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Attorney(S)
  • Mr. H.B Datar, Senior Advocate for Mr. S. Narasimhachar for Appellant
  • Mr. S.V Jagannath, Govt. Advocate for R-1;
  • Mr. Jayakumar S. Patil for R-2.
Judges
  • Venkatachaliah
  • Hiremath, JJ.
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Attorney(S)
  • Mr. H.B Datar, Senior Advocate for Mr. S. Narasimhachar for Appellant
  • Mr. S.V Jagannath, Govt. Advocate for R-1;
  • Mr. Jayakumar S. Patil for R-2.
Judges
  • Venkatachaliah
  • Hiremath, JJ.
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Smart Summary

Judgment Summary — Venkatachaliah, J.

Factual and Procedural Background

The dispute arises from a temporary permit granted by the State Transport Authority (STA) on 29-10-1983 under Section 62 of the Motor Vehicles Act, 1939 to D.P. Sharma (appellant in W.A. 1070/87) to operate stage-carriage services on the inter-state route "Bangalore–Gulbarga", a route overlapping a notified scheme (“Kolar Pocket Scheme”).

Chronology (as set out in the opinion):

  • 27-12-1980: D.P. Sharma applied for a temporary permit; application rejected on 6-1-1981 by STA Secretary because the route overlapped the Kolar Pocket Scheme.
  • Sharma sought mandamus in this Court unsuccessfully, then approached the Supreme Court; the Supreme Court by order dated 25-10-1982 directed the STA to consider Sharma's application.
  • Despite that direction, STA granted a temporary permit to KSRTC; Sharma filed W.P. 2065/83 to quash KSRTC's permit and to compel STA to consider his application. Mandamus was issued; STA then granted temporary permits on the same route to both Sharma and KSRTC on 29-10-1983.
  • The key legal controversy concerned the nature and validity (especially the duration) of Sharma's 29-10-1983 temporary permit.
  • STA relied on an earlier High Court Single Judge decision in W.P. 2052/83 in granting Sharma the permit. That earlier decision was reversed by the Supreme Court on 13-2-1987 (K.S.R.T. Corporation v. Secretary, KSTA), which held that a temporary permit could not be granted beyond four months.
  • Following the Supreme Court reversal, STA passed resolutions (13-4-1987 and 3-7-1987) limiting or refusing further permits to Sharma and, on 15-7-1987, granted a temporary permit to KSRTC effective 29-7-1987 (substituting KSRTC in place of Sharma).
  • Sharma challenged the STA orders in Writ Petition (disposed by the Single Judge on 20-7-1987). The Single Judge quashed the STA orders of 13-4-1987 and 3-7-1987 and directed fresh disposal of Sharma's application. Both parties appealed to this Court: W.A. 1070/87 (Sharma) and W.A. 1104/87 (KSRTC).
  • The present judgment addresses those appeals and related interim applications (including I.A. IV seeking quashing of the KSRTC temporary permit granted on 15-7-1987).

Legal Issues Presented

  1. Whether the temporary permit granted to D.P. Sharma on 29-10-1983 (stating operation "for a period of four months or till the issue of substantive permits whichever event happens later") was valid and effective after the Supreme Court's reversal of the earlier High Court authority relied upon by the STA.
  2. Whether the STA had power to revisit, vary or annul its original grant (i.e., whether the STA possessed an inherent or statutory power of review in respect of a grant once made).
  3. Whether a temporary permit granted under Section 62 can, as a matter of law, be made to enure beyond four months, and if the purported longer grant is a nullity or must be set aside by appropriate proceedings.
  4. Whether the STA's subsequent orders (resolutions dated 13-4-1987 and 3-7-1987) and the 15-7-1987 grant to KSRTC were legally effective in view of the original 29-10-1983 grant and pending proceedings challenging that grant (W.P. 20669/83).

Arguments of the Parties

Appellant's (D.P. Sharma) Arguments

  • The original grant dated 29-10-1983 entitled Sharma to operate until pucca (substantive) permits were granted; that grant had finality and could not be unilaterally undone by the STA except by proceedings properly challenging and setting aside the grant (specifically W.P. 20669/83).
  • The STA could not "tamper" with the finality of the grant since it had no power of review unless such power was expressly conferred by statute.
  • The STA's reliance on the now-reversed decision in W.P. 2052/83 did not automatically invalidate Sharma's grant; the validity of the grant itself must be challenged and set aside in the proper forum.
  • Sharma argued that the grant was referable to Section 62(2) of the Motor Vehicles Act and that the Supreme Court's decision (cited by KSRTC) pertained to Section 62(1)(c), so the shorter (four months) rule may not apply to the type of grant he received.
  • Periodic issuance of permits subsequent to the 29-10-1983 grant were, in his submission, ministerial acts recognizing the original grant rather than fresh quasi-judicial grants.

