Appeals No323 and 324 of 1956
Appeal from the judgment and orders dated April 27 and July 13 1956 of the Madras High Court in Writ Appeals Nos
42 and 88 of 1956 arising out of the orders dated March 23 and July 9 1956 of the said High Court in Writ Petitions Nos 333 and 564 of 1956
A V Viswanatha Sastri J B Dadachanji section N Andley and Rameshwar Nath for the appellant
Daphtary Solicitor General of India R Gan
pathy Iyer and R Gopalkrishnan for respondents Nos 3 and 4
665 1957
February 19
The Judgment of the Court was delivered by VENKATARAMA AYYAR J
These are appeals against the judgment of the High Court of Madras on a certificate given under article 133 1 c of the Constitution and they raise a question of some importance as to the true legal character of a permit when it is renewed under the provisions of the IV of 1939 hereinafter referred to as the Act
In order to appreciate the contentions of the parties it is necessary to state the material facts leading up to the present dispute
Towards the end of 1952 the appropriate authorities under the Act decided to grant two additional permits for stage carriages in the Ondipudur Agricultural College route in the town of Coimbatore in the State of Madras and invited applications therefor under section 57 of the Act
There were as many as 39 applicants and by his order dated December 3 1952 the Regional Transport Authority granted one permit to applicant No 24 the Thondamuthur Trading Company Ltd and another to applicant No 30 the VCK Bus Service
There were appeals by some of the unsuccessful applicants to the Central Road Traffic Board which by its order dated February 19 1953 set aside the order of the Regional Transport Authority and granted the permits one to Stanes Transports Ltd and another to Thirumalaiswami Goundar
Revisions were preferred against this order by the aggrieved applicants under section 64 A of the Act and by its order dated July 9 1953 the Government confirmed the grant of the permit to Stanes Transports Ltd but set aside the permit given to Thirumalaiswami Goundar and granted it instead to Annamalai Bus Transport Ltd Thereupon applicants Nos 24 and 30 moved the High Court of Madras under Aft 226 for a writ of certiorari to quash the order of the Central Road Traffic Board dated February 19 1953 and of the Government dated July 9 1953 but the applications were dismissed by Rajagopala Ayyangar J on March 8 1954
Against the orders of dismissal Writ Appeals Nos 31 and 32 of 1954 were preferred and they were 666 dismissed by Rajamannar C J and Panchapakesa Ayyar J on March 21 1956
It should be mentioned that the operation of the order dated February 19 1953 was stayed pending the disposal of the revision under section 64 A and the writ proceedings in the High Court with the result that both Thondamuthur Trading Company Ltd and VCK Bus Service which had been granted permits by the Regional Transport Authority on December 3 1952 continued to run their buses notwithstanding cancellation of those permits on February 19 1953
It should also be mentioned that in June 1954 the business of the VCK Bus Service which was the grantee of one of the permits under the order of the Regional Transport Authority dated December 3 1952 was taken over by a Company called the VCK Bus Service Ltd which is the appellant before us and by an order of the Regional Transport Authority dated July 7 1954 it was recognised as the transferee of the permit granted to VCK Bus Service
To continue the narrative the permit which was the subject matter of the litigation aforesaid was for a period of one year and a half and it expired on June 30 1954
Before its expiry the appellant applied on April 15 1954 for a renewal thereof for a period of three years
This application was duly notified under s57 and objections to the grant were preferred by both Stanes Transports Ltd and Annamalai Bus Transport Ltd On September 5 1954 the Regional Transport Authority granted a permit to the appellant for a period of one year from July 1 1954 to June 30 1955 obviously in the expectation that Writ Appeals Nos 31 and 32 of 1954 would by then have been decided
On March 19 1955the appellant again applied for a renewal of the permit and that was also notified under section 57 and no objections having been filed to the grant thereof the Regional Transport Authority by his order dated June 23 1955 renewed the permit for a period of three years from July 1 1955 to June 30 1958
It is this permit that forms the subject matter of the present litigation
It has been already stated that Writ Appeals Nos 31 and 32 of 1954 were dismissed on March 21 1956
667 Apprehending that the Regional Transport Authority might in view of the judgment of the High Court cancel the permit which was renewed on June 23 1955 the appellant filed Writ Petition No 333 of 1956 for a Writ of Prohibition restraining the Regional Transport Authority from Cancelling the permit and that was dismissed by Rajagopala Ayyangar J on the ground that when the original permit was set aside the renewal thereof fell to the ground
