Permit; G.T. Venkataswamy Reddy Vs. State Transport Authority [Supreme Court of India, 19-07-2016]

The judgment reported in Karnataka State Road Transport Corporation, Bangalore Vs. B.A. Jayaram and others – 1984 (Supp) SCC 244 is no longer a good law and the decision reported in Pandiyan Roadways Corporation Ltd. Vs. M.A. Egappan – (1987) 2 SCC 47 stands approved which is in tune with the Constitution Bench decision reported in Adarsh Travels Bus Service and another Vs. State of U.P. and others – (1985) 4 SCC 557 and the observations made in R.Raghuram Vs. P. Jayarama Naidu and others – 1990 (supp) SCC 361 stands approved.


IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

[T.S. Thakur, C.J.I.] [Fakkir Mohamed Ibrahim Kalifulla] [S.A. Bobde] [R. Banumathi] [Uday Umesh Lalit] JJ.

July 19, 2016

CIVIL APPEAL NO.4480 OF 1998

G.T. Venkataswamy Reddy …Appellant VERSUS State Transport Authority & Ors. …Respondents

With C.A. No.4481/1998, C.A. Nos.7195-7197/2001, C.A. No.2782/2002, C.A. No.7299/2002, C.A. No.3605/2003, C.A. No.3606/2003, C.A. No.3633/2003, C.A. Nos.3731-3733/2003, C.A. No.3853/2003, SLP(C) Nos.22621-22622/2015

J U D G M E N T

Fakkir Mohamed Ibrahim Kalifulla, J.

1. This reference to this Constitution Bench was made by a Division Bench of this Court in their order dated 22.07.2003 made in the case of

R. Raghuram Vs. P. Jayarama Naidu and others reported in 1990 (Supp) SCC 361

which reference though was initially made to a Three Judges Bench, was subsequently referred to the Constitution Bench by the Three Judges Bench led by the Honourable The Chief Justice of India vide order dated 01.12.2004. As the issues raised and argued before us were common, on the question referred, we heard arguments in common.

2. We heard the arguments of Mr. K.K. Venugopal, learned senior counsel for the appellant in the C.A.No.3606/2003, Ms. Kiran Suri, learned senior counsel for the appellant in C.A.No.4480/1998, Mr. A. Mariarputham, learned senior counsel for the appellant in C.A.Nos.7195-7197/2001, Mr. Amit Singh Chaddha, learned senior counsel for the appellant in C.A.3853/2003 and Mr. Raju Rammachandran, learned senior counsel for the respondent(s) in C.A.No.4480/1998.

3. Mr. K.K. Venugopal, learned senior counsel made his leading submissions, followed by Ms.Suri and Mr. Chaddha as well as Mr. Mariarputham, learned senior counsels for the appellants, while Mr. Raju Ramachandran, learned senior counsel addressed arguments on behalf of the respondents in these appeals.

4. Mr. K. K. Venugopal, learned senior counsel for the appellant in C.A.3606 of 2003 made a brief reference to the order dated 22.07.2003, by which the present reference came to be made to the Constitution Bench and the subsequent order dated 01.12.2004 as well. Learned senior counsel in his submissions, fairly pointed out that the issue concerned in this reference has to be considered by referring to the decisions reported in

Karnataka State Road Transport Corporation, Bangalore Vs. B.A.Jayaram and others – 1984 (Supp) SCC 244

(hereinafter referred to as ‘JAYARAM’),

Pandiyan Roadways Corporation Ltd. Vs. M.A.Egappan – 1987 (2) SCC 47

(hereinafter referred to as ‘EGAPPAN’),

Adarsh Travels Bus Service and another Vs. State of U.P. and others – (1985) 4 SCC 557

(hereinafter referred to as ‘ADARSH TRAVELS’),

Karnataka State Road Transport Corporation, Bangalore Vs. Karnataka State Transport Authority, Bangalore and others -1987 (Supp) SCC 648

(hereinafter referred to as ‘KSRTC’) and R.Raghuram (supra) (hereinafter referred to as ‘RAGHURAM’).

