PETITIONER:
RAMAN & RAMAN LTD.
Vs.
RESPONDENT:
THE STATE OF MADRAS AND ANOTHER.
DATE OF JUDGMENT:
15/03/1956
BENCH:
IMAM, SYED JAFFER
AIYAR, N. CHANDRASEKHARA
BOSE, VIVIAN
JAGANNADHADAS, B.
SINHA, BHUVNESHWAR P.
CITATION:
1956 AIR 463 1956 SCR 256
ACT
Road Transport-Power of the State Government to set aside
orders of subordinate authorities-High Court’s power to
interfere by writ of certiorari-Motor Vehicles Act (IV of
1939), as amended by the Motor Vehicles (Madras Amendment)
Act (XX of 1948), s. 64-A Constitution of India, Art. 226.
HEADNOTE
The appellant and respondent No. 2 along with others applied
for stage-carriage permits for two routes and the Regional
Transport Authority granted a permit for one route to the
appellant and for the other route to the respondent No. 2.
Both appealed to the Central Road Traffic Board but the
appeals were dismissed. Neither the Regional Authority nor
the Board recorded any finding as to which of them had the
better facilities for transport operation or that they were
of equal merit. They applied to the State Government under
s. 64-A of the Motor Vehicles Act of 1939 as amended by the
Motor Vehicles (Madras Amendment) Act of 1948 and the State
Government set aside the orders passed by the said subordi-
nate authorities and issued permits for both the routes to
the respondent No. 2 on the ground that he had better
facilities for operation and would serve the public better.
Against this order of the State Government the appellant
moved the High Court for a writ of certiorari and a single
Judge issued the writ. On a Letters Patent appeal that
decision was set aside. The appellant contended that the
State Government had acted in excess of its powers under s.
64-A of the Act in setting aside the orders of the
subordinate authorities and that the section itself was
invalid.
Held, that the State Government was within its powers in
passing the order it did and the appeal must be dismissed.
That it was within the competence of the State Legislature
to insert s. 64-A into the Act and its legality could not be
questioned and the clear intention of the legislation was to
empower the State Government to decide the legality,
regularity or propriety of any orders passed by the
subordinate authorities in the interest of the general
public.
That the State Government was the final authority to decide
which of the rival applicants had the better facilities for
operation of the bus service and where it bad come to a
decision in favour of an applicant, its decision could not
be interfered with under Art. 226 of the Constitution merely
because its view might be erroneous.
257
JUDGMENT
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1 of 1956.
On appeal from the judgment and order dated the 2nd/21st day
of September 1955 of the Madras High Court in Writ Appeal
No. 65 of 1955 arising out of the order dated the 5th day of
May 1955 of the said High Court in Writ Petition No. 158 of
1955.
G.S. Pathak, B. Ganapathy Iyer and G. Gopalakrishan, for
the appellant.
M. O. Setalvad, Attorney-General for India, B.K.B. Naidu and
Naunit Lal, for respondent No. 2.
1956. March 15. The Judgment of the Court was delivered by
IMAM J.-This appeal comes before us on a certificate granted
by the Madras High Court that the case was a fit one for
appeal to this Court as it involved two important questions,
namely, the powers of the Government under section 64-A of
the Motor Vehicles Act, 1939, as amended by the Motor
Vehicles (Madras Amendment) Act, 1948 for the State of
Madras (hereinafter referred to as the Act), to interfere
with the orders of subordinate Transport Authorities on the
ground of propriety and the limits of judicial review which
the courts have under article 226 of the Constitution of
India.
The appellant and respondent No. 2, had applied for stage-
carriage permits in the Mayuram Town Service for routes Nos.
1 and 2. These applications, along with others, were
considered by the Regional Transport Authority, Tanjore. By
its order dated the 31st of May, 1954, it granted a permit
for route No. 1 to the appellant and for route No. 2 to
respondent No. 2. Both the appellant and respondent No. 2
being dissatisfied appealed under section 64 of the Act to
the appropriate authority, the Central Road Traffic Board
(hereinafter referred to as the Board), but the appeals were
dismissed by its order dated the 18th of August, 1954. As
section 64-A conferred upon the State Government certain
powers, which have
258
been described in this case as revisional powers, the
appellant and respondent No. 2 filed representations
thereunder before the State Government against the orders of
the Regional Transport Authority and the Board. The State
Government set aside the orders passed by the aforesaid
authorities and directed that permits for both the routes
Nos. 1 and 2 be issued to respondent No. 2. Against this
order, the appellant filed an application under article 226
of the Constitution in the High Court for the issue of a
writ of certiorari. The application was heard by a single
Judge who issued the requisite writ. Against his decision
there was a Letters Patent appeal by respondent No. 2, which
was allowed and the decision of the single Judge was set
aside.
