Civil Appeals Nos
1269 71 of 1982
422 Appeals by Special leave from the Judgment and order dated 23rd the March 1982 of the Allahabad High Court in Civil Miscellaneous Writ Petition Nos
2328 2424 and 1998 of 1981
Shanti Bhusan and RR Jain for the Appellants
Mrs Shobha Dikshit for the Respondents
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 Government of Uttar Pradesh under section 43 A of the 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 TXXX 4 15 KM79 Dated Lucknow January 10 1981
Whereas the Government of Uttar Pradesh 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  to all eligible applicants Now
therefore in exercise of the powers under section 43A of the  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  shall be granted according to the provisions of the Act to all eligible applicants and there shall be no upper limit to the number of stage carriages for which permits may be granted
By order Karnail Singh Sachiv 423 II
Notification No 241 TXXX 4 15 P79 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 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 consideration 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 applications 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 with in 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 inter alia on the ground that they were ultra vires the provisions of the Act under which they had been issued
The High Court dismissed the writ petitions after negativing the contentions of the 424 appellants
Aggrieved by the decision of the High Court the appellants have preferred these appeals by special leave as stated above
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 motor 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 alia for registration of motor vehicles licensing of drivers and conductors grant of permits to ply public service vehicles and public carriers 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 Legislatures 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 r 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 Commission 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 233 of the Act as a public service vehicle or a goods vehicle
A public service vehicle  is defined in section 225 of the Act as any motor vehicle used or adapted to be used for the carriage 425 of passengers for hire or reward and includes a motor cab contract carriage and stage carriage
Section 229 of the Act states that a stage carriage  means a motor vehicle carrying or adapted to carry more than 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 451 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 451 or section 452 of the Act as the case may be
The constitution 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 as 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 100 of 1956 read as follows 47
Procedure of Regional Transport Authority in considering application for stage carriage permits 1 A Regional Transport Authority shall in considering an application for a stage carriage permit
have regard to the P following matters namely a the interest of the public generally b the advantages 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 adequacy of other passenger transport services operating or likely to operate in the near future 426 whether 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 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 trans port 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 force 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
3 A Regional Transport Authority may having regard to the matters mentioned in sub section 1 limit the 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 483 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 573
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 hearing 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 appeal before the State Transport P Appellate Tribunal which should consist of a wholetime judicial officer not below the rank of a District Judge
An order of a Regional Transport Authority or of a State Transport Authority against which no appeal can be filed is subject to revision by the State Transport Appellate Tribunal under section 64 A of the Act
Subsection 1 of section 43 of the Act which confers power on the State Government to control transport reads thus 43
Power to State Government to control transport 1 A State Government having regard to 428 a the advantages offered to the public trade and industry by the development of motor transport b the desirability of coordinating road and rail trans port
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 long distance 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 section 68 F 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 429 and in particular to its coordination with A other means of transport and the conveying of long distance goods traffic Provided that no such notification shall be issued unless a draft of the proposed directions is published in the 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 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 UP Amendment Act 1972 with the assent of the President
The material part of section 43 A which was newly introduced by the said amending UP Act read as under 43 A 1 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 give effect to all such directions
2 Without prejudice to the generality of the fore going 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 68C or contract carriage permits or public carrier permits to all eligible applicants it may by notification in the Gazette issue a direction accor dingly 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 430 a in section 47 i for sub section 1 the following sub sections were substituted ii 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 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 representation made by any local authority or police authority within whose jurisdiction any part of the proposed route or area lies and sub section 3 were omitted The above UP Act was preceded by the UP Ordinance which contained more or less the same provisions
