Holding

Section 57(8) does not create a legal fiction; it only mandates that variation applications follow the same procedure as new‑permit applications, and such variations do not amount to a new permit and are not barred by the Scheme.

Summary

The Karnataka State Road Transport Corporation (K.S.R.T. Corp.) appealed against a Karnataka High Court order that dismissed its writ appeal challenging the rejection of an application to increase the number of trips on an inter‑state stage‑carriage permit. The issue centered on whether Section 57(8) of the Motor Vehicles Act, 1939 creates a legal fiction that treats a variation application as a new permit, which would be barred by the Kolar Pocket Scheme under Section 68‑FF. The Supreme Court held that Section 57(8) merely subjects variation applications to the same procedural regime as new‑permit applications and does not create a new permit or a legal fiction. Consequently, increasing trips or vehicles under an existing inter‑state permit exempted by the scheme is not inconsistent with the scheme. The appeal was dismissed and costs awarded to the respondents.

Issues considered

Does Section 57(8) of the Motor Vehicles Act, 1939 create a legal fiction whereby a variation of permit conditions is deemed an application for a new permit?
Is an increase in the number of trips or vehicles under an existing inter‑state stage‑carriage permit, exempted under the Kolar Pocket Scheme, inconsistent with the provisions of the Scheme and Section 68‑FF?

Legislation cited

Karnataka High Court Act, 1961s. 4
Motor Vehicles Act, 1939s. 45, s. 46, s. 47, s. 48, s. 49, s. 50, s. 51, s. 52, s. 53, s. 54, s. 55, s. 56, s. 57(8), s. 58, s. 59, s. 60, s. 68-B, s. 68-C, s. 68-D, s. 68-F, s. 68-FF

Subjects

Motor Vehicles ActSection 57(8)legal fictionpermit variationinter‑state transportKolar Pocket Schemenationalisationstage carriage permittransport lawSupreme Court

Judgment

768

,.,...._

A KARNATAKA STATE ROAD TRANSPORT
CORPORATION, BANGALORE
v.

B. A. JAYARAM AND OTHERS

B January 31, 1984
··~
...
[D. P. MADON AND SABYASACHI MUKHARJI, JJ.J

Motor Vehicles.Act. (Act IV of }939) Section 57(8) Interpretation of-
Whether the section creates any /ega/ fiction-Grant of an applica_lion for varia·
tio1is in conditions of permit, whetlier results in grafit of a new permil-Exisiing
0 inter-state permit holders exempted under the approved scheme of nationalisation
-Grant of request for increase in number of trips or tiumber of vehicles is not
inconsistent with the provisions of the scheme-Motor Vehicles Act S cc/ion 68FF
read with section 57(8) explained.

On February 2, 1966, the Respondent No. 1, B. A, Jayaram had been )
granted by the Regional Transport Authority, Bangalore, a stage carriage per-
D mit .on the inter-state route Cuddapah in the State of Andhra Pradesh to
Bangalore in the Karnataka State, which was duly countersigned by the State
Transport Authority, Andhra Pradesh. On 10.1.1968, the Mysore (Karanataka)
State granted its approval under section 68(0)(2) of the Motor Vehicle Act
1939, to a scp.eme, popularly known as the "Kolar Pocket Scheme", to nationa:
lize passanger transport service between Ba"ngaIOre and various places in the
Kolar District, as also certain routes within the Kolar District, covering 87
E inter-state routes referred to in its appendix. Under clause 4 of· the "Kolar
Pocket Scheme", the existing permit holders oil the inter-state routes, were per-
mitted to continue to oper3.tf: such inter-state routes subject to the conditions
that their permit shall be rendered ineffective for the overlapping portions of
the notified routes.

The route between Bangalore and Royalpad in the State of Karnataka 1
F forme_d part of the route between Bangalore and Cuddapah and was covered '
by the Scheme, with the result that the First Respondent's permit foe the said
portion of the Bangalore Cuddapah route becam_e ineffective and consequent
tha_t tho vehicles operated by him could not either pick up or set down passen-
. gers on the Bangalore-·Royalpad portion of the Bangalore cuddapah route
though they could traverse the said portion. On January 24, 197 3 the first
1

G respondent made an ap~lication to. the Second Resoondent the Karnataka·
State Transport Authority for varying the conditions of the stage carriage per-
1nit granted to him by increasing the number of trips on the Bangalore Cuddap-
pah route from one trip per day to two trips -per- day so as to eliminate one.
overnight halt at either or the two termini. The said application having been
rejected, the First Respondent filed a writ petition No. 3360/74 which was
allowed and a mandamus issued to the Second Respondent to dispose of the
H applicalioo in accordance with law holding that tho said Scheme did not ope-
K.S.R.T. CORPN. v. B.A. 1AYARAM

rate as a bar to increasing the number of trips on an existing inter-state route. A
The Second Respondent accordingly invited representation in connection there-
with. In the meantime, the ~AppelJant the Karnataka State Road Transport
Corporation, filed on November 27, 1974 a writ petition _No. 6399/74 to
recall the order made in the said writ petition No. 3360/74 and to rehear it
after impleading.the Appellant as a respondent thereto. The writ petition was
dismissed holding that the appellant was not a necessary party to writ petition
No. 3360/74. On December 23/24, 1974, the Second Respondent granted to lhe B
first respondent the additional trip applied for by him. Against the order of
dismissal of the W.P. 6399/74, the Appellant filed, an appeal No. WA 949/1979

--
under seclion 4 of the Karnataka High Court Act, 1961 (Mysore Ac.t V of 1962).
On a reference by the Division Bench, the Full Bench by its Judgment delivered
on September 19, 1979, opined that ''If the condition of a permit for operating
a stage carriage over a rOute is allcred by increa~ing the maximum number of
' trips over that route sPecified earlier in the permit such variation of the condi- c
tion of the permit does not amourit to grant of a ner permit."

The Third Respondent who had been granted three stage carriage permits
on three different inter-state routes, namely, Bangalore to Cliddapah; Bangalore
Kalabasti;and Bangalore to VeJJore applied on June 11, 1979 to the Second
Respondent for varyjng the conditions of the said three permits by increasing
the number of vehicles by an additional vehicle on each route and by increasing D
the number of trips from lwo to four on each route, that is for two round trips,
which were granted. The Fourth respondent who did not file any objection to
the applications oft he Third RespondCDt filed three writ petitions being writ peti-
tions Nos. 16247-16249 of 1979 ill the High Court against the said orders of
variations of the Third' Reapondent's permits. The Writ petitions having been
dismissed he preferred three appeals being W.A. Nos. 1285-87/1979 and an
application to implead himself as a respondent in WA No. 949/H filed by the E
appellant. though he had never objected to the grant of the variation to the
First Respondent oarJier. The writ appeals wore disn1issed on 22 2.1980. His
application to implead him$elf as a respondent to the said Writ Appeal No
9~9/74 was granted. The Fourth Respondent thereafte; filed three -speciai
leave petitions Nos. 5141-43of1979 against the order dated 22.2.1980 dismissing
his appeals. He_ bas also filed another special leave petition No. 4771/80
against the Judgment in W, A. No. 949/74 by virtue of his having been aliowed
to be implead ed by the High Court of Karnataka as third responnent thereto F
though it was not all necessary Since in the writ appeal No. 949 of 1974 which
was dismissed on 22.2.1980, the Karnataka High Court granted to the itppellant
a certificate of fitness to appeal to the Supreme Court.

