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Kanchan Kesave Rao v. Kosuri Subbaraju And Another .
Opinion Summary — Viswanatha Sastry, J.
Factual and Procedural Background
This appeal arises from a contest over a stage carriage permit and subsequent governmental revisions under section 64‑A of the Motor Vehicles Act.
On 12‑12‑1950 the Regional Transport Authority (R.T.A.), West Godavari, granted a stage carriage permit for the Narasapur–Juvvalapalem route to K. Kesava Rao, selected from 33 applicants. The R.T.A.'s recorded reasons included (a) that Kesava Rao's father had been the first bus operator in the district and Kesava Rao had sufficient property to buy a bus, and (b) that the claims of other applicants were inferior.
Seven disappointed applicants (including K. Subbaraju) appealed to the Central Road Traffic Board (C.R.T.B.), which on 31‑3‑1951 set aside the R.T.A.'s order and directed that the permit be given to K. Subbaraju. The C.R.T.B. preferred existing operators (owners of one or two buses) on the ground that they could run the service more efficiently and, between competing existing operators, preferred Subbaraju on the ground of previous record.
The provincial government reversed the C.R.T.B.'s order by G.O. No. 2170 dated 30‑5‑1951, restoring the permit to Kesava Rao on the ground that granting the permit to Subbaraju was not desirable in the public interest. Subba Rao J. quashed that G.O. in Writ Petition No. 436 of 1951 on the ground that the order did not explain how public interest would suffer if the permit was not given to Kesava Rao.
Kesava Rao then moved in appeal (L.P.A. No. 177 of 1951); the appellate court held that though the government order was rightly quashed by Subba Rao J., the government still had jurisdiction under section 64‑A to dispose of the revision petition afresh. On 22‑1‑1952 the government issued a second order (G.O. No. 230, Home) reaffirming its decision to grant the permit to Kesava Rao and set out reasons emphasizing that the Motor Vehicles Act does not prohibit grants to new entrants and that the C.R.T.B. had not shown why Kesava Rao could not run the service efficiently.
Balakrishna Ayyar J. quashed the second government order in Writ Petition No. 273 of 1952. The judge's stated grounds (summarized in the opinion) were: (1) the government's power under section 64‑A is not plenary but corrective and must be exercised judicially and with proper reasons; (2) the C.R.T.B.'s order rested on a principle whose soundness the government had accepted; and (3) the government order did not explain in what respect the C.R.T.B.'s order was illegal, irregular, or improper.
The present appeal challenges Balakrishna Ayyar J.'s quashing and raises the scope of the government's power under section 64‑A and the court's power of interference under Article 226 of the Constitution.
Legal Issues Presented
- The scope and limits of the provincial government's revisional power under section 64‑A of the Motor Vehicles Act — i.e., what the government may examine and the standard by which it must act when calling for records and passing orders in revision.
- The extent of the High Court's power under Article 226 of the Constitution to interfere with orders of the government made under section 64‑A — in particular, whether and when the court may substitute its own judgment for that of the government.
Arguments of the Parties
Appellant's Arguments (K. Kesava Rao)
- It was argued on behalf of Kesava Rao that he had enjoyed the benefit of the R.T.A.'s permit for over four years and therefore should not now be deprived of that benefit. The opinion records that this benefit had, in fact, accrued as a result of successive orders staying the operation of the C.R.T.B.'s order.
No other party-specific arguments were detailed in the opinion.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Railroad Commission v. Rowen and Nichols Oil Co. (quoted from Frankfurter J.) | Courts must not substitute their notions of expediency and fairness for those of administrative agencies entrusted with formulation and execution of policy. | The court invoked this pronouncement to support the proposition that where the government, acting under section 64‑A, has taken a bona fide policy decision between competing principles, the judiciary should not substitute its own views; therefore interference under Article 226 is inappropriate absent illegality, irregularity, mala fide or extraneous consideration. |
Court's Reasoning and Analysis
The court's analysis proceeds from statutory text, constitutional context and the factual record:
- Statutory and constitutional framework: The opinion recognizes the need to regulate passenger carriage on state highways and accepts that licensing/permitting systems are valid under Article 19(6) of the Constitution. The Motor Vehicles Act vests initial selection power in the R.T.A., subject to appeal to the C.R.T.B. and revisional power in the provincial government under section 64‑A.
