Punjab Roadways Moga Tr.Gen.Manager vs Punjab Sahib Bus & Transport Co.& Ors

State Transport Commissioner (in short "the Commissioner")

exercising the powers conferred on the Regional Transport

Authorities of Jalandhar, Patiala and Ferozpur. The order of

the Commissioner was confirmed by the State

Transport Appellate Tribunal (in short "the Tribunal") vide its

order dated 27.4.2005, but interfered with by the High Court in

C.W.P No.8483/2005 and C.W.P. No.11768 of 2005 respectively

with a positive direction to the Commissioner to grant Stage

Carriage Permits to the private operators rejecting the claims

of the State Transport Undertakings (STUs). The legality of the

order of the High Court is under challenge in these two cases

filed by the State of Punjab through the Commissioner and the

Punjab Roadways, Moga, represented by its General Manager.

3. The Secretary, Regional Transport Authority,

Jalandhar, published a notice in the Motor Transport Gazette,

Weekly, Chandigarh in its issue dated 22.2.1999 inviting

applications for the grant of four Stage Carriage Permits for

....4/-

- 4 -

plying two return trips daily in the Pathankot - Faridkot via

Mukkerian, Dasuya, Jalandhar Nakodar, Moga, Talwandi Bhai,

Mudki route a substantial portion of which falls within the

National and State Highways. As per the scheme published on 9th

August, 1990 (in short the `1990 Scheme') modified by the

Punjab Government on 21.10.1997 (in short the `1997 modified

scheme'), the routes on the National as well as State Highways

have to be shared by the STUs and private operators in a

specified ratio.

4. In response to the notice, 112 applications were

received which included the applications from the General

Manager, Punjab Roadways, Moga as well as from the Pepsu Road

Transport Corporation, Faridkot, (STUs).

5. The contents of the applications were published

in the Motor Transport Gazette Weekly, Chandigarh in its issue

dated 22.4.1999 inviting representations/suggestions from the

general public, but there was no response.

6. Out of the 112 applicants, 31 applicants failed

to respond. Out of four permits, it was decided by the

Commissioner that two permits with one return trip daily be

allotted to STUs and other two trips to the private operators.

The General Manager, Punjab Roadways, Moga applied for the

....5/-

- 5 -

grant of two stage carriage permits with one return trip daily

in the notified route and the General Manager, Pepsu Road

Transport Corporation, Faridkot applied for the grant of four

stage carriage permits for plying two return trips daily on

that route.

7. The representatives of the STUs submitted that

due share of mileage be allotted to them. The Commissioner

heard the rest of the applicants who had applied for permits

in the private sector. It was decided that the applications of

existing operators be not considered in the interest of healthy

competition and for maintaining balanced transport service and

also to ensure that monopoly of individuals or a group be not

allowed to develop in the particular route/ area.

8. Applications from the new entrants were

considered by the Commissioner and it was resolved vide order

dated 21.8.2000 to grant one stage carriage permit for plying

one return daily trip each on the notified route to the Punjab

Roadways, Moga and to Pepsu Road Transport Corporation, and one

permit to Gurbhajan Singh and Jagdev Singh jointly and the

other to Metro Transport Registered Sangrur for a period of

five years. The grantees were allowed three months' time to

obtain the permits.

....6/-

- 6 -

9. Aggrieved by the order of the Commissioner,

three appeals -- Appeal Nos.391/2000, 233/2001 and 147/2004

were preferred by the private applicants before the Tribunal

under Section 89 of the Motor Vehicles Act, 1988 (in short the

`Act') challenging the grant of permits to the private

operators and the STUs. Before the Tribunal, it was

represented that STUs though granted the permits, were not

operating the services and, therefore, those permits be granted

to the appellants so that public would not be put to

inconvenience. On their request, reports were called for from

the Regional Transport Authority (in short the `RTA') to

ascertain as to whether the STUs were in fact operating

services. The Secretary, RTA, Jalandhar vide his reports dated

5.4.2005 and 20.4.2005 reported that the permit granted to

Pepsu Transport Corporation was surrendered by it on 1.6.2002

and that the Punjab Roadways had so far not utilized the

permit. The Tribunal considered the comparative merits of

the applicants and found no illegality in the order granting

the permits to the private operators and found no reason to

disturb the grant of permits to STUs. Appeal No.223/2007 was

also rejected on the ground of delay so also on the ground that

applicant cannot be treated as a new entrant since its sister

concern was already granted permit. All the three appeals were

therefore rejected by the Tribunal vide its order dated

27.4.2005.