The ordinance was substituted by the said UP Act
The object of enacting section 43 A of the Act was set out in the Statement of objects and Reasons attached to the relevant UP Bill which read as follows Objects and Reasons operators engage in the race for securing permits for stage carriage on non nation alised routes
Due to limitation on 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 431 equitable distribution thereof it was considered necessary to amend sections 47 SO SS and 64 of the  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 which 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  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 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 all eligible applicants
 The validity of section 43 A of the Act introduced by the U P Legislature and of the Notification dated March P 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
vs The State of UP  Ors1 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 432 dingly the State Government issued a Notification on September 24 1975 which ran as follows Whereas in exercise of the power conferred by Section 43 A of the the State Government was by notification No 1188 TXXX 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 carrier permits shall be granted according 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 utilization 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  read with Section 21 of the UP General Clauses Act 1904 the Governor is pleased to direct that 1
The Notification No 1198 TXXX 4 dated 30th March 1972 be and is hereby rescinded with immediate effect
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
No fresh applications for such permits shall be 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 resulting 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 UP 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 UP Act 15 of 1976 read as under 43 A Power of State Government to issue directions to Transport Authorities 1 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 give effect to all such directions
2 Without prejudice to the generality of the provisions of sub section 1 such directions may be given in respect of any of the following matters namely a the number of stage carriage or contract carriage permits that may be granted in respect of any route or area
434 b the preference or the order of preference to be given to or the quota to be fixed for specially deserving categories such as exhibit Army personnel educated unemployed 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 1 may be issued with retrospective effect
4 Where any direction is issued under sub section 1 to any Transport Authority then any appeal or revision pending before the State Transport Appellate Tribunal shall also be decided in such manner as to give effect to such directions
5 Where any direction is issued under sub section 1 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 not withstanding anything contained in sections 47 50 and 57
 The policy behind the above amendment was stated in the Statement of objects and Reasons placed before the State Legislature as follows 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 services
It was accordingly considered necessary to amend the  to authorise the State Government to issue 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 specially deserving categories and the procedure for grant of permits
 Pursuant to the said amended section 43 A of the Act the Government of Uttar Pradesh issued a Notification containing directions on March 12 1976 in the following terms Whereas in exercise of the powers conferred by section 43 A of the MV Act 1939 the State Government had by a notification No 4251 TXXX 4 9P72 dated September 24 1975 as amended by notification No 4530 T XXX 4 75 dated October 61975 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 said section 43 A 2 of the MV Act 1939 read with section 21 of the General Clauses Act 1904 the Governor is pleased to direct 1 That the STA and RT 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 1 of section 47 of the MV Act ensure that the operation of the total number of stage carriages on any route taking 436 into consideration the existing as well as the additional permits proposed to be issued would be economically viable on the existing fare structure as per the norms as laid down by the State Government from time to time       The above notification also contained directions regarding the principle to be followed in determining the number of permits that could be issued and reservation of permits for operators displaced by nationalisation educated unemployed members belonging to the Scheduled Castes the Scheduled Tribes and other backward classes unemployed army drivers and cooperative societies
These directions were superseded by the issue of a fresh notification under section 43 A by the State Government on October 12 1977 which was superseded by a Notification dated October 15 1978
Within a fortnight from the date of the last Notification referred to above Parliament amended the Act by enacting The Motor Vehicles Amendment Act 1978 Act 47 of 1978 which inter alia amended the proviso to subsection 1 of section 47 of the Act and inserted sub sections 1A to 1H in that section
After this amendment the proviso to sub section 1 of section 47 of the Act reads thus 47
