Natesan Transport (Pte.) Ltd., Tiruchi Dt. v. Tanjore Motor Traders (Pte.) Ltd. Tanjore And Another

Srinivasan, J.:— In C.A No. 19 of 1964 since reported in B. Rajagopala Naidu v. State Transport Appellate Tribunal, Madras, AIR 1964 SC 1573, the Supreme Court held that G.O 1298, issued by the Government of Madras in 1956 in exercise of the power conferred by section 43-A of the Motor Vehicles Act, is outside the purview of that section in so far as the directions contained in that Government order purport to impose a method for the determination of questions relevant to the grant of stage carriage permits. Broadly stated, the view taken was that while S. 43-A could authorize the State Government to issue orders and directions of an administrative nature, the power does not extend to the making of directions which would fetter the exercise of the quasi judicial function of the appropriate Tribunals constituted under the Act. As a result of this decision, several writ petitions challenging the orders of the State Transport Appellate Tribunal were allowed by Veeraswami J. The present writ appeal is from one such decision rendered by that learned Judge in W.P No. 1095 of 1962 (Mad.). The party respondent in that writ petition has appealed therefrom and the short contention that he has raised before us is that even in terms of the judgment of the Supreme Court, it is not every order of the Transport authority and the appellate tribunal that can be quashed, but only those where the impugned order has proceeded on the basis of the Government order referred to. The principal contention is that where the appropriate authority has dealt with the matter untrammelled by the Government order in question, and the grant of the permit has been made on the relevant considerations prescribed by the Motor Vehicles Act, the court should not infer that the order of the transport authorities still stands vitiated by reason of the Government order. It is principally that contention that has been urged in the present appeal. It may, however, be mentioned that since a large number of appeals dealing with the extent to which the orders of the Tribunal below stand affected by the application of the Government Page: 474order have been filed in this court, the question has with the consent of the several counsel been considered generally.

2. We shall, however, set out the facts leading to the present appeal. By his proceedings dated 7-4-1962, the Regional transport Authority granted a stage carriage permit on the route Neyveli to Kumbakonam to the first respondent, the Tanjore Motor Trades Ltd. It is not denied that in so far as that authority's consideration of the question went, that authority proceeded on the casis of the Government order and adopted the marking system prescribed by that Government order. The claims of some of the applicants were rejected solely, be the ground that they were fleet operators, whose cases were not eligible for consideration in respect of a route which was classified by the Government order as a medium route. The consideration of the eligible applicants undoubtedly proceeded on the footing that they possessed just those qualifications which the Government order described as necessary for a person who was to be entrusted with the operation of a;bus service. Against this order, an appeal was taken to the State Transport Appellate Tribunal by Natesan Transports Ltd., the appellant in this writ appeal. The Appellate Tribunal examined the marks awarded to the various applicants by the Regional Transport authority on the marking system laid down in the Government order. In dealing with the claims of the appellant, Natesan Transports Ltd., whose financial stability was apparently attacked, the Appellate Tribunal differed from the Regional Transport Authority and held that there was no material on record to hold that the financial stability of Natesan Transports would suffer if another permit; were to be granted to it. It observed that this appellant had qualifications superior to those of the other competing applicant the Tanjore Motor Trades. It accordingly set aside the-order of the Regional Transport Authority granting the permit to Tanjore Motor Trades and granted it to Messrs Natesan Transports. Even at this stage, it may be mentioned that in so far as the other appellants before the Appellate Tribunal are concerned, who were fleet owners but whose claims had been rejected by the Regional Transport Authority, the Appellate Tribunal agreed that the claims of the fleet owners had to be eliminated and excluded, as there were qualified medium route operators eligible to get this permit. In coming to that conclusion,) the Tribunal purportedly did rely upon the Government order which provided that preference may be given to applicants with one to four buses (not fleet owners) in respect of medium routes.

3. The Tanjore Motor Trades Ltd., which lost the permit originally granted to it by the Regional Transport authority, filed writ petition No. 1095 of 1962. It is not necessary to set out or consider the grounds upon which the order of the Appellate, Tribunal was attacked in this writ petition. During the pendency of this writ petition, and before it came on for final disposal, the Supreme Court delivered its judgment in C.A No. 19 of 1964: (Since reported in AIR 1964 SC 1573). In view of that decision, Veeraswami J. thought that as the tribunal's order as well as the order of the Regional Transport Authority were based on the government order which had been struck down, the order of the Tribunal had to be quashed on that ground alone. As there were several writ petitions pending in this court raising the same question, he generally invited arguments from various counsel appearing for the different petitioners as to what should be done. He pointed out that there may be cases where the authorities could have disposed of the grant of the permit without in any way being influenced by the Government order, but on a consideration of the merits and independent of the Government order. To such cases, the principle of the Supreme Court decision would not apply.