The ground upon which the Regional Transport Authority
granted the appellant and respondent No. 2 permits for
routes Nos. 1 and 2 respectively was that they were
experienced and were operating town buses at Kumbakonam.
This opinion was approved by the Board which also thought
that a certain amount of healthy competition was required in
the Mayuram Town routes. It also considered that the
Regional Transport Authority was within its rights in not
considering the aspect of sector coverage by muffassil buses
of the appellant and respondent No. 2. It appears that
respondent No. 2 was covering the entire route No. 1 and the
appellant was covering a portion of route No. 2. The State
Government in setting aside the orders of the Regional
Transport Authority and the Board passed the following
order:
"As between the claims of Sri Raman & Raman Ltd. and Sri
Sathi Vilas Bus Service, the Government consider that it
will be in the interest of the public to grant both the
permits to Sri Sathi Vilas Bus Service, Poryar, since he has
better facilities for operation and will be able to serve
the public better. The Government of Madras therefore sets
aside as improper the order of the Central Road Traffic
Board No. R 27792/A2/54 dated the 18th of August, 1954 in so
far as it confirms the order of the Regional Transport
Authority, Tanjore granting one permit of route
259
No. 1 to Sri Raman & Raman Ltd. and directs that the two
permits in question be granted to Sri Sathi Vilas Bus
Service, Poryar".
Before dealing with the submissions made on behalf of the
appellant, it would be desirable to make reference to
certain provisions of the Act concerning the grant of
permits. Section 42 of the Act prohibits an owner of a
transport vehicle from using or permitting it to be used in
any public place save in accordance with the conditions of a
permit granted by a Regional Transport Authority. Section
43 gives certain powers to the State Government to control
road transport. Section 44 authorises the State Government
to constitute a State Transport Authority as well as a
Regional Transport Authority to perform certain functions
mentioned therein. Section 47 sets forth certain matters
which a Regional Transport Authority shall bear in mind in
deciding to grant or to refuse a stage carriage permit.
Section 64 enables a person aggrieved by the order of the
Regional Transport Authority, with respect to matters men-
tioned therein, to appeal to the prescribed authority.
Section 64-A states: "The State Government may, of its own
motion or on application made to it, call for the records of
any order passed or proceeding taken under this Chapter by
any authority or officer subordinate to it, for the purpose
of satisfying itself as to the legality, regularity or
propriety of such order or proceeding and after examining
such records, may pay pass such order in reference thereto
as it thinks fit".
Mr. Pathak, for the appellant, contended that having regard
to the terms of section 64-A, there were two stages for the
exercise of power thereunder by the State Government. The
first stage was the condition precedent for assumption of
jurisdiction for the exercise of that power. A collateral
fact had to be decided, namely whether the order passed by
any authority or officer subordinate to the State Government
was in fact illegal, irregular or improper. If the decision
was in the affirmative, then and then only would the State
Government have jurisdiction to revise the
260
order complained against. The decision of the State
Government both with respect to questions of fact and law
could be examined by a court in a proceeding for the issue
of a writ of certiorari and such court in doing so could
decide whether the order which was revised by the State
Government was or was not illegal, irregular or improper.
In the present case, there was no question of illegality or
irregularity in the orders of the Regional Transport
Authority and the Board. The only question was as to
whether these orders were improper. The propriety of an
order does not necessarily mean that it must be correct
order. There must be something extraneous to the order it-
self which made it improper. Merely because the State
Government took a different view of the facts to that of the
authority or officer subordinate to it would not make the
order of such authority or officer improper. The second
stage, namely, the passing of an order as the State
Government thought fit, ’could only be reached after a
decision had been arrived at on the condition precedent
conferring jurisdiction on the State Government to revise an
order. The substantial ground upon which the State
Government revised the order of the authority subordinate to
it was that respondent No. 2 had better facilities for
operation and would, therefore, be able to serve the public
better. The authorities subordinate to the State
Government, however, had the representations of the
appellant and respondent No. 2, as well as other applicants,
which fully stated all material particulars in this respect
and it could not be said that these matters were not
considered by them. The orders of the subordinate
authorities accordingly must be read to mean that as between
the appellant and respondent No. 2 both bad equal facilities
for operation and that things being equal between them in
every way, one permit should be granted for one route to the
appellant and another for another route to respondent No. 2.
There could be nothing improper in this. The condition
precedent to the exercise of jurisdiction to revise the
order was therefore absent and the State Government acted in
excess of its
261
jurisdiction in revising the orders of its subordinate
authorities.
