Holding

The proviso to s.63(7) creates a rule of preference, not exclusion, and clause (iv) is unconstitutional as it arbitrarily gives preference to operators of tourist cars approved by the Central Government, violating Art. 14.

Summary

The Karnataka State Transport Authority received 495 applications for 14 All‑India Tourist Vehicle permits. It initially granted 11 permits to the Karnataka State Tourism Development Corporation, one to the Indian Tourism Development Corporation and two to the Karnataka State Road Transport Corporation. The Karnataka State Transport Appellate Tribunal, applying the proviso to s.63(7) of the Motor Vehicles Act, set aside some of these permits and awarded three to private operators, reasoning that the rule of preference gave priority to applicants from the preferred categories and that the number of such applications exceeded the permits available. The High Court upheld the Tribunal’s view. On special leave, the Supreme Court held that the proviso creates a rule of preference, not an exclusion, and that the preference must be applied only when other things are equal; it must not bar consideration of other eligible applicants. The Court further held that clause (iv) of the proviso, which gave preference to operators of tourist cars approved by the Central Government, is arbitrary, violates Art. 14 of the Constitution and is struck down. It also clarified that a "tourist vehicle" is not synonymous with a "tourist car". The orders of the Tribunal and the High Court were set aside and the Tribunal was directed to rehear the appeals on merit.

Issues considered

The nature of the rule in the proviso to s.63(7) of the Motor Vehicles Act – whether it is a rule of preference or exclusion.
Whether clause (iv) of the proviso, giving preference to operators of tourist cars approved by the Central Government, violates Article 14 of the Constitution.
The correct interpretation of the terms "tourist vehicle" and "tourist car" under s.2(29‑A) and s.2(16).
Whether the rule of preference can be applied without the condition that other things be equal.
Whether the statutory tribunal's discretion can be pre‑empted by executive approval under the proviso.

Legislation cited

Constitution of Indias. Article 14
Motor Vehicles Act, 1939s. 2(16), s. 2(29A), s. 63(7)
Motor Vehicles (Amendment) Act, 1978s. 24

Subjects

Motor Vehicles ActPreference clauseArticle 14Tourist vehicle permitsStatutory tribunalAdministrative lawConstitutional lawInterpretation of statutes

Judgment

A

KARNATAKA STATE TOURISM DEVELOPMENT
CORPN. LTD. ETC. ETC.
v.
13 KARNATAKA STATE TRANSPORT APPELLATE
TRIBUNAL & ORS. ETC. ETC.

OCTOBER 1, 1986

[0. CHINNAPPA REDDY AND E.S. VENKATARAMIAH, JJ.]
c Motor Vehicles Act, 1939: ss. 2(29A), 2(16), 63(7)-Cl. (iv) of
provis<>-Rule of 'preference'-lnterpretation and application of-
Clause (iv)-Whether infringes Article 14 of the Constitution-"Tourist
Vehicle" may include a motor car, a motor car excludes an omnibus.

D Words and Phrases: "Tourist Vehic/e"-Meaning of-ss. 2(29A)
and2(16), Motor Vehicles Act, 1939.

Administrative Law:

Statutory Tribunal-Decision of-Cannot be pre-empted by ex-
E ecutive discretion.

Sub-section (7) of s. 63 of the Motor Vehicles Act, 1939 empowers

F
the State Transport Authority, for the purpose of promoting tourism, to
grant permits valid for the whole or any part of India, in respect of such
number of tourist vehicles as the Central Government may in resP!'ct of
that State specify in this behalf. A proviso to that sub-section, intro-
duced by s. 24 of the Amending Act of 1978 laid down that preference
..
t

shall be given to applications for permits from (i) the India Tourism
Development Corporation; (ii) a State Tourism Development Corpora-
tion; (iii) a State Tourist Department, and (iv) operators of tourist cars,
or travel agents, approved in this behalf by the Central Government.
G
Thel'e were as many as 495 applications before the Karnataka
State Transp0rt Authority for the grant of 14 All India Tourist Vehicle
permits. By its proceedings dated April 30, 1984, the Authority granted
11 permits to the Karnataka State Tourism Development Corporation,
one to the Indian Tourism Development Corporation and two to the 'y
H Karnataka State Road Transport Corporation.

