Holding

A stage‑carriage permit must be granted by the RTA after a statutory determination of the permissible number of stage carriages, and cannot be issued merely on the basis of an agreement between two rival claimants.

Summary

The appellant and 14 other applicants sought a stage‑carriage permit for the Pudukkottai‑Kottaipattinam route. The Regional Transport Authority (RTA) granted the permit to the appellant and rejected other applicants, including respondent No. 1, on the ground that they already held another permit. The State Transport Appellate Tribunal set aside the RTA’s order and granted a permit to respondent No. 1. The High Court stayed that order, allowing both parties to operate, and later dismissed the revision petitions. On special leave, the Supreme Court examined whether an agreement between two rival claimants could justify granting two permits on a single route under Section 47(3) of the Motor Vehicles Act, 1939. The Court held that permits must be granted by the RTA based on public interest after determining the permissible number of stage carriages; they cannot be issued merely on the parties’ agreement or exceed the number fixed by the RTA. Consequently, the Court set aside the orders of the RTA, the Tribunal and the High Court and remanded the matter to the RTA for a fresh merit‑based determination, vacating the interim orders allowing both parties to ply.

Issues considered

The legality of granting two stage‑carriage permits on a single route based solely on an agreement between the two claimants under Section 47(3) of the Motor Vehicles Act, 1939.
Whether the Regional Transport Authority must first determine the number of stage carriages permissible for a route before granting permits.
Whether the High Court and the State Transport Appellate Tribunal correctly applied the statutory provisions in refusing to consider other applicants.

Legislation cited

Motor Vehicles Act, 1939s. 47(3)

Subjects

Motor Vehicles ActSection 47(3)stage carriage permitRegional Transport Authoritypublic interesttransport lawpermit determinationspecial leave petition

Judgment

S.V. SIVASWAMI SERVA!
A
v.
HAFEZ MOTOR TRANSPORT (FIRM) AND ORS.
A
AUGUST 17, 1990

B [L.M. SHARMA AND J.S. VERMA, JJ.]

Motor Vehicles Act, 1939: Section 47(3)-Grant of permit-Basis
for-Permits in exce» of routes determined-Whether permissible-
Agreement between rival parties in a tis-Whether can be basis for. _,_
The appellant and 14 others, inclnding respondent No. I applied
c for grant of a stage carriage permit. The R. T .A. rejected the applica-
!ions of respondent No. I and some others on the only ground that each
of them had been granted one other permit in the same sitting, and
granted the permit to the appellant for a period of three years. On
appeal by respondent No. I and some others, the State Transport ~

D Appellate Tribunal, set aside the R. T .A.'s order and granted the
permit in favour of responent No. I. The appellant and another unsuc-
cessful applicant filed two civil revision petitions. The High Court, by
an interim order, stayed the Tribunal's order and directed that the
appellant as well as respondent No. I be allowed to operate on the
route, but ultimately dismissed both the revision petitions.
E
The appellant filed a special leave petition before this Court. By
virtue of this Court's interim order, the appellant and respondent No. I
'
were continuing to operate on the route throughout; as a result, though
the permit granted for three years expired long back, both the clai-

•
man ts had been operating on the route all these years.
F
On behalf of the parties common request was made for remanding
the matter to the R.T.A. for fresh decision on merits and for a direction
to allow both the parties to ply their stage carriages on the route on the ~
ground that there was necessity for two permits on the route.

G Allowing the appeal, this Court,

HELD: 1.1 The grant of a permit is to be made by the R. T .A.
primarily with reference to the object of serving the interests of the
general public and other relevant factors. It cannot be treated as a
dispute relating to grant of a permit between the rival claimants only. It I-
H is not in the nature of a lis for adjudication of conflicting interests of

802
S.V. S!VASWAMI v. MOTOR TPT. (FIRM) 803

private individuals alone. That apart, under Section 47(3) of the Motor
A
Vehicles Act, 1939, the R. T .A. is first required to determine the
-"'number of stage carriages for the route and then to grant permits
according to that determination made earlier. Grant of any permit in
excess thereof was not permissible without first making a fresh deter-
mination and increasing the number, if necessary. [807E-G I
B
1.2 Therefore, an order allowing two claimants, to )lly their
stage carriages on a single route on the basis of agreement between
S--- .them that there is necessity for two permits cannot be made unless the
~· grant of a permit to both the rival claimants would be within the limit
fixed by the R.T.A. at the relevant time. The grant of a permit is not a
matter which can be decided merely on the basis of an agreement bet-
ween the two rival claimants who _alone out of several claimants remain
c
in the lis at this stage. [807H & F]

M. Chinnaswamy v. Mjs. Dhandayuthanpani Roadways (P)
Ltd., [1977] 2 sec 629; Civil Appeal No. JJ33 of 1970 decided on
9. 12. 1981 and Civil Appeal No. 136 of 1980 decided on 13. 7. 1990, D
distinguished.

