposed route or area,

and shall also take into consideration any

representations made by persons already pro-

viding passenger transport facilities by any

means along or near the proposed route or

area, or by any association representing

persons interested in the provision of road

transport facilities recognized 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; .................

(3) A Regional Transport Authority may, having

regard to the matters mentioned in sub-section

(1), limit the number of stage carriages

generally or of any specified type for which

stage carriage permits may be granted in the

region or in any specified area or on any

specified route within the region.

57. Procedure in applying for and granting

permits.- (1) An application for a contract

carriage permit or a private carrier's permit

may be made at any time.

(2) An application for a stage carriage permit

or a public carrier's permit shall be made not

less than six weeks before the date on which

it is desired that the permit shall take

effect, or, if the Regional Transport Authori-

ty appoints dates for the receipt of such

applications, on such dates.

(3) On receipt of an application for a stage

carnage permit or a public carrier's permit,

the Regional Transport Authority shall make

the application available for inspection at

the office of the Authority and shall publish

the application or the sub'

433

stance thereof in the prescribed manner to-

gether with a notice of the date before which

representation in connection therewith may be

submitted and the date, not being less than

thirty days from such publication, on which,

and the time and place at which, the applica-

tion and any representations received will be

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 14

considered:

Provided that, if the grant of any permit in

accordance with the application or with modi-

fications would have the effect of increasing

the number of vehicles operating in the re-

gion, or in any area or any route within the

region, under the class Of permits to which

the application relates, beyond the limit

fixed in that behalf under sub-section (3) of

Section 47 or sub-section (2) of Section 55,

as the case may be,, the Regional Transport

Authority may summarily refuse the application

without following the procedure laid down in

this sub-section.

The old Act was repealed by the Act which came

into force on July 1, 1989. The Statement of

Objects and Reasons appended to the Act is

re-produced as under:-

"The Motor Vehicles Act, 1939 (4 of 1939),

consolidates and amends law relating to motor

vehicleS. This has been amended several times

to keep it up to date. The need was, however,

felt that this Act should now inter alia, take

into account also changes in the road trans-

port technology, pattern of passenger and

freight movements, development of the road

network in the country and particularly the

improved techniques in the motor vehicles

management.

2. Various Committees like National Transport

Policy Committee, National Police Commission,

Road Safety Committee, Low Powered Two-wheel-

ers Committee, as also the Law Commission have

gone into different aspects of road transport.

They have recommended updating, simplification

and rationalisation of this law. Several

Members of Parliament have also urged for

comprehensive review of the Motor Vehicles

Act, 1939, to make it relevant to the modern-

day requirements.

3. A Working Group was, therefore, constitut-

ed in January, 1984 to review all the provi-

sions of the Motor Vehicles Act, 1939 and to

submit draft proposals for a comprehensive

legislation to replace the existing Act. This

Working Group took into account the suggestion

and recommendations earlier made by various

bodies and institutions like Central Institute

of Road

434

Transport Automotive Research Association of

India, and other transport organisations

including the manufacturers and the general

public. Besides, obtaining comments of State

Governments on the recommendations of the

Working Group, these were discussed in a

specially convened meeting of Transport Minis-

ters of all States and Union Territories. Some

of the more important modifications so sug-

gested related for taking care of-

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

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

(c) the greater flow of passenger and

freight with the least impediments so that

islands of isolation are not created leading

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 14

to regional or local imbalances;

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

(e) simplification of procedure and

policy liberalization for private sector

operations in the road transport field; and

(f).....................

The proposed legislation has been prepared in

the light of the above background. Some of the

more important provisions of the Bill provide

for the following matters, namely:-

(a) to

(f) ....................................

(g) liberalized schemes for grant of

stage carriage permits on non-nationalized

routes, all-india tourist permits and also

national permits for goods carriages...

(h) to 1) .........................

