ion No 95 of 1959
Petition under Article 32 of the Constitution for enforcement of Fundamental Rights
C K Daphtary Solicitor General of India and B R L Iyengar for the petitioners
H N Sanyal Additional Solicitor General of IndiaR Gopalakrishnan and T M Sen for respondents Nos 1 and 2 1959
November 6
The Judgment of Sinha CJ Imam Wanchoo and Das Gupta JJ was delivered by Wanchoo J Kapur J delivered a separate judgment
WANCHOO J
This petition under article 32 of the Constitution is a sequel to Writ Petition No 75 of 1959 which is also being disposed of today
It is not necessary therefore to set out the early history leading to 133 this petition as that has already been given in the judgment in Petition No 75
Suffice it to say that the petitioners who are the same as the petitioners in Petition No 75 were transport operators in the Anekal pocket in the State of Mysore
They held stage carriage permits for various routes which were expiring on March 31 1958
They were granted renewal of these permits up to March 31 1959
In the meantime steps were taken to formulate an approved scheme under Chapter IV A of the  No IV of 1939 hereinafter called the Act
The scheme was finally approved and published on April 231959
In order however to avoid inconvenience to the public temporary permits were granted to the petitioners after March 31 1959 for a period of four months or up to the time the Mysore Government Road Transport Department hereinafter called the Department was granted permits under section 68F whichever was earlier
Sometime before June 23 1959 the Department applied for permits in accordance with the scheme while the petitioners had applied for renewal of their permits
The Regional Transport Authority Bangalore hereinafter called the Authority issued permits to the Department and rejected the renewal applications of the petitioners on June 23 1959
The petitioners then applied to the High Court of Mysore by a writ petition challenging the issue of permits to the Department and the refusal of renewal to them
This petition was disposed of by the High Court on July 14 1959 and it was held that the grant of permits to the Department was invalid and the rejection of the renewal applications of the petitioners was incorrect but the High Court dismissed this petition on the ground that the relief to which the petitioners were entitled in view of these findings would be shortlived
The petitioners then applied for a certificate to enable them to appeal to this Court and that application is still pending
The present petition was filed on August 3 1959
The first contention of the petitioners in this petition is that after the scheme had been approved and published under Chapter IV A of the Act it was the 134 duty of the Department to apply under section 68F for all the routes covered by the scheme and it was only when the Department applied for all the routes that it would be open to the Authority to reject the applications for renewal made by the petitioners
The Department in this case applied only for some of the routes and in particular it was pointed out that there was no application at any rate for one out of the fourteen routes included in the scheme
Therefore it is submitted that the Department by picking and choosing which route to apply for and which to leave out was discriminating against those operators for whose routes it applied for permits and in favour of those operators for whose routes it did not apply for permits
Further the Authority by granting permits to the Department in such circumstances was denying equality before the law to the petitioners
This was an infringement of article 14 of the Constitution and also contravened the petitioner s right to carry on business guaranteed under article 19 1g
Secondly the petitioners contended that the Authority could not issue permits in this case as section 572 and 3 was not complied with
The petitioners therefore prayed for a direction quashing the order of the Authority issuing permits to the Department under section 68F and refusing their renewal applications
The petition has been opposed by the Department and its contention is that even though an approved scheme might cover a number of routes it was open to the Department to implement it in stages and that it was the best judge as to which route should be taken over first and there could be no discrimination so long as the holders of the stage carriage permits operating on a particular route were treated equally inter se in pursuance of the approved scheme
It is also urged that sub sections 2 and 3 of section 57 do not apply to applications for issue of permits made under section 68F1
We shall begin by examining the second contention
Section 68F lays down that where in pursuance of an approved scheme any State Transport Undertaking applies in the manner specified in Chapter IV for a stage carriage permit etc in respect of a notified area 135 or a notified route the Regional Transport Authority shall issue such permit to the Undertaking notwithstanding anything to the contrary contained in Chapter IV
Clearly therefore the Undertaking has to apply for permits in the manner provided in Chapter IV even though the Regional Transport Authority may be bound on such application to issue the permits
This takes us to section 45 which lays down to which authority the application shall be made and then to section 46 which lays down the particulars which the application must contain
Thus the Undertaking must comply with the terms of sections 45 and 46 when it applies for permits
Then comes section 572 which lays down that an application for a stage carriage permit with which we are concerned in this case shall be made not less than six weeks before the date on which it is desired that the permit shall take effect or if the Regional Transport Authority appoints dates for the receipt of such applications on such dates
In this case the Regional Transport Authority had appointed no date and clearly therefore the Undertaking should have applied not less than six weeks before the date on which it desired to start the service