D~smissing tha appeal1 the Court

HELD: 1: J. Section 57(8) ol the Motor-Vehicles Act, 1939 does not G
create a legal fiction and grant of an application for variations in the conditicins
of a perf:nit in respect of matter set out in section 57(8) docs not rasult in the
grant of a new permit. Admittedly the language of sub-section (8) is not one
which is normally used by legislatures in creating a legal fiction for sub.s. (8)
does not state that an· application of the nature referred in that sub-section is to
be deemed to be an application for the grant of a ne"'. permit. [787D-E]

l : 2. Section sr is a procCdural section. Its various sub-sections form H
770 SUPREME COURT REPORTS [1984] 2 S.C.R.

A an integral whole providing for the manner in which an application for varia-
tion of certain conditions of a permit is to be made, the mode of inviting objec-
tions thereto and the diSposal of such aPplications and objections. [787E-FJ

1 : 3. Reading sub-section (8) in the context of sub-sections (3) to (7) and
...
'

in juxtapo.~ition with them, it iS clear that [the legislative intant in enacting
thilt sub-section was tp prescribe the procedure to be followed when an applica·
B tion for variation of the conditions of a permit referred to in that sub-section
is made, this procedure being the same as is laid down in sub-sections (3) to (7)

..-
With respect to an applica~ion for a new stage carriage permit or a new pUb1ic
carrier's permit. It is for the purpose of providing that the· fprocedure to be
fo1lowed in the case of an application made under sub-sections (8) is PtO be the
same as the procedure to be followed in the case of an app1ication for a new
permit that sub -section (8) uses the words "shaH be ·treated as an application
for the grant of !I- new permit.' 1 By the use of these words what sub-section i(8) ' --·
c does is to incorporate in it the provisions. of sub-sections (3) to (9). This is a
very different thing from enacting a legal fiction. [787B-D]

East Eng. Dwelllng Co. Ltd. v. Finsbury Borough c..uncll, [1951] 2 All.
E.R. p. 587, 589 H.L.; quoted with approval.

D State of Bombay v. Pandurang Vlnayak Chaphalkar and Others, [1953]
S.C.R. p. 773, 778-9; M/s. Shivchand Amo/akchand v. Regional Transport
Authority and Anr. [1984] l S.C.R.. 288=A.l.R.. 1984 S.C:. 9; followed.

t : 4. Assuming that the application for variation of the conditions of
a permit referred to in sub-section (8) of section 57 is to be deemed to be by a
fiction of law to be an application for a new permit, the question to be consi-
E dere4 is for what purpose is such an application to be deemed to be an applica-
tion f0r grant of a new permit. Reading sub-sections (3) to (8) of section 57 as
a whole, it is cleai- that the only purpose is to apply to such an application for
variation the procedure prescribed by sub-sections (3} to (7) of section 57 and
not for the purpose of providing 1hat when the application for variatiori is
granted, the permtt so varied would be deemed to be a new permit~ If the per-
mit so varied were to be deemed to be a new permit, the result would be
anomalous. [789A-C] ·
E
Ex-parte Walton, In Re Levy L.R. [1881] 17 Ch. D. 743; 756 CA;
Arthur Hi// v. East and West Dock Co. L.R. [1884] 9 A.C. 455, 456 ; The Bengal
Immunity Co. Ltd. v. The State of Bihar and Others, [1955] 2 S.C.R. 603, 647;
The Commissloiter oj lncome·tax, Bombay City, Bombay v. Amarchand N.
Shroff, [1963] Supp. I S.C.R.. 699, 709; Maharani Mada/asa Devi v. M. Ram-
narayan (P) Ltd. and Others, (1965] 3 S.C.R. 421, 424; Commissioner of lncome-
G tax, Gujarat v. Vadllal La//ubhai, [1973] I S.C.R.. 1058, 1064; referred to.

2, In the case of an existing inter-state permit exempted under the said
Scheme an increase in the number of trips or the number of vehicles allowed to
be operated under such a permit would not be inconsistent with the provisions
of the said Scheme. There is no inconsistency between an increaae in the num-
ber of vehicle$ or trips allowed under such a permit and the provisions of the
said scheme. So far as the portions of the inter-stata route covered by the said
ll ~cheme are concerned, the permits of the existius permit-holders hav 4,) bean
K.S.R.T. CORPN. v. B.A .. JAYARAM (Madon, J.) 771

rendered·· ineffective. Further by the said Scheme as notified by a notification A
dated January 10, 1980, th~ existing permit~holderS are not allowed to pick up
or set down passengers on these portions of the notified routes. Whethe~ one
vehicle or more traverse these portions or whether the same vehicle traverses
such portion more than GDCc cannot in any manner affect the services operated
by the Appellant ori such portions since no passengers are allowed to be picked
up or set down on such portio·ns. A11 that would happen is that these vehicles,
in the- cour~e of their inter·state operation, wo_uld traverse these portions of
B
tl:ie notified routes without in any way operating as stage carriages for Such
portion. [790C- Fl ·

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 891 of
1980.

From the Judgement and Order dated the 22nd February, c
!980 of the Karnataka. High Court in Writ Appeal No. 949 of
1974.

K. Parasaran, Soliciter General, Vineet Kumar, Naresh Kumar
and Miss Deepika Saxina for the appellant.
D
K.K. Venugopal, K.N. Bhat, M. Rangaswamy, MRV.Achar
s. Ravindra Bhatt and Nanjappa Ganapathy for the respondents. '
The Judgment of the Court was ,delivered by •
MADON, J. This Appeal has been filed by the Karnataka E
State Road Transport Corporation pursuant to a certificate granted
by the Karnataka High Court against its Judgment and Order in
Writ Appeal No. 949 of 1974 on the following two questions of
law:-

"I. Whether the conditions of a permit can be varied
so as to increase the number of trips and/or. the F
number of vehicles allowed to be operated under
that permit ?

2. Whether the conditions of a permit held by an
existing operator on au inter-~tate route exempted
under the Kolar Pocket Scheme, can be varied so G
as to allow an increase in the number of vehicles
operating under that permit ?

Before embarking on a discussion of the above questions, it
will be convenient to relate the facts which have given rise to this
Appeal. On February 2, 1966, the First Respondent, B.A. Jayar~m, H
.
772 SUPREME COURT RBPOFTS [1984] 2 s.c.a.

A had been granted by the Regional Transport Authority, Bangalore,
a stage carriage permit on the inter-State route Cuddapah in the
State of Andhra Pradesh to Bangalore in the State of Karnataka for
one trip only and a stage ·carriage permit no. 20/65-66 in respect
of this route was issued to him on March 16, 1966. This permit
was counter-signed by the ·State Transport Authority. Andhra
Pradesh, on March 21, 1967. By Notification No. S.O. 111 dated
January 10, 1968, published in the Mysore Government Gazette
dated January 25, 1968, the Government of Mysore (now Karnataka)
granted its approval under sub-section (2) of section 68-D of the
Motor Vehicles Act, 1939' (IV 1.939) (hereinafter referred to as "the
said Act") to a scheme set out in the Schedule to the said Noti-
c fication. The said Scheme covered 87 intra-State routes in the
State of Karnataka set out in the Appendix to the said Scheme.
The effect of the said Scheme was to nationalize passenger transport
service between Bangalore and various places in the Kolar District
as also certain routes within the Kolar District. For this reason,
the said Scheme was popularly known as the 'Kolar Pocket Scheme'.
The class of service covered by the said Scheme· was "Stage Carri-
D
ages, Mofussil". Clause 4 of the said Scheme inter alia provided
as follows:

"Whether the services are to be operated by the State
• Transport Undertaking to the exclusion, complete or par·
tial, of other persons or otherwise :
E
------------------------·----
The State Transport Undertaking will operate services
on all the routes; to the complete exc\usion of other persons
except that : (a) that existing permit holders on the inter-
F state routes, may continue to operate such inte r·State
routes subject to the conditions that their permit shall be .'"'T
.rendered ineffective for the overlaping portions of the noti-
fied routes ..."

