N. Sambandam vs S. Khadar Sheriff and Others

S.B. Ayyar, C.J.

(1) These appeals have been filed against the judgment of Srinivasan J., issuing a writ of certiorari and quashing the order of the State Transport

Appellate Tribunal, Madras, dated 29th April 1959, granting a stage carriage permit to Sambandam, the appellant herein. The route in question is

between Vellore and Arcot, and it has been conceded throughout that the traffic over the route has been at all times very heavy and wayside

passengers suffered greater difficulties than those at the termini to get accommodation in the existing bus service. Previous to the grant of the permit

now in question, the entire stage carriage service over the route was in the hands of Khader Sheriff, the first respondent in the first of the appeals

mentioned above. He was running seven buses, and on 26th May 1958, he was even able to secure from the Regional Transport Authority,

Vellore, permission to increase the seating capacity of his buses and to run additional trips the number of trips per day having been increased from

56 to 70. Even before the increase of trips granted, there was a general direction issued by the Government to increase the existing number of

stage carriages over the route by 25 per cent. But the demand over the route in question being greater, the Regional Transport Authority proposed

to put four additional buses on it and he invited representations to the proposal. Khader Sheriff, naturally, objected to the addition of buses, and,

on 4th July 1957, the authority decided to solve the problem by permitting additional trips to the existing operator (which was given effect to as we

said, on 26th May 1958) and by deciding to increase the number of buses on the route by one. The relevant portion of the order on that occasion

runs thus :

Arcot being a big business centre with close proximity to the district headquarters the traffic demand on this route is very heavy. The wayside

passengers between Vellore and Arcot find it difficult to get the required accommodation in the existing buses. A careful study of the increased

population of this area, the progressive implementation of local development plans and the all round demand for travel facilities reveals that the

present requirements of traffic needs warrant the introduction of one additional bus on this route. Hence the introduction of one additional bus is

approved, in addition to the grant of additional singles for the existing buses on Vellore Arcot route

Applications were then called for in respect of one permit thus decided to be granted. Forty persons applied, and Khader Sheriff was one amongst

them. It was during that time that a part of the previous decision, namely that of granting additional trips to the existing operator, was implemented.

The applications filed by the several operators were considered at a meeting of the Regional Transport Authority on 26th June 1958. Marks were

allotted to the various applicants in accordance with G. O. No. 1298, dated 28th April 1958. Khader Sheriff obtained five marks and another

operator (Uthandi Mudaliar) obtained an equal number of marks. There were several others who secured marks somewhere near. Khader Sheriff,

with his predominating influence over the route, evidently felt his chances of securing the additional permit to be a bit remote. He therefore took up

the stand that, as the route was well served by him, there was no need to increase the number of buses even by one bus. The Regional Transport

Authority, in a laconic order, after referring to that contention, said-

The argument is accepted as applicable to the present position on the route in question. It would appear that there is no immediate need to

increase the number of buses plying on the short route. Vellore to Arcot, and further action is dropped in respect of this subject for the present,

and all the applications are therefore rejected

A singular feature of this order is that the Regional Transport Authority, who himself decided earlier that even after permitting the existing operator

to run additional trips, there was still need for one more bus on the route, and who, proceeding on the basis of that order, permitted Khader Sheriff

to run additional trips with his seven existing buses and who further had also very solemnly allotted marks to the various applicants with a view to

select one from amongst them, should have suddenly felt persuaded by an argument on behalf of the existing operator that what he did all along

was erroneous and that the service rendered by Khader Sheriff was adequate. Such a conclusion on the part of the authority at the stage at which

it was reached is liable, to some extent, to lead to the suspicion that it accepted, and subscribed, to, the philosophy of Khader Sheriff that, if stage

carriage permits over the route were at all to be granted, it should be to him, and that, otherwise, no permit at all should be granted. If that view

were to prevail, neither the public interest nor fairness to the other side can be said to have any place. There is another feature in the case, which is

not the less surprising. There were eight appeals against the order of the Regional Transport Authority, rejecting the applications of the operators

for the issue of a permit. One of the appeals was by Khader Sheriff himself, who, as we said, persuaded the Regional Transport Authority that

there was no need for the issue of permit at all. It is somewhat strange, though not exactly surprising, that Khader Sheriff who was able to

persuade the Regional Transport Authority to reject all applications including that of himself should file one of the appeals and should then take up

the stand that no appeal at all would lie to the State Transport Appellate Tribunal. Yet, that is the position which he took up. It is, however, said in

justification of that attitude that he filed the appeal with a view to secure the permit for himself in case the State Transport Appellate Tribunal were

to decide that the permit should be granted and to proceed to consider the merits of the applicants. But when the appeals were taken up, Khader