5. The learned senior counsel made a detailed reference to the list of dates commencing from 1963-64 when the initial permit in the case of appellant in C.A.3606 of 2003 viz., permit No.13/63-64 for the Route Bangalore to Hosur via., Madivala, Chandapura, Anekal, Thali, Denkanikottah and Keelamangalam came to be issued, which permit was originally granted in favour of one Mr. C. Rajasekaran and subsequently transferred to Smt. G. Kavitha Gopinath on 12.03.1998 and even thereafter transferred in favour of the present appellant Smt. A.M. Kalaivani Ammal. The learned senior counsel also referred to the application made by the appellant on 10.01.1985 to the State Transport Authority (STA), Bangalore for grant of four additional singles and one additional vehicle by the order dated 10.01.1985, the Authority granted two additional singles with inclusion of one additional vehicle. Thereafter by referring to the subsequent proceedings initiated at the instance of the appellant, the learned senior counsel referred to the order of the STAT, Madras as well as that of the order of the learned Single Judge in C.R.P.No.553 of 1988 and the order of the Division Bench in W.A.No.750 and 780 of 2002 dated 23.03.2002 pursuant to which the present appeal came to be filed.

6. The learned senior counsel referred to Section 48(3)(xxi), Section 57(8) and Section 63 of the Motor Vehicles Act, 1939 (hereinafter referred to as “the Act”), which pertain to the statutory prescriptions concerning grant of variation as well as the requirement for the counter signature respectively. The learned senior counsel also fairly referred to the provisions viz., Sections 68A, 68B, 68FF falling under Chapter IV-A of the Act while making his submissions.

7. The learned senior counsel while formulating his submissions, contended that the reference itself was based on incorrect provisions because, there is no conflict or inconsistency between ‘JAYARAM’ and ‘EGAPPAN’ since the existing permit in ‘JAYARAM’ was an exempted one on the Nationalized Route and variation of that permit by added singles and additional bus was an issue, while in ‘EGAPPAN’, the operator was not one of the persons exempted under the Nationalized scheme and on the other hand he was operating on a non-scheme route. The learned senior counsel then contended that ‘ADARSH TRAVELS’ does not deal with Section 57(8) of the Act which concerns grant of variations, but dealt with the interpretation of an existing scheme and as to whether an operator on that Route could operate with corridor restrictions. The learned senior counsel submitted that the ratio in ‘ADARSH TRAVELS’ being that the condition of the Scheme would cover the rights of the operator and therefore the said case is not applicable to the case on hand. As far as the case in ‘RAGHURAM’ is concerned, learned senior counsel submitted that the said case was not of any consequence, because the review petitioner in that case wrongly proceeded on the basis as to what was included was an approved Scheme, while in fact it was only a draft scheme, which would attract different consequence.

8. Lastly, he contended that the judgment in ‘JAYARAM’, ‘RAGHURAM’ and ‘KSRTC’ support the case of the appellant, which concerns grant of variation on a nationalized Route, that the appellant was operating from 1965 and the variation was granted in 1985 and, therefore, his operation should not be disturbed in public interest.

9. Ms. Suri, learned senior counsel for the appellant in C.A.No.4480 of 1998, after referring to the list of dates rightly formulated the questions as under (i) Whether variation is permissible in a notified scheme route? and (ii) Whether the Tamil Nadu Act disentitles counter signature of interstate permit variation?

10. The learned senior counsel after making reference to ‘EGAPPAN’ judgment, submitted that the appellant’s permit was covered by a draft scheme. As regards the alleged conflict between ‘JAYARAM’ and ‘EGAPPAN’, the learned senior counsel submitted that since the scheme was at the draft stage, the position was different. As far as the implication of Section 68FF of the Act was concerned, the learned senior counsel submitted that the same would bar any grant of permit which would include variation by way of additional singles or additional vehicles.

