S.J. Hyder, J.
1. The business of operating public service vehicles is a traderegulated under the provisions of the Motor Vehicles Act, hereinafter referred to as the Act. The process of regulation of the trade and the hierarchy of the Tribunal constituted to give effect to the regulatory provisions of the Act is in itself a fruitful source of litigation between persons competing to enter or to expand their trade. A further complication has been introduced by the policy of nationalising some routes. Another factor which has contributed to increased litigation is that the State Government has looked at the problem of public interest from different standpoints from time to time. All these elements have combined together and are reflected in the present bunch of five writ petitions which we are called upon to decide. Since the question of factual involvement in all these cases are common and the dispute in the writ petition relates to the same route we propose to decide these writ petitions by a common judgment.
2. There is a route known as Saha-ranpur to Muzaffarnagar via Baman Heri, Deoband, Nagal, and Gagal Heri. This whole of the said route formerly lay within the jurisdiction of the Regional Transport Authority, Meerut and had the sanctioned strength of 25 buses. On June 13, 1959 nine vacancies on the said route existed which were notified by the Regional Transport Authority on June 26, 1959. In response to the said notification 1096 applications were made by different persons. All these applications were published for objection on February 1, 1960, On May 12, 1961 the Regional Transport Authority, decided to raise the strength of the route from 25 to 32. Sometime in Sept. 1961 a new region with its headquarters at Dehra Dun was created and thereafter the Regional Transport Authority, Meerut transferred all the applications which had been received by it for the vacancies on the route to the Regional Transport Authority, Dehra Dun since the major portion of the route lay within the jurisdiction of the newly created region. In this judgment the expression Regional Transport Authority, Dehra Dun shall be hereinafter referred to as the RTA.
3. In its meeting held on Feb. 19 and 20 the RTA decided not to notify any further applications for the existing vacancies on the route. In its meeting held on April 6 and 7, 1966 the RTA granted permits to 10 applicants, Against the decision of the R.T.A. 32 applicants who had failed to obtain permits filed appeals before the State Transport Appellate Tribunal (hereinafter referred to as STAT. During the pendency of the said appeals some additional vacancies came into existence and they were notified on June 29, 1967. In response to the said notification a number of persons applied for the grant of permits including Cherkesh Kumar Jain petitioner No. 3 in writ petition No. 1647 of 1973. The application of Cherkesh Kumar Jain was rejected and he filed an appeal before the STAT. The said appeal was allowed by order dated Feb. 2, 1972 and the case was remanded for a fresh decision to the RTA.
4. In the meanwhile in Aug. 1971, 20 additional vacancies were created on the route and the RTA decided to fill 10 of the said vacancies in the year 1971 and the remaining in the year 1972. The vacancies for the year 1971 were notified on Nov. 6, 1971. In pursuance of that notification Suresh Chand Tyagi petitioner No. 2 in writ petition No. 1647 of 1973 and Cherkesh Kumar Jain, petitioner aforesaid made separate applications for the grant of permit to each one of them. The ten vacancies reserved for the year 1972 were also advertised and Cherkesh Kumar Jain made a third application for grant of stage carriage permit to him on the route. It may be stated that the STAT by its order dated 11-2-1971 had directed that all the applications for the vacancies earmarked for the years 1971 and 1972 should be considered together.
5. At this stage the Governor of Uttar Pra. issued Ordn. No. IX of 1972 which in its turn was replaced by U. P. Act No, XXV of 1972. Thereafter the State Government issued notification under Section 43-A of the Act as amended dated March 30, 1972 which inter alia provided that stage carriage permits (except in respect of the routes or areas which have been published under Section 68-C of the Act) shall be granted to all eligible applicants. We shall have occasion to refer later in this judgment to the provisions of this Act and the notification issued thereunder. Suffice it to say that in view of the liberal policy adopted by the State Government under the aforesaid provision of law prima facie there appeared to be no impediment before the STAT to allow all the 32 appeals which had been filed before it, The STAT, which at this time was the Board of Revenue, allowed all the 32 appeals against the order of the RTA dated 6/7 April 1966 and directed that the RTA shall issue regular stage carriage permits to each of the 32 appellants before it, provided they produced vehicles duly registered in their own names having a valid fitness certificate within one month from the date of the order. Each of the appellants was directed to produce his personal affidavit during that period stating that he had not been convicted of any offence under the Penal Code during the preceding five years.