- Text of section 64‑A: The court quotes the provision which allows the provincial government to call for records "for the purpose of satisfying itself as to the legality, regularity, or propriety" of subordinate authorities' orders and, after examining records, to pass such order as it thinks fit.
-
Meaning of the statutory grounds: The court explains the three grounds—
- "Legality" — opposition to any enactment or rule having the force of law.
- "Regularity" — procedural defects, including breaches of natural justice and fair play.
- "Propriety" — a broader concept capable of honest differences of opinion even where the order is lawful and within power.
- Allocation of institutional responsibility: The court emphasizes that selection among competing administrative principles (for example, preference to existing operators and fleet formation versus encouragement of new entrants) is within the state's policy domain. Where the government, after consideration, takes a view on such competing principles, the court should not substitute its judgment for that policy choice. The court reiterates the cited principle from Frankfurter J. that courts must not replace agency policy judgments with their own notions of expediency or fairness.
- Limits of judicial review: The court states the circumstances warranting interference — if the government took into account facts irrelevant to the decision, was influenced by extraneous considerations, acted mala fide or with bias, or otherwise used its powers for improper selection of recipients of governmental favour. In such cases, quashing the order would be appropriate.
- Application to the present facts: On the face of the government order (G.O. No. 230 dated 22‑1‑1952), the government had examined the subordinate proceedings, disagreed with the C.R.T.B.'s approach and provided reasons for its conclusion that the C.R.T.B.'s order was not proper. The dispute essentially involved balancing two legitimate but opposing policy views: (a) encouraging fleet owners (as per C.R.T.B.) for service efficiency; and (b) avoiding monopoly and protecting new entrants (as per R.T.A. and government). The court found no indication that the government took into account irrelevant or extraneous matters, or acted mala fide or with bias.
- Uniformity and reasoned differentiation: The court notes that transport authorities have not always followed a uniform selection principle and that it is open to the state to change selection rules. However, the court warns that it is improper to apply two different and opposing principles to applicants contemporaneously without assigning proper and convincing reasons for such differentiation. Nevertheless, where the government gives reasons that are not improper or irrelevant, the court will not judge the adequacy or compelling nature of those reasons.
- Consideration of Kesava Rao's asserted reliance: The court explains that Kesava Rao's enjoyment of the permit for over four years resulted from interim orders staying the C.R.T.B.'s order; had the court been quashing the government order, that reliance would not have justified confirming Kesava Rao's benefit because it was not "justly or properly obtained."
Holding and Implications
Holding: The appeal is allowed. The order of Balakrishna Ayyar J. (which had quashed the government's second order, G.O. No. 230 dated 22‑1‑1952) is set aside, and Writ Petition No. 273 of 1952 is dismissed. There is no order as to costs either before Balakrishna Ayyar J. or before the court.
Implications:
- The judgment affirms that the provincial government, when exercising revisional power under section 64‑A, may legitimately choose between competing policy principles (for example, preference to existing fleet owners versus encouraging new entrants), and such a choice will not be lightly disturbed by the courts.
- Judicial interference under Article 226 is confined to instances of illegality, procedural irregularity (including breach of natural justice), consideration of extraneous or irrelevant matters, mala fide action, bias, or improper exercise of the power to confer governmental favour. Mere disagreement with the weight or adequacy of reasons offered by the government does not suffice for interference.
- The court cautions administrative bodies and the government not to apply inconsistent and opposing principles to different applicants without proper and convincing reasons; where differentiation is made, it must be explained and defensible on relevant grounds.
- The direct practical effect in this case is that the government's second G.O. (No. 230 dated 22‑1‑1952) stands restored by this appellate decision, and the quashing by the High Court below is reversed. The court ordered no costs in view of honest doubts about policy.
End of summary. This summary is prepared strictly from the contents of the provided opinion and does not add information beyond that opinion.