The appellant filed Writ Appeal No 42 of 1956 against this order and that was heard by Rajamannar C J and Panchapakesa Ayyar J who by their judgment dated April 27 1956 held following a previous decision of that Court in K Muthuvadivelu vs Regional Transport Officer1 that the renewal having been obtained on the basis of a permit which had been subsequently cancelled it could not be regarded as a fresh permit that when the original permit was set aside it must be taken to be non est for all purposes and that the renewal must therefore be held to be a nullity
In the result they dismissed the appeal but granted a certificate under article 1331c observing that the case raised a point of general importance which was stated by them in these terms When an application for renewal of a permit is made and granted and eventually it is held that the original permit was itself wrongly granted does the renewed permit subsist for the period for which it was renewed or does it automatically cease to be in force when it is finally decided that the original permit was not granted validly  This matter now comes before us in Civil Appeal No 323 of 1956
After the High Court delivered its judgment in Writ Appeal No 42 of 1956 on April 27 1956 the respondents herein viz Stanes Transports Ltd and Annamalai Bus Transport Ltd applied to the Regional Transport Authority to grant them permits in accordance with the decisions of the High Court and on May 5 1956 the Regional Transport Authority cancelled the permit granted by him on June 23 1955 in favour 1 AIR 1956 Mad
86 668 of the appellant and granted permits instead to the respondents
Thereupon the appellant filed Writ Petition No 554 of 1956 for a writ of certiorari to quash the order dated May 5 1956 on the grounds which had been put forward in Writ Petition No 333 of 1956 and Writ Appeal No 42 of 1956
That petition was dismissed by Rajagopalan J on July 9 1956 and the Writ Appeal No 88 of 1956 filed against that order was dismissed by Rajamannar C J and Panchapa kesa Ayyar J on July 13 1956
Leave to appeal against that judgment was also given under article 133 1 c as the subject matter thereof was the same as that of Writ Appeal No 42 of 1956 in respect of which leave had already been granted
Civil Appeal No 324 of 1956 relates to this matter
Thus both the appeals relate to the same matter and raise the same point for determination
Mr A V Viswanatha Sastri learned counsel who appeared in support of the appeals contends that the view taken by the learned Judges of the High Court that when a permit is set aside by higher authorities it should be treated as wholly non existent and that in consequence a renewal thereof must be held to be void is not sound that on a correct interpretation of sections 57 and 58 a renewal is practically in the nature of a new grant that the permit which was granted to the appellant for the period July 1 1955 to June 30 1958 though styled a renewal was in substance a fresh permit and that the fact that the old permit was set aside did not therefore affect the rights of the appellant under this permit
He also argues that the Act and the rules framed thereunder contain elaborate provisions as to when a permit could be cancelled forming in themselves a complete code on the subject that the cancellation of the original permit is not one of the grounds on which a renewed permit could be set aside and that the order of the Regional Transport Authority dated May 5 1956 was therefore ultra vires
The contention of the learned Solicitor General for the
respondents is that when a permit is renewed the renewal is on a true construction of the provisions of the Act in substance as in name a continuation of the 669 previous permit and that in consequence when the grant of a permit is set aside by a higher authority the renewal thereof must also stand automatically set aside and that further even if a renewed permit is not to be regarded as a continuation of the original permit seeing that it is granted on the basis of that permit it should be held to be subject to an implied term that it should cease if the original permit is cancelled
The two points that arise for decision on these contentions are 1 when a permit is renewed is it a continuation of the original permit or is it in fact a new one and 2 if a renewed permit is not a continuation of the original permit is the grant of it subject to the implied condition that it is liable to be cancelled if the original permit is cancelled  On the first question it is necessary to refer to certain provisions of the Act material thereto
Section57 prescribes the procedure to be followed in the grant of stage carriage permits
Under sub section
2 applications therefor have to be made not less than six weeks before the date appointed by the Regional Transport Authority therefor
Sub section 3 requires that they should be published in the prescribed manner and provision is made for representations being made in connection therewith
When any representation is so received sub section
5 provides that the person making it is to be given an
