Holding

Permission of the Transport Commissioner under Rule 258(2)(ii) must be obtained before filing a permit application, and the Commissioner’s power to extend a town‑service route beyond 8 km is not unlimited.

Summary

The Supreme Court examined the interpretation of Rule 258(2)(ii) of the Andhra Pradesh Motor Vehicles Rules, 1989 in the context of a scheme notified under Section 100(3) of the Motor Vehicles Act, 1985. Bus operators sought town‑service permits for routes extending beyond 8 km from municipal limits, which the Regional Transport Authority rejected, but the State Transport Appellate Tribunal granted on the condition that the Transport Commissioner’s permission be obtained. The Court held that when a scheme provides an exception for town‑service permits, the applicant must first obtain the Transport Commissioner’s permission before filing a permit application; this permission is a condition precedent. It further ruled that the Commissioner’s power to extend a town‑service route beyond 8 km is not unlimited and must be exercised in accordance with the scheme and the rule’s purpose, not arbitrarily. Consequently, the Tribunal’s and High Court’s orders were set aside, the original rejections restored, and the appeals were allowed.

Issues considered

Whether the permission of the Transport Commissioner under Rule 258(2)(ii) is a condition precedent for filing a town‑service permit application when a scheme under the Motor Vehicles Act governs the route.
Whether the Transport Commissioner’s power to extend a town‑service route beyond the 8 km limit is unlimited.

Subjects

Town service routeMotor Vehicles ActRule 258Transport CommissionerPermit issuanceAdministrative discretionCondition precedentArbitrariness

Judgment

A A.P.S.R.T.C ETC. ETC.
v. .
STATE TRANSPORT APPELLATE TRIBUNAL AND ORS.

AUGUST 11, 1998

B [S.C. AGRA WAL, S. SAGHIR AHMAD AND M. SRINIVASAN, JJ.]

c
Andhra Pradesh Motor Vehicles Rules, 1989-Rule 258-Town
Service-Meaning of-Motor Vehicles Act, 1985-Section 104.

Rules 258 (2)(ii)-Town service routes-Determination of -Power of
~
-
Transport Commission limits of-Permission of Transport Commissioner-
Whether condition precedent for applying for a permit-Motor Vehicles Act
1985-Sections 100(3) and 104.

Words and Pharses-Grant and Issue-Difference between.
D
Under Section 104 of the Motor Vehicles Act, I 988, if any scheme is
published under Section 100(3) of the Motor Vehicles Act, 1988, no permits
can be granted in respect of any notified area or notified route except in
}
accordance with the provisions of the said scheme. The Government of
Andhra Pradesh, on 20.9.1998, notified a scheme in respect of the certain
E routes. The said scheme, however, exempted, inter alia, the holders of stage
carriage permits in respect of town services.

Under Sub-Rule 2 of Rule 258 of the Andhra Pradesh Motor Vehicles
Rules, 1989 the Regional Transport Authority has power to determine which
routes are town service routes, subject to certain restrictions. The second
F
restriction to the power of the Regional Transport Authority is that no route
which extends more than 8 kilometres beyond the limits of the Municipality
or town from which it starts shall be labelled as town service. It is further
>-
provided that this restriction would not apply to those routes for which
specific permission of the Transport Commissioner is obtained.
G
Some bus owners applied to the Regional Transport Authority for
grant of permit in respect of the notified routes. The routes for which the
permits were sought extended more than 8 kilometres beyond the limits of
the Municipality/town frcm where they started. ,,

H The Regional Transport Authority rejected the applications of the bus
1106
I

k

A.P.S.R.T.C v. STATE TRANSPORT APPELLATE TRIBUNAL 1107
owners for grant of permit for plying buses on the ground that the routes A
applied for by them extended more than 8 kilometres beyond the limits of the
Municipality/town and therefore, were not town service routes.

