Supreme Court of India
B.A. LINGA REDDY ETC. ETC.versusKARNATAKASTATE TRANSPORT AUTHORITY & ORS.
- Citation
- 2014 INSC 890
- Decided
- 18 December 2014
- Disposal
- Dismissed
- Bench
- S KHEHAR
Holding
Modification of a scheme under s.102 is a quasi‑judicial act and must be supported by a reasoned order; failure to do so violates natural justice.
Summary
The Supreme Court examined whether the Karnataka State Government, while modifying road‑transport schemes under section 102 of the Motor Vehicles Act, 1988, must record reasons for its decision. The Court held that modification of a scheme is a quasi‑judicial function and, therefore, the State must give a reasoned order after hearing objections, otherwise the action violates the principles of natural justice. The High Court of Karnataka had quashed several scheme modifications for lack of reasons, and the Supreme Court affirmed that judgment. The Court also clarified that the doctrine of prospective overruling is limited to the Supreme Court and to constitutional matters. Consequently, the appeals were dismissed and the State Government was directed to pass a reasoned order within three months.
Issues considered
- When does the State Government have to give reasons while modifying a scheme under s.102 of the Motor Vehicles Act, 1988?
- Is modification of a transport scheme a quasi‑judicial function requiring compliance with natural‑justice principles?
- Does the doctrine of prospective overruling apply to the High Court's decision in this context?
- Was the High Court justified in quashing the scheme modifications?
Legislation cited
- Motor Vehicles Act, 1939s. 68C, s. 68D, s. 68E
- Motor Vehicles Act, 1988s. 102
Subjects
Motor Vehicles Actscheme modificationnatural justicequasi‑judicial functionreasoned orderprospective overrulingadministrative lawpublic interesttransport policy
Judgment
[2014] 13 S.C.R. 205
B.A. LINGAREDDYETC. ETC. A
v.
KARNATAKASTATE TRANSPORT AUTHORITY & ORS.
(Civil Appeal Nos. 11690-11712 of 2014) B
DECEMBER 18, 2014
[JAGDISH SINGH KHEHAR AND ARUN MISHRA, JJ.]
Motor Vehicles Act, 1988 - s.102 - Scheme for c
providing efficient road transport service in public interest -
Modification of scheme u/s. 102 - Requirement of giving
reasons by the State Government while modifying the
existing scheme uls. 102 - Held: When an authority makes
an order in exercise of a quasi-judicial function, it must record D
its reasons in support of the order it makes - Modification of
scheme is a quasi-judicial function - Thus modification of
scheme in absence of reasons cannot be said to be in
accordance with the principles of natural justice - In the instant
case, schemes for operating state carriage services were E
modified whereby providing for operation of the services by
permit holders who had been granted permits to ply their
vehicles on inter-State routes with a condition not to pick up
or set down the passengers on any portion of the routes
overlapping the notified routes- High Court rightly quashed F
the modification on the ground that authority did not apply its
mind to the various objections filed by the Corporation- State
Government to hear the objections and give a reasoned order
- Motor Vehicles Act, 1939- s.68C -Administrative law-
Quasi judicial function. G
Doctrine of Prospective overruling: Held: The power of
prospective overruling is vested only in the Supreme Court
and that too in constitutional matters- The law declared by
H
205
206 SUPREME COURT REPORTS [2014] 13 S.C.R.
A the Supreme Court is normally assumed to be the law from
inception - Prospective operation is only exception to this
normal rule.
Dismissing the appeals, the Court
B HELD: 1. It is apparent from Section 102 of the Motor
Vehicles Act of 1988 that the scheme is framed for
providing efficient, adequate, economical and properly
co-ordinated road transport service in public interest.
C Section 102 does not lay down the requirement of
recording any express finding on any particular aspect;
whereas the duty is to hear and consider the objections.
It requires the State Government to act in public interest
to cancel or modify a scheme after giving the State
Transport Undertaking or any other affected person by
0
the proposed modification an opportunity of hearing. The
State is supposed to be acting in public interest while
exercising the power under the provision. However, that
does not dispense with the requirement to record
E reasons while dealing with objections. [Para 18]
[226-G-H; 227-A-B]
2. Modification of the scheme is a quasi-judicial
function. The State Government is duty-bound to
F consider the objections and to give reasons either to
accept or reject them. The rule of reason is anti-thesis to
arbitrariness in action and is a necessary concomitant
of the principles of natural justice. It is apparent from
the order that there was no consideration of the
G objections except mentioning the arguments of the rival
parties. Objections both factual and legal were not
considered much less reasons assigned to overrule
them. Even in brief, reasons were not assigned indicating
how objections were disposed of. Thus, modification of
H
8. A. LINGA REDDY ETC. ETC. v. KARNATAKA STATE 207
TRANSPORT AUTHORITY
the Schemes could not be said to be in accordance with A
the principles of natural justice in the absence of reasons
so as to reach the conclusion that private operators are
meeting the genuine demands of the public in excess of
the service provided by the STOs, hence, it cannot be
said to be sustainable. [Paras 19, 28, 29][227-C; B
233-G-H; 234-A-C]
Siemens Engineering & Manufacturing Co. of
India Ltd. v. Union of India 1976 (2) SCC 981:
1976 (0) Suppl. SCR 489; S.N. Mukherjee v. c
Union of India 1990 (4) SCC 594 : 1990 (1) Suppl.
SCR 44; Krishna Swami v. Union of India & Ors.
1992 (4) sec 605 : 1992 (1) Suppl. SCR 53;
Workmen of Meenakshi Mills Ltd. & Ors. v.
Meenakshi Mills Ltd. & Anr. 1992 (3) SCC 336: D
1992 (3) SCR 409; Divisional Forest Oft:cer,
Kothagudem & Ors. v. Madhusudhan Rao 2008
(3) SCC 469 : 2008 (2) SCR 610; Chairman,
Disciplinary Authority, Rani Lakshmi Bai Kshetriya
Gramin Bank v. Jagdish Sharan Varshney & Ors. · E
. 2009 (4) SCC 240: 2009 (5) SCR 326; Manohar
v. State of Maharashtra &Anr. 2012 (13) SCC 14:
2012 (12) SCR 850; Naresh Shridhar Mirajkar &
Ors. v. State of Maharashtra & Anr. 1966 (3) SCR
744; Commissioner of Income Tax, Bhopal v. F
G.M. Mittal Stainless Steel (P) Ltd. 2003 (11) SCC
441; Karnataka State Road Transport Corporation
v. Ashraful/a Khan & Ors. 2002 (2) SCC 560 : 2002
. (1) SCR 194; Adarsh Travels Bus Service &Anr.
G
v. State of UP & Ors.1985 (4) SCC 557; A.P State
Road Transport Corporation v. P V. Ramamohan
Chowdhary 1992 (2) sec 235 : 1992 (1) SCR 830
-relied on.
H
208 SUPREME COURT REPORTS (2014] 13 S.C.R.
A H. C. Narayanappa & Ors. v. The State of Mysore
& Ors. 1960 (3) SCR 742; Capital Multi-purpose
Co-operative Society Bhopal & Ors. v. The State
of M.P & Ors. 1967 (3) SCR 329; Gul/apal/i
Nageswara Rao & Ors. v. Andhra Pradesh State
B Road Transport Corporation &Anr. AIR 1959 SC
308: 1959 Suppl. SCR 319- referred to.
3. The High Court decision in Ashrafu//a was
reversed by this Court whereby this Court laid down
c that a permit cannot be granted for a non-notified route
which overlaps or traverses the same line of travel as a
portion of notified route. The said decision is of
retrospective operation as it has not been laid down that
it would operate prospectively more so in the case of
D reversal of the judgment. It was held in *Go/ak Nath that
the power of prospective overruling is vested only in the
Supreme Court and that too in constitutional matters.
[Paras 33, 36][236-B-C; 240-B·D]
E P V. George & Ors. v. State of Kera/a & Ors. 2007
(3) sec 557: 2001 (1) SCR 1198; Golak Nath v.