Mr. Pathak further contended that there was an error on the
face of the record in the order passed by the State
Government as it had refused to consider seniority or
experience in motor transport as a factor for the granting
of a permit and it thought that it could come to any
conclusion it liked and reference was made to paragraph 8 of
the affidavit filed on behalf of the State Government in the
High Court. On the basis of that affidavit and that
paragraph, it was also urged that the error on the face of
the record was that the Government acted on an erroneous
idea of its own jurisdiction.
He further contended that section 64-A was an invalid
provision.
In the alternative, he urged that a court or authority, in
the exercise of its revisional powers, cannot take a
contrary view of the facts to that taken by the subordinate
court or authority. Exercise of such revisional power could
only be made in cases where the subordinate court or
authority had taken a perverse view of the facts and had
arrived at a conclusion which no reasonable person could
have arrived at.
In support of his first contention, Mr. Pathak relied upon
Paragraph 116 at page 59 of Halsbury’s Laws of England,
third edition, Vol. 11. It appears from an examination of
that paragraph and paragraph 117 at page 60 of the same
Volume that there may be cases where the jurisdiction of an
inferior tribunal may depend upon the fulfilment of some
condition precedent or upon the existence of some particular
fact. Such a fact is collateral to the actual matter which
the inferior tribunal has to try, and the determination of
whether it exists or not is logically and in sequence prior
to the determination of the actual question which the
inferior tribunal has to try. In such a case, in certiorari
proceedings, a court can enquire into the correctness of the
decision of the inferior tribunal as to the collateral fact
and may reverse that decision if it appears to it, on the
262
materials before it, to be erroneous. There may be
tribunals, however, which, by virtue of legislation
constituting them, have the powers to determine finally the
preliminary facts on which the further exercise of their
jurisdiction depends. With respect to them, in such cases,
their decision even if wrong on facts or law cannot be
corrected by a writ of certiorari. In cases where the fact
in question is a part of the very issue which the inferior
tribunal has to enquire into, a court will not issue a writ
of certiorari, although the inferior tribunal may have
arrived at an erroneous conclusion with regard to it. In
the present case, if there was at all any collateral fact to
be decided, it was whether the appropriate authority had in
fact passed any order in respect of which powers under
section 64-A could be exercised. It is not disputed that in
fact orders were passed by the Regional Transport Authority
and the Board, authorities subordinate to the State
Government, and that these orders existed when the appellant
and respondent No. 2 moved that Government to exercise its
powers under section 64-A. The condition precedent and the
existence of a collateral fact in that way for the exercise
of powers under that section were therefore present when the
State Government exercised its powers. In order to satisfy
itself whether the order of an authority subordinate to it
was legal, regular or proper, the State Government was not
deciding the existence of a collateral fact but the issue
itself as to the legality, regularity or the propriety of
the order. The satisfaction of the State Government in this
respect would be an expression of its opinion and not the
determination of a fact upon which depended its jurisdiction
to exercise its powers under section 64-A.
What is the nature of the functions performed under the Act
by the Regional Transport Authority, the Board and the State
Government in the matter of granting or refusing to grant a
permit may now, be considered. That they are not judicial
is accepted, but, it is said, they are not administrative
but quasi-judicial and therefore amenable to the
jurisdiction of
263
a court possessing the power to issue a writ of certiorari.
In proceedings under sections 47, 64 and 64-A of the Act
there is no determination of any individual’s rights and
from that point of view the functions of these authorities
may be regarded as executive or administrative. On the
other hand, it may be said that a person has the fundamental
right to carry on his business of plying buses and therefore
has the right to have the statutory functions of these
authorities properly exercised in which case they would be
quasi-judicial functions. Assuming this to be so, it has
yet to be seen whether the State Government acted in excess
of its legal authority. Chapter IV of the Act contains
provisions concerning the control of transport vehicles.
The Act authorises the State Government to constitute a
State Transport Authority and Regional Transport
Authorities, and under section 43, subject to its
provisions, it can control road transport. In the first
instance, the authority to grant or refuse to grant a permit
is vested in the Regional Transport Authority, but its order
is not final as a dissatisfied party can appeal against the
order under section 64 to the appropriate authority. Before
section 64-A was inserted into the Act by an Act of the
legislature of the State of Madras, it might have been
possible to contend that the order of a Regional Transport
Authority which bad not been appealed against and the order
of the appropriate authority under section 64, where an
appeal bad been made, were incapable of interference by the
State Government for lack of statutory authority. By
enacting section 64-A, the legislature clearly intended that
should not be so and that the State Government should have
the powers to intervene, if it was satisfied that the order
in question was either illegal, irregular or improper. In
clothing the State Government with such power the
legislature clearly intended the State Government to decide
the issue as to whether any order in question was illegal,
irregular or improper. It would not be open to a court
exercising the power of certiorari to intervene merely be-
cause it might be of the opinion that the view taken
264 ]
by the State Government was erroneous.