On appeal, the State Transport Appellate Tribunal held that the routes
applied for were town service routes falling under the exception to the
scheme notified by the Government. The Tribunal granted the permit on the B
condition that permission of the Transport Commissioner is obtained under
Rule 258(2)(ii) of the Andhra Pradesh Motor Vehicles Rules, 1989. After
the judgment of the Tribunal, the Transport Commissioner granted
permission under Rule 258(2)(ii) of the Andhra Pradesh Motor Vehicles
Rules, 1989 to the bus owners even though the routes applied for extended C
more than 12 kilometres beyond the limits of Municipality/town in most of
the cases. Thereafter, permits were issued to the bus owners.

The Writ Petitions filed by the appellant against the order of the Sate
Transport Appellate Tribunal were dismissed by High Court, Holding:
D
(i) That the permision of the Transport Commissioner under Rule 258
(2) (ii) of the Andhra Pradesh Motor Vehicles Rules, 1989 was not a condition
• precedent for filing an appliction for route permit; and

(ii) That the Transport Commissioner could exercise his power to E
grant permission under Rule 258(2)(ii) of the Andhra Pradesh Motor Vehicles
Rules, 1989 irrespective of the distance by which the route extended more
than 8 Kilometres beyond the limits of Municipality/town.

Allowing the Special Leave Petition against the judgment and order of
the High Court, this Court F
HELD: I. Rule 258 of the Andhra Pradesh Motor Vehicles Rules, 1989
uses the expression "Town Service". The expression "Town Service" has
not been used in any other rule or any provision in the Motor Vehicles Act,
1985. The expression has not been defined anywhere. In the normal
connotation, "Town Service Route" would mean a route within a town to G
enable passengers to go from one place to another in the town. But generally
people in the peripheral and neighbouring areas would be frequenting the
town and to serve them, buses have to ply between a place in the town and
a place outside. Hence, the rule provides for an extension of 8 Kms. beyond
the limits of the town or municipality. [1116-C) H
1108 SUPREME COURT REPORTS [1998] 3 S.C.R.

A 2.1. Section 104 of the Motor Vehicles Act, 1985 prohibits the grant
of any permit except in accordance with the provisions of the scheme notified
under Section 100(3) of the saide Act. Hence for the purpose of Rule 258(2)
of the Andhra Pradesh Motor Vehicles Rules, 1989 if there is a scheme in
force with reference to the concerned route, the authority has to adhere to
the terms of the scheme. If there is any exception provided in the scheme
B the applicant for a permit has to satisfy the authority concerned that he
would fall within the scope of the exception. [1116-F)

2.2. When the scheme notified under Section 100(3) of the Motor
Vehicles Act, 1985 provides an exception for the holder of stage carriage
permit in respect of town service, any applicant for permit claiming the
C benefit thereof has to necessarily satisfy the Regional Transport Authority
that the route for which the permit is sought is a town service route. In order
to establish the same the applicant for permit has to approach the Transport
Commissioner in the first instance if the route for which permit is sought
extends more than 8 Kilometres beyond the limits of the municipality or town
D from which it starts. In such cases, it is only when the Transport
Commissioner grants specific permission for extension of the route for
more than 8 kilometers beyond the limits of the municipality or town, the
Regional Transport Authority can consider the application for grant of
permit and proceed to pass orders. Hence, the permission of the Transport
Commissoner contemplated in Rule 258(2) of the Andhra Pradesh Motor
E Vehicles Rules, 1989 has to be obtained before an application for permit is
filed for a route covered by a scheme notified under the Motor Vhicles Act,
1985. In none of these case such permission was obtained.
(1116-G-H; 1117-A-B)
3.1. There is no doubt that Rule 258(2) of the Andhra Pradesh Motor
F Vehicles Rules, 1989 does not specify or indicate the limits of the power of
the Transport Commissioner but it is certainly erroneous to think that the
power of the Transport Commissioner is unlimited. If that is so, the very
purpose of the rule providing for a limit of 8 kilometres or extension beyond
the limits of municipality or town will by defeated. The power of the
Commissioner cannot be arbitrarily or indiscriminately exercised.
G [1117-E-FJ
3.2. In no case the permission granted by the Transport Commissioner
should have the effect of converting a town service route into a muffasal
service route. In other worrts a muffasal service cannot be labelled as town
service by virtue of the permission granted by the Transport Commissioner
H though in fact it would be a muffasal service. (1119-H; 1120-A)
I

~.

