# RAMESHWAR PRASAD ETC., ETC v. STATE OF UTTAR PRADESH & OTHERS

- **Citation:** [1983] 2 S.C.R. 418
- **Court:** Supreme Court of India
- **Decided:** 1981-01-19
- **Bench:** A.P. Sen, E.S. Venkataramiah
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/rameshwar-prasad-etc-etc-v-state-of-uttar-pradesh-others-8829
- **Pages:** 30

## Headnote

Motor Vehi~s Act, 1939 as in force in the State of Uttar Pradesh-S. 43 .. A
as amended by U.P. Act 15 of 1976 read withs. 47 as amended by Cent;a/ Act 47
of 1978-lnterpretation of-Stdte Government cannot
issue directions under
sub-s. (1) of s. 43-A for grant of stage carriage permits to all eligible applicants
after amendment of s. 43-A by U. P. Acl 15of1976-Whi/e isJuing directions under
su!J..s. (1) of s. 43-A State Government cannot r"gnore provisions contained in subss. (1) and {IA) to (1H) of s. 47.
Interpretation-Rule of construction of an amnided provision.
Words and Phrases-' Public interest'-What It means in the context of
Motor Vehicles Act, 1939.
A 'stage carriage' under the Motor Vehicles Act, 1939 means a motor
vehicle which carries more than six persons for hire or reward at separate fares
paid by or for individual passengers either for the whole journey or for stages of
the journey and for plying such a vehicle it is necessary to obtain a permit
from the appropriate Transport Authority. While considering an application
for such a permit, the Transport Authority must, under els. (a) to (f) of sub-s. (1)
of s. 47, have regard to the interest of the public generally, the advantages to
the public of the service to be provided, the adequacy of other passenger transport services operating between the places to be served, the operation by the
applicant of other transport services, ,etC., and also take into consideration the
representations made by local or police authorities and by persons already
providing passenger transport facilities by any means along or near the proposed
route or area. The State Government may, under sub-s. (1) of s. 43, having
regard to the advantages offered to the public by the development of motor
transport, the desirability of preventing uneconomic competition among motor
vehicles, etc., issue appropriate directions to the Transport Authority.
The subject matter of regulation of motor vehicles being within the scope
of entry 35 of the Concurrent List, the Act in its application to the State of
Uttar
Pradesh was
amended
in 1972 by the U .P. Legislature by the.
introduction of s. 43-A which was a new provision. While sub-s. (1) thereof
conferred power on the State Government to issue .directions of a general character in public interest in respect of any matter relating to road transport, sub-s.
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RAMESHWAR PD. V, U.P. STATE
419
(2) specifically conferred the power to issue directions regarding grant of stage
carriage permits to all eligible applicants if the State Government was of the
opinion that it was in the public interest to do so. Further, under sub·s. (2) of
s. 43·A, the provisions of s. 47 stood amended to the effect that while considedng
an api)Jication for permit, it was no longer necessary for the Transport Authority
to have regard to the adequacy of other passenger transport services operating
between the places to be served or to the operation by the applicant of other
-transport
services; nor was the Transport Authority required to look into
representations made by any one other than local or police authorities. The
State Government, acting under s. 43-A, ·issued directions in March, 1972 for
grant of permits to a11 eligible applicants without any restriction as to the
number of permits to be issui:d on any route. The validity of s. 43-A and the
directions issued
tbereunder
were upheld by the Court in HanJ Raj Kehar &
Ors v. State of UP. & Ors. (1975) I S.C.R. 916. But, within a short time, the
State Government realised the necessity of reviewing the policy of issuing permits
to all eligible applicants and amended s. 43-A with retrospective effect by the
Uttar Pradesh Act 15 of 1976. While subs. (!)was retained as such, sub-s. (2)
was substituted by an entirely new sub-section. The Statement of Objects and
Reasons appended to the Amending Act stated that it had become necessary to
reconsider the policy of granting bus permits liberally with a view to checking
un

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418
RAMESHWAR PRASAD ETC., ETC.
v.
STATE OF UTTAR PRADESH & OTHERS
February 24! 1983
[A.P. SEN AND E.S. VENKATARAMIAH, JJ.J
Motor Vehi~s Act, 1939 as in force in the State of Uttar Pradesh-S. 43 .. A
as amended by U.P. Act 15 of 1976 read withs. 47 as amended by Cent;a/ Act 47
of 1978-lnterpretation of-Stdte Government cannot
issue directions under
sub-s. (1) of s. 43-A for grant of stage carriage permits to all eligible applicants
after amendment of s. 43-A by U. P. Acl 15of1976-Whi/e isJuing directions under
su!J..s. (1) of s. 43-A State Government cannot r"gnore provisions contained in subss. (1) and {IA) to (1H) of s. 47.