6. Two writ petitions have been filed in which the validity of the order of STAT, dated 9-3-1973 has been called in question. One of these is Civil Misc. Writ Petition No. 1647 of 1973. The first petitioner in that writ petition is one Tulsi Ram who is existing operator on the route. The two other petitioners are Suresh Chand Tyagi and Cherkesh Kumar Jain who have already been referred to above. Civil Misc. Writ Petition No. 3068 of 1973 has been filed by Dharampal Singh and others. All the petitioners in this writ petition were operators who were plying their vehicles from before On this route.
7. In the two writ petitions referred to above this court initially passed an ad interim order directing that in case permits had already been issued in pursuance of the order of the STAT dated March 9, 1973 they shall not be given to the persons in whose favour the appeal has been decided. The aforesaid two writ petitions were again listed for hearing before this Court for confirmation of the stay order after hearing the parties. The stay order initially passed by the Court was modified. This Court ordered that the stage carriage permit will be issued to the appellants before the STAT provided they were found eligible within the meaning of Section 43-A (ii) of the Act and provided further that the route was not a notified route.
8. The court also directed that RTA will itself consider the applications on merit for testing the eligibility of each of the persons found entitled to the grant of permit by the STAT under its order dated March 30, 1973. After the said order the RTA heard the persons concerned in its meeting held on 9/10th April 1975 and reserved its judgment. After waiting for a considerable time some of the persons who were the appellants in the 32 appeals which were decided by the STAT by its order dt. Mar. 9, 1973 filed writ petition No. 699 of 1963 (1975?) before this Court for a writ of mandamus. Without going into unnecessary details it may be stated that the RTA by its judgment dated March 1, 1978 refused to issue permits to all the persons concerned. Some of the persons concerned who are petitioners in Civil Misc. Writ Petition No. 747 of 1980 filed a writ petition under Article 32 of the Constitution of India before the Supreme Court. The said writ petition was converted into an appeal under Article 136 and was numbered as Civil Appeal No. 1224 of 1974. By an ad interim order dated April 17, 1979 the Supreme Court directed that the RTA shall issue a permit to each of the appellants before it. The appeal finally came up for hearing before that Court on May 4, 1979 and was dismissed on the ground that the appellants in the appeal had an alternative remedy.
At the same time the Supreme Court directed that the appellants before it shall continue to ply their vehicles on the route for a period of two weeks from the date of the order. By a subsequent order the Supreme Court extended this period up to May 26, 1977. In the meanwhile the appellants in Civil Appeal No. 1224 of 1978 filed an appeal under Section 64 of the Act before the STAT but the Tribunal rejected their prayer for an ad interim stay order by its order dated May 29, 1979. Thereupon the appellants before the STAT filed writ petition No. 2087 of 1979 and obtained stay order on August 2, 1979. This writ petition was however dismissed by an order dated Sept. 11, 1979 on the ground that the proper remedy for the petitioners in that writ petition was to obtain modification of the stay order granted by this Court in Civil Misc. Writ Petitions Nos. 1647 of 1973 and 308 of 1973. The appeals filed before the STAT came up for hearing and were dismissed by it by its order dated Oct. 3, 1979.
9. Three writ petitions have been filed in which the validity of the orders of the RTA dated March 1, 1978 and the order of the STAT dated Oct. 13, 1979 has been assailed before us. These writ petitions are Civil Misc. Writ Petitions Nos. 747 of 1980, 1214 of 1980 and 1733 of 1980. Petitioners in all these writ petitions are those who had succeeded in their appeals filed against the order of the RTA dated 6/7th April 1966 and in whose favour the STAT had pronounced its judgment dated March 9, 1973. It is in the backdrop of these facts that we shall proceed to dispose of these writ petitions.
10. From what has been stated above it can be seen that this Court had passed certain interim orders in Civil Misc. Writ Petition No. 1647 of 1973 and Civil Misc. Writ Petition No. 3068 of 1973, hereinafter referred to as the writ petitions in the first group. Writ Petitions Nos. 747 of 1980, 1214 of 1980 and 1733 of 1980, hereinafter referred to as writ petitions in the second group, arise mainly on the happenings of events founded on the interim orders passed in the first group of writ petitions. Since we are deciding the writ petitions in the first group on merits by this judgment the second group of writ petitions automatically become infructuous and have to be dismissed as such. We accordingly dismiss the writ petitions in the second group without entering into the merits of the same.
11. Mr. S, K. Dhawan mounted a four pronged attack against the order of the STAT dated March 9, 1973. We shall deal with each of his submissions a little later in this judgment. At this stage we may refer to certain relevant provisions of the Motor Vehicles Act as it stood before 1972 herein referred to as the Act and the State Amendment made therein after 1972 only in so far as they are relevant for the appreciation of the submission made on behalf of the parties.
