Supreme Court of India

GAJRAJ SINGH ETCversusSTATE TRANSPORT APPELLATE TRIBUNAL AND ORS. ETC.

Citation: 1996 INSC 1043
Decided: 12 September 1996
Disposal: Disposed off
Bench: K RAMASWAMY

Holding

Renewal of a stage‑carriage permit under Section 81 of the Motor Vehicles Act, 1988 is a fresh grant, not a vested right, and the holder must obtain a fresh permit under the 1988 Act.

Summary

The appellant, Gajraj Singh, held a stage‑carriage permit originally granted under the Motor Vehicles Act, 1939, which was later renewed under the Motor Vehicles Act, 1988. After the 1988 Act came into force, the State Transport Authority granted overlapping permits to other operators, and the appellant challenged the validity of his renewal, arguing that Section 217(2)(a) and (4) of the 1988 Act saved his permit as a vested right. The Supreme Court held that renewal under Section 81 of the 1988 Act is a fresh grant, not a vested right, and that the earlier renewals are to be treated as temporary permits under Section 87. Consequently, the appellant must apply for a fresh permit under Sections 70, 71 and 72 and seek renewal under Section 81 in accordance with the new Act. The Court dismissed the appeal, confirming that the earlier renewals do not confer a permanent right and that the scheme saved under Section 217(2)(a) does not obviate the need for fresh applications.

Issues considered

The effect of Section 217(2)(a) and (4) of the Motor Vehicles Act, 1988 on permits granted under the repealed Motor Vehicles Act, 1939.
Whether a renewal of a stage‑carriage permit under Section 81 of the 1988 Act constitutes a vested right or merely a privilege.
Whether the appellant must obtain a fresh permit under Sections 70, 71 and 72 of the 1988 Act after the repeal of the 1939 Act.
The applicability of Section 6 of the General Clauses Act, 1897 in preserving rights accrued under the repealed Act.

Legislation cited

General Clauses Act, 1897s. 6
Motor Vehicles Act, 1988s. 100, s. 101, s. 102, s. 104, s. 217(1), s. 217(2)(a), s. 217(2)(b), s. 217(2)(e), s. 217(4), s. 47(3), s. 58, s. 66, s. 68, s. 68F(1D), s. 68F(1F), s. 69, s. 70, s. 71, s. 72, s. 80, s. 81, s. 87, s. 88, s. 90

Subjects

stage carriage permitrenewalrepealed legislationMotor Vehicles Act 1988Section 217General Clauses Actvested rightprivilegestatutory interpretationadministrative law

Judgment

A GAJRAJ SINGH ETC.
v.
STATE TRANSPORT APPELLATE TRIBUNAL AND ORS. ETC.

SEPTEMBER 12, 1996

B [K. RAMASWAMY, B.L. HANSARIA AND S.B. MAJMUDAR, JJ.]

Motor Vehicles Act, 1988: Sections 217(2)(a) & (b) and (4), and 70,
72 and 81.

C Stage caniage pennit-Granted under repealed Act of 1939-Pennit
valid till commencement of new Act-Pennit renewed under new Act which
came into force on 1.7.1989-Validity of-Saving under S.217(2)(a) or
(b )--<:onditions precedent for applicability of-Held : grant of pennit under
new Act not a vested or accrl(ed right but only a p1ivilege-Provisions of
repealed Act inconsistent with those of new Act as regards renewal-Hence,
D S.217(2)(a) or (b) not attracted-Pennit granted under repealed Act stood
expired on 1. 7.1989 unless application for renewal pending under S.58 of
repealed Act-If no application was pending fresh application must be made
under S.70 of new Act for grant of pennit-S.6 of General Clauses Act
applicable. ·
E
Stage Caniage Pemzit-Renewal-Grant of-Nature-Explained.

Stage Caniage Pennit-Sclzeme approved and published under Chapter
IV-A of repealed Act of 1939-Such pennits held by named private
operators-Scheme continued after commencement of new Act on
F 1.7.1989-Held: Scheme was self-contained and self-operative and law by
itself and saved by S.217(2)(a)-Rights of such named private operators alone
for grant or renewal of their pennits preserved-Such a right was not violative
of Art. 14 on ground of invidious discrimination-Procedure for grant or
renewal of pennit laid down-Motor Vehicles Act, 1939, Ss.68-F(l-D) &
G 68-F( 1-F).

General Clauses Act, 1897 : Section 6.

Repeal of Act-Effect of-Held : Obliterated the Act completely from
record of Parliament as if it never existed except for transactions past and
H closed.
172
GATRAJ SINGH v. STATE 173

Repeal of Act-Followed simultaneously by fresh legislation on same A
subject-Held : S.6 would be applicable unless new legislation manifested
contrmy or inconsistell( intention-Hence, Court had to ascerlain such incom-
patibility from relevant p01tions of new Act.

Inte1pretation of Statutes :
B
Interpretation-Subsidiary' rnles of-Legal fiction-Meaning and effect
of-Explained.

Administrative Law :

Repealed Act-Right acquired or accrued unde,-..Per-
c
mit/licence-Grant of renewal of-Held: amounted to fresh grant-Discretion
given by Statute-To be exercised on basis of rules of reason and justice and
not arbitr01ily-Subject to rejection of application for renewal for reasons to
be recorded-Hence, right to renewal of pennit was not a vested or accrued
right but only a privilege-General Clauses Act, 1897, S.6(c). D

The appellant was granted a stage carriage permit on the route
under Section 47(3) of the Motor Vehicles Act, 1939 (Repealed Act) for a
period of 3 years. The said permit was renewed under Section 81 of the
Motor Vehicles Act, 1988 (which came into force on 1.7.1989) for a further E
period of 5 years and a second renewal was also granted. The respondents
bad applied under Section 70 of the Act for· grant of stage carriage permits
under Section 72 of the Act on the' route which intersected a part of the
route on which the appellant was operating his stage carriage. Despite
objections raised by the appellant, the State transport Authority (STA)
granted permits to them which were challenged in the revision petition F
filed under Section 90 of the Act before the State Transport Appellate
Tribunal (STAT). The STAT dismissed the revision petition on the ground
that the renewal of the permit granted to the appellant was not valid in
law as the appellant did not get a new permit under the Act. The High
Court dismissed the writ petition filed by the appellant. Hence this appeal. G

On behalf of the appellant it was contended that the renewal of the
permit of the appellant granted under the Repealed Act was a permit
under the Act and its operation was saved by Section 217(2)(a) read with
sub-section (4) thereof and Section 6 of the General Clauses Act, 1897;
therefore, the second renewal of the permit granted under Section 81 of H

'
174 SUPREME COURT REPORTS (1996) SUPP. 6 S.C.R.

A the Act which was renewable under Section 68-F(l-D) of Chapter IV-A Qf ,
the Repealed Act was valid in law; that there was no need for the appellant
to obtain a fresh permit under the Act as the renewal was a continuation
of the original permit which was a vested right; that Section 217(2)(b) of
the Act would be applicable only if the permit was inconsistent with the
provisions of the Act in which case the life of the permit granted under the
B Repealed Act got extended for the balance period of the permit; and that
since the appellant was not paid compensation, he was entitled to renewal
of permits as a matter of right.

On behalf of the respondents it was contended that the scheme of
C the Act was inconsistent with the scheme of operation in the Repealed Act;
that the STA or the Regional Transport Authority as the case may be,
would be devoid of power and jurisdiction to grant permit under the act;
that under Section 217(2)(b) of the Act the permit was valid only for the
unexpired period granted under the Repealed Act; that between the dates .
of application for permit and its grant the Act provided for grant of
D temporary permits; that any grant of permit should only be consistent with
the provisions of the Act; and that the Repealed Act continued to remain
in operation in spite of its express repeal by Section 217(1) of the Act.

Disposing of the appeal, this Court
E HELD: 1.1. Ex abundenti cautela clauses (a) to (e) of Section 217(2)
of the Motor Vehicles Act, 1988 elaborate the enumeration of rights. They
would apply to specific rights given to an individual upon· the happening
of one or other of the events specified in the statute. Section 217(2)(a) of
the Act gives an elongated operation as regards all transactions, which
F being consistent with the provisions of the Act should be deemed to have
been issued, made, granted, done or taken under the corresponding
provisions of the Act. [198-C-D] ·

1.2. By operation of Section 217(4) of the Act read with Section
217(2), Section 6 of the General Clauses Act, 1897 (GC Act) steps in and
G the proceedings initiated before Motor Vehicles Act, 1939 (the Repealed
Act) was repealed, would be continued and concluded under the Act as if
the Act was not enacted. However, four things would emerge from its
operation. First there must exist a corresponding provision under the Act
pari materia with the Repealed Act; secondly, that the order or permit
H granted must exist and be in operation as on 1.7.1989-the day on which

·-
GAJRAJ SINGHv. STATE 175

the Act had come into force; thirdly, it must not be inconsistent with the A
provisions of the Act; and fourthly some positive acts should have been
done before 1.7.1989 to further secure any right. All the four conditions
should be satisfied as conditions precedent for application of Section 6 of
the GC Act by operation of Section 217(4) and then Section 217(2)(a) steps
in and starts operation thereof. (199-B-G]
B
1.3. This may be angulated from yet another legal perspective, name-
ly, consequences that would flow from the meaning of the word 'renewal'
of a permit under Section 81 of the Act. Grant of renewal is a fresh grant
though it breaths life into the operation of the previous lease or licence
granted as per existing appropriate provisions of the Act, rules of orders C
or acts intra vires or as per the law in operation as on the date of renewal.
Grant of renewal under Section 81 is a discretion given to the State
Transport Authority (STA) or Regional Transport Authority (RTA) sub·
ject to the conditions and the requirement of law. Discretion given by a
statute connotes making a choice between competing considerations ac·
cording to rules of reason and justice and not arbitrary or whim but legal D
and regular. Sections 70 and 71 read with Section 81 of the Act do indicate
that grant of permit or renewal thereof is not a matter of right or course.
It is subject of rejection for reasons to be recorded in support thereof.
Therefore, right to renewal of a permit under Section 81 is not a vested or
accrued right but a privilege to get renewal according to law in operation E
and after compliance with the pre-conditions and abiding the law. There
is a distinction between right acquired or accrued, and privilege, hope and
expectation to get a right. A right to apply for renewal and to get a
favourable order would not be deemed to be a right accrued unless some
positive acts are done, before repeal of the Repealed Act or corresponding
law to secure that right of renewal. (199-H; 200-E-H]
F

Provash Chandra Dalui & Anr. v. Bishwanath Banerjee & Anr., (1989]
Supp. 1. SCC 487; Ambika Quarry Works v. State of Gujarat, (1987] 1 SCC
213; Rural Litigation and Entitlement Kendra v. State of U.P., [1989] Supp.
1 SCC 504; State of M.P. & Ors. v. Krishnadas Tikaram, [1995] Supp. 1 SCC G
587 and Gujarat Electricity Board v. Shanti/al, AIR (1969) SC 239 relied on.

