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T. Veeranna Etc. v. The Regional Transport Authority And Others
Factual and Procedural Background
These petitions under Article 226 challenge the validity of a temporary permit granted by the Regional Transport Authority (RTA), Chitradurga in favour of respondent-3 under Section 68-F(1-C) of the Motor Vehicles Act, 1939.
In 1974 the State Road Transport Corporation (the Corporation), a State transport undertaking under Chapter IV-A, published in the Official Gazette a "Davanagere Draft Scheme" under Section 68-C covering the Davanagere–Chitradurga route (40 miles). The scheme has not been approved or modified by the State Government under Section 68-D(2), producing the legal bar under Section 68-F(1-D) against granting ordinary permits on the notified route; only temporary permits under subsections (1-A) and (1-C) were available.
By 1980 there were 27 services (excluding night services) on the route run by both the Corporation and private operators (including the petitioners and respondent-4). On 9 June 1980 respondent-3 applied for a temporary permit under Section 68-F(1-C) claiming "seasonal demands." The RTA solicited and received a traffic survey from the Inspector of Motor Vehicles recommending grant in the interest of the travelling public.
On 29 October 1980 the RTA considered the application. The petitioners and respondent-4 opposed, contending there were already sufficient services and that their services would be adversely affected by the proposed timings. The RTA rejected objections and granted a temporary permit to respondent-3, describing the need as introduction of an express service to provide better travelling facilities until implementation of the Davanagere Draft Scheme. Timings were later assigned (8 December 1980), and several other applications for similar permits were filed thereafter.
The petitioners challenged the RTA's grant of the temporary permit before the court. The petitions concluded with an order quashing the impugned RTA order and granting liberty to the RTA to reconsider respondent-3's application in accordance with law and the court's observations.
Legal Issues Presented
- Whether the temporary permit granted by the RTA to respondent-3 under Section 68-F(1-C) was valid, in particular whether it was granted for a purpose different from that applied for (seasonal demands vs. "better travelling facilities").
- Whether the RTA had jurisdiction to grant temporary permits to private operators when the Corporation had earlier obtained temporary permits for the same route (i.e., the effect of Section 68-F(1A)/(1C) and the Corporation's preferential right).
- Whether the RTA complied with the procedural and substantive requirements before granting temporary permits—specifically, whether it first determined the number of additional permits required and afforded the Corporation and other operators an opportunity to apply.
- Whether the timings assigned to the permit unduly interfered with or adversely affected the services of existing operators (petitioners and respondent-4).
Arguments of the Parties
Petitioners' Arguments
- The petitioners contended there was no need for an additional permit because existing services on the route were sufficient to meet travelling public demand.
- They argued that the RTA lacked jurisdiction to grant temporary permits to private operators since the Corporation had already obtained temporary permits for the same route in 1976 and 1978.
- They argued the permit was granted for a purpose different from that applied for (respondent-3 sought a permit for "seasonal demands" but the permit was granted to provide "better travelling facilities" pending implementation of the draft scheme).
- They contended that the timings assigned to respondent-3's service would adversely affect the services and viability of existing operators (petitioners and respondent-4).
Applicant / Respondent-3's Position (as reflected in the record)
- Respondent-3 applied on 9 June 1980 for a temporary permit under Section 68-F(1-C), stating the permit was required for "seasonal demands." The record does not elaborate further argumentation by respondent-3 beyond the application itself.
- The Inspector of Motor Vehicles conducted a route survey and recommended the application be considered in the interest of the travelling public, noting that many buses then ran as shuttle services and that an express service would be useful.