12. Sub-section (29) of Section 22 of the Act defines the Stage Carriage to mean a motor vehicle carrying or adapted to carry more than six persons, excluding the driver, which carries passenger for hire or reward at separate fares paid by or for individual passengers either for the whole journey or for a stage of the journey. A 'public service vehicle' under Sub-section (25) of Section 2 of the Act means any motor vehicle used or adapted to be used for carriage of passengers for hire or reward and includes a motor cab, contract carriage and stage carriage. Sub-Section (33) of Section 2 of the Act states that transport vehicle means a public service vehicle or a goods vehicle.
13. We have already stated that the business of plying public service vehicles is regulated by the provisions of the Act. Chapter X of the Act deals with the control of transport vehicles. It consists of Section 42 to Section 68. Section 42 enjoins that no owner of a transport vehicle shall use or permit the use of the vehicle in any public place save in accordance ' with the conditions of permit granted or countersigned by the Regional Transport Authority. Section 44 provides for setting up the State Transport Authority and the Regional Transport Authority. The Regional Transport Authority has been vested with powers in relation to a region only. The extent of a region is to be specified by notification issued by the State Government in that behalf. The State Transport Authority coordinates and regulates the activities and policies of the Regional Transport Authority.
Section 45 of the Act mentions the authority to whom an application for grant of permit shall be made. Section 46 of the Act deals with the procedure of the Regional Transport Authority in considering applications for stage carriage permits. Section 48 confers powers on the Regional Transport Authority to grant stage carriage permits, Section 57 refers to the procedure which has to be followed in applying for grant of permits. Section 63 deals with validation of permits for use outside the region in which it is granted. It may be mentioned that Sub-section (3) of Section 47 enjoins on the Regional Transport Authority first to fix the strength of the inter region (intra regional?) route. It is only when the strength of a route has been so fixed that application to fill vacancies on the said route can be invited. Section 64 of the Act confers a right to appeal to a person aggrieved by the order of the Regional Transport Authority. Such an appeal is required to be preferred on grounds (a) to (i) of the section and in the prescribed manner and before the STAT constituted by the State Government in accordance with Sub-section (2) of the said section.
14. When the law was in this state, the State Legislature passed the U. P. Motor Vehicles (Uttar Pradesh Amendment) Act, 1972, hereinafter referred to as the Amendment Act of 1972. Statement of Objects and Reasons of the Amendment Act 1972 inter alia provided that as operators of public service vehicles were engaged in a race for securing permits for stage carriage on non-nationalised routes and because of limitation placed on the strength of the routes complaints have been received that the business was being controlled by a few persons. It was, therefore, necessary to suitably amend the Motor Vehicles Act so that it could become easier to secure permits on non-nationalised routes. It was also considered necessary that public interest would be served by more vehicles on the non-nationalised routes. To give effect to this policy a new Section 43-A was introduced in the Act which reads as follows:
'43-A. Power of the State Government to issue directions to Transport Authorities.-- (1) The State Government may issue such directions of a general character as it may consider necessary or expedient in the public interest in respect of any matter relating to road transport to the State Transport Authority or to any Regional Transport Authority and such Transport Authority shall give effect to all such directions.........'
By the same Act Sub-section (1) of Section 47 was substituted by a new sub-section as follows:--
(i) A Regional Transport Authority shall, in considering an application for a stage carriage permit, have regard to the following matters, namely,
(a) the interest of the public generally;
(b) the advantage to the public of the service to be provided, including the saving of time likely to be effected thereby and any convenience arising from journeys not being broken;
(c) the benefit to any particular locality or localities likely to be afforded by the service, and shall also take into consideration any representations made by any local authority or police authority within whose jurisdiction any part of the proposed route or area lies.'
