# I959 February xB. I959 M/s. Raman & Ranian Ltd v. The Stats of Madras & Others

- **Citation:** [1959] Supp. 2 S.C.R. 227
- **Court:** Supreme Court of India
- **Decided:** 1956-09-14
- **Case number:** Civil Appeal No. 37 of 1958
- **Bench:** Jafer Imam, A. K. Sarkar, SuBBA RAo
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/i959-february-xb-i959-m-s-raman-ranian-ltd-v-the-stats-of-madras-others-1629
- **Pages:** 29

## Headnote

Motor Vehicles-Legislation empowering State Government to
issue orders and directions-Interpretation-Nature of jurisdiction
conj erred-Such orders and directions, if law regulating rights of
parties-Motor Vehicles (Madras Amendment) Act, z948 (XX of
I948), s. 43A.
The appellant and the fourth respondent along with others
were applicants for a stage carriage permit.
The Regional
Transport Authority after hearing the applicants granted the
permit to the appellant. On appeal by the fourth respondent, the
Central Road Traffic Board set aside the order of the Regional
Transport Authority and granted the permit to the fourth respondent. The appellant moved the State Government in revision but to no effect. He thereafter moved the High Court
under Art. 226 of the Constitution for a writ of certiorari quashing the orders of the Central Road Traffic Board and the State
Government. The single Judge who heard the matter quashed
Rapur J.
I959
February xB.
I959
M/s. Raman &
Ranian Ltd.
v.
The Stats of
Madras & Others
228
SUPREME COURT REPORTS [1959] Supp.
the said orders and directed the State Transport Appellate Tribunal, which was constituted in place of the Central Road Traffic
Board, to dispose of the appeal according to law. On a Letters
Patent appeal by the fourth respondent, the Appellate Bench
of the High Court set aside the order of the single Judge and
restored the order of the Central Road Traffic Board. Hence this
appeal by special leave. The point for determination in the
appeal was whether the order granting the permit to the appellant made by the Regional Transport Authority on the basis of
an order issued by the State Government under s. 43A of the
Motor Vehicles Act, 1939, as amended by the Motor Vehicles
(Madras Amendment) Act, 1948, could be set aside on the basis
of another order imposing new restrictions issued thereunder
while the appeal was pending before the Central Road Traffic
Board and thus involved the question as to whether an order or
direction issued by the State Government under s. 43A of the
Act had the force of law, so as to create a vested right in the
appellant.
Held (per Jafer Imam and Subba Rao, JJ.), that s. 43A of
the Motor Vehicles Act, 1939. as amended by the Motor Vehicles
(Madras Amendment) Act, 1948, properly construed, must be
given a restricted meaning and the jurisdiction it conferred on
the State Government must be confined to administrative functions. An order or direction made thereunder by the State
Government, therefore, could not have the status of law regulating rights of parties and must partake of the character of an
administrative order.
C. S.S. Motor Service, Tenkasi v. The State of Madras, I.L.R.
1953 Mad. 304 and Gopalakrishnan Motor Transport Co., Ltd. v.
Secretary, Regional Transport Authority, Krishna District, V ijayawada, A.LR. (1957) A.P. 882, approved.
Consequently, in the instant case, the appellant could not be
said to have acquired a vested right that was defeated by a new
law enforced pending the appeal and the order of the Central
Road Traffic Board could not .be set aside merely on the ground
that it had decided the appeal on the basis of an order issued
subsequent to the grant of the permit if such order was otherwise
in public interest.
Per Sarkar. J.-It could hardly be said that the rule that a
court hearing an appeal from a decision should not ordinarily
take into consideratiol) a law passed subsequent to that decision
had application where a quasi-judicial tribunal heard an appeal
from another such tribunal. Consequently, in the instant case, it
could not be said that there was an error of law apparent on the
face of the record so as to attract a writ of certiorari and the
appeal must fail on that ground.
No applicant for a permit under the Motor Vehicles Act
could have a substantive right to the permit vested in him and
(2) S.C.R. SUPREME COURT REPORTS
229
the granting or refusal of a permit by the Regional Transport
Authority could not operate as res judicata

## Text

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(2) S.C.R. SUPREME COURT REPORTS
227
I959
it may be for the benefit of the parties to the difference, must be regarded as inserted in the interest of
the public also".
Waman
Shriniwas Kini
In that case there was a provision made by the Legisv.
lature that disputes mentioned in the section of the
Ratilal
Act were to be determined by an Expert nominated by Bhagwandas & Co.
the Board of Trade and it was contended that though
not in the strict technical sense estoppel, it was a
waiver of the provisions introduced into the Statute
for the benefit of private rights. No doubt that was
a case which proceeded on a question of jurisdiction
but the judgment proceeded on the principle of waiver
of a statutory provision inserted in public interest.
Thus the plea of waiver is unsustainable.