- The RTA, relying on the Inspector's report, framed the grant as an express service to provide better travelling facilities until implementation of the Davanagere Draft Scheme and directed the Secretary to fix timings respecting existing services.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Dhanna Singh v. The Regional Transport Authority, Gwalior, AIR 1975 Madh. Pra. 77 | Held (by Madhya Pradesh High Court) that a temporary permit granted under subsections (1A) and (1C) should not in any case exceed four months. | The court expressly declined to follow this view. It analysed Chapter IV (Section 62) and Chapter IV-A (Section 68F), concluded Section 68B makes Chapter IV-A prevail in case of inconsistency, and held the four-month limit under Section 62 need not be imported into Section 68F(1A)/(1C). |
| Obliswami Naidu v. Additional State Transport Appellate Tribunal, Madras, (1969) 1 SCC 733 : AIR 1969 SC 1130 | Observation by the Supreme Court about the need to avoid nepotism and manipulation in transport permit matters; stressing appropriate administrative procedures. | The court relied on this observation to support the proposition that the RTA/STA must periodically review traffic needs and adopt procedures (e.g., determining strength and affording opportunities) that avoid nepotism and manipulation when granting temporary permits. |
| Praveen Ansari v. State Transport Appellate Tribunal, Lucknow, (1980) 4 SCC 503 : AIR 1981 SC 516 | Principles that the State Transport Authority determines strength of vehicles on a route; Corporation has preferential right under Section 68F(1A) if it can operate to the required strength; if the Corporation does not apply for all vacancies, remaining permits fall under Section 68F(1C) and may be granted to eligible private applicants for public benefit. | The court quoted and relied on this authority to explain the correct application of Sections 68F(1A) and (1C): the RTA must determine available additional strength, give the Corporation opportunity to apply, and if vacancies remain, consider competent private applicants for the benefit of the travelling public. The court found the RTA did not follow this procedure in the instant case. |
Court's Reasoning and Analysis
The court proceeded by interpreting the statutory scheme (Sections 68C, 68D and 68F) and analysing whether the RTA complied with the statutory requirements when granting the temporary permit to respondent-3.
1) Statutory framework and basic requirement: The court observed that once a scheme is published under Section 68C, ordinary permits for the notified route are barred under Section 68F(1D) until publication of the approved or modified scheme, subject only to temporary permits under subsections (1A) and (1C) and certain renewals. Subsections (1A) and (1C) therefore constitute the statutory exceptions to the general bar.
2) Purpose and public interest test: Under both subsections (1A) and (1C) the authority (STA or RTA) can issue temporary permits only if it is satisfied that it is necessary, in the public interest, to increase the number of vehicles operating on the route or area. The court emphasised that this "public interest" requirement may be satisfied by either a temporary need or a more lasting need of the travelling public; it is not limited narrowly to the concept of "seasonal demand."
3) Relationship with Section 62 and temporal limit: The court considered whether the four-month limit in Section 62 (Chapter IV) should be read into Section 68F (Chapter IV-A). It rejected the Madhya Pradesh High Court's approach in Dhanna Singh that temporary permits under Section 68F must not exceed four months. The court reasoned that Chapter IV-A (Section 68B) prevails over Chapter IV in case of inconsistency, and subsection (1A) and (1C) themselves specify the temporal scope (i.e., permits continue until publication of an approved modified scheme). Thus no fixed four-month maximum should be imported into Section 68F.
4) Allocation procedure and the Corporation's preference: The court analysed the allocation logic under Sections 68F(1A) and 68F(1C), relying on Praveen Ansari. It held that the STA/RTA must first determine the additional number (strength) of permits required on the route. The Corporation has a preferential opportunity to apply for temporary permits under subsection (1A). If the Corporation applies for all additional permits, private operators are excluded. If the Corporation applies only for some permits, the remaining vacancies come within subsection (1C) and may be granted to competent private applicants in the public interest.
5) Failures by the RTA in the instant case: The court found multiple procedural and substantive deficiencies in the RTA's conduct:
- The RTA did not determine in advance the number of additional permits to be granted on the Davanagere–Chitradurga route before granting a permit to respondent-3.
- The RTA did not afford the Corporation an opportunity to apply for the temporary permits before granting them to private operators.
- The RTA granted permits serially as applications came in, instead of first fixing additional strength and then opening the field to applicants as required by the statutory scheme.
- The RTA granted respondent-3's permit for a purpose different from the one pleaded in the application (the application sought relief for "seasonal demands" but the permit was framed to provide "better travelling facilities" until scheme implementation).
6) Timings and effect on existing operators: The court examined the assigned timings and found that respondent-3's express service, although leaving later, arrived earlier than existing services (thereby likely capturing passengers). While noting the benefit to the travelling public, the court stressed that the RTA should avoid meddling with the priority of existing operators on identical routes as far as practicable because timings are important to incumbents' viability.