This is necessary to give time to the Regional Transport Authority to deal with the matter and if necessary to inform those who might be affected under section 68F 2 to be prepared for the change
That is why section 68F 1 provided that the applications shall be made in the manner provided in Chapter IV
This provision has nothing to do with the publication required under section 573 which is meant for a different purpose
It was urged by the learned Solicitor General that the procedure provided in section 573 also applies as it is not inconsistent with the provisions of Chapter IV A see section 68B
We consider it unnecessary to go into this matter for it is not disputed that the applications for permits in this case were not made at least six weeks before the date from which the permits were to take effect
In the circumstances the applications being not in the manner provided in Chapter IV and being actually in breach of section 57 2 no permits could be issued on such applications
Therefore the orders in favour of the 136 Department issuing permits to it are liable to be quashed on this ground alone
In view of the above decision it is really not necessary for us to decide the first contention
We would however like to point out the dangers inherent in the claim put forward by the Department
A scheme is prepared under section 68C It is initiated by the Undertaking when it is of opinion that for the purpose of providing an efficient adequate economical and properly coordinated road transport services it is necessary in the public interest that road transport services in general or any particular class of such service in relation to any area or route or portion thereof should be run and operated by the Undertaking whether to the exclusion complete or partial of other persons or otherwise
This section thus gives power to the Undertaking to prepare a scheme in relation to an area or route or portion thereof
The Undertaking is thus not bound to prepare a scheme for the whole State at one time it has been given the power to choose particular types of services or a particular area or particular routes or even portions thereof for the reason that it may not be possible for the Undertaking to run services all over the State at the same time
Thus when the Undertaking decides to frame a scheme it must take into account its resources in men material and money and frame a scheme only to the extent to which it can carry it out in full
For example if it can carry out the scheme for the whole State at once it may frame a scheme for the whole State
But if it cannot do so it can frame a scheme for one district
Even if that is not within its resources it can frame a scheme for a part of a district
Even in a part of the district its scheme may deal with certain routes and not all
So long as it can show that the scheme is an efficient adequate economical and properly coordinated scheme for road transport service it will have a right to frame a scheme for only a part of the transport services running in a State
Therefore the scheme to be framed must be such as is capable of being carried out all at once and that is why the Undertaking has been given the power to frame a 137 scheme for an area or route or even a portion thereof Further after the scheme is framed it is approved and published by the State Government
Thereafter it is the duty of the Undertaking to carry out the scheme and in pursuance of that it applies for permits under section 68F1
If the Undertaking at that stage has the power to carry it out piecemeal it would be possible for it to abuse the power of implementation and to discriminate against some operators and in favour of others included in the scheme and also to break up the integrity of the scheme and in a sense modify it against the terms of section 68E
There is no difficulty for the Undertaking to apply for permits relating to the entire scheme at the same time for the manner in which the scheme is prepared under section 68C takes into account all the difficulties which might arise in the implementation of the scheme and with that very object provides for taking over particular types of transport services in relation to areas or routes or even portions thereof
We need not however pursue the matter further on this occasion
Before we go to the other point raised in this petition we should like briefly to refer to a feature of the scheme which has been brought to our notice
This feature is that though the scheme mentions fourteen routes with their terminii and intermediate points and the length of the routes there is a parrot like repetition of the words  or any portion thereof  in all the fourteen routes
We should like to point out  that it is the duty of the Undertaking when it prepares a scheme under section 68C to decide whether it will take up a whole route or a portion thereof
If it decides to take a portion of the route provided however conditions of efficiency adequacy economy and proper co ordination are fulfilled it should specify that portion only in the scheme
section 68C does not contemplate that the routes should be specified in the manner in which they have been specified in this case as for example  Bangalore to Anekal or any portion thereof
 If the intention was not to operate on the whole Bangalore Anekal route but only a portion of it that portion should have been specified 18 138 as the route
However in this particular case we are of opinion that the intention clearly was to take over the whole route in the case of all the fourteen routes which will be clear from the length of the route to be taken over mentioned in the schedule to the scheme
Therefore the words  or any portion thereof  which have been repeated as if they were some kind of charm throughout the schedule are surplusage in view of the length specified and may be ignored and the scheme taken to apply to the entire length of the fourteen routes
The next question is about the order to be passed in this case
The contention on behalf of the Department is that as the petitioners had applied to the High Court and their petition was dismissed and the application for a certificate to appeal to this Court is pending before the High Court this Court should dismiss the present petition and direct the petitioners to come either on a certificate granted by the High Court or by a special leave application in case the High Court refuses the certificate