In our opinion, therefore, the judgment of the High
Court is sound and the appeal must therefore be dismissed with costs.
Appeal dismissed.
M/S. RAMAN & RAMAN LTD.
v.
THE STATE OF MADRAS & OTHERS
(JAFER IMAM, A. K. SARKAR and SuBBA RAo, JJ.)
Motor Vehicles-Legislation empowering State Government to
issue orders and directions-Interpretation-Nature of jurisdiction
conj erred-Such orders and directions, if law regulating rights of
parties-Motor Vehicles (Madras Amendment) Act, z948 (XX of
I948), s. 43A.
The appellant and the fourth respondent along with others
were applicants for a stage carriage permit.
The Regional
Transport Authority after hearing the applicants granted the
permit to the appellant. On appeal by the fourth respondent, the
Central Road Traffic Board set aside the order of the Regional
Transport Authority and granted the permit to the fourth respondent. The appellant moved the State Government in revision but to no effect. He thereafter moved the High Court
under Art. 226 of the Constitution for a writ of certiorari quashing the orders of the Central Road Traffic Board and the State
Government. The single Judge who heard the matter quashed
Rapur J.
I959
February xB.
I959
M/s. Raman &
Ranian Ltd.
v.
The Stats of
Madras & Others
228
SUPREME COURT REPORTS [1959] Supp.
the said orders and directed the State Transport Appellate Tribunal, which was constituted in place of the Central Road Traffic
Board, to dispose of the appeal according to law. On a Letters
Patent appeal by the fourth respondent, the Appellate Bench
of the High Court set aside the order of the single Judge and
restored the order of the Central Road Traffic Board. Hence this
appeal by special leave. The point for determination in the
appeal was whether the order granting the permit to the appellant made by the Regional Transport Authority on the basis of
an order issued by the State Government under s. 43A of the
Motor Vehicles Act, 1939, as amended by the Motor Vehicles
(Madras Amendment) Act, 1948, could be set aside on the basis
of another order imposing new restrictions issued thereunder
while the appeal was pending before the Central Road Traffic
Board and thus involved the question as to whether an order or
direction issued by the State Government under s. 43A of the
Act had the force of law, so as to create a vested right in the
appellant.
Held (per Jafer Imam and Subba Rao, JJ.), that s. 43A of
the Motor Vehicles Act, 1939. as amended by the Motor Vehicles
(Madras Amendment) Act, 1948, properly construed, must be
given a restricted meaning and the jurisdiction it conferred on
the State Government must be confined to administrative functions. An order or direction made thereunder by the State
Government, therefore, could not have the status of law regulating rights of parties and must partake of the character of an
administrative order.
C. S.S. Motor Service, Tenkasi v. The State of Madras, I.L.R.
1953 Mad. 304 and Gopalakrishnan Motor Transport Co., Ltd. v.
Secretary, Regional Transport Authority, Krishna District, V ijayawada, A.LR. (1957) A.P. 882, approved.
Consequently, in the instant case, the appellant could not be
said to have acquired a vested right that was defeated by a new
law enforced pending the appeal and the order of the Central
Road Traffic Board could not .be set aside merely on the ground
that it had decided the appeal on the basis of an order issued
subsequent to the grant of the permit if such order was otherwise
in public interest.
Per Sarkar. J.-It could hardly be said that the rule that a
court hearing an appeal from a decision should not ordinarily
take into consideratiol) a law passed subsequent to that decision
had application where a quasi-judicial tribunal heard an appeal
from another such tribunal. Consequently, in the instant case, it
could not be said that there was an error of law apparent on the
face of the record so as to attract a writ of certiorari and the
appeal must fail on that ground.
No applicant for a permit under the Motor Vehicles Act
could have a substantive right to the permit vested in him and
(2) S.C.R. SUPREME COURT REPORTS
229
the granting or refusal of a permit by the Regional Transport
Authority could not operate as res judicata.
It was unnecessary for the purpose of the present case to
decide what kind of orders could be issued by the State Government under s. 43A of the Act, for whatever its nature, administrative or otherwise, if an order under that section entitled a
person to its observance, and there was hardly any doubt as to
that, it would be a law a mistake of which would justify the
issue of a writ of certiorari at his instance.
The Mayor of Rochester v. The Queen, (1858) EL. BL. & E.L.
1924; 120 E.R. 791, referred to.
Nagendra Nath Bora v. The Commissioner of Hills Division
and Appeals, Assam, [1958] S.C.R. 1240, distinguished.
CIVIL APPELLATE JURISDICTION:
Civil
Appeal
No. 37 of 1958.
Appeal by special leave from the judgment and
order dated September 14, 1956, of the Madras High
Court in Writ Appeal No. 64 of 1956, arising out of
the judgment and order dated May 1, 1956, of the said
High Court in Writ Petition No. 852 of 1955.