Respondent's (KSRTC) Arguments

  • The 29-10-1983 grant, to the extent it purported to operate for more than four months, was without jurisdiction and therefore illegal — in light of the Supreme Court's ruling that a temporary permit could not be granted beyond four months.
  • Because the purported long-duration permit was a nullity, STA was entitled to treat it as such and to refuse further permits to Sharma; to allow Sharma to continue would be to reward an illegality.
  • Sharma on each occasion filed Form-57 appropriate to applications for fresh grants, and STA dealt with such filings as quasi-judicial applications; therefore the periodic permits were not merely ministerial renewals.
  • KSRTC argued that a private operator should not be entitled to a permit on a route overlapping a notified scheme and that the Single Judge erred in directing STA to treat Sharma's application as if it were a live entitlement to continued operation.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
K.S.R.T. Corporation v. Secretary, K.S.T. Authority (Supreme Court order dated 13-2-1987; C.A. No. 428 & 4289 of 1983) (1987 Supp SCC 728; AIR 1987 S.C. 714) Holds that a temporary permit could not be granted beyond four months; therefore a High Court direction that a temporary permit would enure until grant of a permanent permit was invalid. The Court treated this Supreme Court pronouncement as an important precedent which partially undercut the STA's rationale for the long-duration grant; however, the Court concluded that reversal of the W.P. 2052/83 decision did not ipso facto render the 29-10-1983 grant a total nullity — the grant had to be challenged and set aside in proper proceedings (W.P. 20669/83).
Smith v. East Elloe Rural District Council (House of Lords) An order, even if not made in good faith, remains an act capable of legal consequences and remains effective unless and until set aside by necessary proceedings. The Court relied on this authority to support the proposition that an administrative order (such as the STA's grant) cannot be ignored by parties on a self-assessed basis of illegality; the grant remains effective until quashed by a competent authority.
Nawab Khan v. State of Gujarat (1974 2 SCC 121) Warns against enabling persons to defy administrative decisions on self-determined grounds of voidness: allowing such self-help would produce startling consequences. The Court used this to emphasize that parties cannot ignore administrative orders on the ground of self-assessed invalidity and that remedies exist to challenge and set aside orders rather than to permit unilateral disobedience.
London & Clydeside Estates Ltd. v. Aberdeen District Council (1980 1 WLR 182) Describes a spectrum of consequences for procedural defects — from total nullity to trifling defects — and counsels against rigid categorisation; courts must assess consequences based on facts. The Court invoked this reasoning to justify a nuanced approach: although the STA's grant may have been erroneous or founded on a now-reversed precedent, it was not so flagrantly invalid as to be treated as no decision at all; therefore it remained effective until properly challenged.
ILR 12 Bombay 486 (approved in L. Hazari Mal v. I.T. Officer; Pitamber Yajirshet v. Dhondu Navlapa : AIR 1961 S.C. 200) Support for the proposition that if an authority had jurisdiction to make a decision, the decision is referable to that jurisdiction and thereby valid rather than being a nullity. The Court cited this authority (as approved in later Supreme Court decisions) to note that even if the STA arguably had power to issue the grant beyond four months, that grant would be referable to jurisdictional power and not automatically invalid; in any event the question required determination in the pending proceedings.
P.N. Thakershi v. Pradyumansingji (1971 3 SCC 844) Establishes that the power to review is not inherent in an authority and must be conferred by law; until set aside by a competent authority, an order stands and must be given effect. The Court relied on this precedent to hold that the STA had no inherent power to undo or review its final grant of 29-10-1983; the STA could not itself nullify the grant that had been lawfully made (unless statutory review power existed, which was not asserted).

Court's Reasoning and Analysis

The Court proceeded in a stepwise analytical manner, closely following the authorities cited in the opinion and the factual matrix:

