Case: Ajantha Transports Private Limited Coimbatore &amp; Another Vs. M/s. T.V.K. Transports, Pulampattti, Coimbatore, Distt. &amp; Others

categories of public interest including those laid down by valid rules. Clause (F) of sub-rule (3) of Rule 155-A. set out above, should therefore, have been taken into account, and, unless there was good enough reason to depart from it, the rule should have been followed. Had this been done, it is clear that every additional stage carriage upto four would give an applicant an additional mark so as to help him to make up the "Viable Unit" of five. A recent grant could not, considered by itself and singly, be converted into a demerit as the Appellate Tribunal seems to us to have done. Inasmuch as disposal of the claims before the Appellate Tribunal seems to us to have taken place in a rather mechanical fashion by ignoring clause (F) of sub-rule (3) of Rule 155A and without showing the correlationship of facts mentioned by it to any of the categories of public interest found in Section 47 (1) of the Act or to Constitutional guarantees contained in Articles 14 and 19 (1) (g) of the Constitution, the observance of which must also be presumed to be in public interest, the order of the Appellate Tribunal was, in our opinion, vitiated by a material irregularity. The High Court should, therefore, have interfered even in the exercise of its power under Section 115, Civil Procedure Code which has been made applicable to such cases.33. In Civil Appeal No. 2254 of 1969, a preliminary objection was taken to the grant of a certificate of fitness of the case under Article 133 (1) (c) of the Constitution in such a case when there was no final order passed by the High Court. Reliance was placed upon M/s. Raman and Raman (P.) Ltd. Kumbakonam v. Sri Rama Vilas Service Ltd. Kumbakonam, C. A. No.995 of 1965 D/- 3-5-1968 (SC) where this Court said :"We are of the view that the High Court was in error in granting the certificate when nothing was decided by their judgment. The order was not final. The order of the High Court did not determine the rights and obligations of the parties: it merely set aside the order of the Appellate Tribunal and directed the Tribunal to deal with and dispose of the question according to law. The appeal is liable to fail on that limited ground alone".No satisfactory answer has been given to the preliminary objection. But, as we could, if the case deserved it, grant special leave to appeal, even at this stage, we will refer to the merits also.34. In this case, we find that the Division Bench of Madras High Court had only sent back the case to the Tribunal for disposal after determining the impact of considerations placed before the Tribunal on public interest. The relative merits of rival claimants must be compared after testing the very criterion of merit adopted on the anvil of public interest. The High Court only held that the fact that an applicant is a recent grantee may be a relevant consideration. As we have pointed out, the relevance or irrelevance of such a consideration will depend upon the totality of facts and circumstances which must correlate such a ground to public interest. It was contended, not without force, that the Appellate Tribunal had discussed all the relevant facts and circumstances sufficiently to indicate the impact of each of these upon public interest without expressly saying so and that the Division Bench need have done no more than to have pointed out that the observation of the learned Single Judge, to the effect that the question of a recent grant of a permit in favour of an applicant was extraneous to the considerations contained in Section 47 of the Act was incorrect, or, to have explained that what this really meant was that, without showing other facts and circumstances connecting a recent grant with public interest, a recent grant of a permit was not material. However, as the Division Bench had sent back the case so the Appellate Tribunal, without determining - the rights of the parties, we do not think that the mere fact that two views could be taken on the advisability of such a course would not, in our opinion, justify interference by us under Article 136 of the Constitution. Therefore, we are not disposed to grant special leave at this stage on the question raised. The question whether the order is a final one determining the rights of the parties is material even when considering the question of propriety of interference under Article 136 of the Constitution. We have no doubt that, in view of the clarification of the law by us here, the Tribunal will dispose of the case in accordance with law and deal with all the facts and circumstances which have a bearing on public interest, including facts and circumstances which may have come into existence between the time when the grant was made and the time when the Tribunal reconsiders the claims to which the case is confined.35. In Civil Appeals Nos. 1481-1483 of 1970, we find that the High Court has given good enough grounds to justify reconsideration of the claims by the State Transport Appellate Tribunal. The High Court seems to us to have rightly hinted that, where the results of exercise of power to grant permit shows that permits are, without sufficient grounds for a discrimination or preference based on an appraisement of merits or requirements of public interest, being invariably granted to one particular party the powers are not fairly or impartially exercised. Quasi-judicial powers have to be exercised fairly, reasonably, and impartially. Capricious or dishonest preferences on purely personal grounds are necessarily excluded here. We have no doubt that the Tribunal will reconsider claims in conformity with needs of public interest as they exist at the time of reconsideration by the Tribunal. We do not think that these cases justify interference by this Court in exercise of its power under Art. 136 of the Constitution.

