Case: B. Rajagopala Naidu Vs. State Transport Appellate Tribunal &amp; Ors

2. The appellant B. Rajagopala Naidu is a bus operator in the State of Madras and he runs a number of buses on various routes. On June 26, 1956, the State Transport Authority by a notification invited applications for the grant of two stage carriage permits on the route Madras to Krishnagiri. The buses on this route were to be run as express service. The appellant and 117 bus operators including respondents 2 and 3 D. Rajabahar Mudaliar, proprietor of Sri Sambandamoorthy Bus Service and K. H. Hanumantha Rao, proprietor of Jeevajyoti Bus Service respectively, submitted applications for the two permits in question. The State Transport Authority considered the said applications on the merits. In doing so, it proceeded to award marks in accordance with the principles prescribed by the impugned order and came to the conclusion that the appellant satisfied the requirements enunciated by the State Transport Authority for running an efficient bus service on this long route, and so, it granted the two permits to the appellant on May 8, 1958.3. Against this decision 18 appeals were preferred by the unsuccessful applicants including respondents 2 and 3. All these appeals were heard together by the State Transport Appellate Tribunal, Madras in June 1959. It appears that before the appeals were thus heard, the State Government had superseded the principles enunciated in the order in so far as they related to the grant of stage carriage permits and had issued another direction under S. 43A known as G. O. 2265 on August 9, 1958, Incidentally, it may be added that by this order, different criteria had been prescribed for selection and a different marking system had been devised. The Appellate Tribunal considered the claims of the rival bus operators and allotted marks in accordance with the principles laid down by the earlier order. As a result, respondents 2 and 3 secured the highest marks and their appeals were allowed, the order under appeal was set aside and two permits were granted to them. This order was passed on July 4, 1959.4. The appellant then invoked the jurisdiction of the Madras High Court under Art. 226 of the Constitution by his writ petition No. 692 of 1959. In his writ petition, the appellants challenged the validity of the order passed by the Appellate Tribunal on several grounds. One of them was that the impugned order on which the decision of the Appellate Tribunal was based, was invalid. This plea along with the other contentions raised by the Appellant failed and the learned Single Judge who heard his writ petition dismissed the petition, on October 18, 1962. The appellant then challenged the correctness of this decision by a Letters Patent Appeal No. 214 of 1962 before a Division Bench of the said High Court. The Division Bench, however, agreed with the view taken by the Single Judge and dismissed the Letters Patent Appeal preferred by the appellant. The appellant then moved the said High Court for leave, but failed to secure it, and that brought him here with an application for special leave which was granted on November 14, 1963. It is with this special leave that the appellant has brought this appeal before. us for final disposal.

Court's reasoning:
Therefore, it seems to us that on a fair and reasonable construction of S. 43A, it ought to be held that the said section authorises the State Government to issue orders and directions of a general character only in respect of administrative matters which fall to be dealt with by the State Transport Authority or Regional Transport Authority under the relevant provisions of the Act in their administrative capacity.In reaching this conclusion, we have been influenced by certain other considerations which are both relevant and material. In interpreting S. 43A, we think, it would be legitimate to assume that the legislature intended to respect the basic and elementary postulate of the rule of law, that in exercising their authority and in discharging their quasi-judicial function the Tribunals constituted under the Act must be left absolutely free to deal with the matter according to their best judgment. It is of the essence of fair and objective administration of law that the decision of the Judge or the Tribunal must be absolutely unfettered by any extraneous guidance by the executive or administrative wing of the State. If the exercise of discretion conferred on a quasi-judicial tribunal is controlled by any such direction, that forges fetters on the exercise of quasi-judicial authority and the presence of such letters would make the exercise of such authority completely inconsistent with the well-accepted notion of judicial process. It is true that law can regulate the exercise of judicial powers. It may indicate by specific provisions on what matters the tribunals constituted by it should adjudicate. It may by specific provisions lay down the principles which have to be followed by the Tribunals in dealing with the said matters. The scope of the jurisdiction of the Tribunals constituted by statute can well regulated by the statute and principles for guidance of the said tribunals may also be prescribed subject of course to the inevitable requirement that these provisions do not contravene the fundamental rights guaranteed by the Constitution. But what law and the provisions of law may legitimately do cannot be permitted to be done by administrative or executive orders. This position is so well established that we are reluctant to hold that in enacting S. 43A the Madras Legislature intended to confer power on the State Government to invade the domain of the exercise of judicial power. In fact, such had been the intention of the Madras Legislature and had been the true effect of the provisions of S. 43A. S. 43A itself would amount to an unreasonable contravention of fundamental rights of citizens and may have to be struck down as unconstitutional. That is why the Madras High Court in dealing with the validity of S. 43A had expressly observed that what S. 43A purported to do was to clothe the Government with authority to issue directions of an administrative character and nothing more. It is somewhat unfortunate that though judicial decisions have always emphasised