Chapter V of the Act-substitute for Chapter IV of the

old Act consisting of Sections 66 to 96, provides for 'co-

ntrol of transport vehicles'. Sections 71, 72 and 80, to the

relevant extent, are reproduced as under:

"71.Procedure of Regional Transport Authority

in considering application for stage carriage

permit. - (1) A Regional Transport Authority

shall, while considering an application for a

stage carriage permit, have regard to the

objects of this Act:

Provided that such permit for a route

of fifty kilometers or less shall be granted

only to an individual or a State transport

undertaking.

435

(2) A Regional Transport Authority shall

refuse to grant a stage carnage 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:

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.

(3)(a) The State Government shall, if so

directed by the Central Government having

regard to the number of vehicles, road condi-

tions and other relevant matters, by notifica-

tion in the Official Gazette, direct a State

Transport Authority and a Regional Transport

Authority to limit the number of stage car-

riages generally or of any specified type, as

may be fixed and specified in the notifica-

tion, operating on city routes in towns with a

population of not less than five

lakhs.....................

(4) A Regional Transport Authority shall not

grant more than five stage carriage permits to

any individual or more than ten stage carriage

permits to any company (not being a State

transport undertaking).

(5) In computing the number of permits to be

granted under sub-section (4), the permits

held by an applicant in the name of any other

persons and the permits held by any company of

which such applicant is a director shall also

be taken into account.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 14

72. Grant of stage carriage permits - (1)

Subject to the provisions of Section 71, a

Regional Transport Authority may, on an appli-

cation made to it under Section 70, grant a

stage carriage permit in accordance with the

application or with such modifications as it

deems fit or refuse to grant such a permit:

Provided that no such permit shall be

granted in respect of any route or area not

specified in the application.

80. Procedure in applying for and granting

permits, - (1) An application for a permit of

any kind may be made at any time.

(2) A Regional Transport Authority shall not

ordinarily refuse to grant an application for

permit of any kind made at any time under this

Act:

Provided that the Regional Transport

Authority may summarily refuse the application

if the grant of any permit in

436

accordance with the application would have

the effect of increasing the number of stage

carriages as fixed and specified in a notifi-

cation in the Official Gazette under clause

(a) of sub-section (3) of section 71 or of

contract carriages as fixed and specified in

a notification in the Official Gazette under

clause (a) of sub-section (3) of Section 74:

Provided further that where a Regional

Transport Authority refuses an application for

the grant of a permit of any kind under this

Act, it shall give to the applicant in writing

its reasons for the refusal of the same and an

opportunity of being heard in the matter."

A comparative-reading of the provisions of the Act and

the old Act make it clear that the procedure for grant of

permits under the Act has been liberalised to such an extent

that an intended operator can get a permit for asking irre-

spective of the number of operators already in the field.

Under Sections 57 read with Section 47(1) of the old Act an

application for a stage carnage permit was to be published

and kept for inspection in the office of the Regional Trans-

port Authority so that the existing operators could file

representations/objections against the said application. The

application, along with objections, was required to be

decided in a quasi-judicial manner, Section 47(3) of the old

Act further permitted the imposition of limit on the grant

of permits in any region, area or on a particular route. It

is thus obvious that the main features of Chapter IV "con-

trol of transport vehicles" under old Act were as under:

1. The applications for grant of permits were

published and were made available in the

office of the Regional Transport Authority so

that the existing operators could file repre-

sentations;

2. The applications for grant of permits

along with the representations were to be

decided in quasi judicial manner; and

3. The Regional Transport Authority was to

decide the applications for grant of permits

keeping in view the criteria laid down in

section 47(1) and also keeping in view the

limit fixed under Section 47(3) of the Act. An

application for grant of permit beyond the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 14

limited number fixed under Section 47(3) was

to be rejected summarily.

The Parliament in its wisdom has completely effaced the

above features. The scheme envisaged under Section 47 and 57

of the old Act has been completely done away with by the

Act. The right of existing-

437

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 Section 47 and Section 57

under the Act. The Statement of Objects and Reasons of the

Act shows that the purpose of bringing in the Act was to

liberalize 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 Liberalisation, 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 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 popula-

tion of more than five lakhs.