4. Before the learned Judge, two positions were canvassed. One was that only the tribunal's order should be quashed and the tribunal directed to dispose of the appeals before it afresh. The other point of view was that the order of the Regional Transport authority itself should be quashed, the matter being remitted to that authority as the initial authority, subject to the qualification that the enquiry should be confined only to those persons who were the appellants and the respondent before the Tribunal, excluding those who had not chosen to appeal against the decision of that initial authority. It was also suggested before the learned Judge, if the decision of the initial authority should be quashed, it would lead to serious public inconvenience, as no vehicle could operate on the routes, and to meet that situation, the submission was made that though the order of the Regional Transport authority might be quashed, the grant of the permit made by it might stand till it reheard and disposed of the matter afresh. The other point of view was that if the matter was to be reheard by the initial authority, the cases of all the applicants before that authority should be considered, for unsuccessful applicants before that authority might not have preferred appeals on the footing that the validity of the Government Order had been upheld on previous occasions by decisions of this court.

5. Dealing with these opposing contentions, the learned Judge held that it Would be expedient and proper to quash only the order of the Appellate Tribunal leaving it free to dispose of appeals before it afresh, or to remit the manner in its turn to the Regional Transport authority for fresh disposal. He thought, and rightly, if we may say so with respect, that by adopting that course, the permits granted by the Regional Transport authority could be maintained and the vehicles could be operated till finality was reached in the matter, and he proceeded to deal with the writ petition before him on that basis. He found on an examination of the order of the Tribunal that there, was not the slightest doubt that the Government order was very much in the mind of the tribunal when it reached the conclusion that the appellant was to be preferred to the first respondent. It followed that the decision of the Tribunal was influenced in no uncertain measure by the impugned Page: 475Government order. The order of the Tribunal was accordingly quashed.

6. Natesan Transports Ltd. has preferred this appeal. The learned Advocate General, appearing on behalf of the appellant contended initially that the only matter that was raised in the writ petition as invalidating the order of the Appellate Tribunal was the question of the financial stability of the appellant. The respondent did not impugn the order of the Appellate Tribunal on any other grounds. But this matter, however, did not survive for consideration for the judgment in the writ petition proceeded entirely on the basis of the decision of the Supreme Court. The learned Advocate General read out various parts of the order of the Appellate Tribunal and endeavoured to make out that though the Government order might have been referred to, the concluding portion of the Tribunal's judgment would show that the consideration of the appeal before the Tribunal proceeded independently of the Government order. It is this contention that notwithstanding the invalidity of the Government order, the Supreme Court being well aware that this Government order had been in force and had in fact been applied by the appropriate transport authorities for a period of several years, their Lordships did not indicate that all matters dealt with by the Appellate Tribunal should be reopened in the light of that decision. He refers to the following passage from the concluding part of the judgment of the Supreme Court:

“If the Appellate Transport Authority had considered these matters on its own without the compulsive force of the impugned order, it would have been another matter. But the order pronounced by the Appellate Authority clearly and unambiguously indicates that it held that in a sense rightly that it was bound to follow the impugned order, unless, in the exercise of its opinion, it decided to depart from it and was prepared to record its reasons for not adopting that course. It would, we think, be idle to suggest that any transport authority functioning in the State would normally refuse to comply with the order issued by the State Government itself. Therefore, we have no hesitation in holding that the decision of the Appellate Tribunal is based solely on the provisions of the impugned order, and since the said order is invalid, the decision itself may be corrected by the issue of a writ of certiorari”

7. The learned Advocate General emphasises those portions where the Supreme Court has indicated that there could be a decision by the Appellate Authority free from the compulsive force of the Government order and that there could be cases where the decision is not based solely on the provisions of the Government order. In such cases, so it is argued, the order of the Appellate Authority would not stand vitiated on the principle laid down by the judgment of the Supreme Court but would need an independent consideration of whether the order is liable to be quashed for other reasons, such as an error of law apparent on the record. It is claimed that only if the order is based solely on the provisions of the Government Order should it be quashed.