G. S. Pathak, R. Ganapathy Iyer and G .. Gopalakrishnan, for the appellant.
A. V. Viswanatha Sastri, J.B. Dadachanji and S. N.
Andley, for respondent No. 4.
1959. February 18. The judgment of Imam and
Subba Rao, JJ., was delivered by Subba Rao, J.
Sarkar, J., delivered a separate judgment.
SuBBA RAO, J.-This appeal by Special Leave
against the judgment of the High Court of Judicature
at Madras raises the ques.J,ion of interpretation of
s. 43A of the Motor Vehicles Act, 1939 (IV of 1939),
as amended by the Motor Vehicles (Madras Amendment) Act, 1948 (Mad. XX of 1948), hereinafter referred to as the Act. On February 19, 1955, the Regional
Transport Authority, Tanjore, Madras State, the
second respondent herein, called for applications under
s. 57(2) of the Act for grant of a stage carriage permit
on the Saliamangalam Kodavasal route. The appellant and the fourth respondent, K. M. Shanmugam,
Proprietor, K. M. S. Transport, Ammapet, Tanjore
District, along with others, applied for the grant of
the said permit. The Regional Transport Authority
z959
M/s. Raman &
Raman Ltd.
v.
The State of
Madras & Others
Subba Rao].
/
230
SUPREME_ COURT REPORTS [1959] Supp.
x959
at its meeting held on April 19, 1955, after hearing the
M/s. Raman &
representations of the applicants, granted the permit
Raman Ltd.
to the appellant. The fourth respondent and two
v.
others preferred appeals against the said order to the
The State of
Central Road Traffic Board, Madras, the third responMadras & Others dent herein. The Central Road Traffic Board by its
order dated June 25, 1955, set aside the order of the
Subba Rao].
Regional Transport Authority and granted the permit
to the fourth respondent. The appellant preferred a
Revision Petition against that order to the first respondent, the State of Madras, but the first respondent
rejected the petition by its order dated October l~,
1955. Thereafter, the appellant filed a Writ Petition
(No. 852 of 1955) in the High Court of Madras under
Art. 226 of the Constitution to quash the orders of the
Central Road Traffic Board and the State of Madras.
Rajagopalan, J., of the said High Court by his order
dated May 1, 1956, quashed the order of the Government and directed the State Transport Appellate
Tribunal which had been constituted in place of the
Central Road Traffic Board to dispose of the appeal in
accordance with law. Against the judgment of the
learned Judge, the fourth respondent preferred an appeal under the Letters Patent and the Appellate Bench
of that High Court, consisting of Rajamannar, C. J.,
and Ramaswami, J., set aside the order of Rajagopalan, J., and restored the order of the Central Road
Traffic Board. The appellant with special leave filed
the present appeal against that judgment of the High
Court.
_
Mr. Pathak, appearing for the appellant, raised before us the following two points: (i) The appeal filed
by the fourth respondent against the order of the
Regional Transport Authority to the Central Road
Traffic Board was barred by limitation and the Board
acted illegally in disposing of the appeal without
deciding the question of limitation; and (ii) the appellant had the fundamental right to carry on the business of transport subject to reasonable restrictions
imposed by law as on the date he applied for a permit
·or at any rate when the Regional Transport Authority
issued the permit to him, and that the Central Road
(2) S.C.R.
SUPREME COURT REPORTS
231
Traffic Board committed an error, evident on the face
r959
of the record, in disposing of the appeal in accordance
with the new restrictions imposed by law made pendM/s. Raman &-
ing the appeal before it. Stated as a legal proposition,
Raman Ltd.
the contention is that the appellant had acquired a
The s:~te of
vested right to carry on the business of transport and Madras & Others
that the same could not be defeated by a subsequent
law made pending the appeal, which was only proSubba Rao J.
spective in character.
The first argument need not detain us, for the learned Counsel, in view of the finding of the High Court
that as a matter of fact the appeal to the Central
Road Traffic Board was not barred, fairly did not
press it before us.
This leaves us with the second
·and the only argument in the case. To appreciate
the contention it is necessary to set out some more
relevant facts : On March 28, 1953, the Government
made an order, G. 0. Ms. No. 1037 Home, purporting
to be under s. 43A of the Act.
The material part of
that order reads:
"(1) That additional buses should not be permitted to ply on existing routes unless there is a clear
need for increase in the number of buses plying on a
particular route and wasteful competition should be
discouraged but healthy competition where there is
room should be encouraged and,
(2) that the transport authorities while granting
stage carriage permits should work up to the minimum of 5 permits with a spare bus for each operator
and the issue of permits should be so regulated as not
to encourage benamidars on one hand and inefficient
operators on the other."