opportunity of being heard thereon in person or by a duly authorised representative and that the application for permit is to be disposed of at a public hearing
Section 58 deals with renewals and is as follows 1  A permit other than a temporary permit issued under section 62 shall be effective without renewal for such period not less than three years and not more than five years as the Regional Transport Authority may in its discretion specify in the permit Provided that in the case of a permit issued or renewed within two years of the commencement of this Act the permit shall be effective without renewal for such period of less than three years as the Provincial Government may prescribe
670 2 A permit may be renewed on an application made and disposed of as if it were an application for a permit Provided that other conditions being equal an application for renewal shall be given preference over new applications for permits
 The contention of the learned counsel for the appellant based on section 58 2 is that under the Act an application for renewal is to be dealt with exactly as an application for a new permit that it is to be notified under section 57 and representations have to be called for in connection herewith and considered at a public hearing that though the grant of the previous permit furnishes a ground of preference it is subject to the limitation that the other conditions are equal and is thus only one of several factors to be taken into account and that therefore when a renewal is actually granted it is on an independent consideration of the merits and it cannot be distinguished from a fresh grant
It was further argued that the proviso to section 582 meant little because it was well established that the grant of a permit was not a matter of right and the authorities under the Act would be acting within their powers if they refused an application for renewal and granted a fresh permit to a new applicant
It was also contended that though the statute spoke of a renewal of a permit that expression did not accurately bring out the true position because in legal terminology renewal imports that the transaction which is renewed as for example a lease is to operate for a further period but on the same terms but that when a permit was renewed it was open to the authorities to impose new conditions to alter the period during which it was to operate and generally to modify its terms and that therefore the use of the word renewal  should not lead to the
inference that it was the original permit that was being continued
There is force in these contentions but there are other provisions bearing on this question and when they are reviewed as a whole it is abundantly clear that the intention of the legislature was to treat a renewal as a continuation of the previous permit
To 671 start with section 581 enacts that a permit shall be effective for the period specified therein but this is qualified by the words  without renewal 
Therefore when there is a renewal the effective period is not the original period specified but the period up to which the renewal is granted
That indicates that the life of a renewed permit is one and continuous
The matter is placed beyond doubt when we turn to the rules which have been framed under the Act
Rule 184 1 provides that when a renewal is granted it shall be endorsed on the permit itself and Form No 33 which is prescribed therefor is as follows  This permit is hereby renewed up to the day of  19 Thus what is renewed is  this permit
In this connection reference must be made to the definition of  permit  in section 22 of the Act as  the document issued by a Provincial or Regional Transport Authority Rule 1985 is very material for the purpose of the present discussion and it runs as follows If an application for the renewal of a permit has been made in accordance with these rules and the prescribed fee paid by the prescribed date the permit shall continue to be effective until orders are passed on the application or until the expiry of three months from the date of receipt of the application whichever is earlier
If orders on the application are not passed within three months from the date of receipt of the application the permit holder shall be entitled to have the permit renewed by the Transport Authority for the period specified in the application or for one year whichever is less and the Transport Authority shall call upon the permit holder to produce the registration certificate or certificates and Part B or Parts A and B of the permit as the case may be and endorse the renewal in Parts A and B of the permit accordingly and return them to the permit holder 
Under this rule when an application for renewal is made the permit already granted is to be in force until an order is passed thereon and what is more important if no order is passed within three months 672 the permit becomes automatically renewed for the period mentioned in the rule
This goes a long way to support the contention of the respondents that on the scheme of the Act renewal is a continuation of the original permit
It should also be mentioned that the rules provide for different forms for an application for fresh permit and one for renewal and the fee to be paid along with those applications is also different