8. It seems to us that while one class of cases may fall within the ambit of the argument expressed above, the argument expressed in such broad terms cannot be possibly accepted. In an earlier decision of the Supreme Court Abdulla Rowther v. S.T.A Tribunal Madras, AIR 1959 SC 896 which was cited by the learned Advocate General in another context to which we shall refer in due course, the very same Government order came to be considered. It was held therein that these Government orders contain merely executive or administrative directions and that their breach, even if patent, would not justify the issue of a writ of certiorari. Their Lordships proceeded to say that the direction though valid and in a sense binding on the subordinate authorities is not a statutory rule and has not the force of law. They further observed that while the executive orders did not confer any legally enforceable rights and imposed no legal obligations on the subordinate authorities for whose guidance they are issued,

“that is not to say that the directions are not valid and should not be followed by the said authorities. The said authorities are undoubtedly expected to follow the said directions and their breach may expose them to disciplinary or other appropriate action”.

9. The validity of the issue of such directions in the exercise of the power under S. 43A of the Act, did not come up for consideration in that case. But their Lordships specifically emphasised the position that the subordinate tribunals could not venture to depart from those orders and that they were bound to obey those orders. It is true that the Government order itself gave liberty to the Tribunals not to apply the marking system contained in the Government order, if, for reasons to be recorded, it was thought that in any particular case the system worked unfairly. Unless, therefore, such reasons existed and the authorities expressed themselves in that manner, it would not be open to them to depart from the principles laid down in the Government order. It should therefore follow that in any case where the Regional Transport authority or the Appellate Tribunal did not expressly exclude the Government order from application in any particular case, whether or not they referred to the Government Order as canalising their decision, the normal inference should necessarily be that the directions of the Government order were in fact obeyed. It is only that class of cases where the appropriate authority expressly excluded the application of Government order that it could be said that there was an independent consideration of the merits of the case before it without its being oppressed by the directions contained in the Government Order. In all other cases, the position must be that it was the compulsive force of the Government order that dictated the particular considerations which resulted in the decision of the appropriate authority.

10. The very same argument was advanced by Mr. Rajah Iyer, who conceded that cases where reliance was wholly based upon the Government order or cases where the Government order was expressly excluded would be clear cases. In the first class of cases, the order of the Page: 476authority would stand vitiated by reason of the Supreme Court's Judgment. In the other cases, the judgment of the Supreme Court would not have any application and the question whether the order or the authority should be quashed would have to be considered on other grounds appropriate to the exercise of the writ jurisdiction of this court. But Mr. Rajah Iyer contended that there is an intermediate class of cases where though the Government order might have been incidentally referred to, the matter was apparently dealt with on independent considerations. According to the learned counsel, such cases would have to be examined on their merits. It is argued that it is not a mere casual reference to the Government order in the order of the appropriate authority that would justify the quashing the order in question. This argument has no doubt a measure in the plausibility about it. But it seems to us that it is impossible to ignore the effect of the Government order on the mind of the quasi judicial authority. When it has been pronounced by the highest court of the land that a transport authority could ignore the terms contained in the Government order only at the risk of inviting disciplinary or other appropriate action against it, it is hardly to be imagined that authority would shed from its mind all matters set down in the Government orders as matters that should necessarily govern the grant of the permit. It is impossible in such circumstances to dissect the judgment of the lower authority in order to discover to what extent the Government order had influenced the decision. That the determination of the lower authorities partakes of a judicial nature is well-recognized and their Lordships in C.A No. 19 of 1964: (since reported in AIR 1964 SC 1573) emphasise that in discharging such quasi judicial function.

“the tribunals constituted under the Act must be left absolutely free to deal with the matter according to their best judgment. It is of the essence of fair and objective administration of law that the judgment of the Judge or the tribunal must be absolutely unfettered by an extraneous guidance by the executive or administrative wing of the State. If the exercise of discretion conferred on a quasi judicial Tribunal is controlled by any such direction, that forges fetters on the exercise of the function of the quasi judicial authority, and the presence of such fetters would make the exercise of such authority completely inconsistent with the well-accepted notion of judicial process”.

11. Where the decision of the authority below mentions the fact or not, thee is, therefore, no doubt that the mere existence of such directions by the Government is sufficient to interfere with the quasi judicial disposal of the matter entrusted to the authority. It is impossible therefore, to accept the contention that his court should embark upon, the wholly futile task of differentiating between such cases.