Holding and Implications
Holding: The court allowed the writ petitions and quashed the impugned RTA order. The core ruling is summarized as:
Writ petitions allowed; the impugned order granting a temporary permit to respondent-3 is quashed, with liberty to the RTA to dispose of respondent-3's application afresh in accordance with law and the court's observations.
Direct implications and directives recorded by the court (as stated in the opinion):
- The RTA must determine, before granting temporary permits, the number of additional vehicles (strength) required on the route.
- The RTA must afford the Corporation an opportunity to apply for temporary permits under Section 68F(1A) before granting permits to private operators.
- If the Corporation applies for only some of the additional permits, the remaining permits should be considered under Section 68F(1C) for competent private applicants on merit and suitability for the public benefit, as explained by Praveen Ansari.
- The RTA should avoid altering the priority of existing operators on identical routes insofar as practicable, particularly with respect to assigned timings, because such changes may imperil existing operators' services.
- The temporary permits under Section 68F(1A)/(1C) are co-extensive with the interregnum between publication of the draft scheme and the approved/modified scheme; they are not to be strictly limited by the four-month period in Section 62.
Broader legal consequence: The court clarified the correct application of Sections 68F(1A) and (1C) in relation to the Corporation's preferential position and the duties of the RTA/STA, and rejected the narrower temporal limitation advanced in Dhanna Singh. The order remitted the matter to the RTA to act in conformity with these legal principles. The court did not, in terms of this opinion, declare a new principle beyond its statutory interpretation and direction for correct administrative procedure in this context.
1. These petitions under Article 226 of the Constitution, are concerned with the validity of a temporary permit granted by the Regional Transport Authority (“RTA”), Chitradurga in favour of respondent-3 under Sec. 68-F (1-C) of the Motor Vehicles Act, 1939 (for short, “the Act”).
2. The facts are not in dispute, and may briefly be stated thus:—
In 1974, the State Road Transport Corporation (“the Corporation”) which is a State Transport Undertaking under Chapter IV-A of the Act, prepared and published in the Official Gazette a Scheme which is generally termed as “Davanagere Draft Scheme.” The scheme was published under Sec. 68-C of the Act. The entire route from Davanagere to Chitradurga covering a distance of 40 miles was a notified route thereunder. The Scheme is yet to be approved or modified by the State Government under Section 68-D(2). None knows the reason for his inordinate delay. The consequence is, there is a legal bar under Section 68-F(1-D) to grant permits except temporary permits as provided under sub-sections (1-A) and (1-C) of Section 68-F. In 1976 and 1978, the Corporation has obtained some temporary permits either on the said entire route or covering a section thereof. As of today, there are in all twenty-seven services excluding the night services running on the said route. Some are shuttle services, while others are express services. Some are operated by the Corporation and the rest by private operators including the petitioners and respondent-4.
3. On 9th June, 1980, respondent-3 applied for a temporary permit for the said route under Section 68-F (1-C) for the purpose what he described as “seasonal demands.” The RTA, Chitradurga called for a traffic survey report on the route from the Inspector of Motor Vehicles. The Inspector after a survey of the route, submitted his report as follows:
“Conduced the route survey from Davanagere to Chitradurga on P.B road. The Total length of the route is 40 miles. There are 27 services running on the said route excluding the night services, towards Chitradurga. Some of the vehicles are running on the deviation routes from Anugodu towards Chitradurga. There are several villages on the surrounding of the route in question and also well populated. Most of the buses are running as shuttle services. Davanagere is a Taluk head-quarters for having Hospitals, Courts and other offices. Most of the surrounding villagers are visiting Davanagere and as well as Chitradurga for their works, like purchasing of manure, attending the offices and courts. If the applicant's request is considered, it is very useful to the travelling public of the on route. Hence the request of the applicant may be considered in the interest, of the travelling public.
SD/- xx
(B. Giridhar)
Sr. Inspector of Motor Vehicles, Davanagere.”