Interpretation-Rule of construction of an amnided provision.
Words and Phrases-' Public interest'-What It means in the context of
Motor Vehicles Act, 1939.
A 'stage carriage' under the Motor Vehicles Act, 1939 means a motor
vehicle which carries more than six persons for hire or reward at separate fares
paid by or for individual passengers either for the whole journey or for stages of
the journey and for plying such a vehicle it is necessary to obtain a permit
from the appropriate Transport Authority. While considering an application
for such a permit, the Transport Authority must, under els. (a) to (f) of sub-s. (1)
of s. 47, have regard to the interest of the public generally, the advantages to
the public of the service to be provided, the adequacy of other passenger transport services operating between the places to be served, the operation by the
applicant of other transport services, ,etC., and also take into consideration the
representations made by local or police authorities and by persons already
providing passenger transport facilities by any means along or near the proposed
route or area. The State Government may, under sub-s. (1) of s. 43, having
regard to the advantages offered to the public by the development of motor
transport, the desirability of preventing uneconomic competition among motor
vehicles, etc., issue appropriate directions to the Transport Authority.
The subject matter of regulation of motor vehicles being within the scope
of entry 35 of the Concurrent List, the Act in its application to the State of
Uttar
Pradesh was
amended
in 1972 by the U .P. Legislature by the.
introduction of s. 43-A which was a new provision. While sub-s. (1) thereof
conferred power on the State Government to issue .directions of a general character in public interest in respect of any matter relating to road transport, sub-s.
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RAMESHWAR PD. V, U.P. STATE
419
(2) specifically conferred the power to issue directions regarding grant of stage
carriage permits to all eligible applicants if the State Government was of the
opinion that it was in the public interest to do so. Further, under sub·s. (2) of
s. 43·A, the provisions of s. 47 stood amended to the effect that while considedng
an api)Jication for permit, it was no longer necessary for the Transport Authority
to have regard to the adequacy of other passenger transport services operating
between the places to be served or to the operation by the applicant of other
-transport
services; nor was the Transport Authority required to look into
representations made by any one other than local or police authorities. The
State Government, acting under s. 43-A, ·issued directions in March, 1972 for
grant of permits to a11 eligible applicants without any restriction as to the
number of permits to be issui:d on any route. The validity of s. 43-A and the
directions issued
tbereunder
were upheld by the Court in HanJ Raj Kehar &
Ors v. State of UP. & Ors. (1975) I S.C.R. 916. But, within a short time, the
State Government realised the necessity of reviewing the policy of issuing permits
to all eligible applicants and amended s. 43-A with retrospective effect by the
Uttar Pradesh Act 15 of 1976. While subs. (!)was retained as such, sub-s. (2)
was substituted by an entirely new sub-section. The Statement of Objects and
Reasons appended to the Amending Act stated that it had become necessary to
reconsider the policy of granting bus permits liberally with a view to checking
unproductive capital expenditure and unnecessary consu.mption of fuel, preventing elimination of sman operators as a consequence of unreasonable competition, efc. and authorising the State Government to issue necessary directions
from time to time in regard to the number of permits that may be granted in
respect of any route or area, the preference to be given to specifically deserving
categories, etc. The State Government thereafler issued directions to the
Transport Authorities to ensure that the operation of the total number of stage
carriages on any route was economically viable.
Section 47 was amended by the Central Act 47 of 1978. The proviso to
sub-s. (1) of s. 47 was amended by providing that in addition to a registered
cooperative· society, an application for a stage carriage permit from a person who
bas a valid licence for driving transport vehicles shall be given preference over
applications from individual owners. Parliament also introduced new sub-ss. (lA)
to (lH) in s. 47 providing for reservation of certain percentage of stage carriage
permits for the Scheduled Castes and Tribes and weaker sections of the commu~
nity and empowered the State Government to frame rules for implementing
sub-ss. (lA) to (lH) of s.47. These amendments came into force on January
16, 1979.
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On January 19, 1981 the State Government issued a notification .directing
the Transport Authorities to issue stage carriage permits to all eligible applicants
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and specifying that there should be no upper ·limit to tbo number of stage
carriages for which permits might be granted. On January,23, 1981, by another
notification, of the ~ransport Authorities were directed to have regard only to
matters refferred tom els. (a), (b), (d) and (f) of sub-s. (I) of s. 47 arid to take
into consideration representations made by local or police authorities only. The
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appellants challenged the notifications under Article 226.
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SUPREME COURT REPORTS
[19831 2 s.c.R.