Sheriff''s counsel took a preliminary objection to the maintainability of the appeals on the ground that the decision of the Regional Transport

Authority not to issue the permit to any one was an order administrative in nature and could not be appealed against Strange are the ways of

monopolists. In a very careful order, the State Transport Appellate Tribunal overruled the objection, held that the appeals were properly laid, and

proceeded to judge the comparative merits of the appellants before it by applying the marking system prescribed by G. O. 1298 dated 28-4-

1956. We shall refer to the marks obtained by four of eight operators, which alone are relevant for the present purpose

Sambandam (appellant) ... 5 marks

Khader Sheriff ... 5 marks

Ranganathan ... 11/2 marks

Uthandi Mudaliar ... 5 marks

The Appellate Tribunal eliminated Khader Sheriff as he had a predominating influence over the route in question, which in the interests of the

public, needed a newcomer. As between Sambandam and Uthandi Mudaliar, the Tribunal preferred the former on account of his superior

qualifications and granted him the permit. That order of the Tribunal was challenged under Art. 226 of the Constitution in this court by Khader

Sheriff, Uthandi Mudaliar and Ranganathan, who respectively filed W. P. 498 of 1959, 901 of 1959 and 481 of 1960 Srinivasan J. before whom

the petitions came up for hearing, accepted the argument urged on behalf of Khader Sheriff and held that the Tribunal had no jurisdiction to grant

the permit to Sambandam, as no appeal could properly lie before it under S. 64(a) of the Motor Vehicles Act against an order of the Regional

Transport Authority declining to grant the permit to any one. In this view, the learned Judge did not proceed to consider the merits of the several

petitions : he issued an order, quashing the order of the Appellate Tribunal. Sambandam has filed these appeals against that judgment.

(2) From what we have stated above, it will be clear that the order of the Regional Transport Authority can hardly be regarded as one in

accordance with law. That authority had, no doubt, the power under S. 47(3) to limit the number of stage carriages. It has, in exercise of that

power limited the number of carriages over the route to 8. After so doing, it proceeded to call for applications for the issue of one permit, seven

having been already held by Khader Sheriff, and received both applications and representations under S. 57 in the matter of issue of the additional

permit. It is certainly inappropriate at the stage of considering the applications under S. 57(3), for the Regional Transport Authority to take up the

question of limiting the number of buses over the route under S. 47(3) afresh. This point need not require any elaboration, as the Supreme Court, in

a recent judgment reported in Abdul Mateen v. Ram Kailash Pandey, AIR 1963 SC 64 , has said--

We cannot accept the contention on behalf of the appellant that, when the Regional Transport Authority, following the procedure provided in S.

57 comes to grant or refuse a permit, it can ignore the limit fixed under S. 47(3), because it is also the authority making the order under S. 48, S.

47(3) is concerned with a general order, limiting the stage carriages generally, etc., on a consideration of matters specified in S. 47(1). That general

order can be modified by the Regional Transport Authority if it so decides one way or the other. But the modification of that order is not a matter

for consideration when the Regional Transport Authority is dealing with the actual grant of permits under S. 48 read with S. 57, for, at that stage

''what the Regional Transport Authority has to do is to choose between various applicants who may have made applications to it under S. 46 read

with S. 57, (italics (here into '' '') ours). That, in our opinion, is not the stage where the general order passed under S. 47(3) can be reconsidered,

for, the order under S. 48 is subject to the provisions of S. 47, which includes S. 47(3), under which a general order limiting the number of stage

carriages etc., may have been passed

The above observations will apply equally to a case where the Regional Transport Authority, after having fixed the number of permits to be issued,

wants to go back upon it at the time of considering the application under S. 57.