The petitioners are existing stage-carnage operators on

different routes. They hold permits granted by the Regional

Transport Authorities concerned. Mithlesh Garg, petitioner

in Civil Writ Petition No. 1345/89 has stated that he holds

a stage carnage permit and plies his vehicles on the

Meerut-Parikshitgarh-Hasifabad-Laliana and allied routes

under the jurisdiction of the Regional Transport Authority,

Meerut. According to him prior to the enforcement of the

Act, 23 permit-holders were operating on the said route but

thereafter under Section 80 of the Act the Regional Trans-

port Authority, Meerut has issued 272 more permits in re-

spect of the same route. Similar facts have been stated in

the other writ petitions. As mentioned above the petitioners

are permit holders and are existing operators. They are

plying their vehicles on the routes assigned to them under

the permits. They are in the full enjoyment of their funda-

mental right guaranteed to them under Article 19(1)(g) of

the Constitution of India. There is no threat of any kind

whatsoever from any authority to the enjoyment of their

right to carry on the occupation of transport operators.

There is no complaint of infringement of any of their statu-

tory rights. Their only effort is to stop the new operators

from coming in the field as competitors. We see no justifi-

cation in the petitioners' stand. More operators mean

healthy-competition and efficient transport system. Over-

crowded buses, passengers standing in the aisle, persons

clinging to the bus-doors and even sitting on the roof-top

are some of the common sights in this country. More often

one finds a bus which has noisy engine, old upholstry,

uncomfortable seats and continuous emission of black-smoke

from the exhaust pipe. It is, therefore, necessary that

there should be plenty of operators on every route to pro-

vide ample choice to the commuter-public to board the vehi-

cle of their choice and patronize the operator who is

438

providing the best service. Even otherwise the liberal

policy is likely to help in the elimination of corruption

and favouritism in the process of granting permits. Re-

stricted licensing under the old Act led to the concentra-

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 14

tion of business in the hands of few persons thereby giving

rise to a kind of monopoly, adversely affecting the public

interest. The apprehensions of the petitioners, that too

many operators on a route are likely to affect adversely the

interest of weaker section of the profession, is without any

basis. The transport business is bound to be ironed-out

ultimately by the rationale of demand and supply. Cost of a

vehicle being as it is the business requires huge invest-

ment. The intending operators are likely to be conscious of

the economics underlying the profession. Only such number of

vehicles would finally remain in operation on a particular

route as are economically viable. In any case the transport

system in a state is meant for the benefit and convenience

of the public. The policy to grant permits Liberally under

the Act is directed towards the said goal. The petitioners

who are already in the business want to keep the fresh

entrants out of it and as such eliminate the healthy compe-

tition which is necessary to bring efficiency in the trade.

This Court in Jasbhai Desai v. Roshan Kumar & Ors., [1976] 3

S.C.R. 58 posed the following questions for its determina-

tion:-

"Whether the proprietor of a cinema theater

holding a licence for exhibiting cinematograph

films, is entitled to invoke the certiorari

jurisdiction ex debito justitiae to get a

'No-Objection Certificate', granted under Rule

6 of the Bombay Cinema Rules, 1954 (for short,

the Rules) by the District Magistrate in

favour of a rival in the trade, brought up and

quashed on the ground that it suffers from a

defect of jurisdiction, is the principal

question that falls to be determined in this

appeal by special leave."

Sarkaria, J. speaking for the Court an-

swered the question in the following words:-

"In the light of the above discussion, it is

demonstrably clear that the appellant has not

been denied or deprived of a legal right. He

has not sustained injury to any legally pro-

tected interest. In fact the impugned order

does not operate as a decision against him,

much less does it wrongfully affect his title

to something. He has not been subjected to a

legal wrong. He has suffered no legal griev-

ance. He has no legal peg for a justiciable

claim to hang on...... While a Procrustean

approach should be avoided, as a rule the

Court should not interfere at

439

the instance of 'stranger' unless there are

exceptional circumstances involving a grave

miscarriage of justice having an adverse

impact on public interests. Assuming that the

appellant is a 'stranger', and not a busybody,

then also, there are no exceptional circum-

stances in the present case which would justi-

fy the issue of a writ of certiorari at his

instance. On the contrary, the result of the

exercise of these discretionary powers, in his

favour, will, on balance, be against public

policy. It will eliminate healthy competition

in this business which is so essential to

raise commercial morality; it will tend to

prepetuate the appellant's monopoly of cinema

business in the town; and above all, it will,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 14