12. With particular reference to this case, we have no hesitation in holding that the learned Judge was right in the view that he took that the decision of the matter by the Tribunal proceeds only on the basis of the Government order. We are not impressed with the argument of the learned Advocate General that in the concluding portions of its order, the Appellate Tribunal has applied its mind to the question before it independently of the Government order in question. In paragraph 15, the Tribunal summed up the position wherein it set out the various matters upon which the competency of an applicant had to be determined. In this paragraph, no doubt, it did not refer to the Government Order; but that even a consideration of these matters was undoubtedly coloured by the direction contained in that Government order is manifest to us on a perusal of the earlier parts of the judgment. We must, therefore, reject the contention that the order in this particular case does not fall within the mischief of the decision of the Supreme Court.

13. The learned Advocate General next dealt with the question on the basis that the order of the Tribunal was not invalidated by reason of the Supreme Court's judgment. It was contended that in the proceedings before the lower authorities, all the parties relied upon the Government order and the ruler, as conceived in the Government order were applied to all the parties as equally applicable to them. It cannot be said, so argued the learned Advocate General, that the application of the Government Order operated in favour of one party to the prejudice of the another, so that the latter could claim to be aggrieved thereby. It was urged that in several decisions of this court, the validity of the Government order had been upheld. Reference was in this connection made to AIR 1959 SC 896, a passage from which has been extracted earlier in this judgment. If, therefore, all the parties and the Tribunal proceeded on the assumption that the Government Order was valid and could and in fact should be applied in the consideration of the matter, where then could there be an error of law? From another aspect also, the learned Advocate General contended that the quasi judicial Tribunal could not be accused of legal misconduct in having its judicial discretion influenced by the invalid Government order, for here again, the position was that the Tribunals had been told by reason of the judgment of the Supreme Court earlier referred to, that the Tribunals were under a duty to follow the directions contained in the Government order. From either point of view it was urged by the learned Advocate General that in the absence of a manifest error of law or of legal misconduct, this court should not quash the order of the tribunal below. Reference in this context was made to a decision of this court in Vythialingam Pillai v. Lakshminarayanan, 1964-1 Mad LJ 131 : (AIR 1964 Mad 465) where it was pointed out that for any justified interference in writ jurisdiction, the error of law must be apparent on the face of the record and must have directly led to the result or caused it.

14. It seems to us that this is not the proper approach in the present case. The effect of the judgment of the Supreme Court is C.A No. 19 of 1964 (since reported in AIR 1964 SC 1573) is clearly that so long as the decision by the quasi judicial tribunal was brought about by reliance upon the invalid Government order, Page: 477there was no judicial disposal of the matter at all. Their Lordships observe in the civil appeal referred to:

“It is true that in regard to the marking system evolved by the impugned rule, liberty is left to the Tribunal not to adopt the system for reasons to be recorded by it. This liberty in practice may not mean much: but even theoretically if the impugned order is invalid, nothing can prevent the State Government from issuing another order requiring that the marking system prescribed by it shall always be followed. Their Lordships were fully aware of the fact that the existence of a Government Order of this description had necessarily the effect of fettering the independent discretion of the quasi-judicial authority, and if that should be so, the consequence is inevitable that the decision readied by that quasi judicial authority can no longer be regarded as having proceeded independent of the directions contained in this Government order, except perhaps in cases where that authority specifically states for reasons recorded that it was not pursuing the directions contained in the Government order. Undoubtedly then the result is that the decision reached by the authority is no longer a judicial one and looked at in that light, it is not a question whether there exists any error of law manifest-on record or whether there is a legal misconduct in the disposal of the matter. The learned Advocate General does not deny that if the mode of disposal of a judicial matter is unjudicial, this court can interfere in the exercise of its writ jurisdiction.

15. This takes us to the next question as to the proper order that has to be passed not only in the instance case but on all other cases affected by the decision of the Supreme Court. Mr. G. Ramaswami for the appellant pointed out that in C.A No. 19 of 1964 (since reported in AIR 1964 SC 1573), their Lordships had quashed the order of the Regional Transport Authority itself and directed a reconsideration of the matter by the initial authority. Veeraswami J. dealt with the question in the following manner:

1. Where the Tribunal has relied on or was influenced by the Government order in some form or other, its order should be quashed with a direction to the Tribunal to dispose of the relative appeal without reference to the said Government order:

2. On rehearing the appeal, the Tribunal may itself finally decide it, or if it thinks fit, set aside the order of the Regional Transport authority and direct it to dispose of the whole mailer afresh;

3. When it decides to remit the matter for fresh disposal by the Regional Transport authority, the tribunal may direct whether the authority should hear all the original applicants or only some of them; and

4. Whether the Regional Transport authority or the Tribunal was influenced in any way by the said Government order will be a matter for decision in each case in the light of particular facts and circumstances, and this will apply both to the disposal of writ petitions as well as the disposal of appeals by the Tribunal.

