Holding

The preference granted by Section 58(2) of the 1939 Act creates a civil right that survives the repeal and is saved by Section 6(c) of the General Clauses Act and Section 217(4) of the 1988 Act.

Summary

The appellant, a stage carriage operator, applied for renewal of his permit under Section 58(2) of the Motor Vehicles Act, 1939, and the application was duly notified. Before the renewal could be granted, the Motor Vehicles Act, 1988 came into force, repealing the 1939 Act. The respondent applied for a fresh permit on the same route, but the Regional Transport Authority renewed the appellant's permit and rejected the respondent's application. The High Court held that the appellant's right to renewal was not a vested right and ceased to exist upon the repeal, setting aside the renewal. On appeal, the Supreme Court held that the preference granted by Section 58(2) creates a civil right enforceable in law, which is saved by Section 6(c) of the General Clauses Act and by sub‑section (4) of Section 217 of the 1988 Act. The Court further observed that the new Act does not express an intention to extinguish this right, and the absence of a preference clause in Section 81 does not destroy the claim. Consequently, the appeal was allowed and the High Court order set aside.

Issues considered

Whether an application for renewal of a permit filed under the repealed Motor Vehicles Act, 1939, survives the commencement of the Motor Vehicles Act, 1988.
Whether the preference provision in Section 58(2) of the 1939 Act creates a enforceable right that is saved by the General Clauses Act, 1897.
Whether Section 217(4) of the 1988 Act preserves the appellant's right to have his renewal application considered.

Legislation cited

Companies Act, 1956s. 658
General Clauses Act, 1897s. 6(c)
Motor Vehicles Act, 1939s. 58(2)
Motor Vehicles Act, 1988s. 217(4), s. 81

Subjects

stage carriagepermit renewalrepealing legislationsaving clausepreference rightGeneral Clauses ActMotor Vehicles Actcivil right

Judgment

GURCHARAN SINGH BALDEV SINGH A
v.
Y ASHW ANT SINGH AND ORS;

NOVEMBER 15.1991

[M.H. KANIA AND R.M. SAHAI, JJ.] B
Motor Vehicles Act,1939: Section 58(2)-Proviso.

Stage Carrier-Pennit-Application for renewal of pennit under
1939 Act-Enforcement of Motor Vehicles Act,1988 during pendencY of
application-Effect Of--Held preference created in favour of a pennit C
holder for consideration and grant of pennit is a rigliJ enforceable in
law-By virtue of Section 6(c) of the General Clauses Act, 1897 such a
right is saved by section 217(4) of the 1988 Act-Absence of preference
clause in section 81 of the 1988 Act does not destroy the claim for re-
newal set in motion under the 1939 Act.
D
General Clauses Act, 1897: Section 6(c)
Statute-Repeal-Effect of-Object ofsection 6(c) explained.

The appellant, a Stage Carriage Operator, filed an application
fo,r renewal of his permit under section 58(2) of the Motor Vehicles
J\,d, 1939 and his application was notified. However, before the E
renewal could be granted the Motor Vehicles Act, 1988 came into
force. The respondent had also applied for a fresh permit on the
same route on which the appellant was operating his carriage. The
Regional Transport Authority allowed renewal of the appellant's
permit and rejected the respondent's application. On respondent's
appeal the State Transport Appellate Tribunal held that no appeal F
against renewal was maintainable. The respondent filed a writ peti-
tion and the High Court allowed it by holding that right to seek
renewal of a permit was not a vested right but was merely an .focohate
right which ripened into a right only on being granted; with the
coming into force of 1988 Act, the 1939 Act/was repealed as a result
of which the appellant's application for renewal ceased to exist and G
consequently the Regional Transport Authority was not empowered
to grant a renewal of permit. Against the decision of the High Court
an appeal was filed in this Court.

Allowing the appeal and setting aside the order of the High .
---; Court, this Court, · ~, H
I

305
{
306 SUPREME COURT REPORTS [1991) SUPP. 2 S.C.R.