15. Thus consideration which were to weigh with the transport authority in granting permits were originally six in number were reduced to only three. Sub-section (3) of Section 47 which empowered the Regional Transport Authority to fix the strength of the intra regional route was totally deleted. There were some other consequential amendments to which it is not necessary to refer. Suffice it to say that the primary object of the Amendment Act of 1972 was to give effect to what came to be known as a liberal policy which was to be followed for the purposes of granting permits. Acting in pursuance of the powers conferred upon it by the Amendment Act of 1972 the State Govt. issued a notification dated March 30, 1972 which was published in the U. P. Govt. Gazette of the same date. We deem it proper to quote the said notification in extenso:--
'Whereas the State Government is of opinion that it is in the public interest to grant stage carriage permits (except in respect of routes or areas for which schemes have been published under Section 68-C of the Motor Vehicles Act 1939) contract carriage permits and public carrier permits. Now, therefore, in exercise of the power conferred by Section 43-A of the Motor Vehicles Act, 1939 the Governor is pleased to direct that stage carriage permits (except in respect of routes or areas aforesaid), contract carriage permits and public carrier permits shall be granted according to the provisions of the said Act to all eligible applications (applicants?).'
16. After a brief experiment with the liberal (policy?) enunciated under the Amendment Act of 1972 and the notification dated March 30, 1972 the State Government went back on that policy. It accordingly issued a notification dated Sept. 24, 1975. Para. 1 of the notification rescinded the notification issued on March 30, 1972. In the second para, of the notification it was stated that the consideration of applications for stage carriage permits pending with any State Transport Authority shall stand postponed until further directions were issued in this behalf by the State Government. Close on the heels of this notification an Ordinance was issued which was replaced by U. P. Act No. XV of 1976. In para. 5 of the Statement of Objects and Reasons of this Act it was stated, 'In 1972 the State Government had accepted the policy of granting bus permits liberally.
Reconsideration of the said policy, however, became necessary with a view to checking unproductive capital expenditure and unnecessary consumption of fuel and preventing elimination of small operators as a consequence of unreasonable competition and to removing difficulties in the implementation of long term plans pertaining to passenger road transport services. It was accordingly considered necessary to amend the Motor Vehicles Act, 1939 to authorise the State Government to issue directions from time to time in regard to the number of permits that may be granted in respect of any route or area, preference to be given to specifically deserving category and the procedure for grant of permits.'
17. Section 21 of this Amendment Act inter alia amended Section 43-A of the Act, Sub-section (2) of Section 43-A was substituted by a new Sub-section (2). Sub-secstion (3), (4), (5) and (6) were added to this section. Section 21 of the U. P. Act No. XV of 1976 is quoted below for easy reference:--
'21 Amendment of Section 43-A of Act IV of 1939 as inserted by U. P. Act No. 25 of 1972. In Section 43-A of the Motor Vehicles Act, 1939, (hereinafter referred to as the principal Act) for Sub-section (2) the following sub-section shall be substituted and be deemed always to have been substituted, namely,
(2) Without prejudice to the generality of the provisions of Sub-section (1) such directions may be given in respect of any of the following matters, namely.
(a) the number of stage carriage or contract carriage permits that may be granted in respect of any route or area,
(b) the preference or the order of preference to be given to or the quota to be fixed for, specially deserving categories such as ex-army personnel, educated unemployed persons, such persons holding driving licences as are members of cooperative societies formed for passenger transport business, persons belonging to the Scheduled Castes and Scheduled Tribes.
(c) the procedure for grant of permits, and for selection from among the applicants, including selection by drawing of lots from among persons belonging to the same category.
(3) Any direction under Sub-section (1) may be issued with retrospective effect.
(4) Where any direction is issued under Sub-section (1) to any Transport Authority, then any appeal or revision pending before the State Transport Appellate Tribunal shall also be decided in such manner as to give effect to such direction,
(5) Where any direction is issued under Sub-section (1) with retrospective effect then
(a) any Transport Authority or the State Transport Appellate Tribunal may review any order passed earlier by it with a view to making it conform to such direction, and may for that purpose cancel any permit already issued;
(b) any Transport Authority may apply to the High Court for review of any order passed by such Court earlier with a view to enabling such authority, to comply with such direction.
(6) The provisions of this Section shall have effect notwithstanding anything contained in Sections 47, 50 and 57.'
18. Mr. S. K. Dhawan appearing for the petitioners in the first group of writ petitions contended that the order of STAT impugned in this group of writ petitions was bad as this Court had issued an order staying the operation of the notification of the State Government dated Sept. 30, 1972. In other words it was urged by him that the impugned order of the STAT was invalid as it was based on the liberal policy enunciated in the notification dated March 30, 1972 and the enforcement of said notification had been stayed by this Court. The submission of the learned counsel is founded on a stay order issued by this Court to which the STAT was not admittedly a party. Mr. Dhawan however submitted that the State Government was a party to that writ petition in which the stay order had been passed and the STAT was only an instrumentality of the State according to him. The stay order issued by this Court would be binding on the STAT also. In support of his submission he placed reliance on a decision of the Supreme Court in AIR 1967 SC 1386. Mulraj v. Murti Raghunathji Maharaj.
