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Jabalpur Transport Development Co. v. State Transport

Madhya Pradesh High Court

Jul 22, 1960

Judgment

Subsequent
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Summary of Opinion

Factual and Procedural Background

The petitioner invoked Articles 226 and 227 of the Constitution challenging (a) a condition in an order of the Regional Transport Authority (RTA), Jabalpur dated 27-9-1958 that any grant of a stage carriage permit to the petitioner for the Jabalpur–Mandla via Berela–Niwas route would stand cancelled if an appeal filed by Sheikh Rasool Motor Transport Company (respondent 3) succeeded before the State Transport Appellate Authority (respondent 1); and (b) the validity of the Appellate Authority's order dated 25-1-1960 allowing that appeal.

Background facts (undisputed): respondent 3 had obtained a stage carriage permit but its fixed timings conflicted with another permit; timings were revised, but respondent 3 failed to operate according to the revised timings. On 28-3-1958 the RTA directed respondent 3 to produce a stay or comply within 30 days, failing which timings would be enforced and non-compliance could lead to cancellation. Respondent 3 did not obtain a stay and initially did not run buses as required; a notice dated 1-5-1958 warned of consideration of cancellation under Section 60 of the Motor Vehicles Act, 1939. On 30-5-1958 the RTA found respondent 3 had started running only from 26-5-1958 and cancelled its permit for non-compliance.

The cancellation left a vacancy; several applications for a regular permit were made, and the petitioner obtained a regular permit granted on the express condition that it would stand cancelled if respondent 3's appeal succeeded. Respondent 3 had filed an appeal against its cancellation. Before the Appellate Authority, the petitioner sought impleadment under Rule 73(b) of the Motor Vehicles Rules as "any other person interested"; this application was rejected, the appeal was allowed, the cancellation of respondent 3's permit was set aside, and the petitioner's newly granted permit was subsequently cancelled by order dated 14-3-1960 (not communicated before this writ petition was filed).

Legal Issues Presented

Whether the condition imposed by the Regional Transport Authority — that the petitioner's grant of a regular permit would stand cancelled if the appeal filed by respondent 3 succeeded — was lawful and consistent with Section 58 of the Motor Vehicles Act, 1939 (and whether the petitioner could challenge that condition despite having consented to it).
Whether the State Transport Appellate Authority's order dated 25-1-1960 allowing respondent 3's appeal was invalid on the grounds that (a) there was no appeal against the basic order dated 28-3-1958, and (b) the petitioner was not heard in support of the order appealed against and thus was denied a hearing.

Arguments of the Parties

Petitioner's Arguments

The condition imposed by the RTA was contrary to Section 58 of the Motor Vehicles Act, 1939 and thus illegal; the petitioner contended it could challenge the condition even though it had consented to it because there can be no estoppel against a statute.
The Appellate Authority's order dated 25-1-1960 was bad because (i) there was allegedly no appeal against the basic order dated 28-3-1958 and (ii) the petitioner was not permitted to be heard in support of the basic order in the appeal proceedings.
The petitioner relied on authorities including Maritime Electric Co. Ltd. v. General Dairies Ltd. (AIR 1937 PC 114), Veerappa Pillai v. Raman (1952 SCR 583 : AIR 1952 SC 192), and Mahboob Sheriff and Sons v. Mysore State Transport Authority (AIR 1960 SC 321) to support the position that there is no estoppel against statute and that the condition was unlawful.