AP.S.R.T.C r. STATE TRANSPORT APPELLATE TRIBUNAL [SRINIVASAN, J] J J()9

3.3. The Transport Commissioner has granted permission for extension A
of the town service route by not less than 12 Kilometres excepting in one
or two cases. Thus it is evident that the Transport Commissioner has not
applied his mind to the relevent factors in these cases. (1119-E)

(De Smith's Judicial Review of Administrative Action, 4th edn, pp. 283- B
285;} Comptroller and Auditor General of India v. K.S. Jagannathan and
Another, [1986) 2 SCC 679 and C. Kasturi and Another v. Secretary, Regional
Transport Authority and Another; Afsar Jahan Begum and Others v. State of
M.P., (1996) 8 SCC 38, referred to.

3. The actual issue of permit is only a ministerial act and it cannot be C
equated to the grant of permit. It is fallacious to contend that in all cases
the actual issue of permit was after the grant of permission by the Transport
Commissioner and there was no violation of the rule. The grant of permit
· in these cases is by the State Transport A pell ate Tribunal before the grant
of permission by the Transport Commissioner. The Tribunal acted beyond its D
jurisdiction in granting permits in all these cases. [1117-D) ·

CIVIL APELLATE JURISDICTION: Civil Appeal No. 3715 of
1998 Etc. Etc.

From the Judgment and Order dated 6.11.97 of the Andra Pradesh High E
Court in W.P. No 19258of1994.

L. Nageshwara Rao, G.R.K. Prasad, D. Mahesh Babu and G. Prabhakar,
for the Appellants.

R. Venugopal Reddy, T.N. Rao and P.P. Singh for the Respondent.
F

Ms. K. Amreshwari, Ms. N. Annapoorani, K. Ram Kumar, S. Srinivasan,
Partaparai Durlabhji for the Respondent in S.L.P. (C) No. 1623/98

The Judgment of the Court was delivered by G
SRINIVASAN, J. Leave granted.

The common questions which arise for decision in these cases depend
on the interpretation of Rule 25 8 of the Andhra Pradesh Motor Vehicles Rules,
1989 (for short, the 'Rules') which is in the following terms:- H
1110 SUPREME COURT REPORTS (1998] 3 S.C.R.

A "RULE 258:- FIXATION OF STAGES FOR CARRIAGES :

1. In the case of stage carriage, the Regional Transport Authority shall,
after consultation with such other authority as it may deem desirable, fix
stages on all bus routes except town service. The maximum distance of each
stage shall not ordinarily exceed 6.4 kilometres. When stages are so fixed,
B fares shall be collected according to stages.

Explanation:- When a passenger gets into or gets down from a stage
carriage at a place lying in between two stages, he shall pay the fare
from the stage preceding the place where he gets into the bus to the
'("

-
stage succeeding the place where he gets down.
c
2. The Regional Transport Authority shall, subject to the
following restrictions, determine which are town service routes.

(i) at least one terminus of every town service shall lie within the
limits of a municipality or any built up place notified in the
D Andhra Pradesh Gazette as 'town' for this purpose by the
Regional Transport Authority concerned, with the prior
concurrence of the State Transport Authority. 1

(ii) No route of town service shall extend more than 8 kilometres
beyond the limits of the Municipality or town from which it
E starts, provided that this restriction shall not apply to any town
service routes, which were in existence on the date of coming
of these rules into force or in respect of those routes for which
specific permission of the Transport Commissioner is obtained.

(iii) No route shall be determined as both town and muffasal
F •
service routes".
2. The Government of Andhra Pradesh notified in GOMS No. 695,
Transport, Roads & Buildings (P-IV), 20th September, 1988 a Scheme published
by the appellant in these cases relating to the route Chilukuru to Gutlapadu.
Section 104 of the Motor Vehicles Act, 1988 (for short, the 'Act') prohibits
G
the grant of any permit except in accordance with the provisions of the
scheme. The scheme sets out five exceptions and they are:- .,, - .