1.3 The fact that the claimants had the benefit of plying their
stage carriages for several years on the basis of interim orders of the
Court or other authorities long after the period of the permit had
expired, is not a valid reason for perpetuating that act and confining the E
grant only to the litigants before the ·court when claimants for the
permit were many and are likely to be many in case the qustion of grant
at this point of time is decided afresh. Admittedly, the appellants for
permit before the R. T .A. were many more and when the matter is to be
considered afresh by the R.T.A. everyone of them is entitled to a fresh
consideration of his claim on merits. [808B:D I F

1.4 The grant of permit by the R. T .A. to the appellant refusing to
consider the claim of respondent No. 1 and some other applicants on
merits solely on the ground that they had been granted one other permit
in the same sitting is clearly untenable. The grant of a permit for
another route to the respondent No. 1 and some others could only be a G
relevant circumstance, while assessing the comparative merits of all the
applicants, but by itself it could not be decisive or sufficient to refuse
consideration of their claim. The orders of the R. T .A. the Tribunal and
the High Court are set aside and the matter remanded to the R. T .A. for
a fresh consideration and decision of the claim of all the applicants on
merits in accordance with law. [SOSC-D; 808F) H
804 SUPREME COURT REPORTS [1990) 3 S.C.R.

A [The Court vacated the interim order permitting the appellant
and respondent No. l to ply their stage carriages on the route and
directed the R. T .A. to make arrangement for operation of the route till ~
the matter is decided afresh, to avoid inconvenience to the travelling
public.] [808F-G)

$ CIVIL APPELLATE JURISDICTION: Civil Appeal No.
11407 of 1983.

From the Judgment and Order dated 1.12.1983 of the Madras _ ~
High Court in C.R.P. No. 2978 of 1981.

G. Ramaswamy and S. Srinivasan for the Appellant.
c
A_.T.M. Sampath for the Respondents.

The Judgment of the Court was delivered by

D VERMA, J. Applications were invited by the Regional Trans-
port Authority, Pudukkottai (in short 'the R.T.A.') for gtant of one
stage carriage permit on the route, Pudukkottai-Kottaipattinam, the
total length of the route being 70 kms. There were in all 15 applicants
including the appellant, S.V. Sivaswami Servai, and respondent No. l,
Hafez Motor Transport (firm). On 26.10.1979, the R.T.A. took up the
E case of all the applicants for consideration. The R.T.A. rejected the "
application of respondent No. 1 and some other applicants on the only
ground that each of them had been granted one other permit in the
same sitting and, therefore, the R.T.A. did not deem it fit to consider
their claim for grant of the permit. Out of the remaining applicants
who were allotted equal marks, the R.T.A. found the appellant more ~
F suitable for the grant. Accordingly, the R.T.A. granted the permit to
the appellant for a period of three years on 26.10.1979. The respndent .(
No. 1 and some others, feeling aggrieved by the R.T.A.'s Order in
appellant's favour, preferred the appeals to the State Transport
Appellate Tribunal, Madras (in short 'the S.T.A.T.'). By the Order
dated 5.9.1981, the S.T.A.T. set aside the R.T.A.'s Order granting,
G the permit to the appellant and ·granted the permit in favour of respon-
dent No. 1. This led to two civil revision petitions in the High Court of
Madras (hereinafter referred to as 'the High Court'), one by appellant
and the other by another unsuccessful applicant. The High Court, by
an interim Order dated 22.9.1981, stayed operation of the S.T.A.T.'s j..
Order and directed that the appellant as well as respondent No. 1 be
H allowed to operate on the route. Ultimately, the High Court dismissed
S.V. SiVASWAMI. v. MOTOR TPT. (FIRM) (VERMA, J.] 805

both the revision petitions by its Order dated 1.12.1983. The appellant
A
filed a petition for grant of special leave on 7 .12.1983 which was
/'..allowed giving rise to this appeal. By virtue of the interim Order of this
Court, the situation existing, during pendency of the revision in the
High Court has been continued with the result that the appellant as
well as respondent No. 1 have been continuing to.operate on the route
throughout obviously on account of renewal being granted to them 8
from time to time because of this Court's interim Order. The result is
that the permit granted in October 1979 for three years expired long
_.~--·back and yet not merely one of these claimants for the permit, but both
of them have been operating on the route all these years.

