IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 06-04-2009 CORAM: THE HONOURABLE MR. JUSTICE V. RAMASUBRAMANIAN W.P. Nos.3477, 3486, 3790 and 3884 of 2009 And M.P. Nos.1, 1, 1, 1 and 2 of 2009 M.Anandhan .. Petitioner in WP 3477/2009 Madras Metro Auto Drivers Association (Affiliated to the AITUC) Represented by its General Secretary J.Seshasayanam (Old No.204), New No.48, Prakasam Salai, (Jeeva Hall) Broadway, Chennai – 600 108. .. Petitioner in WP 3486/2009 Auto and Taxi Drivers Union (Regd. No.1363/MDS), Rep., by its General Secretary, No.11, Lawyer Jagannathan Street, Guindy, Chennai – 600 032. .. Petitioner in WP 3790/2009 Auto Thozhilalar Sangam (Regd. No.2656/CNI), Rep., by its General Secretary, No.52, Cooks Road, Chennai – 600 012. .. Petitioner in WP 3884/2009 Vs. 1.The Secretary, Home (Transport-III) Department, State Government of Tamil Nadu, Fort St. George, Chennai – 600 009. 2.The State Transport Authority, Chepauk, Chennai - 600 005. 3.The Joint Transport Commissioner- cum-The Regional Ayanavaram Transport Authority (Chennai Region), Chennai – 600 023. .. Respondents in all WPs. WP Nos.3477 and 3486 of 2009: Writ petitions filed under Article 226 of the Constitution of https://hcservices.ecourts.gov.in/hcservices/ India, praying for the issue of Writs of Mandamus, forbearing the second and third respondents and their subordinates in granting or issuing the Auto rickshaw permits in pursuant to the draw conducted by the third respondent in Chennai, on 1.3.2009 for the grant of the Auto rickshaw permits. WP No.3790 of 2009: Writ petition filed under Article 226 of the Constitution of India, praying for the issue of a Writ of Mandamus, forbearing the second and third resp9ondents from granting or issuing the Auto rickshaw permits in pursuant to the draw conducted by the third respondent on 1.3.2009 in Chennai pursuant to G.O.No.1645, dated 18.12.2008 and consequently direct the first respondent to follow transport manner by adopting the following guidelines namely (i) he should be a resident of Chennai, (ii) he should be possessing a valid licence to drive with badge experience, (iii) follow seniority in driving with maximum age of 55 years (iv) he should be an auto driver cum owner only (v) persons who has given proper detail with verification and (vi) not to grant permit for those who already having permit in granting and issuing the Auto rickshaw permits. WP No.3884 of 2009: Writ petition filed under Article 226 of the Constitution of India, praying for the issue of a Writ of Certiorarified Mandamus, calling for the records of the first respondent G.O.No.1645, dated 18.12.2008, read with its amendment G.O.No.96, dated 30.1.2009, and quash the same as being illegal, arbitrary and contrary to the principles of natural justice, mala fide and consequently direct the first respondent to follow transport manner by adopting the following guidelines namely (i) he should be a resident of Chennai, (ii) he should be possessing a valid licence to drive with badge experience, (iii) follow seniority in driving with maximum age of 55 years (iv) he should be an auto driver cum owner only (v) persons who has given proper detail with verification and (vi) not to grant permit for those who already having permit in granting and issuing the Auto rickshaw permits. For Petitioner in WPs 3477 & 3486/2009 : Mr.Govindaraman For Petitioner in WP 3790/2009 : Mr.N.Karunakaran For Petitioner in WP 3884/2009 : Mr.AL.Manoharan For Respondents in all WPs: Mr.P.S.Raman, Additional Advocate General assisted by Mr.A.Arumugham, Spl. G.P.. https://hcservices.ecourts.gov.in/hcservices/ COMMON ORDER While the first three writ petitions viz., W.P.Nos.3477, 3486 and 3790 of 2009 are for the issue of a Writ of Mandamus to forbear the respondents from granting or issuing Auto rickshaw permits in pursuance of the draw conducted on 1.3.2009, the fourth writ petition viz., W.P. No. 3884 of 2009 has been filed for quashing a Government Order on the basis of which, the entire process of selection of persons for the grant of Auto rickshaw permits was undertaken. 2. I have heard Mr.S.Govindaraman, learned counsel appearing for the petitioner in two writ petitions and Mr.N.Karunakaran and Mr.AL. Manoharan, petitioners appearing in person in the other two writ petitions and Mr.P.S.Raman, learned Additional Advocate General appearing for the respondents. 