Case: D.R. Venkatachalam &amp; Ors Vs. Dy. Transport Commissioner &amp; Others

A terse presentation of the twin contentions canvassed before us, in these appeals by special leave, after discomfiture at two tiers below, highlights the importance of the economic role of the State in undertaking, with legal preferences, strategic services vital to the community. The keynote thought underlying our decision is that the jural postulates of the old competitive order have to yield place to the new values of developmental jurisprudence. Public law in India, responding to the public needs and the States functional role mandated by the Constitution, had evolved now approaches to old problems and given up dogmas which once prevailed during laissez faire days but now have become obsolete because of the welfare economy which has been nurtured. This radical change in jural perspectives has its impact on canons of statutory construction and on verdicts about the vires of legislation. All these generalities acquire appropriate application in the present cases which arise under the Motor Vehicles Act, 1939 (Act IV of 1939) (the Act, for short) from challenges before the High Court without avail, by private operators, of the permit granted to the State Transport Undertaking (STU) by the transport tribunals. The validity of Rule 155A of the Motor Vehicles Rules framed under Section 68 of the Act is in issue.2. The core of counsels submissions is twofold : (1) Is Rule 155A, assigning five marks for a State undertaking not fatally violative of Section 47 of the Act ? (2) Does the later amendment to the proviso to Section 47 giving preference to State Transport systems, other things being equal, impliedly repeal, as contrary to its content, Rule 155A which gives better advantage to the favoured category, fulfilling the spirit of the statutory amendment more tellingly ? We will proceed further after stating the circumstances leading up to the writ petition before the High Court and the appeal before us.3. The appellants, who have come by special leave to this Court, are private stage carriage operators. We will relate the facts of one case (Civil Appeal 1178 of 1976) the decision in which will settle the fate of the rest, the decisive point of law being identical. The permit of the appellants bus on the rote Salem to Erode was to have expired on September 13, 1974 and so he applied for renewal under Section 58(2) of the Act. TheTransport Undertaking objected to the renewal of the permit urging preferential grounds in its own favour. The State undertakings claim was upheld on the score that it secured higher marks computed with the aid of RuleBaulked in his application for renewal, the appellant challenged the order before the appellant tribunal. Apprehending an adverse decision on the strength of Rulehe filed a writ petition before the High Court praying that a direction be issued to the appellant tribunal to dispose of his appeal without relying one RuleThe plea was negatived by the learned single Judge and a Division Bench dismissed the appeal therefrom. Aggrieved by the concurrent findings the appellant has assailed before us the vires of Ruleas obnoxious to the public interest excluding, in some measure, a fair competition and being contrary to the proviso to Section 47(1) of the Act.4. A meaningful discussion of the points debated at the bar has to begin with a brief outline of the scheme of the Motor Vehicles Act in the branch relating to grant of permits for transport vehicles (Chapter IV). All transport vehicles, before they can be plied in any public place, require permits under Section 42 and even government vehicles, if put to commercial use, have to possess permits. Applications are made for stage carriage permits under Section 57 and the considerations germane to their grant are set out in Section 47 of the Act. It is common ground, and decisions are legion in support thereof, that the interest of the public generally is the super consideration decisive of the award of permits when there is a plurality of applicants. He who can serve the public best gets the permit to ply the stage carriage from theauthority charged with the responsibility forterse presentation of the twin contentions canvassed before us, in these appeals by special leave, after discomfiture at two tiers below, highlights the importance of the economic role of the State in undertaking, with legal preferences, strategic services vital to the community. The keynote thought underlying our decision is that the jural postulates of the old competitive order have to yield place to the new values of developmental jurisprudence. Public law in India, responding to the public needs and the States functional role mandated by the Constitution, had evolved now approaches to old problems and given up dogmas which once prevailed during laissez faire days but now have become obsolete because of the welfare economy which has been nurtured. This radical change in jural perspectives has its impact on canons of statutory construction and on verdicts about the vires of legislation. All these generalities acquire appropriate application in the present cases which arise under the Motor Vehicles Act, 1939 (Act IV of 1939) (the Act, for short) from challenges before the High Court without avail, by private operators, of the permit granted to the State Transport Undertaking (STU) by the transport tribunals. The validity of Rule 155A of the Motor Vehicles Rules framed under Section 68 of the Act is in issue.2. The core of counsels submissions is twofold : (1) Is Rule 155A, assigning five marks for a State undertaking not fatally violative of Section 47 of the Act ? (2) Does the later amendment to the proviso to Section 47 giving preference to State Transport systems, other things being equal, impliedly repeal, as contrary to its content, Rule 155A which gives better advantage to the favoured category, fulfilling the spirit of the statutory amendment more tellingly ? We will proceed further after stating the circumstances leading up to the writ petition before the High Court and the appeal before us.3. The appellants, who have come by special leave to this Court, are private stage carriage operators.