19. We have given due consideration to the submission made by the learned counsel but we are unable to accept it It is admitted that the writ petitions in which the operation of the impugned notification had been stayed were ultimately dismissed. The ad interim stay order passed in that writ petition has therefore ceased to exist. Even if it be assumed that the STAT was bound by the stay order the dismissal of the writ petition in which that order had been passed cannot introduce an infirmity in the impugned order which can be said to subsist even now.
20. Be that as it may we are of the opinion that the stay order passed in the writ petition to which STAT was not a party was not binding upon it. The decision in Mulraj's case (AIR 1967 SC 1386) (supra) lends support to this view and does not in any way support the contention urged by Shri S. K. Dhawan. In that case an application for permission to sue a tenant had been made by the landlord before the Rent Control and Eviction Officer. The tenant moved an application to the higher authority for the transfer of the case which passed an order staying further proceedings in the case. However, before the said stay order could be communicated to him the Rent Control and Eviction Officer pronounced a judgment in that case and granted permission to the landlord to sue the tenant for ejectment.
In the suit filed on the basis of that permission it was contended on behalf of the tenant that the permission on the basis of which the suit had been filed was invalid as the same had been granted after the stay order had been passed by a higher authority. In second appeal this court took the view that the stay order could not and did not take away the jurisdiction of the Rent Control and Eviction Officer from the moment it was passed and that the Rent Control and Eviction Officer had no knowledge or information about the same. The order passed by him was proper and did not suffer from any illegality. The Supreme Court accepted the view taken by this Court. Wanchoo J. speaking for the Court observed (at p. 1389):--
'The order of injunction is generally issued to a party and it is forbidden from doing certain acts. It is well settled that in such a case the party must have knowledge of the injunction order before it can be penalised for disobeying it. Further it is equally well settled that the injunction order not being addressed to the Court, if the court proceeds in contravention of the injunction order the proceedings are not a nullity. In the case of stay order as it is addressed to the Court and prohibits it from proceeding further, as soon as the court has knowledge of the order it is bound to obey it and if it does not it acts illegally and all proceedings taken after the knowledge of the order would be a nullity. That in our opinion is the only difference between the order of injunction to a party and an order of stay to a Court. In both cases knowledge of the party concerned or of the Court is necessary before prohibition takes effect.'
21. It follows from what has been stated above that knowledge of Court about the existence of stay order is necessary in order to create an illegality or infirmity in the judgment or order pronounced in contravention of such stay order. In our view the STAT cannot be said to be instrumentality of the State in the sense so as to make an agent of the State Government. The said Tribunal was constituted in accordance with the provisions contained in the rules framed under, the Act. The question of importing know-j ledge to the STAT of the stay order passed by this Court does not therefore arise. We find no substance in the submission urged on behalf of the petitioners in thei first group of writ petitions.
22. Mr. Dhawan next contended that portions of the route were nationalised under Chapter IVA of the Act and the scheme provided for total exclusion of private operators and as such permits could not have been granted to contesting respondents in pursuance of the provisions contained in S. 43-A of the Act read with the notification of the State Government dated March 30, 1972. This submission is based on the fact that some portions of the route from Muzaffarnagar to Saharanpur were nationalised routes and in support of his submission he placed reliance on AIR 1974 SC 1940, Mysore State Road Transport Corporation v. Mysore Transport Appellate Tribunal and AIR 1977 All 1 (FB), U.P. State Road Transport Corporation v. State Transport Appellate Tribunal, Mr. L. P. Nathani appearing on behalf of the contesting respondents, however, urged that after the decision of the Appellate Tribunal dated March 9, 1973 the contesting respondents became permit holders and they were entitled to the benefit of U. P. Motor Vehicles (Special Provisions) Act, 1976, U. P. Act No. XXVII of 1976. According to Mr. Nathani the order of the STAT dated March 19, 1973 (sic) was an order of absolute grant of permission in favour of the contesting respondents. Only the ministerial act of issuing permits remained to be performed by the RTA and the performance of the ministerial act was stayed by this Court on account of ad interim stay order. He urged that the petitioners were not entitled to claim any benefit on account of the said stay order. We shall presently deal with the effect of U. P. Act No. XXVII of 1976 on the rights of the parties.