1008
KAR. S.D.C. v. KAR. S.T. APP. TRIL. 1009

On appeals being preferred, the Karnataka State Transport
AppellateTribunal, by its order dated February 28, 1985 set aside the
grant of two permits in favour of the Karnataka State Road Transport
Corporation, .three out of eleven permits to the Karuataka State
Tourism Development Corporation, and instead granted three permits
to private operators and increased the nu.;..ber of permits granted to the ll
Indian Tourism Development Corporation from one to three, on the
,.. premises that in view of the rule of preference enunciated by the proviso
to s. 63(7) the applications from the non-preferred category had to be
excluded as the number of applications from the applicants who were
required to be given preference exceeded the number of permits to be
granted. Though some of the appellants before the Tribunal had better.
expertise, experience and resources they did not succeed. c
The High Court rejected the writ petitions on the ground that the
rule of preference contained in the proviso to s. 63(7) contemplated
exclusion of the 'non~preferred' class, if sufficient number of applicants
from the preferred classes were available. I)

In these appeals by special leave, it was contended for the appel-
lants that on a correct interpretation of the proviso to s. 63(7) the
preference became operative only if other things were equal. It was also
). urged that the fourth sub-clause of the proviso offended Art. 14 of the
1 Constitution, and had to be struck down ..
E
Allowing .the appeals, the Court,

HELD: 1.1 The rule contained in the proviso to s. 63(7) of the
Motor Vehicles Act, 1939 is a rule of preference and not a rule of
exclusion, for it does not say that the permit shall be granted to the F
categories of operators specified therein. The claims of eligible appli-
cants must be considered on merits, applying the rule of preference
whenever the claims are approximately equal. The application of an
applicant is not to be altogether excluded from consideration on the sole
ground that another applicant is entitled to preference. Though the
proviso does not expressly refer to other things being equal, the princi- G
ple is very much implicit in it. [JOISB-E]

1.2 What has been said by this Court in Sher Singh. v. Union of
India, [1984] 1 SCR 464, about preference in relation to s. 47(1-H)
applies mutatis mutandis to the preference contemplated by the proviso
to s. 63(7) in the instant case. [1017C] H
1010 SUPREME COURT REPORTS [1986] 3 S.C.R.

A 2.1 Clause (iv) of the proviso to s. 63(7) is arbitrary, unreason-
able and uncoostitutional. Th~re is no indication in it as to the manner
in which the approval of the Central Government is to he sought and
granted and the considerations which are expected to weigh with the
Central Government. It compels a tribunal, created by a statute for the
purpose of considering rival claims and granting permits on merits, to
B give preference to persons securing the approval of the Executive
Government. To the extent the clause goes, it pre-empts the decision of
the designated tribunal hy executive discretion. l 1017E-G I

2.2 The clause provides for a preference not to operators of
tourist vehicles but to operators of tourist cars and travel agents,
c though the permits to be granted are for tourist vehicles. It is difficult to
understand why preference should be given to operators of tourist cars
in the matter of granting permits for tourist vehicles which may well be
omnibuses required to travel long distances. I1018B-C]

2.3 The experience of running a tourist taxi cannot be said to be a
D better qualification than running a tourist hus when the question is of
granting permits for tourist vehicles. I 1018C-D I

3. Having regard to the definitions of 'tourist vehicle' and 'motor
car' contained in s. 2(29-A) and s. 2( 16) respectively of the Act, the
expression 'tourist cars' cannot be said to mean 'tourist vehicles'. While
E ' vehicle may include a motor car, a motor car, hy definition,
a tourist
excludes an omnibus. [1018D-E]

Io the instant case, the State Transport Appellate Tribunal and ;
the High Court ban failed to consider the merits of the claims of the
Karnataka State Road Transport Corporation and the private opera-
F tors who did not get a certificate of approval from the Central Govern-
ment, because of the rule of preference contained in proviso to s. 63(7).
Their orders are, therefore, set aside. The State Transport Appellate
Tribunal is directed to re-hear the appeals and dispose them of in
accordance with law. [1017C-E]
G CIVIL APPELLATE JURISDICTION: Civil Appeal Nos.
3677-3680of 1986 Etc.