On November 15, 1954, in supersession of paragraph 2
of the above order, the Government issued an order,
G. 0. Ms. No. 3353 Home, to the following effect:
" The Governor of Madras hereby directs that
each viable stage carriage unit in this State shall consist of not less than 10 buses and that in the matter of
grant of stage carriage permits, other things being
equal, and with a view to build up such viable units,
the following shall be the order of preference :
232
SUPREME·COURT REPORTS [1959] Supp.
1959
(1) Operators with less than 10 buses but nearer
the mark of 10.
M/s. Raman &
Raman Ltd.
(2) Operators with IO and more buses.
v.
(3) Others including new entrants.
The State of
The Governor also directs that in order to facili,
Madras & Others tate the amalgamation of existing small units into
-
viable units transfer of permits shall be allowed
Subba Rao j. liberally."
On June 15, 1955, the Government issued .another
order, G. 0. Ms. No. 1689 Home, whereby the Central
Road Traffic Board was informed that pending further orders of Government after re-examination of the
question of formation of viable units of stage carriages,
the orders in para. (2) of G. 0. Ms. No. 1037 Home
dated 28th M;i,rch, 1953, would be in force.
The effect
of this order was that the first order was restored
pending final orders.
When the Regional Transport Authority issued the
permit in favour of the appellant, G. 0. Ms. No. 3353
Home dated 15th November, 1954, was in force, and
when the Central Road Traffic Board made the order
giving the permit to the fourth respondent, G. 0. Ms.
No. 1689 Home dated 15th June, 1955, was in operation. Apart from other considerations, the Regional
Transport Authority relied upon the former G. 0. in
preferring the appellant to other applicants,· while
the Central Road Traffic Board referred to G. 0. Ms.
No. 1037 Home dated 28th March, 1953, which was
restored by the later G. 0. in preferring the fourth
respondent to the appellant. We shall give further
details of the orders of the Regional Transport Authority and the Appellate Tribunal in the context of
another argument, but, for the present, the aforesaid
facts would suffice.
It would be convenient at this stage, before entering into the controversial question, to state briefly
some of the well-established principles relevant to the •
question raised : (i) A citizen has a fundamental right
to ply motor vehicles on public pathways under
Art. 19(1 )(g) of the Constitution, and any infringement
of that right by the State can be justified only if it
falls within the scope of Art. 19(6) thereof-See 0. S.S.
(2) S.C.R.
SUPREME COURT REPORTS
233
Motor
Service, Tenkasi v. The State of Madras (1)
and Saghir Ahmad v. The State of U. P. (2); (ii) proceedings before tribunals issuing permits are of quasijudicial in character-See 0. S.S. Motor Service, Tenkasi v. The State of Madras (1) and New Prakash
Transport Go. Ltd. v. New Suwarna Transport Go.
Ltd. (3); (iii) a new law which takes away or impairs
vested rights acquired under existing laws must be
deemed to be intended not to have retrospective
operation, unless such law makes it retrospective expressly or by implication-See Maxwell on the Interpretation of Statutes, p. 215; Garikapatti Veeraya v.
N. Subbiah Chowdhury {4) and Seth Gulab Chand v.
Kudilal (5); and (iv) the same principle applies to a
law made pending an appeal before an appellate
Court-See P. M. Seshadri v. Province of Madras (6).
So much is not, and cannot, de disputed. We shall
assume that the said principles apply to a law made
pending an appeal against an order of a quasi-judicial
tribunal. The main controversy centres round the
fact whether the orders made and the directions issued
by the State Government under s. 43A of the Act are
"laws" as to attract the operation of the aforesaid
principles.
While Mr. Pathak says that the said
directions are as much laws as those of the provisions
of a statute or rules made thereunder, Mr. A. Viswanatha Sastri contends that, having regard to the
scheme of the Motor Vehicles Act and the different
sections of the Act vesting powers in the State Government with regard to different matters dealt with by
the Act, the power conferred on the State Government
under s. 43A is a power to make orders or issue directions in respect of administrative matters regulating
the relationship between the State Government and
the Transport Authorities and that such orders do
not affect the legality or the validity of judicial acts
of the said authorities. To appreciate the rival contentions, it is necessary to consider the relevant provisions of the Act.
(r) I.L.R. 1953 Mad. 304, 330, 334·
(3) [1957] S.C.R. 98, rr8.
(5) [1959] S.C.R. 313, 322.
30
(2) [1955] 1 S.C.R. 707, 719.
(4) [1957] S.C.R. 488, 515.
(6) A.I.R 1954 Mad. 543.
z959
M / s. Raman &
Raman Ltd.
v.
The State of
Madras & Others
Subba Rao J.
234
SUPREME COURT REPORTS [1959] Supp.
z959
The Act, which is a Central Act, was passed in the
year 1939 and subsequently it was amended from time
M~::n~~":;d~ to time both by Parliament and also by the local
v.
legislatures. The main object of the Act is to regulate
The State of
the motor traffic in every State in the interest of the
Madras & Others public. Chapter II contains provisions relating to
licensing of drivers of motor vehicles. Chapter III
Subba Rao J.
prescribes for the registration of motor vehicles.