A HELD: 1. The High Court committed a manifest error of law
in rejecting the appellant's application of renewal on the ground
that the new Act had come into force. [310-H]

1.1 Although section 58(2) of the Motor Vehicles Act, 1939
uses the word 'may' but read with proviso it creates a- preference in
B favour of a permit holder to claim renewal if other conditions were
equal. A holder of a permit thus stands OD a better footing. The
preference created by sub-section (2) of Section 58 for consideration
· of the permit and its grant cannot be said to be a mere iocohate
right, or a right which does not exist in law. It may not be a vested
right or a fundamental right but it certainly is civil right which
c could be enforced in a court of law and any authority acting in
contravention of it can be forced to act in accordance with it. [310
B-C)

1.2 The right accrued to appellant as he had already applied
for renewal and his application had been notified. The legal ma-
D chinery was set in motion by him. He therefore had a right to get
his application for renewal processed and considered in accordance
with 1939 Act. It would be too technical to say that no right bad
acer ued to him under 1939 Act. By virtue of Section 6(c) of the
General Clauses Act the right of the appellant to get his application
considered and decided in accordance with law was saved by sub-
.E section (4) of Section 217 of Motor Vehicles Act, 1988. [310 D-E]

. The Brihan Maharashtra Sugar Syndicate Ltd v. Janardan Ramchandra
Kulkarni & Ors, (1960] 3 S.C.R.85, followed.

Cheran Transport Co. Ltd. v. Kanan Lorry Service & Anr, [1977) ·
2 S.C.R. 389; D.Nataraja Mudaliar v. State Transport Authority,
F Madras [1979) 1S.C.R.522, referred to.

2. The objective of Section 6(c) of the General Clauses Act is
to ensure protection of any right or privilage acquired under the
repealed Act. The only exception to it is legislative intention to the
contrary. That is, the repealing Act may expressly provide or it may
G impliedly provide against· continuance of such right, oblig.ation or
liability. [309-E] "'

3. The new Act is a legislation on the same subject and Sec-
tion 81 of the said Act specifically provides for renewal of permits.
The scheme of renewal having been continued even under new Act.
H mere absence of preference clause in Section 81 of the new Act

'
GURCHARAN SINGH v. YASHWANT SINGH [SAHAI, J.] 3<J7

could Dot be construed as destroying the clahn for. renewal set in A
motion under the old Act. (311 B-C)

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2568 of
1991.

From the Judgment and Order dated 10.5; 1991 of the Madhya Pradesh B
High Court in M.P. No. 2727of1990.

S.K.Mehta, R.D. Sharma, Dhruv Mehta, Arvind Verma and Aman
Vachher for the Appellants.

Rameshwar Nath and Ravinder Nath {for Rajinder Narain & Co.) foe C
the Respondents.

The Judgment of the Court was delivered by
.'-
R.M. SARAI, J. The only legal question that arises for considera-
tion, in this appeal directed against judgment of the Madhya Pradesh High D
Court is, if an application filed by an operator for renewal of his permit
under Section 58 of Motor Vehicles Act, 1939, became extinct and was
rendered non-existent, in eye of law, after coming into force of Motor
Vehicles Act, 1988 or it being a right within meaning of clause (c) of
Section (6) of General Clauses Act survived and continued despite repeal
of 1939 Act. E

The appellant, holder of a pennit, for operating stage carrier on
route Eklera-Narsinghgarh in District Rajgarh, applied for its renewal, as
required, on 18th October, 1988, 120 days before the date of its expiry on
18th February 1989 under Section 58(2) of the 1939 Act. The application
was published on 23rd June, 1989, under Section· 57(3) of the Act. But F
before renewal could be granted 1988 Act came into force on lst July
1989. The respondent who, too, had applied on 30th December 1988 for a
fresh permit on the same route and on the same time schedule, withdrew
his application and filed a fresh application on 18th May, 1990. The
Regional Transport Authority after considering both the applications, al-
lowed renewal of the appellant's permit from 18th February, 1989 to 18th G
February, 1994. The application of respondent was rejected as that could
be considered only if the appellant's existing pennit was cancelled, but
since the appellant was operating on the route regularly and paying taxes
etc. there was no reason to refuse renewal. In an appeal to the State
Transport Appellate Tribunal held that no appeal against renewal was
maintainable against which the respondent filed writ petition which was H ·

'
308 . SUPREME COURT REPORTS (1991) SUPP. 2 S.C.R.