State of Punjab AIR 1967 SC 1643: 1967 SCR .
762; Ravi S.Naik v. Union of/ndia & Ors. 1994
Suppl. (2) sec 641 : 1994 (1) SCR 754; M.A.
F Murthy v. State of Karnataka & Ors. 2003 (7) SCC
517: 2003 (3) Suppl. SCR 327 - relied on.
Case Law Reference:
2002 (1) SCR 194 referred to Para 7
G
1960 (3) SCR 742 referred to Para 11
1967 3 SCR 329 referred to Para 13
1959 Suppl. SCR 319 referred to Para 15
H
B. A. UNGA REDDY ETC. ETC. v. KARNATAKA STATE 209
TRANSPORT AUTHORITY
1976 (0) Suppl. SCR 489 relied on Para 20 A
1990 (1) Suppl. SCR 44 relied on Para 21
1992 (1) Suppl. SCR 53 relied on Para 22
1992 (3) SCR 409 relied on Para 23 B
2008 (2) SCR 610 relied on Para 24
2009 (5) SCR 326 relied on Para 25
2012 (12) SCR 850 relied on Para 26 c
1966 (3) SCR 744 relied on Para 31
2003 (11) sec 441 relied on Para 32
2002 (1) SCR 194 relied on Para 33
D
1985 (4) sec 557 relied on P~1ra 34
1992 (1) SCR 830 relied on Para 35
2007 (1) SCR 1198 relied on Para 36
E
1967 SCR 762 relied on Para 36
1994 (1) SCR 754 relied on Para 37
2003 (3) Suppl. SCR 327 referred to Para 37
F
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos.
11690-11712 of 2014.
From the Judgment and Order dated 21.04.2011 of the
Division Bench of the High Court of Karnataka at Bangalore
G
in W.P. Nos. 1104-1108.1110-1112, 1154-1157, 13133, 1039,
5381-5384, 1150-1153 of 2010 and W.P. No. 4030 of 2004.
WITH
H
210 SUPREME COURT REPORTS [2014] 13 S.C.R.
A Civil Appeal Nos.11719, 11714-11716, 11725, 11722,
11728, 11730, 11753, 11771, 11736-11740, 11732-11733,
11756-11769, 11745-11775, 11774-11789, 11742, 11792,
11793, 11796-11797, 11799, 11803-11805, 11801, 11815,
11813, 11808-11809, 11811, 11820, 11817and 11822-11835
B of2014.
K. K. Venugopal, Basava Prabhu S. Patil, Sr. Advs.,
N. 0. B. Raju, N. Rajshekar, Mrs. Bharathi R (For N. Ganpathy),
Yunus Malik, Shashank Malik, Aman Malik (For Sanjeev
c Agarwal), M. E. Nagesh, S. J. Amith (For Or. (Mrs.) Vipin Gupta)
V. Ramasubramanian, M. Gireesh Kumar, Ankur S. Kulkarni,
Sriram P (For Vijay Kumar), R. S. Hegde, Shanti Prakash,
Rajendra Kaushik (For Rajeev Singh), S. N. Bhat, N. P. S.
Panwar, V. N. Raghupathy, Parikshit P. Angadi, Mrs. Rajani K.
0 Prasad (For Ms. Abha R. Sharma) for the appearing parties.
The Judgment of the Court was delivered by
ARUN MISHRA, J. 1. Leave granted in all the SLPs.
E 2. The question involved in the appeals is whether the
State Government while modifying the scheme under Section
102 of the Motor Vehicles Act, 1988 (hereinafter referred to
as 'tl1e Act of 1988') is required to assign reasons while
modifying the existing scheme. The High Court of Karnataka
F has quashed the orders modifying the scheme called Bellary
Scheme notified in the Gazette dated 26.7.2003; Kolar
Scheme notified on 7.11.2003; Bangplore and Kanakpura
Plans as notified on 11.11.2003, modification of the scheme
called Mysore Scheme, BTS Scheme by notification dated
G 31.5.2007.
3. The Bellary Scheme was initially notified on
31.10.1962 by Karnataka State Road Transport Corporation,
Bangalore, (for short 'KSRTC') under section 68C of the Motor
H
B. A. UNGA REDDY ETC. ETC. v. KARNATAKA STATE 211
TRANSPORT AUTHORITY [ARUN MISHRA, J.]
Vehicles Act, 1939 (hereinafter referred to as 'the Act of 19.39') A
by which it was proposed to operate stage carriage services
on 86 routes in Bellary sector for the purpose of providing
efficient, adequate, and economical road transport services.
The Government approved the scheme and published it in the
Gazette dated 18.4.1964. The scheme provided for operation B
of services by the State Transport Undertakings only and no
exemption had been provided therein for operation of services
. by the State Transport Undertakings of other States and the
existing inter-State private operators. The said Scheme was
modified on 10 .1.1980 under section 68E of the Act of 1939 C
providing for operation of services by permit-holders who had
been granted permits by the Transport Authorities on the date
of publication on the basis of inter-State agreements entered
into by the Government of any other State provided that the
operators on such route shall not be permitted to operate on D
the routes which overlap any portion of the notified routes. The
Government further modified the approved scheme on
31.3.2000 under section 102(1) of the Act of 1988. A provision
was made for operation of the services by permit-holders who E
had been granted permits to ply their vehicles on inter-State
routes, with a condition not to pick up or set down the
passengers on any portion of the routes overlapping the notified
routes.
4. Thereafter, under section 102(2) of the Act of 1988, a F
proposal was published in the Gazette dated 26.10.2002 to
modify the said Scheme. Objections and representations were
invited. KSRTC also filed detailed objections with respect to
the proposed modifications. Objections were heard. The G
impugned notification modifying the aforesaid scheme had
been issued by the State Government permitting operation of
services by permit-holders who had been granted permits to
ply their vehicles on inter-State routes, inter-District routes and
intra-District routes and operating their services after the H
212 SUPREME COURT REPORTS [2014] 13 S.C.R.
A publication of the modified schemes dated 10.1.1988 and
1.4.2000 and those permits operating on 1.4.2002 and whose
routes were overlapping, the notified routes of the Bellary
approved scheme with a direction not to pick up or set down
passengers on any portion of the routes overlapping th~ notified
B routes except at bus-stands.
5. Simil,arly, Kollar Pocket Scheme was initially notified
on 10.1.1968 and later on modified on 10.1.1980. The
impugned modified scheme was published on 7.11.2003.
c Mysore, BTS, Kanakpura and Bangalore Schemes were
initially notified on 17.11.1960, 16.1.1961, 24.12.1965 and
7.6.1980 respectively. The Mysore Scheme was earlier
modified on 21.11.1987. The impugned notification modifying
Mysore, Bangalore and BTS Schemes was issued on
D 31.5.2007. The impugned notification of Bangalore and
Kanakpura Plans had been issued on 11.11.2003, modifying
the scheme.
6. As against the proposed modifications, detailed
E objections had been filed contending that the State Transport
Authorities have granted permits illegally time and again on
the notified routes. The permits were issued in a mala fide
manner, violation of law was committed repeatedly and such
violations cannot be ratified by the State Government as
F providing efficient services to the public has always been the
main objective of the State Transport Undertakings. The State
Transport Undertakings are on a better footing to provide
efficient, adequate economical and well-co-ordinated services
to cater to the demand of travelling public as compared to the
G private operators. Permits granted illegally cannot be saved
by the Government under the guise of modifying the scheme.