Black's Law Dictionary, p.1296 and P. Ramanatha Aiyar's "The Law
Lexicon" (Reprint Edition 1987), referred to.

2.1. If no action under the Repealed Act was set in motion before H
176 SUPREME COURT REPORTS (1996] SUPP. 6 S.C.R.

A 1.7.1989, by valid application for renewal of a permit, there was no right ·
acquired or accrued to pursue the remedy untler the Act. The privilege to
obtain renewal of a permit is not an accrued right. Section 58(2) of the
Repealed Act gives, as stated supra, preferential right to a holder of a
permit for renewal thereof. Section 71 of the Act gives preferential right in
B favour of State Transport Undertaking (STU) for grant of permit in
Chapter V which is not available under the Repealed Act. Therefore, even
for grant of a permit or a renewal under Section 72 or 81, the STU is
entitled to preferential right over the private citizens .. Thereby, the Act
manifests intention inconsistent with and incompatible to that in Chapter
IV of the Repealed Act. Similarly, even on the approved routes under a
c Scheme framed in Chapter IV-A, an execution has been carved out in the
scheme with a non-obstante clause in favour of STU, which is a self-opera-
tive law by itself. The rights of the existing operators for renewal thereof ,
under Section 68F(ID) under the Repealed Act were saved. But, under the
Act, Chapter VI does not speak of renewal of the permits to the private
D operators, though permits were saved in the scheme itself. Chapter VI
manifested inconsistency in its operation from the law in Chapter IVA of
the Repealed Act. Similarly, other provisions are inconsistent with those
in the Repealed Act. Therefore, Section 217(2)(a) would not get attracted,
even if it were to apply to grant of permit being a "thing done" as contended
E by the appellant. Let it be said that a permit is preceded by an order
granting permit by the concerned RTA or STA, as the case may be, under
the Repealed Act. The said order stands merged with the grant of permit
and gets exhausted. [202-C-H]

p 2.2. By operations of Section 217(2)(b) of the Act a permit granted
under the Repealed Act shall continue to have the same operation under
the Act under the same terms and conditions and for the same period, as
if the Repealed Act was in operation and as if the Act had not been passed.
This is the fiction of law by which, though the Repealed Act was wiped out,
its operation gets revived. The intention, thereby, appears to be that the
G Act breaths life into the dead permits etc •. and allows full play to the
permits granted under the Repealed Act, even if inconsistent, till their ·
period expired by eftlux of time. Any other view would tantamount to
allowing the Repealed Act to remain in operation in perpetuity simul-
taneously with the operation of the Act. Both cannot co-exist in the same
H shelter. [203-A]
GAJRAJ SINGH v. STATF 177

State of Punjab v. Mohar Singh, (1955] 1 SCR 893 and Universal A
Imp01ts Agency & Anr. v. The Chief Controller of Imports and Exports & Ors.,
[1961) 1 SCR 305, held inapplicable.

D. Nataraja Mudaliar v. The State Transport Auth01ity, Madras, [1978]
4 sec 290, referred to.
B
2.3. It must, therefore, be held that grant of renewal of the stage
carriage permit should necessarily be preceded by a grant of a permit to
stage carriage under Section 72, in accordance with the procedure laid
down in Sections 70 and 71. This should be made before the expiry of the
period prescribed in the permit granted under the Repealed act. Therefore, C
for stage carriage permits granted under Chapter IV of the Repealed Act,
if they stand to expire or expired after 1-7-1989 without any pending ap-
plication for renewal having been made under Section 58 as on 1-7-1989,
fresh applications under Section 70 should be filed and after consideration
under Section 71, permits be obtained as per law under Section 72. If there
is any delay to obtain permits pending consideration, by operation of D
providing stage carriage service, Section 87 gives power to grant temporary
permit without following the procedure laid down in Section 70. The argu-
ment of arbitrariness, discrimination or avoidable inconvenience to the
holders of permits etc. under the Repealed Act and to the travelling public
would be hypothetical and without force. [203-H; 204-A-D] E

Mithilesh Garg & Ors. v. Union of India & Ors., [1992] 1 SCC 168,
relied on.

3.1. Section 68F (lD) and Section 68F (lF) of the Repealed Act had
prescribed that renewal of the p,ermits granted to the private operators and F
STU should be renewed under the scheme; similar provision does not find
place in Chapter VI of the Act. Rules do prescribe procedure to apply for
renewal by the private operators as well as STU but the rules or procedure
do not confer substantive right to renewal of the permits granted under the
scheme; when Chapter VI is Sub silentio, rules cannot travel beyond the Act. G
[205-C-DJ

3.2. However, the approved scheme under the Repealed act or in the
Act is a self-contained and self-operated scheme. It is a law by itself. The
schemes published under the Repealed Act are saved by Section 217(2)(a)
of the Act. Therefore, until they are modified or cancelled under Section H
178 SUPREME COURT REPORTS (1996] SUPP. 6 S.C.R.

A 102, the scheme should continue to be in operation in the notified area,
route or part thereof. The right to apply for and obtain permit in the
notified scheme was totally frozen to the private operators giving exclusive
right to the STU to apply for and obtain permits to run the stage carriages
or additional service under Section 101 of the Act on the notified area,
route or a part thereof and none else. With a non-obstante clause in Section
B 101, the right to apply for and obtain temporary permits under Section 87
by private operators was taken away. There is no need for STU to obtain
such permits, as an intimation to concerned RTA of its providing such
additional service on special occasions like fair or religious gatherings for
conveyance of passangers, is sufficient. Yet the scheme itself saved and
c preserved the rights of the named existing operators in respect of overlap-
ping routes in the specified permits, subject to the corridor restrictions of
picking up and setting down the passengers en route the prescribed
prohibited route. They became entitled to run their stage carriages subject
to the law. Though,. their permits are saved, the named operators being
D private operators, the Parliament appear to have thought that there was
no necessity to expressly retain in Chapter VI itself their right of renewal
as the same was already provided in Section 81 of the Act corresponding
to Section 68F(1D) of Chapter IV-A of the Repealed Act. There is no
express indication of their rights being taken away under the Act; nor it is
so by necessary implication. [206-G-H; 207-A-F]
E
33. Thus the rights of the existing named operators saved in the
appropriate approved schemes in respect of specified permits were not
desti::oyed. By necessary implication of Section 104, they were saved. they
became entitled to avail of their right to apply for grant of permit in
F accordance with the procedure prescribed under Sections 70 and 71 and
to obtain permit under Section 72, before the expiry of the permit or
renewed permit saved under the approved scheme and should obtain
permit afresh to ply their stage carriages before expiry of the period
mentioned therein; periodical renewals from time to time should be
obtained under Section 81 of the Act in accordance with the operation of
G the law. The RTA or STA, as the case may be, should consider and may
grant permits or renewal of permits as per law or rejection thereof for
reasons to be recorded in that behalf. [209-H; 210-A-C]

Krishan Kumar v. State of Rajasthan & Ors., [1991) 4 SCC 258, relied
H on.
GAJl~I SINGH v. STATE 179

3.4. The contention that such a construction creates and brings A
about invidious discrimination offending Article 14 of the Constitution is
without force. Section 217(2)(a) read with Section 217(4) of the Act
manifest the distinction between acts done or actions taken consistent with
the provisions of the repealed Act but inconsistent with the Act. The Act
saves only acts done or actio(\S taken etc. which are consistent with the
B
provisions. By implication, all inconsistent acts done or actions taken,
except those c.ompleted and closed, would not be considered to be done or
taken under the Act and consequently could not be operative under the
Act. They are obliterated completely from statute as if they never existed
except to the extent of limited operation provided in the appropriate
clauses in Section 217(2) of the Act. (211-D-E-F] c
3.5. Acco~dingly, the na11:1ed transport operators whose permits were
saved in the relevant scheme shall apply for permits under Sections 70 and
71 and obtain permits afresh under Section 72 of the Act before the expiry
of the period mentioned in the permit issued either under Section 47 or D
Section 48 or renewal under Section 58 or Section 68F (lD) of the Repealed
Act. No third party/private operators are entitled to apply for permits on
the same notified route or part thereof, nor are they entitled to compete
with them for grant of permit, since the right of all other private operators
to apply for and operate in the approved notified area, route or a part E
thereof, has been frozen. The right is reserved only in relation to the named
operators and that too for specified permit, and none else. Along with the
application under Section 70 filed for grant of permit under Section 72 or
renewal under Section 81 made by the named holder of a specified permit
in an approved scheme, he should enclose an authenticated copy of the
approved scheme, the details of the route on which he was plying his stage F
carriage with corridor restrictions on over lapping routes. the RTA or STA,
as the case may be, should verify the original scheme under which the
named operator, whose specified permit was saved, whether he is entitled
to ply the stage carriage in the approved scheme with the condition of the
corridor restrictions on the notified scheme and if so to what extent. What G
is the dura~ion of his right~saved in the approved scheme? Whether he had
plied his stage carriage on complying with the law in force? His right to
permit under Section 72 or renewal under Section 81 cannot be higher than
the original right saved in the approved scheme. The STU also should be
heard in that behalf, in 1·elation to grant of stage carriage permit or renewal
thereof, the appropriate authority may grant or reject; in the latter event, H
180 SUPREME COURT REPORTS (1996) SUPP. 6 S.C.R.