  1. Assessment of the immediate legal question: the Court first framed the issue as whether the STA's 29-10-1983 grant could be treated as a nullity in the light of the Supreme Court's reversal of the decision (W.P. 2052/83) relied upon by the STA when making the grant.
  2. Distinction between the validity of the precedent and the validity of the grant: the Court emphasized the distinction between an administrative authority acting on a then-binding precedent and the separate question of whether the administrative act itself is void. The reversal of the precedent does not automatically undo a grant previously made.
  3. Finality of administrative decisions and the absence of inherent review: relying on P.N. Thakershi and related authority, the Court held that the power to review is not inherent and that a decision affecting legal rights is, unless review power is conferred, finally expended when made. Consequently, STA could not simply undo the finality of its earlier grant by internal resolution.
  4. Spectrum of invalidity: invoking London & Clydeside and other authorities, the Court observed that invalidating effects differ in intensity. Only where an order is so flagrantly void would it be safe to treat it as a nullity absent formal setting aside; in most cases the proper remedy is to obtain judicial relief to set aside the grant.
  5. Application to the facts: applying these principles, the Court concluded that the 29-10-1983 grant, albeit potentially erroneous or founded upon a precedent later reversed, was not so manifestly void that the STA could ignore it or treat it as non-existent. The proper remedy for KSRTC remained W.P. 20669/83, already filed to challenge that grant.
  6. Consequences for STA actions: because the STA lacked power of review, its resolutions of 13-4-1987 and 3-7-1987 purporting to curtail or refuse further permits to Sharma were ineffective; accordingly, the Single Judge's quashing of those STA orders was affirmed in that respect.
  7. Disposition of the subsequent KSRTC temporary-permit (15-7-1987): while the Court held that, as a legal matter, the 15-7-1987 grant to KSRTC must fail if based on the ineffective STA actions, it exercised discretion to balance competing interests. The Court gave KSRTC a reasonable opportunity to pursue and obtain appropriate relief in W.P. 20669/83, and therefore preserved the KSRTC permit for a limited interim period to avoid public inconvenience.
  8. Limitations and directions: the Court refused to direct immediate issuance of permits to Sharma pursuant to the purported 29-10-1983 grant; instead, the Court clarified that Sharma's application should not be treated as a fresh grant application so long as the original grant remained undisturbed, and provided a timetable and conditions in which the STA should proceed consistent with ongoing W.P. 20669/83 proceedings.

Holding and Implications

Holding:

W.A. 1070 of 1987 is allowed; W.A. 1104 of 1987 (filed by KSRTC) is dismissed.

Direct consequences and orders (as set out in the opinion):

  • The Court affirmed the Single Judge's quashing of the STA orders dated 13-4-1987 and 3-7-1987 (these were held to be ineffective attempts by STA to undo its earlier grant).
  • The Court set aside the Single Judge's direction that Sharma's application be treated as one for a fresh grant to be considered along with any rival application by KSRTC; the Court held Sharma's application could not be treated as a fresh grant while the 29-10-1983 grant remained undisturbed.
  • The Court dismissed KSRTC's appeal (W.A. 1104/87) and allowed Sharma's appeal (W.A. 1070/87).
  • With regard to the KSRTC temporary permit granted on 15-7-1987, the Court ordered that it remain operative only until 14-9-1987 (to avoid inconvenience to the travelling public) and shall stand quashed with effect from 15-9-1987, subject to the directions that follow.
  • The STA was directed to take up Sharma's application in furtherance of and consistent with the 29-10-1983 grant after four weeks from the date of the judgment (i.e., on or after 15-9-1987). The KSRTC was left free to move in W.P. 20669/83 for expeditious disposal or a stay of the 29-10-1983 grant. The STA must regulate its jurisdiction in light of any directions made in W.P. 20669/83; if none are issued, the Secretary, STA may then take up and dispose of Sharma's application in the light of the 29-10-1983 grant.

Broader implications:

  • The judgment underscores the principle that administrative decisions affecting legal rights remain effective until set aside by appropriate judicial proceedings; administrative authorities do not possess an inherent power to review and undo final grants unless such power is conferred by statute.
  • The Court exercised discretion to protect interim public interest (by temporarily preserving KSRTC's permit) while preserving the right of KSRTC to challenge the original grant through pending judicial proceedings.
  • The opinion does not purport to lay down a novel rule of law overriding existing precedents; rather it applies established authorities (as cited) to the particular factual matrix. The direct effect is limited to the parties and proceedings in question; the Court directed procedures for further consideration consistent with the pending W.P. 20669/83.

Note: This summary is strictly confined to the material and statements contained in the provided opinion and does not add or infer facts beyond the judgment text.

Show full summary ...

    D.P Sharma v. State Transport Authority

    The Judgment of the Court was delivered by

    Venkatachaliah, J.:— Writ Appeal No. 1070 of 1987 is by the petitioner and Writ Appeal No. 1104 of 87 is by Respondent-2 (KSRTC) in W.P No. 9795 of 1987 and both the appeals arise out of the order dated 20-7-1987 made by the learned Single Judge in W.P 9795 of 87.

    The controversy pertains to the validity of a temporary permit granted on 29-10-1983 by the State Transport Authority (STA) under Section 62 of the Motor Vehicles Act, 1939 (‘Act’) to the appellant in W.A 1070/87 for operating a stage-carriage services on the Inter-State Route “Bangalore-Gulbarga” covered by an inter-state agreement.

    2. A brief advertance to the factual antecedents is necessary:

    By the application dated 27-12-1980, D.P Sharma, appellant in W.A 1070/87, sought a temporary permit on the Inter-State route “Bangalore to Gulbarga” covered by an Inter-State agreement between the State of Karnataka and State of Andhra Pradesh. That application was rejected on 6-1-1981 by the Secretary, STA, on the ground that the ‘Route’ over-lapped a notified scheme viz., the “Kolar Pocket Scheme.” Having failed to obtain a Mandamus from this Court for a fresh consideration of his application, appellant-Sharma moved the Supreme Court which by its order dated 25-10-1982 in C.A 3422 and 3423 of 1982, directed the STA to consider and dispose of Appellant-Sharma's application.