1  
Provided that other conditions being equal an application for a stage carriage permit from a co operative society registered or deemed to have been registered under any enactment in force for the time being and an application for a stage carriage permit from a person who has a valid licence for driving transport vehicles shall as far as may be be given preference over applications from individual owners
 The new sub sections 1A to 1H of section 47 of the Act read 47
1   437 1A The Government of a State shall reserve in that State certain percentage of stage carriage permits for the Scheduled Castes and the Scheduled Tribes
Explanation In this section and in sections 55 and 63 Scheduled Castes  and Scheduled Tribes  have the meanings respectively assigned to them in Article  366 of the Constitution
1B The reservation of permits under sub section 1A shall be in the same ratio as in the case of appointments made by direct recruitment to public services in the State
1C The Government of a State may having regard to the extent to which persons belonging to economically weaker sections of the community have been granted stage carriage permits in that State a reserve in that State such percentage of stage carriage permits as may be prescribed for persons belonging to economically weaker sections of the community or b notwithstanding anything contained in the proviso to sub section 1 give preference in such manner as may be prescribed to applications for stage carriage permits from such person Explanation I In this section and in sections 55 63 and 68 a person shall be deemed to belong to economically weaker section of the community if and only if on the prescribed date a the annual income of such person together with the annual income if any of the members of his family or G b the extent of land whether in one class or in different classes held by such person together with that if any held by the members of his family or 438 c the annual income and the extent of land aforesaid does or do not exceed such limit as may be prescribed
Explanation II
For the purposes of Explanation I family in relation to an individual means the wife or husband as the case may be of such individual and the minor children of such individual
1D The number of permits reserved under sub section 1B and clause a of sub section 1C shall not exceed fifty per cent of the total number of stage carriage permits granted during a calendar year
1E In giving effect to the provisions of sub section 1B and clause a of sub section 1C the Regional Transport Authority or the State Transport Authority may if it considers necessary or expedient so to do group the various routes within its jurisdiction
1F Where any stage carriage permit is to be granted from the quota reserved under sub section 1B or clausea of sub section 1C to any cooperative society registered or deemed to have been registered under any enactment in force for the time being or any firm to which the provisions of the 9 of 1932 apply no permit shall be granted to such society or firm unless the members of the co operative society or the partners of the firm belong to the Scheduled Castes the Scheduled Tribes or economically weaker sections of the community Provided that where the members of such co operative society or the partners of such firm are partly from the Scheduled Castes partly from the Scheduled Tribes and partly from the economically weaker sections of the community or from any two of these categories any permit under this sub section shall be granted to such society or firm only from the quota reserved for the category to which the largest number of members of the co operative society or as the case may be partners of the firm belong 439 Provided further that where no reservation has been made in the State for economically weaker sections of the community under clause a of sub section 1C no permit under this sub section shall be granted to a co operative society or firm unless the members of such society or partners of such firm belong to the Scheduled Castes or the Scheduled Tribes or partly to the Scheduled Castes and partly to the Scheduled Tribes and the permit to such society or firm shall be granted only from the quota reserved for the Scheduled Castes or the Scheduled Tribes according as to whether the larger number of the members of the co operative society or partners of the firm belong to the Scheduled Castes or the Scheduled Tribes
1G The circumstances under which the manner in which and the extent to which reservation under sub section 1A and clause a of sub section 1C may be carried forward shall be such as may be prescribed
1H Notwithstanding anything contained in this section an application for stage carriage permit from a State transport undertaking for operating in any inter State route shall be given preference over all other applications Provided that the authority shall not grant a permit under this sub section unless it is satisfied that the State transport undertaking would be able to operate in the inter State route without detriment to its responsibility for providing efficient and adequate road transport service in any notified area or notified route as is referred to in sub section 3 of section 68D where the undertaking operates the service
Explanation
For the purposes of this sub section inter State route  means any route Lying continuously in two or more States
 By the amendment of section 47 of the Act as stated above Parliament directed that the Regional Transport Authority while considering applications for stage carriage permits should provided that other conditions being equal give preference to an application 440 from a person who has a valid licence for driving transport vehicles over applications from individual owners