The High Court dismissed tt1e petitions repelling the contc~tion that in
the absence of
reservation of the required percentage of permits for persons
belonging to the Scheduled Castes, tbe Scheduled Tribes and weaker sections as
provided ins. 47 the grant of permits would be vitiated. Accordina: to the High
Court the question of reservation would arise only in those cases where the seats
or articles are limited for distributio11 or allotment but where there is no limit or
no fixed number. -the question of reservation would not arise. The High Court
said that the Statement of Objects 8nd Reasons appended to the Amending Act
15 of 1976 cannot override the clear provisions of s. 43-A as amended by that
Act and held that though the two impugned notifications did not follow the
procedure prescribed by sub·s. (2) of s. 43-A, they could be sustained under
sub-s. (1) ofs.43-A. It relied on the decision in Hans Raj Kehar's case to hold
that large number of buses operating on different routes would
be for the convenience and benefit of the travelling public.
Allowing the appeals,
HELD : Whenever a court is called upon to interpret an amended
provision it bas to bear in mind the history of the provision, the mischief which
the legislature attempted to remedy, the remedy provided by the amendment and
the reason for providing such remedy. Section 43-A or the Act as in force in the
State of U.P. was amended by the U.P. Act IS· of 1976. By the substitution of the
former sub-s. (2) by the new sub·s (2) in s. 43-A the legislature clearly expressed
itself against the policy of granting permits to all eligible applicants without any
c0nsideration to the needs of any particular Jocality or route or to the qualifica·
tions of applicants. After the amendment, sub-s. (1) of S. 43-A did not comprehend
within its scope the power to issue directions for issuing permits to all
eligible applicants without any sort of restriction relevant to the scheme of the
Act, - The sub-section states that the: State Government may issue such directions
of a general character as it may consider necessary in the public interest.
'Public
interest' under the Act does not mean the interests of the operators or of the
passengers only. It takes within its fold several factors such as, the maximum
number of permits that may be Issued on a·route or in any area having regard to
the needs and convenience of the travelling public, the non-availabiJily of sufficient
number of stage carriages in other routes or areas wbich may be in
need of
running of additional services, tbc: problems of law and order, availability of
fuel, etc. To say that larger the number of stag~ carriages in any route or area
more convenient it would be to the 1nembers of the public is an
over~simplifica
tion of a problem~with myriad facetS affecting the general public. The Act itself
contains provisions relating to lic~nsing of drivers and conductors, specifications
of motor vehicil!S, co ordination of road and rail transport, prevention of deterio~
ration of road systen1, prevention of uneconomic competition among motor
vehicles, etc. Any direction given by the State Government under s. 43-A should,
therefore, be in conformity with all matters regarding which the statute bas made
provision. In this situation.to say that any number of permits can be issued to
any eligible Operator without any upper limit is to overstep the limits of delegation of statutory power. [444 A-H; 445 A-El
In the instant case, a reading of the two notifications shows that the
State Government ignored the legi'Slative policy underlying the U.P. Act 15 of
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RAMESHWAR PD. V. U,P. STATE
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1976 by which the new sub·s. (2) of s. 43·A was enacted in substitution of the
former sub·s. (2) with retrospective effect. The new sub-s. (2) was introduced
by the State legislature after it had realised the mistake committed by the State
Government in issuing the notificat.ion in the year 1972 directing the issue of bus
permits liberally in favour of all eligible applicants which bad resulted in investR
ment of unproductive capital expenditure and under-utiJisation of capital and
fuel and in unreasonable competition which eventually eliminated ~man operators
from business. [441 D-F]
(ii) The State
Government also ignored the new policy governing the
issue of permits introduced by Parliament by amending s. 47 of the Act in 1978.
The High Court erred in not noticing that by issuing the notification containing a
direction to the Transport Authorities to issue Jiaiitless number of permits, the
State Government bad attempted to circumvent sub-ss. (I) and (IA) to (IH) of
s. 47. The observation of the High Court that preferences have to be shown and
reservations have to be made only when there is scarcity of permits and since
there were no restrictions on the number of permits to be issued· there was no .