Respondents' Positions (as reflected in the opinion)

Respondent 3 objected to the grant of a new permit while its own appeal against cancellation was pending, contending that a new permit should not be granted because its appeal might succeed.
The applicants for the new permit (including the petitioner) expressly acknowledged that any permit granted would stand cancelled if respondent 3's appeal succeeded; the RTA proceeded on this basis and imposed that condition.
The Transport Authority's exercise of powers under Section 60 (to penalise a permit holder after giving an opportunity to explain) was described as an action the Authority takes on its own, so a subsequent permit-holder is not a party interested in an appeal concerning the original permit-holder's cancellation.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Maritime Electric Co. Ltd. v. General Dairies Ltd., AIR 1937 PC 114	Principle that there is no estoppel against statute (relied on by petitioner).	The court acknowledged the principle but held it did not assist the petitioner because the impugned condition was not, in effect, contrary to Section 58 of the Motor Vehicles Act.
Veerappa Pillai v. Raman, 1952 SCR 583 : AIR 1952 SC 192	Authority relied on by petitioner concerning limits on importing conditions into administrative grants when litigation is pending.	The court found the facts distinguishable and stated that Veerappa Pillai had been distinguished by the Supreme Court in later decisions; it rejected a broad reading of that decision.
Mahboob Sheriff and Sons v. Mysore State Transport Authority, AIR 1960 SC 321	Authority cited by petitioner concerning invalid renewal contrary to statutory provision (sub-section (2) of Section 58).	The court distinguished it on facts: in Mahboob Sheriff the regular permit was renewed for only one year contrary to s.58(2), a different factual situation from the present case.
V.C.K. Bus Service Ltd. v. Regional Transport Authority, Coimbatore, (S) AIR 1957 SC 489	Principles on implication or imposition of a condition that a renewal/permit stand cancelled if an appellate order later negates the right to the original permit.	The court relied on this authority to hold that there is no legal obstacle to imposing such a condition; the decision supports implying the condition and treating a reversing appellate order as wiping out the original grant.
New Prakash Transport Company Ltd. v. New Suwarna Transport Co. Ltd., (S) AIR 1957 SC 232	Cases cited by petitioner in relation to procedural fairness and hearing in appeals (context cited by the court).	The court stated these cases are distinguishable on facts and need not be examined in detail for the purposes of the present decision.
Nagendra Nath v. Commissioner of Hills Division, AIR 1958 SC 398	Case cited on procedural points / rights to be heard (context cited by the court).	Distinguished on facts by the court and not determinative of the issues in the present case.
Shivji Nathubhai v. Union of India, AIR 1960 SC 606	Case referenced regarding procedural aspects (context cited by the court).	Also regarded as distinguishable on the facts relevant to the petitioner's contentions.
Patli Transport Co. v. Regional Transport Authority (Misc. Petn. No. 132 of 1952, Dated 7-10-1952, MB)	Division Bench decision of the Court used to show that a subsequent permit-holder is not necessarily a person interested in appeal regarding an earlier permit-holder.	Relied on to support the proposition that the petitioner was not a person interested under the relevant rule and therefore was not entitled to be heard in the appeal.
New Motor Transport Co. v. Regional Transport Authority (Misc. Petn. No. 224 of 1953, Dated 7-12-1953, MB)	Another Division Bench decision referenced on similar lines to Patli Transport Co.	Used to buttress the court's conclusion that the petitioner was not a person interested within the meaning of the applicable rule and thus was disentitled to be heard.

Court's Reasoning and Analysis

The court proceeded in two main analytical strands, corresponding to the two central issues.