    STA, not having complied with that direction, but, instead, having granted a temporary-permit to the KSRTC, appellant-Sharma filed W.P 2065/83 for the quashing of the permit granted to the KSRTC and for issue of a Mandamus to consider and dispose of his application dated 27-12-1980. Such Mandamus having been issued, the STA considered appellant-Sharma's application and granted two permits on the same route, one to appellant-Sharma and the other to the KSRTC, over-ruling KSRTC's opposition to the grant in favour of appellant-Sharma, that the route in question over-lapped a notified scheme and no permit to a private operation was permissible, except in accordance with and as permitted by the scheme itself. The entire controversy in these proceedings centres round the nature and validity of the temporary-permit so granted to appellant-Sharma on 29-10-1983.

    The said grant made on 29-10-1983 by the STA in the operative part reads thus:

    “For the reasons stated above, the State Transport Authority resolves to grant the temporary permit under Section 62, to ensure for a period of four months or till the issue of substantive permits whichever event happens later for operating at two singles by two vehicles each by K.S.R.T.C and Sri D.P Sharma………”

    (Emphasis supplied)

    This order of the STA was challenged by the KSRTC in W.P No. 20669/83 which is yet binding decision before this Court. However, no stay of the order impugned in the Writ Petition was sought for or obtained by the KSRTC. Accordingly, pursuant to the Temporary permit granted on 29-10-1983, appellant-Sharma operated the services on the said Inter-State Route till 28-7-1987.

    The STA, in granting the Temporary permit to a private operator on a route which over-lapped a notified scheme and in granting the ‘Temporary-permit’ for a period more than 4 months, had placed reliance on another pronouncement dated 14-3-1983 of a Learned Single Judge of this Court in W.P No. 2052/83 which, though between the same parties, however, related to the grant of another permit in respect of another route. The appeals preferred by the KSRTC against the said order of the Learned Single Judge in W.P 2052/83, in W.A 359 & 360/83, had come to be rejected by a Division Bench. The operative part of the order of the Learned Single Judge reads thus:

    “In view of the foregoing reasons, these Writ Petitions are allowed with costs Rules are made absolute and the Order No. STA: 6: TP: 11/81-82 passed by Respondent 1 on 19-1-1982 (Annexure-D in Writ Petition No. 40614/82) rejecting the application made by the petitioner for grant of temporary permit on the inter-State route from Bangalore to Punganoor and back and Order No. STA: 6: TP: 43/82 dated 21-1-1983 passed by Respondent 1 holding that Respondent 2 is to be issued a temporary stage-carriage permit for the inter-State route Bangalore to Punganoor and back, and the permit dated 21-1-1983 issued by Respondent 1 to Respondent 2 are quashed. The STA and Respondent 1 are directed to issue temporary stage carriage permit, which will enure until the grant of pucca permit or for four months from the date of issue of the temporary permit whichever is later, in favour of the petitioner, on the inter-State route Bangalore to Punganoor and back, with a condition that no passenger shall be picked up or set down on the route between Bangalore and Mulbagal, assigning the timings as prayed for by the petitioner, within one week from the date of the receipt of copy of this order”.

    However, the KSRTC took up the order in W.P No. 2052/83 in appeal to the Supreme Court. The Supreme Court by its order dated 13-2-1987 in C.A No. 428 & 4289 of 1983 (K.S.R.T Corporation v. Secretary, K.S.T Authority)1 reversed the order of the Learned Single Judge in the said W.P 2052/83. Supreme Court did not approve the legal position posited by and implicit in the directions of the Learned Single Judge excerpted earlier. It was observed:

    “A temporary permit could not be granted beyond four months, therefore, the direction that a temporary stage carriage permit granted to the Respondent No. 2 would enure till the grant of a permanent permit was not valid. The permit granted under the directions of the High Court must be taken to have already lapsed. If any permit has been granted in favour of Respondent No. 2 under the impugned directions of the High Court which if in force shall stand vacated after two weeks from today unless it has lapsed before that period.”