3. By successive orders passed in G.O.Ms.Nos.1492, 166, 841, 1214 and 1431, Home Department, dated 30.10.1998, 10.2.1999, 14.6.1999, 1.9.1999 and 29.10.1999 respectively, the Government imposed a ban and continued the same, on registration of new three seater Auto rickshaws in the City of Chennai. However, by an order in G.O.Ms.No.1099, Home (Transport-VI) Department, dated 7.12.2005, the Government decided to grant 5,000 fresh permits in the City of Chennai and adjoining areas and directed the Transport Commissioner and Regional Transport Authority, Chennai, to grant 5,000 fresh permits to three seater LPG dedicated Auto rickshaws to the owner- cum-driver applicants in the said area in relaxation of the existing ban. 4. Simultaneously, another order was issued in G.O.Ms. No.1100, Home (Transport-VI) Department, dated 7.12.2005, introducing a "Loan Scheme with subsidy component" with a view to provide self-employment and to help unemployed youth to acquire Auto rickshaws for their livelihood. In paragraph-4 of the said G.O., detailed guidelines were issued for the scheme. Some of the guidelines, which may be of relevance to the cases on hand, are as follows:- (a) The scheme is applicable to owner-cum-driver applicants only. (b) The beneficiary/applicant should possess a driving licence to drive a light motor vehicle-transport vehicle/Auto rickshaw. (c) The beneficiary's annual income should not exceed Rs.36,000/- per annum. (d) The beneficiary should not already possess an Auto rickshaw permit in his name to avail the subsidy. (e) The permit granted under the scheme should not be transferred except in the case of death of the holder of the permit. https://hcservices.ecourts.gov.in/hcservices/ 5. The above Government Order G.O.Ms.No.1100, dated 7.12.2005, was challenged before this Court in W.P.No.1809 of 2006 by the petitioner in W.P.No.3486 of 2009. Similarly, the petitioner in W.P.No.3790 of 2009 also filed a writ petition in W.P.No.40582 of 2005. But by an order dated 24.1.2006, W.P.No.1809 of 2006 was dismissed, forcing the petitioner therein to file an appeal in W.A. No.181 of 2006. 6. The writ appeal W.A.No.181 of 2006 was taken up by the Division Bench along with W.P.No.40582 of 2005 and both of them were disposed of on 5.9.2006, on the basis of a statement made by the learned Government Pleader that the scheme introduced under G.O.Ms.No.1100, dated 7.12.2005, was withdrawn by the Government. 7. Thereafter, the Government issued a fresh order in G.O.Ms. No.322, Home (Transport-VI) Department, dated 1.3.2007, cancelling G.O. Ms.Nos.1099 and 1100, dated 7.12.2005 and approving the guidelines for the loan-cum-subsidy scheme to 5,000 beneficiaries in Chennai Metropolitan area for the purchase of new LPG driven three seater Auto rickshaws. The Government also permitted the Regional Transport Authorities of Chennai Metropolitan area, to grant 5,000 contract carriage permits to LPG driven three seater new Auto rickshaws under the loan-cum-subsidy scheme and another 5,000 contract carriage permits without subsidy under general category. To facilitate the grant of such permits, the earlier ban order of the year 1999, was relaxed. The guidelines for the subsidy scheme were furnished in Annexure-I and the guidelines for non- subsidy scheme were furnished in Annexure-II to the said Government Order. 8. Annexure-I to the aforesaid Government Order which contained the guidelines for the grant of permits under the loan- cum-subsidy scheme, prescribed as many as 17 conditions, some of which are as follows:- "(a) The scheme shall be applicable to Chennai Metropolitan Area. (b) The applicant should be a resident within the Chennai Metropolitan Area. (c) The age of the applicant shall be between 25 and 40 years. (d) The applicant shall possess minimum educational qualification of a pass in 10th standard for the purpose of availing this scheme. (e) This scheme is applicable to driver-cum- owner only. (f) The applicant shall possess a valid driving licence to drive a light Motor Vehicle with Badge number/Transport Vehicle and shall have an experience of not less than five years. https://hcservices.ecourts.gov.in/hcservices/ (g) The applicant should not have possessed any Auto rickshaw permit. (h) More than one permit shall not be allotted to the same family under this scheme. (i) To avail the permit under this scheme, the family income of the applicant should not exceed Rs.36,000/- per annum. (j) Other things being equal preference shall be given to Woman, Scheduled Caste & Scheduled Tribe candidates considering the seniority in age and experience in driving the vehicle and for others the seniority in age and experience of driving the vehicles." 9. Similarly, Annexure-II to the Government Order, contained only one prescription for the grant of permit under the non- subsidised scheme and it is as follows:- "As the scheme is applicable to Chennai Metropolitan Area, the applicant shall be a resident of Chennai Metropolitan Area." 10. Again the scheme framed in G.O.Ms.No.322, dated 1.3.2007, was also challenged in a writ petition in W.P.No.27802 of 2007, by the very same Association which is the petitioner in W.P.No.3486 of 2009 herein. The prayer in the writ petition was for the issue of a Writ of Mandamus to direct the respondents to take on file, all the applications filed in pursuance of G.O.Ms.No.322, dated 1.3.2007 and to consider all of them in accordance with law. The contention of the petitioner therein was that there is a statutory duty cast upon the respondents to consider all applications and to prepare the list of eligible persons after screaming. 