Chapter IV provides for the control of transport
vehicles. Chapter V lays down the general provisions
regarding construction, equipment and maintenance
of motor vehicles. Chapter VI regulates the control
of traffic. Chapter VIII deals with the insurance of
motor vehicles against third party risks. Chapter IX
defines the offences, lays down the penalties and prescribes the procedure for detecting offences and enforcing penalties. Chapter X deals with miscellaneous ·
matters. Every Chapter contains a specific provision
conferring a pqwer on the State Government to make
rules for the purpose of carrying into effect the provisions of that Chapter. To carry out the objects of the
Act, the State Government is authorized to create a
hierarchy of officers such as the State Transport Authority, the Regional Transport Authority, the Registering Authority, etc. Such Authorities are entrusted
with administrative as well as quasi-judicial functions.
Chapter IV with which we are now concerned follows
the same pattern. Its general heading is "Control of
Transport Vehicles". Section 42 prohibits the owners
of transport vehicles from using them in any public
place without permits. Section 43 empowers the
State Government to control road transport. Section 44
enables the State Government to constitute Transport
Authorities to exercise and discharge the specified
powers and functions. Under s. 44(4) the State Transport Authority is authorized to issue directions to any
Regional Transport Authority and the latter shall be
guided by such directions. Sections 46, 4 7, 48, 57, 60
and 64 prescribe the procedure for issue of permits
and also create a hierarchy of Tribunals for hearing
of applications and disposal of appeals. The said procedure is clearly quasi-judicial in character and has
(2) S.C.R. SUPREME COURT REPORTS
235
been held to be so by this Court. Sections 67 and 68
confer a power on the State Government to make
rules to regulate the operation of transport carriages
and also to make rules for the purpose of carrying into
effect the provisions of this Chapter.
Under the aforesaid provisions and the rules made
thereunder, the State Transport Authority is made
the administrative head of all the other Transport
Authorities functioning in the State, and the Central
Road Traffic Board the appellate authority in the hierarchy of Tribunals constituted under the Aet. As the
admh1istrative head the State Transport Authority is
authorized under s. 44(4) of the Act to issue directions
to any Regional Transport Authority, who shall be
guided by such directions.
As an appellate tribunal
the Central Road Traffic Board is empowered to dispose of the appeals preferred against the orders made
by the subordinate authorities under the Act in respect of specified matters. But the Central Act did
not make any provision enabling the State Governments to control either the quasi-judicial or the administrative wings of the machinery provided under
the Act. While the State Transport Authority could
issue directions to other Transport Authorities constituted under the Act, a State Government could not
likewise issue any directions either to the State Transport Authority or to its subordinate authorities. So
too, while the Central .Road Traffic Board could in its
appellate jurisdiction set aside or modify the orders of
the subordinate tribunals, the State Government was
not in a position to set aside the improper orders of
the tribunals under the Act. Presumably, therefore,
to bring the said authorities under its control, both on
the judicial and the administrative wings, Motor
Vehicles (Madras Amendment) Act, 1948 (Mad. XX of
1948), was passed and it became law on December 21,
1948.
Among other amendments, ss. 43A and 64A
were inserted in the Act. Section 43A reads:
" The State Government may issue such orders
and directions of a general character as it may consider necessary, in respect of any matter relating to
road transport, to the State Transport Authority or
I959
Mjs. Raman &
Raman Ltd.
v.
The State of
Madras & Others
Subba Rao].
236
SUPREME COURT REPORTS [1959) Supp.
r959
a Regional Transport Authority; and such TransM /s. Raman"" port Authority shall give effect to all such orders and
Ranian Ltd.
directions."
v.
Section 64A is to the following effect :
The State af
" The State Government may, on its own motion
Madras & Others
l'
·
d
·
11 ,.
d
f
_
or on app 10a.t10n ma e to it, ca
.or the recor s o
subba Rao J.
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
orders in reference thereto as it thinks fit."
