R. Rajendra Babu, J.
O.P. 17712/2001
1. Petitioner K.T. Sureshan applied for four months temporary permit on the route Chaliam-Providence College a city permit as notified by the RTA, Kozhikode in the vacancy of stage carriage bearing Reg. No. KL2 9659, having a valid regular permit till 16.6.2000. The permit holder had not renewed the permit and hence there was vacancy for conducting service as a substitute one. Another operator also had applied for four months temporary permit on the above route. Both the applications were rejected by the RTA, Kozhikode as per Ext. P1 proceedings dated 6.2.2001 holding hat as per SRO 891/2000 the number of stage carriages in Kozhikode city had been limited to 400 and the above number of regular permits had already been exhausted. The petitioner filed this Original Petition challenging Ext. P3 notification, i.e. SRO891/2000 issued by the Government under Section 71(3) of the Motor Vehicles Act(hereinafter referred to as 'the Act') limiting the number of permits, as ultravires theprovisions of Section 71(3) (a), (b) and (c) of the Act. It was further contended that thereservation of 40 permits in favour of the State Transport Undertaking was withoutjurisdiction and as such the above reservation was also liable to be quashed. Later, anadditional prayer was made for quashing Ext. P2 notification stating that Ext. P3notification was issued modifying Ext. P2 notification, ie., SRO 278/93, issued by theGovernment under Section 71(3).
O.P. 31627/2001
2. Petitioner, one K.P. Ajith Kumar, filed an application for the grant of regularpermit to operate on the route Meenchanda, Medical College, Feroke College (Via)Civil Station and Malaparamba. Earlier, the third respondent, Ex-servicemen Co-operativeSociety was operating on the above said route and they had defaulted. Thepetitioner applied for regular permit with the same set of timings and initially theapplication was rejected by the RTA on 13.11.2000 by Ext. P4 order. The petitionerchallenged Ext. P4 order before the STAT in MVAA No. 437/2000 and the Tribunalby Ext. P5 order set aside Ext. P4 order of the RTA and held that the petitioner wasentitled to the grant of permit. The matter was again placed before the RTA on2.3.2001 and the application was again rejected by Ext. P6 order holding that thenumber of permits had been limited to 700 in the city of Kochi as per notification SRO891/2000 and the number has already exhausted. The above order was challengedbefore the STAT in MVAA No. 223/2001. By Ext. P9 order the STAT partly allowedthe appeal. Aggrieved by the above order the petitioner filed this Original Petition forquashing Ext. P6 order of the RTA, Exts. P7 and P8 notifications (SRO 278/1993 and891/2000 respectively) issued by the Government under Section 71(3) of the Act and alsofor quashing Ext. P9 order of the STAT.
3. The first respondent, State of Kerala, filed a counter in O.P. 1771/2001contending that the Central Government as per Notification No. SO.701(E) dated12.9.1990 directed the State Government to limit the number of stage carriage operatingin the city routes in the cities of Kozhikode and Kochi. Accordingly, the Governmentissued Ext. P2 notification (SRO 278/93) limiting the number of stage carriages operatingin the city routes of Kozhikode and Kochi. The total number of stage carriagesoperating in Kozhikode city was fixed at 1150 and in Kochi at 750 and 50 permits hadbeen reserved for the State Transport Undertaking at Kozhikode and Kochi. Later,the District Rod safety Committee Meeting held at Kozhikode on 7.12.1996 decidedto request the Government to reduce the number of services in Kozhikode consideringthe road condition, the number of vehicles and all other relevant matters. The matterwas again considered by the RTA in its meeting held on 7.4.1997 and decided to takeup the matter with the State Transport Authority, Trivandrum and requested theGovernment to give appropriate action to reduce the number of stage carriages.Accordingly, the earlier notification was amended by reducing the number of stagecarriages operating in the city limits of Kozhikode to 400 and 40 permits had beenreserved for State Transport Undertaking. The State Government has the powerunder Section 71(3) of the Act to limit the number of permits having regard to the numberof vehicles, road conditions and all other relevant matters and the notification hadbeen issued complying with all the legal formalities and as such those notifications arenot liable to be quashed.
4. The additional fourth respondent, the KSRTC also filed a counter raisingidentical contentions as those raised by the first respondent State and prayed that theOriginal Petition is liable to be dismissed.