A reading of the relevant provisions of the Act and of the rules leads indubitably to the conclusion that a renewal is a continuation of the permit previously granted
The fact that the grant of renewal is not a matter of course or that it is open to the authorities to impose fresh conditions at the time of renewal does not when the permit is in fact renewed alter its character as a renewal
We shall now consider the authorities cited by learned counsel for the appellant as supporting the view that a renewal under the Act is in the same position as a fresh permit
In Mahabir Motor Co vs Bihar State1 the point for decision was whether an appeal lay under section 64 f against an order granting a renewal of a permit
The contention before the Court was that the Act made a distinction between the grant of a permit and a renewal thereof and that as section 64 f provided only for an appeal against an order granting a permit no appeal lay against an order granting a renewal
In repelling this contention the Court observed Both grant
and renewal stand more or less on the same footing by reason of sections 47 57 and 58 of the  
This observation has reference to the procedure to be followed in the renewal of a permit and the right of appeal given under a 64 as part of that procedure
It has no bearing on the character of a permit when it is renewed
Another decision on which the appellant strongly relied is Anjiah vs Regional Transport Officer Guntur There the facts were that an order of suspension had been passed for breach of one of the 1 Patna 429
2 1956 Andhra Law Times 347  673 conditions of the permit
The correctness of the order was challenged before higher authorities but without success
Meantime the period fixed in the permit had expired and it had been renewed
The question was whether the period of suspension could be enforced against the renewed permit
It was held by the Andhra High Court that it could not be because the renewal was in essence a new permit and not a mere continuance of the old one
The reason for  this decision was thus stated in the judgment  There is no right of renewal as such and when a permit is renewed there is no right either on the part of the permit holder to insist upon the continuance of the old terms
It would be undesirable that there should be any such restrictions upon the right of the authorities to grant the permit to anybody they choose or subject to any conditions that they think it to be necessary to impose provided that they are acting all the time in the public interest and subject to the provisions of the and the
Rules made thereunder
 These considerations though not without force can
not in our opinion outweigh the inference to be drawn from the other provisions to which we have made reference and for the reasons already given we are unable to agree with this decision
In the view that we have taken that under the provisions of the Act and the rules a renewal is a continuation of the original permit there can be no doubt as to what the rights of the appellant are
When the proprietor of V C K Bus Service was granted a permit by the Regional Transport Authority on December 3 1952 that grant was subject to the result of the decision of the higher authorities
On September 5 1954 when the permit was renewed in favour of the appellant that was subject to the decision of the High Court in Writ Appeal No 32 of 1954 which was then pending
When the renewed permit dated September 5 1954 was again renewed on June 23 1955 that was likewise subject to the result of the decision in Writ Appeal No 32 of 1954
When the High Court by its judgment dated March 674 21 1956 passed in the said Writ Appeal upheld the cancellation of the permit which had been granted by the Regional Transport Authority on December 3 1952 to V C K Bus Service the permit renewed on June 23 1955 became ineffective at least as from that date
The Regional Transport Authority was therefore right in treating it as having become void and granting by his order dated May 5 1956 permits to the respondents
The second question arises on the alternative contention advanced by the respondents that even if the renewal is to be regarded not as a continuation of the original permit but as an independent grant it must be held to have been subject to an implied condition that if the original permit is ultimately set aside the renewal thereof should come to an end
Mr Sastri learned counsel for the appellant disputes the correctness of this contention
He argues that when there is a document embodying the terms  of a contract it is not permissible to imply therein a condition if that will contradict or vary any terms contained in it that to read into the permit a condition that it is to cease if the decision of the High Court went against the appellant  would be to modify the terms contained therein that it is to be effective upto June 30 1958 and that it could not therefore be implied