....7/-

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10. Aggrieved by the said order, Majhi Express

Transport Service Corporation, preferred Writ Petition C.W.P.

No.8483/2005 and Punja Sahib Bus Transport Corporation

preferred Writ Petition C.W.P. No.11768 of 2005 before the

Punjab and Haryana High Court. The Writ Petition C.W.P.

No.8483/2005 came up before a Division Bench of the Punjab and

Haryana High Court on 24.10.2005. It was represented before

the Court that since STUs had failed to operate the two permits

granted to them, those permits be granted to the Writ

Petitioner. The High Court took the view that the Tribunal was

not justified in declining grant of permit to the Writ

Petitioner on the ground of delay and on the ground that its

sister concern had already been granted a permit on 9.11.2004.

Further, the High Court also took the view that due to

non user of the permit by the STUs, public will be the

sufferer. The Court noticed that the permit granted to STUs was

neither utilized nor operated and, hence, it was not open to

the STUs to raise any objection regarding the grant of permit

to the writ petitioner. The High Court, therefore, gave a

positive direction to the Commissioner to grant one stage

carriage permit with half return trip daily to the said writ

petitioner. The permits granted to the other private operators

were not interfered with.

....8/-

- 8 -

11. C.W.P. No.11768/2005 later came up for hearing

before the Division Bench on 1.12.2006 and following the

judgment in Writ Petition no. 8483/2005, the Court ordered that

one stage carriage permit be granted to the writ petitioner

therein also with half return trip daily in the notified route

since the STUs were not operating the permits granted. Permits

granted to the private operators were not interfered with.

12. Aggrieved by the judgments in C.W.P.

No.8483/2005 and 11768/2005, the State of Punjab and the Punjab

Roadways Moga respectively have filed the first two appeals.

Facts in the other appeals.

13. We shall now refer to the facts of the other

connected appeals since some of the issues which arise for

consideration in all those appeals are common. The Punjab

Roadways has preferred all these appeals challenging the common

judgment dated 1.5.2007 of the Punjab and Haryana High Court in

C.W.P. No.11916/2006, CWP No.123/2006, 11332/2006, 12982/2006,

9085/2005 and 5824/2006. The Punjab Roadways was the petitioner

in all those writ petitions challenging the orders passed by

the Tribunal on 28.10.2005, 17.12.2004, 25.8.2005, 3.10.2005

and 1.8.2005 directing grant of permits to private operators in

various notified routes on the ground that Punjab Roadways was

not operating services inspite of grant of permits. In these

appeals, the Punjab Roadways has contended that the Tribunal as

well as the High Court has erred in granting regular permits to

....9/-

- 9 -

the private sector over-looking the claims of STUs in gross

violation of 1990 scheme as modified in the year 1997 and the

provisions of Chapter VI of the Act.

14. The learned counsel for the appellants submitted

that the High Court was not justified in directing the

Commissioner to grant permits to the private operators on the

ground that the STUs had either not utilized the permits,

surrendered the permits or not applied for the permits.

Learned counsel submitted that substantial portions of the

notified route fall under the National/State Highways and as

per the provisions of the 1990 scheme as amended in the year

1997 the mileage of different types of routes in the State of

Punjab has to be shared by the STUs along with private

operators in the prescribed ratio mentioned in the scheme.

Learned counsel submitted that the STUs could not operate

services due to insufficiency of fleets and dearth of staff and

now STUs are in possession of sufficient number of buses and

are in a position to operate services on the notified routes.