Viswanatha Sastry, J.:-
(1) This is an appeal from the judgment of balakrishna ayyar j. Quashing an order of the government g. O. No. 230, home d/ 22 - 1 - 1952, passed under sec. 64 - a of the motor vehicles act (hereinafter referred to as " the act"). On 12 - 12 - 1950, the regional transport authority, west godavari (hereinafter referred to, for the sake of brevity, as r. T. A.) granted a stage carriage permit on the route between narasapur and juvvalapalem to one k. Kesava rao who was selected from among 33 applicants for the reason that " (a) his father was the first bus operator in the district and he has sufficient property to buy a bus and (b) the claims of the others arc inferior. " seven of the disappointed applicants for the permit including one k. Subbaraju applied to the central road traffic board, madras (hereinafter referred to as c. R. T. B.) which passed an order on 31 - 3 - 1951 setting aside the order of the r. T. A. Granting the permit to k. Kesavarao and directing the permit to be given to k. Subbaraju. The reason given by the c. R. T. B. For its order was as follows :
" in our opinion, appellants like no. 5 (k. Subbaraju) and no. 1 (venkatasomaraju) who own one and two buses respectively should have been given preference on the ground that they are existing operators who would be able to run their vehicles more efficiently with the addition of some more vehicles. As between the ist appellant and the 5th appellant, we prefer the 5th appellant on the ground of previous record ; no. 1 (appellant) seems to have been caught overloading his bus on 18 - 19 - 1949."
(2) The order of the central road traffic board was reversed by the government by its order g. O. No. 2170 dated 30 - 5 - 1951 under which the permit was directed to be granted to k. Kesavarao. In the course of its order, the government observed :
" the government are convinced that it is not desirable in the public interests to grant to sri k. Subbaraju the permit in question. The order of the c. R, t. B. , is accordingly set aside."
In writ petition no. 436 of 1951, subba rao j. Quashed this order of the government on the ground that it did not appear from the order how public interest would suffer if the permit was not given to kesavarao. Kesavarao preferred l. P. A. No. 177 of 1951 against the order of subba rao j. And the appellate court held that though the order of the government was rightly quashed by subba rao j. It would still have jur diction to dispose of afresh the revision petition preferred by kesava rao under sec. 64 - a of the act. On 22 - 1 - 1952 the government passed a second order g. O. No. 230, home, dated 22 - 1 - 1952, reaffirming its original decision granting the permit to k. Kesavarao. This second order of the government gave the following reasons:
" the motor vehicles act and rules do not prohibit the grant of permits to new entrants. The c. R. T. B. 's order does not indicate how or why sri kesavarao would not be able to run the service as efficiently as the respondent sri subba raju. On the other hand, the regional transport authority which is the local authority was satisfied that sri kesavarao has sufficient means to run the service. While it is true that one or two bus owners who have satisfactory records should be enabled to become in due course fleet owners of three buses to have an economic unit, on that ground alone the claims of new entrants could not be set aside altogether. The government therefore set aside the order of the g. R. T. B. , as it is not proper in the circumstances of the case and uphold the order of the r. T. A. Granting a permit to sri k. Kesavarao."
(3) This second order of the government was again quashed by balakrishna ayyar j. In writ petition no. 273 of 1952 on the following grounds: (1) the power conferred on government by sec. 64 - a of the act was not a plenary power but a corrective power to be exercised in a judicial manner and for proper reasons. (2) the order of the c. R. T. B. , was based on a principle, the soundness of which was accepted by the government in its order. (3) the order of the government did not state in what respect the order of the c. R. T. B. Was illegal, irregular or improper. We may state that this is our own summary of the reasoning of the learned judge.
(4) The questions that were raised before us at the hearing of this appeal related to the powers of the government under sec. 64 - a of the act and our own powers of interference under art. 226 of the constitution with the orders of government passed under sec. 64 - a. We may state at the outset it was not contended before us that sec. S4 - a was ultra vires art. 19 (1) (g) or any other article of chapter iii of the constitution. It must be conceded that in the interests of public safety and convenience as well as for the proper maintenance of highways which are state property, it is necessary to control and regulate the business of carrying passengers for hire in motor vehicles plying on highways. A limit has to be imposed on the number and capacity of motor transports running along particular routes, and this is achieved by the system of permits or licences, a system which would be valid and proper under article 19 (6) of the constitution. When a number of persons apply for a stage carriage permit, which only one or a few of them can have, the authority empowered to grant the permit must, of necessity, exercise a measure of discretion in the selection and elimination of applicants. The act therefore vests the power of selection in the first instance in the r. T. A. Subject, however, to an appeal to the c, r. T. B. , and the revisional power of the government under sec. 64a, which runs as follows:
" the provincial government may, of its own motion or on application made to it, call for the records of any order passed or proceeding taken under this chapter by any authority or officer subordinate to it, for the purpose of satisfying itself as to the legality, regularity, or propriety of such order or proceeding and after examining such records, may pass such order in reference thereto as it thinks fit."