A for reasons to be recorded in support of the rejection. The authorities
should consider their applications in accordance with the law and the
prescribed procedure and may grant new permits under section 72 and
later on before the ex11iry thereof, to renew it in accordance with the proce-
dure prescribed in Sections 80 and 81, that too, on compliance with law,
until the scheme is duly modified or cancelled in accordance with law. This
B right is available exclusively to the named private operators and that too
in respect of the specified permits and with same restrictions continued in
the scheme and none else and no more. [211-H; 212-A-E]

3.6. Since the appellants had obtained permits by mistake of the law
C and misconception of law on the part of the competent authorities applied
under Section 81 and had been granted renewal of their respective permits
under Section 81 after· t.7.1989, such grant of renewal of the permits
should be treated to be temporary permits under Section 87 of the Act.
Therefore, the private operators, be they covered by Chapter V or VI,
should apply for and obtain afresh permits before the expiry of the period
D mentioned in their respective permits or renewed for consideration under
Section 71 and grant under Section 72 of the permits afresh consistently
with Section 2(31~ of the Act. Such permit alone would be a permit defined
in Section 2(31)ofthe Act. Therefore, before expiry thereof, they shall apply
for and the concerned STNRTA may grant or refuse renewals of permit
E for reasons to be recorded under Section 81 of the Act. [212-F-H; 213-A]

Secreta1y, Qui/on Distt. Motor Transp01t Workers' Cooperative Society
Ltd. v. Regi-onal Transp01t Auth01ity & Ors., [1994) Supp. 3 SCC 210, af-
firmed.

F M/s. Gurcharan Singh Baldev Singh v. Yashwant Singh & Ors., [1992)
sec 428, held inapplicable.
Mysore State Road Transp01t Co1poration v. Mysore State Transpo1t
Appellate T1ibunal, [1974) 2 SCC 750; Adarash Travels Bus Se1vice &Anr. v.
G State of U.P. & Ors., [1985) 4 SCC 557; T.V. Nataraj & 01:f. v. State of
Kamataka & Ors., [19941. 2 SCC 32; Ram Krishna Venna & Ors. v. State of
U.P. & Ors., [1992] 2 SCC 620 and Nisar Ahmad & Ors. v. State of U.P. &
Ors., [1994] Supp. 3 SCC 640, referred to ..

4.1. Whenever an Act is repealed it must be considered, except as to
H transactions past and closed, as if it had never Existed. The effect thereof
GAJRAJ SINGH v. STATE 181

is to obliterate the Act completely from the record of the Parliament as if A
it had never been passed, it never existed except for the purpose of those
actions which were commenced, prosecuted and concluded while it was
existing law. Repeal is not a matter of mere form but is of substance
de11ending on the intention of the Legislature. If the intention indicated
either expressly or by necessary implication in the subsequent statute was
B
to abrogate or wipe off the former enactment wholly or in part, then it
would be a case of total or pro tanto repeal. [193-B-C]

India Tobacco Co. Ltd. v. The Commercial Tax Office1; Bhavanipore
& Ors., [1975] 3 SCC 512, relied on.
c
4.2. When there is a repeal and simultaneous re-enactment, Section
6 of the GC Act would be applicable in such cases unless the new legislation
manifests intention inconsistent with or contrary to the application of the
section. Such incompatibility would have to be ascertained from all
relevant provisions of the new Act. Therefore, when the repeal is followed
by a fresh legislation on the same subject, the Court would undoubtedly D
have to look to the provisions of the new act only for the purpose of
determining whether the new Act indicates different intention. The object
of repeal and re-enactment is to obliterate the Repealed Act and to get rid
of certain obsolete matters. [193-D-E]
E
Bishambhar Nath Kohli & Ors. v. State of U.P. & Ors., AIR (1966) SC
573, relied on.

Crawford's Inte1pretation of Law (1989), pp. 626, 627, 657; G.P. Singh:
"P1inciples of Statuto1y Inte1pretation", (Sixth Edn.), 1996, pp. 413, 418;
Jagdish Swamp : "Legislation and Inte1pretation ", (1974) Edn.), p. 539; F
Maxwell On the Inte1pretation of Statutes, (12th. Edn.) p. 17; Sutherland
Statuto1y Construction", (3rd. Edn.) Vol. 1 paras 2043 to 2045; Francis
Benion's Statutory Inte1pretatio11, (Second Edn.) p. 210 and Randall: "Car-
dinal Rules of Legal Interpretation", (3rd. Edn.), A.E., 1924, pp. 531-32,
referred to.
G
Brown v. Mc. Lachian, (1872), LR. 4 PC 543; In re Busfield, (1886) 32
Ch. D 123; Hume v. Some1ton, (1890) 25 QBD 239 and In re R., (1906) 1
Ch. 730, cited.

5. Legal fiction is one which is not an actual reality and which the H
182 SUllREME COURT REPORTS (1996] SUPP. 6 S.C.R.

A law recognises and the court accepts as a reality. Therefore, in case of legal
fiction the court believes something to exist which in reality does not exist.
It is nothing but a presumption of the existence of the State of affairs which
in actuality is non-existent. The effect of such a legal fiction is that a
position which otherwise would not obtain is deemed to obtain under the
circumstances. [192-C-D]
B
CIVIL APPELLATE/ORIQINAL JURISDICTION: Civil Appeal
No. 2003 of 1996 Etc.

From the Judgment and Order dated 13.10.95 of the Allahabad High
c Court in C.W.P. No. 26132 of 1995.

H.N. Salve, S.K. Dhaon, Rani Chhabra, V.P. Gupta, S.C. Garg,
Rachna Srivastava, Abha Jain, Gaurav Jain, Vijay K. Mehta, Ms. Nirmala
Gupta, Pramod Swarup, Anil Karnwal, Krishan Singh Chauhan, A.K. Goel
for the appearing parties.
D
The Judgment of the Court was delivered by

K. RAMASWAMY, J. Common questions of law have arisen in all
these cases. The facts in Gajaraj Singh's case are sufficient for disposal of
all these cases. Though notices were served on respondents, Shri Goel
E appeared for the State and Shri Pramod Swarup for the UPSRTU, none
is appearing in other cases.

In 1988, the appellant was granted a stage carriage permit on the
Meerut-Baraut route under Section 47(3) of the Motor Vehicles Act, 1939
p (4 of 1939) (for short, the 'Repealed Act') for a period of 3 years. The
Motor vehicles act, 1988 (59 of 1988) (for short, the 'Act') came into force
w.e.f. July 1, 1989. The said p·ermit was renewed under Section 81 of the
Act in 1991 for a further period of 5 years and the second renewal was
granted in 1995. Respondents 3 to 17 had applied under Section 70 for
grant of stage carriage permits under Section 72 on the Meerut-Gangoh
G route which intersects part of the route on which the appellant was operat-
ing his stage carriage. Despite objections raised by the appellant, the State
Transport Authority (for short, 'STA') granted permits to them on Novem-
ber 23, 1992 which came be challenged by the appellants in revision filed
under Section 90 before the State Transport Appellate Tribunal (for short,
H 'STAT'). The respondents questioned the appellant's locus standi under
GATRAJ SINGH v. STATE (K. RAMASWAMY, J.] 183

the preliminary objection that the renewal granted under Section 81 to the
appellant was void. By order dated August 9, 1995, the STAT upheld the
·. preliminary objection and held that the appellant has no locus standi to
object the grant of permits to the respondents, since the renewal of the
permit granted to the appellant was not valid in law as he had not got any
new permit under the Act. The High Court in the impugned judgment
B
dated October 13, 1995 made in Writ Petition No. 26132of1995 has upheld
the order of the STAT. Thus, this appeal by special leave.

Shri K.K. Venugopal, learned senior counsel for the appellant, con-
tended that the renewal of the permit of the appellant granted under the
Repealed Act is a permit under the Act and its operation was saved by C
Section 217(2)(a) read with sub-section (4) thereof. Therefore, the second
renewal granted under Section 81 was valid in law. There was no need for
the appellant to obtain a fresh permit under the Act as the renewal is a
continuation of the original permit which is a vested right. The effect of
saving provisions in Section 217(2)(a) is to allow all the permits granted D
under the Repealed Act to continue after renewal under the Act. Section
217(2)(a) and sub-section (4), thus, obviate the need to obtain fresh permit
under the Act and, therefore, it would be unnecessary. In support thereof,
he placed strong reliance on M/s. Gurcharan Singh Baldev Singh v. Yash-
want Singh & Ors., [1992] 1 SCC 428. He further contended that this Court
in Secret01y Quillon Distt. Motor Transp01t Workers' Cooperative Society Ltd E
v. Regional Transp01t Auth01ity & Ors., [1994] Supp. (3) SCC 210 did not
intend to lay down that after the Act came into force, all the holders of
stage carriage permits granted tinder the Repealed Act would be required
to obtain fresh permits under the Act. Section 6 of the General Clauses
Act (for short, the 'GC Act') read with Section 217(2)(a) and (4) saves F
operation of all those permits which were alive when the Act came into
force. Consequently, renewals granted under Section 81 were valid. For
contra construction, an argument of inconvenience was forcefully
projected. He argued that Section 217(2)(b) would be applicable only if
the permit is inconsistent with the provisions of the Act in which event the
life of the permit granted under the Repealed Act gets extended only for G
the balance period of permit.