necessity to make any such provision is shocking. Preferences and reservations
have value only when
there
is a limit on the number of permits to be issued
and in the context of the Act there should necessarily be a lilnit on the issue
of permits to operate motor vehicles in respect of any route or area. By the
method adopted by it the State Government has virtually allowed the rich and
well·to-do
businessman who can bear the loss for some time to introduce any
number or vehicles on a route or in any area until all the small operators who
also may take the permits to ]eave tQe field owing to the inevitable loss that
ensues by the operation of an unlimited· number of vehicles. The two notifications
in question are clearly outside the scope of the Act. [445 F-H; 446 A-El
(iii) The o~servations in Hans Raj Kehar's case are inapplicable to the
present cases. In that case the Court was concerned with sub-s. (2) of s. 43-A as
it stood then. At that time, the sub-section contained a clear legislative policy
which considered that there could be no public prejudice if all eligible applicants
were granted permits. Whatever the Court may have observed while considering
that provision would not apply now as there is a clear departure made by the
legislature from that policy when it enacted the new sub·s. (2) of s. 43·A. In the
face of this amendment by which the former sub-s, (2) of s.43-A which specifically
~uthorised the State Government when it was satisfied that it was necessary to do
so in the public interest to issue directions to the Transport Authorities to grant
permits to all eligible applicaμts was deliberately taken away by the State legisla!ure, the High Court was wrong in holding that such power was still available
under sub-s. (!)of s. 43-A which was widely worded. [443 C·Hl
'Hans Raj Kehar & Ors. v. State of U.P. & Ors. [1975] 2 S.C,R. 916, held
inapplicable.
CIVIL APPELLAW JURISDICTION: Civil Appeals Nos. 1269-71
of 1982.
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. SUPREME COURT REPORTS
(1983) ~ s.c.1 .
Appeals by Special leave from the Judgment and Order dated
23rd the March, 1982 of the Allahabad High Court in Civil Mis·
cellaneous Writ Petition Nos. 2328, 2424 and 1998 of 1981.
Shanti Bhusan and R.K. Jain for the Appellants.
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Mrs. Shobha Dikshit for the Respondents.
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The Judgment of the Court was delivered by
VENKATARAMIAH, J. In these appeals by special leave filed against
the common judgment dated March 23, 1982 of the Allahabad
High Court, the validity of two Notifications issued by the Gov~rn
ment of Uttar Pradesh under section 43·A of the Motor Vehicles
Act, 1939 (Act IV of 1939) (hereinafter referred to as 'the Act') as
in force in the State of Uttar Pradesh arises for consideration. The
two impugned Notifications are reproduced below :
I.
"Notification
No. 68 T/XXX·4-15-KM/79
Dated: Lucknow: January 10, 1981.
Whereas, the Government of Uttar Pradesh is of opinion
th&t it is in the public interest to grant stage carriage
permits (except in respect of routes or areas for which
schemes have been published under section 68-C of the
Motor Vehicles Act, 1939) to all eligible applicants:
Now, therefore, in exercise of the powers under section
43·A of the Motor Vehicles Act, 1939, the Governor of
Uttar Pradesh is pleased to direct that the stage carriage
permits
(except
in
respect of routes or areas for
which schemes have been -published under section 68-C of
the Motor Vehicles Act, 1939) shall be granted according
to the provisions of the Act to all eligible applicants and
there shall be no upp"r limit to the number of stage carriages for which permits may be granted.
By Order
Karnail Singh,
Sachiv
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RAMESHWAR PD. v. U:P' STATE (Venkataramiah, J.)
423
II. Notification
No. 241 T/XXX-4-15-P/79
Dated : January 23, 1981
The Governor being satisfied that it is expedient in the
public interest so to do, is pleased to direct in exercise of
the powers under section 43.A of the Motor Vehicles
Act, 1939 (Act No. 4 of 1939) that while considering applications for stage carriage permits, the State Transport
Authority or a Regional Authority :
(i)
shall have regard only to matters referred to in clauses
(a), (b), (d) and (f) of sub-section (1) of section
47 of the said Act and shall also take into considera·
tion representations made by the local authority or
police authority within whose jurisdiction any part of
the proposed route or area lies; and
(ii) shall be deemed to have made sufficient compliance
of the provisions of section 57 of the said Act, if it
intimates the particulars of the application> to such
local
authority and police authority for making
representations, if any, within a
period of fifteen
days from the date of despatch of the intimation with
the stipulation that if no representation is received within the prescribed period of time, it shall be presumed
that they have no representation to make, and has
considered any representation made by such local
authority and police authority,
By Order
Karnail Singh,
Sachiv."
The appellants who are stage carriage operators challenged
the validity of the above Notifications in the writ petitions filed by
them under Article 226 of the Constitution before the High Court
i1'ter alia on the ground that they were 11/tra vires the provisions
of the Act under which they had been issued. The High Court
dismissed the writ petitions after ne¥ativing the contentions of thq
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iUPREME COURT REPORTS
(1983) 2 S,C,R.
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appellants. Aggrieved by the decision of the High Court the appellants have preferred thes1i appeals by special leave as stated above.