this aspect of the matter, occasion did not arise so long to consider the validity of the Government order which on the construction suggested by the Respondent would clearly invade the domain of quasi-judicialare not impressed by the argument. It is not the function of the executive to assist quasi-judicial Tribunals by issuing directions in the exercise of its powers conferred under S. 43A. Besides, if S. 48A is valid and an order which is issued under it does not fall outside it purview, it would be open to the State Government to issue a direction and require the Tribunal to follow that direction unquestionably, in every case. It is true that in regard to the marking system evolved by the impugned rule, liberty is left to the Tribunal not to adopt that system for reasons to be recorded by it. This liberty in practice may not mean much, but even theoretically; if the impugned order is valid, nothing can prevent the State Government from issuing another order requiring that the marking system prescribed by it shall always be followed. We have already seen that S. 43A itself provides that effect shall be given to the orders issued under it, and so, if an order issued under S. 43A itself were to prescribe that it shall be followed it will have to be followed by the Tribunal and no exception can be made in that behalf. Therefore, we cannot accept the argument strongly pressed before us by Mr. Ganapathy Iyer on behalf of Respondent No. 1 that the validity of the order cannot be challenged on the ground that the principles laid down by it are sound and healthy. We have therefore, come to the conclusion that the impugned order is outside the purview of S. 43A inasmuch as it purports to give directions in respect of matters which have been entrusted to the Tribunals constituted under the Act and which have to be dealt with by these Tribunals in a quasi-judicial manner. We cannot overlook the fact that the validity of the Act particularly in reference to its provisions prescribing the grant and refusal of permits, has been sustained substantially because this important function has been left to the decision of the Tribunals constituted by the Act and these Tribunals are required to function fairly and objectively with a view to exercise their powers quasi-judicially, and so, any attempt to trespass on the jurisdiction of these Tribunals must be held to be outside the purview of S. 43A.We are conscious of the fact that the impugned order was issued after and presumably in response to the decision of the Madras High Court in the case of C. S. S. Motor Service, ILR (1953) Mad 304 : (AIR 1953 Mad 279  ) though it would appear that what the High Court had suggested was presumably the making of the rules under S. 68 of the Act. It cannot also be disputed that the main object of the State Government in issuing this order was to avoid vagaries, and introduce an element of certainly and objectivity, in the decision of rival claims made by applicants in respect of their applications for permits. It may have been though by the State Government that if the Tribunals are allowed to exercise their discretion without any guidance, it may lead to inconsistent decisions in different areas and that may create dissatisfaction in the public mind. It does appear, however, that in some other States the problem of granting permits has been resolved without recourse to the marking system. But apart from that, even if it assumed that the marking system, if properly applied, may make the decisions in regard to the grant of permits more objective, fair and consistent, we do not see how that consideration can assist the decision of the problem raised before us. If the State Government thinks that the application of some kind of marking system is essential for a fair administration of the Act, it may adopt such course as may be permissible under the law. Section 47(1)(a) requires inter alia that the interest of the public generally have to be borne in mind by the Regional Transport Authority in considering applications for stage carriage permits. The said Section refers to other matters which have to be borne in mind; it is unnecessary to indicate them for our present purposes. The Legislature may amend S. 47 by indicating additional considerations which the Transport Authority may have to bear in mind; or the Legislature may amend S. 47 by conferring on the State Government expressly and specifically a power to make rules in that behalf or the State Government may proceed to make rules under S. 68 without amending S. 47. These are all possible steps which may be taken if it is thought that some directions in the nature of the provisions made by the impugned order must be issued. That however, is a matter with which we are not concerned and on which we wish to express no opinion. As this Court has often emphasised, in constitutional matters it is of utmost importance that the court should not make any obiter observations on points not directly raised before it for its decision. Therefore, in indicating the possible alternatives which may be adopted if the State Government thinks that the marking system helps the administration of the Act, we should not be taken to have expressed any opinion on the validity of any of the coursespresented, the argument is no doubt plausible; but a closer examination of the argument reveals the fallacy underlying it. If the Appellate Transport Authority had considered these matters on its own without the compulsive force of the impugned order, it would have been another matter; but the order pronounced by the Appellate Authority clearly and unambiguously indicates that it held and in a sense rightly, that it was bound to follow the impugned order unless in the exercise of its option it decided to depart from it and was prepared to record its reasons for adopting that course. It would, we think, be idle, to suggest that any Transport Authority functioning in the State would normally return to comply with the order issued by the State Government itself. Therefore, we have no hesitation in holding that the decision of the Appellate Tribunal is based solely on the provisions of the impugned order and since the said order is invalid the decision itself must be corrected by the issue of a writ of certiorari.