11. When the above writ petition was pending, the Government came up with an amendment to G.O.Ms.No.322, dated 1.3.2007, under an order in G.O.Ms.No.1645, Home (Transport-III) Department, dated 18.12.2008. By the said amendment - (a) The number of permits to be granted under the subsidy scheme was brought down from 5,000 to 2,500 and the number of permits to be granted under the non-subsidy scheme was increased from 5,000 to 7,500. (b) The minimum and maximum age prescribed under condition No.3 of Annexure-I for the subsidised scheme were modified from 25 and 40 years to 23 and 45 years respectively and (c) The minimum educational qualifications prescribed in condition No.4 of Annexure-I was reduced from a pass in 10th standard to a pass in 8th standard. 12. By another order in G.O.Ms. No.96, Home (Transport-III) Department, dated 30.1.2009, the number of years of experience https://hcservices.ecourts.gov.in/hcservices/ stipulated as 5 years under condition No.6 of Annexure-I of G.O.Ms.No.322, dated 1.3.2007, was also brought down to 3 years. 13. Thus, as a cumulative effect of G.O.Ms.No.322, dated 1.3.2007, amended by G.O.Ms.No.1645, dated 18.12.2008 and G.O.Ms.No.96, dated 30.1.2009, the Government decided to grant 7,500 permits under the non-subsidised scheme for general category and 2,500 permits under the subsidised scheme. The only condition for applying for a permit under the non-subsidised scheme (general category) is that the applicant should be a resident of Chennai Metropolitan Area. On the other hand, an applicant under the subsidised scheme, had to fulfil several eligibility criteria such as (i) a pass in 8th standard (ii) lower and upper age limits of 23 and 45 years (iii) residency in Chennai Metropolitan Area (iv) possessing a valid driving licence with badge number and an experience of not less than 3 years and being a driver-cum-owner. 14. After the issue of G.O.Ms.No.96, dated 30.1.2009, the Transport Department published notifications in English and Vernacular Newspapers dated 4.2.2009, inviting interested persons to obtain applications for the grant of permits under both categories. It was indicated in the notification that 1,653 permits will be issued under the subsidy scheme and 2,468 permits will be issued under the non-subsidy scheme. 15. Since the response to the notifications was overwhelming, the respondents issued a press release on 13.2.2009 that a draw would be conducted for selecting applicants for the grant of permits. Accordingly, a draw was conducted on 1.3.2009. 16. Immediately after the draw, W.P.Nos.3477 and 3486 of 2009 came to be filed on 2.3.2009, merely seeking to forbear the respondents from issuing permits on the basis of the draw held on 1.3.2009. These two writ petitions came up for admission on 3.3.2009 and the petitioners appeared in person and argued. After hearing them, I directed the learned Additional Government Pleader to take notice and posted the writ petitions to 9.3.2009. I also directed the respondents not to issue permits in the meantime. 17. On 9.3.2009, the respondents filed a common counter in the first two writ petitions and they were adjourned for enquiry. In the meantime, the next two writ petitions were filed and hence all of them were taken up together by the consent of parties for final disposal. 18. The petitioners challenge the process adopted by the respondents for selecting persons for the grant of Auto rickshaw permits, basically on the following grounds:- (a) Under Section 74 of the Motor Vehicles Act, 1988, it is the Regional Transport Authority, who is conferred with the power to grant a contract carriage permit subject to the conditions laid down and the State Government has the power to limit the number of contract carriages either generally or for any specified type, under Section 74(3)(a), only if so, directed by the Central Government. So far the Central Government has not issued any such https://hcservices.ecourts.gov.in/hcservices/ direction and hence the restriction of the number of Auto rickshaw permits by the respondents, was in violation of statutory provisions. (b) Under Section 68(1) of the Act, a State Transport Authority and several Regional Transport Authorities are constituted for the purpose of exercising and discharging the powers and functions specified in sub section (3) and such powers cannot be exercised by any one not authorised by sub sections (2) and (3) of Section 68 and Section 69. In this case, there has been a violation of these provisions. (c) Under Section 80(2), a Regional Transport Authority shall not ordinarily refuse to grant an application for permit of any kind. Therefore, the rejection of the applications for permit, of all those who were not successful in the draw of lots, is violative of Section 80(2). At any rate, the second proviso to sub section (2) of Section 80 makes it obligatory for a Regional or State Transport Authority, to give to the applicant, an opportunity of being heard and to communicate in writing, the reasons for refusal of an application for permit. This was also not followed by the respondents. (d) Even if a limit upon the number of permits is imposed, the Act or the Rules do not authorise the conduct of a draw of lots. Rule 165 of the Tamil Nadu Motor Vehicles Rules, enables the Transport Authority to stop receiving applications, once the prescribed limit is reached. (e) Rules 166 and 167 of the Tamil Nadu Motor Vehicles Rules, list out the grounds on which an application cannot be rejected and the grounds on which an application can be rejected, respectively. The non-selection of a person in the draw of lots, is not listed as one of the grounds for rejection. 