4. On 29th October, 1980, the application of respondent-3 came for consideration before the RTA. The petitioners and respondent-4, among others, opposed the application mainly on two grounds: First, they contended that there was no need to grant an additional permit as there are sufficient services on the route to meet the demand of the travelling public; and second, they urged that their services would be affected if the timings proposed by respondent-3 are accepted and assigned. The RTA, however, rejected those objections and granted a temporary permit by stating thus.
“The applicant is seeking temporary permit from Davanagere to Chitradurga. The proposed timings leaving Davanagere at 8.00 a.m, will be convenient to the people who are coming for District Offices, Courts, etc. and also it will be convenient to reach Davanagere in the evening hours. Chitradurga is a district head-quarters and an industrial place attracting number of tourists and there will be floating population. It is seen from the report of the Inspector of Motor Vehicles that most of the buses are shuttle services and there is need for an express service.
In view of the above facts, this RTA comes to the conclusion to introduce an express service, leaving Davanagere in the morning hours to provide better travelling facilities. Hence a temporary permit is granted on route Davanagere to Chitradurga via Anagoud, Bharamasagara and Katral (two round trips daily express non-stop service) till the implementation of Davanagere Draft Scheme, in the interest of the travelling public. The Secretary, RTA is directed to fix suitable timings without affecting the existing services.
SD/- xx
Deputy Commissioner & Chairman RTA, CHITRADURGA,
5. It is said that a similar permit was also granted to another operator. On 8th December, 1980 the Secretary, RTA after examining objections of the existing operators, assigned timings to the permit granted to Respondent-3. It was then the turn of several other operators to come forward with applications for similar permits for the same route. Six of those applications were set down for consideration before the RTA on 17th January, 1981. It is not known what the RTA did on that day. It is seen from the proceedings of the RTA, a temporary permit was sought by Respondent-3 on the ground that there is seasonal demands; but the RTA granted the permit not for that purpose but to provide better travelling facilities till the implementation of the Davanagere Draft Scheme.
6. This is the foundation for the first contention urged by the counsel for the petitioners that the temporary permit granted to Respondent-3 was illegal and unsustainable as it was granted for a purpose quite different from the one asked for. The counsel next urged that the RTA has no jurisdiction to grant temporary permits to private operators since the Corporation has already obtained such temporary permits in 1976 and 1978 for the same route. The last contention urged relates to the clash of timings assigned to the impugned permit adversely affecting the services of the petitioners and respondent-4.
7. For a proper examination of these contentions, it will be useful for extract hereunder the relevant provisions of the Act authorising the RTA or the State Transport Authority (“STA”) to grant temporary permits pending approval of any draft scheme under Section 68C.
68F. (1A). “Where any scheme has been published by a State transport undertaking under Section 68C, that undertaking may apply for a temporary permit, in respect of any area or route or portion thereof specified in the said scheme, for the period intervening between the date of publication of the scheme and the date of publication of the approved or modified scheme, and where such application is made, the State Transport Authority or the Regional Transport Authority, as the case may be, shall, if it is satisfied that it is necessary to increase, in the public interest, the number of vehicles operating in such area or route or portion thereof, issue the temporary permit Prayed for by the State transport undertaking.”
68F. (1C). “If no application for a temporary permit is made under sub-section (1A), the State Transport Authority or the Regional Transport Authority, as the case may he, may grant, subject to such conditions as it may think fit, temporary permit to any person in respect of the area or route or portion thereof specified in the scheme and the permit so granted shall cease to be effective on the issue of a permit to the State transport undertaking in respect of that area or route or portion thereof.”
68F. (ID). “Save as otherwise provided in sub-section (1A) or sub-section (1C), no permit shall be granted or renewed during the period intervening between the date of publication, under Section 68C of any scheme and the date of publication of the approved or modified scheme, in favour of any person for any class of road transport service in relation to an area or route or portion thereof covered by such scheme:
Provided that where the period of operation of a permit in relation to any area, route or portion thereof specified in a scheme published under Section 6BC expires after such publication, such permit may be renewed for limited period, but the permit so renewed shall cease to be effective on the publication of the scheme under sub-section (3) of Section 68D.”