(3) But the more important question in the present case is one on which the decision of Srinivasan J. is rested namely, whether the order of the

Regional Transport Authority can be challenged by way of an appeal to the State Transport Appellate Tribunal. There can be little doubt that,

where there is an order of the simpliciter, limiting the number of stage carriages under the provisions of S. 47(3), it would be a general order

against which no individual person can have a grievance. It is in other words an administrative order not affecting a party, but merely regulating the

stage carriage service over a route. Such an order would not be subject to an appeal under S. 64. But the matter, in our opinion, will stand on a

different footing, where, as in this case, that stage is passed and the Regional Transport Authority had called for applications, and while disposing

of those applications, he proceeds to fix the number of buses, and, as a consequence, passes an order of rejecting the applications. The order at

that stage cannot be regarded as general order of administrative character--one in respect of which nobody can have a grievance. That will

undoubtedly be an order rejecting the applications of the various operators for the issue of a permit which had once been decided to be issued, but

later withheld at the time of disposal of the applications under S. 57. In the present case, the very terms of the order say that the applications of the

several applicants are rejected. The reason given for that order was, no doubt, not one germane to Ss. 48 and 57, but one coming under S. 47(3).

But, even so, the order can only be regarded as one rejecting the applications. Section 64 which confers a right of appeal to a persons says--

(a) aggrieved by the refusal of the State or a Regional Transport Authority to grant a permit or by any condition attached to a permit granted to

him, or...... (f) being a local authority or police authority or an association which, or a person providing transport facilities who, having opposed the

grant of a permit, is aggrieved by the grant thereof or by any condition attached thereto.......

Srinivasan J. has recognised that the terms of the section are sufficiently wide to include a right of appeal against an order like the one in the present

case and observed--

It may be stated at once that this section appears to be in perfectly general terms and a perusal of it seems to indicate that even in a case where

the Regional Transport Authority declines to grant the permit to any person applying for it on the ground that there is no public need for the grant of

the permit in question an appeal would appear to lie

But the learned Judge has proceeded to state that that provision has to be read along with clause (f), and if so done the apparently wide terms of

sub-clause (a) will have to be controlled by sub-clause (f), with the result that it is only if there has been a grant of the permit to some person that

an appeal would lie. Therefore, if nobody had been granted the permit, no appeal would lie. The learned Judge, referring to S. 64 says--

Read side by side, there appears to be a limitation upon the apparent tenor of S. 64(1)(a). It contemplates a person who fails to obtain a permit at

the hands of the Regional Transport Authority and finds that another person is granted the permit. To my mind, that section does not cover a case

where the Regional Transport Authority comes to a decision that the grant of a permit on that route is not necessary and declines to grant the

permit to any person. Unless a person can show that he has been prejudiced by the grant of a permit to another person, S. 64(1) (a) does not

provide for an appeal"".

(4) We are, with respect, unable to agree to share that view. Clauses (a) and (f) of S. 64 refer to different categories of persons who are entitled to

appeal under the respective provisions. In Ram Gopal Vs. Anant Prasad and Another, the Supreme Court has held that clause (f) of S. 64 of the

Act does not in any way restrict the power of the Appellate Tribunal to grant all the reliefs in an appeal under clause (a) of that section. Clause (f)

of S. 64 relates to persons who have not themselves been applicants for the permit, whereas clause (a) specifically refers to persons whose

applications for permit have been refused. Those two clauses have therefore to be regarded as dealing with different categories of persons, and it

will be incorrect to read them together so as to restrict the operation of one of the clauses by the other. Again, the view that an appeal can lie only

in cases where there has been a grant of a permit to some one is really opposed to certain well-settled principles. We may refer in this connection

to a comparatively early decision of this court in Nadar Transports Tiruchirapalli Vs. The State of Madras and Others, where it has been held that

the right of appeal conferred on a person by sub-section (a) was in respect of a refusal of the application to him and not against a grant made to the

other. It is true that the grantee of a permit by the subordinate authority has got to be impleaded as a party to the appeal; but that is because, if the

appellate authority is going to interfere in favour of the appellant, the persons who had obtained a permit from the subordinate authority should

have the opportunity of showing that the order in his favour was correct. Therefore if the appellate authority were to grant the permit in favour of

the other side, it does so, because the permit had been refused to that person by the inferior authority and its setting aside the permit granted by the

latter authority will merely be incidental. It would follow, therefore, from the decision to which we have made reference, that it is not necessary for

enabling an appeal to be filed that there should have been an order granting the permit. What determines the right of appeal is the refusal of a

permit to an applicant. That condition has been satisfied in the present case.