We do not think it necessary in this case to decide this general question in view of certain special features of the present case
It is true that the writ petition by the petitioners was dismissed by the High Court but the judgment of the High Court shows that it was of opinion that the applications under section 68F should have complied with section 57 2 of the Act and should thus have been made at least six weeks before the date from which the scheme was to be implemented
On that view the High Court held that the issue of permits to the Department was not according to law
It also held in consequence that refusal of the renewal to the petitioners was illegal but it refused to pass an order in favour of the petitioners on the ground that the relief granted to them would be short lived
In effect therefore the judgment of the High Court was in favour of the petitioners and not against them though in form the writ petition was dismissed
In these circumstances we are of opinion that as the petitioners  fundamental right to carry on business is certainly involved in this case we should not refuse relief to the 139 petitioners on the ground that their writ petition was dismissed by the High Court and they have not yet been able to obtain a certificate permitting them to appeal to this Court
There are two prayers in the present petition 1 that the proceedings of the Authority issuing permits to the Department be quashed and 2 that the proceedings rejecting the renewal applications of the petitioners be also quashed
We see no reason why we should not grant the first prayer and quash the issue of permits to the Department by the Authority on June 23 1959
Our attention in this connection was drawn to K N Guruswamy vs The State of Mysore and Others1
In that case this Court after declaring the law in favour of the petitioner did not issue a writ as there was hardly a fortnight left for the excise contract which was involved in that case to expire and the issue of a writ would have been meaningless and ineffective
That case however is distinguishable because the contract there would have come to an end within a few days
In the present case there is no reason to assume that the six weeks period which is the minimum period prescribed under section 57 2 is the only period that will be required for implementation of the scheme under section 68F1
In these circumstances we are of opinion that the prayer for quashing the permits granted to the Department on June 23 1959 should be allowed
As for the other prayer for quashing the order rejecting the renewal applications of the petitioners it is now unnecessary in view of our decision in Petitions Nos 54 and 75 of 1959
We therefore allow the petition and quash the order issuing permits to the Department
We order parties to bear their own costs of this petition taking into account that Petition No 117 of 1959 filed by the petitioners with respect to the validity of the scheme has been withdrawn by them at a late stage and we have directed parties to bear their own costs of that petition also
KAPUR J
I have read the judgment prepared by my learned brother Wanchoo J but I respectfully 1  140 dissent from the opinion therein given
I shall proceed to give my reasons for the dissent
It is not necessary to restate the facts which are set out in detail in the proposed judgment but reference may be made to certain dates
On August 28 1958 the proposed scheme under Chapter IV A of the  as amended by Act 100 of 1956 which for the sake of convenience will hereinafter be termed the Act was published as a draft scheme
It was approved on October 24 1958 but on its being challenged in the High Court of Mysore it was quashed on December 3 1958
A fresh draft scheme was published on January 22 1959 and after the Chief Minister had heard objections against it it was approved on April 15 1959 and was published on April 23 1959
The fresh scheme was also challenged in the High Court of Mysore in Civil Writ Petition No 315 of 1959 but this petition was dismissed on June 1 1959
The Regional Transport Authority on the application of the Mysore Government Road Transport Department hereinafter termed the Department issued in favour of the Department permits on June 23 1959 and rejected the application of the other operators the petitioners
This order was challenged in the High Court by Civil Writ Petition No 463 of 1959 on June 24 1959
On July 14 1959 the High Court although it found in favour of the petitioners practically on all points did not grant any relief and dismissed the petition on the ground that the effectiveness of the relief will be for a short period of six weeks at the most but in the order it was stated that the permits granted to the Department were invalid as they had not applied for in the manner provided in section 57 of the Act and also that the Regional Transport Authority had been careless in the exercise of its powers
Against this decision the peti tioners applied to the High Court for a certificate for appeal to this Court but the matter is still pending in the High Court
In the meanwhile the petitioners filed this petition in this Court under article 32
The core of the question is what is the consequence of the framing of the scheme under Chapter IV A 141 and how it is to be implemented
The petitioners contended that on a proper construction of sections 68C and 68F the scheme as approved must be implemented as a whole simultaneously or not at all
The submission of the Department on the other hand is two fold 1 that in the very nature of things it must be left open to the Department to implement the scheme in reasonably convenient stages and 2 if the Department has applied for and obtained permits for certain routes in the scheme and has substantially implemented that scheme the implemented portion of the scheme cannot be set aside
The decision of these rival contentions would turn on the interpretation of the various sections in Chapter IV A