in effect, seriously injure the fundamental

rights of respondents 1 & 2, which they have

under Article 19(1) (g) of the Constitution,

to carry on trade or business subject to

'reasonable restrictions' imposed by law. The

instant case fails well-nigh within the ratio

of the this Court's decision in Rice and Flour

Mills v. N.T. Gowda, wherein it was held that

a rice mill-owner has no locus standi to

challenge under Article 226, the setting up of

a new rice-mill by another-even if such

setting up be in contravention of S. 8(3) (c)

of the Rice Milling Industry (Regulation) Act,

1958 because no right vested in such an appli-

cant is infringed. For all the foregoing

reasons, we are of opinion that the appellant

had no locus standi to invoke this special

jurisdiction under article 226 of the Consti-

tution. Accordingly, we answer the question

posed at the commencement of this judgment, in

the negative."

We, therefore, see on justification for the petitioners

to complain against the liberalised policy for grant of

permits under the Act.

Article 19(1)(g) of the Constitution of India guarantees

to all citizens the right to practice any profession, or to

carry on any occupation, trade or business subject to rea-

sonable restrictions imposed by the State under Article

19(6) of the Constitution of India. A Constitution Bench of

this Court in Saghir Ahmad v. The State of U.P. and Others,

[1955] 1 S.C.R. 707 held that the fundamental right under

Article 19(1)(g) entitles, any member of the public to carry

on the business of transporting passengers with the aid of

the vehicles. Mukerjea, J. speaking for the Court observed

as under:

"Within the limits imposed by State regula-

tions any member of the public can ply motor

vehicles on a public road. To that extent he

can also carry on the business of transporting

passen-

440

gers with the aid of the vehicles. It is to

this carrying on of the trade or business that

the guarantee in article 19(1)(g) is attracted

and a citizen can legitimately complain if any

legislation takes away or curtails that right

any more than is permissible under clause (6)

of that article."

It is thus a guaranteed fight of every citizen whether rich

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

transport business. It is only the State which can impose

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

the Constitution of India. Section 47(3) and 57 of the old

Act were some of the restrictions which were imposed by the

State on the enjoyment of the fight under Article 19(1)(g)

so far as the motor transport business was concerned. The

said restrictions have been taken away and the provisions of

Section 47(3) and 57 of the old Act have been repealed from

the Statute Book. The Act provides liberal policy for the

grant of permits to those who intend to enter the motor

transport business. The provisions of the Act are in con-

formity with Article 19(1)(g) of the Constitution of India.

The petitioners are asking this Court to do what the Parlia-

ment has undone. When the State has chosen not to impose any

restriction under Article 19(6) of the Constitution of india

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 14

in respect of motor transport business and has left the

citizens to enjoy their right under Article 19(1)(g) there

can be no cause for complaint by the petitioners.

On an earlier occasion this Court dealt with somewhat

similar situation. The Uttar Pradesh Government amended the

old Act by the Motor Vehicle (U.P. Amendment) Act, 1972 and

inserted Section 43A. The new Section 43-A apart from making

certain changes in Section 47 of the old A Act also omitted

sub-section (3) of Section 47 of the old Act) Section 43A

provided that in the case of non nationalised routes, if the

State Government was of the opinion that it was for the

public interest to grant permits to all eligible applicants

it might, by notification in the official gazette issue a

direction accordingly. The necessary notification was issued

with the result that the transport authorities were to

proceed to grant permits as if sub-section (3) of section 47

was omitted and there was no limit for the grant of permits

on any specified route within the region. Section 43-A and

the consequent notification was challenged by the existing

operators before the Allahabad High Court. The High Court

dismissed the writ petitions. On appeal this Court in Hans

Raj Kehar & Ors. v. The State of U.P. and Ors., [1975] 2

S.C,R. 916 dismissed the appeal. Khanna, J.speaking for the

Court held as under;-

"It hardly need much argument to show that the

larger number of buses operating on different

routes would be for the conven-

441

ience 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 neces-

sarily 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 trans-

port 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................. The conten-