Parliament also provided for reservation of certain percentage of permits for state carriages in favour of persons belonging to the Scheduled Castes and the Scheduled Tribes in the same ratio as in the case of appointments made by direct recruitment by a State Government to public services in that State
Since it was considered necessary to promote the well being of economically weaker sections of the community the State Government was empowered under certain circumstances either to reserve certain percentage of permits for stage carriages for persons belonging to economically weaker sections of the community or to give preference to them in the prescribed manner
It was however provided that the number of permits reserved under section 471B and 1Ca of the Act should not exceed fifty per cent of the total number of stage carriage permits granted in a calendar year
It was also provided that if a State Transport Undertaking applied for a stage carriage permit operating in any inter State route such application should be given preference over all other applications provided the authority we satisfied that the Undertaking would be able to operate in the inter State route without detriment to its responsibility for providing efficient and adequate road transport service in any notified area or notified route as is referred to in sub section 3 of section 68 D of the Act where the Undertaking operated its service
By the very same amending Act of 1978 Parliament also amended section 68 of the Act by inserting clauses ci cii ciii and civ enabling the State Governments to frame rules for implementing subsections 1A to 1H of section 47 of the Act
The above said amendments made to sections 47 and 68 came into force on January 16 1979
It is conceded by the learned Attorney General who appeared for the State Government that these amendments which were made by Parliament would have an over riding effect on section 43 A of the Act introduced earlier by the State Legislature and that section 43 A should be read subject to those later amendments made by Parliament
Curiously the State Government issued on January IO 1981 and January 23 1981 the impugned notifications which are set out at the commencement of this judgment
By the first notification the State Government directed the Regional Transport Authorities of the State of Uttar Pradesh to issue stage carriage permits except in respect of routes or areas for which schemes had been published under section 68 C of the Act to all eligible applicants and that there should be no upper limit to the number of stage carriages for which permits might be 441 provided
By the second impugned notification dated January 23 1981 the State Government directed the State Transport Authority and the Regional Transport Authorities to have regard only to matters referred to in clauses a b d and f of sub section 1 of section 47 of the Act and should also take into consideration representation made by the local authority or police authority within whose jurisdiction any part of the proposed route or area lay
It also directed that section 57 should be deemed to have been complied with if the Transport Authority concerned intimated the particulars of the applications 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 was received within the prescribed period of time it would be presumed that they had no representation to make and considered any representation made by such local authority and police authority A reading of these two notifications shows that the State Government ignored first the legislative policy underlying the Uttar Pradesh Act 15 of 1976 by which the new sub section 2 of section 43 A was enacted in substitution of the former sub section 2 with retrospective effect
As stated earlier the State Legislature introduced the new sub section 2 of section 43 A after it realised the mistake committed by the State Government in issuing the notification in the year 1972 directing the issue of bus permits liberally in favour of all eligible applicants which had resulted in investment of unproductive capital expenditure and under utilisation of capital and fuel and in unreasonable competition which eventually eliminated small operators from business
The State Government also ignored the new policy governing the issue of permits introduced by Parliament by amending section 47 of the Act
It was argued on behalf of the State Government before the High Court that the State Government d not contravened either section 43 A or the provisions of section 47 as amended in the year 1978
The High Court dismissed the writ petitions observing that the Statement of objects and Reasons attached to the Bill which was ultimately enacted as the UP Act 15 of 1976 could not over ride the clear provisions of section 43 A as amended by that Act
The High Court upheld the notification dated January 10 1981 and further observed that since the schemes of grant of free permits had been upheld by it the State Government had the power to prescribe the procedure to be followed in 442 granting the same which has been provided for by the Notification dated January 23 1981 
Repelling the contention of the writ petitioners that in the absence of reservation of the required percentage of permits for persons belonging to the Scheduled Castes the Scheduled Tribes and weaker sections as provided in section 47 as amended by Parliament in 1978 the grant of permits would be vitiated the High Court observed as follows The question of reservation however arises only in those cases where the seats or articles are limited for distribution or allotment but where there is no limit or no fixed number the question of reserved on will not arise