On the legality of the condition attached to the petitioner's permit:
- The court treated the condition as a condition subsequent — i.e., not a modification of the terms of the permit but a proviso that, upon the happening of a specified event (the success of respondent 3's appeal), the permit would stand cancelled.
- Relying principally on V.C.K. Bus Service (AIR 1957 SC 489), the court held there is no legal obstacle to imposing such a condition when granting a permit; indeed, in the circumstances of such litigation the condition could be implied even if not expressly stated because a reversing appellate order effectively wipes out the original order and stands in its place.
- The court acknowledged the general principle that there is no estoppel against statute (the petitioner’s reliance on Maritime Electric, et al.) but found that principle inapplicable because the impugned condition was not, in substance, contrary to Section 58 of the Motor Vehicles Act; other authorities cited by the petitioner were distinguished on their facts (e.g., Veerappa Pillai and Mahboob Sheriff).
On whether the Appellate Authority's order was invalid for want of an appeal against the "basic order" dated 28-3-1958 or for denial of a hearing to the petitioner:
- The court noted that Section 60 of the Motor Vehicles Act vests the Transport Authority with a discretion to penalise the holder of a permit in specified circumstances after giving him an opportunity to explain; action under Section 60 is taken by the Authority on its own motion.
- Because the Transport Authority acts on its own, there is "no lis" between the Authority's action and other persons; accordingly a person who subsequently obtains a permit is not, for that reason alone, a person "interested in the appeal" within the meaning of the relevant rule (Rule 75(b) of the Motor Vehicles Rules as cited in the opinion), and therefore was not entitled to be impleaded or heard in support of the order appealed against.
- The court relied on earlier Division Bench decisions (Patli Transport Co. and New Motor Transport Co.) to support the proposition that the petitioner, not being a party to the proceedings in which the order appealed against was passed, was not a person interested in the appeal and was thus disentitled to be heard on that basis.
- Consequently, the fact that the petitioner was not heard by the Appellate Authority was not a ground to challenge the appellate order.
- Finally, the court treated the related submission that there was "no appeal against the basic order dated 28-3-1958" as unsubstantial because that order did not itself effectuate the cancellation of respondent 3's permit; cancellation occurred by later proceedings.

The court also observed that the petitioner had expressly agreed to the conditional nature of its permit and that the present petition sought to deny respondent 3 the benefit of its successful appeal despite that agreement.

Holding and Implications

Holding: The petition was found to be without merit and was dismissed. The core ruling may be stated as: DISMISSED.

Direct consequences and terms imposed by the court:

The petition fails and is dismissed.
The petitioner shall bear its own costs.
Out of the petitioner's security amount the costs of respondent 3 shall be paid; the outstanding amount of security shall be refunded to the petitioner.
Counsel's fees were recorded as Rs. 75/-.

Broader implications: The court's analysis reiterates and applies existing authorities (notably V.C.K. Bus Service) to confirm that a condition subsequent, which causes a permit to be cancelled if an appellate order later negates the right to the original permit, is permissible and may even be implied. The opinion does not state that it establishes a new legal precedent beyond the application and distinction of earlier authorities; its decision primarily resolves the dispute between the parties and enforces the direct legal consequences described above.

Show all summary ...

1. The petitioner under Articles 226 and 227 of the Constitution is directed against the condition imposed in an order of the Regional Transport Authority, Jabalpur (respondent 2) dated 27-9-1958 to the effect that a grant to the petitioner of a stage carriage permit for the Jabalpur-Mandla via Berela-Niwas route (hereinafter called the route) would stand cancelled if the appeal filed by Messrs. Sheikh Rasool Motor Transport Company (respondent 3) is allowed by the State Transport Appellate Authority (Respondent 1). The petitioner has also challenged the validity of the order of the State Transport Appellate Authority dated 25-1-1960 whereby the aforesaid appeal was allowed.

2. The facts of the case, which are not in dispute,' are these. The respondent 3 had applied for and obtained a stage carriage permit for the route to be operated on timings to be fixed subsequently. It transpired that the timings so fixed conflicted with the timings of another permit for the route. On a representation made by the respondent 3, the timings were revised. Since the respondent 3 did not operate even in accordance with the revised timings, the respondent 2 passed on 28-3-1958 the following order :-

"The applicant is represented by Shri Sheikh Rasool. He has been directed to produce a stay order within 30 days failing which the timings given to him will be enforced and if he does not run his bus, the permit will be cancelled. Order communi-cated."