19. I have carefully considered the above contentions and I shall deal with them one after another. 20. The first contention is based upon Sections 69, 73 and 74 of the Motor Vehicles Act, 1988. But an overview of the Act in entirety shows that Chapter-V of the Act, containing Sections 66 to 96 deals with "Control of Transport Vehicles". Section 67 confers power upon the State Government to control road transport. Clauses (c) and (d) of sub section (1) of Section 67 empower the State Government to issue appropriate directions to the State Transport Authority and Regional Transport Authority, having regard to - (i) the desirability of preventing the deterioration of the road system and (ii) the desirability of preventing uneconomic competition among the holders of permits. Though Clauses (i) and (ii) specify the matters in respect of which such directions can be issued by the State Government, Clause (iii) is a residuary clause, since it uses the expression "any other https://hcservices.ecourts.gov.in/hcservices/ matter". Therefore the power of the State Government to restrict the number of permits, stems essentially from the broad powers conferred by Section 67. 21. The mandate contained in Section 74(3)(a) that the State Government shall limit the number of contract carriages, if so directed by the Central Government, cannot be understood to mean that such power can be exercised only when so directed by the Central Government. Section 74(3)(a) reads as follows:- "The State Government shall, if so directed by the Central Government, having regard to the number of vehicles, road conditions and other relevant matters, by notification in the Official Gazette, direct a State Transport Authority and a Regional Transport Authority to limit the number of contract carriages generally or of any specified type as may be fixed and specified in the notification, operating on city routes in towns with a population of not less than five lakhs." 22. A careful reading of Section 74(3)(a) extracted above, would show that whenever a direction is issued by the Central Government, the State Government is obliged to direct the Transport Authorities to limit the number of contract carriages. It does not mean that the State Government has no power to independently issue a direction to limit the number of contract carriages. If no direction is issued by the Central Government, the State Government is free to issue such a direction restricting the number of contract carriages. This discretion may or may not be exercised by the State Government of its own accord, in the absence of a direction from the Central Government. But this discretion will not be available, once a direction is issued by the Central Government. Therefore the first contention that under Section 74(3)(a), the State Government is empowered to restrict the number of contract carriages, only if a direction by the Central Government is issued, cannot be accepted. 23. The second contention of the petitioners is that there are different Regional Transport Authorities, constituted statutorily under Section 68(1) of the Act, with area of restriction over which they exercise jurisdiction. The grievance of the petitioners is that under the notification dated 4.2.2009, the Regional Transport Authority, Chennai, was appointed as Nodal Officer, though areas other than those coming under his jurisdiction were also included in the draw of lots. 24. But factually, it was only the draw of lots that was conducted in a centralised fashion. The scrutiny of applications and issue of permits, even according to the respondents, would be done only by the concerned Regional Transport Authorities. The duties and functions conferred by the provisions of the Statute, according to the respondents, would be performed only by those indicated in the Act. Therefore the second contention also cannot be accepted. https://hcservices.ecourts.gov.in/hcservices/ 25. The third contention is that under Section 80(2), an application shall not ordinarily be rejected and that by virtue of the second proviso to sub section (2) of Section 80, an opportunity of being heard and an order in writing are necessary for the rejection of an application. Sub section (2) of Section 80 and the second proviso thereunder, read as follows:- "(2) A Regional Transport Authority, State Transport Authority or any prescribed authority referred to in sub-section (1) of Section 66 shall not ordinarily refuse to grant an application for permit of any kind made at any time under this Act. Provided further that where a Regional Transport Authority, State Transport Authority or any prescribed authority referred to in sub- section (1) of Section 66 refuses an application for the grant of a permit of any kind under this Act, it shall give to the applicant in writing its reasons for the refusal of the same and an opportunity of being heard in the matter." 