This Chapter contains special provisions relating to State Transport Undertaking and was inserted in the Act by section 62 of Act 100 of 1956 Section 68A contains definitions 68B gives overriding effect to this Chapter qua Chapter IV
Section 68C deals with preparation and publication of the scheme of road transport services of the State Transport Undertaking
Section 68D provides for objections to be filed against a proposed scheme 68E to the consequences of cancellation or modification of the scheme
Then comes section 68F which provides for the issue of permits to State Transport Undertakings
Section 68G provides for the method of determining of compensation in case of State Transport taking over 68H for payment of compensation and 681 gives power to make rules
We were informed by Mr Sanyal that rules have been framed under this section
The relevant portion of section 68C is as follows  Where any State transport undertaking is of opinion that for the purpose of providing an efficient adequate economical and properly coordinated road transport service it is necessary in the public interest that road transport services in general or any particular class of such service in relation to any area or route or portion thereof should be run and operated by the State transport undertaking whether to the exclusion complete or partial of other persons or otherwise the State transport undertaking 142 may prepare a scheme giving particulars of the nature of the services proposed to be rendered the area or route proposed to be covered Section 68F1 provides  Where in pursuance of an approved scheme any State transport undertaking applies in the manner specified in Chapter IV for a stage carriage permit or a public carrier s permit or a contract carriage in respect of a notified area or notified route the Regional Transport Authority shall issue such permit to the State Transport undertaking not withstanding anything to the contrary contained in Chapter IV
 It was contended that the State Transport Undertaking to be termed the Undertaking can propose a scheme only when the conditions in section 68C are fulfilled that is for the purpose of providing efficient adequate economical and properly coordinated road transport services
The argument is that all these conditions are a sine qua non of the scheme being proposed and if for any reason the Undertaking is unable to put the whole scheme into effect all at once then it should modify the scheme under section 68E and implement this modified scheme
No doubt the words adequate economical and coordinated are used in the section but they must be read in the context
The words of the section require that when the Undertaking is of the opinion that for the objects therein mentioned the services on any route or in any area should be operated by it it may prepare a scheme
All that the section requires is that the Undertaking must be of that opinion when it prepares the scheme
The scheme has to contain particulars of the services proposed to be rendered the areas or routes to be covered
It was next submitted that the language of section 68F further supports the contention that if the approved scheme is to be implemented it must be implemented all at once or not at all and emphasis was laid on the words in pursuance of and permit in respect of a notified area or notified route
These words in my opinion do not necessarily lead 143 to that conclusion
Before the scheme is proposed the Undertaking is to be of a certain opinion and when it is to be in operation the Undertaking has to proceed in a manner prescribed in the section But it cannot be said that when the scheme is implemented the whole thing is to be done in a rigid manner
Some flexibility and practicability in effectuating the scheme must necessarily be implied because of the implications financial and others of the scheme itself
It may happen that at the time of the implementation it is discovered that the scheme cannot be put into effect all at once because of a natural calamity or of some unforeseen circumstance beyond the control of the State Transport Undertaking
If the contention of the petitioners is correct then it would mean that the whole scheme must be scrapped and a new scheme prepared and approved with its consequential delays
In this manner the policy of nationalisation which is the State policy in India would be indefinitely put off because in the meanwhile all kinds of interests may come into existence and circumstances may supervene which may delay if not obstruct the State in its policy of nationalisation
The use of the words  in pursuance of  in section 68F only means that applications are made to give effect to the scheme or in execution of the scheme
These words import a notion of obligation and are more restrictive than the phrase  by reason of  which is permissive
Bradford Corporation vs Myers 1 where Lord Buckmaster in construing these word said   It is because the act is one which is either an act in the direct execution of a statute or in the discharge of a public duty or the exercise of a public authority Therefore the mere use of the words  in pursuance of  cannot mean that the whole scheme has to be put into operation and not a portion of it 1 at p 247
144 The second argument raised in support of the contention that the scheme has to be implemented as a whole and all at once is the use of the words  applies in the manner specified in Chapter IV for a stage carriage permit in respect of a notified area or notified route
 Chapter IV deals with the control of transport vehicles
Section 46 deals with applications for such stage carriage permits and requires the following particulars to be set out in the applications  the route or routes or the area or areas for which the application is made the number of vehicles proposed to operate in relation to each route or area the minimum and maximum number of daily services pro posed to be provided in relation to each route the number of vehicles to be kept in reserve the arrangements to be made for housing and repair of vehicles and for the comfort and convenience of passengers and such other matters as may be prescribed