8. It can be seen from these provisions, that no permit shall be granted during the period intervening between the date of publication, under Section 68C of any scheme and the date of publication of the approved or modified scheme, in favour of any person in relation to the notified area or route or portion thereof except temporary permits under sub-section (1A) or (1D). The opening words of sub-section (1D) “save as otherwise provided in sub-section (1A) or sub-section (1C)” make this position beyond controversy. An exception, however, has been made in regard to renewal of an existing permit.
9. Under sub-section (1A), the Corporation has a preferential right to obtain temporary permits in respect of any area or route specified in the scheme. If there is no offer by the Corporation to take temporary permits, then the private operators could legitimately ask for such permits. In either case, however, the authority granting the permit must be satisfied “that it is necessary to increase, in the public interest, the number of vehicles operating in such area or route or portion thereof.” That is the basic requirement for the RTA or STA to grant temporary permit either under sub-section (1A) or under sub-section (1C).
10. The decision of the transport authority to increase the number of vehicles in any given area or route, under sub-sections (1A) and (1C) must be in the interests of the public. It may, therefore, be founded either on temporary need or permanent need of the travelling public. The purposes for which a temporary permit could be granted under Sec. 62 of the Act need not be excluded from consideration. The purpose of Section 62 was also intended to serve the interests of the public. There is no in-consistency in the purposes provided under Section 62 and that underlined in sub-sections (1A) and (1C). Therefore, any temporary need or purpose envisaged under Section 62 may also justify the decision of the RTA or STA to increase the operation of the vehicles subject, of course, to the limitation that a temporary permit granted to a private operator, shall not be effective after publication of the approved scheme if the concerned route is covered thereunder.
11. The question may be asked whether a temporary permit issued or granted under sub-section (1A) or (1C) should be limited at a time only for a period of four months as prescribed under Section 62 of the Act. Madhya Pradesh High Court in Dhanna Singh… v. The Regional Transport Authority, Gwalior…., Gwalior AIR 1975 Madh Pra 77 has no doubt taken the view that a temporary permit granted under sub-sections (1A) and (1C) should not in any case exceed four months. With respect, I am unable to concur with that view. The amplitude of the sub-sections should not unnecessarily be curtailed to bring in tune with Section 62 merely because the word “temporary permit” has been used in both the provisions. Section 62 is in Chapter IV and Section 68F is in Chapter IV-A. Section 68B makes the provisions of Chapter IV-A prevail over the provisions of Chapter. IV in case, of inconsistency. The maximum period of four months, prescribed under Sec. 62 is not consistent with the period prescribed under sub-sections (1A) and (1C). The period during which a temporary permit could be granted and also the period for which it could be granted, are both specified under the said sub-sections. A temporary permit under the sub-sections (1A) and (1C) can be granted at any time during the period intervening between the date of publication of the scheme - and the date of publication of the approved scheme or modified scheme. In other words, it can be granted for any period during that interregnum. In a given case, it might fall short of four months, if the approved scheme is published earlier since the maximum period of a temporary permit is coterminous with the date of publication of the approved scheme.
12. Having thus examined, the scope of sub-sections (1A) and (1C), I will turn now to examine the contentions urged for the petitioners.
13. It was urged that since the Corporation had obtained some temporary permit in 1976 and 1978 for the route in question, the RTA, has no jurisdiction to grant such permits to Respondents or to any other private operators. I do not think the contention is sound. It runs counter to the scheme underlined in Section 68F. The Corporation obtained temporary permits in 1976 and 1978 having regard to the then prevailing need. A couple of years rolled thereafter. The traffic need must have changed calling for more transport vehicles. The RTA should review the traffic need periodically and decide whether any additional vehicle is necessary on any route or portion thereof. It is the duty of the RTA or STA as the case may be, to have such a periodical review. The review could be undertaken suo motu or at the instance of the Corporation or of a private operator. A decision similar to the one to be taken by the RTA under Section 47(3) of the Act must precede the grant of temporary permit either to the Corporation or of a private operator. This procedure would avoid nepotism and manipulation, as observed by the Supreme Court in Obliswami Naidu v. Additional State Transport Appellate Tribunal, Madras (1969) 1 SCC 733 : AIR 1969 SC 1130.
