Holding

Only the Regional Transport Authority, as a statutory body, may entertain and grant stage carriage permits; the Chief Minister has no jurisdiction to intervene in such matters.

Summary

The appellants, bus owners, applied for stage carriage permits under the Motor Vehicles Act, 1988 before the Regional Transport Authority (RTA). Respondent No.4, a politically connected bus operator, bypassed the RTA and sought the permit directly from the Chief Minister, who issued an order approving the permit. The Director of Transport forwarded the Chief Minister’s recommendation to the RTA, which then granted the permit to Respondent No.4, ignoring earlier applications by the appellants. The appellants challenged this process, arguing that the Chief Minister had no statutory authority to entertain or direct the grant of such permits. The Supreme Court held that only the statutory RTA may consider applications for stage carriage permits and that any interference by the Chief Minister violates the constitutional scheme and the Act. Consequently, the Court allowed the appeal, set aside the High Court’s judgment, and imposed costs on the State.

Issues considered

Whether an application for a stage carriage permit under the Motor Vehicles Act, 1988 can be filed before the Chief Minister or any authority other than the Regional Transport Authority.
Whether the Chief Minister’s direction to the Director of Transport constitutes unlawful interference with the statutory functions of the Regional Transport Authority.

Legislation cited

Motor Vehicles Act, 1988s. 2(41), s. 2(47), s. 66, s. 67, s. 68, s. 69, s. 70, s. 71, s. 72

Subjects

Stage carriage permitMotor Vehicles ActStatutory authorityChief MinisterQuasi-judicial bodyConstitutional schemeArticle 162Interference

Judgment

[2008] 3 S.C.R. 888

~
A PANCHAM CHAND AND OTHERS ,,.
v.
STATE OF HIMACHAL PRADESH AND OTHERS
(Civil Appeal No. 1732 of 2008)
MARCH 4, 2008
B
[S.B.SINHA AND V.S.SIRPURKAR, JJ.]
' ,..
Motor Vehicles Act, 1988- ss.2(41), 2(47), 70 and 72 -
Stage Carriage Permit - Grant of - Application for permit filed
•
c directly before Chief Minister - Permit granted under the
direction of Chief Minister - Correctness of - Held: Chief
Minister or any authority, other than statutory authority could
not have entertained application for grant of permit nor usurp
the function of Regional Transport Authority - Also, Director
Transport erred in forwarding the same to Regional Transport
D Officer with recommendations of Chief Minister - Such
r
interference violates the constitutional scheme - It interferes 1
with the independent functioning of quasi judicial authority -
Constitution of India, 1950 - Article 162.

E Appellant-bus owners applied for grant of stage
carriage permits for different routes before the Regional
Transport Officer. Respondent no. 4 owner of fleet of buses
had political connection. He applied for the route permit
directly to the Chief Minister. The Office of Chief Minister
communicated the order indicating approval for grant of
F
a route permit in favour of respondent no. 4 to respondent "' I..

no. 2-Director Transport twice. Respondent no. 2 acted
thereupon. It advised the Regional Transport Authority to
•
proceed after obtaining a proper application from
respondent no.4 in that behalf. Thereafter, stage carriage
G permit was granted in favour of respondent no.4 for the
route. However, the appellants were not granted the permit
though they applied prior to respondent no.4. Aggreived,
appellants filed writ petition which were dismissed. Hence ,..
the present appeal.
H 888
PANCHAM CHAND AND OTHERS v. STATE OF 889
HIMACHAL PRADESH AND OTHERS
~
The question which arose for consideration in this A
~

appeal was whether the application for grant of permit of
a Stage Carriage Permit in terms of the provisions of the
Motor Vehicles Act, 1988 could be filed before Chief
Minister or any other Authority other than those specified
under the Act. B
Allowing the appeal, the Court
"'
. HELD: 1.1 Regional Transport Authority being a
statutory body is bound to act strictly in terms of the
provisions thereof. It cannot act in derogation of the c
powers conferred upon it. While acting as a statutory
authority it must.act having regard to the procedures laid
down in the Act. It cannot bye-pass or ignore the same.
Nothing has been placed on record to show that the Chief
Minister in his capacity even as a Member of the Cabinet
D
was authorized to deal with the matter of transport in his
~
official capacity, he had even otherwise absolutely no
business to interfere with the functioning of the Regional
Transport Authority. [Para 18) [896-G; 897-A, BJ
1.2 The facts goes to show that prior thereto no E
proper application was filed before the Regional Transport
Authority. Such an interference on the part of any authority
upon whom the Act does not confer any jurisdiction, is
wholly unwarranted in law. It violates the constitutional
.)
' scheme. It interferes with the independent functioning of F
a quasi judicial authority. A permit, if granted, confers a
~
valuable right. An applicant must earn the same. Therefore,
the application of the respondent No.4, was to be
entertained alongwith other similarly situated persons.
[Para 19) [897-C, D, F]
G
1.3 In the matter of grant of permit to individual
applicant, the State has no say. Therefore, the Chief
·J., Minister or any authority, other than the statutory authority
could not entertain an application for grant of permit nor
could issue any order thereupon. Even any authority H
890 SUPREME COURT REPORTS [2008] 3 S.C.R.