11. Mr. Mariarputham, learned senior counsel for the appellant in C.A.Nos.7195-7197 of 2001, submitted that the question as regards the implication by reason of the Tamil Nadu Act can be left open for consideration by the regular Bench since the question referred to the Constitution Bench does not cover the said issue.

12. Mr. Chaddha, learned senior counsel for the appellant in C.A.No.3853 of 2003 after making reference to the scheme concerning the case of the appellant in that case, submitted that the said scheme does not cover the case, in as much as the argument is that any interstate agreement even entered subsequently, will stand excluded and by referring to the object of the scheme in the case of the said appellant and after referring to the relevant laws in the agreement, learned senior counsel sought to distinguish the case of the appellant.

13. As against the above submissions, Mr. Raju Ramachandran, learned senior counsel for the respondent in C.A.4480 of 1998 submitted that Section 68B of the Act is the complete answer to the argument of the learned counsel for the appellant in C.A.3853 of 2003. The learned senior counsel further submitted that having regard to the implication of the provisions contained in Chapter IV-A of the Act, the scheme is the law and if the scheme does not permit any variation, then the same would not be permissible.

14. Having heard learned senior counsel for the appellants and the learned senior counsel for the respondent, we proceed to answer the reference as under.

15. By order dated 22.07.2003, the Division Bench of this Court after noting the reference made in the case of R.Raghuram (supra) to a Constitution Bench and on finding that later the matter was then referred to a three Judge Bench, and subsequently before the three Judge Bench, the petition itself abated on account of the death of the petitioner in that case and since the conflict continued to remain in these cases, the matter was referred to a Bench of three Judges. Subsequently, when the above appeal along with the connected matters was listed before a three Judge Bench headed by the then Hon’ble The Chief Justice of India, by an order dated 01.12.2004, the said Bench again referred the case back for hearing before a Constitution Bench. That is how these appeals are listed before us.

16. When we refer to the order dated 22.07.2003, we find an apparent conflict in the view of the law taken in ‘JAYARAM’ and ‘EGAPPAN’. It was also noted therein that the Constitution Bench decision in ‘ADARSH TRAVELS’, wherein, similar question came to be considered and decided was distinguished by a three Judge Bench of this Court in ‘KSRTC’. The case which got abated was reported in ‘RAGHURAM’. When we read the order dated 22.07.2003, which is the order by which initially the reference came to be made to a three Judge Bench which was subsequently referred to the Constitution Bench by the subsequent order dated 01.12.2004, except making a reference to the apparent conflict as between ‘JAYARAM’ and ‘EGAPPAN’ as well as the distinction in ‘ADARSH TRAVELS’ made in ‘KSRTC’, there was no specific terms of reference made in either of the two orders. However, when we refer to the case which got abated viz., ‘RAGHURAM’, while dealing with an identical issue, this Court while referring the review to a Constitution Bench has specified the terms of reference which can be culled out and can be taken as the Terms of Reference and the same reads as under: “Whether on the publication of an approved scheme, the number of trips of the vehicles of the existing operations can be increased both by number of trips and vehicles by granting the variation of a permit even when the existing operators are allowed to carry on their business as on the date of the publication of the scheme”. A little later we will refer to the relevant provisions, which necessitated the said reference.

17. It is worthy to note that before formulating the said question for reference to a Constitution Bench, the learned Judges culled out the ratio decidendi in the Constitution Bench decision of ‘ADARSH TRAVELS’ and how the case in ‘JAYARAM’ run counter to the said ratio and consequently, it was held that the ruling in ‘JAYARAM’ was impliedly overruled in ‘ADARSH TRAVELS’.