This section also applies to applications made under 68F
It means therefore that if the area is extensive or the number of routes which a State Undertaking wishes to take over is large a number of applications will have to be made if all these particulars have to be properly given
If the contention of the petitioners is correct then all applications under section 46 will have to be made at one and the same time and there is no reason to make allowances for mistakes or accidental omissions
If accidental omissions are to be excused there is no reason to exclude omission due to unforeseen circumstances eg some vehicle being found unusable some repair shops not being completed in time or some natural calamity making it impossible to start operations on a particular route
If the State cannot take over those routes for which applications can immediately be made then it would mean that taking over would become not only difficult but extremely expensive because as I have said before other interests may come in which it may not be possible for the State to take over
Therefore if the State Undertaking intends to run a scheme within a reason able time then there is no reason why the State should not apply for different routes within reasonable time 145 so long as it acts honestly fairly and without oblique motives
The third argument on behalf of the respondents  was that if the State Undertaking has implemented the scheme in regard to certain routes and has actually started work on those routes after having obtained permits that portion of the implemented scheme should not be quashed because it would mean that the stage carriages of the State Undertaking will be taken off and somebody else will have to be given the permits at once or the people will have to go without road transport which cannot be the intention of the Act
If the policy of the State is nationalisation then such an order will not only delay but obstruct and thwart that policy
In my opinion therefore it is not the intention of the legislature in sections 68C and 68F that the whole scheme must be put into operation all at once or not at all
The question then arises as to what should be the order in the instant case
The High Court has indicated in its order that the applications made on behalf of the State Undertaking were not in accordance with section 57 of the Act and the learned Additional Solicitor General informed us that the State Undertaking had accepted that view of the law and proceedd to make applications in accordance with section 57 and other relevant provisions of Chapter 1V
In that view of the matter in my opinion it is not necessary to pass a formal order quashing the permits granted in favour of the State Undertaking
The case is very much like K N Guruswamy vs The State of Mysore  Ors1
In this view of the matter and in view of the opinion I have given in Petitions Nos 54 75  76 1 am of the view that this petition should be dismissed but the parties should bear their own costs
ORDER OF COURT In accordance with the opinion of the majority we allow the petition and quash the order issuing permits 1  19 146 to the Department
We order parties to bear their own costs of this petition taking into account that Petition No 117 of 1959 filed by the petitioners with respect to the validity of the scheme has been with drawn by them at a late stage and we have directed parties to bear their own costs of that petition also


Summary:
As a general rule a person cannot transfer or otherwise confer a better title on another than he himself has and a mortgagee cannot therefore create an interest in mortgaged property which will enure beyond the termination of his interest as mortgagee
Further a mortgagee cannot during the subsistence of the mortgage act in a manner detri mental to the mortgagor s interests such as by giving a lease which may enable the tenant to acquire permanent occupancy rights in the land thereby defeating the mortga gor s right to khas possession
A permissible settlement by a mortgagee in possession with a tenant in the course of prudent management and the springing up of rights in the tenant conferred or created by statute based on the nature of the land and possession for the requisite period is an exception to the general rule but to fall within this exception the settlement of the tenant by the mortgagee must have been a bona fide one
The exception will not apply in a case where the terms of the mortgage prohibit the mortgagee from making any settle ment of tenants on the land either expressly or by necessary implication
Where a zuripeshgi ijara deed contained the following clause It is desired that the ijaradars should enter into possession and occupation of the share let out in ijara being the kkudkasht land under his own cultivation culti vate them pay 2 as
as reserved rent year after year to us the executants and appropriate the produce thereof year after year on account of his having the ijara interest and the kabuliat executed by the tenant to whom the lands were leased by the mortgagee for a period of 3 years referred to the ijara deed and contained an express provision that he the tenant would give up possession of the tika land on the expiry of the lease without urging any claim on the score that the lands were his kasht lands Held confirming the decision of the High Court that the settlement was not a bona fide one and the successors of the tenant the de fendants did not acquire permanent rights of occupancy in 101 776 the demised lands under the Bihar Tenancy Act even though the lands had been in the occupation of the tenant and his successors for over 30 years after the expiry of the lease
Held further that the defendants could not acquire occupancy rights under sections 20 and 21 of the Bihar Tenancy Act as the mortgagee was neither a proprietor nor a tenure holder or under tenure holder and the tenant and his successors were not therefore settled raiyats within the meaning of section 5 cl
2 of the said Act
Manjhil Lal Biswanath Shah Deo
vs Shaikh Mohiuddin ILR Babu Bairo Nath Ray vs
Shanke Pahan ILR 8 Pat
31 and Binda Lal Pakrashi and Others vs Kalu Pramanik and Others ILR distinguished