Learned counsel submitted that granting permits falling in the

share of STUs to the private operators would be against the

provisions of the Act and the Rules and the provisions of

notified scheme. Learned counsel submitted that even if STUs

had failed to utilize the permits or surrendered the permits,

or had failed to apply for permits on the notified routes those

vacancies could be filled up only by inviting fresh

applications and only temporary permits could be granted in

- 10 -

case if there is a public need. Learned counsel submitted

that the Tribunal and the High Court have committed a grave

error in directing the RTA to grant regular permits to the

private operators on the notified routes upsetting the ratio

fixed by the scheme in gross violation of the proviso to

Section 104 of the Act.

15. Mr. Jawahar Lal Gupta, learned senior counsel

appearing for the contesting respondents submitted that there

is no illegality in the order passed by the High Court in

directing the grant of stage carriage permits to the private

operators since there was failure on the part of STUs in

operating the services in spite of grant of permits. Learned

senior counsel referred to Rule 128(5) of the Punjab Motor

Vehicles Rules, 1989 and submitted that if the grantees fail

to utilise the permit for a period of more than six months, the

permit would lapse and the grantee is debarred from raising

further claims on the grant of permit to the other operators.

Learned senior counsel also submitted that the High Court was

justified in directing the grant of permits to the private

operators under Article 226 of the Constitution of India in

public interest. Learned senior counsel also referred to the

1990 scheme and submitted the route i.e. Pathankot - Faridkot

does not find a place in the annexures to scheme and is not a

notified route. Further, it was also pointed out that the

Pathankot - Faridkot is not a monopoly route of the STUs and no

portion of the route partly overlaps any of the monopoly

- 11 -

routes. It was also pointed out that with reference to the

appeal by Punjab Roadways, Nawanshahar, that the route in

dispute that is Ludhiana to Mahilpur is also not a monopoly

route and is not a part of the list annexed with the 1990

scheme. Various other infirmities have also been pointed out.

16. The first question for our consideration is whether the

Tribunal and the High Court are justified in directing the

Commissioner exercising the powers of RTAs to grant regular

permits to the private operators on the ground that the STUs

had either failed to utilize the permits granted or

surrendered the permits or had not applied for the permits in

the notified routes. In order to examine that question it is

necessary to refer to the 1990 Scheme as amended in the year

1997.

17. The Government of Punjab, in exercise of the

powers conferred under Section 100 of the Act, formulated a

scheme so as to provide an efficient, adequate, economical and

properly co-coordinated road transport service in the State of

Punjab. Notification to that effect was published in Punjab

Government Gazette (Extra Ordinary ) dated 9th August, 1990

stipulating areas and routes to be operated by the STUs to the

complete or partial exclusion of other persons. Clause 5, 6

and 7 of the Scheme are relevant for our purpose and hence

extracted hereunder :-

- 12 -

(5) All future operations of routes on the National Highways falling within the State shall be undertaken by the State Transport Undertakings and the private operators in the ratio of 30:30 which shall be determined on the basis of the passenger road transport needs, as so assessed by the State Transport Commissioner, Punjab, from time to time. The existing operations of the State Transport Undertakings on the National Highways falling within the State are given in Annexures `D' and D-1.

(6) all future operations of routes on the State Highways other than the routes specified in clauses 2, 3 and 4 shall be undertaken by the State Transport Undertakings and private operators in the ratio of 50:50 which shall be determined on the basis of the passenger road transport needs, as so assessed by the State Transport Commissioner, Punjab, from time to time. The existing operation of routes of the State Transport Undertakings on the State Highways are given in Annexure `E' and `E-1'.

(7) All future operations of routes other than the routes specified in clauses 2,3 and 4 on District and other roads shall be undertaken by the State Transport Undertakings and private operators in the ratio of 50:50 on the basis of the passenger road transport roads, as to assessed by the State Transport Commissioner, Punjab, from the time to time." [Page 8 of the Written Notes].