From the Judgment and Order dated 10.3.1986 of the Karnataka
High Court in W.P. Nos. 4053 to 4056 of 1985.
H
Shanti Bhushan, Dr. Y.S. Chitale, H.B. Datar, K.R. Nagaraja,
KAR. S.D.C. v. KAR. S.T. APP. TRIL. {REDDY,J.] 1011

R.S. Hegde, R.B. Datar, S.S. Jawali~ B.P. Singh, N.D.B. Raju, R.P., A .
Wadhwani, Aruneshwar Gupta, Swaraj Kaushal, KMM Khan, S.R.
Setia, A.T.M. Sampath and C.S. Vaidyanathan for the appearing
parties.

The Judgment of the Court was delivered by B

CHINNAPPA REDDY, J. Special leave granted in all the cases.
These appeals raise common questions of law and may therefore, be
disposed of by a common judgment. In exercise of its powers under s.
63(7) of the Motor Vehicles Act, the Central Government specified 50
'.~ as the number of 'All India Tourist Vehicle Permits' which may· be
' granted by the Karnataka State Transport Authority. By s. 24 of c
Amending Act 47 of 1978, a proviso to s. 63(7) was introduced. We are
concerned in these appeals with the vires and interpretation of this
proviso. By the time the proviso came into force, 36 permits ·had been
granted by the Karnataka State Transport Authority arid 14 remained
to be granted. There were as many as 495 applications for the grant of D
these 14 permits. By an order dated February 1, 1984, the Supreme
Court directed the Karnataka State Transport Authority to dispose of
these applications. The State Transport Authority, by its proceedings
dated April 30, 1984, granted 11 out of the 14 permits to the Kamataka
State Tourism Development Corporation, one permit to the Indian
Tourism Development Corporation and two permits to the Kamataka E
State Road Transport Corporation. A number of appeals were prefer-
red to the Karnataka State Transport Appellate Tribunal. The
Tribunal by its order dated February 28, 1985 set aside the grant of the
two permits in favour of the Kamataka State Road Transport Cor-
poration, set aside the grant of three out of eleven permits to the
Karnataka State Tourism Development Corporation and instead F
. granted three permits to private. operators and increased the number
of permits granted to the Indian Tourism Development Corporation
from one to three. The Tribunal took the view that having regard to
the rule of preference enunciated by the proviso to s. 63(7), the appli-
cations from the 'non-preferred' category had to be excluded as the
number of applications from the applicants who were. required to be G
given preference exceeded the number of permits to be granted. It was
on that ground that the grant of two permits to the Karnataka State
Road Transport Corporation was set aside, though the Appellate
Triburtal had no doubt regarding the resources and ability of that
corporation to operate the tourist services. It was on that ground
again, it was so stated by the Tribunal, that some of the appellants H
1012 SUPREME COURT REPORTS [1986] 3 S.C.R.