A under the Act, including the appellate authority cannot
issue any direction, except when the matter comes up .
before it under the statute. (Para 20) [897-G; 898-A]
1.4 It is not a case where the statutory authority was
hearing a grievance from the public that buses are not
8 plying in a particular route as a result whereof the villagers
were suffering. [Para 23] (899-B]
' ..
1.5 The political connection of respondent no. 4 •
encouraged him to file an application for grant of permit
c before the Chief Minister directly. The Chief Minister could
not have entertained the same nor usurp the function.of
the Regional Transport Authority. Similarly, the respondent
No.2-Director Transport committed a serious illegality in
forwarding the same to the respondent No.3 with the
purported recommendations of the Chief Minister..
0
[Paras 24 and 25) (899-B, C, DJ
1.6 It cannot be understood as to how an
independent quasi judicial body, like the respondent No.3,
could affirm an affidavit together with the State. Its duty
E before the High Court, in response to the rule issued by
it, to place the facts as borne out from the records. It was
not supposed to take any stand one way or the other. It
had no business to defend the State or the Chief Minister.

F
[Para 26) (899-D, E)
,
1.7 As a limited notice was issued no consequential
order is passed which is within the realm of the Regional
Transport Authority. A cost of Rupees one lakh is imposed
upon the State which may be paid to the National Legal
Services Authority. (Paras 27 and 28) (899-F, G)
G
D. Nataraja Mudaliar vs. The State Transport Authority,
Madras AIR 1979 SC 114; Commissioner of Police vs.
Gordhandas Bhanji AIR 1952 SC 16; Mohinder Singh Gill
and Anr. vs. The Chief Election Commissioner, New Delhi and , ..
H Ors. AIR 1978 SC 851 -referred to.
PANCHAM CHAND AND OTHERS v. STATE OF 891
HIMACHAL PRADESH AND OTHERS [S.B. SINHA, J.)
~ CIVILAPPELALTE JURISDICTION : Civil Appeal No. 1732 A
of 2008.
From the final Judgment and Order dated 15.9.2005 of
the High Court of Himachal Pradesh at Shimla in C. W .P. No.
1217/2004.
B
Ravi Bakshi and Yash Pal Dhingra for the Appellants.
-;
.. . J.S. Attri, Dr. R.P. Sharma, T.C. Sharma and V.N .
l".
Raghupathy for the Respondents.
The Judgment of the Court was delivered by c
S.B. SINHA, J. Leave granted.
1. Whether Chief Minister of a State has any role to play in
a matter of grant of permit of a Stage Carriage Permit in terms
of the provisions of the Motor Vehicles Act, 1988 (for short the
D
Act) is in question in this appeal which arises out of a judgment
~ ,. and order dated 15th September, 2005 passed by a Division ·
Bench of the Himachal Pradesh High Court, Shimla, in C.W.P.
•. No. 1217 of 2004.
t.
2. The basic fact of the matter is not in dispute. E
Appellants ate the bus owners. They applied for grant of
stage carriage permits for different routes before the Regional
Transport Officer as envisaged under Section 70 of the Act.
While Appellant No.1 had applied for grant of route - Tikri to
,J ' Palampur, Palampur to Chahiar and Palampur to Jaisinhpur, F
Appellant No.2 had applied for grant of permit for the route
• Palampur to Jaisinhpur, Jaisinhpur to Baijnath and Jaisnhpur to
Palampur, Appellant No.3 had applied for the route lndora to
Kaaza, Maclodganj to Mandi and Damtal to Manali.
3. Fourth respondent, who is said to have a political G
connection being a leader of C<;mgress Party, approached the
State Chief Minister directly by a letter, which reads thus :-
. •-\
''The Hon'ble Chief Minister,
Himachal Pradesh, Shimla
H
892 SUPREME COURT REPORTS [2008] 3 S.C.R.