So far as s. 64A is concerned, in express terms it confers a judicial power on the State Government to keep
a subordinate judicial tribunal within bounds. Section 64A, along with ss. 45 to 57, 60 and 64, forms a
complete code in respect of the quasi-judicial disposals
of the issue of permits. The permits should be issued
in accordance with the provisions of the Act and the
rules framed thereundAr following the judicial procedure. The words used in s. 43A are very wide. It
says that the State Government may issue orders and
directions of a general character in respect of any
matters relating to road transport. Divorced from the
context and the setting in which the new sectiou appears, it may comprehend any orders or directions of
a general character in respect of road transport ; and,
if so construed; it would not only subvert the other
provisions of the Act but also would be vulnerable to
attack on the ground of constitutional invalidity. It
would entrust the Government with a naked arbitrary
power capable of being used to compel quasi-judicial
tribunals to dispose of cases in a particular way ; it
would enable them to couch the order in a general
way to induce a tribunal to come to a particular deoi·
sion in a given case; and it would be destructive of
the entire judicial procedure envisaged by the Act and
the rules framed thereunder in the matter of disposal
of specified questions. It would be attributing to the
legislat~re an incongruity, for the State Government
could issue . directions in respect of which it could
make rules ignoring the safeguards provided in the
(2) S.C.R. SUPREME COURT REPORTS
237
making of the rules. Section 133 lays down that every
power to make rules given by the Act is subject to the
condition of the rules being made after previous publication. It.also enjoins on the Central and the State
Governments to place the said rules for not less than
fourteen days before the appropriate legislature and
the rules so made shall be subject to such modification
as the legislature may make in such session in which
they are so laid. All these salutary precautions can
be ignored if the directions given under s. 43A are
given the status of law; on the other hand, if a restrictive meaning is given as it should be in the context, there would be a happy correlation of the
functions of the various bodies under the Act, includ -
ing the Government. The Government's legislative
power is recognised under ss. 67 and 68 of the Act; its
judicial power is maintained under s. 64A and its
administrative power is affirmed under s. 43A. Chapter IV and the rules made thereunder confer administrative powers on the Regional Transport Authorities
and the State Transport Authority. Section 43A
enables the State Government to make orders and issue
directions of a general character in respect of those
functions to implement the provisions of the Act and
the rules made thereunder ; and the said authorities
shall give effect to all such orders and directions.
The context in which and the setting wherein the
section is inserted also lend support to the said conclusion. Section 42 describes the necessity for permits
and s. 43 confers specific powers on the Government
to control road transport. Section 43A coming ther~
after and before the sections conferring quasi-judicial
powers on tribunals is indicative of the fact that the
jurisdiction conferred under s. 43A is confined to
administrative functions of the Government and the
tribunals rather than to their judicial functions; for,
if the section was intended to confer .l~gislative power,
it should have found its place aft~r-
~-, 64A or somewhere near the end of the Chapter. Though it is not
a conclusive test, t}le pla.cing of the proyisions of
ss. 43A and Q4A,. which were ipserted by ~he same
Amending Act is also a point~r to the intentjdn of the
I959
M/s, Raman &
Raman Ltd,
v.
The State of
M adra• & Others
Subba Rao].
I959
M/s. Ranian &-
Raman Ltd.
v.
The State of
Madras & Others
Subba Rao ].
238
SUPREME COURT REPORTS [1959] Supp.
legislature, namely, that s. 43A was intended to
govern administrative functions of the tribunals.
The terms of the section and the manner of issuing
orders and directions thereunder also support the
same conclusion. The legislature used two words in
the section : (i) order and (ii) directions. Whenever it
intended to affect the rights of parties, it used the
word " rules ", but in this section it designedly used
the words appropriate to the control of admiuisLrative
machinery. The words " directions and order" are
defined in one of the Law Lexicons thus: "Direction
contains most of instruction in it; order most of
authority. Directions should be followed; orders
obeyed. It is necessary to direct those who are unable
to act for themselves; it is necessary to order those
whose business it is to execute the orders. " The said
meaning of the words is more appropriate to administrative control rather than to rules of law affecting
rights of parties. Further, the declaration in the section that the orders and the directions under the
section shall be binding on the authorities concerned
is indicative of the fact that they are not laws, for if
they are laws, no such declaration is necessary. What
is more, they need not even be published and may, if
the Government so desires, take the form of secret
communication to the authorities concerned. Nor is
there any basis for the argument that as the directions are issued under a statutory power, they are
"laws". The source of the power does not affect the
character of the things done in exercise of that power.
Whether it is a law or an administrative direction
depends upon the character or nature of the orders or
directions authorized to be issued in exercise of the
power conferred. That should be determined on other
considerations adverted to by us already. Our view
is in accord with that expressed by a Division Bench
of the Madras High Court in C. S.S. Motor Service,
Tenkasi v. The State of Madras (1). There the constitutional validity of ss. 42, 43A, 4 7, 48 and 64A of the
Act was questioned. In dealing withs. 43A, Venkatarama Ayyar, J., who delivered the judgment of the
Court, observed at p. 335 thus :
(1) l.L.R. 1953 Mad. 304. 330, 334.
... -•
(2) S.C.R. SUPREME COURT REPORTS
239
r959
"Coming next to section 43A, it is argued that it
confers on the Provincial Government wide and unlimited powers to issue all such orders and directions·of M~~ .... ::m:;/''
a general character as they may consider necessary,
v.
that the transport authorities are bound under that
The State of
section to give effect to such orders and directions, Madras & Others
that there is nothing to prevent the Government
from even issuing directions with reference to the
judicial functions which those authorities have to discharge under the Act, that it could not be expected
that such directions would be disregarded by those
authorities and that in practice the provisions of section 4 7 could be evaded. Reference is also made to
the fact that this section was introduced for nullifying·
the effect of the decision in Sri Rama Vilas Service
Ltd: v. The Road Traffic Board, Madras (1) where it
was held that the transport authorities had failed in
the discharge of their judicial function in meekly
giving effect to an order of the Government which
was opposed to the provisions of the Act.