Shri S.K. Dhaon, learned Counsel appearing in C.A.@ SLP (C) No.
27335/95, contended that the permits granted to the existing· operators
under the nationalised scheme in Chapter IV-A of the Repealed Act are H
184 SUPREME COURT REPORTS (1996) SUPP. 6 S.C.R.
' .
A not required to be renewed under Section 81 of the Act as they have
already been saved being existing permits. So the need to obtain fresh
permits under the Act would be inconsistent with the scheme of the
Repealed Act as well as the Act. Shri Venugopal buttressed the contention
emphasising that the renewal is only a continuation of the existing permit
granted under the Repealed Act. The need for fresh permit arises only if
B the renewal is inconsistent with the provisions of the Act. Therefore, the
view of the High Court is clearly not sust~inable in law. In support thereof,
Shri Venugopal placed strong reliance on D. Nataraja Mudaliar v. The State
Transport Auth01ity, Madras, (1978) 4 SCC 290; State of Punjab v. Mohar
Singh, (1955) 1 SCR 893 and M/s. Universal Imp01ts Agency & Anr. v. Tlze
c Chief Controller of Imp01ts and Exp01ts & Ors. (1961) 1 SCR 305. Shri
Harish N. Salve, appearing for some of the existing operators in the
nationalised schemes, contended that they were not paid compensation
since permits in their names were saved with corridor restrictions. They
are, therefore, entitled to renewal of permits as a matter of right.
D
Shri Adrash Kumar Goel, learned counsel for the state, resisted the
contentions. According to him, the scheme of the Act in many a provision
is inconsistent with the scheme of operation in the Repealed Act. When
the Legislature manifested its intention as to its inconsistency in the opera-
tion of the Act with the provisions of the Repealed Act, the STA or the
E Regional Transport Authority (for short, 'RTA'), as the case may be, would
be devoid of power and jurisdiction to grant renewal of permit under the
Act. Consequently, the erstwhile holders of permits are required to obtain
fresh permits under the Act. The Repealed Act has been saved only to the
extent of validating, under Section 217(2)(b), the continuation of the permit
F for the unexpired period granted under the Repealed act. The owner of
the vehicle, thereby, became entitled. to operate, for the balance period,
stage carriage on the respective route. On its expiry, the erstwhile holder
of the permit ceases to have the permit under the Act until he obtains
afresh stage carriage permit under the Act. To obviate the difficulty of
running the stage carriage between the date of application for permit and
G the date of grant, the Act provides for grant of temporary permits. There
is no hiatus in the operation in that behalf and any grant of permit or
renewal should only be consistent with the provisions of the Act. Other-
wise, the Repealed Act continues to remain in operation, in spite of its
express repeal by Section 217(1) of the Act. The ratio of this Court in
H Secretary, Quillan Dist1ict Motor Transp01t Worker's Cooperative Society
GATRAJ SINGH v. STATE [K RAMASWAMY, J.] 185

Ltd.'s case (for short, 'Quillon's case) would be applicable to the situation. A
The ratio in Gzirnchara11 Singh's case (supra) would be applicable only to
a pending application for renewal filed before the Act came into force
which would be disposed of by operation of Section 217(2)(a) as saved by
Section 217(4) of the Act. If so understood, there is no inconsistency in the
ratio of the aforesaid two decisions of this Court and the operation of the
B
provisions of the two Acts.

We issued notice to Shri Promod Swamp to appear on behalf of
STUs and argue on the question of renewal of permits covered by the
schemes. He contended that they are not entitled to renewal under Chapter
VI of the Act. Chapter V does not apply to them. Therefore, they have no C
right to apply or obtain permit under Section 72 or renewal under Section
81.

We may make it clear at this juncture that when the .cases had come
up for admission and Shri Venugopal had pointed out to plausible misap- D
prehension in the operation of the the ratio laid down by this Court in the
above two cases, we had referred the matter to three Judge Bench. Thus,
the matter has come before this Bench.

The question for consideration is : whether the holder of a stage
carriage permit under the Repealed Act is required to obtain fresh permit E
or a renewal of the permit as per the provision of the Act? To appreciate
the contentions in proper perspective, it would be profitable to refer to
the provisions of the Act, extent of their operation and their inconsistency
with the provision in the Repealed Act so as to focus the tiue intentment
and operation of the Act. Section 2(31) of the Act defines "pennit" to mean F
a pennit issued by the State or Regional Tra11sp01t Auth01ity or an a11tlz01ity
presC1ibed in this behalf under the Act (emphasis supplied) authorising the
use of motor vehicle as a !ransport vehicle. "Transport vehicle" has been
defined under Section 2(47) to mean a public service vehicle, a goods
carriage, an educational institution bus or a private service vehicle. "Stage G
carriage" has been defined under Section 2(40) .to mean motor vehicle
constructed or adapted to carry more than six passengers excluding the
driver for hire or reward at separate fares paid by or for individual
passengers, either for the whole journey or for stages of the journey.
"Route" has been defined under Section 2(38) to mean a line of travel
which specifies the highway which may be traversed by a motor vehicle H
186 SUPREME COURT REPORTS [1996) SUPP. 6 S.C.R.

A between one terminus and another. "Public service vehicle" has been
defined by Section 2(35) to mean any motor vehicle used or adapted to be
used for the carriage of passengers for hire or reward, and includes a
maxicab, a motorcab, contract carriage, and stage carriage. These defini-
tions similarly had found place in the Repealed Act with slight variations.
B Chapter V of the Act under the heading "Control of transport
vehicle" regulates use of, or permission for use of, the vehicles and the
necessity to obtain permits in that behalf by an owner of motor vehicle.
Section 66 enjoins every owner of a motor vehicle to obtain permit and no
owner shall use the motor vehicle as stage carriage except in accordance
c with the conditions of the permit granted or countersigned by the
prescribed authority for its use in the public place. The manner in which
the vehicle should be used gets regulated by the conditions of the permit,
the rules and the law; the details thereof are not material. Section 67
empowers the State Government to control road transport. Section 68
enumerates the manner in which the RTA or the STA or other authorities
D
under the Act would exercise the powers and perform functioi1s specified
under the Act. Section 69 enjoins the owner of a vehicle to make applica-
tion for permit.

Section 70 specifies the procedure for making an application to
E obtain stage carriage permit and· the conditions subject to which the
application is required to be dealt with. Section 71 prescribes the proce-
dure for ·sTA or RTA to consider such applications for grant of stage
carriage permits. It envisages, under sub-section (3) thereof, that subject
to the number of vehicles, road conditions and the relevant matters, the
F State Government shall, by a notification, direct an STA or RTA to limit
the number of stage carriages generally or of any specified, type as may be
fixed and specified in the notification, operating on city routes in towns
with a population of not less than five lakhs. Its, operation is subject to
clause (b) and (c) thereof. The proviso to sub-section (3) of Section 71
envisages that other conditions being equal, preference shall be given to
G applications for permits from (1) State transport undertakings; (ii) co-
operative societies registered or deemed to have been registered under any
enactment for the time being in force; (iii) ex-servicemen; and (vi) any
other class or category of persons, as the State Government may, for
reasons to be recorded in writing, consider necessary. On other routes,
H except town service, no restrictions are imposed unlike in Section 47{3) of
GAJRAJ SINGH v. STATE [K RAMASWAMY, J.] 187

the Repealed Act to grant stage carriage permits. Section 72 empowers the A
RTA or STA to decide an application for grant of a permit to operate a
Stage carriage with any one or more of the conditions enumerated under
sub- section (2) thereof or the rules or conditions attached to the permit.

Section 80 prescribes procedure to apply for and grant of renewal of
permits. Sub-section (2) envisages that on an application made under B
sub-section (1) at any time, the STA or RTA or any prescribed authority
under Section 66, shall not ordinarily refuse to grant an application for pemiit
of any kind made under the Act. (emphasis supplied). The proviso lifts the
embargo of sub-section (2) and permits summary refusal of the application,
if such a grant would have the effect of "increasing the number of stage C
carriages as fixed and specified in a notification" under Section 71(3)(a) or
of the contract carriages as fixed and specified in a notification under
Section 74(3)(a). Under the proviso to Section 71(1), prior to its amend-
ment thereof by Section 23 of Amendment Act 54 of 1994, the RTA/STA
was prohibited to grant permit for a route of 50 kilometers or less to all
juristic persons and to grant permit "only to an individual or a State D
Transport undertaking". The Amendment became operative from Novem-
ber 14, 1994 and the above prohibition no longer operates.

Section 81 regulates renewal of permits and duration thereof. Sub-
section (1) visualises that a permit, other than a temporary permit issued
under Section 87 or special permit issued under Section 88(8), shall be E
effective from the date of issuance or renewal thereof for a period of 5
years. Under the proviso, the period of countersigned permit is coterminus
with the validity of the primary permit. Sub-section (2) prescribes the
limitation within which an application for renewal should be made before
expiry of original grant or renewal. Sub-section (3) gives discretion to F
condone the delay in making the application for the grounds mentioned
thereunder. Sub-section (4) enumerates grounds for refusal of renewal of
a permit for one or more of the grounds enumerated thereunder. The
terms and conditions subject to which stage carriage permit is required to
be renewed are different from those of Section 58 of the repealed Act
except the procedural part. Sub-section (2) of Section 58 of the Repealed G
Act gives preferential freatment for renewal of a permit in favour of the
holder of the permit, while Section 81 of the Act does not give such
preferential right to renewal. On the other hand, if the permits granted
under Section 72 exceed the limit prescribed by the State Government for
town service, there would be danger of refusal or renewal subject to giving H
188 SUPREME COURT REPORTS [1996] SUPP. 6 S.C.R.

A reasons in support thereof. Equally, in relation to other routes, discretion
is given to reject renewal of a permit for reasons to be recorded in the
order.

Chapter VI deals with special provisions relating to State Transport
Undertakings (for short, 'STU') which is equivalent to Chapter IV-A of
B the Repealed Act. By operation of Section 98, Chapter VI and the rules
and orders made thereunder shall have overriding effect over the inconsis-
tent provisions contained in Chapter V or in any other law for the time
being in force or in any instrument having effect by virtue of any such law.
The STU shall provide an efficient, adequate, economical and properly co-
C ordinated road transport service on the notified area or route or portion
thereof to the exclusion of the private operators except as exempted in the
scheme itself which itself is a self-operative law. The details are not
material for the purpose of this case except that under the said Chapter,
there is no specific provision, like Section 68F(1D) for renewal in favour
of any person or any class in relation to an area or route or portion thereof
D covered by such scheme for renewal, or Section 68F(1E) in favour of STU.