A before the Tribunal had to be denied the grant of permits though
otherwise they would have been entitled to the grant of permits having
regard to their expertise, experience and resources. The Tribunal re-
jected their appeals regretfully. A large number of applicants filed writ
petitions in the High Court. The writ petitions were rejected by the
High Court on the ground that the preference contemplated by the
B
proviso to s. 63(7) contemplated exclusion of the 'non-preferred' class if
sufficient number of applicants from the preferred classes were avail-
able. The decision of this Court in Sher Singh v. Union of India, [1984] I
SCR 464 was distinguished on the ground that in that case the court
interpreted the word 'preference' occurring ins. 47(1-H} in the back-
ground of the provisions of Chapters IV and IV-A of the Act, under j
c the former of which the State Transport Undertaking would have pre-
ference whereas under the latter the State Transport Undettaking
would have a monopoly. The Karnataka State Road Transport Cor-
poration, the Karnataka State Tourism Development Corporation and
some other private operators have filed these app.eals by special leave
of this Court under Art. 136 of the Constitution.
D
Shri Shanti Bhushan, learned counsel for the Karnataka State
Road Transport Corporation, Dr. Chitley, learned counsel for some of
the private operators, Shri Datar, learned counsel for the Karnataka
State Tourism Development Corporation, Shri Sampat and Shri
E Javali, learned counsel for other private operators submitted that the
State Transport Appellate Tribunal and the High Court were wrong in
distinguishing the decision of this court in Sher Singh's case and that
the true position was that on a correct interpretation of the proviso to
sec. 63(7), the preference became operative only if other things were
equal. It was also urged that the fourth sub-clause of the proviso
F offended Art. 14 and had to be struck down. Shri C.S. Vaidyanathan, ' Ill
learned counsel for some of the preferred private operators urged that
the view taken by the High Court and the State Transport Appellate
Tribunal was correct and that the fourth sub-clause of the proviso to s.
63(7) did not offend Art. 14 of the Constitution.

We may now glance at some of the relevant provisions of the
G
Motor Vehicles Act. S. 2(33} defines a "transport vehicle" as meaning
a ·'public service vehicle or a goods vehicle". A "public service vehicle"
is defined ins. 2(25} as "any motor vehicle used or adapted to be used
for the carriage of passengers for hire or reward, and includes a motor
cab, contract carri(lge,-and stage carriage". A "motor car" is defined
H in s. 2(16) as "any motor vehicle other than a transport vehicle,
KAR. S.D.C. v. KAR.S.T. APP. TRIL. [REDDY,J.I 1013

omni-bus, road-roller, tractor, motor cycle or invalid carriage". A A
"contract carriage" is defined as, broadly, a motor vehicle which
carries a passenger or passengers for hire or reward under a contract.
"Tourist vehicle" is defined bys. 2(29-A) as "a contract carriage cons-
tructed or adapted and equipped and maintained in accordance with
such specifications as the State Government may, by notification. in the B
Official Gazette, specify in this behalf". "Stage carriage" is defined by
s. 2(29) as "a motor vehicle carrying or adapted to carry more than six
persons excluding the driver which carries passengers for hire or re-
ward at separate fares paid. by or for individual passengers, either for
the whole journey or for stages of the journey." Chapter IV, sections
42 to 68, deals with "Control of Transport vehicles". Section 42 pres-
cribes permits for the use of a transport vehicle in any public place. c
Sections 46, 47 and 48 deal with_the grant of stage carriage permits.
Section 47(1) prescribes the matters to be taken into consideration in
granting stage carriage permits and the first consideration, naturally, is
"the interest of the public generally." The proviso to s. 47(1) pres-
cribes that, other things being equal, a registered cqoperative society D
and a person possessing a licence for driving transport vehicles shall be
given preference over individual owners in granting stage carriage
permits. Section 47(1-A) enables the State Government to reserve a
certain percentage of stage carriage permits for the Scheduled Castes
and Scheduled Tribes. Section 47(1-C) enables the State Government
to reserve a certain percentage of stage carriage permits to persons
E
beionging to economically weaker sections of the community. Section
47(1-H) prescribes that notwithstanding anything contained in the sec-
tion, an application for stage carriage permit from a State Transport
undertaking for operating in any inter-State route shall be given pre-
ference overall other applications, provided, of course, the authority is
satisfied that the State Transport Undertaking would be able to
F
operate in the inter-State route without detriment to its responsibility
for providing efficient and adequate road transport services in any
notified area or notified route. Sections 49, 50, 51 deal with the grant
oK contract carriage permits. Section 52 and 53 deal with private
carrier's permit and sections 54, 55 and 56 deal with public carrier's
permit. Section 57 deals, generally with the procedure to be followed G
in applying for and gra.nting permits. Section 63(1) stipulates, broadly,
that a permit granted by the Regional Transport Au(hority of any one
region shall not be valid in any other region, unless the permit has been
countersigned .by the Regional Transport Authority of that other
region, and a permit granted in any one State shall not be valid in any
other State unless countersigned by the State Transport Authority of H
1014 SUPREME OOURT REPORTS [1986] 3 S.C.R.