3. Since the respondent 3 neither obtained a stay order nor operated the permit by running its buses in terms of the order dated 28-3-1958, a notice dated 1-5-1958 (Annexure II) was served on the respondent 3 directing it to start at once running its buses on the fixed timings and that, if it failed so to do, the question of cancellation of the permit under S, 60 of the Motor Vehicles Act, 1939, would be taken up for consideration. The matter came up before the respondent 2 on 30-5-1958, when it was found that the respondent 3 started running its buses from 26-5-1958, that is nearly one month after the time limit originally fixed in the order dated 28-3-1958. The permit granted to the respondent 3 was cancelled because it had failed to comply with that order.

4. In view of the vacancy caused by cancellation of the permit of the respondent 3, applications were made for regular stage carriage permits. One of the objectors was the respondent 3 who contended that, since it had filed an appeal against the order of cancellation, a new permit in place of the one which was cancelled should not be granted. In regard to this, the respondent 2 observed:

"An affidavit is filed by Sheikh Rasool Motor Transport Company Ltd., stating that he has filed an appeal against the order of cancellation of his permit. The applicants for the permit concede that any order granting a permit to any of them will stand cancelled if Sheikh Rasool Motor Transport Co.'s appeal succeeds. In these circumstances, there is no need to adjourn the case for decision cf Sheikh Rasool's appeal"

Ultimately, on the condition mentioned in the opening paragraph of the order, a regular permit was granted to the petitioner which expressly agrees to that condition.

5. When the appeal filed by the respondent 3 came up before the respondent 1 (State Transport Appellate Authority), the petitioner applied for being impleaded as a party to the appeal under Rule 73(b) of the Motor Vehicles Rules on the ground that it had subsequently obtained a permit for the route and should be regarded as "any other person interested in the appeal". The respondent 1 rejected that application, allowed the appeal and set aside the order of cancellation of the permit granted to the respondent 3. Thereupon, by an order dated 14-3-1960, the new permit granted to the petitioner was cancelled though that order was not communicated before this petition was filed.

6. One of the two contentions in support of the petition is that th'e respondent 2, in granting a regular permit subject to the condition impugned before us, disregarded the provisions of Section 58 of the Motor Vehicles Act, 1939 that the condition was liable to be struck down as illegal and that, even if the petitioner consented to it, it was not precluded from challenging it because there was no estoppel against statute. Reliance is placed upon Maritime Electric Co. Ltd. v. General Dairies Ltd., AIR 1937 PC 114, Veerappa Pillai v. Raman and Raman Ltd. 1952 SCR 583 : (AIR 1952 SC 192), and Mahboob Sheriff and Sons v. Mysore State Transport Authority, AIR 1960 SC 321.

The principle that there is no estoppel against statute is well established but in the instant case, as we would show hereafter, the condition imposed In this case is, in effect, not contrary to the provisions of section 58 ibid. The facts of Veerappa Pillai's case 1952 SCR 583 : (AIR 1952 SC 192) are distinguishable and their Lordships of the Supreme Court also distinguished that case in a later case to which we would advert more fully presently. In Mahboob Sheriffs case, AIR 1960 SC 321, the regular permit was renewed only for one year contrary to the provisions of sub-Section (2) of Section 58.

7. In V.C.K Bus Service Ltd. v. Regional Transport Authority, Coimbatore., (S) AIR 1957 SC 489, the facts were there. For a certain route, the Regional Transport Authority, rejecting the claims of several others, granted a permit to one V. C. K. Bus Service. By an order dated 19-2-1953, the appellate Authority set aside that grant and gave the permit to another person. The order passed in appeal was unsuccessfully challenged in revision and also in writ proceedings in the Madras High Court. Even the Letters Patent Appeal against the decision on the writ petition was dismissed on 21-3-1956. During the pendency of these protracted proceedings, the operation of the order dated 19-2-1953 was stayed.