" legality" and "regularity" are well - understood terms and well - recognised grounds of judicial interference on an appeal or revision. An order is illegal if it is opposed to any enactment or any rule having the force of law. It is irregular if the procedure followed is in violation of the principles of natural justice and fairplay. The term "propriety" is, however, of wide import and there might be honest differences of opinion about the "propriety" of an order even though it is in conformity with law and within the powers of the authority making the order. This very case furnishes an illustration. The view of the g. R. T. B. Was that persons who run one or two buses and who have satisfactory records should be enabled to become in due course fleet owners of three or five buses to enable them to have an efficient and economic unit. It may be that a person who runs one or two buses would have acquired some experience and if he is allotted one or two more buses, he would be able to run the service efficiently by having a workshop for effecting repairs and by being in a position to substitute buses in case there is a breakdown of the stage carriage on the way. From the point of view of effective service to the public, which alone is the criterion in matters of this kind, a fleet owner may be preferable to stray operators owning a single bus. On the other hand, the view of the r. T. A. And the government was that the above rule would operate as a hardship on new entrants and would tend to create a monopoly which might not be in the interests of the public. It is also possible that new entrants and single bus owners might devote greater attention to the service than fleet owners. This difference in the point of view or the angle of approach is common to the present as well as other controversies. In such matters, it is for the state to decide which among the competing principles would best serve the interests of the public. If, after due consideration, the government has taken a decision on this matter, it is not for us to investigate the relative merits or soundness of one point of view as against the other. As observed by frankfurter j. In railroad commission v. Rowen and nichols oil com. "
" a controversy like this always calls for a fresh reminder that the courts must not substitute their notions of expediency and fairness for those which have guided the agencies to whom the formulation and execution of the policy have been entrusted."
If the government in coming to its conclusion in a revision under section 64 - a of the act had taken into account facts or circumstances irrelevant for a consideration of the question before it or had been influenced by extraneous considerations in reaching its decision or if the order of the government was mala fide or biased in any manner, it would be the duty of this court to quash the order of the government. So long as the government exercises its power under section 64 - a bonafide and for the purpose for which the power has been conferred, we cannot substitute our own notions for the policies or opinions on which the government acted and quash the order of the government as being in excess of its powers. It cannot be said in the present case that the order of the government is based on considerations not germane to a decision of the question brought up before it or extraneous or irrelevant thereto. Nor could it be said that the government has used its powers so as to enable it to select recipients of governmental favour in the field of road transport. On the face of the order it appears that the government had examined the proceedings of the subordinate transport authorities and found that the order of the c. R. T. B. , was improper and that of the r. T. A, should be upheld. The government has given some reasons for its conclusion that the order of the c. R. T. B. , was not proper. It is really a question of balancing two possible views one of which appealed to the c. R. T. B. , and the other to the government. In these circumstances, we consider that it is not proper for us to substitute our own judgment for the judgment of the tribunal appointed by the legislature especially in a case where there is no right of appeal to this court and where interference is sought under art. 226 of the constitution.
(5) It was brought to our notice that the transport authorities have not followed a uniform principle in selecting persons to whom stage carriage permits should be granted. It is no doubt open to the state to alter the rules of selection from time to time if as a result of experience, it discovers that they require alteration in the interests of the public. It is, however, not proper for the government to apply two different and opposing principles at the same time, one to one applicant and the other to another, without assigning proper and convincing reasons for such differentiation. We therefore, hold that it is not for us to say whether the reasons given by the government are adequate or compelling so long as those reasons were not improper or irrelevant reasons.
(6) It was argued on behalf of kesavarao that he had the benefit of the permit granted to him by the r. T. A. , for over 4 years and that he should not now be deprived of that benefit. The benefit accrued to kesavarao by reason of successive orders obtained by him for stay of the operation of the order of the c. R. T. B. If we were quashing the order of the government, we would hold that the benefit obtained by kesavarao as a result of the orders staying the operation of the order of the c. R. T. B. , was not a benefit justly or properly obtained by him, and that that circumstance would be no reason for confirming him in the enjoyment of that benefit. It follows that the appeal should be allowed, the order of balakrishna iyyar j. Should be set aside and the writ petition no. 273 of 1952 dismissed. In view of the doubts honestly entertained by the parties with reference to the policy of the government in granting stage carriage permits, we direct that there should be no order as to costs either before balakrishna ayyar j. Or before us. T. A. B. Appeal allowed.
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