A that other State or by the Regional Transport Authority concerned.
Section 63(7) is the provision with whose interpretation and vires we
are primarily concerned in this case. It is as follows:

"(7) Notwithstanding anything contained in sub-section( 1)
8 but subject to any rules that may be made under this Act,
any State Transport Authority may, for the purpose of
promoting tourism, grant permits valid for the whole or
any part of India, in respect of such number of tourist
vehicles as the Central Government may, in respect of that
State, specify in this behalf, and the provisions of Sections
49, 50, 51, 57, 58, 59, 59-A, 60, 61 and 64 shall, as far as
C may be, apply in relation to such permits:

Provided that preference shall be given to appli-
cations for permits from-

D (i) the India Tourism Development Corporation;

(ii) a State Tourism Development Corporation;

(iii) a State Tourist Department;

·(iv) such· operators of tourist cars, or such travel
E
agents, as may be approved in this behalf by the
Ministry of the Central Government dealing in
tourism."

Section 68 enables the State Government to make rules for the
F purpose of carrying into effect the provisions of Chapter IV. Chapter
. IV-A relates to "special provisions relating to State Transport Under-
takings." Sections 68-C, 68~0 and 68-E provide for the preparation
0

and publication of schemes of road transport service to be provided by
State Transport Undertakings, the procedure to be followed, etc. Sec-
tion 68-F(l) prescribes that where, in pursuance of an approved
scheme, a State Transport Undertaking applies for a stage carriage
G
permit, a contract carriage permit or a public carrier's permit in res-
pect of a notified area or notified route, such permit shall be granted to
the State Transport Undertaking by the State Transport Authority in a
case where the said area or route lies in more than one region and the
Regional Transport Authority in any other case. This is to be so
H notwithstanding anything to the contrary contained in Chapter-IV.
KAR. S.D.C. v. KAR. S.T. APP. TRIL. (REDDY,J.) 1015

· The general scheme of the Act in the matter of grant of permits A
Y for stage carriages and contract carriages appears to be that except in
• the case of a notified route or notified area, where under s. 68-F(l) the
' permit has tP be necessarily granted to the State Transport Under-
taking, in all other cases, the claims of all eligible applicants must be
considered on merits, applying the -rules of preference wherever the. B
claims are approximately equal. Except in the case of a notified route or
notified area,· the application of no applicant may be altogether
~ excluded from consideration on the sole ground that another applicant
is entitled to preference under one or the other provisions of the
statute. The proviso to s. 47(1) for example, provides that other condi-
\ tions being equal, an application for a stage carriage permit from a
, j..._ cooperative society or a person holding a valid licence for driving · C
) ·transport vehicles shall as far as may be, be given· preference 'over ,
applications from individual owners. There is no problem here since
~ the proviso itself says that the rules of preference will apply only if
other conditions are equal. Section 47(1-H) also enunciates a rules of
pre~ence and says. that an application for stage carriage permit froth
State Transport Undertaking for operating in ·any inter-State route
shall be given preference overall other applications. While it is true
thats. 47(1-H) does not expressly.refer to "other things being equal",
it appears to be implicit in the provision that other things are equal.
The rule is a rule of preference and no.t a rule of exclusion. Section
)- 47(1-H) does not say, for example, likes. 68-F(l) that the pennit shall E
be granted to the State Transport Undertaking. That is hows. 47(1-H)
was interpreted in Sher Singh's case. Desai, J., speaking for the court
observed:

"However, when an application for a permit is made under
Chapter IV, the Undertaking has to compete with private F
operators who may as well make an application for permit.
When the Undertaking applies for peimit under .Chapter
IV, it must satisfy the Regional Transport Authority that it
is better sttited than the private operator to render trans-
port facility to the travelling public. Sec. 47(1,H) however,
·provides that in the case of inter-State route, the UO'dertak- G
ing will have preference in the matter of stage carriage
permit. Does preference of this nature deny equality ·
guaranteed by Art. 14? The · expression 'preference'
amongst others means prior right, advantage, precedence
etc. But h()w would it be possible to give precedence to one
over the other. It signifies that other things being equal, H
' .
1016 SUPREME COURT REPORTS [1986] 3 S.C.R.

A one will have preference over the others. When an appli-
cation for a stage. carriage permit is being processed as
require'd by sec. 47, the application of the Undertaking for
an inter-State route shall be examined as application of any
other pr.ivate operator. Their merits and demerits must be
B ascertained keeping in view the requirements of (a) to (f) of
s. 47(1) and after comparing the merits and demerits of
both, not with the yard-stick of mathematical accuracy, but
other things being equal, the application of the Under-
taking will have preference over others. Qualitative and
quantitative comparison on broad features of passenger
transport facility such as fleet, facilities to travelling public
c and other relevant consideration may be undertaken and
after. balancing these factors other things being equal, the
application of the Undertaking shall be given preference
over other applicants. There is no question of eliminating
private operators merely because the Undertaking applies
D for a stage carriage permit under Chapter IV. That situa-
tion is catered to under Chapter IV-A. In an application
under Chapter IV, Corporation has to enter the arena like
any other applicant, face the competition and come-up to
the level of other private operators int~nding to obtain
stage carriage permits and then in respect of the route in
E question claim preference. Would this statutory provision
violate equality guaranteed by Art. 14? The answer is
obviously in the neg_ative."

F " ............... .let it be made clear that while
considering the application for stage carriage permit under
s. 47, the private operator has an equal chance to get a
1
permit even on inter-State route if it shows that th~ Under-
taking is .either unable to provide efficient and economical
service or that the private operator is better equipped to
G
render the same. Preference in this context would mean
that other things generally appearing to be qualitatively
and quantitatively equal though not with mathematical
accuracy, statutory provision will tilt the balance in favour )
of the Undertaking."

H What has been said by the Court with reference to the prefernnce
KAR. S.D.C. v. KAR. S.T. APP. TRIL. [REDDY,J.[ 1017

provided for in s. 47(1-H) applies with equal force to the preference A
provided for by the proviso to s. 63(7). In the judgment under appeal,
the High Court attempted to distinguish the decision of this Court in
Sher Singh's case on' the ground that any other interpretation would
have wiped out the difference between Chapter IV and Chapter IV-A.
We do not think the High Court was right in distinguishing the case in B
that fashion. The 'reference to Chapter IV-A there was for the purpose
of contrasting the exclusion contemplated by s. 68.F(l) with the pre-
ference to be given under s. 47 ( 1-H) and so to interpret the word
'preference' occurring ins. 47(1-H). We ha~e no hesitation in saying
that all that has been said about 'preference' in Sher Singh's case in
relation to s. 47(1-H) applies mutatis mutandis to the preference con-
templated by the proviso to s. 63(7). Since tlie State Transport Appel- c
late Tribunal and the High Court have failed to consider the merits of
the claims of the Karnataka State Road Transport Corporation and the
private operators who did not get a certificate of approval from the
Central Government, because of the rule of preference contained in
proviso to s. 63(7), the proper course for us is to set aside the orders of D
the State Transport Appellate Tribunal and the High Court and to
direct the State Transport Appellate Tribunal to re-hear the appeals
and dispose them of in accordance with law, after considering the
claims of the eligible applicants in the manner indicated in Sher Singh's
case and now.
E
A question was raised before us about the vires of the fourth
clause of the proviso to s. 63(7). Clauses (i) to (iii) of the proviso
providing for preference to be given to applications for permits from
the Indian Tourism Development Corporation, the State Tourism
Development Corporation and the State Tourist Department were
not questioned, but the preference provided for by clause (iv) and to F
be given to "such operators of tourist cars, or such travel agents, as
may be approved in this behalf by the Ministry dealing in tourism" was
questioned as an infringement of Art. 14 of the Constitution. We find
it difficult to sustain .this clause and uphold its validity. The very idea
that a Tribunal created by a statute for the purpose of considering rival
claims and granting permits on merits should be compelled to give G
peference to persons securing the approval of the executive Govern-
ment, appears to us to be arbitrary and unreasonable . To the extent
that it goes, the. clause pre-empts the decision of the designated tribunal
by executive discretion. It was said that the clause contained sufficient
guidelines for the exercise of discretion in granting approval by the
Central Government. It was said that the object of the proviso to s. H
1018 SUPREME COURT REPORTS [1986) 3 S.C.R.