Section
43-A appears to be intended to clothe the Government
with authority to issue directions of an administrative
character and in that view it would be valid.
No
specific order or direction of the Government is attacked in these proceedings as invalid and the discussion
is largely academic. The section must itself be held
to be valid though particular orders passed thereunder
might be open to challenge as unconstitutional."
From the aforesaid observations, it is manifest that
the learned Judge construed s. 43A as conferring a
power on the State Government to issue directions of
an administrative character. If the construction was
otherwise, the learned Judge would have held that
the section was constitutionally. bad as he had held
in regard to other sections.
The High Court of
Andhra Pradesh in Gopalakrishna Motor Transport Co.
Ltd. v. Secretary, Regional 'l.'ransport Authority, Krishna District, Vijayawada (2) had also considered the
scope of the provisions of s. 43A.
There, the State
Government issued an order under s. 43A of the Act
prescribing the manner of checking a bus for over-
(1) (1948) l M.L.J. 85.
(2) A.I.R. 1957 A.P. 882.
Subba Rao].
240
SUPREME COURT REPORTS [1959] Supp.
r959
loading. The procedure prescribed was not followed
M/s. Raman &
by the Regional Transport :Authority, which was emRaman Ltd.
powered to suspend the permit on the ground of overv.
loading under s.· 60 of the Act. One of the contentions
The State of
raised was that as the mandatory direction given by
Madras & Others the State Government under s. 43A was not followed,
the Regional Trarisport Authority in exercising its
Subba Rao ].
powers under s. 60 should have held that there was no
over-loading. In rejecting this plea, the High Court
observed at p. 885 thus:
" Government has power to frame rules and also
to issue administrative directions of a general character under Section 43-A of the Act.
. ........... In so far
as the order was couched in mandatory terms, it is
incumbent upon the officers concerned to comply with
it.
Any instruction given under Section 43-A cannot
override the discretionary power conferred upon the
Transport Authority under section 60.
. ..... We,
therefore, hold that the order of the Government contained only administrative instructions issued under
Section 43-A. It is true that some of the ad ministrative instructions impose a mandatory duty on the
officers concerned and if they do not discharge their
duty, Government
may take disciplinary action
against them. But, in our view, non-compliance with
those directions cannot affect the finding the Au thority arrived at on other material on the question of
over-loading."
In the present case, the learned Chief Justice, who
was a party to the decision in 0. S. S. Motor Service
v. The State of Madras (1), presumably on the basis of
that judgment observed thus:
"In our opinion, these Government orders, which
are in the nature of general administrative directions
to the transport authorities, do not vest any rights,
indefeasible rights-in any applicant for a stage carriage permit ".
The result of the discussion may be summarised
thus: The appellant had a fundamental right to carry
(1) l.L.R. 1953 Mad. 304. 330, 334·
'
(2) S.C.R.
SUPR:gME COURT REPORTS
241
on his motor transport business subject to reasonable
r959
restrictions imposed upon that right by law. Some of
the provisions of Chapter IV of the Act contain
M /s. Raman""
Rarnan Ltd.
reasonable restrictions on the said right. He was given
v
a permit on the basis of the law imposing the said
The st~te of
restrictions on his right. The orders made and the Madras & Others
directions issued under s. 43A could cover only the
administrative field of the officers concerned and
Subba Rao J.
therefore any direction issued thereunder was not law
regulating the rights of the parties. The order made
and the directions issued under s. 43A of the Act cannot obviously add to the considerations prescribed
under s. 47 on the basis of which the tribunal is empowered to issue or refuse permit, as the case may be.
There was, therefore, no change in the law pending
the appeal so as to affect the appellant's vested right.
In this view, the appellant cannot question the validity of the order of the Central Road Traffic Board on
the ground that it decided the appeal on a law that
was made subsequent to the issue of the permit to him.
The same result could be arrived at by different
process of reasoning.
The appellant had a fundamental right to carry on the business of motor transport subject to reasonable restrictions imposed by law
under Art. 19(6) of the Constitution. The Act imposed
reasonable restrictions on the said right. One such
restriction was that the State Government may issue
such orders and directions of a general character as it
may consider necessary in respect of any matter relating to road transport to the State Transport Authority.