A allowed and it was held that right to seek renewal of pennit under a Motor .
V~hicle Act was not a vested right. It was merely an incohate right with
riJ)ens into a right only on being granted. But before this could happ~n the
1939 Act was repealed. Effect of. it was that tht: application ceased to
exist. Thus there was nothing pending which could empe>wer the Regional
Transport Authority to grant r~newal.
B
Is this correct? Could the application for renewal be dismissed, only,
because. of enforcement of 1988 Act or the right of the appellant to get his
application under the earlier Act decided in accordance with law subsisted
and survived under the new Act as well. The answer shall depend on
construction of Section 217, 'the repealing and saving provision, in 1988
C Act read with Section 6 of the General Clauses Act. Sub-Section (1) of
Section 217 of 1988 Act repeals 1939 Act. But Sub-Section (2) saves
certain notifications, rules, regulations, Acts etc. Clause (b) of sub-section
(2) reads as under:-

217(1) Notwithstanding tht,' repeal by sub-section (1) of the
D re}>ealed~nactments, ---

"(b) any certificate of fitness or registration or licence or per-
mit issued or granted under the repealed enactments shall con-
tiiiue to have effect after such commencement under the same
conditiops and for the same period as if this ~ct had not been
E passed;"
On strength of this it was urged on behalf of the respondents that the only
saving was in respect of unexpired period of a permit. However what is
relevant is sub-section (4) of Section 217 which provides as follows:-
I

"S.217(4) - The mention of particular matter in this Section '.
F shall not be held to prejudice or 2.ffect the general application
of section 6 of the General Clauses Act, 1897 (I 0 of 1897),
with regard to the effect of repeals."
How such a provision should be construed was explained by this Court in
The Brihan Maharashtra Sugar Syndicate Ltd. v. Janardan Ramchandra
G Kulkarni & Others, (1960] 3 .SCR 85. It was held that such a provision
was not by way of abundant caution and any proceedings pending under
repealed Act could be continued in view of Section (6) of General Clauses
Act. Section 658 of Companies Act 1956 which was a repealing and
saving provision which was considered by the Court read as under:-

H "The mention of particular matters in ss. 645 to ·657 or in any
other provision of this Act shall not prejudice the ·general ap- )
J

!
(
GURCHARAN SINGH v. YASHWANT SINGH [SAHAI, J.] 3()1)

plication of s(6) of the Generai Clauses Act, 1897 (X of 1897), A
with respect to the effect ofrepeals."
It should be noticed that phraseology of Section 658 of the Compa-
nies Act and sub-section (4) of Section 217 of the Motor Vehicles Act
1988 is identical. Therefore the reasoning given in the decision squarely
applies for construction of sub-section (4) of Section 217. Consequently it
could not be, successfully, argued that sub-section (2) of Section 217 is B
exhaustive and sub-section (4) should be read by way of abundant caution
and applied only to the field which is already covered by sub-section (2).
Section (6) of the General Clauses Act may now be extracted:

"S.6. - Effect of repeal - Where this Act, or any (Central Act)
or Regulation made after the commencement of this Act, re-
c
peals any enactment hitherto made or hereafter to be made,
then, unless a different intention appears, the repeal shall not:-
(a) ........................................................ .
(b) ........................................................ .
D
(c) affect any right, privilege, obligation or liability acquired,
accrued or incurred under any enactment so repealed;

(d) ·························································
(e) ......................................................... "