23. Now it is not disputed by the contesting respondents that the portions of the route were nationalised under the scheme framed under Chapter IV-A of the Act. As already stated in Mysore State Road Transport Corporation (AIR 1974 SC 1940) (supra) the Supreme Court held that if there was prohibition to operate on a route notified as nationalised route under Chapter IV-A of the Act, no licence can be granted to any private operator whose route transversed or overlapped any part or whole of the notified route. In the case of U. P. State Road Transport Corporation (AIR 1977 All 1) (supra) the Full Bench of this Court held that if the route had been nationalised then no one could be permitted to carry passengers for hire on any portion of the notified route. The Bench further observed (at p. 5):--
'Even if the respondents did not pick up or set down passengers on the notified portion of the route they would certainly carry passengers from a point prior to one termini to a place beyond the other termini of the notified route and in doing so they would charge fare from the passengers for the notified portion of the route. Thus they would be carrying passengers for hire and reward on the notified portion of the route. This would certainly be in contravention of the two schemes noted below which means complete prohibition against the private operators to ply their vehicles or carrying goods for hire or reward on the notified portion of the route thereof.'
It may be stated that the two decisions referred to above were primarily based on the consideration of provisions of law contained in Section 68-F (2) and Section 68-C which appear in the amalgam of sections included in Part IV-A of the Act. Moreover the language of the notification issued by the State Government on March 30, 1972 makes it clear that the liberal policy was not to apply in respect of routes or areas which were covered by a scheme for nationalisation covered by Chapter IV-A of the Act. If the matter had stayed there, there would have been no difficulty in accepting the contention urged on behalf of Mr. S. K. Dhawan. The more formidable question which, however, arises for our consideration is the impact on the rights of the parties by coming into force of U. P. Act No. XXVII of 1976.
24. The said Act was passed mainly to get over the difficulty created by the decision of the Supreme Court in the case of Mysore State Road Transport Corporation (AIR 1974 SC 1940). Para 2 of the Statement of Objects and Reasons of that Act, reads as under:--
'Secondly there are certain routes on which private buses are plying and which overlap some of the routes notified under Chapter IV-A of the said Act. Private buses are allowed to ply on these routes on the condition that they will neither pick up nor set down passengers between any two points on the notified portion. The Supreme Court has recently held that if an approved scheme did not make specific provisions for any private operator over part of the notified route such plying is illegal. To completely do away with plying of such private buses over such 'corridor' would cause undue hardship to motor operators as also to the general public. It has accordingly been decided that plying of private buses on 'corridors' should continue to be allowed subject to certain financial and (administration (administrative?) arrangements notified on behalf of the U. P. State Road Transport Corporation. Necessary provision is being made only to achieve this object as well.'
24-A. The hardship to which reference has been made in the Statement of Objects and Reasons appended to Act No. XXVII of 1976 is obvious. Muzaffar-nagar and Saharanpur are adjoining districts but at one time the only approach from Muzaffarnagar to Saharanpur and vice versa was through Roorkee. This route covered a considerable distance. It was accordingly decided to connect portions of pre-existing roads to provide a nearer link between the districts. The pre-existing roads were routes nationalised under Chapter IV-A of the Act. Under the ratio of the decision in the case of Mysore State Road Transport Corporation (AIR 1974 SC 1940) (supra) and U. P. State Road Transport Corporation (AIR 1977 All 1) (FB) (supra) the passengers travelling between Saharanpur and Muzaffarnagar would be required to change vehicles in which they travel on several occasions. Moreover the operators of public service vehicles can confine their activities to small stretches of the route. They were under an obligation to carry their vehicles empty on that portion of the route which was covered by the scheme framed under Chapter IVA of the Act. It was to do away with this intolerably state of affairs that U. P. Act No. XXVII of 1976 was enacted.
25. Section 1 (3) of Act XXVII of 1976 lays down that the Act shall apply in relation to schemes approved or purported to be approved areas and routes notified or purporting to be notified under Chapter IV-A of the Motor Vehicles Act, 1939 as amended in its application to Uttar Pradesh and to permits issued under the Act before the commencement of this Act. Section 2 (a) lays down that the expression 'approved scheme' 'notified area' and 'notified routes' shall have the same meanings as given to them in Section 68-D of the Motor Vehicles Act. 'Competent' Authority means an authority constituted under Section 3 of Act XXVII of 1976. Section 7 empowers the State Government to appoint a Competent Authority.