There are number of private operators whose permits have
been rejected and they had been discriminated against while
. others were granted illegal permits. They will also pray for grant
H
B.A. UNGA REDDY ETC. ETC. v. KARNATAKASTATE 213
TRANSPORT AUTHORITY [ARUN MISHRA, J.]
of permits on the notified routes. If the illegal permits are save<;l, A
it would lead to several complications. Under section 102 of
the M.V. Act, any modification to an approved scheme can
only be made in public interest. The permits were not granted
on the representation of the public. It is at the instance of the
private operators, an exercise had been undertaken. The B
permit-holden? are operating services on nationalised routes
causing heavy financial losses to the Corporation. The saving
of illegal permits will render the Scheme infructuous and its
integrity will be diluted. The Corporation is fully equipped to
meet any additional demand from the travelling public. It has C
taken utmost care to provide modern buses and to make its
fleet environment friendly by controlling the smoke emission
level of its vehicles. It has also framed the scheme of providing
compensation to the passengers of the bus on behalf of the
0
Corporation because of unfortunate accidents. Modern bus .
stands have been constructed with public amenities making
huge investments and also issue free/concessional passes to
the blind, physically challenged, Police and Press reporters.
The Corporation is fully controlled by State and Ce.ntrcil E
Government as such the proposed modification be dropped.
7. The State Government in the order dated 23.3.2003,
passed with respect to modification of Bellary Scheme, has
observed that modifications had been necessitated in view of
the decision of this Court in Karnataka State Road Transport F
Corporation v. Ashraful/a Khan & Ors. [2002 (2) SCC 560].
During the perio-9 4.12.1995 and 14.1.2002 considering the
interpretation with regard to "overlapping", "intersection" and
"corridor restriction" of the High Court of Karnataka, the G
Transport Authorities had granted the permits to private
operators in accordance with the Act of 1988 and the Rules
made thereunder considering the need of the travelling public
as these operators are meeting the genuine demand of the
travelling public in excess of services provided by the State H
214 SUPREME COURT REPORTS [2014] 13 S.C.R.
A Transport Undertakings. So it has become necessary to save
all the permits granted by the RTAs. which were in operation
as on 1.4.2002 with the condition that they shall not pick up or
set down the passengers except in the bus-stands.
B 8. Witl:! respect to the modification in Mysore, Bangalore,
BTS and Kanakpura, order dated 25.5.2007 had been passed
in which it has been mentioned that it is to provide exemption
to the permits which are granted by the Transport Authorities
· and are pending renewal as on 9.3.2007 in respect of the routes
c operating on inter-State, inter-District and intra-District routes
overlapping the road section of notified routes modified as
per the approved notification dated 9.3.2007, in the order, no
reason - good, bad or otherwise- has been given. While in
the notification which has been issued, it has been mentioned
D that it was considered necessary in public interest so to do.
Schemes of Mysore, Bangalore and BTS have been modified.
In the notification dated 11.11.2003 modifying the Bangalore
and Kanakpura Schemes, it has been mentioned that the
Temple Committee had submitted a representation on which
E a proposal had been initiated to modify the scheme and
accordingly modification has been made. On behalf of the
State Government, it was stated before the High Court that it
was ready to pass fresh orders after considering various
objections raised by KSRTC.
F
9. The High Court of Karnataka by impugned orders has
quashed the modifications so made in the various Schemes.
The High Court of Karnataka vi de order dated 21.4.2011 has
quashed the notification dated 31.5.2007 with respect to
G Mysore, Bangalore and BTS Schemes. After looking into the
original records, it was observed that the Ministers held a
cross-sitting held by the Corporation regarding notification of
the Shimoga Scheme and an order was passed on 17.4.2007
modifying the Shimoga Scheme. There was no application of
H
B.A. UNGA REDDY ETC. ETC. v. KARNATAKASTATE 215
TRANSPORT AUTHORITY [ARUN MISHRA, J.)
mind to the various objections filed by the Corporation and A
without considering them, an order has been passed. The State ..
Government had been directed to consider the objections and
pass a fresh order in accordance with law within 3 months,
providing an opportunity of hearing to the Corporation and other
private operators, the permit-holders holding valid permits as B
on the date of the order and if they are authorised to run the
vehicles otherwise for a period of 3 months had been permitted
to operate. Similar is the order passed with respect to
Bangalore and Kanakpura Schemes. Vide order dated
14.9.2011, the notification dated 11.11.2003 with respect to C
Bangalore and Kanakpura Schemes has also been quashed.
Similarly, other modifications have also been quashed.
10. Mr. K.K. Venugopal, learned senior counsel for the
appellants, has submitted that reasons have been assigned D
by the State Government while modifying the schemes. It was
not necessary to cull out the reasons in detail. The exercise
has been undertaken in public interest. Thus, there was no
reason to quash the modifications made in the schemes.
E
11. Learned counsel for the appellants has placed
reliance on the decision of this Court in H. C.Narayanappa &•
Ors. v. The State of Mysore & Ors. [1960 (3) SCR 742).
Following paragraphs have been relied upon :
F
"Re.3:
The plea that the Chief Minister who approved the
scheme under s. 680 was biased has no substance.
Section 680 of the Motor Vehicles Act undoubtedly
imposes a duty on the State Government to act judicially G
in considering the objections and in approving or
modifying the scheme proposed by the transport
undertaking. Gullapalli Nageswara Rao v. Andhra
Pradesh State Road Transport Corporation and another
H
216 SUPREME COURT REPORTS (2014] 13 S.C.R.
A (1959) Supp. 1 S.C.R. 319. It is also true that the
Government on whom the duty to decide the dispute
rests, is substantially a party to the dispute but if the
Government or the authority to whom the power is
delegated acts judicially in approving or modifying the
B scheme, the approval or modification is not open to
challenge on a presumption of bias. The Minister or the
officer of the Government who is invested with the power
to hear objections to the scheme is acting in his official
capacity and unless there is reliable evidence to show
c that he is biased, his decision will not be liable to be
called in question, merely because he is a limb of the
Government. The Chief Minister of the State has filed an
affidavit in this case stating that the contention of the
petitioners that he was "biased in favour of the scheme
D
was baseless"; he has also stated that he heard such
objections and representations as were made before him
and he had given the fullest opportunity to the objectors
to submit their objections individually. The Chief Minister
has given detailed reasons for approving the scheme
E
and has dealt with such of the objections as he says were
urged before him. In the last para. of the reasons given,
it is stated that the Government have heard all the
arguments advanced on behalf of the operators and "after
F giving full consideration to them, the Government have
come to the conclusion that the scheme is necessary in
the interest of the public and is accordingly approved
subject to the modifications that it shall come into force
on May 1, 1959". In the absence of any evidence
G controverting these averments, the plea of bias must fail.
Re.4:
The argument that the Chief Minister did not give
"genuine consideration" to the objections raised by
H
B.A UNGA REDDY ETC. ETC. v. KARNATAKASTATE 217
TRANSPORT AUTHORITY [ARUN MISHRA, J.]
· operators to the scheme in the light of the conditions A
·prescdbedhas no force. The order of the Chief Minister
discusses the questions of law as well as questions of
. fact. There is no specific reference in the order to certain
objections which were raised in the reply filed by the
· objectors, but we are, on that account, unable to hold B
that the Chief Minister did not consider those objections.
The guarantee conferred bys. 680 of the Motor Vehicles
Act upon persons likely to be affected by the intended
scheme is a guarantee of an opportunity fo put forth their
objections and to make representations to the State C
Government against the acceptance of the scheme. This
··opportunity of making representations and of being heard
in support thereof may be regarded as real only if in the
consideration of the objections, there is a judicial
D
.. approach: f3ut the Legislature does not contemplate an
court
... ·ap.Pea1 to this against the order passed by the State
. Government. approving. or modifying the $Cherne.
Provided the authority invested with the power to consider
· the objections gives an opportunity to the objectors to E
be heard in the matter and deals with the objections in
the light of the object intended to be secured by the
scheme, the ultimate order passed by that authority is
not open to challenge either ori the ground that another
viewmay possibly have been taken on the objections or F
that detailed reasons have not been given for upholding
or rejectingthe contentions raised by the objectors." .
12. This Court observed that while dealing with these
quasi-judicial matters like modifying the scheme, the Act of G
1939 imposed a duty on the State Government to act judicially
in considering the objections while approving or modifying the ·
scheme ..The same is not open to question on the presumption
of bias. It has been observed that the Chief Minister had given
detailed reasons for approving the scheme and had dealt with H
218 SUPREME COURT REPORTS [2014] 13 S.C.R.
A such technical and legal objections filed before him. It has also
been observed that the ultimate order passed by the Authority
is not open to challenge on the ground that another view may
possibly have been taken on the objections or that detailed
reasons have not been given. It is apparent that reasons have
B to be given, factual and legal objections have to be dealt with.