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It is necessary at this stage to give a resume of the relevant
statutory provisions to understand the rival
contentions of the
. parties. On finding that the Indian Motor Vehicles Act, 1914 which
was brought into force at an early stage of development of motor
transport was inadequate to meet the new situation created by the
growth of mo.tor. transport by the year 1939, the Central Legislature
passed the Act for the purpose of regulating motor traffic in the
interests alike of the safety and convenience of the public and of
the development of a coordinated system of transport. The Act
underwent major alterations in 1956 and 1969. Broadly the Act
provided inter a/ia for registration of motor vehicles, licensing of
drivers and conductors, grant of permits to ply public service
vehicles and public earners, operation of road transport service
by State transport undertakings in any area or on any route to the
exclusion, complete or partial of other persons, construction,
equipment and maintenance of motor vehicles, control of traffic,
insurance of motor vehicles against third party risks and offences,
penalties and procedure.
The State Governments were entrusted
with the duty of framing rules on various matters connected with
the topics dealt with by the Act. The subject of regulation of motor
vehicles being within the scope of Entry 35 -
mechanically propelled vehicles including the principles on which taxes on such
vehicles are to be levied-in List III of the Seventh Schedule to
the Constitution, various amendments were made from time to time
by several State Legisla1tures with the assent of the President of
India either adding to or modifying the provisions of the Act.
Chapter IV of the Act which includes section 42 to section 68 contains provisions pertaining to the control of motor vehicles. Section
42 of the Act provides that no owner of a transport vehicle shall
use or permit the use of the vehicle in any public place whether or
not such vehicle is actually carrying any passenger or goods save
in accordance with the conditions of a permit granted or countersigned by a Regional or State Transport Authority or the Commis- ·
sion authorising the use of the vehicle in that place in the manner
in which the vehicle is being used. A 'transport vehicle' is defined
in section 2(33) of the Ai:t as a public service vehicle or a goods
vehicle.
A 'public servic,e vehicle' is defined in section 2(25) of the
Act as any motor vehicle used or adapted to be used for the carriage
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RAMESHWAR PD. v. U.P. STATE (Venkataramiah, J,)
425
of passengers for hire or reward, and includes a motor cab, contract
carriage and stage carriage. Seption 2(29) of the Act states that a
'stage carriage' means a motor vehicle carrying or adapted to carry
more tran six persons excluding the driver which carries passengers
for hire or reward at separate fares paid by or for individual passengers, either for the whole journey or for stages of the journey.
Section 45(1) of the Act prescribes that every application for a
permit shall be made to the Regional Transport Authority of the
region in which it is proposed to use the vehicle or vehicles. When
the vehicle is to be used in two or more regions, the applications
for permits may be made as. provided in the provisos to section
45(1) or section 45(2) of the Act, as the case may be.
The constitu·
tion of the Regional Transport Authorities and the State Transport
Authorities is dealt with by section 44 of the Act.
A State Transport Authority or a Regional Transport Authority shall consist of
a Chairman who has had judicial experience or experience as an
appellate or revisional authority under any law relating to land
revenue and in the case of a State Transport Authority, such other
officials and non-officials, not being less than two, and, in the case
of Regional Transport Authority such other persons (whether officials or not) not being less than two, a~ the State Government may
think fit to appoint. An application for a stage carriage permit shall
have to contain the particulars mentioned in section 46 of the Act.
Prior to its amendment in 1978, section 47 as amended by Act JOO
of 1956 read as follows :
"47. Procedure of Regional Transport Authority in
considering application for stage carriage permits.-(!) A
Regional Transport Authority shall, in considering an
application for a stage carriage permit, have regard to the
following matters, namely :
(a) the interest of tbe public geuerally;
(b) the advantages to the public of the service to be pro·
vided, including the saving of time likely to be effected
thereby and any convenience arising from journeys not
being broken;
(c) the adequacy of other passenger transport services
op~rating or likely to operate i~ th,e
n~a,y future,
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SUPREME COURT llBPOllTS
(1983) 2 S.C.ll'.
wh~ther by road or other means, between the places
to be served.
(d) the benefit to any particular locality or localities likely
to be afforded by the service;
(e) the operation by the applicant of other transport
services, including those in respect of which applications from him for permits are pending;
(f) the condition of the roads included in the proposed
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route or area;
and shall also take into consideration any representations made by persons already providing passenger
transport facilities by any means along or near the
proposed route or area, or by any association representing persons interested in the provision of road transport facilities recognised in this behalf by the State
Government, or by any local authority or police
authority within whose jurisdiction any part of the
proposed route or area lies :
Provided that other conditions being equal, an application for a stage carriage permit from a cooperative
society registered or deemed to have been registered under
any enactment in for,~e for the time being shall, as far
as may be, be given preference over applications from
individual owners.
(2) A Regional Transport Authority shall refuse to
grant a stage carriage: permit if it appears from any timetable furnished that the provisions of this Act relating to
the speed at which vehicles may be driven are likely to be
contravened :
Provided that before such refusal an opportunity shall
be given to the applicant to amend the time-table so as to
conform to the said provisions.