He also relies on the following observation of Lord Parker in P A Tamplin Steamship Company Limited vs AngloMexican Petroleum Products Company Limited 1   This principle is one of contract law depending on some term or condition to be implied in the contract itself and not on something entirely dehors the contract which brings the contract to an end
It is of course impossible to imply in a contract any term or condition inconsistent with its express provisions or with the intention of the parties as gathered from those provisions
 It is undoubted law that when the terms of a contract or grant are reduced to writing no condition can be implied therein which will be inconsistent with its express terms
But the contention of the respondents 1  422 675 involves no conflict with this principle
They do not seek to obtain any modification or alteration of the terms of the permit leaving it to operate subject to such modification or alteration
They want that the whole permit with all its terms as to duration and otherwise should be held to have become inoperative
What they are pleading is a condition subsequent on the happening of which the permit will cease and to that situation the observation quoted above has no application
Reference may be made in this connection to the following observation occurring later in the speech of Lord Parker in F A Tamplin Steamship Company Limited vs Anglo Mexican Petroleum Products Company Limited supra  Moreover some conditions can be more readily implied than others
Speaking generally it seems to me easier to imply a condition precedent defeating a contract before its execution has commenced than a condition subsequent defeating the contract when it is part performed Thus there is no legal obstacle to implying a condition that the renewal should stand cancelled if the right of the appellant to the original permit was negatived by the High Court
That brings us on to the question of fact whether on an examination of the permit and of the circum
stances under which it came to be granted we can infer that it was the intention of the Regional Transport Authority to renew the permit subject to the result of the decision of the High Court in the appeal which was then pending before it
The permit granted to the V C K Bus Service on December 3 1952 had been cancelled on February 19 1953 and it was only by reason of the stay orders that the bus was permitted to run
When the appellant applied for renewal on April 15 1954 there was opposition to the grant thereof from both the respondents herein based on the decision of the Government dated July 9 1953 and it was in view of their objection that the Regional Transport Authority renewed the permit for one year from July 1 1954 to June 30 1955
It is true that 87 676 when the appellant applied again for renewal on March 19 1955 the respondents did not raise objection thereto but as the appeals in the High Court were still pending they had good reason to believe that the renewal would not affect whatever rights might be declared in their favour by the High Court
As all the papers relating to the grant of the original permit and the subsequent proceedings were part of the record before the Regional Transport Authority when he renewed the permit on June 23 1955 it is impossible to resist the conclusion that he really intended to renew the permit only subject to the decision of the High Court
It is of the utmost importance in this connection to bear in mind that the appellant applied not for a fresh permit but for a renewal and in sanctioning it the Regional Transport Authority expressly acted in exercise of his powers under Rule 134 A read with section 58 of the Act and if he did not expressly provide that it was subject to the decision of the High Court it must be because he must have considered that that was implicit in the fact of its being only a renewal
That that is how the appellant understood it is clear beyond doubt from the proceedings taken by it immediately after the High Court pronounced its judgment
But it is argued for the appellant on the strength of the decision in Veerappa Pillai vs Raman  Raman Ltd1 that the mere knowledge on the part of the authorities that the rights of the parties were under litigation is not a sufficient ground to import a condition in the permit that it is subject to the result of that litigation when in its terms it is unconditional
We do not read that decision as authority for any such broad contention
There the question related to five permits which had been originally granted to one Balasubramania
Raman and Raman Ltd obtained a transfer of the relative buses and applied to the transport authorities for transfer of the permits to itself
Then Veerappa having subsequently obtained a transfer of the same buses from Balasubramania 1  677 applied to have the permits transferred in his name
On October 3 1944 he also instituted a suit in the Sub Court Kumbakonam to establish his title to the buses against Raman and Raman Ltd and that was decreed in his favour on May 2 1946
Raman and Raman Ltd appealed against this decision to the Madras High Court which by its judgment dated September 2 1949 reversed the decree of the Sub Court and held that it was entitled to the buses