It is obvious that the grant of permit by the R.T.A. to the appel-
lant refusing to consider the claim of respondent No. 1 and some other c
applicants on merits solely on the ground that they had been granted
one other permit in the same sitting is clearly untenable. The grant of a
-~permit for another route to the respondent No. 1 and some others
could only be a relevant circumstance while assessing the comparative
merits of all the applicants, but by itself it could not be decisive or D
sufficient to refuse consideratfoii 0f theirciitim. the S.T.A,.L would
have been justified· iii in'terfering-with the R.T.A>s Order on this
ground and either remanding the matter to the R.T.A. or considering
the same itself on merits. The S.T.A.T. missed this aspect, even
though it made a comparison of t\J.e merits of all the applicants. Shri G.
• Ramaswamy, learned counsel for the appellant showed that the E
S.T.A.T. has committed several errors in making the comparison
which include a misreading of the past operational record described as
'history-sheet' of the rival claimants. The High Court, while deciding
the revision petitions, has also not proceeded on the correct basis. Shri
A.T.M. Sampath, learned counsel for the respondent No. 1 made an
attempt initially to support the S.T.A.T.'s Order granting the permit F
>.., to the respondent No. 1 which was upheld by the High Court. How-
ever, after some arguments, both counsel made a common request to
remand the matter to the R.T.A. for a fresh decision on merits taking
into account the comparative merits of all the applicants. They also
requested that in view of the remand to the R.T.A. for a fresh decision
on merits, no observations need be made herein on the comparative G
merits of the claimants or the merits of the rival contentions initially
advanced to us. We are of the opinion that in the circumstances of this
case, this would be the appropriate course to adopt. We have, how-
~- ever, some difficulty in accepting the other common request made by
both the learned counsel. Both sides agreed that there is necessity for
two permits on the route and, therefore, we may direct that both H
806 SUPREME COURT REPORTS [1990] 3 S.C.R.
- .

A parties, who have been operating on the route by Orders of the High
Court or this Court, should be allowed to ply their stage carriages on ~
the route. Reliance is placed by them on M. Chinnaswamy v.M/s.
Dhandayuthanpani Roadways (P) Ltd., [1977) 2 SCC 629 wherein a
similar Order was made on the basis of an agreement of both the sides.
The Order made in this case is a brief order based entirely on the
B agreement of the parties, the relevant portion of which is as under:

"It is represented by Shri M.K. Ramamurthi appearing for
the appellant that from about 1960, for the last 16 years,
both the parties had been plying their stage carriages on the
said route. Although the permit to be granted was only
c one, but by orders of court or other authority both the
parties had been allowed to ply their buses. It seems to be
so obvious that in public intrest if two stage carriages have
--
been plying on the route for the last 16 years there is no
reason to confine it to one. Both sides agree that there is
necessity for two permits on the route. In that view we
D consider the dispute to be academic. We direct that the
status quo of both parties being allowed to ply their stage
carriages on the route taking appropriate permits from the
authorities concerned will continue. With this direction,
the appeal is dismissed."

E It was stated at the Bar that this decision was followed in Civil Appeal ~
No. 1133 of 1970 decided on 9.12.1981 wherein the Order made is as
under:

"We have heard learned counsel for the parties and it
seems to us that having regard to the particular circumst- -
F ances of this case, the order should be that which was ...
passed by this Court in M. Chinnaswamy v. Mis. Dhan- 1..
dayuthanpani Roadways (P) Ltd., AIR 1977 SC 2095. Dur-
ing the pendency of the appeal in this Court, this Court
made an order on April 21, 1970, directing that the appel-
lant and respondent No. 1 should be permitted to ply their
G stage carriages on the route, and ever since the order of
1970 these two stage carriages have been plying continu-
ously under permits which have been renewed from time to
time under the Motor Vehicles Act. There is every justifi- >.
cation for permitting the present situation to continue. In
the circumstances, we direct that the status quo shall con-
H tinue and both the parties will be allowed to ply their stage
S.V. SIVASWAMI v. MOTOR TPT. (FIRM) [VERMA, J.J 807

carriages in accordance with law under appropriate permits
A
issued in their favour pursuant to the interim order dated
April 21, 1970."

