Case: Rameshwar Prasad Etc., Etc Vs. State of Uttar Pradesh and Others

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 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 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 t he 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 47(1) 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.10

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

Explanation:
1[ds]The validity of section 43-A of the Act introduced by the U. P. Legislature and of the Notification dated March P 3 0, 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. v. The State of U.P. &Ors.(1) 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. Accordingly the State Government issued a Notification on September 24, 1975 which ran asin exercise of the power conferred by Section 43-A ofthe Motor Vehicles Act, 1939 the State Government was by notification No. 1188-T/XXX-4, dated March 30, 1972, pleased to direct that stage carriage permit s (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 transportHigh Court further proceeded to observe that though the tow impugned notifications did not follow the procedure prescribed 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 Kehars 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 Rehars 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-A(1) 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 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-A(1) 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 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 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 t he 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 47(1) 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.