1. The State Transport Undertakings:
2. The holders of stage carriage permits in respect of town
H services:
A.P.S.R.T.C v. STATE TRANSPORT APPELLATE TRIBUNAL [SRINIVASAN, J] ) JJJ

/L
3. The holders of stage carriage permits in respect of inter-State A
routes overlapping on the notified route;

4. The holders of stage carriage permits in respect of such route
or routes overlapping not more than 8 kms. on the notified route;
and
B
5. The services operated by Devasthanams.

3. The third respondent in S.L.P(C) NO 21474/97 filed an application for
grant of pucca stage carriage permit to ply his buses on the route Bhimavaram
old bus stand to Losari. The total length of the said route was 19.2 Kms. C
comprising 4.3 Kms. within the municipal limits of Bhimavaram and 14.9 Kms.
beyond the municipal limits with an overlapping of 12.3 Kms on the notified
route under the scheme. The Regional Transport Authority rejected it on the
ground that the overlapping exceeded 8 Kms. On appeal, the State Transport
Appellate Tribunal held that the route applied for was a town service route
falling under the second exception set out in the scheme. The Tribunal D
allowed the appeal and granted the permit to the third respondent on condition
that the Transport Commissioner granted permission as contemplated in Rule
258 (2) (ii) of the Rules. The Tribunal directed the Secretary of the Regional
Transport Authority to issue permit on production of permission of the
Transport Commissioner. E

4. The Tribunal's order was challenged by the appellant in Writ Petition
No. 19258 of 1994 in the High Court of Andhra Pradesh. The High Court
rejected the contention of the appellant that the permission of the Transport
. Commissioner under Rule 258(2)(ii) was a condition precedent for filing an F
application for route permit when there was a scheme governing the route.
The High Court also held that the power of the Transport Commissioner
under Rule 258(2) (ii) was unlimited. Consequently the writ petition was
dismissed. Following that judgment, the writ petitions filed by the appellant
against the grants in the other cases were dismissed.
G
.... 5. Though it is not necessary to set out the facts in each case as they
are similar, it will be very useful to reproduce the tabular statement furnished
by learned counsel for the appellant containing the particulars of the route,
total distance, extension beyond municipal limits and the extent of overlapping
in each case. H
1112 SUPREME COURT REPORTS [1998) 3 S.C.R.

A PARTICULARS OF THE ROUTE IN SLP21474/97 & BATCH

SI. SLP NO. NAME OF THE PERMITTED ROUTE TOTAL BEYOND OVER

NO. RESPONDENT FROM AND TO DISTANCE MUNICIPAL
LJMITS LAPP-ING

B I. 21474/97 Sri Ch. Bhimavaram to 19.2 km 14.9 km 12.3kin
Nageswararao Lasari.
'{ -
2. 547/98 M. Sridhar New Godavari Rly 22.9 km 19.9 km 22.6km
st. to Seeth-anagaram.

c 3. 598/98 SriCh.V.R.
Prasad
Gokavaram Bus
Stand to Dwrapudi-
23.8 km 17.6 km 21.6km

Market

4.1116/98 Sri T. Kasi Tanuku Rly St. 16.7 km 14.4 km 16.7km
Annapuraraju Attoli Bus Stand.
D 5. 1171/98 M. Rama Rao Bhimavaram New 20.4 km 14.9 km 13.5km
Bus Stand to Lasari

6. 1139/98 Sri B. Bha- Gokavaram Bus 23.8km 17.6km21.6km
•
skar Rao Stand to Dwarapudi
Market.
E
7.1118/98 Sri Sama Tadepalligudam 16.5 km 12.3 km 15.6km
Raju DRJ Lomens College
to Ravipadu Via Bus
dept. Indian Bank centre
F
Vijaya vihar Ce-ntre D.R.D. ...
Govt. College mulanur •
centre, Chilakarampadu
New bridge, Kanipadu,
Chintapalli.