13. Reliance has also been placed by the learned senior
counsel for the appellants on Capital Multi-purpose Co-
operative Society Bhopal & Ors. v. The State of MP. &. Ors.
C (1967 (3) SCR 329] wherein this Court dealt with the mode of
hearing of the objections and the question of adequate and
real hearing. The paragraph relied upon is reproduced
hereunder:
"The third contention raised on behalf of the appellants
D
is that the orders approving and modifying the schemes
in this case do not show that the authority had applied its
mind to the question whether the schemes were such as
to subserve the purposes of providing an efficient,
E adequate, economical and properly co-ordinated
transport service. Reliance in this connection is placed
on certain. American cases which hold that the lack of
an express finding necessary under a statute to validate
an order of an administrative agency cannot be supplied
F by implication. When therefore such an administrative
agency is required as a condition precedent to an order
to make a finding of facts the validity of the order must
rest upon the needed finding. If it is lacking the order is
ineffective and the lack of express finding cannot be·
G supplied by implication. It is unnecessary for us to refer
to the American cases in detail; it is enough to say that
the principles enunciated above may be unexceptionable
where the existence of a finding is necessary for taking
action, but that depends upon the words of the statute
H
B. A. UNGA REDDY ETC. ETC. v. KARNATAKA STATE 219
TRANSPORT AUTHORITY [ARUN MISHRA, J.]
and therefore we must now turn to the words of Section A
68-C and Section 68-D. We have already indicated that
the State Transport Undertaking publishes a scheme
when it has arrived at a certain opinion. After the scheme
is published under Section 68-C any person affected by
it can object within 30 days under Section 68-D ( 1). B
Thereafter the State Government considers the
objections and gives an opportunity to the objector to be
heard and also to the State Transport Undertaking.
Thereafter the State Government or the authority
authorised by it either approves or modifies the scheme C
or even rejects it. There is no express provision in these
two sections laying down that the authority hearing
objections must come to some finding of fact as a
condition precedent to its final order. As such no express D
finding as envisaged in the American cases is necessary
under Section 68-C read with Section 68-D that the
scheme provides an efficient, adequate, economical and
properly co-ordinated road transport service. Besides
we are of opinion that the whole object of hearing E
objections under Section 68-D is to consider whether
the scheme provides an efficient, adequate, economical
and properly co-ordinated road transport service. After
hearing objections the State Government, or the officer
authorised by it has either to approve or modify, or if F
necessary to reject the scheme. Where the scheme is
approved or modified it necessarily follows in our opinion
that it has been found to provide an efficient, adequate,
economical and properly co~ordinated transport service;
if it is not of that type, the State Government or the G
authority appointed to hear objections would reject it. In
the absence of a provision requiring an express finding
in these two sections it seems to us that the very order of
the State Government or the authority appointed by it to
H
220 SUPREME COURT REPORTS [2014] 13 S.C.R.
A hear objections must be held to mean either, where the
scheme is approved or modified, that it subserves the
purposes mentioned in Section 68-C, or, where it is
rejected, that it does not subserve the purposes. Section
68-D (2) does not require in our opinion any express
B finding, and even ifthere is none in the present case, it
would not invalidate the orders passed by the authority
hearing the objections. The argument on behalf of the
appellants under this head is also rejected."
c 14. It has also been observed that there is no power or
authority in the State Government to compel attendance of
witness or to compel production of documents. This Court has
emphasised that no express finding is necessary under section
68C read with section 680 that the scheme provides efficient,
D adequate, economi_cc:il and properly co-ordinated road
transport service as abovesaid is the purpose of the entire
exercise. If the scheme is modified, it follows that it has been
to provide efficient, adequate, economical and proper transport
service. This Court has considered the question whether
E section 680 requires recording of any particular finding as
condition precedent to exercise the power conferred
thereunder. The decision does not dispense with the
requirement to mention the reasons.
F 15. Reliance has also been placed by the operators on
Gul/apalli Nageswara Rao & Ors. vs. Andhra Pradesh State
Road Transport Corporation & Anr. [AIR 1959 SC 308] in
which it was laid down that an express recital of the formation
of the opinion that the scheme was necessary in public interest,
G is not made a condition of the validity of the scheme. This Court
has laid down that the framing of scheme is manifestation of
such opinion. This Court has laid down thus:
"14. The learned counsel then contends that the scheme
H
B.A. LI NGA REDDY ETC. ETC. v. KARNATAKASTATE 221
TRANSPORT AUTHORITY [ARUN MISHRA, J.]
published does not disclose that the State Transport A
Undertaking was of the opinion that the scheme was
necessary in the interests of the public and therefore, as
the necessary condition for the initiation of the scheme
was not complied with, the scheme could not be.enforced.
Section 68-C says that where any State Transport B
Undertaking is of opinion that for specified reasons it is
necessary in the public interest that road transport
service should be run oroperated by the State Transport
Undertaking, it may prepare a scheme giving particulars
of the scheme and publish it in the Official Gazette. An C
express recital of the formation of the opinion by the
Undertaking in the scheme is not made a condition of
the validity of the scheme. The scheme published in terms.
of the section shall give particulars of the nature of the
0
service proposed to be rendered, the area or route
proposed to be covered and such other particulars
respecting thereto. It is true that the preparation of the
scheme is made to depend upon the subjective opinion
of the. State Undertaking as regards the necessity for E
such a scheme. The only question, therefore, is whether
the State Transport Undertaking formed the opinion
before preparing the scheme and causing it to be
published in the Official Gazette. The scheme published,
as already noticed, was signed by Guru Pershad, General F
Mein ager, State Transport Undertaking, Andhra Pradesh
Road Transport. The preamble to the scheme reads:
"In exercise of the powers conferred by section 68-C
of the MotorVehiclesAct, 1939, it is hereby proposed, G
for the purpose of providing an efficient, adequate,
economical and properly co-ordinated road transport
service in public interest, to operate the following
transport services as per the particulars given below
with effect from a date to be notified by the H
222 SUPREME COURT REPORTS [2014] 13 S.C.R.
A Government."
We have already held that Guru Pershad represented
the State Transport Undertaking. The scheme was
proposed by the said Undertaking in exercise of the
B powers under Section 68-C of the Act for the purpos.e of
providing an efficient, adequate, economical and properly
coordinated road transport service in public interest.
Except for the fact that the word 'opinion' is omitted, the
first part of the Section 68-C is incorporated in the
c preamble of the scheme; and, in addition, it also discloses
that the scheme is proposed in exercise of the powers
conferred on the State Transport Undertaking under
Section 68-C of the Act. The State Transport Authority
can frame a scheme only if it is of opinion that it is
D necessary in public interest that the road transport
· service should be run or operated by the Road Transport
Undertaking. When it proposes, for the reasons
mentioned in the section, a scheme providing for such a
transport undertaking, it is a manifest expression of its
E opinion in that regard. We gather from a reading of the
scheme that the State Transport Undertaking formed the
necessary opinion before preparing the scheme and
publishing it. The argument of the learned counsel carries
technicality to a breaking point and for the aforesaid
F reasons, we reject it."
16. Sections 68-C, 68-D and 68-E of the Act of 1939
which came up for consideration are reproduced hereunder:
"68-C. Preparation and publication of scheme of
G
road transport service of a State Transport
Undertaking.- Where any State Transport Undertaking
is of opinion that for the purpose of providing an efficient,
adequate, economical and properly co-ordinated road
H
B. A. UNGA REDDY ETC. ETC. v. KARNATAKA STATE 223
TRANSPORT AUTHORITY [ARUN MISHRA, J.]
transport service, it is necessary in the public interest A
that road transport services in general or any particular
class of such service in relation to any area or route or
portion thereof should be run and operated by the State
Transport Undertaking, whether to the exclusion,
complete or partial, of other persons or otherwise, the B
State Transport Undertaking may prepare a scheme
giving particulars of the nature of the services proposed
to be rendered, the area or route proposed to be covered
and such other particulars respecting thereto as may be
prescribed, and shall cause every such scheme to be c
published in the Official Gazette and also in such other
manner as the State Government may direct."