5. The third respondent in OP 31627/2001, the Ex-servicemen Co-operativeSociety, represented by its Secretary, filed a counter contending that the petition wasnot maintainable and was liable to be dismissed. It was contended that the city permitMeenchanda-Medical College stood in the name of the society and as it was valideven now no permit could be granted to the petitioner in its place. It was admitted thatthe vehicle of the society was garaged for major repairs and is expected to ply on theroute with immediate effect and as such no permit can be granted in favour of thepetitioner.
6. The learned counsel for the KSRTC and also the learned Government Pleadersubmitted that the counter filed by them in the case OP 17712/2001 may be treated asthe counter in the other case also. Heard Smt. Sumathi Dandapani, the learned counselfor the petitioners, Sri. James Koshi, the learned standing counsel for the KSRTC.Sri. P. Santhosh Kumar, the learned counsel for the Ex-servicemen Co-operative Societyand the learned Government Pleader Smt. M.J. Rajasree.
7. The main relief prayed for in these Original Petitions was to quash Exts. P2and P3, the two notifications issued by the Government under Section 71(3) of the Actlimiting the number of stage carriages to be operated in the city limits of Kozhikodeand Kochi. The first notification Ext. P2 (SRO 278/93) was dated 18.2.1993 and thesecond notification Ext. P3 (SRO 891/2000) was dated 19.9.2000. By Ext. P2notification the number of stage carriages to be operated at Kozhikode was fixed as1150 and out of which 50 permits were reserved to be operated by the State TransportUndertaking. By Ext. P3 notification, which is an amendment to Ext. P2 notification,ie., SRO 891/2000, the number of stage carriages to be operated in Kozhikode cityhad been amended and reduced to 400 and 40 permits had been reserved for the StateTransport Undertaking. The above notifications would reveal that out of the totalnumber of permits 10% had been reserved for SC/ST as provided under Section 71(3) (b)and (c) of the Act.
8. The main argument advanced by the learned counsel for the petitioners wasthat the reservation of permits in favour of the State Transport Undertaking waswithout any jurisdiction and Section 71(3) of the Act did not permit or authorise theGovernment to reserve any permit in favour of the State Transport Undertaking, thougha priority had been provided under Section 71(3)(d) of the Act. It was submitted that whenthe State Transport Undertaking files an application and when there is a rival applicantand all other conditions contemplated by the law and Rules are equal, the State TransportUndertaking will have the priority in getting the permit granted and beyond such priority,the law did not permit the State to reserve any permit in favour of the State TransportUndertaking. Hence, the reservation of the permits in favour of the State TransportUndertaking as per Exts. P2 and P3 notifications are ultra vires the provisions of lawand beyond the powers conferred on the State and hence Exts. P2 and P3 notificationsare liable to be quashed. it was further argued that as per Ext. P2 notification thenumber of stage carriages to be operated in the city limits had been fixed and notifiedas 1150 and that was after considering the number of vehicles, the condition of theroad and all other relevant matters and as such the subsequent reduction of the numberof stage carriages to be operated in the city by Ext. P3 notification was without anyauthority or sanction from the Central Government. It was further argued that Ext.P3 notification did not comply with the provisions of law as it did not specify thereservation of permits in favour of the SC/ST as contemplated by law (Section 71(3) (b) and (c) of the Act) and on the above grounds also Ext. P3 notification was liable to bequashed. The learned Government Pleader as well as the learned standing counselfor the KSRTC submitted that both the notifications are strictly in accordance with theprovisions of law and as such those notifications are not liable to be quashed. Section 71(3)of the Act reads as follows:
'71(3).
(a) The State Government shall, if so directed by the Central Government having regardto the number of vehicles, road conditions and other relevant matters, by notificationin the Official Gazette, direct a State Transport Authority and the Regional TransportAuthority to limit the number of stage carriages generally or of any specified type, asmay be fixed and specified in the notification, operating on city routes in town witha population of not less than five lakhs.
(b) Where the number of stage carriages are fixed under Clause (a), the Government of theState shall reserve in the State certain percentage of stage carriage permits for thescheduled castes and scheduled tries in the same ratio as in the case of appointmentsmade by direct recruitment to public services in the State.
(c) Where the number of stage carriages are fixed under Clause (a), the Regional TransportAuthority shall reserve such number of permits for the Scheduled Castes andScheduled Tribes as may be fixed by the State Government under Sub-clause (b).