·A 63(7) was very obviously the promotion of tourism and the approval of
the Central Government would be given to those operators of tourist
cars and travel agents who may be expected to serve that purpose.

It is difficult to agree with these submissions. In the first place,
B clause (d), it is seen, provides for a preference, not to operators of
tourist vehicles but to operators of tourist cars and travel agents.
Though the permits to be granted are for tourist vehicles, the prefer-
ence is confined to operators of tourist cars and travel agents. One
may understand a preference granted to operators of tourist vehicles
but it is difficult to understand why preference should be given to
operators of tourist cars in the matter of granting permits for tourist
c vehicles which may well be omnibuses required to travel long dis-
tances. Surely it cannot be said that experience of running a tourist taxi
is a better qualification than running a tourist bus when the question of
granting permits for tourist vehicles arises. The High Court of
Kamataka tided over the difficulty by interpreting the expression
D "tourist cars" as meaning "tourist vehicles". It is difficult to agree with
the interpretation of the Karnataka High Court having regard to the
definitions of "Transport Vehicle" and "motor car" contained in s.
2(29-A) ands. 2(16) respectively. While a tourist vehicle may include a
motor car, a motor car, by definition, excludes an omnibus. In the
second place, we have no indication as to the manner in which the
approval of the Central Government is to be sought and granted and
E
the considerations which are expected · to weigh with the Central
Government. Shri C.S. Vaidyanathan, learned counsel for the 'Prefer-
red' Operators has placed before us 'a Scheme for granting approval to
tourist transport operators in India.' The scheme makes no reference
to the proviso to sec. 63(7) of the Motor Vehicles Act. On the other
F hand, it mentions that approval carries with it certain privileges, such
as, allotment of ex-STC vehicles and that it is, therefore, necessary
1
that the department is able to exercise some control on the functioning
of these operators. The terms and conditions to be fulfilled are that
l
'the party must have been in the car-hire business for a period of 2
years with the help of cars of indigenous make or cars obtained from
G
elsewhere and should have sufficient contacts with travel agencies
hoteliers/airlines, etc. and should be financially sound or that they
should be owning and operating five vehicles as tourist taxies of either
indigenous make or acquired from elsewhere regardless of the period in
the car-hire '?,.usiness or that they should be ex-Defence Service
personnel, who satisfy certain prescribed conditions. It is seen that the
H scheme excludes omnibus operators and requires applicants to have
KAR. S.D.C. v. KAR. S.T.APP. TRIL. [REDDY,J.] 1019

either two years' experience in the car hire business with contacts in A
the tourist business or to own five tourist taxies. There are no guide-
lines as to how the discretion to grant approval is to be exercised once
the minimum conditions are fulfilled. The matter appears to be left to
the total discretion of the Central Government, virtually as we said,
pre-empting the decision of the statutory tribunal. We think that
B
clause (iv) of the proviso-to s. 63(7) is unconstitutional ·and we so
declare it.

In the result we set aside the orders of the State Transport
Appellate Tribunal and the High Court and direct the State Transport
Appellate Tribunal to hear the appeals in the light of what we have
said. c

P.S.S. Appeals allowed.