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(3)
A Regional Transport Authority may, having
regard to the matters mentioned in sub-section (1), limit th~
itAMESHWAR PD· v. U.P •• STATE (Venkataramiah, J.)
427
number of stage carriages generally or of any specified
type for which stage carriage permits may be granted in
the region or on any specified area or on any specified
route within the region."
The procedure in applying for and granting permits is set
out in section 57 of the Act.
Section 48 of the Act . provides that
subject to section 47, a Regional Transport Authority may, on an
· application made to it under section 46, grant a stage carriage permit in accordance with the application or with such modifications
as it deems fit or refuse to grant such a permit. If the Regional
Transport Authority decides to grant a stage carriage permit, it
may· attach to it all or any of the conditions mentioned in section
48(3) of the Act. The proceedings before a Regional Transport
Authority are quasi judicial in character.
While considering
the application for the grant of a stage carriage permit the
Regional Transport Authority has to consider all representations
referred to in section 57(3 ). Sub-section (5) of section 57 of the
Act provides that when any representation such as is referred to
in sub-section (3) thereof is made, the Regional Transport Authority
shall dispose of the application at a public bearing at which the applicant and the persons making the representations shall have an opportunity of being heard either in person or by a duly authorised representative.
Representations can .be made among others by any
person who is providing transport facilities on the route or in the
area, any rival applicant, police authorities and local authorities.
Any person who satisfies the qualifications mentioned in section 64
of the Act and who is aggrieved by the resolution of the Regional
Transport Authority may file an ap~eal before the State Transport
Appellate Tribunal which should consist of a wholetime judicial
officer not below the rank of a District Judge. An order ofa Regional
Transport Authority or of a State Transport Authority against
which no appeal can be filed is subject to revision by the State
Transport App~llate Tribunal under section 64-A of the Act. Subsection ( !) of section 43 of the Act which coofere power on the
State Government to control transport reads thus :
"43. Power to State Government to control transpo~t-
. (I) A State Government having regard to :
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(a) the advantages offered to the public, trade and
. industry by the development of motor transport,
(b) the desirability of coordinating road and rail transport,
(c) the desirability of preventing the deterioration of
the road system, and
(d) the desirability of preventing uneconomic competition among motor vehicles, may, from time to
time, by notification in the Official Gazette, issue
directions to the State Transport Authority :
(i) regarding the fixing
of fares and freights
(including the maximum and minimum in
respect thereof) for stage carriages, contract
carriages and public carriers;
(ii)
regarding the prohibition or restriction, subject to such conditions as may be specified
in the directions, of the conveying of longdistance goods traffic generally, or of specified classes of goods, by private or public
carriers;
(iii) regarding the grant of permits for alternative
routes or areas, to persons in whose cases
the existing permits are not renewed in pursuance of the provisions of sub-section (1-D)
of sectio11 68-fl, or are cancelled or the terms
thereof are modified in
exercise of the
powers conferred by clause (b) or clause (c)
of sub-section (2) of section 68-F;
(iv) regarding any other matter which may appear
to . the State
Government
necessary or
expedient for giving effect to any agreement
entered
into
with the Central Government or any other State Government or the
Government of any other country relating to
the regulation of motor. transport generally, ·
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429
and in particular to its coordination with
other means of transport and the conveying
of Jong distance goods traffic :
Provided that no such notification shall be issued
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unless a draft of the proposed directions is published in the
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Official Gazette specifying therein a date being not less
than one month after 'Such publication, on or after which
the draft will be taken into consideration and any objection or suggestion which may be received has, in consultation with the State Transport Authority, been considered
after giving the representatives of the interests affected an
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opportunity of being heard."
In the year 1972, however, the Act was amended by the
Legislature of the State of Uttar Pradesh introducing a new section
being section 43-A by the Motor Vehicles (U.P. Amendment) Act,
1972 with the assent of the President. The material part of section
43-A which was newly introduced by the said amending U.P. Act
read as under :
"43-A. (I) The State Government may issue; ~uch
directions of a general character as it may consider necessary or expedient in the public interest in respect of any
matter relating to road transport to the State Transport
Authority or to any Regional Transport Author)ty, and
such Transport Authority shall give effect to all such
directions.