(d) After reserving such number of permits as is referred to in Clause (c), the RegionalTransport Authority shall in considering an application have regard to the followingmatters, namely:-
(i) financial stability of the applicant.
(ii) satisfactory performance as a stage carriage operator including payment of tax if theapplicant is or has been operator of stage carriage service; and
(iii) such other matters as may be prescribed by the State Government.
Provided that other conditions being equal, preference shall be given to applications forpermits from-
(i) State Transport Undertaking;
(ii) co-operative societies registered or deemed to have been registered under anyenactment for the time being in force; or
(iii) ex-servicemen.
The learned Government Pleader submitted that the Central Government had directedthe State Government to limit the number of stage carriages to be operated in the citylimits of Kozhikode and Kochi and on the basis of such direction Ext. P2 notificationhad been issued. It was further argued that as per Clauses (b) and (c) of Sub-section 3 ofSection 71 of the Act, 10% of the above number of stage carriage had been reserved forthe SC/ST as per Ext. P2 notification and the reservation of 50 permits in favour ofthe State Transport Undertaking is only limiting the right of the KSRTC to operate itsservice within the city limits. It was further submitted that by the above notificationthe right conferred by the statute to the State Transport Undertaking is limited so thatthe remaining permits can be allowed to the private operators and though it is mentionedas a reservation, in fact it is a restriction imposed on the number of permits to beissued to the State Transport Undertaking. It was further argued that the abovedirection in the notification has to be treated only as an order limiting the number ofpermits in favour of the State Transport Undertaking and not as reserving certainpermits in favour of the KSRTC. Ext. P2 notification, SRO 278/93 reads as follows:
'GOVERNMENT OF KERALA
Public Works and Transport (M) Department
NOTIFICATION
G.O.(P) No. 12.93/PW & T Thiruvananthapuram, 15th February, 1993
SRO No. 278/93 : Whereas the Central Government have by Notification S.O. 701(E) datedthe 12th September, 1990 directed the State Government under Clause (a) of Sub-section (3) of Section 71of the Motor Vehicles Act, 1988 (59 of 1988) to direct the State Transport Authority and theRegional Transport Authorities concerned to limit by notification in the official gazette, thenumber of stage carriages operating as city services in the places in the State specified therein.
Now, therefore, in pursuance of the said direction, having regard to the number of vehiclesoperating in the cities bad road conditions and other relevant matters, and in supersession ofthe Notification No. G.O.(P) 64/91 dated 30th August, 1991 published as SRO No. 1110/91 in thegazette dated 30th August, 1991 the Government of Kerala hereby direct the Regional TransportAuthorities concerned to limit the number of stage carriages operating on the city routes in thecities of Kozhikode and Kochi as fixed and specified in the table below:
TABLE
CityNumber of stage
carriages operated
by the State
Transport
Undertaking
(other than
fast passengers,
express and
deluxe services)Number of stage
carriages operated
by othersTotal number
of stage
carriages
1. Kozhikode50110011502. Kochi50700750
Ten percent of the total number of permits in respect of stage carriages as fixed above shallstand reserved for Scheduled Caste and Scheduled Tribes and the quota so reserved shall befilled up by allotting one it every ten permits sanctioned, subject to the condition contained inthe provisions to Rule 146 of the Kerala Motor Vehicles Rules, 1989.
By Order of the Governor,
N. Chandrasekharan Nair,
Commissioner and Secretary to Govt.'.
A reading of Ext. P2 would reveal that the notification was issued on the directions ofthe Central Government as contemplated under Section 71(3)(a) of the Act and alsocomplying with Section 71(3) (b) and (c) of the Act reserving certain percentage of permitsfor Scheduled Caste and Scheduled Tribe operators. Section 71(3) does not specificallyauthorise the State to reserve any permit for the State Transport Undertaking, thougha priority is provided under Clause (d) of Sub-section 3 of Section 71 of the Act. The priorityprovided under Clause (d) of Sub-section 3 of Section 71 of the Act can be available only whenthe KSRTC applies for permit and the conditions mentioned in the same clause areequal. A preference shall be given to the State Transport Undertaking, only when theState Transport Undertaking files an application for operating its service in the cityalong with private operators. When there is no application filed by the KSRTC, thequestion of priority does not arise. Section 71(3) of the Act does not authorise the State toreserve any permit in favour of the State Transport Undertaking and the reservationof 40 permits in favour of the State Transport Undertaking is not in accordance withany provisions under the Act. When there was a specific provision in the sameSection that a stipulated percentage of the permits shall be reserved for SC/ST andwhen there was no similar provision for reserving any permit for the State TransportUndertaking, but there was provision only for giving priority to the State TransportUndertaking, the reservation of permits for the State Transport Undertaking could notbe held to be as authorised by law. When the law provided only a priority in the grantof permit, the reservation of 40 permits in favour of the State Transport Undertakingwas not based on any provisions of law. The above reservation of permits for the StateTransport Undertaking was beyond the powers conferred under Section 71(3) of the Act.