    3. The aftermath of this pronouncement of the Supreme Court, so far the further proceedings taken by the STA in regard to the permit granted by it on 29-10-1983 are interesting. The STA was of the view that with the reversal of the order in the Writ Petition 2052/83, relying upon which it had earlier granted the permit to appellant-Sharma, the very foundation of the grant had disappeared and that in the light of the appellate-Judgment of the Supreme Court the grant in this case must also be held to be limited to a period of 4 months from the initial grant, and that after the expiry of 4 months from the initial grant there could be no subsisting grant in favour of appellant-Sharma at all. On this view and interpretation of the effect of the reversal of the order in W.P 2052/83, the STA proceeded to pass a resolution dated 13-4-1987 to the effect that pursuant to the original grant dated 29-10-1983, appellant-Sharma would not be entitled to the issue of further permits. As a logical consequence to this order the application of appellant-Sharma for issue of a permit for the period between 29-7-1987 and 28-11-1987 came to be rejected on 3-7-1987. Appellant-Sharma challenged these two orders in his Writ Petition.

    4. During the pendency of this Writ Petition a further development occurred. On 15-7-1987, the STA granted the temporary-permit on the route to the KSRTC with effect from 29-7-1987, in substitution of the one granted to appellant-Sharma. The STA observed:

    “The route is included in the existing reciprocal agreement dated 1-4-1979 entered into between the State of Karnataka and Andhra Pradesh vide Appendix “C” Sl. No. 10 providing provision for operation. This provision was utilised in favour of KSRTC since the grant made in favour of one Sri D.P Sharma was withdrawn by the KSTA allowing, however to lapse the temporary permit on the date of expiry of his prior temporary permit upto 28-7-1987.

    In the circumstances, application for temporary permit is perused and after satisfying the need, I pass the following orders:

    ORDER NO. STA 6 TP 71/86-87 dated 15-7-1987:

    In exercise of the powers under Section 62 of the M.V Act, 1939 delegated to me under Rule 94-A and 96 of Karnataka State Transport Authority do hereby grant the temporary permit for a period from 29-7-1985 to 31-10-1987 subject to countersignature by the State Transport Authority, Andhra Pradesh on single point tax and subject to usual conditions attached to the permit.

    ….….….”

    This development was not brought to the notice of the Learned Single Judge, on 20-7-1987 when he disposed of the Writ Petition. Accordingly, appellant-Sharma has filed I.A IV in this appeal to have that order also quashed.

    5. Learned Single Judge quashed both the orders dated 13-4-1987 and 3-7-1987 which, latter, had been passed during the pendency of the Writ Petition and directed the application of appellant-Sharma be disposed of afresh in accordance with law. It was held and observed:

    “9. In the result, I allow this Writ Petition, quash the impugned orders dated 13-4-1987 and 3-7-1987 of the KSTA and its Secretary respectively and remit the application of the petitioner to the KSTA for fresh disposal according to law. If Respondent-2, the Managing Director of the Karnataka State Road Transport Corporation, has already made any application for grant of temporary permit or if he makes any applications for temporary permit in respect of the route Bangalore to Gulbarga and back, the same may be clubbed to either and disposed of in accordance with law. If the applications made or to be made by the petitioner as well as Respondent-2 could be lawfully disposed of by the Secretary, Karnataka State Transport Authority, this order will not come in the way of such disposal. The applications for grant of permit may be disposed of as expeditiously as possible.”

    6. Both appellant-Sharma and the KSRTC are aggrieved by the Learned Single Judge's order. We have heard Sri H.B Datar, Learned Senior Counsel for the appellant and Sri Jayakumar S. Patil for the KSRTC.

    7. Sri Datar contended that in terms of the original grant dated 29-10-1983 appellant-Sharma was entitled to operate the stage carriage service till pucca permits were granted and that the grant not having been set-aside in a manner known to or recognised by law, the STA could not itself tamper with the finality of the grant and that its subsequent proceedings dated 13-4-2987, 3-7-1987 and 15-7-1987 to the extent inconsistent with the grant dated 29-10-1983, were beyond the power of the STA, as the latter had no power of review. Learned Counsel says that the only manner in which the effect and finality of the grant dated 29-10-1983 could be got rid of was in proceedings in W.P 20069/83 in which the validity of the grant had been specifically challenged.

    Sri Datar contended that the circumstances that the ‘STA’ in making the grant, had relied upon the pronouncement in W.P 2052/83 and that decision had itself come to be reversed by the Supreme Court did not by themselves affect the finality and effectiveness of the grant, unless the grant itself-and not merely the precedents on which the STA relied in making the grant-was reversed in a properly constituted proceedings viz., W.P No. 20669/83. Learned Counsel said that STA itself could not undo its earlier order by a side wind as it were.