"68-D. Objection to the scheme- (1) On the publication
of any scheme in the Official Gazette and not less than D
one newspaper in regional language circulating in the
area or route which is proposed to be covered by such
scheme, -
(i) any person already providing transport facilities by any E
means along or near the area or route proposed to
be covered by the scheme;
(ii) any association representing persons interested in
the provis!on of road transport facilities recognised in
this behalf by the State Government; and
F
- _,.,
(iii) any local authority or police authority within whose
jurisdiction any part of the area or route proposed to
be covered by the scheme lies,
G
may within thirty days from the date of its publication in
the Official Gazette, file objections to it before the State
Government."
"68-E. Cancellation or modification of scheme.-(1 )Any
H
224 SUPREME COURT REPORTS [2014] 13 S.C.R.
A scheme published under sub-section (3) of SectiQn 68-·
D may at any time be cancelled or modified by the State
Transport Undertaking and the procedure laid down in
Section 68-C and Section 68-D shall, so far as it can be
made applicable, be followed in every case where the
B scheme is proposed to be cancelled or modified ·as if
the proposal were a separate scheme :
Provided that the State transport undertaking may, with
the previous approval of the State Government, modify
c without following the procedure laid down in Section 68-
C and Section 68-D, any such scheme relating to any
route or area in respect of which the road transport
. services are run and operated by the State transport
undertaking to the complete exclusion of other persons
D in respect of the following matters, namely, -
(a) increase in the number of vehicles or the number of
trips;
(b) change in the type of vehicles without reducing the
E seating capacity;
(c) extension of the route or area without reducing the
frequency of the service; or
(d) alteration of the time-table without reducing the
F
frequency of the service.
((2) Notwithstanding anything contained in sub-section
(1 ), the State Government may, at anytime, if it considers
necessary in the public interest so to do, modify any
G scheme published under sub-section (3) of Section 68-
D, aftergiving-
(i) the State transport undertaking, and
(ii) any other person who, in the opinion of the State
H
B.A. UNGA REDDY ETC. ETC. v. KARNATAKASTATE 225
TRANSPORT AUTHORITY [ARUN MISHRA, J.]
Government, is likely to be affected by the proposed A
modification,
an opportunity of being heard in respect of the proposed
modification]."
17. The pari materia. provisions contained in sections B
99 and 102 of the Act of 1988are reproduced hereunder:
"99. Preparation and publication of proposal
regarding road transport service of a State
transport undertaking.-[(1 )] Where any State C
Government is of opinion that for the purpose of providing
an efficient, adequate, economical and properly co-
ordinated road transport service, it is necessary in the
public interest that road transport services in general or
any particular class of such service in relation to any area D
or route. or portion thereof should be run and operated
by the State trar:isport undertaking, whether to the
exclusion, complete or partial, of other persons or
otherwise, the State Government may formulate a
proposal regarding a scheme giving particulars of the E
nature of the services proposed to be rendered, the area
or route proposed to be covered and other relevant
particulars respecting thereto and shall publish such
proposal in the Official Gazette of the State formulating F
such proposal and in not less than one newspaper in the
regional language circulating in the area. or route
proposed to be covered by such sch.eme and also in
such other manner as the State Government formulating
such proposal deem fit.
G
[(2) Notwithstanding anything contained in sub-section
( 1), when a proposal is published under that sub-section,
then from the date of publication of such proposal, no
permit shall be granted to any person, except a temporary
H
226 SUPREME COURT REPORTS [2014] 13 S.C.R.
A permit during the pendency of the proposal and such
temporary permit shall be valid only for a period of one
year from the date of its issue or till the date of final
publication of the scheme under section 100, whichever
is earlier.]
B
xxxxx
102. Cancellation or modification of scheme.-(1)
The State Government may, at any time, if it considers
necessary, in the public interest so to do, modify any
c approved scheme after giving-
(1) the State transport undertaking; and
(ii) any other person who, in the opinion of the State
0 Government, is likely to be affected by the proposed
modification,
an opportunity of being heard in respect of the proposed
modification.
E (2) The State Government shall publish any modification
proposed under sub-section (1) in the Official Gazette
and in one of the newspapers in the regional languages
circulating in the area in which it is proposed to be
covered by such modification, together with the date, not
F being less than thirty days from such publication in the
Official Gazette, and the time and place at which any
representation received in this behalf will be heard by
the State Government."
G 18. It is apparent from the provisions that the scheme is
framed for providing efficient, adequate, economical and
properly co-ordinated road transport service in public interest.
Section 102 of the Act of 1988 does not lay down the
requirement of recording any express finding on any particular
H
B. A. LIN.GA REDDY ETC. ETC. v. KARNATAKA STATE 227
TRANSPORT AUTHORITY [ARUN MISHRA, J.]
aspect; whereas the duty is to hear and· consider the A
objections. It requires the State Government to act in public
interest to cancel or modify a scheme after giving the State
Transport UndE!rtaking or any other affected person by the
proposed modification an opportunity of hearing. The State is
supposed to be acting in public interest while exercising the B
power under the provision. However, that does not dispense
with the requirement to record reasons while dealing with
objections.
19. Modification of the scheme is a quasi-judicial function c
while modifying or cancelling a scheme. The State Government
is duty-bound to consider the objections and to give reasons
either to accept or reject them. The rule of reason is anti-thesis
to arbitrariness in action and is a necessary concomitant of
the principles of natural justice. D
20. In Siemens Engineering & Manufacturing Co. of
India Ltd. v. Union of India [1976 (2) SCC 981], it was held:
"6. xx x It is now settled law that where an authority makes
an order in exercise of a quasi-judicial function, it must E
record its reasons in support of the order it makes. Every
quasi-judicial order must be supported by reasons. That
has been laid down by a long line of decisions of this
Court ending with N.M. Desai v. Testeels Ltd.. But,
unfortunately, the Assistant Collector did not choose to F
give any reasons in support of the' order made by him
confirming the demand for differential duty. This was in
plain disregard of the requirement of law. The Collector
in revision did give some sort of reason but it was hardly G
satisfactory. He did .not deal in his order with the
arguments advanced by the appellants in their
representation dated December 8, 1961 which were
repeated in the subsequent representation dated June
H
228 SUPREME COURT REPORTS (2014] 13 S.C.R.
A 4, 1965. It is not suggested that the Collector should have
made an elaborate order discussing the arguments of
the appellants in the manner of a Court of law. But the
order of the Collector could have been a little more explicit
and articulate so as to lend assurance that the case of
B the appellants had been properly considered by him~ If
courts of law are to be replaced by administrative
authorities and tribunals, as indeed, in some kinds of
cases, .with the proliferation of Administrative Law, they
may have to be so replaced, it is essential that
c administrative authorities and tribunals should accord fair
and proper hearing to the persons sought to be affected
by their orders and give sufficiently clear and explicit
reasons in support of the orders made by them. Then
alone administrative authorities and tribunals exercising
D
quasi-judicial function will be able to justify their existence
and carry credibility with the people by inspiring
Gonfidence in the adjudicatory process. The rule requiring
reasons to be given in support of an order is, like the
principle of audi alteram partem, a basic principle of
E
natural justice which must inform every quasi-judicial
process and this rule must be observed in its proper spirit
and mere pretence of compliance with it would not satisfy
the requirement of law. xx x."
F 21. This Court in Rani Lakshmi Bai Kshetriya Gramin
Bank's case (supra) while relying upon S.N. Mukherjee v.
Union of India [1990 (4) SCC 594] has laid down thus :
"8. The purpose of disclosure of reasons, as held by a
G Constitution Bench of this Court in S.N. Mukherjee v.