18. Annexure 'A' of the Scheme deals with monopoly

routes operated by the STUs viz., Punjab Roadways and Pepsu

Road Transport Corporation. Annexure 'B' of the Scheme deals

with the list of National Highways. Annexure 'C' of the Scheme

deals with a list of State Highways Roads. Annexure 'D' deals

with the list of routes falling on National Highways (Punjab

Roadways). Annexure `D-1' deals with list of routes falling on

National Highways (Pepsu Road Transport Corporation). Annexure

`E' deals with list of routes falling on State Highways (Punjab

Roadways) and Annexure `E-1' deals with list of routes falling

- 13 -

on State Highways (Pepsu Road Transport Corporation). Future

operations of services on the above mentioned routes have to be

undertaken by the STUs and private operators in the prescribed

ratio mentioned in the Scheme.

19. The 1990 Scheme was modified by the Government

of Punjab in exercise of the powers conferred under Section 102

of the Act and a notification to that effect was published in

the Punjab Government Gazette (Extraordinary) dated 21.10.1997.

Clause 5 of the 1990 Scheme was amended and the ratio 30:30 was

substituted by 75:25 and the ratio 50:50 mentioned in Clauses

6 and 7 was substituted by 50:50 are 40:60 respectively as per

the amended scheme dated 21.10.1997. The Tribunal in its

orders dated 27.04.2005 as well as on 28.10.2005 has stated

that the routes for which applications were preferred by the

STUs for the grant of permits were notified routes under the

Scheme. All the parties had proceeded as if the routes in

question were included in the 1990 Scheme. Before the Tribunal

it was represented by the private operators that though the

Pepsu Transport Corporation was granted a Stage Carriage Permit

on the route notified, the same was surrendered by the

Corporation on 1.6.2002 and the Punjab Roadways though was

granted permit had failed to utilize the permit. Few other

instances were also pointed out where inspite of grant of

permits the STUs had either surrendered the permits or were not

operating the permits on the routes notified. A copy of such

an order dated 19.7.2007 passed by the Secretary RTA,

- 14 -

Jullandhar was produced before this Court and it was submitted

that Punjab Roadways, Pathankot had surrendered 29 return trips

on the route between Amritsar and Pathankot. Further it was

also contended that due to surrendering of large number of

return trips on the route, the public of that area was put to

considerable hardships and inconvenience. Consequently it was

pointed out that there is no illegality in granting regular

permits to the private operators in the vacancies occurred

either due to surrender of permits or not utilizing the permits

or on omission to apply for permits in the notified routes.

20. The Tribunal in Appeal No. 46 of 2000 and

connected matters, decided on 28.10.2005 has taken a view that

where an STU applies for permit and if it is granted and,

thereafter the STUs fail to operate the services inspite of

grant, they will lose their right and share of the permits

unless the route in question is Inter-state or monopoly routes.

Further, it was also held if the permit is not utilized within

the maximum period of six months under Sub-rule 5 of Rule 128

of the Punjab Motor Vehicles Rules, 1989 the RTA could revoke

the sanction of the permit. Further it was also held in such a

case RTA has a right to issue regular permits and not temporary

permits as provided in the proviso to Section 104 of the Act.

- 15 -

21. We find it difficult to accept the reasoning of

the Tribunal. In our view, there is complete misreading of the

provisions of 1990 Scheme as amended and provisions of Chapter

VI of the Act. Provisions of this Chapter confer a monopoly on

the State in respect of transport service to the partial or

complete exclusion of other persons. Section 98 says that

provisions of above mentioned Chapter and the Rules or orders

made thereunder shall have effect notwithstanding, anything

inconsistent contained in Chapter V or in any other law for the

time being in force or any instrument having effect by virtue

of any such law. Section 99 of the Act deals with preparation

and publication of proposal regarding road transport services

of an STU which enables the State Government to formulate a

proposal for the purpose of providing an efficient, adequate,

economical and properly co-coordinated road transport service,

by giving particulars of the nature of the service proposed to

be rendered, the area or route proposed to be covered and other

relevant particulars respecting thereof and the Government is

also empowered to publish such a proposal in the gazette in

public interest. After calling for objections to the proposed

scheme, and examining the same the scheme has to be published

in accordance with the provisions of Section 100 of the Act.