9. Chapter VI of the Act deals with special provisions relating to TransportUndertaking. Section 99 empowers the State Government to formulate and publish schemesfor running of road transport services in any route or area by the State Road TransportUndertaking in exclusion of others complete or partial. it is settled law that whensuch schemes are published, no permit can be issued to any private operator except asprovided under the scheme itself. Thus, the law empowered the State to publish suchschemes for monopolising the operation of services on such notified routes or area.But so far as Section 71(3) of the Act was concerned, the law specifically granted a rightof priority alone to the State Transport Undertaking. The reservation of certain permitsin favour of State Transport Undertaking in Ext. P2 as well as in Ext. P3 notificationswas not in accordance with law and was beyond the powers conferred under theStatute and was ultravires of the powers and the clause in Exts. P2 and P3 reservingthe number of permits in favour of the State Transport Undertaking are liable to bequashed.
10. The learned standing counsel for the KSRTC submitted that Sub-section 3 of Section 71 of the Act would permit the State Government to reserve any specified type of statecarriages for the operation in the city limits and the usage of such specified type wouldinclude the stage carriages owned by the State Transport Undertaking and as such thereservation of certain permits in favour of the State Transport Undertaking was inaccordance with law. It was further argued that the stage carriages operated by theKSRTC has to be treated as 'specified type' of stage carriages and as such thereservation of permits in favour of the KSRTC or State Transport Undertaking wouldbe in accordance with Section 71(3) of the Act. The learned counsel for the petitionerssubmitted that the specified type of vehicles mentioned in Section 71 of the Act is notrelating to the stage carriages being operated by the KSRTC or by the State TransportUndertaking, but it relates to the nature or type or model of vehicles. Reliance wasplaced on the decision of this Court in Antony v. R.T.A., Kottayam (1960 KLJ 532),where this Court had considered the term 'vehicles of a specified type'. There itwas held:
'An argument was advanced that the word 'types' cannot cover models, I do not see whyit should not be accepted, if the word may be liberally interpreted. However, the words 'specifieddescription' in Sub-section (3) are of sufficient amplitude, as to cover a direction of the kind made.'
The same approach was made by a Division Bench of this Court of Raghavan v.R.T.O., Kollam (2001 (2) KLT 209). There it was held:
'In the light of the above discussion, it has to be held that the expression 'specifieddescription' appearing in Section 72(2) of the act has to be understood as taking in the model of thevehicle also with reference to its age'.
Section 74(3) of the Act empowers the State to restrict the number of contract carriagesgenerally or of a specified type. In fact Section 74(3) of the Act is similar to Section 71(3) of theAct. Vehicles of a specified type mentioned in the above Section cannot be taken asvehicles owned by the State Transport Undertaking, when the right of preference inrespect of the State Transport Undertaking is specifically dealt with in the same sub-section.The vehicles of specified type mentioned therein can only be in respect of thenature of type or model of the vehicle and it can never be taken as the vehicles ownedby the person or an undertaking. Hence, the above argument advanced by the learnedstanding counsel for the KSRTC cannot be accepted. The term specified typementioned in Section 71 of the Act is in respect of the nature or type or model of thevehicles and not in respect of the vehicles owned and operated by the KSRTC.