When the appellant applied for a permit, he must be
deemed to have had the knowledge of the fact that
his application would be disposed of by the State
Transport Authority in accordance with orders and
directions of a general character issued by the State
Government. The directions were not new law that
came into existence pending the appeal, but only
issued under a law that was in existence even at the
time he applied for a permit. The law was that embodied in s. 43A of the Act, namely, that the Government could issue directions binding on the authorities
31
242
SUPREME COURT REPORTS [1959] Supp.
concerned and that law was a pre-existing one and
the application had to be disposed of subject to that
M/s. Raman &
law till it was finally terminated by an order: of the
Raman Ltd.
I959
v.
highest tribunal in the hierarchy. In this view also
The State of
there are no merits in the appellant's contention.
Madrns & Othm
Now coming to the merits of the case, the contenSubb:i Rao ].
tions of the parties may be stated thus : The learned
Counsel for the respondents contends that there is no
material difference between G. 0. Ms. No. 1037 and
G. 0. Ms. No. 3353, except in regard to one circumstance, which is not material for the present purpose:
while in the former G. 0., the argument proceeds, the
transport authority is directed to work up to a minimum of five units with a spare bns, under the latter
G. 0., the viable unit fixed is not less than ten buses
and the authority concerned is directed to work up to
that limit. It is pointed out that the only difference
is in the measure of a viable unit and that the fourth
respondent's case falls squarely within the first category in the order of preference prescribed in G. 0. Ms.
No. 3353of1954. The learned Counsel for the appellant contends that the order of preference is based upon
the achievement of the object, namely, building up of
viable units of ten permits and that the appellant
admittedly had only four permits and, therefore, far
below the viable unit and he could not be given preference in a competition between him and the appellant, who had more than thirty permits. The problem
presented can only be solved by a reasonable interpretation of the plain words used in G. 0. Ms. No. 3353
of 1954 read along with the expressed object sought to
be achieved thereby. It will be convenient at this
stage to read the said order omitting the unnecessary
words:
G. 0. Ms. No. 3353 Home dated 15th November, 1954.
"The Planning Commission has made the following recommendation in respect of Road Transport
service:
'It is desirable for the existing private operators'
units to amalgamate, wherever possible, into big viable
units to enable them to achieve better returns and
maintain better standards of operation '.
·1 ,
'
(2) S.C.R. SUPREME COURT REPORTS
243
I959
The Government considered that it will be in the M /s. Rama"&·
interests of the public if road transport services are
Haman Ltd.
conducted by operators having at least ten stage
v.
carriaaes and they have therefore decided that each
The State of
b
•
viable unit should consist of at least ten stage car- Madras & Others
riages.
-
Subb;;ao ].
In exercise of the powers conferred by Section 43-A
of the Motor Vehicles Act, 1939 (Central Act IV of
1939), and in supersession of the orders issued in paragraph (ii) of G. 0. Ms. 1037, Home dated 28th March,
1953, the Governor of Madras hereby directs that each
viable stage carriage unit in this State shall consist of
not less than IO buses and that in the matter of grant
of stage carriage permits, other things being equal,
and that with a view to build up such viable units, the
following shall be the order of preference :
I. Operators with less than 10 buses, I.mt nearer
the mark of ten.
2~ Operators with 10 and more buses.
3.
Others including new entrants.
The Governor also directs that in order to facilitate the amalgamation of existing small units into
viable units transfer of permits shall be allowed liberally."
The G. 0., was issued to achieve the object of inducing
the operators to amalgamate wherever possible, into
big viable units to enable them to achieve better
returns and maintain better standards of operation.
The Government decided that a unit of at least ten
buses would be necessary to achieve that object. To
implement that policy, it directed that each viable
stage carriage unit should consist of not less than ten
buses and with a view to build up such viable units,
it directed that, other things being equal, the order of
preference contained therein should be followed.
The
order of preference contained three categories, one excluding the other. They did not provide for any rules
of preference inter se of operators coming within each
one of the categories. Presumably, that was left to be
decided by the transport authorities, having regard to
the considerations mentioned in s. 47.
The argument
1959
M/s. li'a1nan 6'
Haman Ltd.
v.
The State of
Madras & Others
Subba Rao J.
244
SUPREME COURT REPORTS
[1959) Supp.
of the learned Counsel for the fourth respondent is
based upon the first category, which reads:
"Operators with less than 10 buses but nearer the
mark of IO".
He contends that, having regard to the
object of the G. 0., namely, to build up a viable stage
.carriage unit of ten, in the absence of an operator
with stage carriages nearer to the mark of ten than
the fourth respondent, he is entitled to a permit in
preference to the appellant provided other things are
equal between them. In respect of this argument,
emphasis is laid upon the word "nearer" and it is
said that the said word indicates a rule of preference
between
operators coming within that category,
namely, that an operator like the fourth respondent is
to be preferred, if there is no other operator nearer
than him to the mark of ten. This argument is attractive, but, in our view, it is inconsistent with the
scheme of the order. It is true that the phraseology
of category (I) has not been happily worded and perhaps grammatically not correct. But the intention is
fairly obvious.