    Sri Datar submitted that the original grant, in unequivocal terms, made the grant for a period up to the date of grant of pucca permits and the subsequent periodic issues of the permits themselves disclose that the periodic issue of permits made subsequently from time to time were in due recognition of the scope and extent and effectuation of the original grant. The periodic issues of the permits were, Learned Counsel says, not instances of fresh grants. Sri Datar sought to distinguish between the purely ministerial acts of issue of the permit on the one hand and the quasi-judicial act of grant on the other. Sri Datar submitted that it would be erroneous to think that all grants contemplated under Section 62 should, necessarily, be confined to a period of 4 months alone at a time; that the decision of the Supreme Court in 1987 Supp SCC 728 : A.I.R 1987 S.C 714 pertained to a clear case of grant under Section 62(1)(c) and that, there the Supreme Court had no occasion to consider the permissible duration of the grants referable to Section 62(2), which provided that notwithstanding anything in sub-section (1) of Section 62 a permit under Section 62(2) could be “for a period not exceeding the period of such suspension.” Sri Datar said that in the present case the grant by the STA was referable to and in exercise of the power under Section 62(2).

    Sri Datar, therefore, urged that the learned Single Judge was in error in directing the STA to consider appellant-Sharma's application, as if it were a case of a fresh grant and in directing its consideration along with any rival application of the KSRTC for the same permit. Sri Datar said that as long as the grant dated 29-10-1983 subsisted, the STA should merely issue the permits from time to time.

    8. Sri Jayakumar Patil, learned Counsel for the KSRTC, however, contended that the original grant dated 29-10-1983, to the extent it sought to make the grant for more than 4 months, was itself illegal and without jurisdiction, as no temporary permit under Section 62 could enure for more than 4 months, and that in the light of the pronouncement of the Supreme Court in RSRTC's case such a grant for more than 4 months would be one without jurisdiction and a nullity entitling the STA to ignore it. Sri Patil submitted that under this temporary-permit, which could only be 4 months, appellant-Sharma had operated the service for four years. To ask the STA to consider his prayer for a permit for any further period would amount to placing a premium on illegality.

    Sri Patil sought to point out that appellant-Sharma had on each occasion, filed Form-57, which was appropriate to a fresh grant and the STA or the Secretary, as the case may be, dealt with it, not merely as a case of ministerial or consequential order, but as a quasi-judicial proceeding. Sri Patil, accordingly, submitted that appellant-Sharma was not entitled to any permit at all on this interstate route which overlapped a notified scheme, and that the learned Single Judge fell into an error in directing the STA to consider the application of appellant Sharma afresh as indeed, in the light of the law laid down by the Supreme Court, a private operator was not entitled to a permit on the route.

    9. On a consideration of the matter, we think that the grant made on 29-10-1983, however grossly erroneous it might otherwise be, could not be ignored as a nullity so as to be susceptible of a collateral challenge or to be ignored by the very authority that granted it. However severe the error on the part of the STA might otherwise be-but Sri Datar would say that there is no error at all-in granting a permit in the terms it did for a period beyond 4 months, it is not a case of the order being such an absolute nullity as would entitle the STA to treat it as non-est. The remedy is to have the grant set-aside. That, indeed, is what the KSRTC has actually sought to do in W.P 20669/83. If the STA had the jurisdiction to issue a temporary permit for a period beyond 4 months-this question we do not feel called upon to answer in this case-the grant would be referable to a jurisdiction which confers validity upon the exercise and not to a jurisdiction which will invalidate it. (See ILR 12 Bombay 486, approved in L. Hazari Mal v. I.T Officer . Pitamber Yajirshet v. Dhondu Navlapa. : AIR 1961 S.C 200, para-5).

    10. As mentioned earlier the grant is challenged in W.P 20669 of 1983 which is still pending. What is its validity pending the decision in the Writ Petition? The grant, in the meanwhile, stands and must be obeyed unless its crass invalidity is so patent and obvious that a party can proceed, on his own self assessed invalidity, to ignore it. A party has perhaps a discretion to disobey at the risk of accountability if he turned, out at the end, to be wrong. In Smith v. East Elloe Sural District Council,3 the House of Lords said:

    “An order, even if not made in good faith, is still an act capable of legal consequences. It bears no brand of invalidity upon its forehead. Unless the necessary proceedings are taken at law to establish the cause of invalidity and to get it quashed or otherwise upset, it will remain as effective for its ostensible purpose as the most impeccable of orders.”

    (emphasis ours)

    The invalidating effect of non-compliance with the provisions, either substantive or procedural, of a statute on the decisions of administrative bodies and Tribunals is not uniform. The invalidating effect, so far as the decision is concerned, may range widely according as the nature and intensity of the vitiating factors. At one end of the scale there may, conceivably, be cases where the vitiating factors may be so overwhelming that the decision may well nigh be no decision at all in the eye of law and may safely be ignored and admit of a collateral-challenge. But between one end to the other, there are various shades and degrees of invalidity; the effect of the invalidating factor or factors in most of them requiring to be adjudicated upon by the Court. In the meanwhile the decision is effective. In Nawab Khan v. State of Gujarat . 1974 2 SCC 121, referring to the startling consequences that follow if persons obliged under “decisions” of authorities are enabled to defy the decisions on self-determined illegality, observed:

    “12. Illegal acts of authorities if can be defied on self-determined voidness, startling consequences will follow as the High Court apprehends. A detenu will beat back, a builder will put his wall on the forbidden line, a Court-officer will meet with physical resistance, all because the order is, on the view of the affected party, a nullity and is later proved so before a Court. Not every action by a Government agency carries with it the force of law and naturally what should he do if he concludes that the action is invalid? Should he disobey, face penal proceedings and get his violation legitimated by Court? Is there no alternative to breaking the law or order to expose the lawlessness of the law or order?….”