tion that the impugned notification is viola-

tive of the rights of the appellants under

article 19(1)(f) or (g) of the Constitution(is

equally devoid of force. There is nothing in

the notification which prevents the appel-

lants from acquiring, holding and disposing of

their property or prevents them from practis-

ing any profession or from carrying on any

occupation, trade or business. The fact that

some others have also been enabled to obtain

permits for running buses cannot constitute a

violation of the appellants' rights under the

above two clauses of article 19 of the Consti-

tution. The above provisions are not intended

to grant a kind of monopoly to a few bus

operators to the exclusion of other eligible

persons. No right is guaranteed to any private

party by article 19 of the Constitution of

carrying on trade and business without compe-

tition from other eligible persons. Clause (g)

of article 19(1) gives a right to all citizens

subject to article 19(6) to practise any

profession or to carry on any occupation,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 14

trade or business. It is an enabling provision

and does not confer a right on those already

practising a profession or carrying on any

occupation, trade or business to exclude and

debar fresh eligible entrants from practising

that profession or from carrying on that

occupation, trade or business. The said provi-

sion is not intended to make any profession,

business or trade the exclusive preserve of a

few persons. We, therefore, find no valid

basis for holding that the impugned provisions

are violative of article 19".

The identical situation has been created by Sections 71,

72 and 80 of the Act by omitting the provisions of Section

47(3) of the old Act. It has been made easier for any person

to obtain a stage carriage permit under the Act. The attack

of the petitioner on Section 80 on the ground of Article 19

has squarely been answered by this Court in Hans Raj Kehar's

case (supra).

It has been contended in the writ petitions that differ-

ent yard-sticks have been provided for interregion, intra-

region and inter-State permits

442

under the Act. According to the petitioners the imposition

of limit for grant of inter-State permits is permissible

under Section 88(5) of the Act whereas no such limit can be

imposed in respect of intra-region permits. The contention

is that the provisions are discriminatory and are violative

of article 14 of the Constitution of India. We are not

impressed by the argument. The three categories of permit-

seekers cannot be considered to be belonging to the same

class. Different criteria have been provided under the Act

for granting permits in respect of each of the categories.

It is nobody's case that Section 80 brings about discrimina-

tion in the matter of grant of permits between applicants

belonging to the same class. The argument on the ground of

Article 14 is thus wholly untenable and is rejected. This

question also came for consideration in Hans Raj Kehar's

case (supra) and this Court rejected the contention in the

following words:-

"Argument has also been advanced that the

deletion of Section 47(3) would have the

effect of removing the limit on the number of

permits for intra-region routes but that fact

would not prevent the imposition of a limit

for the number of permits for inter-region

routes. This argument has been advanced in the

context of the case of the appellants that the

impugned provisions discriminate in the matter

of issue of permits for intraregion routes and

those for inter-region routes and as such are

violative of article 14 of the Constitution.

We are not impressed by this argument for we

find no valid basis for the inference that if

there is no limit on the number _of permits

for intra-region routes,limit on the number of

permits for interregional routes would' have

to be imposed. The object of the impugned

notification is to liberalise the issue of

permits and we fail to see as to how such a

liberal measure can have the effect of intro-

ducing strictness or stringency in the matter

of grant of permits for inter-region routes.

Assuming that a different rule is applicable

in the matter of inter-region routes, the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 13 of 14

differentiation is based upon reasonable

classification. It is nobody's case that the

impugned provision brings about discrimination

in the matter of grant of permits between

applicants belonging to the same class. The

argument about the impugned provision being

violative of article 14 is wholly trotenable."