Section 217 repeals the existing laws and provides savings from its
operation. Sub-section (1) specifically repeals Act 4 of 1939 and any law
corresponding to that Act in force in any State before July 1, 1989.
E Sub-section (2) with a non obstante clause provides certain savings as
provided thereunder :

Clause (a) of Section 217(2) provides that notwithstanding the repeal
of act 4 of 1939 or any other analogous enactments in operation, any
notification issued, rule, regulation made, order passed or notice issued or
F any appointment or declaration made, or exemption granted or any con-
fiscation made, or any penalty or fine imposed, any forfeiture, cancellation
or any other thing done (emphasis supplied) or any other action taken under
the Repealed Act and in force immediately before July 1, 1989 shall, so far
as it is not inconsistent with the provisions of the Act (emphasis supplied)
G be deemed to have been issued, made, granted, done or taken under the
corresponding provision of the Act. In other words, clause (a) saves such
of those enumerated events under the Repealed Act which are consistent
with the provisions in the Act.

Clause (b) of Section 217(2) provides that any certificate of fitness
H or registration or licence or pemiit (emphasis supplied) issued or granted
GAJRAT SINGH v. STATE (K. RAMASWAMY, J.] 189

under the repealed enactment shall continue to have effect after such A
commencement under "the same conditions and for the same period" as if
the Act had not been passed (emphasis supplied). In an emphatic manner,
the saving provision provides that, notwithstanding the repeal of Act 4 of
1939 or any corresponding law, the permit issued under the Repealed Act
should continue to operate proprio vigore till its life expires under the same B
conditions and for the same period as if the Act was not passed. Other
clauses are not relevant. Hence they are not dealt with.

Clause (e) deals with the scheme under Section 68-C or under the
corresponding law in operation, which shall be disposed of under Section
100 of the Act. Similarly, temporary permits issued under sub-section (1-A) C
of Section 68F of the Repealed Act or under the corresponding provisions
shall, because of use of clause (f), continue to remain in force until
approved scheme under Chapter VI of the Act is published. The omission
to provide similar right of renewal of permanent permit like one available
under Section 68F(1D) to a private operator or to STU under Section D
68(1F) is significant and deliberate. It should be presumed that the Parlia-
ment having made similar provision in Section 81 for renewal of permits
issued in Chapter V of the Act, the omission thereof in Chapter VI in
relation to the private operators manifests the intention of the Parliament
that the right to obtain stage carriage permit, contract carriage permit or E
temporary permit on the notified area or route or a portion thereof has
been frozen to all private operators except to the extent of the right to ply
stage carriage on the basis of the permits saved under Chapter IV-A of the
Repealed Act. Therefore, the result would be that even the private
operators whose permits were saved also would have limited operation
under Section 217(2)(b) to ply their stage carriages for the unexpired
F
period only. So, limited validity of permits to run stage carriages etc. on
the nationalised routes or notified area or portion thereof in the approved
scheme was saved so that the holder of the stage carriage permits will have
full course of unexpired life of the permits granted under the Repealed
Act. In other words, Section 217(2)(b) breathed limited life into all permits G
granted under the repealed Act except those granted to STU under
approved or draft schemes to run its full course. It was so manifested by
Section 217(4) and Section 6 of the GC Act. The operation of law in
Chapter IVA of the Repealed Act as declared by this Court would be of
much assistance for interpretation in this behalf. H
190 SUPREME COURT REPORTS (1996) SUPP. 6 S.C.R. ·

A In Mysore State Road Transport Corporation v. Mysore State
Transp01t Appellate Tlibunal, (1974) 2 SCC 750, it was held that no licence
can be granted to any private operator whose route traversed or over-
lapped any part of a notified route or routes as prohibited in Chapter IV-A
of the Repealed Act. An applicant seeking grant of a permit on a route
which overlapped even on a portion of a notified route was held to be not
B entitled to the grant of the permit. In Adarsh Travels Bus Service and
Another v. State of U.P. & Ors, [1985) 4 SCC 557, a Constitution Bench of
this Court approved the above law and had held that under Sections 68FF,
68B, 68C, 68D read with Section 2 (28A), once a scheme was published
under Section 68D in relation to any area or a route or portion thereof,
C whether to the exclusion, complete or partial, of other persons or other-
wise, no person other than the .State Transport Undertaking may operate
on the notified area or notified route except as provided in the scheme
itself. No private operator can operate his vehicle on any portion of the
notified are or notified route unless authorised to do so by terms of the
D scheme itself. Therefore, corridor shelter was impermissible on a notified
area, route or a portion of the route. It was further held that unless the
scheme provides for exempting operators already having permit for com-
mon sector from the scheme by incorporating appropriate conditional
clauses in the scheme to enable them to ply their vehicles over common
sectors without picking up or setting down passengers on the common
E sectors, it was not open to the RTA or STA to grant permits on the notified
area or notified route providing corridor shelter.

In T.V. Nataraj & Ors. v. State of Kamataka & Ors., (1994) 2 SCC 32,
a Bench of two Judges of this Court considered the integrity of the route,
p the effect of the notification of the scheme under Section 68C of the
Repealed Act and held that on publication of the approved scheme under
Section 68A, the private operators were excluded, utiless saved· by the
scheme itself, to operate on an approved area or route by obtaining· permits
to run the stage carriage on the approved route under the Scheme. In the
absence of any express exemption in the Scheme, the exclusion of the
G private operators to operate the stage carriage on the approved scheme is
total and complete. It was only for the State Government to take steps to
put vehicles on approved schemes so as to avoid any inconvenience to the
travelling public.

H In Ram Krishna Venna & Ors. v. State of U.P. & Ors., [1992) 2 SCC
GAJRAJ SINGH v. STATE [K RAMASWAMY, J.] 191

620 another Bench of two Judges had considered the scheme of Chapter A
IV-A of the Repealed Act and Sections 80 and 98 of the Act. It was held
that the scheme published under Section 68D of the Repealed Act (Chap-
ter VI of the Act) is a law and it has over-riding effect over chapter IV of
the repealed Act (Chapter V of the Act). The scheme operates against
everyone unless it is modified. It excluded private operators from the
B
notified area or notified route or a portion thereof covered under the
scheme except to the extent saved under the scheme itself. The right of the
private operators to apply for and to obtain permits under Chapter IV of
the Repealed Act (Chapter V of the Act) had been totally frozen and
prohibited. The result was that on the approved nationalised route or area,
the private operators were totally prohibited to obtain permits under c
Section 72 or renewal under Section 81 of the Act to ply their stage
carriages. This ratio was reiterated by another Bench in Nisar Ahmad &
Ors. v. State of U.P. & Ors., [1994) Supp. 3 SCC 460 holding that the
approved scheme is a law by itself and everyone, whether or not party to
the earlier order of this Court K.K. Venna's case, was bound by the law D
laid down and directions given by this Court under Article 142(2) of the
Constitution.

It is seen that Chapter VI of the Act empowers STU to frame
schemes which have over-riding effect, by operation of Section 98, on
Chapter V and other laws. Section 101 with a non obstante clause gives E
power to the STU to operate additional services for the conveyance of the
passengers on special occasions such as to and from fairs and religious
gatherings. Section 102 empowers the State Government to modify or
cancel the approved scheme only in the public inter.;st. Section 103 gives
exclusive right to the STU to apply for and obtain stage carriage permits F
or goods carriage permits or contract carriage permits in respect of a
notified area or notified route or portion thereof. Section 104 prohibits
STA or RTA to grant any permit except in accordance with the scheme.
Thus, private operators whose named permits were saved from the scheme,
became entitled to operate their stage carriages subject to corridor restric-
tions of picking up on up and setting down the passangers enroute on the G
overlapped route.

It would, thus, be clear that there is no provis10n like Section
68F(1D) of the Repealed Act to obtain renewal of a permit saved under
the scheme to private operators. In contrast, sub-section (2) of Section 103 H
192 SUPREME COURT REPORTS [1996] SUPP. 6 S.C.R.

A gives power to the STA or RTA, on application made by the STU under
Section (1) thereof, either to grant any other permit or reject a pending
application or to cancel an existing permit or to modify the terms of an
existing permit in the manner indicated in clause (c) of sub-section (2) of
Section 103. It would, thereby, indicate the inconsistency with the
provisions contained in Chapter IVA of the Repealed Act.
B
Whenever an Act is repealed it must b_e considered, except as to
transaction past and closed, as if it had never existed. The effect thereof is
to obliternte the Act completely from the record of the Parliament as if it
had never been passed, it never existed except for the purpose of those
C actions which were commenced, prosecuted and concluded while it was
existing law. Legal fiction is one which is not an actual reality and which
the law recognises and the court accepts as a reality. Therefore, in case of
legal fiction the court believes something to exist which in reality does not
exist. It is nothing but a presumption of the existence of the state of affairs
D which in actuality is non- existent. The effect of such a legal fiction is that
a position which otherwise would not obtain is deemed to obtain under the
circumstances. Therefore, when Section 217(1) of the Act repealed Act 4
of 1939 w.e.f. July 1, 1989, the law in Act 4 of 1939 in effect came to be
non-existent except as regards the transactions, past and closed or saved.

E In Crawford's Interpretation of Law (1989) at page 626, it is stated
that "(A)n express repeal will operate to abrogate an existing law, unless
there is some indication to the contrary, such as a saving clause. Even
existing rights and pending litigation, both civil and criminal, may be
affected although it is not an uncommon practice to use the saving clause
F in order to preserve existing rights and to exempt pending litigation". At
page 627, it is stated that "(M)oreover, where a repealing clause expressly
refers to a portion of a prior Act, the remainder of such Act will not usually
be repealed, as a presumption is raised that no further repeal is necessary,
unless there is irreconcilable inconsistency between them. In like manner,
if the repealing clause is by its terms confined to a particular Act, quoted
G by title, it will not be extended to an act upon a different subject". Section
6 of the GC Act enumerates, inter alia, that where the Act repeals any
enactment, unless a different intention appears, the repeal shall not (a)
revive anything not in force or existing at the time at which the repeal takes
effect; or (b). affect the previous operation of any enactment so repealed
H or anything duly done or suffered thereunder; or (c) affect any right,
GAJRAJ SINGH v. STATE [K RAMASWAMY, J.] 193

privilege, obligation or liability acquired, accrued or incurred under any A
enactment so repealed, and any such investigation, legal proceeding or
remedy may be instituted, continued or enforced. In India Tobacco Co.
Ltd. v. The Commercial Tax Officer, Bhavanipore & Ors., [1975) 3 SCC 512
at 517 in paras 6 and 11, a Bench of three Judges had held that repeal
connotes abrogation and obliteration of one statute by another from the
B
statute book as completely as if it had ~ever been passed. When an Act is
repealed, it must be considered, except as to transactions past and closed,
as if it had never existed. Repeal is not a matter of mere form but is of
substance, depending on the intention of the Legislature. If the intention
indicated either expressly or by necessary implication in the subsequent
statute was to abrogate or wipe off the former enactment wholly or in part, C
then it would be a case of total or pro tanto repeal.