The said Scheme was implemented ·with effect from January
G 1, J 969, by issuing a stage carriage permit to the Appellant under
sub-section (1) of section 68-F of the said Act.

The ·route between Bangalore and Royalpad in the State of
Karnataka formed part of the route between Banglore and Cuddapah
and was covered by the said Scheme. Accordingly, the First Res·
H pondent's permit for the said portion of the Bangalore Cuddapah
•

• . :• K;S.RiT: CORPN.:v. B.A. JAYi.ilAM (Mada~, l.) ',,. 773.
rout~ b'cicaine ine~:~i~[~ith'ihe reslllt,that the v~hicles ·~perated.
by the ,First Respondent coulil' not either 'pick up or ''set down
passengers on the Bangaloie-Royalpad portion of: the ,Bangalore-
Criddapah route though 'they i\:ould traverse the said portion; On
,: January 24, 1973, the First' Resli_ondentlmade an application to the·
Kamataka State Road Transport Authority, the Second Respondent.
· before us, for varymg the conditions of the stage carnage· permit B
granted to .him by inc·reasing the number of trips on the ·Bangalore-
Cuddapali route from bne ,trip per day to· two trips per day :. This . , •
was apparently done .. to eliminate an overnight halt at .. either of
the two termini. The said application was rejected. by the Second
Respondent on April 22, 1974; as. not being maintainable in view . '
ofthe said Scheme, without: publishing it for inviting ,objections c
. thereto:" The First Respoii.dent jhereupon 'ined; a writ 'petition in
. 'i
the.Karnataka High Court, being.,WritPetidon No. 3360 of'i974,
·'against the ,said order. of the,Second Respondent. On September ..
25,'1974, .the said writ petition was, allowed and the court issued a'
writ of mandamus to , the :Second Respondent to •. dispose of ihe, ·
First Respondent's said application in'· accordance with '1aw, 'holding : \, ·D'
that the said Scheme did not operate as i a bar to 'iacreasing the
number of trips on . an e1'isting inter-State route. In , pursuance of
the said order of the 'High Court, the Sec"ond Respondent published
, the .First Respondent's said application inviting representations .jn
.. connection therewith. In the meanwhile the Appellant flied on .
'November 27, 1974, a writ petition in.the Karnataka ·High .Conrt, · .Ei · ··
being Writ Petition No. 6399. of 1974; to recaa the order made in
:J':.- \.
the said Writ Petition No. 3360 of 1974 and to rehear the said •'

writ petition after impleading the Appellant as a respondent thereto.'.
A.learned Single Judge of the said High Court dismissed. the Appel-;·
!ant's said writ, petition 1on .. December ,z, 1974, hold,ing. that the
· Appellant was not a necessary party to the said Writ . Petition No ..
. 3360 of 1974, . On Decemb~r
', ' .~, .... .·23/24, 1974,.{-,.·-
-~.
the Second -
R~spondent
, .. --
granted to the . First Respondent the additional trip applied .for by.,
.. · him." Against the order of th~ le~rned . Single Judge dismissing its
writ petition, the Appell~nt·filed a12 intra:Court appeal under. s'ection
·4 of the Karnataka High .Court Act. 196L (Mysore Act Vof 1962),
being Writ Appeal No.:'949 of 1979. Th~· Division Bench, IVhich ,< G!: !'
)ea rd the said appeal,. referred 'the .following qdestiori to a ·larger ·-,~

'Bench for its opillion : · · ; ' ...
. i· ... f:t' ~J:, ·- :~\ , ,;,,,,
'"c < f(
I '

~ · . '.'.If iii~ .condition of a permitfor/iqpefating a st~ge.: .,_; ,
c_arri~ge:oveft>a'-_ rout~ is arte~e~, by_'1liricreasillg the' in:aiimU.ffi·-:~" •.-' .
number oftrlps 'over th\it 'route,'specified earifor 'in that ;~.
.:fo
. .:·' _,.__:·* -; - ., ,,, '~ ' ·' '-f~1.· '~~~~ .:;:~ "-~-- . ;~· "'' :. .-'.:~~/-~~~.
774 . SUPREME COURT REPORTS (1984] 2 s.c.R.

A pcnnit, does such variation of the condition of the permit
amount to grant of a new permit ?"

By its Judgment delivered on September 19, 1979, the Full
Bench answered the said question as follows :

B "If the condition of a permit for op~rating a stage
carriage over a route is altered by increasing the maximum
number of trips over that route specified earlier · in the
permit such variation of the condition of the permit does
, not amount to grant of a new permit."

c We will now relate the circumstances in which the Third
Respondent, ·S. Joginder Singh, the soJe. proprietor of Janatha
Travels, Bangalore, and the Fourth Respondent, D.P. Sharma, sole
proprietor of Sharma Transport, Bangalore, made their entry on the
stage of this litigation. The Third Respondent had been granted
three stage carriage permits on three different inter-state routes,
D namely, Bangalore to Cuddapah, Banglore to Kalahasti and
Bangalore to Vellore. After coming into force of the said Scheme,
the Third Respondent made applications on June 11, 1979, to the
second Respondent for verying the conditions of the said three
permits by increasing the number of vehicles by an additional
vehicle on each route and by increasing the number of trips from
E two to four on each route, that is, for two round tr:ps. These
[applications were granted by the Second Respondent. The Fourth
Respondent did not file any objections to the said applications for
variation made by the Third Respondent, nor does it appear that he
bar filed any objection to the said application for variation made
by the First Respondent. The Fourth Respondent, however, filed
F three writ petitions, being W•it Petitions [Nos. 16247 to 16249 of
1979, in the Karnataka High Court against the orders of the Second
Respondent granting variation of the Third Respondent's said
permits. The said writ petitions were dismissed by a learned
Single Judge of the Karnataka High Court and against these orders
of dismiss~( the Fourth Respondent preferred three writ appeals,
G being Writ Appeals Nos. 1285 to 1287 of 1979. He also made an
application to implead himself as a respondent in the said Appeal
No. 949 of 1974 out of which the present appea.l before us arises.
The Fourth Respondend's said application was granted and he was
impleaded as Fourth Respondent to the said Writ Appeal No .. 949
of 1974' The Third Respondent before us was the Third Respon-
H dent in the said Writ Appeal No. 949 of 1974.
K.S.R.T. CORPN. v. B.A. JAYARAM (Madon, J.) 775

By Notification HD 45 TM! 76 dated January 10, 1980, the
said Scheme was modified by substituting clause (d) thereof. The
substituted clause (d) inter alia provided as follows :