G 8. 1122/98 Sri M.D.S. Tanuku Rly St. 16.7 km 16.7 km 13.4km
R.N. Road to Athili
Chandra Bus stand

9. 1138/98 Sri I. Bhimavaram old 19.2 km 14.9 km 12.3km
Surya Rao bus stand to Lasari
H 10. 1168/98 Sri Ch. Raja Rajahmundry 25.0 km 18.6 km 18.6 km
.,..
I

A.P.S.R.T.C v. STATE TRANSPORT APPELLATE TRIBUNAL [SRINIVASAN, J] 1113

... Rammohan ladies hospital A
Rao to Korukonda

11. 1128/98 Ch. Nages- Bhimavaram old 26.0 km 24.7 km 26.0 km
wara Rao bus stand to
Akiveedu High Bhimavaram
Centre. B

12. 1172/98 Sri B.T. Bhimavaram Ke- 26 km 24.7 km 26 km
• Sh yam opella Jakkaram, Kallu,
Kaikaluru, Juvvapalem
Elurupadu, and
Bhimavaram. c
13. 1281/98 Sri Ch. New Godavari 22.9 km 19.9 km 22.9 km
Nagalakshmi Rly. St. to via Goka-
varam Bus stand A.P.
Paper Mills, Kateru
D
14. 1204/98 G. Shekhar Palacole 15 km 13 km 12 km
Surya Rao Basic School to Burug-
upalle
15. 1623/98 Kum. B. Si- Prodduturu bus 15.9 km 1.0 km 3.8 km
valakshmi stand to Duvvur Das E
(via) Gopavaram And
Kamanuru
16.1628/98 Sri Puma- Bhimavaram New 17 km 13.8 km 14.8km
chandrarao bus stand to
Doddanapudi (via)
F
. ., Pedameram Jakkaram
and Kalla

17. 1642/98 Sri M. Bhimavaram bus 19.2 km 14.9 km 12.3 km
Sree ama stand to Lasari
Murthy (via) DNR. College,
Yana madururrever,
G
Gollavaripeta, Gutlaparu
Rev er

18. 1887/98 Sri G. Tadepallegudem, 19km 15km 15km
Somalakshmi DJR womens H
I
~

1114 SUPREME COURT REPORTS [1998) 3 S.C.R.

A college, to Ganap-
avaram Panchayat,
Office

19. 1758/98 Sri C. Tanuku polyte- 28.6 km 25.3 km 16.8 km
Adinarayana chnic Penugonda bus
B stand via Komavaram,
Mahalakshmicheruvu,
Coteru, lrugovaram
Junction Kothapadu,
,.. <

Kakileru Kayetipodu
Subbaraidu peta,
c Penugada.

20. 2001198 Sri Rama- Tanuku )3us 23.4 km 22.9 km 22.9 km
chandra rao stand to Attili

21. 1530/98 M.D.R.S.N. Tanuku Rly. 16.7 km 14.4 km 16.7 km
D Chowdary st. Road to Attili Bus
Stand via Narendra
Centre Velpur Bus stand,
Relenji centre, •
Govaralapalem,
A. Samudrapugatta.
E
22. 1117/98 A.Venkat- Tanuku Polytech- 26 km 1.5 km 16.9 km
eswara Rao nic college to
, Penugonda Bus. stand
to Lasari
F 23. 7542/98 Sri K. Rajahmundry Goka 23.4 km 17.3 km 0.2 km
Srinivasa varam Bus stand to
Murthy Dwarapudi Mkt. (via)
Devi Chowk, Jampeta
Gandhi, Statue, Churc-
G ehate Apsara Theatre,
Delux Centre, Kotipalli,
Bus stand
·-
24. 22781/97 Sri M. Dokavaram Bus 23.8 km 17.6 km 21.6 km "'
Gopala stand to Dwarapudi
H Krishna Mkt.
I
~

A.P.S.R.T.C v. STATE TRANSPORT APPELLATE TRIBUNAL [SRINIVASAN, J.] 1115

•
25. 22779/97 Sr. A.Sv. Bhimavaram New 29.5 km 25.5 km 25.1 km A
Nageswara- Bus stand to
rao Mogalthur
26.22299/97 Sri B.T. Bhimavaram to 20.4 km 14.9 km 13.5 km
Sh yarn La sari

The S.L.P. in Serial No. 15, that is S.L.P. 1623/98, has been dismissed B
as 'not pressed' by a separate order

~ . 6. On the above facts, the following questions are debated:-

(i) Whether the permission of the Transport Commissioner
contemplated in Rule 258 (2) (ii) of the Rules should be obtained c
before an application for permit is filed for a route covered by a
scheme notified under the Act?