The scheme once published is law and chapter VI has an

overriding effect on Chapter V of the Act and it operates

against everyone unless it is modified or cancelled by the

State Government.

- 16 -

22. The scheme also provides for a ratio with regard

to the grant of permits on the notified routes between STUs and

private operators which is fixed based on the assessment made

by the State Transport Commissioner, Punjab on the basis of the

passenger road transport needs which is legally binding on all.

The provisions of the scheme including the list of routes

mentioned in the various annexures, and the ratio fixed are

statutory in character which cannot be tinkered with by the

RTAs and have overriding effect over the powers of RTAs under

Chapter V of the Act. The power to cancel the Scheme or modify

the Scheme rests with the State Government under Section 102 of

the Act and the RTA and the Tribunal have committed a grave

error in tampering with the Scheme as well as disturbing the

ratio fixed by the Scheme by granting regular permits to the

private sector from the quota earmarked for STUs. Once a

scheme is approved and published, private operators have no

right to claim regular permits to operate their vehicles in the

notified area, route or portion thereof upsetting the ratio

fixed. Since the scheme makes provision for partial exclusion,

the private operators are not completely excluded, they may get

regular permits on the notified route or portion thereof in

accordance with the terms and conditions laid down in the

scheme and within the quota earmarked for them.

- 17 -

23. Therefore, a combined reading of Sections 99,

100 and 104 in the light of Section 2(38) of the Act, makes it

clear that once a scheme is published under Section 100 in

relation to any area or route or portion thereof, whether in

complete or partial exclusion of other persons, no persons

other than STUs may operate on the notified area or route

except as provided in the scheme itself. Reference can be made

to the decisions of this Court in Adarsh Travels Bus Service

and Anr. vs. State of U.P. and Ors., (1985) 4 SCC 557, U.P.

State Road Transport Corporation, Lucknow vs. Anwar Ahmad and

Ors. (1997) 3 SCC 191, Ram Krishna Verma vs State of U.P.

(1992) 2 SCC 620.

24. Section 104 of the Act specifically restricts

the grant of permits in respect of notified area or notified

route. The said provision is extracted hereunder:-

Restriction on grant of permits in respect of a notified area or notified route---Where a scheme has been published under sub-section (3) of section 100 in respect of any notified area or notified route, the State Transport Authority or the Regional Transport Authority, as the case may be, shall not grant any permit except in accordance with the provisions of the scheme:

Provided that where no application for a permit has been made by the State Transport Undertaking in respect of any notified area nor notified route in pursuance of an approved scheme, the State Transport Authority or the Regional Transport Authority, as the case may be, may grant temporary permits to any person in respect of such notified area, or notified route subject to the condition that such permit shall cease to be effective on the issue of a permit to the State transport undertaking in respect of that area or route.

- 18 -

25. The above mentioned provision states where a scheme

has been published under Sub-section 3 of Section 100 in

respect of any notified area or notified route, STA or the RTA

as the case may be shall not grant any permit except in

accordance with the provisions of the Scheme. An exception has

been carved out in the proviso to Section 104 stating, where no

application for permit has been made by the STU in respect of

any notified area or notified route in pursuance of an approved

scheme, the STA or the RTA, as the case may be, may grant

temporary permits to any person in respect of any such notified

area or notified route subject to the condition that such

permit shall cease to be effective on the issue of permit to

the STU in respect of that area or route. In our view same is

the situation in respect of a case where an STU inspite of

grant of permit does not operate the service or surrenders the

permit granted or not utilizing the permit. In such a situation

it should be deemed that no application for permit has been

made by the STU and it is open to the RTA to grant temporary

permit if there is a temporary need. By granting regular

permits to the private operators RTA will be upsetting the

ratio fixed under the scheme which is legally impermissible.