Union oflndia (1990 (4) SCC 594), is that people must
have confidence in the judicial or quasi-judicial
authorities. Unless reasons are disclosed, how can a
person know whether the authority has applied its mind
H
B.A. UNGA REDDY ETC. ETC. v. KARNATAKASTATE 229
TRANSPORT AUTHORITY [ARUN MISHRA, J.]
or not? Also, giving of reasons minimises the chances A
of arbitrariness. Hence, it is an essential requirement of
the rule of law that some reasons, at least in brief, must
be disclosed in a judicial or quasi-judicial order, even if
it is an order of affirmation."
B
22. A Constitution Bench of this Court has laid down in
. Krishna Swami v, Union of/ndia & Ors. [1992 (4) SCC 605]
that if a statutory or public authority/functionary does not record
the reasons, its decision would be rendered arbitrary, unfair,
unjust and violating Articles 14 and 21 of the Constitution. This c
Court has laid down thus :
"Undoubtedly, in a parliamentary democracy governed
by rule of law, any action, decision or order of any
statutory/public authority/functionary must be founded
0
upon reasons stated in the order or staring from the
record. Reasons are the links between the material, the
foundation for their erection and the actual conclusions.
They would also demonstrate how the mind of the maker
was activated and actuated and their rational nexus and E
synthesis with the facts considered and the conclusions
reached. Lest it would be arbitrary, unfair and unjust,
violating Article 14 or unfair procedure offending Article
21. But exceptions are envisaged keeping institutional
pragmatism into. play, conscious as we are of each F
other's limitations.
23. In Workmen of Meenakshi Mills Ltd. & Ors. v.
Meenakshi Mills Ltd. & Anr. [1992 (3) SCC 336] while
considering the principles of natural justice, it has been G
observed that it is the duty to give reasons and to pass a
speaking order; that excludes arbitrariness in action as the
same is necessary to exclude arbitrariness. This Court has
observed thus :
H
230 SUPREME COURT REPORTS [2014] 13 S.C.R.
A "We have already dealt with the. nature of the power that
is exercised by the appropriate Government or the
authority while refusing or granting permission under sub-
section (2) and have found that the said power is not
purely administrative in character but partakes of
B exercise of a function which is judicial in nature. The
exercise of the said power envisages passing of a
speaking order on an objective consideration of relevant
facts after affording an opportunity to the concerned
parties. Principles or guidelines are insisted on with a
c view to control the exercise of discretion conferred by
the statute. There is need for such principles or guidelines
when the discretionary power is purely administrative in
character to be exercised on the subjective opinion of
the authority. The same is, however, not true when the
D
power is required to be exercised on objective
considerations by a speaking order after affording the
parties an opportunity to put forward their respective
points of view.
E xxxxx
We are also unable to agree with the submission that
the requirement of passing a speaking order containing
reasons as laid down in sub-section (2) of Section 25-N
F does not provide sufficient safeguard against arbitrary
action. In S.N. Mukherjee v. Union of India [1990 (4)
sec 594], it has been held that irrespective of the fact
whether the decision is subject to appeal, revision or
judicial review, the recording of reasons by an
G administrative authority by itself serves a salutary
purpose, viz., "it excludes chances of arbitrariness and
ensures a degree of fairness in the process of decision-
making."
H 24. In Divisional Forest Officer, Kothagudem & Ors. v.
B. A. UNGA REDDY ETC. ETC. v. KARNATAKA STATE 231
TRANSPORT AUTHORITY[ARUN MISHRA, J.]
Madhusudhan Rao [2008 (3) SCC469], this Court has laid ·A
down thus:
"20. It is no doubt also true that an appellate or revisional
authority is not required to give detailed reasons for
agreeing and confirming an order passed by the lower B
forum but, in our view, in the interests of justice, the
delinquent officer is entitled to know at .least the mind of
the appellate or revisional authority in dismissing his
appeal and/or revision. It is true that no detailed reasons
·. are required to be given, bufsome brief reasons should c
be indicated even in an order affirming the views of the
lower forum."
25. In Chairman, Disciplinary Authority, Rani Lakshmi
Bai Kshetriya Gramin Bank v. Jagdish Sharan Varshney & D
Ors. [2009 (4)SCC 240], it was observed that:
"8. The purpose of disclosure of reasons, as held by a
Constitution Bench of this Court in S.N. Mukherjee v.
Union of India (supra), is that people must have·
confidence in the judicial or quasi-judicial authorities. E
Unless reasons are disclosed, how can a person know
whether the authority has applied its mind or not? Also,
giving of reasons minimises the chances of arbitrariness.
Hence, it is an essential requirement of the rule of law F
that some reasons, at least in brief, must be disclosed in
a judicial or quasi-judicial order, even if it is an order of
affirmation."
26. In Manohar v. State of Maharashtra & Anr. [2012
· (13) SCC 14] it has been laid down that in the context of State G
Information Commission, it has to hear the parties, apply its
mind and record the reasons as they are the basic elements
of natural justice. This Court has laid down thus:
H
232 SUPREME COURT REPORTS [2014] 135.C.R.
A "17. The State Information Commission is performing
adjudicatory functions where two parties raise their
respective issues to which the State Information
Commission is expected to apply its mind and pass an
order directing disclosure of the information asked for
B or declining the same. Either way, it affects the rights of
the parties who have raised rival contentions before the
Commission. If there were no rival contentions, the matter
would rest at the level of the designated Public Information
Officer or immediately thereafter. It comes to the State
c Information Commission only at the appellate stage when
rights and contentions require adjudication. The
adjudicatory process essentially has to be in consonance
with the principles of natural justice, including the doctrine
of audi alteram partem. Hearing the parties, application
D of mind and recording of reasoned decision are the basic
elements of natural justice. It is not expected of the
Commission to breach any of these principles, particularly
when its orders are open to judicial review. Much less to
Tribunals or such Commissions, the courts have even
E
made compliance with the principle of rule of natural
justice obligatory in the class of administrative matters
as well."
27. Now we come to the order passed in the instant case
F with respect to the Bellary Scheme which is to the following
effect:
"The objections and representations received in this
regard is examined and the arguments advanced by the
G representatives of the STUs and private operators for
and· aQainst the modification proposed by the State
Government is considered in the light of the provisions
of the Motor Vehicles Act, 1988.
H
B. A. UNGA REDDY ETC. ETC. v. KARNATAKA STATE 233
TRANSPORT AUTHORITY [ARUN MISHRA, J.]
Sec. 102 of the M.V.Act, 1988 empowers the State A
Government, at any time, if it consider necessary in the
public interest so to do, modify any approved scheme.
Therefore, what is paramount for modifying the scheme
·is that it should be in the public interest. The modification B
·now proposed is necessitated in view of the stand taken
by the Hon'ble Supreme Court of India in Ashrafulla
Khan's case reported in :AIR 2002 SC 629. During the
period from 04.12.1995 and 14.01.2002, considering the
interpretation with ·regard to the words "overlapping", c
"intersection" and "corridor restriction" of the Hon'ble High
Court of Karnataka, the Transport Authorities have
granted the permits to the private operators in
accordance with the provisions of M.V.Act, 1988 and
rules made thereunder considering the need of the D
travelling public, as these operators are meeting the
genuine demands of the travelling public in excess of
the services provided by the STUs. Hence, it has become
necessary to save all the permits, granted by the RTAs
which were in operation as on 1.4.2002 in the interest of E
the travelling public.
Therefore, on the facts and averments made before me,
I do not find the sufficient grounds is established to
support the objections and representations received and F
made in person opposing the modification of the
approved Bellary and Raichur schemes published in
Notification No.HD/22/TMP/64 Dated 18.4.64 and TD/
140/TMl/82, dated 03.11.1987. Hence, the draft
notification modifying the above schemes published in G
Notification No.HTD/122/TMA97 dated 25.10.2002 is
upheld and approved. All the permits held as on 1.4.2002
are saved with the condition that they shall not pick up of
set down passengers except in the bus stands."