(5) Once it is conceded that an appeal from an order refusing the permit lies, the ground on which such refusal is based cannot obviously regulate

the statutory right of appeal given to the aggrieved party. If therefore, the Regional Transport Authority has rejected an application for permit on

the ground that there was no need on public grounds to issue the permit to anybody still, the order, in substance, so far as at any rate as the

aggrieved person is concerned, will be an order rejecting his claim for a permit, and, as such, it will be appealable. The circumstance that the

under-lying reason for the order has been that the public do not require additional service will not affect the situation. That this is the true principle

will be clear if we refer to certain provisions of the Act. S. 45, for example, contemplates applications being filed by persons desirous of running

stage carriages or other forms of transport voluntarily without being invited to do so by the transport authority. Section 57 is the procedural

section. Sub. Cl. 2 of that section refers to both types of applications, viz. Applications filed voluntarily by a person desirous of getting a permit to

run stage carriages and those filed by operators in answer to applications called for by the Regional Transport Authority. In AIR 1963 SC 64, the

Supreme Court emphasised that time factor referred to in S. 2 as important. Sub-clause 5 to S. 57 obliges the Regional Transport Authority to

dispose of the applications, whether made voluntarily or invited at a public hearing. There is thus no difference in the matter of disposal of

applications whether voluntarily made or made in response to a notification calling for applications. In the former type of cases, the Regional

Transport Authority can certainly refuse a permit on the ground that the route in question does not need one. It cannot be denied, and indeed, it is

not disputed, that, even in such a case, a right of appeal would be available to the aggrieved party. That shows that notwithstanding the ground of

refusal, viz., that the public needs do not require a permit over the route in question, there could exist a right of appeal because the order is one

rejecting an application for permit. It will follow from this that it is not the form of the order that determines that right of appeal, but the result of it.

In other words if the order results in the rejection of an application, S. 64(a) will, in our opinion, apply to it.

(6) It is, however, argued that, the decision of the Regional Transport Authority to limit the number of buses being an administrative order, no

appeal can lie. A right of appeal is a creature of a statute; it can exist both in respect of judicial as well as administrative decisions. The question,

therefore, in every case will be whether the statute permits an appeal, and that cannot further be made to depend on the character or nature of the

decision appealed against. Indeed S. 64(F) envisages a decision on a matter relating to the necessity of a permit being dealt with by the Appellate

Tribunal. There is therefore nothing in the Act which supports the view that a quasi judicial appellate authority functioning under the Act is

incompetent to decide questions relating to the number of buses to be run in the route when the matter comes to it, albeit incidentally in a properly

filed appeal before it.

(7) But, as we pointed out already, the decision to reduce the number of buses by the Regional Transport Authority in the instant case to the

existing number is merely a reason for not granting the permit to the operators who applied for it, and not purely an administrative order that is

envisaged in S. 47(3) of the Act. In our opinion, an appeal would lie from such an order.

(8) It is argued that, if such a power of entertaining an appeal on a question under S. 47(3) were to be recognised in the State Transport Appellate

Tribunal, it will in effect confer a power on that authority to set aside an order under S. 47(3) and such a power would be in conflict with the

overriding powers of the Government under S. 43-A and of the State Transport authority under S. 44(3) in respect of administrative matters.

There is, however, no substance in the argument. So long as the Regional Transport authority has confined himself to making general direction

under S. 47(3), there could be no appeal and no question of interference can at all arise. But where he utilises S. 47(3) only as a means of

dismissing an application, certain expectations have been raised in operators who had filed applications, there should certainly be a right of appeal

against such an order, that is what S 64(a) provides for. The powers that are referred to in S. 43-A and S. 44-(3) are all general powers, not

disposing of applications for permit. It is very doubtful whether even the Regional Transport Authority could, after having once fixed the number of

permits to be issued over the route, alter that limit at any later stage. Assuming that it can do so, we have to see whether that order is not so

integrally connected with the order refusing the permit that it can be appealed against. Having regard to the terms of S. 64(a), the answer to that

question can only be in the affirmative. In such an appeal, it should be competent for the State Transport Appellate Tribunal to go into the propriety

or otherwise having regard to the additional permit. Otherwise, the right of appeal itself would become illusory.