(2)
Without prejudice to the generality of the foregoing power, where ·the State Government is of opinion
that it is in the public interest to grant stage carriage permits (except in respect of routes or areas for which schemes
have been published under section 68(C) or contract carriage
permits or public carrier permits to all eligible applicants, it
may by notification in the Gazette issue a direction accordingly, and thereupon all transport authorities as well as
the State Transport Appellate Tribunal .constituted under
section 64 shall proceed to consider and decide all applications, appeals and revisions in that behalf (including any
pending applications, appeals and revisions) as if -
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(a) in section 47 -
(i) • for sub-section (I) the following sub-sections were
substituted :
(ii)
A Regional Transport Authority ·shall in consi·
dering an application for a stage carriage permit,
have regard to the following matters, namely -
(a) the interest of the public generally;
(b) the advantage to the public of the service
to be provided including the saving of time
likely to be effected thereby and any convenience arising from journeys .not being
broken;
(c) the benefit to any particular locality or
localities likely to be afforded by the service;
and shall also take into consideration any represent&·
lion made by any local authority or police authority
within whose jurisdiction any part of the proposed
route or area lies ; and
(ii) sub-section (3) were omittted"
"
The above U.P. Act was preceded by the U.P. Ordinance
which contained more or less the same provisions. The Ordinance
was substituted by the said U.P. Act. The object of enacting section
43-A of the Act was set out in the Statement of Objects aild
Reasons attached to the relevant U.P. Bill which read as follows :
"Objects and Reasons-Operators engage in the race
for securing permits for stage carriage on non-nationalised routes. Due to limitation OD the number of permits
this business is controlled by a few persons. Complaints in
this regard are made every other day. Therefore, with a
view to making it easier to secure permits in respect of non,
nationalised routes and to introducing simplicity in procedure and to providing greater employment and securing
l!.AMBSHWAR PD. v. U.P. STATE (Venkataramfah, J.)
431
equitable distribution thereof it was considered necessary
to amend sections 47, 50, 55 and 64 of the Motor Vehicles
Act, 1939, suitably.
Accordingly, in the public interest
and with the aforesaid object in view, the Motor Vehicles
(Uttar Pradesh Amendment) Ordinance, 1972, was. promulgated. This Bill is introduced to replace the said
Ordinance.''
Pursuant to the. power conferred on it by section 43-A of
the Act, the Government of the State of Uttar Pradesh issued the
following directions on March 30, 1972 by a Notification, the
relevant part of whi.ch reads as under :
"Whereas the State Government is of opinion that it
is in the public interest to grant stage carriage permits
(except in respect of routes or areas for which schemes
have been published under section 68-C of the Motor
Vehicles Act, 1939) contract carriage permits and public
carrier permits to all eligible applicants.
Now, therefore, in exercise of the power conferred
. by section 43-A of the Motor Vehicles Act, 1939 the
Governor is pleased to direct that stage carriage permits
(except in respect of routes or areas aforesaid) contract
carriage permits and public carrier permits shall be granted
according to the provisions of the said Act to aJl eligible
applicants."
The validity of section 43-A of the Act introduced · by
the U. P.
Legislature and of the Notification dated March
30, 1972 issued by the Government of Uttar Pradesh pursuant
to that section was questioned in some
writ petitions filed
by some motor operators in the High Court of Allahabad. Those
petitions were dismissed. On appeal this Court upheld the validity
of section 43-A of the Act as well as the Notification by its judgment in Hans Raj Kehar & Ors. v.
The State of U.P. & Ors.(')
which was delivered on December 4, 1974. Within about three and
half years from the date of the above said notification the Government of Uttar Pradesh realised that it was necessary to review the
., whole question of issuing permits to all eligible applicants.
Accor·
(I) [197SJ 2 S.C.R. 916.
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SUPREME COURT REPORTS
{!983) 2 S.C.l\
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dingly the State Government issued a Notification on September
24, I 975 which ran as follows :
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"Whereas, in exercise of the power conferred by Section
43-A of the Motor Vehicles Act, 1939 the State Govern·
ment was by notification No. 1188-T/XXX-4, dated March
30, 1972, pleased to direct that stage carriage permits (except
in respect of routes or areas aforesaid) contract carriage
permits and public carrieir permits shall be granted accord·
ing to the provisions of the said Act to all eligible
applicants :
And whereas,
on further consideration
the State
Government is of opinion that the policy of granting such
permits to all eligible applicants requires review with a
view to:
(a) Preventing unproductive expenditure and under utiliza·
tion of capital and fuel.
(b) Preventing elimination of small operators due to
unfair competition resulting from the issue of
more permits than required for a route.
(c) Facilitating long term planning of passenger road
transport services.
And whereas, such review is likely to take some time
· and in the mean time it is necessary to stay the , disposal of
all pending applications for permits or entertainment of
fresh applications.
Now, therefore, in exercise of the powers conferred by
the said Section 43-A of the Motor Vehicles Act, 1939, read
with Section 21 of the U.P. General Clauses Act, 1904, the
Governor is pleased to direct that :
I. The Notification No. 1198 T/XXX-4, dated 30th ·
March, 1972 be and ;_is hereby rescinded with immediate
effect.