    In London & Clydeside Estates Ltd. v. Aberdeen District Council . 1980 1 WLR 182., Lord Hailsham observed:

    “…. But what the Courts have to decide in a particular case is the legal consequence of non-compliance on the rights of the subject viewed in the light of a concrete state of facts and a continuing chain of events. It may be that what the Courts are faced with is not so much a stark choice of alternatives but a spectrum of possibilities in which one compartment or description fades gradually into another. At one end of this spectrum there may be cases in which a fundamental obligation may have been so outrageously and flagrantly ignored or defied that the subject may safely ignore what has been done and treat it as having no legal consequences upon himself. In such a case if the defaulting authority seeks to rely on its action it may be that the subject is entitled to vise the defect in procedure simply as a shield or defence without having taken any positive action of his own. At the other end of the spectrum the defect in procedure may be so nugatory or trival that the authority can safely proceed without remedial action, confident that, if the subject is so, misguided as to rely on the fault, the Courts will decline to listen to his complaint. But in a very great number of cases, it may be in a majority of them, it may be necessary for a subject, in order to safeguard himself to go to the Court for declaration of his rights, the grant of which may well be discretionary and by the like token it may be wise for an authority (as it certainly would have been here) to do everything in its power to remedy the fault in its procedure so as not to deprive the subject of his due or themselves of their power to act. In such cases, though language like “mandatory”, “directory”, “void”, “voidable”, “nullity” and so forth may be helpful in argument, it may be misleading in effect if relied on to show that the Courts, in deciding the consequences of a defect in the exercise of power, are necessarily bound to fit the facts of a particular case and a developing chain of events into rigid legal categories or to stretch or cramp them on a bed of Procrustes invented by lawyers for the purposes of convenient exposition….”

    (Emphasis supplied)

    On a consideration of the matter by these tests we are of the opinion that the grant did not admit of being treated as a total nullity and that the remedy of the KSRTC was to seek to get rid of it in the W.P 20669/83 already filed by it.

    11. The STA could not itself undo the finality of the grant. STA has no power of review. There is no inherent power of review. The power must be conferred by the statute. Where the power in a Tribunal is one to decide questions affecting legal rights, the power is expended, once it is exercised. This is for reasons of imparting finality to the decision. The decision, so far the authoirty making it is concerned, becomes irrevocable, except where power of review is expressly conferred. Prof. Wade in his “Administrative Law” brings out the distinction between powers of a continuing character on the one hand and these that are finally expended:

    “In the interpretation of statutory powers and duties there is a rule that, unless the contrary intention appears, ‘the power may be exercised and the duty shall be performed from time to time as occasion requires.’ But this gives a highly misleading view of the law where the power is a power to decide questions affecting legal rights. In those cases the Courts are strongly inclined to hold that the decision, once validity made, is an irrevocable legal act and cannot be recalled or revised. The same arguments which require finality for the decisions of Courts of law apply to the decisions of statutory tribunals, ministers and other authorities.”

    “For this purpose a distinction has to be drawn between powers of a continuing character and powers which, once exercised, are finally expended so far as concerns the particular case….”

    In P.N Thakershi v. Pradyumansingji . 1971 3 SCC 844, Supreme Court observed:

    “4….. It is well settled that the power to review is not an inherent power. It must be conferred by law either specifically or by necessary implication…………………………………………………….. The question whether the Government's order is correct or valid in law does not arise for consideration in these proceedings so long as that order is not set aside or declared void by a competent authority. Hence the same cannot be ignored. The Subordinate Tribunals have to carry out that order…..”

    We agree with Sri Datar that having regard to the nature of the power exercised by the STA, it was not open it to undo the effect and finality of the earlier grant in the manner purported by it. The order dated 29-10-1983 cannot be said to be a “dependant” order wholly dependant on its validity, in turn, on the validity and existence of the order made in W.P No. 2052/83. There is a concept of “dependant-decrees” as in the case of preliminary and final decrees-where the “dependant” decree does not survive after the setting-aside of the decree on which it is dependant.

    But in the present case even if the order in W.P 2052/83 is reversed or over-ruled, it will not, ipso-facto, have the effect of rendering the grant dated 29-10-1983 non-est. The STA has uaderstood the pronouncement of the Supreme Court as having knocked-out the bottom of the grant. That might be so in a legal sense. But the grant itself has to be got rid-of in a properly constituted proceeding brought against it.