When there is a repeal and simultaneous re-enactment, Section 6 of
the GC Act would apply to such a case unless contrary intention can be
gathered from the repealing Act. Section 6 would be applicable in such D
cases unless the new legislation manifests intention inconsistent with or
contrary to the application of the section. Such incompatibility would have
to be- ascertained from all relevant provisions of the new Act. Therefore,
when the repeal is followed by a fresh legislation on the same subject, the
Court would undoubtedly have to look to the provisions of the new Act
only for the purpose of determining whether the new Act indicates dif- E
ferent intention. The object of repeal and re- enactment is to obliterate the
Repealed Act and to get rid of certain obsolete matters.
(

On "Saving of rights acquired", in the Principles of Statutory Inter-
pretation by G.P. Singh [(Sixth Edition) - 1996) at page 413, the learned F
author has stated that the effect of clauses (c) to (e) of Section 6 of GC
Act is, speaking briefly, to prevent the obliteration of a statute in spite of
its repeal to keep intact rights acquired or accrued and liabilities incurred
during its operation and permit continuance or institution of any legal
proceedings or recourse to any remedy which may have been available
before the repeal for. enforcement of such rights and liabilities. At page G
418, the learned author has stated that the privilege to get an extension of
a licence under an enactment is not an accrued right and no application
can be filed after the repeal of the enactment for renewal of the licence.
In Legislation and Interpretation by Jagdish Swarup (1974 Ed.) at page
539, it is stated that the power to take advantage of an enactment may H
·-
194 SUPREME COURT REPORTS [1996) SUPP. 6 S.C.R.

A without impropriety be termed as a "right", but the question is whether it
is a "right accrued". A mere right (assuming it to be properly so called)
existing in the members of the community or any of them to take advantage
of an amendment, without any act done by an individual towards availing
himself of that right, cannot properly be deemed a "right accrued".
B In Bishambhar Nath Kohli & Ors. v. State of Uttar Pradesh & Ors., (
AIR 1966 SC 573 a Constitution Bench of this Court was to consider
application of Section 6 of the GC Act to Section 27 of the Administration
of Evacuee Property Act, 1950. Regarding saving of rights accrued there-
under by operation of Section 6 of the GC Act ~his Court, after an
C elaborate consideration, had held that by Section 58 (3) of the Administra-
tion of Evacuee Property Act the Legislature had not expressed any
reservation in the application of that section and none can be implied. The
order of the Deputy Custodian was declared final by operation of Section
30(6) of Ordinance 1of1949, but the liability was subject to the provisions
D of sub-sections (1) to (5) of Section 30. If fictionally order is deemed to
have been passed under Act 31 of 1950 (Administration of Evacuee
Property Act) as if the Act were in operation on October 12, 1949, it is
difficult to escape the conclusion that the order would be subject to the
appellate or revisional jurisdiction of the authorities who have the appellate
or revisional power by virtue of provisions conferring those powers and
E which must also be deemed to have been in force on the date when the
impugned order was passed. It was held that Section 6 was inapplicable to
revive the Act that became final.

The question, therefore, is: what rights were preserved by saving
F provisions in Section 217(2) of the Act? In Crawford's Statutory Interpreta-
tion it is stated under Section 322 at page 657 thus :

"Often the legislature instead of simply amending a pre-existing
statute, will repeal the old statute in its entirety and by the same
enactment re-enact all or certain portions of the pre-existing law.
G Of course, the problem created by this sort of legislative action
involves mainly the effect of the repeal upon rights and liabilities
which accrued under the original statute. Are those rights and
liabilities destroyed or preserved? The authorities are divided as
to the effect of simultaneous repeals and re-enactments, some
H adhere to the view that the right and liabilities accruing under the
GAJRAJSINGHv. STAIB[K RAMASWAMY,J.) 195

repealed act ~e destroyed, since the statute from which they A
sprung has actually terminated, even though for only a very short
period of time. Others, and they seem to be in the majority, refuse
to accept this view of the situation, and consequently maintrun that
all rights and liabilities which have accrued under the original
statute are preserved and may be enforced, since the re-enactment
B
neutralizes the repeal, thereby continuing the law in force without
interruption. Logically, the former attitude is correct, for the old
statute does cease to exist as an independent enactment, but all
practical considerations favour the majority view. This is so even
where the statute involved is a penal act."
c
In Maxwell on the Interpretation of Statutes (12th Ed.) it is stated at
page 17 that the effect of repealing Acts passed after August 30, 1889, is
now dealt with by Section 38(2) of the Interpretation Act. Such repealing
Acts are, unless the contrary intention appears, not to ....." (b) affect the
previous operation of any enactment so repealed or anything duly done or D
suffered under any enactment so repealed; or (c) affect any right, privilege,
obligation, or liability acquired, accrued or incurred under any enactment
so repealed; or ( d) affect any penalty, forfeiture, or punishment incurred
in respect of any offence committed against any enactment so repealed; or
(e) affect any investigation, legal proceeding, or remedy in respect of any
such right, privilege, obligation, liability, penalty, forfeiture, or punishment E
as aforesaid".

In Sutherland Statutory Construction (3rd Edition) Vol. I by Horack,
in paras 2043 to 2045, it is stated that :
F
"Under common law principles of construction and interpreta-
tion all rights, liabilities, penalties, forfeitures and offences which
are of purely statutory derivation and unknown to the common law
are effaced by the repeal of the statute which granted then,
irrespective of their accrual. Likewise, where a common law prin-
ciple is abrogated, its effective existence is destroyed both as to G
past actions and to pending proceedings. However, a right of a
common law nature which is further embodied in statutory terms
exists as an enforceable right exclusive of the statute declaratory
of it, and therefore the right is not expunged by the repeal of the
statute. H
196 SUPREME COURT REPORTS .(1996] SUPP. 6 S.C.R.

Since the effect of a repeal is to obliterate the stattik and to .
destroy its effective operation in futuro, or to suspend the opera-
tion of the common law when it is a common law: principle which
is abrogated, any proceedings which have not culminated in a final
judgment prior to the repeal are abated at the consummation of
the repeal. When, however, the repeal does not contemplate either ·
B a substantive common law or statutory right, but merely the pro-
cedure prescribed to secure the enforcement of the .right, the right
itself is not annulled but remains in existence e~orced by applying
the new procedure.

Effect on vested rights
c
Under. common law principles of construction and interpreta-
tion the repeal of a statute or the abrogation of a common law
principle operates to divest all the rights accruing under .. the ·
repealed statute or the abrogated common law, and to halt all
D proceedings not concluded prior to the repeal.. However, .a right
which has become vested is not dependent upon the common law
or the statute under which it was acquired for its assertion, but has
an independent existence. Consequently, the repeal of the statute
.or the abrogation of the common law from which it originated does
not efface a vested right, but it remains enforceable without regard
E to the repeal.

In. order to become vested, the right must be a contract right,
a property right, or a right arising from a transaction in the nature
of a contract which· has become perfected to the degree that the
continued existence of the statute cannot further enhance its ac-
F quisition.

Effect up On inchoate rights

Rights of action which are dependent upon a statute, and which
are still inchoate and not reduced to possession or perfected by
G final judgment, are lost ·by the repeal of the statute from which
they stem. This rule of construction.is simply a.restatement of the
common law principle of construction that the repeal of a statute
operates to divest all· rights accruing under the repealed statute
and all proceedings not concluded prior to the repeal, since
H inchoate rights are by definition not vested rights such as to escape
GArRAJ SINGH v. STATE [K RAMASWAMY, J.j 197

the common law rule of effacement. The inchoate rights are but A
an incident to the statute and fall with its repeal."

In Francis Bennion's Statutory Interpretation (Second Edition) it is
stated at page 210 thus : ·

"Where an Act passed after 1978 repeals and re- enacts as If
enactment (with or without modification) then, unless the contrary
intention appears, anything done, or having effect as if done.under
the enactment repealed, in so far as it could have been done under
the provision re-enacted, has effect as if done under that
provision." C

In Cardinal Rules of Legal Interpretation (3rd Edition) by Randall,
A.E., 1924, it is stated at page 531-32 thus :

"Their lordships ........ conceived that, in dealing with a statute
which professes merely to repeal a former statute of limited opera- D
tion, and to re-enact its provisions in an amended form, they are
not necessarily to presume·an intention to extend the operation of
those provisions to classes of persons not previously subject to
them unless the contrary is shown, but that they are to determine
on a fair construction of the whole statute, considered with refer-
ence to the surrounding circumstances, whether such an intention E
existed.". Brown v. Mc. Lachlan, [1872) L.R. 4 P.C. 543, at p.550;
42 L.J.P.C. 18, at p.23, Sir W. Colville, delivering the judgment of
the Judicial Committee.

"Where you have a repeal, and you have also a saving clause, F
you have to consider whether the substituted enactment contains
anything incompatible with the previously existing enactment. The
question is, Aye or No, is there incompatibility between the two?
And in those cases the judges, in holding that there was a saying
clause large enough to annul the repeal, said .that you must see
. whether the true effect was to substitute something incompatible G
with the enactment in the Act repealed; and that if you ·found
something in the repealing Act incompatible with the general
enactments in the repealed Act, then you must treat the jurisdiction
under the repealed Act as pro tanto wiped out. That is settled by
the cases of In re Busfield (1886), 32 Ch. D. 123; 55 L.J. Ch. 467; H
198 SUPREME COURT REPORTS (1996) SUPP. 6 S.C.R.