18. Keeping the said perception which weighed with this Court in ‘RAGHURAM’ to make a reference to the Constitution Bench, we can discern from the said order of reference that the conflict with reference to which the present reference came to be made by the orders dated 22.07.2003 and 01.12.2004 were in all fours covered by the reference made in ‘RAGHURAM’ to the Constitution Bench. Therefore, though the said reference stood abated because of the demise of the appellant therein, the question of law referred to the Constitution Bench rightly survived and the said question requires to be answered in this reference.

19. In order to answer the above referred question, we have to make note of the principles which were noted in the judgments reported in ‘JAYARAM’ (supra), ‘ADARSH TRAVELS’ (supra), ‘EGAPPAN’ (supra) – ‘KSRTC’ (supra) and ‘RAGHURAM’ (supra), apart from the relevant provisions falling under Chapter IV and IV-A of the Act. We shall make a reference to the decisions in the forefront before making a reference to the Statutory provisions and thereafter analyze the question for consideration and render our decision.

20. Before doing so, at the very outset, we want to make it clear that we are not dealing with any individual facts involved in these appeals as we are not concerned with various intricated facts involved in the different appeals. After we answer the reference all the appeals will be listed before the regular Bench for disposal based on the answer to the question referred before us. With that prelude, we proceed to first analyze the decisions mentioned above.

21. ‘JAYARAM’ (supra) is the starting point for this controversy, in which the legal questions framed and the answer rendered can be set out. The question considered by the said two Judge Bench decision in ‘JAYARAM’ has been formulated in paragraph 9 which reads as under:

“9. On the above rival contentions, two main questions arise for our consideration, namely,

(1) Whether sub-section (8) of section 57 creates a legal fiction by reason of which the grant of an application for variation in the conditions of a permit in respect of a matter set out in that sub- section results in the grant of a new permit ?

(2) Whether an increase in the number of trips or the number of vehicles above the maximum specified in an existing inter-State stage carriage permit would be inconsistent with the provisions of the said Scheme ?”

22. Before answering the above questions the learned Judges made a detailed reference to the various provisions contained in Chapter IV and IV-A of the Act. Thereafter, by making a particular reference to Section 57(8) of the Act, the learned Judges in their analyses observed as under in paragraph 15 :

“15. …….If the effect of sub-section (8) of section 57 were as contended for by the Appellant, that is, if the said sub section (8) were to create a legal fiction by which an application for variation of the conditions of a permit of the nature referred to in that subsection is to be deemed to be an application for the grant of a new permit and such variation when granted would result in the grant of a new permit, then clearly by reason of the prohibition contained in section 68-FF, the granting of such application would be inconsistent with the provisions of the said Scheme and would not be permissible in law. Considerable emphasis were placed on behalf of the Appellant on the words “shall be treated as an application for the grant of a new permit” occurring in the said sub-section (8) and on the basis of this phraseology, it was submitted that an application for variation of a condition of a permit referred to in subsection (8) of section 57 was by a fiction of law put on the same footing as an application for the grant of a new permit and it, therefore, followed as a corollary that such an application if granted would result in the grant of a new permit.”

23. Thereafter, the learned Judges referred to sub-section 1 to 10 of Section 57 of the Act in detail and then stated as under in paragraph 16:

“16. ……….Sub-section (8) comes immediately after sub- sections (3) to (7) and when read in the context of these sub-sections and in juxtaposition with them, it is clear that the legislative intent in enacting that subsection was to prescribe the procedure to be followed when an application for variation of the conditions of a permit referred to in that sub-section is made, this procedure being the same as is laid down in sub sections (3) to (7) with respect to an application for a new stage carriage permit or a new public carrier’s permit. It is for the purpose of providing that the procedure to be followed in the case of an application made under sub-section (8) is to be the same as the procedure to be followed in the case of an application for a new permit that sub-section (8) uses the words “shall be treated as an application for the grant of a new permit.” By the use of these words what sub-section (8) does is to incorporate in it the provisions of subsections(3) to (7). This is a very different thing from enacting a legal fiction………”

(Underlining is ours)

24. While stating the law as above, the learned Judges sought reliance upon the decision reported in