    12. Sri Jayakumar Patil, however, submitted that the exercise made by the STA should not be construed as an exercise of “Review” of the original-grant; but as one of proper construction of the grant. The STA, Learned Counsel says, was competent to construe the grant in the light of the pronouncement of the Supreme-Court in order to decide whether appellant-Sharma was entitled to a further permit or not. Learned Counsel said that, on a proper construction of the grant dated 29-10-1983, it would mean nothing more than a mere grant for a period of 4 months. This position, says Counsel, is reinforced by the circumstance that appellant-Sharma filed applications appropriate to a fresh grant on each occasion and that is clearly not cases of mere ministerial issue of permit but cases of quasi-judicial dispensation. But the following endorsements on the permits granted on each occasion, do not appear to support the contention of Sri Patil:

    “This Temporary Stage Carriage Permit issued as per the proceedings of the Karnataka State Transport Authority, Bangalore held on 3rd and 4th October 1983 and 29th October 1913 in Subject No. 132 of 1983.”

    Sri Patil may be right in his contention that if the grant of the kind prayed for by the appellant-Sharma was considered in the light of the correct law and not the principles laid down in W.P 2052/83, it might be that the giant may not be permissible. But, that question would necessarily require to be decided in W.P 20669/83. The mere reversal or over-ruling of the Judgment in W.P 2052/83 does not have the effect uprooting a quasi judicial determination made in another case relying upon that decision at a time when it was a binding precedent. It is trite proposition that even inter-parties, if the law laid down in a pronouncement is later over-ruled, as distinguished from it being reversed, its binding effect interparties is not set at naught. The decision itself has to be assailed and got rid of in a manner known to or recognised by law.

    Consistent with the view we have taken of the non-amenability of the grant dated 29-10-1983 to any collateral challenge we must hold that the Resolution of the STA dated 3-7-1987 and 13-4-1987 would require to be declared ineffective. Learned Single Judge has in effect done that.

    13. We now come to the difficult question of the relief to be granted in regard to the fresh grant made by the STA on 15-7-1987 in favour of the KSRTC. As a logical consequence of the earlier proceedings of 13-4-1987 and 3-74987 being declared not competent, the grant of 15-7-1987 must also fail.

    It the grant is considered in the light of the law settled by the Supreme Court in 1987 Supp SCC 728 : AIR 1987 S.C 714 appellant might have to surmount some legal hurdles to support the grant we think, we should not, in exercise of the discretion of this Court, direct the STA straight-away to issue a permit pursuant to the original grant dated 29-10-1983. It appears to us that in the circumstances of this case, the KSRTC must have an effective opportunity of pursuing its legal remedy against the grant in the Writ-Petition already filed by it and that for a reasonable time grant made on 15-7-1987 should not be disturbed. The mere fact that there are some illegalities will not, by itself justify exercise of discretion under Article 226. The possible instrinsic infirmities of the original-grant must also be looked at in assessing the justice of the matter in administering this jurisdiction which is, at once, extraordinary and discretionary.

    14. We, accordingly, allow W.A 1070 of 1987 and while affirming the order made by the Learned Single Judge, quashing the order dated 13-4-1987 and 3-7-1987, however set-aside the directions in the Learned Single Judge's Order that appellant-Sharma's application be treated as one for a fresh grant and considered along with any rival application of the KSRTC. Appellant-Sharma's application cannot be treated as one for a fresh grant as long as the grant dated 29-10-1983 remains undisturbed.

    The Writ Appeal 1104/87 filed by the KSRTC is dismissed.

    As regards I.A IV filed for quashing the temporary-permit granted to the KSRTC, in substitution of the one granted to appellant-Sharma, is concerned, we think it is appropriate to issue these directions: The STA is directed to take-up the application of appellant-Sharma for issue of permit in furtherance of and consistent with the grant dated 29-10-1983 after 4 weeks from today i.e, any day on or after 15-9-1987. The KSRTC shall be at liberty to move this Court in W.P 20669/83 for an expeditious disposal of the Petition itself or for a prayer of stay of the operation of the grant dated 29-10-1983 challenged in the Petition. In considering appellant-Sharma's application the STA will regulate its jurisdiction in accordance with such directions, final or interlocutory, as may be made in the said W.P 20669/83. If no such interim or final orders are made in W.P 20669,83, the Secretary, STA will be at liberty to take-up and dispose of appellant-Sharma's application in the light of the grant dated 29-10-1983. In order that inconvenience to the travelling public is avoided the temporary-permit granted to the KSRTC on 15-7-1987 will remain operative till 14-9-1987 and stand quashed with effect from the expiry of 14-9-1987. I.A IV disposed of accordingly.

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    D.P Sharma v. State Transport Authority
    (Aug 14, 1987)