A and Hume v. Sonwton, [1890], 25 Q.B.D. 239; 59 L.J. Q.B. 420."
- In re R., (1906) 1 Ch. 730, at p. 736; 75 L.J. Ch. 421, at p. 423,
Collins,_ M.R."

It is already seen that the operation of sub-section (1) of Section 217
is to obliterate the Act 4 of 1939 and any corresponding law in force in any
State from operation with effect from 1st July, 1989, However, repeal shall
not affect any right or liability acquired, accrued or incurred. Sub-section
(2) enumerates and saves from the obliteration of Act 4 of 1939 and
corresponding law by fiction with its non obstante clause. Ex abwidenti
cautela clauses (a) to (3) elaborate the enumeration of rights. They would
c apply to specific rights given to an individual upon the happening of one
or other of the events specified in the statute. Clause (a) preserves con-
tinued operation of any notification, rules, regulations, order or notice
issued etc. and any appointment ·or declaration made etc. under the
Repealed Act in force immediately before July 1, 1989. Those enumerated
D acts or actions shall be deemed to have been issued, made, granted, done
or taken under the corresponding provisions of the Act which are not
inconsistellt with the provisions of the Act. In other words, Section 217(2)
(a) gives an elongated operation as regards all transactions, which being
consistent with the provisions of the Act should be deemed to have been
issued, made, granted, done or taken under the corresponding provisions
E of the Act. Existence of the corresponding provisions similar to the
repealed provisions is a condition precedent. If the operation of the
provisions in the Act is inconsistent and incompatible, it gets obliterated
and the earlier provisions no longer revive or survive. If anologous
provision in the Repealed Act does not find place in the Act, the rights
accrued or acquired thereunder would not continue under the Act unless
F
fresh rights are acquired under the Act.

By operation of clause (b), any certificate of fitness of a motor vehicle
or its registration or licence issued or permit granted under the repealed
enactments, shall continue to have effect after such commencement under
G the same conditions and for the same period as if this Act had not been
....
passed. In other words, a permit granted under the Repealed Act 4 of 1939
shall continue to have the same operation under the Act under the same
terms and conditions and for the same period, as if the Repealed Act was
in operation and as if the Act had not been passed. This is the fiction of
H law by which, though Act 4 of 1939 was wiped out, its operation gets
GATRAJ SINGH v. STATE [K. RAMASWAMY, J.] 199

revived. The intention, thereby, appears to be that the Act breaths life into A
the dead permits etc., and allows full play to the permits granted under the
Repealed Act, even if inconsistent, till their period expired by efflux of
time.

On expiry of the period of permit granted under Act 4 of 1939 or
corresponding law, what would be the consequence is the question? It is
B
true, as contended by Shri Venugopal, that by operation of sub-section (4)

- of Section 217, read with clause (a) of sub- section (2) of Section 217,
Section 6 of the GC Act steps in and the conjoint operation thereof leaves
no manner of doubt that the notification issued, rules or regulations made,
orders passed, notice issued, or any appointment or a declaration made, c
exemption granted or any confiscation made or any penalty or fine imposed
in or any other thing done or any other action taken under the repealed
enactment in force immediately before such commencement shall, as far as
it is not inconsistent with the provisions of the Act, be deemed to have
been corresponding issued, made, granted, done or taken under the Act
and their operation thereby gets saved by appropriate clause in Section 6 D
of the GC Act read with Section 217(2)(a) to (e) of Act. In other words,
proceedings initiated before Act 4 of 1939 was repealed, would be con-
tinued and concluded under the Act as if the Act was not enacted.
However, four things would emerge from its operation. First there must
exist a corresponding provision under the Act pari materia with the
Repealed Act; secondly, that the order or permit granted must exist and
E
be in operation as on July 1, 1989 - the day on which the Act had come
into force; thirdly, it must not be inconsistent with the provisions of the
Act; and fourthly some positive acts should have been done before July 1,
1989 to further secure any right. All the four conditions should be satisfied
as conditions precedent for application of Section 6 of the GC Act by F
operation of sub-section (4) of Section 217 and then clause (a) of sub-sec-
tion (2) of Section 217 steps in and starts operation thereof. We are
concerned with permits, let it be said that a permit is preceded by an order
granting permit by the concerned RTA or STA, as the case may be, under
the Repealed Act. The said order stands merged with the grant of permit
and gets exhausted. G

This may be angulated from yet another legal perspective, namely,
consequences that would flow from the meaning of the word 'renewal' of
a permit under Section 81 of the Act. Black's Law Dictionary defines the
word 'renewal' at page 1296 thus : H
200 SUPREME COURT REPORTS [1996) SUPP. 6 S.C.R.

A "The act of renewing or reviving. A revival or rehabilitation of an
expiring subject; that which is made anew or re-established. The
substitution of a new right or obligation for another of the same
nature. A change of something old to something new. To grant or
obtain extension of;"

B
In P. Ramanatha Aiyar's "The Law Lexicon" (Reprint Edition 1987),
the word 'renewal' is defined at page 1107 to mean "a change of something
old for something new. The renewal of a 'license' means a new license
granted by way of renewal". the renewal of a negotiable bill or note is
regarded simply as a prolongation of the original contract. The office of a
-
c "renewal", as it is termed, of a life policy, is to prevent discontinuance or
forfeiture.

In Provaslz Chandra Dalui & Anr. v. Bisawanath B01wjee & Anr.,
[1989) Supp. 1 SCC 487 at 496 in para 14, this Court drew the distinction
D between the meaning of the words extension and renewal. It was held that
a distinction between extension and renewal is chiefly that in the case of
renewal, a new lease is required while in the case of extension the same
lease continues in force during additional period by the performance of
stipulated act. In other words, the word 'extension' when used in its proper
and usual sense in connection with a lease, means prolongation of the
E lease.

It is settled law that grant of renewal is a fresh grant though it breaths ·
life into the operation of the pervious lease or licence granted as per
existing appropriate provisions of the Act, rules, or orders or acts intra
F vires or as per the law in operation as on the date of renewal. The right to
get renewal of a permit under the Act is not a vested right but a privilege
subject to fulfilment of the conditions precedent enumerated under the
Act. Under Section 58 of the Repealed Aet, renewal of a permit is a
preferential right and refusal thereof is an exception. But the Act expresses
different intention. Sections 66, 70, 71 and 80 prescribe procedure for
G making application and compliance of the conditions mentioned therein.
Existence of the provisions of the Act consistent with the Repealed Act is
a pre-condition.· Grant of renewal under Section 81 is a discretion given to
the authority (STA or RTA) subject to the conditions and the requirement
of law. Discretion given by a statute connotes making a choice between
H competing considerations according to rules of reason and justice and not
GAIRAJ SINGH v. STATE [K. RAMASWAMY, J.J 201

arbitrary or whim but legal and regular. Sections 70 and 71 read with A
Section 81 do indicate that grant of permit or renewal thereof is not a
maller of right of course. It is subject of rejection for reasons to be
recorded in support thereof. Therefore, right to renewal of a permit under
Section 81 is not a vested or accrued right but a privilege to get renewal
according to law in operation and after compliance with the pre-conditions
B
and abiding the law.

In Ambika Quany workis V. State of Gujarat, [1987] 1 sec 213 this
Court was to deal with right to renewal of a mining lease under the Gujarat
Mines and minerals Concessions Rules. When the renewal of the lease was
not !,l'fanted, due to statutory embargo created by Section 2 of the Forest C
(Conservation) Act, 1980, this Court had held that though the right to
renewal was in accordance with the rules, with the interposition of the Act
for conservation of the forests, it puts an embargo on the right to renewal.
Therefore, the refusal to grant renewal of lease was upheld.

In Rural Litigation and Entitlement Kendra v. State of U.P., [1989) D
Supp. 1 SCC 504 at 523-24 after considering the above ratio, it was held
that though the lessees of the mines were entitled to apply for renewal as
per the law and clauses in the lease, this Court prohibited obtaining of
renewals applying Section 2 of the Forests (Conversation) Act, 1980.
E
In State of M.P. & Ors. v. .KJishnadas Tikaram, (1995) Supp. 1 SCC
587 this Court had held that it is settled law that renewal is a fresh· grant
and must be granted consistent with law in operation as onthat date. In
that case, it was held that renewal of mining lease in the forest area for
extraction of minerals under the Mining and Mineral Concessions Rules

- should be consistent with Forest (Conservation) Act, 1980. Section 2
mandates the State Government to obtain prior approval of the Central
Government, renewal granted without. prior approval was subsequently
cancelled. When its validity was questioned, the High Court set aside the
F

order. On appeal, this Court reversed the High Court's order and had held
that the. Government was not precluded to cancel the renewal of the lease G
granted without obtaining prior approval of the Central Government. The
order of cancellation was, therefore, upheld.

There is a distinction between right acquired or accrued, ·and
privilege, hope and expectation to get a right, as rightly pointed out by the
High Court in the impugned judgment. A right to apply for renewal and H
202 SUPREME COURT REPORTS (1996) SUPP. 6 S.C.R.

A to get a favourable order would not be deemed to be a right accrued unless
some positive acts are done. before repeal of Act 4 of 1939 or correspond-
ing law to secure that right of renewal. In Gujarat Elect1icity Board v.
Shanti/al, AIR (1969) SC 239, this Court had pointed out that before
Section 71 of the Electricity Supply Act was amended, the appellant had
issued a notice under Section 7 thereof, exercising the option to purchase
B the undertaking. It was held that a right to purchase the electrical under-
taking which had accrued to the Electricity Board was saved by Section 6
of the GC Act.