Recently, a similar Order has been passed in Civil Appeal
No. 136 of 1980 decided on 13.7.1990which reads as under:

"The authorities concerned will consider the case of the
parties herein for grant of permit in accordance with law
and also in accordance with the directions in the decision of
this Court in M. Chinnaswamy v. Mis. Dhandayuthanpqni
-· Roadways (P) Ltd., reported in AIR 1977 SC 2095. In the
meantime, status quo as on today will continue. Bo\!\ the
parties will ply their vehicles on the route in question.
c
Counsel for both the parties are present here and
they have no objection to the order passed above. The
appeal is disposed of in the above terms. No costs."
D
With respect, we are unable to accept this common request made
to us in the present case. It is obvious from the above quoted orders on
which the common request is based that in none of them, any point of
law was considered or decided and the Order permitting both the
claimants to operate on the route, even though the, permit to be
' granted was only one, was made without adverting to the legal implica- E
tions of such an Order. In the first place, grant of a permit is to be
made primarily with reference to the object of serving the interests of
the general public and it cannot be treated as a dispute relating to
grant of a permit between the rival claimants only. It is not in the
nature of a !is for adjudication of conflicting interests of private indi-
viduals alone It is, therefore, not a matter which can be decided F
~ merely on the basis of an agreement between the two rival claimants
who alone ont of several claimants remain in the /is at this stage. The
question of grant of permit is to be decided primarily by the R.T.A.
having regard primarily to the interests of the general public and other
prescribed relevant factors. That apart, under Section 47(3) of the
Motor Vehicles Act, 1939, the R.T.A. is first required to determine G
the number of stage carriages for the route and then to grant permits
'· according to that determination made earlier. Grant of any permit in
excess thereof was not permissible without first making a fresh
.... ~- determination and increasing the nnmber, if necessary. It is, therefore,
obvious that an order of this kind cannot be made unless the grant of a
permit to both the rival claimants would be within the limit fixed by H
808 SUPREME COURT REPORTS [1990] 3 S.C.R.

A the R. T.A. at the relevant time. There is nothing in any of these above
quoted orders to indicate that this aspect was even adverted to or that ~
there was material to indicate that the consent order so made was·
within' the limit fixed by the R.T.A. If at all the indication is to the
contrary that a permit which could be granted was for plying only one
stage carriage on the route whereas the consent order made had the
B
effect of permitting two stage carriages instead of one. Moreover. if
the claimants had the benefit of plying their stage carriages for several
years on the basis of interim orders of the Court or other authorities
long after the period of the permit had expired, that does not appear to
us to be a valid reason for perpetuating that act and confining the grant 1,..
only to the litigants before us when claimants for the permit were many
c and are likely to be many in case the question of grant at this point of
time is decided afresh. With respect, we are, therefore, unable to
accede to this common request and to confine the operation of this
route only to the two claimants before us in a /is between them which
commenced more than a decade earlier. Admittedly, the applicants for
permit before the R.T.A. were many more and when the matter is to
p be considered afersh by the R.T.A., everyone of them is entitled to a
fresh consideration of his claim on merits. As already stated, our
inability to pass a consent order in terms of the above-quoted orders is
for some of the reasons already indicated. For the reasons given by us,
the above-quoted consent orders cannot be treated as precedents for
such a situation.
E
Cosequently, the appeal is allowed, the impugned orders of the

-
R.T.A., the S.T.A.T. and the High Court are set aside and the matter
is remanded to the R.T.A., Pudukkottai, for a fresh consideration and

•
decision of the claim of all the applicants for grant of the permit on
merits in accordance with law. The interim orders, permitting the
F appellant and the respondent No. 1 to ply their stage carriages on the
route, stand vacated. However, it would be expedient that the R.T.A. i
decides the matter afresh at an early date and it also makes arrange-
ment for operation of the the route during the intervening period in
accordance with law to avoid any inconvenience to the travelling
public. No costs.
G
N.P.V. Appeal Allowed