(ii) Whether the Transport Commissioner's power to extend a town
service route more than 8 Kms. beyond the limits of the Municipality
or town is unlimited? D
7. Rule 258 uses the expression "town service". Sub-rule (1) enjoins
' the Regional Transport Authority to fix stages on all bus routes except town
service after consultation with such other authority as it may deem desirable.
Sub-rule (2) directs the Regional Transport Authority to determine which
are town service routes subject to the restrictions mentioned therein. There E
are three restrictions set out in the sub-rule.

(a) At least one terminus of every town service shall lie within the
municipal limits or any built up place notified in the State Gazette
as "town" for the purpose of the rule by the said authority with the
prior concurrence of the State Transport Authority.
F
i

(b) The route of town service shall not extend more than 8 kilometres
beyond the municipal limits or town limits but such restriction shall
not apply to town service routes which already existed on the date
of coming into force of the rules or in respect of which routes specific
G
permission of the Transport Commissioner is obtained

,,,. (c) No route shall be determined as both town and muffasal service
routes. The expression "town service" has not been used in any other
rule or any provision in the Act. The expression has not been defined
anywhere. H
1116 SUPREME COURT REPORTS [1998] 3 S.C.R

A 8. Our attention has been drawn to Sections 70 and 71 of the Act which
...
provide for application for stage carriage permit and prescribe the procedure
in considering the said application. Neither section throws any light as to
what is a "town service route": On the other hand Section 71(3)(a) refers to
city routes in towns with a population of not less than five lakhs. We have
also been taken through rules 171 to 174 and 179. There is no guidance in
B any of the said rules with reference to the expression "town service". There
is no prescribed form of application for permit for a town service route; nor
is there any prescribed form of permit.
.. ~

9. In the normal connotation, 'town service route' would mean a route
c within a town to enable passengers to go from one place to another in the
town. But generally people in the peripheral and neighbouring areas would
be frequenting the town and to serve them, buses have to ply between a place
in the town and a place outside. Hence, the rule provides for an extension
of 8 kms beyond the limits of the town or municipality.

D I 0. Bearing that in mind we have to construe Rule 258 (2) in the light
of Sections 98 to 100 and 104 of the Act. Section 98 provides that the
provisions of Chapter VI and the rules and orders made thereunder shall have
overriding effect against anything inconsistent in Chapter V or any other law "
for the time being in force. Section 99 deals with preparation and publication
of proposals regarding road transport service of a State Transport Undertaking.
E
Section I00 deals with publication of proposal and a notification of the
scheme after consideration of the objections to the proposal. Section I 04 as
stated earlier, prohibits the grant of any pennit except in accordance with the
provisions of the scheme. Hence for the purpose of Rule 258(2), if there is
a scheme in force with reference to the concerned route, the authority has to
F adhere to the terms of the scheme. If there is an absolute bar in the scheme
against the grant of any permit for the notified route or any portion of the r

route nothing further could be done. On the other hand if there is any
exception provided in the scheme the applicant for a permit has to satisfy the
authority concerned that he would fall within the scope of the exception.
When the scheme provides an exception for the holder of stage carriage
G permit in respect of town service any applicant for permit claiming the benefit
thereof has to necessarily satisfy the Regional Transport Authority that the
route for which the permit is sought is a town service route. In order to .,.
establish the same the applicant for permit has to approach the Transport
Commissioner in the first instance if the route for which permit is sought
H extends more than 8 kilometres beyond the limits of the municipality or town
I~

A.P.S R T.C 1-. STATE TRANSPORT APPELLATE TRIBUNAL [SRINIVASAN, J.] 1117

from which it starts. In such cases, it is only when the Transport Commissioner A
grants specific permission for extension of the route for more than 8 kilometres
beyond the limits of the municipality or town, the Regional Transport Authority
can consider the application for grant of permit and proceed to pass orders.
It is only on the basis of the Transport Commissioner's permission the
Regional Transport Authority can determine the town service routes. Hence
our answer to the first question is that the permission of the Transport B
Commissioner contemplated in Rule 258(2) of the rules has to be obtained
~
before an application for permit is filed for a route covered by a scheme
notified under the Act.