In that event every body would be served according to his need and aspiration
Hence if under section 43 A a direction has been made for grant of stage carriage permit to all eligible applicants without putting any fixed number for the vehicles to ply the interest of the Scheduled Castes and Scheduled Tribes would be sufficiently safeguarded
A member of the Scheduled Caste or Scheduled Tribe as well as economically weaker section of the community would as much be entitled to get a permit to run his vehicle as a member of any other community
It is where the seats are limited that the legislature thought of making a provision to reserve the grant of permits in their favour to the extent of 25 per cent
The principle behind reservation in the grant of stage carriage permits employed by the Parliament appears to be the same as in reserving appointment in the Government service
If today government services are available in abundance the question of reservation would not arise
It is only on account of the posts being limited that the question of reservation has arisen
So we are not able to agree with the submission of the petitioner s learned counsel that there is a conflict between section 43 A as inserted by the UP Legislature and the amendments made in section 47 by Parliament in the  The High Court further proceeded to observe that though the tow impugned notifications did not follow the procedure prescribed 443 by sub section 2 of section 43 A as it is now in force in the State of Uttar Pradesh they could be sustained under sub sec
1 of section 43 A which authorised the State Government to issue such directions of a general character as it might consider necessary or expedient in the public interest in respect of any matter relating to road transport to the State Transport Authority or to the Regional Transport Authority and which required such authority to give effect to any such directions
The High Court also relied upon the decision of this Court in Hans Raj Kehar s case supra to hold that larger number of buses operating on different routes would be for the convenience and benefit of the travelling public
We may here state that any observations made in Hans Raj Rehar s case supra would be inapplicable so far as these cases presently before us are concerned
In that case the Court was concerned with sub section 2 of section 43 A of the Act as it stood then which was a provision enacted by the Legislature
That sub section provided that without prejudice to the generality of the power contained in section 43 A1 of the Act where the State Government was of opinion that it was in 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 issue appropriate directions as stated therein
That sub section contained a clear legislative policy which considered that there could be no public prejudice if all eligible applicants were granted permits
Without saying anything more on the point it may be stated that whatever this 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 section 2 of section 43 A
In the face of this amendment by which the former sub section 2 of section 43 A which specifically authorised he 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 applicants was deliberately taken away by the State Legislature the High Court was wrong in holding that such power was still available under sub section 1 of section 43 A of the Act which was widely worded
The High Court shut its eyes to the realities of the situation when it observed that in 444 this case the contents of the Statement of objects and Reasons were irrelevant as the provisions of section 43 A 1 were very clear
Even without the aid of the Statement of objects and Reasons it has to be held that by the substitution of the former sub section 2 by the new sub section 2 in section 43 A the Legislature clearly expressed itself against the policy of granting permits to all eligible applicants without any consideration to the needs of any particular locality or route or to the qualification of applicants
It is a well settled rule of construction of statutes that whenever a court is called upon to interpret an amended provision it has to bear in mind the history of that provision the mischief which the Legislature attempted to remedy the remedy provided by the amendment and the reason for providing such remedy
Therefore after the amendment at any rate it has to be held that sub section 1 of section 43 A of the Act did not comprehend within its scope the power to issue direction for issuing permits to all eligible applicants without any sort of restriction relevant to the scheme of the Act
What does section 43 A1 after all say  It says that the State Government may issue such directions of a general character as it may consider necessary in the public interest What is the meaning of the term public interest   In the context of the Act 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 availability of sufficient number of stage carriage services in other routes or areas which may be in need of running of additional services the problems of law and order availability of fuel problems arising out of atmospheric pollution caused by a large number of motor vehicles operating in any route or area the condition of roads P and bridges on the routes uneconomic running of stage carriage services leading to elimination of small operators and employment of more capital than necessary in any sector leading to starvation of capital investment in other sectors etc
Public interest under the Act does not mean the interest of the operators or of the passengers only
We nave to bear in mind that like every other economic activity the running of stage carriage service is an activity which involves use of scarce or limited productive resources