While these proceedings were going on the transport authorities suspended on March 28 1944 the permits which had been granted to Balasubramania and instead they were issuing temporary permits from time to time to Veerappa who had been appointed receiver in the suit in the Sub Court Kumbakonam
On March 29 1949 the Government decided to discontinue the policy of granting temporary permits indefinitely and accordingly granted permanent permits to Veerappa
Then on October 14 1949 Veerappa applied for renewal of these permanent permits and that was granted by the Regional Transport Authority on January 31950
The question was whether this order was bad on the ground that it was inconsistent with the decision of the High Court that it was Raman and Raman Ltd that had obtained a valid title to the buses
This Court held that the ownership of the buses was only one of the factors to be taken into account in granting the permits and that as the Regional Transport Authority granted the renewal on an appreciation of all the facts his decision was not liable to be questioned in proceedings under article 226
It should be noted that the renewal which was granted on January 3 1950 was of permanent permits granted in pursuance of the order of the Government dated March 29 1949 which had quite plainly declared as a matter of policy that notwithstanding the pendency of litigation between the parties permanent permits should be granted to Veerappa
There can be no question of implying thereafter a condition that they were subject to the decision of the Court
Moreover the renewal was granted on January 3 1950 after the litigation had ended on September 2 1949 and any attack on that order could only be by 678 way of appeal against it and that had not been done We are of opinion that the decision in Veerappa Pillai vs Raman  Raman Ltd 1 is of no assistance to the appellant
In the result we affirm the decision of the High Court both on the ground that the renewal dated June 23 1955 is a continuation of the permit granted on December 3 1952 and must fall to the ground when that stood finally set aside by the judgment of the High Court in Writ Appeal No 32 of 1954 dated March 21 1956 and on the ground that it was an implied condition of that renewal that it was to be subject to the decision of the High Court in that appeal and that in the event which had happened it had ceased to be effective
These appeals fail and are dismissed with costs in Civil Appeal No 323 of 1956
Appeals dismissed


Summary:
The appellant was granted a permit for stage carriage by the Regional Transport Authority under the provisions of the  but on appeal to the appellate authority the Central Road Traffic Board by the unsuccessful applicants the order granting the permit was set aside and the order of the Central Road Traffic Board was approved by the Government in revision
The appellant thereupon moved the High Court for a writ of certiorari to quash the proceedings of the Central Road Traffic Board and the Goverment
During the pendency of these proceedings there was a stay of operation of the order setting aside the grant of the permit to the Appellant with the result that be continued to run his buses notwithstanding the cancellation of his permit
Before the expiry of the period fixed in the original 664 permit he applied for and got a renewal of the permit from the Regional Transport Authority under section 58 of the Act
The High Court finally dismissed the application for a writ of certiorari and the question arose as to the validity of the renewal of the permit in view of the High Court s decision
The matter was raised before the High Court once again by proceedings under article 226 of the Constitution and the High Court held that the renewal having been obtained on the basis of a permit which had been subsequently cancelled it could not be regarded as a fresh permit that when the original permit was set aside it must be taken to be non est for all purposes and I that the renewal must therefore be held to be a nullity
The appellant appealed to the Supreme Court
Held1 Under the provisions of the Motor Vehicles Act 1949 and the rules framed thereunder a renewal is a continuation of the original permit
When the original permit was renewed in favour of the appellant it was subject to the decision of the High Court in the proceedings under article 226 of the Constitution which were then pending and therefore when the order granting the original permit was fin ally set aside the renewed permit became void
Anjiah vs Regional Transport Officer Guntur 1956 Andhra Law Times 347 disapproved
2When the appellant applied for a renewal of his permit under section 58 of the Act and not merely for a fresh permit the order of the Regional Transport Authority granting the renewal must be held to have been made subject to the implied condition that the right of the appellant to the original permit is recognized by the High Court and that accordingly in the event that had happened the renewed permit ceased to be effective
Veerappa Pillai vs Raman  Raman Ltd   explained and distinguished