"The State Transport· Undertaking will operate the
· services on all routes. to the complete exclusion of other
persons except the following :- :u
x • x X' x x
• (c) The operation; of services by the permit holders who.
have already been granted permits by_the Transport
Authorities on the date of publication of the 'modified e.
scheme on inter-Staie routes which are included in the
inter-State agreement entered into by the Government
• of aµy other State provided that the operator Oil such ''
route shall not be entitled to pick up and set down
passengers in such portion of the Notified routes."
I

By its Judgment and Order dated February 22, 1980, a Divi- D
sion Bench of the Karnataka ·High Court dismissed the said writ
appeals filed b~ the Fourth Respondent . The Division Bench held
1 that in view of the opinion given by the Full Bench in the said Writ
Appeal No. 949 of 1974 it was permissible under sub-section '(8)
of section 57 of the said Act to vary the .conditions of a· stage
carriage permit in.respect. of a route so as to increase the number
of trips on that route allowed under such permit ; that increase in
the number of trips on a route can be. effected either by increasing
the frequency of operation of the existing number of vehicles play-
ing on that route without increasing the existing number of vehicles
operating on that route . or by· increasing the number of ,vehicles
.operating on that route ; and that the Fourth Respondent was not
an existing ·inter-State Permit holder nor had filed any objection
before the Second Respondent to ·the applications for variation ·
made by the Third· Respondent and had, therefore, no locus. to file
the said writ petitions.- ·By its Judgment and Order, made on the
same day, the said Division Bench dismissed the Appellant's ·.said
\. Writ Appeal No. 949· of 1974 with no order as to costs and granted '
to the Appellant a certificate of fitness to appeal to this Court on
.the two questions• which we have set out earlier,; in pursuance of . .~·

which the present Appeal has been filed. The Fourth ·Respondent has
also filed in this Court a petition for special leave to appeal, being.
Special Leave PetitimiNo. 4771 of.1980, agaillst. the said Judgment .
and· Order in: the said Writ Appeal No. 949 of 1974;. He has"alse ff:
1<;·•'
776 SUPREME COURT REPORTS (1984) 2 S.C.ll.

filed three other petitions for special leave to appeal to this Court,
being Special Leave Petitions Nos. 5141 to 5143 of l 9i0
against the common Judgment and Order of the said High Court
in the said Writ Appeals Nos. 1285 to 1287 of 1979. These peti-
tions have been ordered to be listed after the disposal of thL Appeal
. and will accordingly be disposed of by separate orders.

We now turn to the rival contentions rahed before us at the
hearing of this Appeal. On behalf of the Appellant, it was sub-
~··
mitted that under sub-section (8) of section 57 an application to
vary the conditions of a permit in respect of a matter spcc;fied in
that sul>:section "shall be treated as an application for the grant of
a new permit." Sub-section (8), therefore, creates a legal fiction and
a legal fiction must be taken to its logical conclusion. An applica-
tion to vary the conditions of a permit in respect of a matter
apecified in sub-section (8) when granted would, therefore, result in
the grant of a new permit. One of the matters specified in sub-
section (8) is a variation of the conditions of a stage carriage permit
D by increasing the number of trips above the specified maximum. J'
If such variation were permitted, by the result of the operat:on of
the statutory fiction enacted in sub-section (8) of sec! ion 57 the
permit so varied would in law be a new permit. Under section
68-FF of the said Act no permit can be granted except in accordance
with the provisions of a scheme. The said Scheme prohib:ts of a
E new permit and, therefore; to vary the conditions of a stage carriage
permit by increasing the number of trips or the number of vehicles
would be tantamount to granting a new permit which would be
contrary to the said Scheme and thus not p~rmissible under section
68-FF. According to the Appellant, tbe Judgment of the learned
Single Judge in the said Writ Petition No. 3360 of 1974 filed by the
F. First Respondent allowing the said Writ Petition No. 3360 of 1974
and setting aside the order of the Second Respondent rejecting as not
maintainable the First Respondent's said application for varying
the conditions of his inter-State carriage permit by increasing the
number of trips by one and directing the Second Respondent by a
writ of mandamus to dispose of the said application in accordance
with law was erroneous as also the decision of the Full Bench in the
said Civil Appeal No. 949 of 1974, holding that such variation did
not amount to grant of a new permit. It was further submitted that
increasing the number of vehicles on a route resulted in an increase
in the number of trips and an application for varying the conditions
of a permit by increasing the number of vehicles allowed to ply on
the route in respect of which such permit was given was, therefore,
. '

"'···

K.S.R.T. CORPN. '· B.A,' JAYARAM (Madon, J.) ;777
' '
'.equally an .aplication for the 'grant of a new permit a~d ·such an ' /i/
~application could not, therefore, b€ granted in respect ~fa portion ·1
of a route covered by the said Scheme. ,, .V ""
'! .t-

On the other.hand, it was submitted on behalf of !he contest- '
ing Respondents that Sub-section (8) of section si did not create a
\
legal fiction and all that it did was to provide that the procedure lB
for considering an application for varying the ,conditions of a - . "'"~- '-'..
'':

permit in respect of the matters specified in that sub-section was to
be the same as the procedure for considering an application for
granting a new permit. In the alternative, it was submitted that

•
'
if sub-section (8) of section 57 created a legal fiction, it was only
for the purpose of the procedure to he 'followed in processing· -c
an application for a variation in the conditions of a , permit in
respect of a matter' specified in that sub-section and cannot he
extended beyond that purpose so as to create another legal fict10n,
namely, that a permit the conditions of which were so, allowed to
be varied would be deemed to be a new permit. It was further
'submitted that the sa"id Scheme, both prior to and after its modi-
.fication, permitted the existing permit holders on inter-State' routes
to continue to' operate on such routes subject to the condition th'at
their permits be rendered ineffective for the overlapping'portions''of
the notified routes only, with the result' that they could not pick up
and .set down passengers on :such portions only. It was also sub- •
mitted that increasing the number of hips or vehicles on such inier- '·'
.IE '.'
State routes was not in any manner inconsistent with the provisions
of the said Scheme, whether prior to or after its notification.·

On the above rival.contentions, two main questions 'ar'ise ·for
our consideration, namely,
/•·
. '

(I) Whether sub-section (8) of section 57 creates a legal fic-
tion by reason of ·which the grant of an application for
variation in the conditions 'of a permit ,in respect of,a
matter set out in that sub-section 'results in th~ grant of a
new permit? •, •, ·'·"
(2) Whether an increase in the number of trips. or the num: ~G
ber of vehicles above the maximum· specified in an existing'.· , '
inter-State stage carriage permit would be inconsistant
with the provisions of the said Scheme? ·' - ' ·(',
'i f
In order. to determine these questions, it is' necessary to refer ' ''
of
to. the rele~ant provisions of the' said Act;· Chapter IV the said ~H
1't8 . UPRBMB COURT RBPORTS (19S4) 2 S.C.R •

Act,.which consists of sections 42 to 68, provides for control of
transport vehicles. A "transport vehicle" is defined by clause (33)
of section 2 as meaning "a public service vehicle or a goods vehicle".
A "public service vehicle" is defined by clause (25) of section 2 as
meaning "any motor vehicle used or adapted to be used for the
carriage of passengers for hire or reward, and includes a motor cab,
B contract carriage, and stage carriage". The expression "stage
carriage" is ddjned by clause (29) of section 2 as follows :

"(29) "stage carriage" means a motor vehicle carrying
or adapted to carry more· than six persons exclud-
ing the driver which carries passengers for hire
c or reward at separate fares paid by or for indi-
vidual passengers, either for the whole journey
or for stages of the journey."