A Subject :- Application regarding route permit t
,
Hon'ble Sir,
With due regards, it is requested that I have previously
requested for the route permit, but I was not given any
B route permit in the meeting of RTA. I have come to the
Oakover and I have again stated that no buses are running
on the route and still then I was not given any route. It is, ,.
..
'

therefore, requested that the following route may kindly be
granted in my favour.
c Baijnath - Tikkari - Panchrukhi - 6RT.
This route was notified, but not issued to any one.
Yours faithfully,
Sd/-
D (Rajinder Rana)
Tehsil Baijnath, District Kangara" r
~
4. The said letter was addressed on the letter head of
Mandal Congress Committee, Rajgir Panchukhi, Himachal
Pradesh. Respondent No.4 described himself to be the
E
President thereof. The said letter was received in the official
residence of the Chief Minister. The Chief Minister's office by a
letter dated 9th March, 2004 addressed to the Commissioner
(Transport), Himachal Pradesh, respondent No.5, directed :-
r
F " It has been approved that permit may be sanctioned in ...
favour of Shri Rajender Rana, VOP Rakkar, Tehsil Baijnath
Tikri, Panchrukhi-G RT route. A copy of his application is ~

enclosed.
Commissioner Transport, H.P. is requested to please take
G further action accordingly and send compliance report to
this office.
Sd/-
Additional Secretary to 1-·

Dt. 9.3.2004 Chief Minister, HP"
H
PANCHAM CHAND AND OTHERS v. STATE OF 893
HIMACHAL PRADESH AND OTHERS [S.S. SINHA, J.]
r~
5. The Director Transport-Respondent No.2 herein, in turn, A
communicated the said order to the Regional Transport Officer
by his letter dated 16th March, 2004 asking him to place the
said proposal in the next meeting of the Regional Transport
Authority after obtaining an application from the applicant in the
prescribed format. It furthermore appears that the Chief B
Minister's Office again on 9th June, 2004 issued another letter
A, •
to the second respondent indicating approval for grant of a route
" permit in favour of the 4th respondent. Respondent No.2 was
requested to take action as per observations of the Hon'ble
Chief Minister. c
6. Indisputably a meeting of the Authority was held on 3rd
July, 2004 but no decision was taken on the applications filed
by the appellants, although the same were made prior in time to
that of the one filed by the respondent No.4, who had approached
the Chief Minister. A Stage Carriage Permit was granted in D
favour of the fourth respondent for the said route.
7. Aggrieved, a writ petition was filed by the appellants
before the Himachal Pradesh High Court which was marked as
CWP No. 1217 of 2004. While issuing notice in the said writ
pet1tion, operation of the permit granted in favour of the fourth E
respondent was directed to be stayed by the High Court.
8. In their counter-affidavit, the State of Himachal Pradesh,
Director {Transport), Regional Transport Authority and
' Commissioner (Transport) inter alia contended that the routes F
applied for by the appellants and that of respondent No.4 are
different and the permit was granted in his favour purely on merit.
A rejoinder thereto was filed by the appellants stating that the I
permit was being granted only on the instructions of the higher
authorities and not in accordance with law.
G
9. By reason of the impugned judgment the Division Bench
of the High Court dismissed the wtit petition of the appellants,
stating :-
" It is the admitted case of the parties that the route in
H
894 SUPREME COURT REPORTS [2008] 3 S.C.R.

respect (of) which permit has been granted to respondent
No.4 is different from the routes in respect of which '
applications have been made by the writ petitioners.
Therefore, in our considered view the writ petitioners can
have no grievance against respondent No.4.
B Now the Directorate of Transport, Shimla, vide
communicaton dated 4th January, 2005 (annexure R-1)
with a view to implementing the provision of Section 68(3)
(ca) of the Motor Vehicles Act has conveyed the decision
of the State Government to all the Regional Transport
c Officers that all the applications pending with the Regional
Transport Authority for grant of route permit, except those
which are in respect of 100% exclusively rural routes or
109 notified routes, are to be deemed to have been
rejected. In view of the issuance of this communication by
D the Directorate of Transport, Shimla, we direct respondent
No.3, i.e .. Regional Transport Authority, Dharamshala
Through its Secretary, to consider the pending applications
of the writ petitioners for grant of permits, if those
applications or any of them pertain to route(s) which are
E 100% exclusively rural route(s) or which are among J09
notified routes within a period of six weeks from today.
With these directions, the writ petition is disposed of."
10. Notice was issued by this Court on 30th January, 2006
confined only to the question as to whether the application for
F grant of permit filed under the Motor Vehicles Act can be filed
before any authority other than the one prescribed thereunder.
11. Mr. Ravi Bakshi, learned counsel appearing on behalf
of the appellants urged that the High Court committed manifest
G error in refusing to apply the legal principles involved in the matter
inasmuch as under no circumstances, applications for grant of
permit could be filed before the Chief Minister or any other
authority or processed by them, other than those specified in
the Act.
H 12. Mr. J.S. Aattri, learned counsel appearing on behalf of
L PANCHAM CHAND AND OTHERS v. STATE OF
HIMACHAL PRADESH AND OTHERS [S.B. SINHA, J.]