Court's reasoning:
12. We now move on to an examination of the alleged fatal incompatibility between the proviso to Section 47(1) and Rule 155A. This second submission of counsel is a trifle mystifying. There cannot be a contradiction without diction. Unless Section 47(1) proviso carries a negative injunction that transport tribunals shall not give any other preferential consideration than what is stated in it, there cannot be any conflict between it and the impugned rule. The proviso to the section does nothing of the kind. It merely takes care of a specific situation. Where a State Transport Undertaking and a private operator are equally balanced, the scales may be tilted in favour of the former. There is no implied interdict that in other contingencies no preference shall be accorded. It is not a Thus far and no further. Indeed, the spirit of this proviso has been carried further by the rule, having regard to the realities of the total transport system plying in the State.13. The third consideration which silences the appellants charge of violation of Section 47 is that the marking formula dies not deprive the administrative tribunals of their discretion to choose the best. The consternation of the private entrepreneurs that by manipulating the marking mechanism the State undertaking, regardless of its demonstrable inferiority of public service, will knock off all the permits, paralysing the power of the tribunal to pick and choose, by the overwhelming and inevitable superiority of marks, is misplaced. The fear is falsified if we read the rule aright. It has, written on its face, its own limitation. Marks shall guide, not govern the award. Full discretion, to some extent, canalised by the marking procedure, still vests in the transport authority. For, the marks, these authorities will remember, way the exercise of judgment, not supersede it. It is conceivable that the peculiarities of a route, the calamitous performance in an area of a State Transport system, the outstanding special facilities of a particular private operator or other like feature may outweigh the mechanics of marks. After all, many qualifications, advantageous to the travelling public, may be thought of, untouched by the rigid marking moulds. They are not irrelevant and may still be regarded by the tribunals. All this leads to the conclusion that marks shape but do not clinch the ultimate selection. The public is the consumer, its plenary service is the final test. Therefore, there is nothing in Rule 155A deprivatory of the discretion vested by Section 47(1). This interpretative footnote must allay the apprehensions voiced by counsel. Nor are we convinced that there is no possibility of a private operator exceeding the minimum marks of a State Transport Undertaking. Moreover, the marking formula lacks flexibility. Merely because the State Transport Undertaking has no residence or workshop on the route, although its attention and ability to reach are considerable, why should it suffer ahandicap ? There is equity in Rulemaking up, as it does, for the present shortfalls in the marking system vis a vis a government transportthe contentions can be shout down by three considerations. Firstly, a State enterprise, in a truly Welfare State, is charged with a social consciousness and responsibility for its citizens, an attention to serve them and a willingness to embark on public utility undertakings better to fulfil peoples demands. The public sector enterprises are expected to be model employers and model servants, planning their budgets, subjecting themselves to public audit and criticism and inquest by legislative committees and the Houses of the legislature. Profits are their concern but, more importantly, public weal is their commitment. Such is the philosophy of the State sector in our socialistic pattern of society. Article 19(6)(ii) and Article 38 of the Constitution, Section 47(1), especially the proviso, and Chapter IVA of the Act (now governed by the impregnable Ninth Schedule to the Constitution) throw light on this policy of the paramount law. Here, therefore, the rule making authority, having regard to all relevant circumstances, has decided to award to a State Transport Undertaking 5 marks. This is not an arbitrary stroke of favouritism because there are many promotional factors bearing on the interest of the travailing public which a State enterprise qua State enterprise will, but a private enterprise qua private enterprise will not, take care of. After all, private enterprise has its primary motivation in profit, although, under State direction, it is becoming socially responsive. The superiority in many respects (not all respects) of State Transport Undertakings, in the legislative judgment, has led to Rule 155A. This classification has poetic nexus with and rational relation to the object of augmenting the good of the passenger community. The theory, rooted in the obsolescent laissez faire economics, that only cold competition among claimants to run businesses brings out the best operator has serious limitations in fields where the focus is on public service, not gains of business. Public law, adapting itself to thisview, shifts its emphasis. This is what we have earlier called legal Darwinism. We, therefore, hold that the assignment of marks under Rule 155A is geared to public interest, which is the