As the said Scheme and its modification relate only to stage carri-
ages, we are not concerned in this Appeal with contract carriages or
D goods vehicles and it is unnecessary to look at the definitions of
those expressions or the provisions of the said Chapter IV relating
to these ~ypes of vehicles.

Under section 42 no owner of a transport vehicle can use or
_permit the use of the vehicle in any public place (whether or not
E such vehicle is actual!y carrying any passenger or goods) save in
accordance with the conditions of. a permit granted or .counter-
signed by a Regional or State Transport Authority or the Commis-
sion, that is, the Inter-State Transport Commission constituted
under section 63-A, authorizing the use of the vehicle in that
place in the manner in which the vehicle is being used.
Section 43 confers power upon the State Government to con-
trol road transport by issuing directions to the State Transport
Authority in the form of notifications in the Official Gazette .
.Section 44. empowers the State Government by notification in the
Official Gazette to constitute for the State a State Transport Authority
to exercise and discharge the powers and functions specified in sub-
c ~cction (3) of section 44 and in like manner to constitute Regional
Transport Authorities to exercise and discharge throughout speci-
fied areas the powers and functions conferred on· Regional
Transport Authorities by the said Chapter IV. The said Chapter
IV .provides for grant of different permits, namely, stage carriage
permits, contract crrriage permits, private carrier's permits, public
H carrier's pfrmit and temporary permits, as also for applications to
K.S.R.T. CORPN.
~ '
v: B.A. JAYARAM'(Madon,
.. - . J.) 779

.be made in respeCt of these ~classes of permits, the procedure to b~, 'A_,.{i
followed in dealiug with such applications, for cancellation and
suspension' of permits :and other cognate'matters:· Section 45·.sets
outthe general provisions .iwith respect to applications for permits
• irrespective ~f the type of permits applied for and it. prescribes the
auihority to whom an application for· ·a permit i,s to be made ...
Under sub-sectiOn (3) ·of section 45 every applicant for the gran•, of,. B
a new stage carriage permit or public carrier's . permit is re'quired to i ·
deposit, ·by way of security, with his application an amount· in such.·
manner and at such rate not exceeding Rs. 200 per motor vehicle,:
as the State Government may, with reference to each class of vehicle,
• by notification in the Official Gazette, 1 specify. Under sub-section
(4),of section 45 thesecurity so furnished is liable to be forfeited.in,. c
whole or in part by the transport authority if it is satisfied that the
application was made for the purpoS'e' of preventing the issue of a
.temporary permit under section 62. The whole or part of the security
.. deposit as lias not been forfeited ·is to be refunded to . the applicant,
as soon as may be, after: the disposal of his application. Other
sections in the said Chapter IV make special provisions with respect D
to applications for different types of permits. Section 46 deals with
~-
an application for a stage carriage. permit:· Such an application is
to contain· the particulars specified in 'clauses (a) to (f)'of the said
section 46. The particulars required to be specified by clauses (a)
to (c) of the said .section 46 are material for our purpose and it will
be, therefore, convenient to reproduce these clauses These clauses . E'
'pr-0vide as follows : ·

"(a) the route or routes or the area or areas' to which

) the application relates;

~- (b) the number ,of vehicles it is proposed to operate in
'-..-- relation to each route 'or area and the type and
seating capacity of .each such vehicle
. ·... •:' ;

(c) the minimum, and maximum . 11uml)er of daily trips
proposed to be .. provided in• rel;i.tion to each ronte
.G
or area. and the time table of the normal trips.

Explanation-For the purposes "or this section 57, ·
"trip"'means a single journey from,one point to. another,
and every ;return· journey. shall be dccnied · to be .a,,
.' sq)arate·trip." ·~ H
'180 SUPREME COURT RBPO'RTS (1984] 2 s.c.R.

A Section 47 prescribes the matters which a Regional Transport
Authority is to have regard to in considering an application for a
stage carriage permit. It also requires the Regional Transport
Authority to take into consideration any representations made by
persons already providing passenger transport facilities by any
means along or near the route or area or by any association repre-
B senting persons interested in the provision of road transport faci -
litics recognized in this behalf by the State GoV0rnment' or by any
local authority or police authority within whose· jurisdiction ·any
part of the proposed route or area lies. The said section also
providcsfor reservation of certain percentage of stage carriage
permits for the Scheduled Castes, and the Scheduled Tribes and
C persons belonging to economicaily weaker sections of the commu-
nity. Under section 48, subject to the provisions of section 47, a
Regional Transport Authority may, on an applidation made to it
under section 46, grant a stage carriage permit in accordance with
the application or with such modifications as it deemed fit· or refuse
to grant such a permit. Sub-section (3) of section 48 provides for
D conditions which may be attached to a stage carriage permit.
·Amongst the conditions which can be attached are conditions that
the vehicle or vehicles be used only in a specified area or on a
·specified ·route or routes, the minimum and maximum · number of
daily trips to be provided in relation to any route or area generally
or on specified days and occasions· and a condition that within
E municipal limits and such other areas and places as may be pres-
cribed, passengers or goods shall not be taken up or set down except
at specified points. Sections 49 to 51 deal with contract carriage
permits, sections 52 and 53 with private carrier's permits and sec- •
tions 54 to 56 with public carrier's permits. Section 57 is important
since the answer to the first question which we have to determine
F in this Appeal depends upon the true interpretation of sub-section
(8) thereof and in order to understand the scope and effect of that
sub-section, it is necessary to reproduce section 57. The said section
57 provides as follo.ws :

"27. Procedure in applying fot and granting permits-
G (!) An application for a contract carriage permit or a
private carrier's permit may be made at any time.

(2) An application. for a stage· carriage permit or a
· public carrier's permit shall be made not less than six
weeks before the date on which it is desired that the per-
H ·.nit shall take effect, or if the Regional Transport Autho-

l
~ /.

I ~ ~. -~

K.s.R.T. CORP.N. voe:A..'JAYARAM (Madon, J.). . 781'
.. · rity appoints dates for the receipt of such applications; . ' '· A.
on such dates. . •
''
(3) .On receipt of an applicaticin for a stage,.carriage
permit or a public carrier's permit, the Regional Transport
Authority shall ri1ake the application available for inspec-
tion at, the office of the Authority and sho H publish the ,B
application or the substance thereof in the prescribed
manner together 1iiith a notice 'of the date before which·
representations connection ther.ewith may be submitted and
. the date,not b~ing less than thirty ,days from such publi-
cation, on which, and thc,,time ,.and place at whic~,. the
application and any representations received will be consi-
dered.:

Provided that, if the grant of any permit in accordance
with the application or with modifications would have the
effect of increasing the manner of .vehicles operating in the
region, or any area or on any route within the region, . ··1D --~·

under the class of permits to which the application relates,
beyond the limit fixed in that behalf under sub-sect{on (3)
of section 47 or sub-section (Z) of section 55, as the case
may be, tho Regional Transp6rt Authority may summarily
refuse the application without following the procedure laid . .,_\.
-~_;:1

down in this sub-section.
•,E~'.._.,
"{

(4) N~ representation in'· connection with an appli- "
cation referred to in sub-section (3) shall be cosidered by
the Regional Transport Authority unless it is made in writ-
. ing before the appointed date and. unless a copy thereof ' \~.-;

is furnished simultaneously to the applicant by the person . ·,.)::,
. .F
· making such represeutation.
i.-