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

Explanation:
1[ds]20. What the Andhra Pradesh High Court seems to have meant was that powers contained in Section 47 of the Act as well as the rule-making powers of the State must be exercised conformably with the Constitutional guarantees given to citizens by Articles 14 and 19 (1) (g) of the Constitution which are certainly not mentioned specifically anywhere in the Act. All powers conferred by the Act, including those given by Sec. 47, must be deemed to be confined to the limits imposed by Constitutional guarantees to citizens. Hence, the manner in which a grant would affect guaranteed fundamental rights of citizens could also be considered. If this is all that is meant by laying down that even matters not specified in Section 47 of the Act can be taken into account, we think that the view is unobjectionable. Even where powers to be exercised by authorities, which are organs of the State, are not clearly defined, the Constitutional guarantees contained in Articles 14 and 19 (1) (g) of the Constitution would certainly limit the scope and regulate the exercise of such powers.Thus, decisions of this Court have made it clear that an exercise of the permit issuing power, under Section 47 of the Act, must rest on facts and circumstances relevant for decision on the question of public interest, which has to be always placed in the fore-front in considering applications for grant of permits. Consideration of matters, which are not relevant to or are foreign to the scope of powers conferred by Sec. 47 will vitiate the grant of a permit under Section 47. A fact which, in certain circumstances, is relevant for a decision on what the public interest demands may become irrelevant where it is not connected with such public interest. Indeed, every class of consideration specified in Section 47 (1) of the Act seems correlated to the interests of the public generally. It appears that Section 47 (1) (a) gives the dominant purpose and Section 47 (1) (b) to (f) are only its sub-categories or illustrations.If any matter taken into consideration is not shown to be correlated to the dominant purpose or, the relationship or the effect of a particular fact, which has operated in favour of a grant is such as to show that it is opposed, on the face of it, to public interest, the grant will be bad. The power to grant permits under Section 47 of the Act is limited to the purposes for which it is meant to be exercised. Considerations which are relevant for applying Articles 14 and 19 (1) (g) of the Constitution could not be foreign to the scope of Sec. 47 (1) (a) which is fairly wide.24. Where the power to grant permits shows that its exercise is meant to be judged on the touchstone of the interests of the public generally, the test being broad enough to take in applications of Articles 14 and 19 (1) (g), read with the relevant proviso, which require a just and reasonable balancing and reconciliation of general and individual interests, we think that it would not be correct to hold that the power contained in Sec. 47 can go beyond it or against it, because, to take such a view, would make the provision itself constitutionally invalid. Therefore, we hold that permits issuing power under Section 47 is restricted to service of interests of the public generally in a broad enough sense to include due respect for guaranteed fundamental rights of citizens. Indeed, service of interests of the public generally is the expressed object of even Section 68C in Chapter IVA of the Act authorising framing of schemes of nationalization of transport services. Such an object underlies the whole machinery of regulation by issue of permits for plying motor vehicles on hire.25. It should be clear, when the main object, to which other considerations must yield in cases of conflict, of the permit issuing powers under Section 47 of the Act is the service of interests of the public generally, that any particular fact or circumstance, such as a previous recent grant in favour of an applicant or the holding of other permits by an operator, cannot by itself, indicate how it is related to this object. Unless, there are other facts and circumstance which link it with this object the nexus will not be established. For instance, an applicant may be a recent grantee whose capacity to operate a transport service efficiently remains to be tested so that a fresh grant to him may be premature. In such a case, another applicant of tested efficiency may be preferred. On the other hand, a fresh grantee may have, within a short period, disclosed such superiority or efficiency or offer such amenities to passengers that a recent grant in his favour may be no obstacle in his way at all. Again, the fact that an applicant is operating other motor vehicles on other permits may, in one case indicate that he had exceeded the optimum, or, has a position comparable to a monopolist, but, in another case, it may enable the applicant to achieve better efficiency by moving towards the optimum which seems to be described as a "Viable Unit" in the rules framed in Madras in 1968. Thus, it will be seen that, by itself, a recent grant or the possession of other permits is neither a qualification nor a disqualification divorced from other circumstances which could indicate how such a fact is related to the interests of the public generally. It is only if there are other facts establishing the correlationship and indicate its advantages or disadvantages to the public generally that it will become a relevant circumstance. But, in cases where everything else is absolutely equal as between two applicants which will rarely be the case, it could be said that an application of principle of equality of opportunity, which could be covered by Article 14, may enable a person who is not a fresh grantee to obtain a preference. Such a consideration, as we have indicated above could not be said to be outside the broad view of the interest of the public generally which we are taking so as to include within its purview application of tests underlying provisions giving fundamental rights to citizens under Articles 14 and l9 of the Constitution., decisions of this Court have made it clear