11. Admittedly in none of these cases such permission was obtained.
Learned counsel for the respondents contended that in all these cases the
c
actual issue of permit was after the grant of permission by the Transport
Commissioner and there was no violation of the rule. According to him, grant
of permit and issue of permit are the same. The argument is fallacious. The
grant of permit in these cases is by the Tribunal before the grant of permission
by the Transport Commissioner. The Tribunal itself directed issue of permit D
by the Secretary to the R. T.A. after receipt of record evidencing Transport
Commissioner's permission. The actual issue of permit was only a ministerial
• act and it cannot be equated to the grant of perm it. The Tribunal acted
beyond its jurisdiction in granting permits in all these cases.

12. Turning to the second question, there is no doubt that rule 258(2) E
does not specify or indicate the limits of the power of the Transport
Commissioner but it is certainly erroneous to think that the power of the
Transport Commissioner is unlimited. If that is so, the very purpose of the
rule providing for a limit of 8 kilometres of extension beyond the limits of
municipality or town will be defeated. The power of the Commissioner cannot F
,.
, be arbitrarily or indiscriminately exercised. According to learned counsel for
the appellant, the power is coupled with a duty.

13. Though there is 'no direct ruling on the point, learned counsel for
the appellant has drawn our attention to two passages in de Smith's Judicial
Review of Administrative Action, Fourth Edition, pages 283 and 285 which G
read as follows:

Page 283:-

"An authority may have a discretion whether to exercise a power, and
a discretion in the manner of exercising it. But discretionary powers H
1118 SUPREME COURT REPORTS [1998] 3 S.C.R.

A are frequently coupled with duties. A Minister may be empowered to
confirm or refuse to confirm a compulsory purchase order. In making
his decision he is entitled to exercise a very wide discretion, but he
is under a legal duty to determine the application for confirmation
one way or the other. Again, to the extent that a discretionary power
is not absolute, the repository of a discretion is under a legal duty
B to observe certain requirements that condition the manner in which
its discretion may be exercised."

Page 285:-

"The relevant principles formulated by the courts may be broadly
c summarised as follows. The authority in which a discretion is vested
· can be compelled to exercise that discretion,. but not to exercise it
in any particular manner. In general, a discretion must be exercised
only by the authority to which it is committed. That authority must
genuinely address itself to the matter before it: it must not act under
the dictation of another body or disable itself from exercising a
D discretion in each individual case. In the purported exercise of its
discretion it must not do what it has been forbidden to do, nor must
it do what it has not been authorised to do. it must act in good faith,
must have regard to all relevant considerations and must not be swayed
by irrelevant considerations, must not seek to promote purposes
alien to the letter or to the spirit of the legislation that gives it
E power to act, and must not act arbitrarily or capriciously."

14. Reliance is placed on Comptroller and Auditor-General of India
v. K.S. Jagannathan and another, [1986] 2 SCC 679 wherein it is said; "It
is now necessary to examine the nature of the discretion conferred by the
F said Office Memorandum dated January 21, I 997 - "whether it is a
discretionary power simpliciter or a discretionary power coupled with a ....
r
duty?" From the provisions of the Constitution referred to above, it is
transparently clear that it is a discretion to be exercised in the discharge of
the constitutional duty imposed by Article 335 to take into consideration the
Claim of the members of the Scheduled Castes and the Scheduled Tribes,
G consistently with the maintenance of efficiency of administration, in the
making of appointments to services and posts in connection with the affairs
of the Union or of a State."