Motor Transport involves a huge capital investment on motor vehicles training of competent drivers and mechanics establishment of workshops construction of safe roads and bridges deployment of sufficient number of 445 policemen to preserve law and order and several other matters
To say that larger the number of stage carriages in any route or area more convenient it would be to the members of the public is an over simplification of a problem with myriad facts affecting the general public
If we run through the various provisions of the Act it becomes clear how much attention is given by it to various matters affecting public interest
There are provisions relating to licensing of drivers on the basis of their competence licensing of conductors specifications to which the motor vehicles should conform coordination of road and rail transport prevention of deterioration of the road system prevention of uneconomic competition among motor vehicles fixation of reasonable fare compliance by motor vehicles with the prescribed time table construction of bus stands with necessary amenities maintenance of standards of comfort and cleanliness in the vehicles development of inter State tourist traffic and several other matters with the object of making available adequate and efficient transport facilities to all parts of the country
Any direction given by the State Government under section 43 A of the Act should therefore be in conformity with all matters regarding which the statute has 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 and to make a mockery of an important economic activity like the motor transport
It is surprising that the High Court has reached the conclusion that the preferences and reservations to be observed while granting permits as stated in the proviso to sub section 1 to section 47 and in sub sections 1A to 1H of section 47 have not been contravened as there is no restriction on the number of permits to be issued
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 are no restrictions on the number of permits to be issued there is no necessity to make any such provision really shocks us
The High Court erred in not noticing that it was dealing with a vital economic activity which could be carried on at a huge cost both to the operator and to the Government and that by issuing the notification containing a direction to the Transport Authorities to issue limitless number of permits the 446 State Government had attempted to circumvent sub sections 1 and 1A to 1H of section 47 of the Act
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 he a limit 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 of vehicles on a route or in any area until all the small operators who also may take the permits to leave the field owing to the inevitable loss that ensues by the operation of an unlimited number of vehicles
The learned Attorney General while conceding that the amendment made in 1978 to section 47 of the Act should prevail contended that they had not been violated by the impugned notifications
We do not agree with the above submission
We are clearly of the view that the State Government has transgressed the provisions contained in sub section 1 and sub sections 1A to 1H of section 47
It has failed to comply with the duty imposed on it by those provisions
We are of the view that the two notifications are clearly outside the scope of the Act
The first notification which directs that all eligible applicants shall be granted permits and that there shall be no upper limit to the number of permits to be issued for stage carriages and the second notification which says that the Transport Authorities shall have regard only to matters referred to in clauses a b d and f of sub section 1 of section 47 of the Act and thereby precludes the Transport Authorities to take into consideration matters contained in the proviso to section 471 and in sub section 1A to 1H of section 47 of the Act are ultra vires the Act and they are liable to he struck down
We therefore allow these appeals set aside the judgment of the High Court in each of these cases and declare that the Notification No 68 TXXX 4 15 KM79 dated January 10 1981 and the Notification No 241 TXXX 4 15 P79 dated January 231981 issued by the GoverDmeDt of the State of Uttar Pradesh under section 447 43 A of the Act are ultra vires and therefore void and ineffective
In the circumstances of the case
there will be no order as to costs
HLC Appeals allowed


Summary:
A stage carriage  under the 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 cls
a to f of sub section
1 of section 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 section
1 of section 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 tho State of Uttar Pradesh was amended in 1972 by the UP Legislature by the introduction of section 43 A which was a new provision
While sub section
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 section
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 section 2 of section 43 A the provisions of section 47 stood amended to the effect that while considering an application 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 section 43 A issued directions in March 1972 for grant of permits to all eligible applicants without any restriction as to the number of permits to be issued on any route
The validity of section 43 A and the directions issued thereunder were upheld by the Court in Hans Raj Kehar  Ors vs Srate of UP
 Ors  But within a short time the State Government realised the necessity of reviewing the policy of issuing permits to all eligible applicants and amended section 43 A with retrospective effect by the Uttar Pradesh Act 15 of 1976
While sub section 1 was retained as such sub section