The learned counsel for the writ petitioners, have

relied upon a later decision of this Court in Rameshwar

Prasad & Ors., v. State of Uttar Pradesh & Ors., [1983] 2

S.C.C. 195 and have contended that the decision of this

Court in Hans Raj Kehars case (supra) no longer holds the

443

field. There is no force in the contention. This Court on

two occasions interpreted the old Act as amended by the

State of Uttar Pradesh at the relevant times. The provisions

of law which were interpreted in Hans Raj Kehar's case were

entirely different than those which were before this Court

in Rameshwar Prasad's ease. The legal position with which we

are faced in these writ petitions is almost similar to that

which was considered by this Court in Hans Raj Kehar's case.

What happened in the State of Uttar Pradesh was that after

the U.P. Amendment of 1972 to the old Act, which was subject

matter of interpretation before this Court in Hans Raj

Kehars ease, it was found that certain anomalies had arisean

in the working of the liberal policy of granting permits.

With a view to remedy the situation the U.P. Legislature

amended the old Act again by the U.P. Act 15 of 1976 permit-

ting imposition of limit on the number of permits to be

issued. In spite of the restrictions on grant of permits as

provided in the U.P. Act 15 of 1976 the State Government

issued notifications permitting grant of permits to all

eligible applicants without any upper limit. This Court held

in Ratneshwar Prasad's ease that the said notifications were

inconsistent with the limitation as to the number of permits

introduced by the U.P. Amending Act 1976 and as such were

bad in law. Venkataramiah, J. (as he then was) speaking for

the Court in Rameshwar Prasad's ease observed as under:

"We may here state that any observations made

in Hans Raj Kehar case would be inapplicable

so far as these cases presently before us are

concerned. In that case the court was con-

cerned 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 the gener-

ality of the power contained in Section 43-

A(1) of the Act where the State Government was

of opinion that it was in public interest to

grant stage carriage permits (except in re-

spect 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

issue appropriate directions as stated there-

in. That sub-section contained a clear legis-

lative policy which considered that there

could be no public prejudice if all eligible

applicants were granted permits. Without

saying anything more on the point, it may be

slated that whatever this court may have

observed while considering that provision

would not apply now as there is a clear depar-

ture made by the legislature from that policy

when it enacted the new sub-section (2) of

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 14 of 14

Section 43-A."

It is thus obvious that the reliance by the petitioners

on the ratio and observations of this Court in Rameshwar

Prasad's case is wholly mis-

444

placed. The Parliament has, under the Act, made a clear

departure from the policy and has reverted to the position

which was before this Court in Hans Raj Kehar's case.

Relying on Rameshwar Prasad's case the petitioners

contend that it is in 'public interest' to limit the grant

of permits on intra-region routes and while fixing the limit

various factors indicated by this Court in the said case are

to be taken into consideration. We do not agree. The concept

of public interest, in relation to motor transport business,

as propounded by this Court in Rameshwar Prasad's case was

only in the context of the old Act as amended by the U.P.

Act. We are of the view that the Act having brought-in

complete change in the policy of granting permits, the

observations of this Court in Rameshwar Prasad's case are

not relevant in the present context. The provisions of law

for consideration before this Court in Hans Raj Kehar's case

were almost similar to Section 80 of the Act. We are, there-

fore, bound by the law laid down by the four-Judges Bench of

this Court in Hans Raj Kehar's case.

The petitioners have further contended that the condi-

tions of roads, social status of the applicants, possibility

of small operators being eliminated by big operators, condi-

tions of hilly routes, fuel availability and pollution

control are some of the important factors which the Regional

Transport Authority is bound to take into consideration

while taking a decision on an application for grant of

permit. These are the matters which are supposed to be

within the comprehension of the transport authorities. The

legislative policy under the Act cannot be challenged on

these grounds. It is not disputed that the Regional Trans-

port Authority has the power under the Act to refuse an

application for grant of permit by giving reasons. It is for

the authority to take into consideration all the relevant

factors at the time of quasi-judicial consideration of the

applications for grant of permits. The statutory authorities

under the Act are bound to keep a watch on the erroneous and

illegal exercise of power in granting permits under the

liberalised policy.

We, therefore, see no force in any of the contentions

raised by the petitioners and as such we dismiss the writ

petitions. The parties are left to bear their own costs.

G.N. Petitions dis-

missed.

445