15. Reference was also made to C. Kasturi and another v. Secretary,
Regional Transport Authority and another, [1996] 8 SCC 314 decided by a
H bench of three Judges to which one of us (Justice Saghir Ahmad) was a party.
I

~

A P.S.R.T.C v. STATE TRANSPORT APPELLATE TRIBUNAL [SRINIVASAN, J.) 1119

Dealing with the corresponding old rule namely, Rule 282(2)(ii) of the Andhra A
Pradesh Motor Vehicles Rules, 1964, the Bench observed:

"It would, thus, be clear that once a notified draft scheme has been
approved and published the private operators operate their services on the
notified route strictly in accordance with the scheme only and within the
exceptions engrafted thereunder. By necessary implication, the "town service" B
as defined in Rule 282(2)(ii) has to be read subject to the scheme in Chapter
IV-A of the repealed Act. If so read, clauses 2, 3 and 4 are to operate as an
' ·' exception and they provide only a right to overlap not more than 8 Kms in
the notified route. Otherwise, the town service will cease to be town service
and would get transformed into a moffussil route and the private operator C
would run his stage carriage along the line of the notified route which is
impermissible. When so read, though under Rule 282(2)(ii) town service extends
upto 8 Kms from the municipal limits that does not give any right to a holder
of a town service stage carriage permit to run his vehicle beyond 8 Kms on
the notified route nor does it extend to 8 Kms overlapping on the notified
route from municipal limits." D
16. Learned counsel for the appellant has pointed out rightly that in
• these cases the Transport Commissioner has granted permission for extension
of the town service route by not less than 12 kilometres excepting in one or
two cases. The tabular statement reproduced by us earlier shows that the
extension is not only much more than 8 kilometres beyond the municipal limits E
but also the overlapping on the notified route is more than 12 kilometres
excepting in one or two cases. Thus it is evident that the Transport
Commissioner has not applied his mind to the relevant factors in these cases.

17. Learned counsel for the respondents has submitted that without
making the Transport Commissioner a party to these proceedings the orders F
passed by him cannot be questioned by the appellant. We do not find any
merit in the contention. There is no necessity for the Transport Commissioner
to be a party to these proceedings., We are construing Rule 258(2) and
deciding the scope of the power to be exercised by the Transport Commissioner
under that rule. While doing so it is open to this Court to point out that in G
the present case the power has been exercised arbitrarily.

18. Though we do not propose to fix any specific limit upto which the
- 'r Transport Commissioner can extend the town service route it must be pointed
out that in no case the permission granted by the Transport Commissioner
should have the affect of converting a town service route into a muffasal H
1120 SUPREME COURT REPORTS [1998] 3 S.C.R.

A service route. In other words a muffasal service cannot be labelled as town
service by virtue of the permission granted by the Transport Commissioner
..
though in fact it would be a muffasal service. Apart from the above guidelines,
the Transport Commissioner must also bear in mind that in the case of a route
covered by a notified scheme grant of permits to any other person is barred
except to the extent permitted by the scheme. The Transport Commissioner
B should, therefore, take care not to convert an exception into a rule. He must
bear in mind the provisions of Chapter VI of the Act and see that they are
not made illusory by the permission for extension of town service granted by
>.
him.

c Section19.72Learned counsel for the respondents has submitted that under
of the Act the Regional Transport Authority can impose conditions
while granting permit and it is only such a power which has been exercised
by the Tribunal. He placed reliance on Afsar Jahan Begum and others v. State
of M.P. and others, [I 996] 8 SCC 38. In that case it was held that the Court
could not give any direction or relief to the petitioners on the basis of a
D modification of approved scheme during the pendency of the appeal and they
directed the parties to approach the RTA or STA for appropriate reliefs if they
had any right thereto. The ruling has no relevancy in the present case. Nor
does Section 72 of the Act help the respondents in any manner.

20. In the result, we answer the second question in the negative and
E hold that the power of the Transport commissioner to extend a town service
route more than 8 Kilometres beyond the limits of the municipality or town
is to be exercised in an appropriate manner in accordance with the guidelines
set out in para 18 above.

21. Consequently, the appeals are allowed and the orders of the High
F
Court as well as those of the State Transport Appellate Tribunal are set aside.
The orders of the Regional Transport Authority rejecting the applications of
r
..
the respondents are restored. There will be no order as to costs.

B.K.M. Appeal allowed.