(5) When any representation such as is rreferred to in .
sub-section (3) is made, the Regional Transport. Autho~ity
shall .dispose of the application at a public hearing, at.
which the applicant and the person making the representa-
tion shall have an opportunity of being heard eith~r.in
person or by a duly authi:lrised representative. '·· · ·· ·

'<6) '"When any represeniation ·has been m~de b/ the
persons or auththorit.ies referred fo in ·section· 50 to.the
· effect that the number of. cori'tract 'carriages for whlch· per-
mits have already ,,been ,ilranted in any~regipn or ·any area ,
...
782 SUPREME COURT REPORTS [1982] 2 S.C.R.

within a region is sufficient for or in excess of the needs
of the region or of such area, whether such representation
is made in connection with a particular application for
the grant of a contract carriage permit or otherwise, the
Regional Transport Authority may take any such steps as
it considers appropriate for the hearing of the rcpresenta-
B 1ion in the presence of any persons likely to be affected
thereby. · '

(7) When a Regional Transport Authority refuses an
application for a permit of any kind, it shall give to the
applicant in writing it.s reasons for the refusal.
c
(8) An application to vary the conditions of any
permit, other than a temporary permh, by the inclusion of
a new route or routes or a new area or, in the case of a
stage carriage permit, by increasing the number of trips
above the specified maximum or by altering the route
'covered by it or in the case of a contract carriage permit·
or a public carrier's permit, by increasing the number of
vihicles covered by the permit, shall be treated as an )
' application for the grant of a new permit.

Provided 1hat it shall not be necessary to treat an
application made by the holder of a stage carriage permit
E
who provides the only service on any route or in any area
to increase the frequency of the service so provided, with-
out any increase in the number of vehicles.

(9) A Regional Transport Authority may,· before·
such date as may be specified by it in this behalf, replace
any stage carriage permit or public carrier's permit or
public carrier's permit granted by it before the said date
by a fresh permit conforming to the provjsions of Section
· 48 or section 51 Qr section 56, as the case may be, and the
fresh permit shall be valid for the same route or routes or
. or the same a~ea for which the replaced permit was valid ;

Provided that no condition other than the condition
which was already attached to the replaced permit or
which could have been attached thereto under the law in
force when that permit was granted shall be attached to the
· fresh permit except with the consent in writing of the
·B holder of the permit.
"' -~, :;'· ~ :;(J-,~~'*~
'!·;,

K.S.R.T. CORPN. ~. B.A:'·JAYARAM (Madon, J.) -783
•
, ((10) Notwithstanding anything contained.· insection 1)1
· 58, a permit issued under. the. provisions of sub-section .
(~)shall be effective withiJJ;t ,renewalfor the remainder of, ··•
the. period during which the replaced permit .would have
been so effective."

We will first conclude our survey of the relevant provisions of
the said Act'before. proceeding to ·ascertain the correct interpreta-
tion to be placed upon subcsecticin (8) of. section 57. .Section '58
1\-· . .• • '' . • • I "· •
provides that a stage carnage .permit or a contract carnage permit;
other than a temporary' permit issued .under section 62, shall be
effective" without renewal for such period, not less than three years
and not more than five years, as the Regional Transport Authority .c
may specify in the permit. A private carrier's permit or a pnbl,ic.
carrier's permit otherthan a temporary permit is to be effective with-
out renewal for a period ofJive years. Under sub-section {2) of
'section 58 an applications for renewal of a permit is to be made
and disposed of as if it were an applicat on· for a permit. Sub-
~ection (2) also prescribes the time-limit within which applications
.])
for renewal are .to be made and it fmther provid.es that other condi-'
tions being equal, an application for renewal shall be granted
preference over lle:.v applications for permits.· Section 59 pres-
cribes the general conditions to .. be attached ., to all permits.·
Section 60 deals with cancellation and suspension of permits. It ,
·.is unnecessary to refer to ,the other 'provisions of the said Chap-.
ter IV. '''

Chapter lV-A of the said Act provides for nationalization of
·road transport service. 'Under section 68-B the· provisions' of
"Chapter IVcA and the rules and ·orders made' thereunder are to have . , . ·
.r effect notwithstanding anything inconsistent therewith' contained in ·F
) . Chapter IV of the said Act or any other. law for the time being in
-~
,' .'force or in any instrument having effect by virtue of any such law. '
Section 68:C deals with the preparation ef a scheme by a State
, Transport Undertaking for the purpose of providing an efficient,
,,adequate, economical ·and property, co-ordinated road transport_
service. Such a scheme is to be published in. the Official Gazette " ;G
and also in such other manner as the State Governmentmay direet.
•"'-·'
iSection 68-D, provides for filing of objections to a proposed. scheme.'
Under. Sub-section (2) of section 68-o,' after consid.ering the objec-' .,
tions whfoh may have been made'to a p~oposed scheme and after
giving an opportunity to the objector or his rep~esentatives and the ..
frepresentatives.ofthe State Transport Undertaking. to be heard in' 'He
1· ,'

,.",
784. SUPREME COURT REPORTS [1984] 2 s.c.R.

A the' matter, the State Government may approve or modify the
scheme. The scheme as approved or modified is to be published in ...
the Official Gazette and it is thereupon to become final and is to
be called :the approved scheme and the area or route to which it
relates is to be called the notified area or notified route. Section
68-F provides for cancellation or modification of approved schemes,
B Section 68·F provides for issue ofa stage carriage permit or a public
carrier's permit or a contract carriage permi_t in respect of a noti-
fied area or notified routes to the State Transport Undertaking.

--
Section 68-FF provides as follows :

"68-'-FF-Restriction on_ grant of permits in respect of
c a notified area or notified route.-Where a scheme has been ' ,.
published under sub-section (3) of section 68-D 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." '
D
There is a proviso to the said section 68-FF with which we are not
Con6erned.
>
We now turn to a consideration of the scope and effect of
sub-section (8) of section 57. That sub-section does not apply io
E applications to vary any of the conditions of a permit but applies
only to applications to vary certain conditions of a permit. These
applications are :

(1) an application to vary the conditions of any permit,
other than a temporary permit, by the inclusion of a new
F route or routes or. a new area ;

(2) an !application to vary · the conditions of ra stage
carriage permit by increasing the number of trips above the
specified maximum ;

(3) an application to ivary the conditions of a stage
carriage permit by altering the route covered by it ;

(4) an application to vary the conditions of a contract
carriage permit by increasing the number of vehicles cover·
ed by the permit ; and

.ff (5) an application to vary the conditions of a public carrier's
'" '1,''':~~$t ,.