14. In Praveen Ansari v. State Transport Appellate Tribunal, Lucknow (1980) 4 SCC 503 : (AIR 1981 SC 516), the Supreme Court observed at page 8 (of SCC): (Para 8 of AIR).
“The State Transport Authority is the proper authority to decide the strength of vehicles to be plied on a route. If the Corporation is willing to operate vehicles to the maximum strength undoubtedly the State Transport Authority will have to grant permit to the Corporation under Section 68F(1A) to the exclusion of others. But if the Corporation was unable to provide vehicles for the optimum strength fixed by the State Transport Authority the remaining permits will have to be granted to any other person willing to obtain temporary permit and ply vehicle because in respect of the remaining strength there would be no application, by the Corporation and Section 68F (1C) would be squarely attracted.”
15. Again it was observed at para 9, p. 507 (of SCC): (at p. 518 of AIR).
“If the Corporation has made application for temporary permits covering all the vacancies the matter ends there. But if the Corporation does not apply for all the permits but only for some, the inescapable conclusion is that for the remaining strength, the Corporation has made no application for the temporary permits and Section 68F(1C) would be squarely attracted. In that event the State Transport Authority or the Regional Transport Authority as the case may be will have to examine the application for temporary permits made by persons other than the Corporation and if they are found to be competent, eligible and qualified they may have to be granted permits for the benefit of the large travelling public. That is why power to increase strength of fleet operating on the route is conferred and has to be exercised in public interest meaning transport facility to travelling public.”
16. In the instant case, the RTA has not determined the number of additional permits to be granted on the route Davanagere to Chitradurga before granting the permit to Respondent-3. The RTA has also not afforded an opportunity to the Corporation for applying to that temporary permit. Two temporary permits have already been granted to the private operators. There are still more applications pending for such permits for the same route. It is not proper or legal for the RTA to grant permit one after another as and when the application comes from the private operators. The RTA must first determine the number of additional permits to be granted and afford an opportunity to the Corporation and private operators to apply for those permits. If the Corporation applies for all the permits, then the private operators stand ex-eluded. If the Corporation applies for some of the permits and not for all, then the remaining permits must be thrown open to private operators for grant on the basis of merit and suitability. These reauirements have not been evidently complied with, by the RTA. Besides, the RTA granted the permit to Respondents for a purpose quite different from the one asked for.
17. The contention urged for the petitioners and Respondent-4 relating to the timings may now be examined. The service of Respondent-4 departs at Davanagere at 8-00 a.m, and arrives at Chitradurga at 10-00 a.m; whereas, the departure time assigned to the temporary permit granted to Respondent-3 at Davanagere is 8-15 a.m, and the arrival time at Chitradurga is 9-30 a.m This distance between Davanagere and Chitradurga is 40 miles. Although Respondents leaves Davanagere 15 minutes later, he arrives at Chitradurga half-an-hour earlier. Quite likely, no passenger travelling from Davanagere to Chitradurga would prefer the service of Respondent-4 since he could reach Chitradurga half-an-hour earlier if he travels in the service of Respondent.
18. The position is not very much different in regard to the service of the petitioner in W.P Nos. 23776 of 1980. His service leaves Chitradurga at 9-45 a.m and arrives at Davanagere at 12-00 noon, but in the second trip the service of Respondent-3 departs Chitradurga at 10-15 a.m, and arrives at Davanagere at 11-30 a.m, i.e, half-an-hour before the arrival of the service of the petitioner. The travelling public may thank the RTA for providing a better transport facility. But for an existing operator, the timings of his service are like the heart-beats to him and if a newcomer steals a march over, it would impede his progress if not imperil, his very existence. I do not however mean that the priority of the petitioner and Respondent-4 ought to have been maintained. It may not be practicable or possible in all trips since Respondent-3 was asked to operate an express service. All that I would mean is that as far as possible, the priority of the existing operators on identical routes should not be meddled with.
19. In the result, the writ petitions are allowed, the impugned order is quashed with liberty to the RTA to dispose of the application of Respondent-3 in accordance with law and in the light of the observations made.
20. Petitions allowed.
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