11. The learned counsel for the petitioners submitted that Ext. P3 notification isliable to be quashed in toto as the number of stage carriages to be operated within thecity limits of Kozhikode had been duly notified as 1150 as per Ext. P2 notification andthe further reduction of the number of stage carriages to such a very low number of400 was without any jurisdiction and without the permission from the CentralGovernment as contemplated by law. The learned Government Pleader submittedthat the District Road Safety Committee in its meeting held at Kozhikode on 7.12.1996had examined the situation again and decided to reduce the number of city services inKozhikode city taking into consideration the enormous number of vehicles, the badroad condition and other relevant matters including the large number of traffic accidents.The learned Government Pleader further submitted that Ext. P3 notification was issuedonly in modification of Ext. P2 notification reducing the number of permits in the cityof Kozhikode and in view of Section 21 of the General Clauses Act, the power to issue anotification would include the power to amend the same and as such the State wasfully competent to issue Ext. P3 notification. Section 21 of the General Clauses Act reads:
'Power to issue, to include power to add to, amend, vary or rescind, notifications, ordersrules or bye-law-Where, by any (Central Act) or Regulation, a power to (issue notifications)orders, rules, or bye-laws is conferred, then that power includes a power, exercisable in the likemanner and subject to the like sanction and conditions (if any) to add to, amend, vary or rescindany (notification), orders, rule or by-laws so (issued)'.
Ext. P2 notification was issued by the Government in accordance with the direction ofthe Central Government. Ext. P3 notification is only an amendment to Ext. P2notification reducing the number of permits to be issued in the city limits. The provisionin Ext. P2 regarding the reservation of 10% of the permits in favour of SC/ST operatorswill remain in force without any modification, though it is not specifically included inExt. P3. In view of Section 21 of the General Clauses Act the amendment to the earliernotification can be made without any specific direction from the Central Governmentregarding the amendment. The power conferred by the Cental Government for theissue of Ext. P2 notification would include the power for the issue of Ext. P3 notification,amending Ext. P2 which was issued on the direction from the Central Government.In view of Section 21 of the General Clauses Act Ext. P3 notification also was issued onproper authority and it cannot be challenged on the ground that no separate sanctionor direction has been obtained from the Central Government. Hence, the aboveargument advanced by the learned counsel for the petitioners cannot be accepted.
12. As I have already found that the clause providing a specified number ofpermits in favour of the State Transport Undertaking in Exts. P2 and P3 notificationsis ultravires, those provisions reserving permits in favour of the State TransportUndertaking in Exts. P2 and P3 notifications shall stand quashed. Hence, theapplications filed by the petitioners for the grant of permits will have to be reconsidered.
13. The S.T.A.T. as per Ext. P9 order dated 13.8.2001 issued the followingdirections:
'I make it clear that the RTA must first of all specify the criteria on the basis of which a cityroute is to be identified. This shall be done after hearing all the appellants and any other interestedpersons, after giving prior notice to all concerned. After identifying such criteria, the R.T.A. mustprepare a fresh list of city route permits already granted till the date of S.R.O. No. 891/2000 (19thSeptember, 2000). All grants made subsequently will have to be re-considered in accordancewith law. The R.T.A. must prepare a statement as shown in Appendix II showing the city permits,which existed on 19.9.2000 as also those issued thereafter.
It is further directed that until fresh orders are passed in the matter as directed above, nofresh regular city permits shall be issued to any applicant by the R.T.A.'.
The RTA was directed to define the city routes and till city routes are defined theauthorities were directed not to issue fresh permits also. The Government had alreadydefined the city or town services by an amendment to the Kerala Motor VehiclesRules by SRO 891/2000. When once the State had defined the city or town servicesamending the Rules, the R.T.A. has no authority to define the same. In fact the abovedirections issued by the STAT is illegal and as such the above directions are liable tobe set aside. It was submitted that the above notification defining the city serviceshad been stayed by this Court. When the implementation of the above amendedprovisions has been stayed by this Court, the RTA has to rely on the procedure or thenorms adopted earlier for granting the city permits. When once the city services ortown services had been defined by the State by incorporating an amendment to theRules, the RTA has no jurisdiction to define the services and as such the directionsgiven by the S.T.A.T. shall stand quashed.
In the result, both these Original Petitions are allowed partly. The reservation ofpermits as 50 and 40 in favour of the State Transport Undertaking in Exts. P2 and P3notifications issued by the Government, ie., S.R.O. Nos. 278/1993 and 891/2000respectively shall stand quashed. In all other respects both the notifications are inaccordance with law and are valid. The R.T.A. shall reconsider the application putforward by the petitioners for the grant of regular permit and those shall be disposedof in accordance with law as expeditiously as possible. So far as O.P. No. 31627/2001 isconcerned, the claim of the third respondent also shall be considered in accordancewith Clause (d) of Sub-section (3) of Section 71 of the Act.