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

The Secretary, Regional Transport Authority, Tirunelvelli, invited applications for the grant of a stage carriage permit on the route Tuticorin to Tiruchendur via Mikkani. The distance was about 24 miles. It was a medium route as mentioned in Government Order No. 2265 Home dated February 9, 1958. Several persons applied for the grant. The Regional Transport Authority considered the claims in the light of the directions issued by the State Government under SectionA of the Motor Vehicles Act, 1939 in G. O. M. S. No. 2265 Home dated August 9, 1958, as amended by G. O. No. 3647 Home dated December 1, 1958, and since, in its opinion, the respondents Shri Ram Popular Service (P) Ltd., had obtained the highest number of marks, namely, 3 the respondents were entitled to the grant. Six others including the present appellant, who were aggrieved by the order, went in appeal to the Transport Appellate Tribunal, Madras. By a process of elimination the only important contestors before the Tribunal were the appellant and the respondents. The Tribunal found that so far as the marks were concerned, respondents had scored more marks and would, therefore, be entitled to serious consideration . But in the view of the Tribunal the respondents were a fleet owner with 32 permits while the appellant was a small operator with only two or three permits, and since in all respects the appellant was quite eligible, he was entitled to be preferred to the respondents on the ground that, in the interest of the public, small operators require encouragement as against the bigger operators. For this, the Tribunal relied on a clause of the G. O. referred to above which said that small and medium operators must be preferred to the bigger operators on the smaller and medium routes. The Tribunal, therefore, reversed the order of the Regional Transport Authority and made the grant in favour of the appellant.

Court's reasoning:
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.