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llAMBSHWAR PD. v. U.P. STATB (Venkataramiah, J,)
433
2.
The consideration of applications for stage carriage permits pending with any Transport Authority shall
stand postponed until further directions are issued in this
behalf by the State Government.
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3.
No fresh applications for such permits shall be
B
entertained until further directions are issued in this behalf
by the State Government."
The above Notification shows that as a consequence of the
policy of granting permits to all eligible applicants, necessity had
arisen to take measures (i) to prevent unproductive expenditure and
under utilisation of capital and fuel, (ii) to prevent elimination of
small operators due to unfair competition res!llting from the issue
· of more permits than required for a route; and (iii) to embark upon
long term planning of passenger road transport services.
It is stated that by U.P. Ordinance 35 of 1975, section 43-A
was amended. This Ordinance was replaced by the Uttar Pradesh
Act 15 of 1976. By this Act, sub-section (2) of section 43-A which
had been added in 1972 was substituted with retrospective effect
from the date of its original enactment. Section 43-A after it was
amended by the U.P. Act 15 of 1976 read as under:.
"43·A. Power of State Government to issue directions
to Transport Authorities-()) The State Government may
issue such directions of a general character as it may consider "necessary or expedient in the public interest in respect
of any matter relating to road transport to the State Transport Authority or to any Regional Transport Authority,
and such Transport Authority shall giv~ effect to all such
directions.
(2) Without prejudice to the generality of the provisions of sub-section (1) such directions may be given in res·
pect of any of the following matters, namely :
(a) the n~mber of stage carriage or contract carriage
permits that may be granted in \respect of any
route or area.
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'
(b) the preference or the order of preference to be
given to or the quota to be fixed for, specially
deserving categories, such as Ex. Army personnel,
educated unempl.oyed persons, such persons holding driving licences as are members of cooperative
societies formed for passenger transport business,
persons
belonging to the Scheduled castes and
Scheduled Tribes.
(c) the procedure for grant of permits, and for selection from among the applicants, including selection
by drawing of lots from among persons belonging
to the same category.
(3) Any direction under sub-section (l) may be issued
with retrospective effect.
(4) Where any direction is issued under sub-section (l)
to any Transport Authority, then any appeal or revision
pending before the State Transport Appellate Tribunal shall
also be decided in su·ch manner as to give effect to such
directions.
(5) Where any direction is issued under sub-section (I)
with retrospective effect then
(a) any Transport Authority or the State Transport
Appellate Tribunal may review any order passed
earlier by it with a view to making it conform to
such direction and may for that purpose cancel
any permit already issued.
(b) any Transport Authority may apply to the High
Court earlier with a view to enabling such authority .to comply with such direction.
'(6) The provisions· of this section shall have effect notwithstanding anything contained in sections 47, 50 and 57."
ff
The policy behind the above amendment was stated in the
Statement of Objects and Reasons placed befor.e the State Legislature as follows :
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RAMESHWAR PD. v. U.P. STATE (Venkataramiah, J.)
435
"(5) In 1972 the State Government had accepted a
policy of granting bus permits liberally. Reconsideration of
the said policy however, became necessary with a view to
checking unproductive capital expenditure and unnecessary
consumption of fuel and preventing the elimination of
small operators as a consequence of unreasonable competition and to removing difficulties in the implementation of
long. term plans pertaining to passenger road transport ser·
vices. It was accordingly considered necessary to amend
the Motor Vehicles 'Act, 1939, to authorise the State
Government to issue directions from time to time in regard
to the number of permits that ma{ be granted in respect of
any route or area, the preference to be given to specially
deserving categories and the procedure for grant of per·
mits."
Pursuant to the said amended section 43-A of the Act, the
Government of Uttar Pradesh issued a Notification containing direc·
tions on March 12, 1976 in the following terms :
"Whereas, in exercise of the powers conferred by section 43-A of the M.V. Act, 1939, the State Government
had
by a notification No, 4251-T/XXX-4-9P/72 dated
September 24.1975, as amended by notification No. 4530-T/
XXX-4-75 dated ·October 6,1975 postponed the consideration of applications for permits by any transport authority
in respect of non-notified routes until further directions in
· this behalf of the State Government.
Now, therefore, in exercise of the powers conferred by
the sai.d section 43-A (2) of the M.V. Act, 1939 read with
section 21 of the General Clauses Act, 1904, the Governor
is pleased to direct :
(1)
That the S.T.A. and R.T. As. while fixing the
number of Additional Stage Carriage permits to be issued
at a given time on non-notified routes, shall in addition to
the consideration of the matter mentioned in sub-section (I)
of section 47 of the M.V.