It also confers powers on the Competent Authority to authorise any holder of permit for stage carriage to ply his stage carriage vehicles on the notified portion of the route for such period and subject to such terms and conditions which it may consider fit to impose, S, 8 lays down that an order issued under Act XXVII of 1976 shall have effect notwithstanding anything contrary contained in Chapter IV-A of the Motor Vehicles Act. Section 9 gives finality to order passed by the Competent Authority under Section 5 thereof. These are the salient features of Act XXVII of 1976 which are relevant for the purpose of the decision of these cases. It may be also stated that Act No. XXVII of 1976 had been given the President's assent and any order passed thereunder necessarily prevails over the scheme notified under Chapter IV-A of the Motor Vehicles Act, 1939.
26. The main controversy between the parties is whether the contesting respondents can be deemed to be 'permit holders' within the meaning of the term as used in Act XXVII of 1976. According to the contesting respondents they became permit holders the moment the order dated 9-3-1973 was passed by the STAT. The claim is hotly contested on behalf of the petitioners.
27. It may be noted that the expression 'permit holders' has not been defined either under the Motor Vehicles Act or under Act No. XXVII of 1976. True it is that Sub-section (2) of Section 2 of the Act defines 'permit' to mean a document issued by the State or Regional Transport Authority authorising use of transport vehicle as contract carriage, or stage carriage, or authorising the owner of a private carrier or public carriage to use such vehicle. The scheme of the Act makes a distinction between a permanent permit which is renewable after every five years and temporary permit issued for the period of six months. In Civil Misc. Writ petition No. 9380 of 1'978 (Adya Rai v. Competent Authority) decided by a Division Bench of this Court on Aug. 22, 1978 it has been held that the benefit of U. P. Act No. XXVII of 1976 is available to temporary permit holders as also to permanent permit holders, but the decision in this case does not help us in resolving the controversy before us.
28. Learned counsel for the contesting respondents however relies on AIR 1978 SC 209 Sharif Ahmad v. RTA and AIR 1978 SC 1152 Attar Singh v. RTA to support Ms contention that the petitioners became permit holders the moment the impugned order was passed by the STAT. In Sharif Ahmad case (supra) it has been laid down as follows:--
'To our mind the problem does not present much difficulty. The applications filed by the appellants for grant of permits to them were rejected by the Regional Transport Authority in October, 1971, They were finally disposed of and permits were granted to them by the order of the Appellate Tribunal made on Feb. 19, 1975. The consideration of the applications for grant of permits was no longer pending after the said order. What remained pending was a mere ministerial act to be performed by the Regional Transport Authority or by any delegate of that authority in accordance with Rule 44-A of the U. P. Motor Vehicles Rules, 1940.'
29. The case of Sharif Ahmad (supra) was decided by a Bench of two Judges of the Supreme Court. The principle was, however, approved by a Bench of three Judges in Attar Singh case (supra). In this case the Regional Transport Authority refused to grant permits to the appellants on the around that part of the route was not motorable. In appeal from the said order the Transport Appellate Tribunal held that it was a motorable route and directed the Regional Transport Authority to consider the application of the appellants on merits. One of the existing operators of the route filed writ petition before the High Court challenging the appellate order. In that writ petition the High Court made an order permitting the Regional Transport Authority to consider the application for grant of permits on the route and to grant them if on merits the applications were fit to be allowed. The order, however, provided that the permits so granted shall not be issued until further orders of the High Court. On May 1, 1973 the Regional Transport Authority sanctioned permits in favour of the appellants. The stay order was subsequently vacated but the writ petition itself was finally dismissed. In this context it was observed by the Bench hearing Attar Singh's case (AIR 1978 SC 1152 at p. 1154) (supra):
'In the instant case as a result of the limited stay order passed by the High Court on 20th May, 1971 the Regional Transport Authority itself granted the permits. The applications therefore stood disposed of and were not pending. What remained pending was a ministerial act of issuing the permits on the fulfilment of the conditions imposed in the order. There was no difference between a sanction of permit and grant of permit......'
30. It is thus clear from the observations of the Supreme Court in the two cases to which we have now referred that permit is granted as soon as the final order sanctioning or granting permit in favour of an applicant is passed. The actual issuance of permit is a ministerial act. It cannot be said after an order of grant or sanction has been passed that a person in whose favour the grant or sanction is made is not entitled to receive the same. In other words the person in whose favour a permit is granted or sanctioned is a permit holder,
31. Mr. Dhawan, however, contends that this conclusion will not help the contesting respondents inasmuch as the grant of permit in their favour was not a valid grant and the order dated March 30, 1978 (sic) impugned in this writ petition is totally non est. According to him only those persons can avail of the benefit of Act XVII of 1976 who are holders of valid permits. It is submitted that the order granting permit which is ab initio void would not entitle the purported grantee to call in aid the provisions of Act XVII of 1976.