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 consumption of fuel preventing elimination of small operators as a consequence of unreasonable competition etc
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 thereafter 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 section
1 of section 47 was amended by providing that in addition to a registered cooperative society an application for a stage carriage permit from a person who has a valid licence for driving transport vehicles shall he given preference over applications from individual owners
Parliament also introduced new sub sections
1A to 1H in section 47 providing for reservation of certain percentage of stage carriage permits for the Scheduled Castes and Tribes and weaker sections of the community and empowered the State Government to frame rules for implementing sub sections
1A to 1H of s 47
These amendments came into force on January 16 1979
On January 10 1981 the State Government issued a notification directing the Transport Authorities to issue stage carriage permits to all eligible applicants and specifying that there should be no upper limit to the number of stage carriages for which permits might be granted
On January 23 1981 by another notification of the Transport Authorities were directed to have regard only to matters referred to in cls
a b d and f of sub section
l of section 47 and to take into consideration representations made by local or police authorities only
Tho appellants challenged the notifications under Article 226
420 The High Court dismissed the petitions repelling the contention that in the absence of reservation of the required percentage of permits for persons belonging to the Scheduled Castes the Scheduled Tribes and weaker sections as provided in section 47 the grant of permits would be vitiated
According to the High Court the question of reservation would arise only in those cases where the seats or articles are limited for distribution 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 and Reasons appended to the Amending Act 15 of 1976 cannot override the clear provisions of section 43 A as amended by that Act and held that though the two impugned notifications did not follow the procedure prescribed by sub section
2 of section 43 A they could be sustained under sub section
1 of s43 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 has 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 of the Act as in force in the State of UP was amended by the UP Act 15 of 1976
By the substitution of the former sub section
2 by the new sub s 2 in section 43 A the legislature clearly expressed itself against the policy of granting permits to all eligible applicants without any consideration to the needs of any particular locality or route or to the qualifications of applicants
After the amendment sub section
1 of section 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 availability of sufficient number of stage carriages in other routes or areas which may be in need of running of additional services the problems of law and order availability of fuel etc
To say that larger the number of stage carriages in any route or area more convenient it would be to the members of the public is an over simplification of a problem with myriad facets affecting the general public
The Act itself contains provisions relating to licensing of drivers and conductors specifications of motor vehicles co ordination of road and rail transport prevention of deterioration of road system prevention of Uneconomic competition among motor vehicles etc
Any direction given by the State Government under section 43 A should therefore be in conformity with all matters regarding which the statute has 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 E In the instant case a reading of the two notifications shows that the State Government ignored the legislative policy underlying the UP Act 15 of 421 1976 by which the new sub section
2 of section 43 A was enacted in substitution of the former sub section
2 with retrospective effect
The new sub section
2 was introduced by the State legislature after it had realised the mistake committed by the State Government in issuing the notification in the year 1972 directing the issue of bus permits liberally in favour of all eligible applicants which had resulted in investment of unproductive capital expenditure and under utilisation of capital and fuel and in unreasonable competition which eventually eliminated small 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 section 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 limitless number of permits the State Government had attempted to circumvent sub sections
1 and IA to IH of a section 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
Preference 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 limit on the issue of permits to operate motor vehicles in respect of any route or area
By the D 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 of vehicles on a route or in any area until all the small operators who also may take the permits to leave the 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 E iii The observations in Hans Raj Kehar s case are inapplicable to the present cases
In that case the Court was concerned with sub section
2 of section 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 section
2 of section 43 A
In the face of this amendment by which the former sub section
2 of s43 A which specifically authorised 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 applicants was deliberately taken away by the State legislature the High Court was wrong in holding that such power was still available under sub section
1 of section 43 A which was widely worded
443 C H Hans Raj Kehar  Ors
vs State of UP  Ors
  held inapplicable