Kesava Rao vs Subbaraju and Another

Viswanatha Sastry, J.—This is on appeal from the judgment ol Balakrishna Ayyar J. quashing an order of the Government, G. O. No. 230, Home d/22-1-1952, passed u/s 64-A of the Motor Vehicles Act (hereinafter referred to as "the Act"). On 12-12-1050, the Regional Transport Authority: West Godavarl (hereinafter referred to, for the sake of brevity, as R. T. A. ) granted a stage carriage permit on the route between Narsapur and Juvvulapalem to one K. Kesavarao who was select frond among 33 applicants for the reasons that his father was the first bus operator in the district and he has sufficient property to buy a bus and (b) the claims of the Ors. are inferior." f''\\'' Seven of the disappointed applicants for the permit including one K. Subbaraju applied to the Central Road Traffic Board, Madras (hereinafter referred to as C. R. T. B.) which passed an order on 31-3-1951 setting aside the order of the R. T. A., granting the permit to K. Kesavarao and directing the permit to be given to K. Subbaraju. The rea. ion given by the O. R. T. B. for its order was as follows:

"In our opinion, Appellants like No. 5 (K. Subbaraju) and No. 1 (Venkatasomaraju) who own one and two buses respectively should have been given preference on the ground that they are exist- log operators who would be able to run their vehicles more efficiently with the addition of some more vehicles.... As between the 1st Appellant and the 6th Appellant, we prefer the 5th Appellant on the ground of previous record; No. 1 (Appellant) seems sib have been caught overloading his bus on The order of the Central Road Traffic Board was reversed by the Government by its order G. O. No. 2170 dated 30-5-1951 under which the permit was directed to be granted to K. Kesavarao. M the course of its order, the Government observed:

"The Government are convinced that it is not desirable in the public interest to grant to Sri K. Subbaraju the permit in question. The order of the C. R. T. B., is accordingly set aside." In Writ Petition No. 436 of 1951, Subba Rao J. quashed this order of the Government on the ground that it did not appear from the order how public interest would suffer if the permit was not given to Kesavarao. Kesavarao preferred L. P. A. 177/51 against the order of Subba Rao J. and the Appellate Court held that though the order of the Government was rightly quashed by Subbarao J., it would still have jurisdiction to dispose of afresh the revision petition preferred by Kesavarao u/s 64A of the Act.

On 22-1-1952 the Government passed a second order G. O. No. 230 Home, dated 22-1-1952, reaffirming its original decision granting the permit to K. Kesavarao. This second order of the Government gave the following reasons:

The Motor Vehicles Act and Rules do not prohibit the grant of permit to new entrants. The C. R. T. B''s Order does not indicate how or why Sri Kesavarao would not be able to run the service as efficiently as the Respondent Sri Subbaraju. On the other hand, the Regional Transport Authority which is the local authority was satisfied that SUS Kesavarao has sufficient means to run the service. While it is true that one or two bus owners who have satisfactory records should be enabled to become in due course fleet owners of three buses to have an economic unit, on that ground alone the claims of hew entrants should not be set aside altogether....... The Government therefore set aside the order of the C. R. T. B. as it is not proper in the circumstances of the case and uphold the order of the R. T. A. granting a permit to Sri K. Kesava Rao.

This second order of the Government was again quashed by Balakrishna Ayyar J., in Writ Petition No. 273 of 1952 on the following grounds:

(i) The power conferred on Government by Section 64A of the Act was not a plenary power but a corrective power to be exercised in a judicial manner and for proper reasons.

(ii) The order of the C. R. T. B. was based on a principle the soundness of which was accepted by the Government in its order.

(iii) The order of the Government did not state in what respect the order of the C. R. T. B. was illegal, irregular or improper. We may state that this is our own summary of the reasoning of the learned Judge.

The questions that were raised before us at the hearing, of this appeal related to the powers of the Government u/s 64-A of the Act and our own powers of interference under Article 226 of the Constitution with the orders of the Government passed u/s 64A. We may state at the outset that it was not contended before us that Section 64A was ultra vires Articles 226, 19 (1) (g) or any other Article of Chapter III of the Constitution.

It must be conceded that in the interests of Public safety and convenience as well as for. toe proper maintenance of Highways which are state property, it is necessary to control and regulate the business of carrying passengers for- hire in motor vehicles plying on hires. A limit has to be imposed on the number and capacity of motor transports running along Particular routes, and this is achieved by the system of permits or licences, a system

Which would be valid and proper under Article 19(6) of the Constitution.

When a number of persons apply for a Stage of carriage permit, which only one or a few of them can have, the authority empowered to grant the .permit must, of necessity, exercise a measure of discretion in the selection anti elimination of applicants. The Act therefore vests the power of selection in the first instance in the E. T. A., subject'' however, to an appeal to the O. U. T. ts., and the revisional power of the Government u/s 64-A which runs as follows:

"The Provincial Government may, of its own motion or on application made to it, call for the records of any order passed or proceeding taken'' under this Chapter by any authority or officer subordinate to it for the purpose of satisfying itself as to the legality, regularity or propriety of such order or proceeding and after examining such, records, may pass such order in reference thereto as it thinks fit."