K.S.R.T. CORPN •.. v. B.A. JAYARAM (Madon, J.) 785
·t/
'
permit by increasing the number of vehicles· co"'.ered by A
the permit. ' ' .-~" \ __,

In aJI. ,these ftve,cases.'.~ub,se~tlon (8) - provides that the apph- · '.~·
·-
~-· . - ' r "'
cation "shall be treated as an application for the' grant of a new
permit"-:· As. seen above, under .section 68-FF when a scheme
has been approved and published under• sub-section (3) of section . B
68-D in respect· of any notified area or notified route, the State
Transport Authority or the Regional· Transport Authority, as the
case may be, is prohibited from granting any permit except in'
accordance with.the provisions of that ·' scheme.
\
The said. Scheme
confers a right upon the Appellant to operate the services on all,
.routes mentioned in .the
.. .
appendix to the .said Scheme ., to the com- . '

plete exclusion of all other persons except existing permit holders .
on inter-State routes with the condition that the permits of such
existing permit .holders were to' be rendered ineffective for the over-
. lapping portions of the notified routes ·and they would not be
·,·..
entitled to pick up or set down passengers on such 'portions of the
notified routes. If the effect or'~ub-'sectiori (8) of section 57 were
as eontended for by the Appellant,· that is, if the said sub•'secticin (8)
were to create a legal fiction by which an application for variation .
of the conditions ofa permit of the nature referred to in that sub- . ·
section is to be deemed to be an application for the grant of a riew ·
permit and such variation when granted would result in th~ ''gl'ant ,

- of a new permit, then clearly by reason of the prohibition con-
.tained in section 68-FF, the granting of snch application would be'
. inconsistent with the provisions of the said Scheme and would not
be· permissible in law. Considerable emphasis were placed, on.
behalf of the. Appellant on the ~ords "shall be. tre~ted as' an appli-
.catiori for the grant of a permit occurring in the said sub-section (8) ·, '
: and on the basis .of this phraseology, it was submitted that an appli- ·· ·
cation' for variation .of a condition of a perniit referred to in sub-
section (8) of section 57 was by a fiction of; .law pnt on 'the sam~
footing as an application for t.he grant .of a new.· permit and. it,·
therefore, followed as a corollary that such an application if granted.,
. would result in the grant of a new permit. ·
I . , ~
G·,· .,
-~ ;'
In a passage which has become it classic Lord Asquith in the
House of Lords in the case of East E'nd.Dwe/lings Co.Lid. v Fins-
bury Borough Gouncil(') said : , "'

(I) J19Sl] 2All. B.R. 587, S99 H.L. ' "' ;~f'~:: ~-~· '•.
,. . , ..Ii
786 SUPREME COURT REPORTS [1984] 2 S,C.R.

A "If you are bidden to treat an imaginary state of affairs
as real, you must surely, unless prohibited from doing so,
also imagine as real the consquence and incidents which, if
the putative state of affairs ha_d in fact existed, must inevi-
tably have flowed from or accompanied it ... The statute says ·
·"that y·ou 1nust imagine a c::rtain state of afl'airs ; it does not
B say that. having done. so, you must cause or permit your

--·-
imagination to boggle when it comes to the inevitable
corollaries of that state of affairs."

This passage has been referred to or quoted with approval in a
· nu:riber of dcc:,iom of this Court. One of the earliest of them was
C the State of Bombay v. Pandul'ang Vinayak Ch-,phalkar and others.(')
.
It is unnecessary to refer to other cases of this Court in which
this passage was. cited and approved. The question, however, is
whether sub-section (8) of section 57 creates a legal fiction. Admit-
tedly, ,the language of that sub-section is not one which is normally
D used by legislature in creating a legal fiction. Sub-section (8) does
not state that an application of the nature refereed to in that sub-
section is to be deemed to be an applicat!oq for the grnnt of a new
permit, which would have been the case were the intention of
Parliament to create a legal fiction. The arguments on behalf of the
Appellant are founded upon a basis which has no relation to the
E purpose underlying sub-section (8). Section 57 is a procedural
section, Its various sub-sections form an integral whole providing
for the manner in which an application for variation of certain
·conditions_ of a permit is to be made, the mode of inviting objections
thereto and the disposal of snch applications and objections. Sub-
section (!) provides when an application for a contract carriage
F_ permit or a private carrier's permit can be made. Sub-section·
(2) provides when an application for a stage carriage permit
or a public carriers permit shonld be made. Thus, these two sub-
sections de01l with the time when applications for grant of certain
classes of permits can be 1nade. Sub-sections (3) to (7) prescribe
the procedure to be followed by the Regional Transport Authority.
G when it receives an application for a stage carriage permit or a
public carrier's permit. Sub-section (8) deals with applications to
vary certain conditions of pJrticular permits. Sub-section (9) confers
power upon the Regional Transport Authority to replace a stage

H. (tl I19S3J s.c.R. ~73, 11s-9,
'' 'K.S.R.T. CORPN: v.'B:A.·'jAYARAM (Madon, J.) ·. . 787

~· ,,g,ifriage. permit, contract carriage per~it or public c~rrier's p~rinit' A\
grahted by it by a fresh permit and sub-section (IO) provides that
such fresh ·permit shall be effective without renewal for the remainder,
of the period during which the· replaced permit would have been so ,.
effective. Sub-section. (8) comes immediately after sub~sections (3)
to (7) and when read in the context of these sub-sectiohs and in
juxtaposition with them, it is clear that the legislative int~mt in
enacting that · sub-section·· \vas to prescribe the procedure ·to be
''--1!

followed when an application for 'variation of. the conditions of a Y·
permit referred to in that sub-section is made, this procedure being
the same as is laid down in sub· sections (3) to (7) with ·respect to an
application. for a new stage carriage permit or a new public carrier's
permit. lt is for the.purpose of providing that the procedure to be
· followed in the case of an applieation made under sub-section (8) is
to be the sanie as the procedure to be follo\ved· in the case of an
application for a new permit that sub-section (8) uses the words
"shall be treated as an application for the grant' cif a' new· permit."
.By the use of these words what sub-section (8) does is to incorpo-
rate in it the provisions of sub-sections (3) to (7). This is· a very
different thing from enacting a legal fiction. We find that in a
recent case, namely, .Civil Appeal No. 3787 of 1983- Mis.Shiv·. ··
chand Amolakchand v. Regional 'Transport Authority an.Ii anothe;('):..!...'
su]):.scction (8) of section 57 has been. interpreted in the same way'
as we have done. In that case too'therc was a modification' made.
in an approved scheme whereby plying of stage· carriages by 'private : E{'
operators upon a portion of the notified route connecting a district
I
headquarter and not more than 20 kms. in length was permitted.
On the said modification being made, the applicants whose permits· . . ,.
for a portion of the notified route, namely, from Shivpuri to Sautan;
wana, had become ineffective on the coming into force· of the ·
approved scheme applied to the Regional Transport Authority for F')
. the extension of the route specified in.their permit so as to include, ,
the route from Shivpuri to Santa;;,,ana. The Regional Transport"· -.--.,.
Autho;ityrejected the said application inter a/ia on the· ground that
·no· extension"· of the wuie couid be granted without following 'the
procedure laid down in' sub-section (3) of section 47 of the said Act. ;,
In· the writ petition filed by the app~llants'before the High Court . G f '
of Madhya'.Pradesh, the High Court took ·the same.view. This Court· ·· · · ·
allowed the app,eal and set aside th~ Judgment and Order of the ;

,' .-.
-.;: ,~_: ·~ '.· i

,. - ~ i .:.t (
(I) [4984] I.S.C R: 288.
788 SUPREME COURT' REPORTS [1984] 2 S.C,R,

A High Court. In that case too, this Court had to consider the. effect
of sub-section (8) of s~etion 57. The Court observed :

"The context in which sub-section (8) occurs and its
juxtaposition with sub-section (3) to (7) in section 58 clear-
ly indicate that what is sought to be made applicable to an
B. , application referred to in sub-section (8) by treating it as an
application for grant of a new permit, is the procedure set
out in sub-sections (3) to (7) of section 58 and nothing more
... An application to vary the conditions of a permit as set
out in sub-section (8) of sect'on 57 is undoubtedly to be
treated as an application for grant of a new permit, bnt that
c. is only for the purpose of applying the procedure set out in
sub-sections (3) to (7) of. the said section. It is not an
application for a new permit and if it is granted, the permit
for the extended route does not become a new permit in the
hands of the applicant. It is the same permit which now,
after the granting of the application, covers the extended
D route."