desideratum of Section 47(1) of the Act.We now move on to an examination of the alleged fatal incompatibility between the proviso to Section 47(1) and Rule 155A. This second submission of counsel is a trifle mystifying. There cannot be a contradiction without diction. Unless Section 47(1) proviso carries a negative injunction that transport tribunals shall not give any other preferential consideration than what is stated in it, there cannot be any conflict between it and the impugned rule. The proviso to the section does nothing of the kind. It merely takes care of a specific situation. Where a State Transport Undertaking and a private operator are equally balanced, the scales may be tilted in favour of the former. There is no implied interdict that in other contingencies no preference shall be accorded. It is not a Thus far and no further. Indeed, the spirit of this proviso has been carried further by the rule, having regard to the realities of the total transport system plying in the State.13. The third consideration which silences the appellants charge of violation of Section 47 is that the marking formula dies not deprive the administrative tribunals of their discretion to choose the best. The consternation of the private entrepreneurs that by manipulating the marking mechanism the State undertaking, regardless of its demonstrable inferiority of public service, will knock off all the permits, paralysing the power of the tribunal to pick and choose, by the overwhelming and inevitable superiority of marks, is misplaced. The fear is falsified if we read the rule aright. It has, written on its face, its own limitation. Marks shall guide, not govern the award. Full discretion, to some extent, canalised by the marking procedure, still vests in the transport authority. For, the marks, these authorities will remember, way the exercise of judgment, not supersede it. It is conceivable that the peculiarities of a route, the calamitous performance in an area of a State Transport system, the outstanding special facilities of a particular private operator or other like feature may outweigh the mechanics of marks. After all, many qualifications, advantageous to the travelling public, may be thought of, untouched by the rigid marking moulds. They are not irrelevant and may still be regarded by the tribunals. All this leads to the conclusion that marks shape but do not clinch the ultimate selection. The public is the consumer, its plenary service is the final test. Therefore, there is nothing in Rule 155A deprivatory of the discretion vested by Section 47(1). This interpretative footnote must allay the apprehensions voiced by counsel. Nor are we convinced that there is no possibility of a private operator exceeding the minimum marks of a State Transport Undertaking. Moreover, the marking formula lacks flexibility. Merely because the State Transport Undertaking has no residence or workshop on the route, although its attention and ability to reach are considerable, why should it suffer ap ? There is equity in RuleAn argument advanced on behalf of the appellant seemed to be that Rule 155A(3)(D)(i) results in defeating the mandate of Section 47(1) of the Act, that the Regional Transport Authority must, as explained repeatedly by this Court, keep "the interest of the public generally" in the forefront. As already indicated by me, this argument really proceeds on the erroneous assumption that the mere fact that the State Transport vehicles are given five marks would defeat public interest by excluding consideration of all facts except that the State Undertaking has applied for one or more permits on a particular route. As my learned brother Krishna Iyer has also pointed out, this is an unwarranted assumption. Rule 155A gives only guidance, but the totality of factors mentioned in Section 47(1) really decide.If we start from a theory as to what the real purpose or need is or could be, the danger is that we may be injecting a subjective notion or purpose of our own into what is, after all, a legal question of construction or interpretation, according to well recognised principles, although it may be necessary, in exceptional cases, to explain or fortify the interpretation adopted in the light of so well understood and well known a purpose or theory that we could take judicial notice of it and refer to it. The exposition of the well known purpose or theoretical foundation must, however, generally, flow from and explain an interpretation adopted, on the strength of legally acceptable and accepted canons of construction, if we are to avoid the danger of an a priori determination of the meaning of a provision based on our own preconceived notions of an ideological structure or scheme into which the provision to be interpreted is somehow fitted. The path of judicial certainly and predictability has to be paved with well settled principles of construction and interpretation. We cannot let it develop into a slippery slope beset with hazardous possibilities. The science of statutory construction and interpretationI think we can call it thatrests on certain systematised principles and rules of common sense, logic, and reason. It cannot be transformed into a happy hunting ground for whatever may captivate the forensic or judicial fancy or become something akin to poetry without even the attractions of euphony.