The word "propriety" has nowhere been defined in the Act
and is capable of a variety of meanings. In the Oxford
English Dictionary (Vol. VIII), it has been stated to mean.
"fitness; appropriateness; aptitude suitability;
appropriateness to the circumstances or conditions;
conformity with requirement, rule or principle; rightness,
correctness, justness, accuracy". If the State Government
was of the opinion that respondent No. 2 had better
facilities for operation than the appellant and their
service to the public’ would be more beneficial, it could
not be said that the State Government was in error in think-
ing that the order of the Board confirming the order of the
Regional Transport Authority was improper. It is to be
remembered that under section 47 of the Act a Regional
Transport Authority in deciding whether to grant or to
refuse a permit shall have regard, amongst other things, to
the interest of the public generally and the advantages to
the public of the service to be provided. Assuming that in
the matter of experience there was nothing much to choose
between the appellant and respondent No. 2, better
facilities for operation of the bus service possessed by
respondent No. 2, would be to the interest of the public
generally and an advantage to the public Of the service to
be provided and therefore was an overriding factor when
other things were equal. As between the appellant and
respondent No. 2 neither the Regional Transport Authority
nor the Board recorded a finding as to which of them had the
better facilities for transport operation or that such faci-
lities as existed between them were of equal merit. The
State Government did not have, therefore, the advantage of
knowing, on the face of the orders of these authorities,
what view they took of this matter.,Even if it is assumed
that their orders meant that the facilities for operation as
between the appellant and respondent No. 2 were of equal
merit, still the State Government was not in a position to
know on what material this opinion was based or that it was
a reasonable view. In order to satisfy itself the State
265
Government examined the materials available to it and came
to the conclusion that respondent No. 2 bad the better
facilities, in other words, it would be unreasonable to hold
that respondent No. 2 had not the better facilities. The
learned single Judge. of the High Court more than once held
that he could not find that there was no material before the
State Government to justify its finding that respondent No.
2 had the better facilities, and he further held that was a
factor which restricted the jurisdiction of the High Court
under article 226 of the Constitution. That should have
concluded the matter so far as the High Court was concerned.
He, however, thought that it could not be said that the
conclusion reached by the State Government was the only
conclusion possible and a mere disagreement on the
conclusions to be drawn from the available materials, where
either view was a reasonable one, was not enough to
establish that the orders passed by the Board and the
Regional Transport Authority were improper within the
meaning of section 64-A. The State Government had therefore
acted in excess of its jurisdiction,. It seems to us, that
the order of the State Government as it stands cannot be
said to be in excess of its jurisdiction nor can it be said
that in recording a finding that respondent No. 2 had the
better facilities for operation and would serve the public
better, it went beyond its powers, in the absence of a
finding to the contrary by the authorities subordinate to
it. The interests of the public and the advantages to it of
the service to be provided were very, it not the most,
important factors to be taken into consideration in the
matter of granting or refusingto grant a permit. In the
conflicting claims of the appellant and respondent No. 2
concerning the facilities available to them for operation of
the bus service, the State Government was bound to decide,
in the interests of the public generally, which of these had
the better facilities. It was within the scope of it’s
authority to decide this and a court in certiorari
proceedings ought not to interfere with that decision. To
hold that the opinion of the Regional Transport Authority
and the
266
Board that the facilities for operation were equal as
between these persons was a reasonable view would be to
constitute the court as the final authority in a matter, in
which, by the provisions of the Act, that function was
accorded to the State Government. We are not prepared
therefore to say that the State Government acted in excess
of its statutory authority.
There is no error on the face of the record so far as the
order of the State Government is concerned and reference to
paragraph 8 of the State Government’s affidavit in the High
Court does not establish any such thing. That paragraph was
in answer to paragraphs 13 and 14 of the appellant’s
affidavit and it set out the contentions of the State
Government as to its powers. There is nothing in that
paragraph to establish that in fact the State Government had
declined to consider seniority or experience in the matter
of selection.
No substantial ground was put forward for supposing that
section 64-A was an illegal provision. It was within the
competence of the State Legislature to insert section 64-A
into the Act. It was a reasonable provision in keeping with
the entire scheme of the Act concerning transport vehicles
and control of road transport.
As to the extent of powers of revision in a court or
authority we do not intend to express any opinion in this
case having regard to the view we take that the order of the
State Government cannot be interfered with by the issue of a
writ of certiorari.
As regards the limits of judicial review which the courts
have under article 226 which is one of the grounds on which
the certificate was issued by the High Court, that question
has since been considered in the various decisions of this
Court, which do not require recapitulation.
In our opinion, this is not a case in which it would be
reasonable to hold that the State Government acted in excess
of its jurisdiction. The appeal is accordingly dismissed
with costs to be paid to respondent No. 2.
267