H
234 SUPREME COURT REPORTS (2014] 13 S.C.R.
A 28. It is apparent that there is no consideration of the
objections except mentioning the arguments of the rival parties.
Objections both factual and legal have not been considered
much less reasons assigned to overrule them. Even in brief,
reasons have not been assigned indicating how objections
B are disposed of.
29. Situation is worse in the orders modifying other
schemes. Thus, modification of th'e Schemes could not be said
to be in accordance with the principles of natural justice in the
C absence of reasons so as to reach the conclusion that private
operators are meeting the genuine demands of the public in
excess of the service provided by the STOs., hence, it cannot
be said to be sustainable.
30. It was also urged on behalf of the appellants that the
D
permits were granted in the light of the Full Bench decision of
the High Court in the case of KSRTC v. Ashraful/a which held
the field at the relevant time. Thus, the permits had peen validly
granted in accordance with the prevailing interpretation of
E "overlapping" and "inter-section".
31. On behalf of the appellants, reliance has been placed
on a decision of this Court in Naresh Shridhar Mirajkar & Ors.
v. State of Maharashtra &Anr. [1966 (3) SCR 744] to contend
F that the decision of the High Court is binding upon subordinate
courts, tribunals etc. Reliance has been placed on the following
passage:
"60. There is yet another aspect of this matter to which it
is necessary to refer. The High Court is a superior Court
G of Record and under Art. 215, shall have all powers of
such a Court of Record including the power to punish
contempt of itself. One distinguishing characteristic of
such superior courts is that they are entitled to consider
questions of their jurisdiction raised before them. This
H
B. A. UNGA REDDY ETC. ETC. y. KARNATAKA STATE 235
TRANSPORT AUTHORITY [ARLIN MISHRA, J.]
question fell to be considered by this Court in Special A
Reference No. 1 of 1964 (1965) 1 S.C.R. 413. In that
case, it was urged before this Court that in granting bail
to Keshav Singh, the High Court had exceeded its
jurisdiction and as such, the order was a nullity. Rejecting
this argument, this Court obse'rved that in the case of a B
. superior Court of Record, it is for the court to consider
whether any matter falls within its jurisdiction ornot. Unlike
. a court of limited jurisdiction, the superior court is entitled
to determine for itself questions aoout its own jurisdiction.
That is why this Court did not accede to the proposition C
· thatin passing the order for interim bail, the High Court
can be said to have exceeded its jurisdiction with the
result that the order in question was null and void. ln
support of this view, this Court cited a passage from D
Halsbury's Laws of England where it is observed that
prima facie, no matter is deemed to be beyond the
jurisdiction of a superior court unless it is expressly
shown to be so, while nothing is within the jurisdiction of
an inferior court unless it is expressly shown on the face E
of the proceedings that the particular matter is within the
cognizance of the particular Court." (Halsbury's Laws of
England, Vol. 9, p. 349). If the decision of a superior Court
on a question of its jurisdictiori is erroneous, it can, of
course, be corrected by appeal or revision as may be F
permissible under the law; but until the adjudication by a
superior Court on such a point is set aside by adopting
the -appropriate course, it would not be open to be
.corrected by the exercise of the writ jurisdiction of this
~~ G
32. Reliance was also placed· on Commissioner of
Income Tax, Bhopal v. G.M. Mittal Stainless Steel (P) Ltd.
[2003 (11) SCC 441] in which this Court considered the
question that the decision of the High Court will bind the authority H .
236 SUPREME COURT REPORTS [2014] 13 S.C.R.
A under the Central Act within the State where the decision has
been rendered. The fact that the decision of another High Court .
is pending disposal before the Supreme Court, was irrelevant
and the decision of the jurisdictional High Court was binding
upon the authority within the State.
B
33. The decision in Ashraful/a was reversed by this Court
in Karnataka State Road Transport Corporation v. Ashraful/a
Khan & Ors. [2002 (2) SCC 560] in which this Court had laid
down that a permit cannot be granted for a non-notified route
c which overlaps or traverses the same line of travel as a portion
of notified route. Exception can only be made in case where
non-notified route cuts across or intersects a notified route. It
is not of significance whether the area of overlapping is a small
area or a larger area or whether it falls within the local limits of
D a town or a village. The decision of Full Bench of the High
Court of Karnataka holding that small portions falling within
the limits of a town or a village on a notified route are to be
treated as only an intersection of the notified route and not as
overlapping, had been reversed. In Ashraful/a (supra), this
E Court has laid down that on the repre~entation of the travelling
public, the State Undertaking, as the case may be, the State
Government has to consider the matter of modification of the
Scheme. In case the State Undertaking lacks vehicles or other
infrastructure to provide an efficient and well-co-ordinated
F transport service to travelling public, it may modify the Scheme.
This Court has laid down thus :
"9. Since there was a conflict between the two sets of
decisions rendered by this Court in Ram Sanehi Singh
G v. Bihar SRTC, Mysore SRTC v. Mysore State Transport
Appellate Tribunal and Mysore SRTC v. Mysore
Revenue Appellate Tribunal the matter was referred to
a Constitution Bench of this Court. A Constitution Bench
of this Court in Adarsh Travels Bus Service v. State of
H
B. A. LINGA REDDY ETC. ETC. v. KARNATAKA STATE 237
TRANSPORT AUTHORITY [ARUN MISHRA, J.]
U.P. distinguished the decision in Ram Sanehi Singh v. A
Bihar SRTC for having been decided on particular facts
of its case but did not approve it. However, the decision
in Mysore SRTCv. Mysore Revenue Appellate Tribunal°
was expressly not approved, whereas the decision in
Mysore SRTC. v. Mysore State Transport Appellate .B
Tribunal was approved. The Constitution Bench settled
the law by laying down that once a Scheme is for total
exclusion prohibiting private operators from plying stage
carriages on a whole or part of a notified route, no permit
can be granted on the notified route or portion thereof." C
xxxxx
"29. Before we part with the case, we would like to
observe that the need and convenience of the travelling D
public is of paramount consideration under the Act. A
situation may arise when the Transport Undertaking may
be found not catering to the needs of the travelling public.
In such a situation, on_ representation of the travelling
public, the State Undertaking or the Government, as the E
case may be, may consider the matter and provide
adequate transport services if it is required. In case the
Government finds that the Undertaking lacks vehicles or
other infrastructure to provide an efficient and well-
coordinated transport services to the travelling public, it F
may modify the Scheme as to permit private operators
to ply vehicles on such route or routes. l_n any case it is
always permissible to the legislature to amend law by
providing private operators to run an efficient and well-
coordinated transport services on such route or routes G
on payment of adequate royalty to the State Government.
34. It has also been laid down by this Court in Ashraful/a
that its decision in Adarsh Travels Bus Service &Anr. v. State
of U.P. & Ors. [1985 (4) sec 557] taking the same view as to H
238 SUPREME COURT REPORTS [2014] 13 S.C.R.
A overlapping still holds the field. It prevailed as per the mandate
of Article 141 of the Constitution of India. In Adarsh Travels
(supra), this Court has laid down thus:
"7.Acareful and diligent perusal of Section 68-C, Section
B 68-0(3) and Section 68-FF in the light of the definition of
the expression "route" in Section 2 (28-A) appears to
make it manifestly clear that once a scheme is published
under Section 68-D in relation to any area or route or
portion thereof, whether to the exclusion, complete or
c partial of other persons or otherwise, ·no person other
than the State Transport Undertaking may operate on the
notified area or notified route except as provided in the
scheme itself. A necessary consequence of these
provisions is that no private operator can operate his
D vehicle on any part or portion of a notified area or notified
route unless authorised so to do by the terms of the
scheme itself. He may not operate on any part or portion
of the notified route or area on the mere ground that the
permit as originally granted to him covered the notified
E route or area. We are not impressed by the various
submissions made on behalf of the appellants by their
several counsel. The foremost argument was that based
on the great inconvenience which may be caused to the
travelling public if a passenger is not allowed to travel,
F say, straight from A to Bon a stage carriage, to ply which
on the route A to B a person X has a permit, merely
because a part of the route from C to D somewhere
between the points A and B is part of a notified route.