that an exercise of the permit issuing power, under Section 47 of the Act, must rest on facts and circumstances relevant for decision on the question of public interest, which has to be always placed in the fore-front in considering applications for grant of permits. Consideration of matters, which are not relevant to or are foreign to the scope of powers conferred by Sec. 47 will vitiate the grant of a permit under Section 47. A fact which, in certain circumstances, is relevant for a decision on what the public interest demands may become irrelevant where it is not connected with such public interest. Indeed, every class of consideration specified in Section 47 (1) of the Act seems correlated to the interests of the public generally. It appears that Section 47 (1) (a) gives the dominant purpose and Section 47 (1) (b) to (f) are only its sub-categories or illustrations.If any matter taken into consideration is not shown to be correlated to the dominant purpose or, the relationship or the effect of a particular fact, which has operated in favour of a grant is such as to show that it is opposed, on the face of it, to public interest, the grant will be bad. The power to grant permits under Section 47 of the Act is limited to the purposes for which it is meant to be exercised. Considerations which are relevant for applying Articles 14 and 19 (1) (g) of the Constitution could not be foreign to the scope of Sec. 47 (1) (a) which is fairly wide.24. Where the power to grant permits shows that its exercise is meant to be judged on the touchstone of the interests of the public generally, the test being broad enough to take in applications of Articles 14 and 19 (1) (g), read with the relevant proviso, which require a just and reasonable balancing and reconciliation of general and individual interests, we think that it would not be correct to hold that the power contained in Sec. 47 can go beyond it or against it, because, to take such a view, would make the provision itself constitutionally invalid. Therefore, we hold that permits issuing power under Section 47 is restricted to service of interests of the public generally in a broad enough sense to include due respect for guaranteed fundamental rights of citizens. Indeed, service of interests of the public generally is the expressed object of even Section 68C in Chapter IVA of the Act authorising framing of schemes of nationalization of transport services. Such an object underlies the whole machinery of regulation by issue of permits for plying motor vehicles on hire.25. It should be clear, when the main object, to which other considerations must yield in cases of conflict, of the permit issuing powers under Section 47 of the Act is the service of interests of the public generally, that any particular fact or circumstance, such as a previous recent grant in favour of an applicant or the holding of other permits by an operator, cannot by itself, indicate how it is related to this object. Unless, there are other facts and circumstance which link it with this object the nexus will not be established. For instance, an applicant may be a recent grantee whose capacity to operate a transport service efficiently remains to be tested so that a fresh grant to him may be premature. In such a case, another applicant of tested efficiency may be preferred. On the other hand, a fresh grantee may have, within a short period, disclosed such superiority or efficiency or offer such amenities to passengers that a recent grant in his favour may be no obstacle in his way at all. Again, the fact that an applicant is operating other motor vehicles on other permits may, in one case indicate that he had exceeded the optimum, or, has a position comparable to a monopolist, but, in another case, it may enable the applicant to achieve better efficiency by moving towards the optimum which seems to be described as a "Viable Unit" in the rules framed in Madras in 1968. Thus, it will be seen that, by itself, a recent grant or the possession of other permits is neither a qualification nor a disqualification divorced from other circumstances which could indicate how such a fact is related to the interests of the public generally. It is only if there are other facts establishing the correlationship and indicate its advantages or disadvantages to the public generally that it will become a relevant circumstance. But, in cases where everything else is absolutely equal as between two applicants which will rarely be the case, it could be said that an application of principle of equality of opportunity, which could be covered by Article 14, may enable a person who is not a fresh grantee to obtain a preference. Such a consideration, as we have indicated above could not be said to be outside the broad view of the interest of the public generally which we are taking so as to include within its purview application of tests underlying provisions giving fundamental rights to citizens under Articles 14 and l9 of the Constitution.In Civil Appeal No. 1402 of 1974, Mr. Chitaley, appearing for the appellant, contended that, as S. 47 (1) (e) was omitted altogether by a Madras State amendment, at the relevant time, the State Appellate Tribunal should not have taken into account the alleged disadvantage, almost raised to the level of a disqualification, of a recent or previous grant of a permit.30. We, therefore, examined the provisions of the Motor Vehicles Tamil Nadu (Amendment) Acts l0 and 16 of 1971 and found that they do not omit Section 47 (1) (e) at all, although there were two ordinances Nos. 4 and 6 of 1971 which had substituted amended provisions of Section 47 from which Section 47 (1) (e) was omitted. But, the ordinances were repealed by the Tamil Nadu Acts 10 and 16 of 1971 so that the provisions of Section 47 (1) (e) of the Act in their application to Madras were intact at the time of the grant. The contention was, therefore, unsound.31. It was then contended, in Civil Appeal No. 1402 of 1974, that the State Transport Appellate Tribunal had held two extraneous or irrelevant circumstances to be decisive. These were: that the respondent grantee before it was a recent grantee and that he held three permits altogether whereas the second