the State and Dr. R.P. Sharma, learned counsel appearing on A
behalf of respondent No.4, on the other hand, urged that the
895

permit was granted having regard to the need of the public and
not under the direction of the Chief Minister. Even otherwise it
was urged that the State has the requisite jurisdiction to issue
instructions laying down the policy for grant of pe~mits. B
•• 13. The Motor Vehicles Act, 1988 was enacted to
consolidate and amend the law relating to motor vehicles. While
" enacting the Act the Parliament inter alia took into account
changes in the road transport technology, pattern of passenger
and freight movements, development of the road network in the c
country and particularly the improved techniques in the motor
vehicles management.
The Parliament also took into consideration the reports of
various Committees and the Working Groups appointed for the
D
/r
said purpose.
14. Section 2(41) of the Act defines "permit" to mean a
permit issued by a State or Regional Transport Authority or any
authority prescribed in this behalf under the Act authorizing the
use of a motor vehicle as a transport vehicle. "Transport vehicle" E
has been defined in Section 2(47) to mean a public service
vehicle, a goods carriage, an educational institution bus or a
private service vehicle.
4.
15. Chapter V of the Act provides for control of transport
vehicles. Section 66 provides for necessity for permits in terms F
whereof a statutory embargo has been placed to the effect that
no owner of a motor vehicle shall use or permit the use thereof
as a transport vehicle, save in accordance with the conditions
of a permit granted or countersigned by a Regional or State
Transport Authority or any prescribed authority G

16. Section 67 of the Act empowers the State Government
to control road transport having regard to the factors enumerated
therein. Section 68 provides for constitution of the State Transport
Authority. An application for grant of Stage Carriage Permit, as
H
,.
896 SUPREME COURT REPORTS [2008) 3 S.C.R.

A envisaged under Section 69 of the Act, is to be filed in terms of
" f
Section 70 thereof, detailing the particulars specified therein. '
Section 71 provides for the procedures to be followed by the
Regional Transport Authority in considering application for stage
carriage permit. Section 72 empowers the Regional Transport
B Authority to grant stage carriage permit in respect of any route
or the area specified in the application. The other provisions
contained in the said Chapter provide for the mode and manner ...
for dealing with the applications for grant of other types of "'
permits.
c 17. The Act is a self contained Code. All the authorities
mentioned therein are statutory authorities. They are bound by
the provisions of the Act. They must act within the four corners
thereof. The State, although, have a general control but such
control must be exercised strictly in terms of Article 162 of the
D Constitution of India. Having regard to the nature and the manner
of the control specified therein, it may lay down a policy. Statutory ~
~

authorities are bound to act in terms thereof, but per se the same
does not authorize any Minister including the Chief Minister to
Act in derogation of the statutory provisions. Constitution of India
E does not envisage functioning of the Government through the
Chief Minister alone. It speaks of Council of Ministers. The duties
or functions of the Council of Ministers are ordinarily governed
by the provisions contained in the Rules of Business framed
under Article 166 of the Constitution of India. All governmental
F or:ders must comply with the requirements of a statute as also " ~