The answer to the question is that this is a factor which
G
will necessarily be taken into consideration by the State
Transport Undertaking before publishing the scheme
under Section 68-C, by the Government under Section
68-D when considering the objections to the scheme and
thereafter either by the State Transport Undertaking or
H
B. A. UNGA REDDY ETC. ETC. v. KARNATAKA STATE 239
TRANSPORT AUTt'IORITY [ARUN MISHRA, J.]
by the Government when the inconveniences A
experienced by the travelling public are brought to their
notice. The question is one of weighing in the balance
the advantages conferred on the public by the·
nationalisation of the· route C-D against the
inconveniences suffered by the public wanting to travel B
straight from A to B. On the other hand it is quite well
known that under the guise of the so-called "corridor ·
restrictions" permits over longer routes which cover
shorter notified routes or "overlapping" parts of notified
routes are more often than not misutilised since it is well C
nigh impossible to keep a proper check at every point of
the route. It is also well known thatoftentimes permits for
plying stage carriages from a point a short distance
beyond one terminus to a point a short distance beyond
another terminus of a notified route have been applied D
for and granted subject to the so-callee "corridor
restrictions" which are but mere ruses or traps to obtain
permits and to frustrate the scheme. If indeed there is
any need for protecting the travelling public from E
inconvenience as suggested by the learned counsel we
have no{!oubt that the State Transport Undertaking and
the Government will make a sufficient provision in the
scheme itself to avoid inconvenience being caused to
the travelling public. F
35. Reliance was placed on behalf of the respondents
. on a decision of this Court in A.P State Road Transport
Corporation v. P. V.Ramamohan Chowdhary [1992 (2) SCC
235] in which it has been laid down that the power of
cancellation or modification under section 68E would be de G
hors the permit granted under section 68-D of the Act of 1939.
The conditions precedent therein are that the Government must
objectively come to a finding and the Government should follow
the procedure prescribed in the statute. It would be either on H
240 SUPREME COURT REPORTS (2014] 13 S.C.R.
A the initiative of the State Transport Undertaking or on an
application or representation by the general public of the
necessity in public interest to modify the scheme approved
under section 680(2). It is not at the behest of the erstwhile
holders of permits. It was also laid down that even on partial
B overlapping of approved scheme, private operators have been
totally prohibited to have corridor shelters and could no longer
enter into the frozen area, route or part thereof.
36. The view of the High Court in Ashrafulla (supra) has
c been reversed by this Court. The decision is of retrospective
operation, as it has not been laid down that it would operate
prospectively; more so, in the case of reversal of the judgment.
This Court in P. V. George & Ors. v. State of Kera/a & Ors. (2007
(3) sec 557] held that the law declared by a court will have a
D retrospective effect if not declared so specifically. Referring to
Golak Nath v. State of Punjab [AIR 1967 SC 1643] it had also
been observed that the power of prospective overruling is
vested only in the Supreme Court and that too in constitutional
matters. It was observed :
E
"19. It may be true that when the doctrine of stare decisis
is not adhered to, a change in the law may adversely
affect the interest of the citizens. The doctrine of
prospective overruling although is applied to overcome
F such a situation, but then it must be stated expressly. The
power must be exercised in the clearest possible term.
The decisions of this Court are clear pointer thereto.
xxxxx
G 29. Moreover, the judgment of the Full Bench has attained
finality. The special leave petition has been dismissed.
The subsequent Division Bench, therefore, could not have
said as to whether the law declared by the Full Bench
would have a prospective operation or not. The law
H
B. A. UNGA REDDY ETC. ETC. v. KARNATAKA STATE 241
TRANSPORT AUTHORITY[ARUN MISHRA, J.]
declared by a court will have a retrospective effect if not A
otherwise stated to be so specifically. The Full Bench
having not said so, the subsequent ~ivision Bench did
not have the jurisdiction in tha~ behalf."
37. In Ravi $.Naik v. Union of India & Ors. [1994 Supp B -
(2) sec 641 ], it has been laid down that there is retrospective
operation of the decision of this Court. The interpretation of
the provision becomes effective from the date of enactment of
the provision. In M.A. Murthy v. State of Karnataka & Ors. [2003
(7) SCC 517], it was held that the law declared by the Supreme C
Court is normally assumed to be the law from inception.
Prospective operation is only exception to this normal rule. It
was held thus :
"8. The learned counsel for the appellant submitted that D
the approach of the High Court is erroneous as the law
declared by this Court is presumed to be the law at all
times. Normally, the decision of this Court enunciating a
principle of law is applicable to all cases irrespective of
its stage of pendency because it is assumed that what E
is enunciated by the Supreme Court is, in fact, the law
from inception. The doctrine of prospective overruling
which is a feature of American jurisprudence is an
exception to the normal principle of law, was imported
and applied for the first time in L. C. Go/ak Nath v. State F
of Punjab [AIR 1967 SC 1643]. In Managing Director, ·
ECIL v. B. Karunakar[1993 (4) SCC 727], the view was
adopted. Prospective overruling is a ·part of the principles
of constitutional canon of interpretation and can be
resorted to by this Court while superseding the law G
declared by it earlier. It is a device innovated to avoid
reopening of settled issues, to prevent multiplicity of
proceedings, and to avoid uncertainty and avoidable
litigation. In other words, actions taken contrary to the
H
242 SUPREME COURT REPORTS [2014] 13 S.C.R.
A law declared prior to the date of declaration are validated
in larger public interest. The law as declared applies to
future cases. (See Ashok Kumar Gupta v. State of U.P.
[1997 (5) SCC 201] and Baburam v. C.C. Jacob [1999
(3) SCC 362]). It is for this Court to indicate as to whether
B the decision in question will operate prospectively. In
other words, there shall be no prospective overruling,
unless it is so indicated in the particular decision. It is
not open to be held that the decision in a particular case
will be prospective in its application by application of the
c doctrine of prospective overruling. The doctrine of binding
precedent helps in promoting certainty and consistency
in judicial decisions and enables an organic development
of the law besides providing assurance to the individual
as to the consequences of transactions forming part of
D
the daily affairs. That being the position, the High Court
was in error by holding that the judgment which operated
on the date of selection was operative and not the review
judgment in Ashok Kumar Sharma case No. II [1997 (4)
E SCC 18]. All the more so when the subsequent judgment
is by way of review of the first judgment in which case
there are no judgments at all and the subsequent
judgment rendered on review petitions is the one and
only judgment rendered, effectively and for all purposes,
F the earlier decision having been erased by
countenancing the review applications. The impugned
judgments of the High Court are, therefore, set aside."
38. It was also submitted on behalf of one of the operators
G that as some of the permits granted were illegally cancelled,
fixation of the cut off date and validating the permits held on
the cut off dates would be discriminatory as that would create
monopoly in favour of the incumbent private operators who
were operating their vehicles on the cut off date.
H
B.A. UNGA REDDY ETC. ETC. v. KARNATAKASTATE 243
TRANSPORT AUTHORITY [ARUN MISHRA, J.]
.
39. It was submitted on behalf of KSRTC that it was at A
the behest of the private operators that the exercise of
modification had been undertaken by the State Government.
40. We refrain to dilate upon the various aforesaid
aspects as these were required to be considered by the State B
Government when such objections had been taken before it
by KSRTC. It was necessary to consider, inter a/ia, the
objections raised by the KSRTC as to the necessity of
modification, legality of the permits which were granted and
the plea of discrimination so raised by other operators including C
the observation made above by this Court in KSRTC v.
Ashrafulla Khan (supra).
41. Resultantly, the appeals being bereft of merits are
hereby dismissed. Let State Government hearthe objections,
consider and decide the same in accordance with law by a
reasoned order within 3 months. In the intervening period, the
arrangement as directed by the High Court in the impugned
order to continue. ·
Devika Gujral Appeals dismissed.
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