Since the period of the permit had expired, V. C. K. Bus Service succeeded in obtaining two renewals, one for the period 1-7-1954 to 30-6-1955 and another for the period 1-7-1955 to 30-6-1958. Apprehending that in consequence of dismissal of the Letters Patent Appeal, the renewal would be cancelled, V. C. K, Bus service filed a petition for a writ of prohibition to restrain the Regional Transport Authority from cancelling the permit. Rajago-pala Ayyangar, J. dismissed the petition on the ground that when the original permit was set aside, the renewal thereof fell to the ground. In appeal against that order, Rajamannar, C. J. and Pancha-pakesa Ayyar J. held that the renewal having been obtained on the basis of a permit which had been subsequently cancelled, it could not be regarded as a fresh permit, that when the original permit was set aside, it must he taken to be non-est for all purposes and that the renewal must therefore be held to be a nullity. On a certificate of fitness under Article 133(1)(c) of the Constitution, an appeal was filed against the decision in the Supreme Court. While dismissing the appeal, the Supreme Court observed:-

"Thus, there is no legal obstacle to implying a condition that the renewal should stand cancelled if the right of the appellant to the original permit was negatived by the High Court (page 493)"

"But it is argued for the appellant on the strength of the decision in 1952 SCR 583 : ( AIR 1952 SC 192) that the mere knowledge on the part of the authorities that the rights of the parties were under litigation is not a sufficient ground to import, a condition in the permit that it is subject to the result of that litigation, when in its terms it is unconditional. We do not read that decision as authority for any such broad contention"

. (page 493).

8. It would appear from the case of V. C. K. Bus Service, (S) AIR 1957 SC 489 that the condition impugned here is not a modification or alteration of the terms of the permit. It is a condition subsequent on the happening of which the permit would stand cancelled. That being so, there is no legal obstacle to laying down such a condition when granting a permit. Nay, even if the condition were not there, the Supreme Court case is an authority for the view that, in the circumstances of this case, it could be implied. The reason is that the reversing appellate order wipes out the order appealed against and stands in its place for all legal purposes.

9. The second contention is that the order of the State Transport Appellate Authority dated 25-1-1960 is bad because not only there was no appeal against the basic order dated 28-3-1958 but the petitioner was also not heard in support of the order appealed against.

In this connexion, our attention was invited to New Prakash Transport Company Ltd. v. New Suwarna Transport Co. Ltd. (S) AIR 1957 SC 232, Nagendra Nath v. Commissioner of Hills Division, AIR 1958 SC 398 and Shivji Nathubhai v. Union of India, AIR 1960 SC 606. In our opinion, these cases are distinguishable on facts and need not be examined in detail. Section 60 of the Motor Vehicles Act vests in the Transport Authority a discretion to penalise the holder of a permit in certain specified circumstances after giving to him an opportunity to furnish his explanation. Since, in taking action under the section, the Transport Authority acts on its own, there is no lis and no other person, not even the person who has subsequently obtained that permit is a person interested in the appeal;

In support of this view, we may refer to two Division Bench decisions of the Court, namely Patli Transport Co., v. Regional Transport Authority, Misc. Petn. No. 132 of 1952, D/- 7-10-1952 (MB) and New Motor Transport Co. v. Regional Transport Authority Misc. Petn. No. 224 of 1953, D/- 7-12-1953 (MB). In our opinion, the petitioner here, who was not a party to the proceedings in which the order appealed against was passed, was not a person interested in the appeal within the meaning of Rule 75(b) of the Motor Vehicles Rules and was therefore disentitled to be heard in support of that order. That being so, the order passed in appeal cannot be challenged on the ground that the petitioner was denied a hearing by the Appellate Authority.

10. The minor point that there was no appeal against the basic order dated 28-3-1958 is without, substance for the reason that the permit of the respondent 3 was not cancelled by that order.

11. Before closing, we would also observe that there is no merit in this petition which, contrary to the express agreement of the petitioner, seeks to deny to the respondent 3 the fruits of its successful appeal.

12. The petition fails and is dismissed. The petitioner shall bear its own costs and out of the security amount the costs of the respondent 3. The outstanding amount of security shall be refunded.

Counsel's fee Rs. 75/-.