the constitutional provisions. Our Constitution envisages a rule
~
of law and not rule of men. It recognizes that, how so ever high
~ may be, he is under law and the Constitution. All the
constitutional functionaries must, therefore, function within the
constitutional limits.
G
18. Apart from the fact that nothing has been placed on
record to show that the Chief Minister in his capacity ev~n as a
Member of the Cabinet was authorized to deal with the matter ,...
of transport in his official capacity, he had even otherwise
H absolutely no business to interfere with the functioning of the
PANCHAM CHAND AND OTHERS v. STATE OF
HIMACHAL PRADESH AND OTHERS [S.B. SINHA, J.]
Regional TransportAuthority. Regional Transport Authority being A
a statutory body is bound to act strictly in terms of the provisions
thereof. It cannot act in derogation of the powers conferred upon
it. While acting as a statutory authe>rity it must act having regard
to the procedures laid down in the Act. It cannot bye-pass or
ignore the same. B
19. Factual matrix, as indicated hereinbefor,e, clearly goes
to show that the fourth respondent filed the application before
the Chief Minister straightaway. Office of the Chief Minister
communicated the order of the Chief Minister, not once but twice.
Respondent No.2 acted thereupon. It advised the Regional C
Transport Authority to proceed, after obtaining a proper
application from respondent No.4 in that behalf. This itself goes
to show that prior thereto no proper application was filed before
the Regional Transport Authority. Such an interference on the
part of any authority upon whom the Act does not confer any D
jurisdiction, is wholly unwarranted in law. It violates the
constitutional scheme. It interferes with the independent
functioning of a quasi judicial authority. A permit, if granted,
confers a valuable right. An applicant must earn the same.
In D. Nataraja Mudaliarvs. The State Transport Authority, E
Madras : AIR 1979 SC 114 = (1978) 4 SCC 290 this Court
held:
"9. The Authority must, remember that a permit holder has
an ordinary right of renewal unless it is shown that F
outweighing reasons of public interest lead to a contrary
result. Permits are not bounty but right, restricted
reasonably by the Motor Vehicles Act."
The application of the respondent No.4, therefore, was to
be entertained alongwith other similarly situated persons. G
20. In the matter of grant of permit to individual applicant,
the State has no say. The Chief Minister or any authority, other
than the statutory authority, therefore, could not entertain an
application for grant of permit nor could issue any order H
898 SUPREME COURT REPORTS [2008] 3 S.C.R.

A thereupon. Even any authority under the Act, including the
appellate authority cannot issue any direction, except when the
•
matter comes up before it under the statute.
21. In Commissioner of Police vs. Gordhandas Bhanji :
AIR 1952 SC 16, this Court held:-
B
" It is clear to us from a perusal of these rules that the only .'
person vested with authority to grant or refuse a license ~

for the erection of a building to be used for purposes of
public amusement is the Commissioner of Police. It is
also clear that under Rule 250 he has been vested with
c the absolute discretion at any time to cancel or suspend
any license which has been granted under the rules. But
the power to do so is vested in him and not in the State
Government and can only be exercised by him at his
discretion. No other person or authority can do it."
D
22. Yet again in Mohinder Singh Gill and another vs. The
Chief Election Commissioner, New Delhi and others : AIR 1978
sc 851 =(1978) 1 sec 405
"8. The second equally relevant matter is that when a
E statutory functionary makes an order based on certain
grounds, its validity must be judged by the reasons so
mentioned and cannot be supplemented by fresh reasons
in the shape of affidavit or otherwise. Otherwise, an order
bad in the beginning may, by the time it comes to court on
F accou.nt of a challenge, get validated by additional grounds
later brought out. We may here draw attention to the
observations of Bose, J. in Gordhandas Bhanj1~:
"Public orders, publicly made, in exercise of a
statutory authority cannot be construed in the light of
G explanations subsequently given by the officer making
the order of what he meant, or of what was in his
mind, or what he intended to do. Public orders made
l'
by public authorities are nieant to have public effect
and are intended to affect the actings and conduct of
H those to whom they are addressed and must be
PANCHAM CHAND AND OTHERS v. STATE OF 899
HIMACHAL PRADESH AND OTHERS [S.B. SINHA, J.]
"' construed objectively with reference to the language A
used in the order itself."
Orders are not like old wine becoming better as they grow
older."
23. It is not a case where the statutory authority was hearing B
.- >
a grievance from the public that buses are not plying in a
~ particular route as a result whereof the villagers were suffering.
24. Respondent No.4 appears to be the owner of a fleet of
buses. He had a political connection. Such political connection
encouraged him to file an application for grant of permit before c
the Chief Minister directly. The Chief Minister could not have
entertained the same nor usurp the function of the Regional
Transport Authority.
25. Similarly, the respondent No.2 committed a serious
,. illegality in forwarding the same to the respondent No.3 with the D
purported recommendations of the Chief Minister.
26. We also fail to understand as to how an independent
quasi judicial body, like the respondent No.3, could affirm an
affidavit together with the State. Its duty before the High Court, E
in response to the rule issued by it, was to place the facts as
borne out from the records. It was not supposed to take any
stand one way or the other. It had no business to defend the
.... State or the Chief Minister.
27. For the reasons aforementioned, the appeal is allowed F
.-
with costs. The impugned judgment is set aside. As a limited
notice was issued, we need not pass any consequential order
which is within the realm of the Regional Transport Authority.

l 28. We impose a cost of Rupees one lakh upon the State
which may be paid to the National Legal Services Authority. The
said amount may be deposited within a period of four weeks
G

·~, failing which it will be open to the National Legal Services
Authority to realize the same with interest@ 12 % per annum.
N.J. Appeal allowed. H