(9) Srinivasan J. found that there was an error in the order of the State Transport Appellate Tribunal, as even if one were to concede that an

appeal lay, it was the plain duty of the Tribunal to have remanded the matter afresh to the Regional Transport Authority, so that all those persons

that had applied for permits might have an equal opportunity of getting the permit. We cannot agree that the powers of the Tribunal are so limited.

The State Transport Appellate Tribunal is a statutory Tribunal, sitting in appeal over the orders of the Regional Transport Authority. As an

appellate authority, its powers are co-extensive with those of the Regional Transport Authority. It has no doubt a discretion in proper cases, when

it finds an error in the order of the Regional Transport Authority, to set it aside and remand the case for further hearing. Equally, it has a power to

dispose of the matter itself. The fact that the Regional Transport Authority had not decided the comparative merits of the applications is no bar to

the appellate authority itself looking into the matter and deciding on the merits of the various applications. The further view that all the operators

who had filled applications before the Regional Transport Authority have some kind of right which requires the appellate authority to remit the case

back cannot also be supported. Those persons, no doubt, agitated their claims before the Regional Transport Authority; but, on a refusal by that

authority of their applications, for whatever reason it might be, they no longer persisted. There is therefore no reason why they should be given an

opportunity. It may be that they are not themselves anxious to secure the permit for themselves. Cases can be imagined where on second thoughts

or it might be on obtaining other permits elsewhere they did not want to pursue the matter. There is therefore no substance in the contention that

has been urged before us by Mr. Rajah Iyer on behalf of Khader Sheriff that the State Transport Appellate Tribunal must have remitted the matter

back to the Regional Transport Authority. It follows that the State Transport Appellate Tribunal had the jurisdiction to entertain the appeal and

dispose of the same.

(10) The only question which then survives for determination is whether the order passed by the Appellate Tribunal on the merits is such that it can

be challenged under Art. 226. Mr. T. Chengalvarayan, appearing for Uthandi Mudaliar, who got 5 marks, has frankly stated before us that he

cannot question the legality of the order. So far as Khader Sheriff is concerned, the only point he raised was about the competency of the appeal.

He does not himself say that he should be given the permit. The State Transport Appellate Tribunal has considered that he is almost a monopolist

over that route and he should not be given any further permit. That is a matter that was entirely within the jurisdiction of that authority and cannot

be raised in these proceedings. Indeed, Mr. Rajah Aiyar, appearing on his behalf, did not lay any claim to the permit. The only operator the

remaining is Ranganathan on whose behalf Mr. K.A. Panchapakesan, advanced a very strenuous argument, saying that the Tribunal erred in

allotting 5 marks to Sambandam. The only ground that has been urged in support of that contention is that Sambandam, although he owns a fully

equipped workshop entitling him to two marks, owns it only in his capacity as a member of a joint family which has got another service in a nearby

route. He, therefore, urges that 2 marks should not have been given to Sambandam. The question of allotment of marks is entirely one for the

Tribunal and any error in that respect cannot be corrected by this court in proceeding under Art. 226 of the Constitution. Even if one were to

accept the argument of Mr. Panchapakesan, the position will be that Sambandam will get 4 marks, which is certainly higher than 11/2 marks

obtained by Ranganathan. Finding this difficulty, learned counsel then said that his client was a small operator and that he should be given the

permit in preference to Sambandam, who was an existing operator, under the provisions of the later G. Os. like G. O. 2265 issued by the

Government. But that was a matter entirely for the Tribunal to decide. As we mentioned earlier, the Tribunal has considered the case of every one

of the appellants with meticulous care and we can ourselves find no error in its order to justify interference under Art. 226 of the Constitution. In

this view, it has become unnecessary to remit the cases back to Srinivasan J. on our finding that the learned judge''s view that an appeal did not lie

to the State Transport Appellate Tribunal is not correct. We are of opinion that there was no substance in any one of the writ petitions filed before

the learned Judge. We allow the appeals and dismiss the petitions with costs.

H/K.S.B.

(11) Appeals allowed.