Case: P. Palaniswami Vs. Shri Ram Popular Service Private Limited &amp; Another

Tribunal took the view that small operators were to be favoured as against fleet owners on shorter routes and this was a consideration very relevant under sub-clause (a) of sub-section (1) of Section 47 which required the authority to consider the interest of the public generally. The fleet owners were likely to become monopolistic if even shorter routes were given to them and in course of time, if they monopolised both the shorter routes and the longer routes there would be no effective competition which is, undoubtedly, necessary in the interest of the public generally. The small operators being encourages to successfully ply the shorter routes would in course of time be ready to take over the longer routes and that would generate healthy competition between the longer route operators and help in promoting passengers interest. In other words, such a consideration was germane to Section 47 and merely because the Government order said that they should be preferred, it cannot be construed as having been compulsive in the actual decision taken. There is undoubtedly some force in this approach. Still we think that the High Court was right in coming to the conclusion that the Tribunal appeared to have been influenced by the G. O. and, hence, its decision was liable to be set aside. 7. It must be noted that when the Tribunal decided the case in 1960 the validity of the Government orders issued under Sec. 43-A had not come under challenge and grants to permits under Section 47 of the Motor Vehicles Act were disposed of on the lines given in those Government orders. The Tribunal in the present case obviously felt bound by Government Order No. 2265 of 1958 because it said in two places as follows :..................but when the Government have laid down their policy, the Regional Transport Authorities and the Tribunal should honestly endeavour to follow it. .................The right of appeal cannot be made illusory, and interest of justice and consistency and the need for honestly applying the Government order compel me to set aside the grant made in favour of the respondent, though otherwise they (respondent) may be deserving of the grant and to grant the permit to the third appellant. We have gone through the judgment of the Tribunal and it must be said that it has taken into consideration factors which are germane under Section 47. The Tribunal noticed that the appellant was entitled to 1/4 mark more than what was given to the appellant by the Regional Transport Authority. But this addition did not make any difference because even with this addition to the appellants marks the respondents score would be still higher. It also considered the period of experience of the appellant in the line and noticed that he had two or three permits on shorter routes. Recently he has shifted to Tuticorin which was one of the terminii of the route and had also a well-fitted workshop at Tuticorin. Then again for 3 years preceding the date of the application the appellant had got a very clean record. All these were matters which the Tribunal was entitled to take into consideration under Section 47 and merely because they also find a place in the Government order it would not be enough to show that the Government order was decisive in the final order passed by the Tribunal. But this ignores a very vital aspect of the case. When there is a Government order is existence and parties applying for permits come to know that the authorities under the Motor Vehicles Act, were disposing of their applications for permits in accordance with the Government order, matters not referred to in the Government order but which may be very germane for consideration under Section 47 get autmotically excluded during the hearings. The Government order, instead of Section 47, becomes the last word on the subject. That is the real vice of such Government instructions. The authorities feel bound by these instructions and the parties before them feel equally bound by them. They, naturally excluded from the controversy other matters which though relevant under Section 47 do not find a place in the Government order. As pointed out by this Court in R. M. Subhraj v. K. M. Union (P) Ltd., AIR 1972 SC 2266 . Once it is found that a Tribunal which under the statute has to deal with applications for permits in a judicial manner is directed by the Government to adopt any specified method for assessing the merits of the applicants and the Tribunal takes into consideration such direction of the executive, the judicial determination by the Tribunal is polluted. It is polluted not merely because those instructions have a tendency to interpret Section47 in their own way but also because considerations other than those in the instructions get automatically excluded although they are quite relevant for the purpose of Section 47. We are, therefore, of the opinion that the High Court was right in remanding the case to the Tribunal for a re-hearing without the constraint of the Government order. 8. Mr. Ramamurthy then contended that in any case the respondent would not be entitled to a grant because by Act No. 16 and 1971 the Motor Vehicles Act, 1939, has been amended in its application to the State of Tamil Nadu and under those amendments the respondents who are the owners of 32 permits will not be entitled to consideration for grant of permit. It is, however, contended on behalf of the respondents that it is impossible for their learned Counsel to meet the contention here because several other considerations may arise including the willingness of the respondents to surrender some of their permits in order to come within the permissible limit. We do not think we should deal with the matter, here. The Tribunal will not be considering the matter afresh and if it is open to the appellant to put forward this contention, he is welcome to do it before the Tribunal.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]But in the present case although the appellant had received less marks than the respondents, the Tribunal had considered matters which were germane under Section 47 and made the grant in favour of the appellant. The Government order, according to him, undoubtedly covered certain areas which are covered by Section 47 also and, if the Tribunal referred to such matters it would not be correct to say that the Government order prevailed in the ultimate decision. For example, in the present case the Tribunal took the view that small operators were to be favoured as against fleet owners on shorter routes and this was a consideration very relevant undere (a) ofn (1) of Section 47 which required the authority to consider the interest of the public generally. The fleet owners were likely to become monopolistic if even shorter routes were given to them and in course of time, if they monopolised both the shorter routes and the longer routes there would be no effective competition which is, undoubtedly, necessary in the interest of the public generally. The small operators being encourages to successfully ply the shorter routes would in course of time be ready to take over the longer routes and that would generate healthy competition between the longer route operators and help in promoting passengers interest. In other words, such a consideration was germane to Section 47 and merely because the Government order said that they should be preferred, it cannot be construed as having been compulsive in the actual decision taken. There is undoubtedly some force in this approach. Still we think that the High Court was right in coming to the conclusion that the Tribunal appeared to have been influenced by the G. O. and, hence, its decision was liable to be set asideBut this ignores a very vital aspect of the case. When there is a Government order is existence and parties applying for permits come to know that the authorities under the Motor Vehicles Act, were disposing of their applications for permits in accordance with the Government order, matters not referred to in the Government order but which may be very germane for consideration under Section 47 get autmotically excluded during the hearings. The Government order, instead of Section 47, becomes the last word on the subject. That is the real vice of such Government instructions. The authorities feel bound by these instructions and the parties before them feel equally bound by them. They, naturally excluded from the controversy other matters which though relevant under Section 47 do not find a place in the Government order. As pointed out by this Court in R. M. Subhraj v. K. M. Union (P) Ltd., AIR 1972 SC 2266 . Once it is found that a Tribunal which under the statute has to deal with applications for permits in a judicial manner is directed by the Government to adopt any specified method for assessing the merits of the applicants and the Tribunal takes into consideration such direction of the executive, the judicial determination by the Tribunal is polluted.  It is polluted not merely because those instructions have a tendency to interpret Section47 in their own way but also because considerations other than those in the instructions get automatically excluded although they are quite relevant for the purpose of Section 47. We are, therefore, of the opinion that the High Court was right in remanding the case to the Tribunal for arehearingwithout the constraint of the Government order8. Mr. Ramamurthy then contended that in any case the respondent would not be entitled to a grant because by Act No. 16 and 1971 the Motor Vehicles Act, 1939, has been amended in its application to the State of Tamil Nadu and under those amendments the respondents who are the owners of 32 permits will not be entitled to consideration for grant of permit. It is, however, contended on behalf of the respondents that it is impossible for their learned Counsel to meet the contention here because several other considerations may arise including the willingness of the respondents to surrender some of their permits in order to come within the permissible limit. We do not think we should deal with the matter, here. The Tribunal will not be considering the matter afresh and if it is open to the appellant to put forward this contention, he is welcome to do it before the Tribunal.