.Ev ?n if sub-section (8) of section· 57 can be viewed as creating
a legal fiction. the question which would arise would be for what
purpose such legal fiction was created. As was observed by Lord·
James in Ex Parte Walton, In re Levy('> ;
E .. '
"When a statute enacts that something shall be deemed
to have been done, which in fact and in truth was not done,
the Court is entitled and bound to ascertain for what pur-
poses and between what persons the statutory fiction is to
be resorted to."
F
Thi> passage was quoted with approval by the House of Lords
in Arthur Hill v. East and West India Dock Company('). This
principle of statutory interpretation has been accepted by this Court.
In The Bengal Immunity Co. Ltd. v. The State of Bihar and Ors(')
it was held that "a legal fiction is to be limited to the purpose for
G,. which it was created and should not .be extended beyond that legiti-
mate field." This was reiterated in The Commissioner of Income-

(I) L.R. [1981] 17 Ch.D. 741, 756 C.A.
(2) L.R. [198.4] 9 A.C. 4SS, 456.
H (1) [1955] 2 S.C.R. 603, ~46.
"'
K,S.R.T. CORPN. v. B.A. JAYARAM (Madon, J.) 789

tax, Bombay City, Bombay v. Amarchand N. Shroff('), Maharani A
Mandalsa Devi v. M. Ramnarain P. Ltd. and others(') and Commis-
sioner of Income-tax, Gujarat v. Vadilal Lallubhai('). Assuming,
therefore, that an application for variation of the conditions of a
permit referred to in sub-section (8) ofsection 57 is to be deemed
by a fiction of law to be an application for the grant of a ne\v permit
the question to which we must address ourselves is for what purpose B
is such an application for variation deemed to be an application for
grant of a new permit. Rea~ing sub· sections (3) to (8) of section 57
as a whole, it is clear that the only purpose is to apply to such an
application for·variation the procedure prescribed by sub-sections
(3) to (7) of section 57 and not for the purpose of providing that
when the application for variation is granted, the permit so varied c
would be deemed to be a new permit. If a permit so varied were
to be deemed to be a Iiew permit, the result would be anomalous.
As we have seen, under sub-section (3) of section 45 every appli-
cation for the grant of a new stage carriage permit or a public
carrier's permit is to be accompained by a deposit by way of security
of an amount not exceeding Rs. 200 per motor vehicle as the State ·D
Government may, with reference to each class of vehicle, by notifi -
cation in the Official Gazette, specify. The object of providing for
such. a deposit is made clear by sub-section (4) of section 45. The
object is that if the transport authority is satisfied that 8uch appli-
cation was made for the purpose of preventing the issue of a tempo-
rary permit under section 62, then it can forfeit the whole. or part E
of the security deposit. This consideration does not and cannot be
applied to an application for variation of the conditions of a permit
referred to in sub-section (8) of section 57. Further, under sub-
section (!) of section 58 a stage carriage permit or a contract carri-
age permit, other then a temporary permit, is to be effective without
renewal for such period, not less than ·three years and not more than F
five years, as the Regional Transport Authority may specify in the
permit. Under sub-section (2) of section 58, an application for
renewal of a stage carriage permit or a public carrier's permit is to
be made not less than 120 days before the date of its expiry and an
application for renewal of a permit in any other case is to be made
not less than 60 days before the date of its expiry. Under sub- G
section (3) a permit may be renewed on an application made and

(I) (196'1 Supp.·1 S.C.R. 699, 709.
(21 [1965] 3 S.C.R. 421, 424.
(3) [197J] I S.C.R. 1058, 1064, H
790 SUPREME COURT REPORTS [1984] 2 S,C.R.

A dispQsed of as if it were an application for a permit. If a permit
in respect of which a condition referred to in rnb-section (8) of
section 57 is allowed to be varied is to be deemed to be a new
permit, it would automatically follow that such a permit would get
extended for a further period even though no application for its
renewal was made and that in granting such variation, the Regional
B Transport Authority would have to specify for what period, not
less than three years, the permit so varied would be effective. Such
a result could not have been in the contemplation of Parliament and
has not been provided for.

Even though when the condition of a permit is allowed to be
c varied on an application made under sub-section (8) of section .'i7,
the permit so varied is not a new permit, the question still remains
whether: in the case of an existing inter-State permit exempted under
the said Scheme an increase in the number of trips or the number
of vehicles allowed to be operated under such a permit would not
be inconsistent with the provisions of the said Scheme. We fail
D to see any inconsistency between an increase in the number of
vehicles or trips allowed under such a permit and the provi-
sions of the said Scheme. So far as the portions of the inter-
State route covered by the said Schein• are concerned, the permits
of the existing permit-holders have been r~ndered ineffective.
Further, by the said Scheme as modified, the existing permit-holders
E are not allowed to pick up or set down passengers on these portions
of the notified routes. Whether one vehicle or more traverse these
portions or whether the same vehicle traverses such portion more
than once cannot any manner affect the services operated by the
,,.
Appellant on such portions since no passengers are allowed to be
picked up or set down or such pQrtions. All that would happen is
F· that these vehicles, in the course of their inter-State operation would
traverse these portions of the notified routes without in any way
operating as stage carriages for such portions.

It is, therefore, clear that the Second Respondent was in error
in rejecting the, First Respondent's said application for variation
G without following the procedure laid down in sub·sections (3) to (7)
of section 57 merely on the ground that granting such application
would be to grant a new permit and would be inconsistent with the
provisions of the said Scheme. The learned Single Judge was, there-
fore, clearly right in allowing Writ Petition No. 3360 of 1964 filed
by the First Respondent and in issuing a writ of mandamus against
ff the Second Respondent directing him to dispose of the First Res-
K.S.R.T. CORPN. v. B.A. JAYARAM (Madon, J.) 791

pondent's said application according to law. We are further of the A
opinion that the High Court was right in dismissing the said Writ
Appeal No. 949 of 1974 filed by the Appellant.

We would like to observe that it is difficult to understand how
a certificate was granted by the High Court with respect to the first
question contained in it. The question as framed does not bring B
out the actual controversy between the parties. The· controversy
was not whether the conditions of a permit can be varied so as to
increase the number of trips or the number of vehicles allowed to
·be operated under that permit as mentioned by the High Court in
the certificate granted by it. The real'controversy was whether when
the condition o'f a permit is varied so as to increase the number of c
trips or the number of vehicles allowed to be ~perated under that
permit it would amount to the grant of a new permit, the grant of
which would not be in accordance with the provisions of the said
Scheme by reason of the provisions ofsection 68-FF.

For the reasons set out above, this Appeal fails and is dismis-
D
sed. The Appellant will pay to Respondent Nos. I to 3 the costs
of this Appeal. Respondent No. 4 will bear and pay his own costs
of this Appeal.

S.R. Appeal dismissed.

,