"Legality and regularity" are well understood terms'' and well recognised grounds of judicial interference on an appeal or revision. An order is illegal if it is opposed to any enactment or any rule having the force of law. It is irregular if the Procedure followed is in violation of. the principles of natural justice and fair play. The term "Propriety" is, however, of wide import and there might be honest differences of opinion about the "Propriety" of an order even though it is in conformity with-law and within the powers of the authority making the order.

This very case furnishes an illustration. The View of the C. R. T. B., was that persons who run one or two buses and who have satisfactory records should be enabled to become in due course fleet owners of three or five buses to enable them to have an efficient and economic unit, It may be that a person who runs one or two buses would have acquired some experience and if he is allotted one or two more buses, he would be able to run the service efficiently by having a workshop for effecting repairs and by being in a position to substitute buses in case there is a breakdown of the stage carriage on the way.

From the point of view of effective service ; to the public which alone is the criterion in matter of this kind, a fleet owner may be preferable to .f stray operators owning a single bus. On the other hand the view of the R. T. A. and the Government was that the above rule would operate as a hard-- ship on new entrants and would tend to create a monopoly which might not be in the interests of the public. It is also possible that new entrants and single bus owners might devote greater attention to the service than fleet owners.

This difference in the point of view or the angle of approach is common to the present as well as other controversies. In such matters, it is for the State to decide which among the competing principals would best serve the interests of the public. If, after due consideration, the Government has taken a decision on this matter, It is not for us to investigate the relative merits or soundness of one point of view as against the other.

As observed by the Pranfurter J., in Railroad Commission v. Rowen & Nichols Oil Co., (1940) 84 Law Edn. 1368 (A), "a controversy like this Betrays calls for a fresh reminder that the Courts �! must-not substitute their notions of expediency and fairness for those which have glided the '' agencies to whom the formulation and execution Of the policy have been entrusted".

If the Government in coming to its conclusion in a revision u/s 64A of the Act had taken into account facts or circumstances irrelevant for a consideration of the question before it or had been influenced by extraneous considerations in reaching its decision or if the order of the Government was mala fide or biased in any manner it would be the duty of this Court to quash the order of the Government. So long as the Government exercises its power u/s 64A bona tide and for the purpose for which the power has been conferred, we cannot substitute our own notions and opinions for the policies or opinions on which the Government acted and quash the order of the Government as being in excess of its powers.

it cannot be said in the present case that the order of the Government is based on considerations not germane to a decision of the question brought up before it or extraneous or irrelevant thereto. Nor could it be said that the Government has used its powers so as to enable it to select recipients of governmental favour in the field of road transport. On the face of the order it appears that the Government had examined the proceedings of the subordinate transport authorities and found that the order of the C.R.T.B., was improper and that of. the R.T.A. should be upheld.

The Government has given some reasons for its conclusion that the order of the C.R.T.B., was not proper. It is really a question of balancing two possible views one of which appealed to the O.R.T.B. and the other to the Government. In these circumstances we consider that it is not proper for us to substitute our own judgment for the judgment of the Tribunal appointed by the Legislature especially in case where there is no right of appeal to this Court and where interference is sought under Article 226 of the Constitution.

It was brought to our notice that the transport authorities have not followed a uniform principle in selecting persons to whom stage carriage permits should be granted. It is no doubt open to the State to alter the rules of selection from time to time if as a result of experience, it discovers that they require alteration in the interests of public. It is, however, not proper for the Government to apply two different and opposing principles at the same time one to one applicant and the other to Anr. , without assigning proper and convincing reasons for such differentiation.

We therefore hold that it not for us to say whether the reasons given by the Government are adequate or compelling so long as those reasons were not improper or irrelevant reasons.

It was urged on behalf of Kesavarao that he had the benefit of the permit granted to him by R.T.A. for over four years and that he should not now be deprived of that benefit. The benefit accrued to Kesavarao by reason of successive orders obtained by him for stay of the operation of the order of the C.R.T.B. If we were quashing the order of the Government we would hold that the benefit obtained by Kesavarao as a result of the orders staying the operation of the order of the O.R.T.B., was not a benefit justly or properly obtained by him, and that that circumstance would be no reason for confirming him in the enjoyment of that benefit.

It follows that the appeal should be allowed, the order of Balakrishna Ayyar J. should be set aside, and the Writ Petition No. 273 of 52 dismissed. In view of the doubts honestly entertained by the parties with reference to the policy of the Government in granting stage carriage permits, we direct that their should be no orders as to costs either before Balakrishna Ayyar J., or before us.