26. But the above provisions apply under normal circumstances. The above provision contains a procedural safeguard against arbitrary exercise of power by the State or Regional Transport Authorities. Considering the fact that the number of applications received for the grant of permits far exceeded the number of permits decided to be issued, the respondents have resorted to the system of draw of lots. Therefore, the compliance with the requirements of Section 80(2), cannot be demanded. The statistics furnished by the respondents in paragraphs-9 to 11 of their common counter affidavit shows that by the notifications published in various newspapers, applications were invited for the grant of 2,468 permits under the non-subsidy scheme and 1,653 permits under the subsidy scheme. The total number of applications received were 22,171 under the non-subsidy scheme and 4,373 under the subsidy scheme. In view of such overwhelming response, it was not possible to provide an opportunity of hearing and to pass an order of rejection. The draw conducted by the respondents in full public view, is itself the opportunity for all the applicants. No application is sought to be rejected by the respondents for any special reasons. What was conducted by the respondents was a selection by draw of lots and not a rejection by a scrutiny of individual applications. Therefore, Section 80(2) has no application to the situation on hand. As stated above, the requirements of Section 80(2) are based upon the principles of natural justice. They would have no application when all the applicants are treated on par on the same pedestal and the chance of getting a permit was not made dependent upon the whims and fancies of the Transport Authorities. Therefore the third contention cannot also be accepted. 27. The fourth and fifth contentions can be taken up together, since they are based upon Rules 165 to 167 of the Tamil Nadu Motor https://hcservices.ecourts.gov.in/hcservices/ Vehicles Rules, which read as follows:- "165. Limit upon number of permits. - When a Transport Authority has in exercise of its powers under the Act, imposed a limit upon the number of permits of any class which may be granted for a specified route or a specified area and has already granted such number of permits of that class, the Transport Authority or the Secretary of the Transport Authority, if authorised in this behalf by the Transport Authority, may decline to receive further application for such permits in respect of any such route or areas. 166. Not be rejected – grounds – (1) The Transport Authority shall not reject an application for the grant or renewal of any permit or for the grant of or renewal of counter-signature of any permit on any or all of the following grounds namely:- (i) When an application is presented to a Transport Authority not having jurisdiction; (ii) When the form of application has not been correctly filled in; (iii) Where the prescribed fee has been omitted to be paid; and (iv) Where the application is not made in the prescribed form. (2) In every such case, the Transport Authority shall return the application for presentation to the Transport Authority concerned or for rectification of other defects informing the applicant of the correct procedure in the matter and giving him not more than seven days from the date of receipt of the communication to comply with such direction, failing which the application will stand rejected. 167. Stage carriage – grounds on which application can be rejected. - The Regional Transport Authority or the State Transport Authority, as the case may be, may reject an application for the grant of a stage carriage permit on one or more of the following grounds, namely:- (i) Financial instability as evidenced by insolvency or decree remaining unsatisfied as on thirty days prior to the date of https://hcservices.ecourts.gov.in/hcservices/ consideration of the application or failure to produce: (a) in the case of a new entrant, a solvency certificate from an Officer of the Revenue Department not below the rank of a Tahsildar for a sum of Rs.30,000/- (Rupees thirty thousand only): Provided that purchase of a motor vehicle from money borrowed or under hire purchase agreement shall not be a disqualification by itself; (b) in the case of others, a current clearance certificate in respect of Income Tax and Motor Vehicles Tax: Provided that this clause shall not apply in cases where the applicant is a State Transport