appellant before it, to which the permit was granted by it, held only one permit. It was urged that these considerations were applied mechanically without showing their correlationship at all with the interests of the public generally as though the Appellate Tribunal was entrusted with the task of distributing favours and had to do this equitably on grounds which, however, laudable, are extraneous to the purposes of Section 47 of the Act. Furthermore, it was pointed out that, at the relevant time, certain rules had been validly framed by the State Government under Section 133 (1) of the Act the effect of which was inter alia that possession of more than one vehicle was an item, so to say, on the credit side instead of an item on the debit side of the balance sheet prepared on the basis of marks. The grievance was that the Tribunal had converted into a demerit what was according to the rules, an additional ground to support a grant.In reply, it was pointed out that, although Rule 4 required that the applicants shall be ranked according to the total numbers of marks obtained by them, yet "the application shall be disposed of in accordance with the provisions of sub-section (1) of Section 47." This contention pre-supposes an indication of the relevance of any fact taken into account to matters all of which seem to us to be covered by the broad class of "interests of public generally." On the view we are adopting, Section 47 (1) (a) is wide enough to include all categories of public interest including those laid down by valid rules. Clause (F) of sub-rule (3) of Rule 155-A. set out above, should therefore, have been taken into account, and, unless there was good enough reason to depart from it, the rule should have been followed. Had this been done, it is clear that every additional stage carriage upto four would give an applicant an additional mark so as to help him to make up the "Viable Unit" of five. A recent grant could not, considered by itself and singly, be converted into a demerit as the Appellate Tribunal seems to us to have done. Inasmuch as disposal of the claims before the Appellate Tribunal seems to us to have taken place in a rather mechanical fashion by ignoring clause (F) of sub-rule (3) of Rule 155A and without showing the correlationship of facts mentioned by it to any of the categories of public interest found in Section 47 (1) of the Act or to Constitutional guarantees contained in Articles 14 and 19 (1) (g) of the Constitution, the observance of which must also be presumed to be in public interest, the order of the Appellate Tribunal was, in our opinion, vitiated by a material irregularity. The High Court should, therefore, have interfered even in the exercise of its power under Section 115, Civil Procedure Code which has been made applicable to such cases.In this case, we find that the Division Bench of Madras High Court had only sent back the case to the Tribunal for disposal after determining the impact of considerations placed before the Tribunal on public interest. The relative merits of rival claimants must be compared after testing the very criterion of merit adopted on the anvil of public interest. The High Court only held that the fact that an applicant is a recent grantee may be a relevant consideration. As we have pointed out, the relevance or irrelevance of such a consideration will depend upon the totality of facts and circumstances which must correlate such a ground to public interest. It was contended, not without force, that the Appellate Tribunal had discussed all the relevant facts and circumstances sufficiently to indicate the impact of each of these upon public interest without expressly saying so and that the Division Bench need have done no more than to have pointed out that the observation of the learned Single Judge, to the effect that the question of a recent grant of a permit in favour of an applicant was extraneous to the considerations contained in Section 47 of the Act was incorrect, or, to have explained that what this really meant was that, without showing other facts and circumstances connecting a recent grant with public interest, a recent grant of a permit was not material. However, as the Division Bench had sent back the case so the Appellate Tribunal, without determining - the rights of the parties, we do not think that the mere fact that two views could be taken on the advisability of such a course would not, in our opinion, justify interference by us under Article 136 of the Constitution. Therefore, we are not disposed to grant special leave at this stage on the question raised. The question whether the order is a final one determining the rights of the parties is material even when considering the question of propriety of interference under Article 136 of the Constitution. We have no doubt that, in view of the clarification of the law by us here, the Tribunal will dispose of the case in accordance with law and deal with all the facts and circumstances which have a bearing on public interest, including facts and circumstances which may have come into existence between the time when the grant was made and the time when the Tribunal reconsiders the claims to which the case is confined.35. In Civil Appeals Nos. 1481-1483 of 1970, we find that the High Court has given good enough grounds to justify reconsideration of the claims by the State Transport Appellate Tribunal. The High Court seems to us to have rightly hinted that, where the results of exercise of power to grant permit shows that permits are, without sufficient grounds for a discrimination or preference based on an appraisement of merits or requirements of public interest, being invariably granted to one particular party the powers are not fairly or impartially exercised. Quasi-judicial powers have to be exercised fairly, reasonably, and impartially. Capricious or dishonest preferences on purely personal grounds are necessarily excluded here. We have no doubt that the Tribunal will reconsider claims in conformity with needs of public interest as they exist at the time of reconsideration by the Tribunal. We do not think that these cases justify interference by this Court in exercise of its power under Art. 136 of the Constitution.