16. The fourth category appears to us to fall within the scope of category No. 1 and does not need an independent consideration. It has been urged before us by Mr. K.K Venugopal, learned counsel for the respondent, that it is not open to this court to deal with the order of any authority other than that of the State Transport Appellate Tribunal, that the order of the Regional Transport authority is not before this court for consideration and that this court's jurisdiction can at best extend only to quashing the order of the State Transport Appellate Tribunal. This argument does not convince us, that in proper cases, though in form only the order of the State Transport Appellate Tribunal might be impugned in a writ petition, it is not open to this court to quash the order of the Regional Transport authority from whose decision the appeal was taken to the State Transport Appellate Tribunal. Apart from this question of jurisdiction of this court to interfere with the order of the Regional Transport Authority, we are of the view that if that should be adopted as the uniform course to be followed, that would lead to very serious public inconvenience. In the hundreds of writ appeals that are now pending before this court, if the orders of the Regional Transport authority should be quashed as a result of the decision of the Supreme Court, it would mean that stage carriages of hundreds of routes will stop plying and serious public inconvenience would result. That seems to us to be a very weighty consideration. Unless exceptional circumstances exist, it would be sufficient, in our opinion, if the order of the State Transport Appellate Tribunal alone is quashed and the matter remitted for reconsideration of the appeals before that authority. It would, of course, be open to the State Transport Appellate Tribunal to remit the matter to the Regional Transport authority, but such a course does not appear to us to be necessary except in infrequent cases for the appellate Tribunal has as much jurisdiction to deal with the facts as the Regional Transport authority itself. But if it should remit the matter for fresh disposal, by the Regional Transport authority, the question would next arise whether all the applicants before the Regional Transport authority should receive a fresh consideration of their claims.

17. In the third category of cases set down by the learned Judge, the learned Judge has indicated that it would be open to the Tribunal to direct whether the Regional Transport Authority should hear all the original applications or only some of them. It seems to us that this direction requires some modification. Before the Regional Transport Authority, numerous applicants figure; but only a few of them feel aggrieved with the decision of that authority and carry the matter in appeals before the State Transport Appellate Tribunal. If the State Transport Appellate Tribunal makes a direction with regard to the rehearing of the matter by the Regional Transport Authority, it does not appear to us that it can direct reconsideration of those applicants who had not chosen to file appeals against the decision of the Regional Transport Authority. If the Appellate Tribunal should itself dispose of the matter finally, the disappointed Page: 478applicants who had not appealed, can hardly claim to be entitled to a fresh consideration of their claims. If that should be the position, there is no reason why merely because the Appellate Tribunal remits the matter to the Regional Transport Authority the cases of persons who had not appealed should get revived. In such cases, it is obvious that only those persons who had appealed to the State Transport Appellate Tribunal can rightly claim a fresh consideration of their cases.

18. It was next suggested that if the order of the Appellate Tribunal should be quashed, it is not open for those applicants who had not come to this court with writ petitions to have their cases heard by the Appellate Tribunal, and any fresh consideration of the matter should be restricted only to the writ applicants and the respondents. It is true that decisions of this court ave restricted the rights of parties in such a manner and have discountenanced the claims of persons who had not invoked the writ jurisdiction of this court to have a reconsideration of their claims in the event of the order of the Appellate Tribunal being quashed. It is pointed out by Mr. Mohan Kumaramangalam that though in form the order of the Appellate Tribunal is a combined one, it deals with numerous appeals and only a few of the appellants challenge the ultimate order of the Appellate Tribunal in writ proceedings before this court. He accordingly contends that;on quashing the appellate order, it is only the cases of these persons who were before this court that should receive a fresh examination. We are unable to accept this as the operative principle in dealing with the peculiar situation that has arisen. Here is a case where the disposal of the appeals has been found to have departed from known principles of judicial procedure. That taint affects the entire appellate order and all the appeals that were disposed as a result of a single appellate order. In that view, it would follow that the result of quashing the I appellate order of the Tribunal should revive all the appeals before the appellate Tribunal. The appeal fails and is accordingly dismissed. There will be no order as to costs.

GI/D.R.R

19. Appeal dismissed.