The objective of the provision is to ensure protection of any right or
privilege acquired under the repealed Act. The only exception to it is
legislative intention to the contrary. That is, the repealing Act may ex-
pressly provide or it may impliedly provide against continuance of such
right, obligation or liability. The controversy thus narrows down to ·if the
renewal of a permit under 1939 Act was a right. In other words whether F
any right accrued to the appellant under the repealed Act which could be
said to continue unaffected by the repeal of the Act. A permit could be
renewed under Section 58(2) of 1939 Act which reads as under:-

"S.58(2). A permit may be renewed on an application made
and disposed of as if it were an application for a permit: G
Provided that the application for the renewal of a permit
shall be made-
(a) in the case of a stage carriage permit or a public cartjer's
permit, not less than one hundred and twenty days befort) the
date of its expiry, and H
310 SUPREME COURT REPORTS [1991] SUPP. 2 S.C.R.

A (b) in any other case, not less than sixty days before the date
of its expiry.

P,rovided further that, other conditions being equal, an
application for renewal shall be given preference over new
applications for permits."
B
Although the Section uses the word 'may' but read with proviso it
creates a preference in favour of a permit holder to claim renewal if other
conditions were equal. A holder of a permit thus stands on a better foot-
ing. The preference created by sub-section (2) of Section 58 for considera-
tion of the permit and its grant cannot be said to be a mere incohate right,
C or a right which does not exist in law. It may not be a vested right or a
fundamental right but it certainly is civil right which could be enforced in
a court of law and any authority acting in contravention of it can be forced
to act in accordance with it. For instance, if a Regional Transport Author-
ity under the old Act refused renewal even though the person applying for
renewal was in all respects similar to other new applicants then it could be
D corrected either by the tribunal or by way of writ petition under Article
226. Therefore, it is a right which is enforceable in law. This right accrued
to appellant as he had already applied for renewal and his application had
been notified. The legal machinery was se(in motion by him. He there-
fore had a right to get his application for renewal processed and consid-
ered in accordance with 1939 Act. It would be too artificial to say that it •
E was not a right or it had not accrued under 1939 Act. Therefore, in our
opinion, by virtue of'Section 6(c) of the General Clauses Act the right of
the appellant to g~t his application considered and decided in accordance
with law was saved by sub-section (4) of Section 217 of Motor Vehicles
Act.
.L
F In Cheran Transport Co. Ltd. v. Kanan Lony Service & Anr, [ 1977]2
SCR 389 at 390 1t was held that the setting of a legal process in accord-
ance with law for renewal of permit was nself a right. This principle was
laid down by this Court even when a.scheme under Section 68(t) had been
published which debarred grant or renewal of any permit yet the court was
of the opinion that since there was undue delay and the applicant had done
G all that he could do in law he could not be deprived of his right of
consideration of his application for renewal so long the scheme was not
ptJblished. This was again approved in D. Nataraja Mudaliar v. State
Tran~port Authority, Madras, [1979]1 SCR 552. The Court pointed out
that a permit holder had an ordinary right of renewal. It is thus obvious
that the High Court committed a manifest error of law in throwing out the
H application of renewal as the new Act had come into force.

'
I

I ''
I
GURCHARAN SIN9H v. YASHWANT SINGH [SAHAI, J.) 311

Does the new Act indicate llllY intention to the contrary? No express A
provision debarring renewal of permits, applied for, under old Act could
be pointed out. Reliance was placed on absence of preferential provision
under Section 81 of the Act which provides for renewal of permits. It was
urged that there was a definite departure from the old Act therefore any
right under the old Act, could not be continued to under the new Act. The
submission does not appear to be sound. The new Act is a legislation on B
the same subject. Section 81 specifically provides for renewal. It cuts
across the argument of intention to the contrary. Rather it is kept alive by
Sub-section (4) of Section 217. The scheme of renewal having been· con-
tinued even· under new Act mere absence of preference clause in Section
81 of the new Act could not be construed as destroying the claim for
renewal set in motion under the old Act. C

In the result this appeal succeeds and is allowed. The order passed
by the High Court is set aside. Parties shall bear their own costs.

T.N.A. Appeal allowed.