32. We have given careful consideration to the matter and we are of the view that the submission made by Mr. S. K. Dhawan must be accepted. The position that the actual issuance of permit is only a ministerial act which follows as a matter of course after the order of actual grant has been passed is not contestable. There is, however, nothing which prohibits a Court from looking into an order of grant and forming its own opinion about its validity or invalidity. The grant made by the authority or a person wholly incompetent to do so would not make the grantee a permit holder and will not enable him to avail of the benefit conferred by U. P. Act No. 27 of 1976. If the invalidity of grant stares one in the face it is not possible for the court to shut its eyes. We have already stated above that in view of the notification issued by the State Government on March 30, 1972 no permit could have been granted to the contesting respondents since the portions of the route from Muzaffarnagar to Saharanpur via Bhaman Heri Gagal Heri overlap the nationalised routes. The STAT therefore was wholly incompetent to grant the permits in favour of the contesting respondents.
33. Mr. Dhawan further contended that the STAT which passed the impugned order dated March 9, 1973 was the Board of Revenue which had been appointed as such in accordance with Rule 72 of the Motor Vehicles Rules, 1940 which was promulgated under U. P. notification dated Aug. 14, 1961. He went on to say that on a plain reading of Sub-section (2) of Section 43-A the liberal policy enunciated in accordance with the provisions of U. P. Act No. XXV of 1972 read with the notification of the State Government dated March 30, 1972 could only be enforced by STAT constituted under Section 64 of the Act. In other words he drew a distinction between a Tribunal constituted under Section 64 of the Act and STAT constituted otherwise than under the said provision. True it is that Section 64 of the Act was amended by addition of sub-section (2) which provided that the State Government shall constitute for the State a State Transport Appellate Tribunal which shall consist of a whole time Judicial Officer not below the rank of a District Judge. This amendment in the Act was effected by Act No. 56 of 1969.
Thus an officer appointed as STAT alone can be said to be a Tribunal constituted under Section 64 of the Act on the view canvassed before us by Mr. S. K. Dhawan. However, Sub-section (3) which was also added by the same Amending Act provided that notwithstanding anything contained in Sub-section (2) any appeal pending on the date of the coming into force of the Amendment Act shall be proceeded with and disposed of as if the Act had not been passed. From this it follows that the Tribunals constituted in accordance with the Rules were made competent to dispose of the appeals which were pending before them. It cannot be legitimately said that the authority of such Tribunals to decide appeals was wholly outside the ambit of Section 64 itself. It may be that the initial appointment of such Appellate Tribunal was in accordance with the Rules but for sub- Section (3) of Section 64 introduced by the Amending Act of 1969 such Tribunals would have been divested of the jurisdiction to dispose of matters which were pending before them. It is only by virtue of Sub-section (3) of Section 64 that they continued to have jurisdiction to pass final orders in appeals which had been filed before them before the commencement of the Amending Act of 1969. In this view of the matter we do not feel inclined to accept the submission made by Mr. Dhawan.
34. Lastly it was urged by Mr. Dhawan that Suresh Chand Tyagi and Cherkesh Kumar Jain were petitioners 2 and 3 respectively in Civil Misc. Writ Petition No. 1647 of 1973. They applied for grant of fresh permits as the strength of the route had been increased and the vacancies which were brought into existence had been duly notified. According to him the rights of the said petitioners have been infringed by the impugned order granting permits to the contesting respondents. It is submitted by the learned counsel that the petitioners 2 & 3 were not parties to the appeals before the STAT and the vacancies against which they had applied had been filled in on account of the order passed by the STAT. This submission ignores the fact that the route was inter-regional route. It has been specifically stated in the counter-affidavit that there was no agreement between Dehra Dun region and the Meerut region in respect of the strength of this route. The said averment has not been denied in the rejoinder affidavit filed on behalf of the petitioners. In consequence the RTA, Dehra Dun was not competent to fix the strength of the route and the notification issued by the said authority inviting applications on the basis of the increase was wholly without jurisdiction. The challenge against the impugned order on this ground therefore fails.
35. For the reasons stated above these writ petitions Nos. 1647 of 1973 and 3068 of 1973 are hereby allowed and the order of the STAT dated March 9, 1973 is hereby quashed. Writ Petitions Nos. 747 1214 and 1733 of 1980 are dismissed. There shall be no order as to costs.