In Anwar Ahmad (supra) this Court had occasion to examine the

scope of the proviso to Section 104 and held as follows:-

- 19 -

"it would, therefore, be seen that where the scheme has been published under sub-section (3) of Section 100 in respect of any notified area or notified route, the State Transport Authority or the Regional Transport Authority, as the case may be, shall not grant any permit except in accordance with the provisions of the scheme. Thus, the appellant- Corporation has the exclusive right or monopoly to ply their stage carriages and obtain the required permit as per the scheme. The proviso gives only a limited breath of life, namely, until the Corporation puts the vehicles on the notified routes as per the scheme, temporary permits may be granted to private operators. Thereby, it would be clear that temporary inconvenience to traveling public is sought to be averted till the permits are taken and vehicles are put on the route by the appellant. Therefore, the temporary permits will have only limited breath of life. Private operators are attempting to wear the mask of inconvenience of traveling public to infiltrate into forbidden notified area, route or portion thereof to sabotage the scheme....."

26. We may point out if the public is put to

hardship or inconvenience due to failure on the part of the

STUs to operate services inspite of grant of permits for a

considerable long time, it is always open to the State

Government to modify the scheme and make appropriate changes in

the ratio fixed on the basis of passenger road transport needs

as assessed by the State Transport Commissioner but such a

power is not conferred on the RTA and till that is done no

private operator can operate his service on any part or portion

of a notified area or notified route upsetting the ratio

prescribed in the scheme except on a temporary permit granted

under the proviso to Section 104 of the Act. Reference can be

- 20 -

made to the judgments of this court in UPSRTC and Another vs.

Sanjidha Banu and Ors. (2005) 10 SCC 280; M. Madan Mohan Rao &

Ors. Vs. UOI & Ors. (2002) 6 SCC 348; U.P. SRTC vs. Omaditya

Verma (2005) 4 SCC 424 for understanding the general purport

of such Schemes and the provisions of the Act.

27. Article 226 of the Constitution of India confers

extra ordinary jurisdiction on the High Court to issue high

prerogative writs for enforcement of fundamental rights or any

other purpose, the powers are of course wide and expansive but

not to be exercised as an appellate Authority re-appreciating

the finding of facts recorded by a Tribunal or an authority

exercising quasi judicial functions. Power is highly

discretionary and supervisory in nature. Grant of stage

carriage permits is primarily a statutory function to be

discharged by the RTA exercising powers under Section 72 of the

Act and not by the High Court exercising the Constitutional

powers under Article 226 or 227 of the Constitution of India.

A writ Court seldom interferes with the orders passed by such

authorities exercising quasi-judicial functions, unless there

is serious procedural illegality or irregularity or they have

acted in excess of their jurisdiction. If there is any dispute

on the proper implementation of the ratio or inclusion or

exclusion of any route or area in the Scheme, the RTA can

always examine the same, if it is moved. The direction given

by the High Court to the RTA to grant regular permits to the

private operators, is therefore, patently illegal.

- 21 -

28. We therefore, allow all these Civil Appeals as

follows:-

(i) The judgments of the High Court in C.W.P. No.8483/2005

and in C.W.P. No.11768 of 2005 are set aside;

(ii) The order dated 21.08.2000, passed by the Commissioner

affirmed by the order dated 27.4.2005 of the State Transport

Appellate Tribunal is upheld;

(iii) The common judgment of the High Court dated 1.5.2007

in C.W.P. No.11916 of 2006 and connected cases and also the

orders dated 28.10.2005, 17.12.2004, 25.8.2005, 3.10.2005 and

1.8.2005 passed by the Commissioner directing grant of regular

permits to the private operators are set aside.

(iv) This judgment would not stand in the way of RTAs in

granting temporary permits if there is temporary need in the

notified routes included in the 1990 scheme as amended in the

year 1997.

..................................J. (R.V. Raveendran)

.................................J. (K.S. Radhakrishnan)

New Delhi;

April 27, 2010.