So, if no action under the Repealed Act was set in motion before
c .July 1, 1989, by a valid application for renewal of a permit, there was no
right acquired or accrued to pursue the remedy under the Act. The
privilege to obtain renewal of a permit is not an accrued right. Section
58(2) of the Repealed Act gives, as stated supra, preferential right to a
holder of a permit for renewal thereof. Section 71 of the Act gives
D preferential right in favour of STU for grant of permit in Chapter V which
is not available under the Repealed Act. Therefore, even for grant of a
permit or a renewal under Section 72 or 81, the STU is entitled to
preferential right over the private citizens. Thereby, the Act manifests
intention inconsistent with and incompatible to that in Chapter IV of the
Repealed Act. Similarly, even on the approved routes under a scheme
E framed in Chapter IVA, an exception has been carved out in the scheme
with a non obstante clause in favour of STU, which is a self-operative law
by itself. The rights of the existing operators for renewal thereof under
Section 68F(1D) under the repealed Act were saved. But, under the Act,
Chapter VI does not speak of renewal of the permits to the private
F operators, though permits were saved in the scheme itself. In other words,
Chapter VI manifested inconsistency in its operation from the law in
Chapter IVA of the Repealed Act. Similarly, other provisions are incon-
sistent with those in Act 4 of 1939 which exist in the Act as are apparent
but they are not relevant for our present propose and hence need no
elaboration. Therefore, clause (a) of sub-section (2) would not get at-
G tracted, even if it were to apply to grant of permit being a "thing done" as
contended by Shri Venugopal. So, any permit issued to operate a stage
carriage under the Repealed Act would survive, by virtue of clause (b) of
sub-section (2) of Section 217 of the Act by fictional operation of law; and
this would be on the same conditions and for the same period mentioned
H under the Repealed Act, as if the Act was not enacted. Any other view
l
GAfRAJ SINGHv. STA'lE [K.RAMASWAMY,J.) 203

would tantamount to allowing the Repealed Act to remain in operation in A
perpetuity simultaneously with the operation of the Act. Both cannot
co-exist in the same shelter.

In State of Punjab v. Mohar Singh, (1955] SCR 893 the facts were that
the respondent filed a claim as an evacuee under EP (Registration of Land
Claims) Act, 1948. The claim was investigated into and it was found to be B
false; it _was held to be an offence under the Act. At the trial, on his
confession, the respondent was convicted and was sentenced to imprison-
ment. On suo motzt revision, the District Magistrate found the sentence to
be inadequate and referred the case to the High Court to be dealt with
under Section 437, Cr. P.C. The High Court found that since the Ordinance
was repealed, he could not be convicted under Section 7 of the Act. This
c
Court, on appeal reversed the decision and upheld the conviction applying
Section 6 of the GC Act. Interpreting that section, this Court had held that
the words "anything done" occurring in Section 11 of 1948 Ordinance did
not mean act done by a person but an official act done by the authority in
exercise of the powers conferred by or under the Ordinance. Far from D
helping the appellants, the ratio would apply to official acts done or orders
issued etc. covered by Section 217(2)(a) of the Act. As stated earlier, after
permit was in fact issued, the order passed by STA or RTA out lived its
purpose and grant of the permit and its operation was saved to the extent
provided in clause (b) of Section 217(2).
E
The ratio of M/s. Universal Imports Agency and Anr. v. The Chief
Controller of Imp01ts and Exp01ts & Ors., (1961) 1 SCR 305 also is not of
assistance to the appellants. Therein, before the Government of India
issued notification applying the French Establishments' (Application of
Laws) Order, 1954 to the territory of Pondicherry, tl).e appellant had F
entered into a contract with the foreign buyers for the import of the goods
which, after the said Order came into force, were imported into Pondicher-
ry. The question therein was whether Section 6 of the GC Act would apply,
Majority of three Judges, dissented by minority opinion of two Judges, had
held that the words "things done" in para 6 of the French Establishments' G
(Application of Laws) Order was comprehensive enough to take within its
ambit not only things done but also the effect of the legal consequences
flowing therefrom. The ratio is not at all applicable to the facts of this case.

We, therefore hold that grant of renewal of the stage carriage permit
should necessarily be preceded by a grant of a permit to stage carriage H
I '
204 SUPREME COURT REPORTS [ 1996) SUPP. 6 S.C.R.

A under Section 72, in accordance with the procedure laid down in Sectio~s
70 and 71. This should be made before the expiry of the period prescribed
in the permit granted under the Repealed Act. Therefore; for stage car-
riage permits granted under Chapter IV of the Repealed Act, if they stand
to expire or expired after 1st July, 1989, without any pending application
for renewal havirig been made under Section 58 as on 1st July, 1989, fresh
B applications under Section 70 should be filed and after consideration under
Section 71, permits be obtained as per law under Section 72. If there is any
delay to obtain permits pending consideration, by operation of Section 76,
to avoid hiatus in continued operation of providing stage carriage service,
Section 87 gives power to grant temporary permit withoQt following the
c procedure laid down in Section 70. In Mithilesh Garg & Ors. v.. Union of
India & Ors., [1992] 1 SCC 168, this Court had laid down different criteria
for grant of inter-region, intra-region and interstate permits under the Act
under Section 88 and 80 of the Act which did not find place in the
Repealed Act. It was held that such distinction was neither discriminatory
D nor violative of Article 14 of the Constitution. Thus considered, the
argument of arbitrariness, discrimination or avoidable inconvenience to the
holders of permits etc. under the Repealed Act and to the travelling public
would be hypothetical and without force.

The appeals arising out of SLP Nos. 924/96, 1913/96, 27355/95 relate
E to renewal of state carriage permits of the appellants, whose permits were
saved under the nationalised schemes. It is an admitted position that before
the Act had come into force on July 1," 1989 they had their permits saved
by the schemes approved and published under Chapter IVA of the
Repealed Act and renewable under Section 68F (ID) of the Repealed Act
F and were renewed under Section 81 of the Act without obtaining fresh
permits under the Act. The extreme contention of Sri S.K. Dha~n was that
the definition of "permit" under Section 2(31) of the Act is so wide as to
include permits granted under the Repealed Act and the approval and
publication of the schemes under Section 68D of Chapter IYA of the
Repealed Act stands nullified since there is. no saving thereof under the
G Act. Therefore, every one is free to obtain permits under the nationalised
scheme after expiry of the period for which the permit was granted under
the Repealed Act. We firid it difficult to give acceptance to this extreme
contention. It is settled la~ that the scheme approved u,nder Chapter IVA, .
which is equivalent to Chapter VI of the Act, is a· self contained and.
H self-operative scheme and is a law by itself. The scheme operateSto the ·
GAJRAJ SINGH v. STATE [K RAMASWAMY, J.) 205

exclusion of private operators with non-obstante clause that the STU should A
obtain permits to run stage carriages in the notified area, routes or a
portion thereof to provide coordinated efficient, adequate and economical
road transport service. Thereby the right to apply for and obtain a stage
carriage permit has been frozen to all private operators, except as saved
under the· scheme itself. Until the scheme gets modified or cancelled by B
the State it would continues to be in operation. We find no inconsistency
under the Repealed Act and the Act in this behalf. Resultantly, all schemes
remain operative under Section 217.(2)(a) of the Act.

The question, therefore, is: Whether a private operator saved under
the scheme is not liable to get permits under Section 72 and renewal of the C
permits under Section 81 of the Act? It is true that Section 68F(1D) and
Section 68F (lF) of the Repealed Act had prescribed that renewal of the
permits granted to the private operators and STU should be .renewed
under the scheme; similar provision does not find place in Chapter VI of
the Act. Rules do prescribe procedure to apply for renewal by the private D
operators as well as STU but the rules or procedure do not confer
substantive right to renewal of the p_ermits granted under the scheme; when
ch&pter VI is sub Silentio, rules cannot travel beyond the Act.

The question, therefore, is: whether the named holder of a specified
stage carriage permit has the right of renewal under the Act after the expiry E
of the period mentioned in the permit granted under the Repealed Act?
·Did the Parliament intend to put an end to and denude the right of a
private named operator to operate the .stage carriage, or to that extent the
right to apply for and obtain permit under Sections 70 to 72 or renewal
under Section 81 was preserved? p

Two views are plausible under the Scheme of the Act. The first is
that after the expiry of the permit or renewed permit under the Repealed
Act, the named private operator saved under the scheme gets denuded of
his right of renewal of his permit under the Act, since "permit" defined G
under Section 2(31) would mean permit granted under tlte Act, which
occasion does not arise as the field, occupied by the exclusive right to
operate stage carriages was given to STU. Thereby, he ceases thereafter to
have any right to ply stage carriages, though saved under the self operative
scheme which continues to be in existence after the Act came into force.
The other view is that the rights of the private named operators whose H
206 SUPREME COURT REPORTS (1996) SUPP. 6 S.C.R.

A specified permits were saved under the respective schemes, were not
expressly taken away under the Act. Being private operators, they would
be entitled to avail of the right and remedy given in Chapter V of the Act,
with exclusion of other private competitors. Thereby they should apply for
and obtain permit afresh under Section 72 and renewal thereafter under
Section 81. In this behalf, it is relevant to noLe the contention of S/Shri
B Venugopal and Salve. Their contention is that in the scheme, such named
operators whose specified permits were mentioned in the scheme alone
were given exclusive rights to ply their stage carriages on the named routes
subject to corridor restrictions mentioned in the scheme. Other persons
whose permits were nationalised were paid compensation under the
c Repealed Act or under Section 105 of the Act but the appellants were not
paid compensation as their permits were saved. By operation of Section
217 (2)(e) and Section 100 of the Act, even pending schemes should be
finalised under the Act within the limitation prescribed therein. Until its
finalisation, the existing operators are allowed to ply their vehicles and to
D obtain temporary permits. This would indicate the legislative intention that
the Act did not intend to destroy the rights, saved under the respective
schemes, of the named operators in respect of the specified permits. The
contention of Mr. Pramod Swarup for U.P.S.R.T.U. is that after the expiry
of the period mentioned in the permits granted to the named operators of
the specified permits, they lost their right to renewal of their permits since
E the right to renewal, similar to Section 68F(1D ), does not find place in
Chapter VI. The grant of renewal to them, unless modified by the scheme
under Section 102 of the Act, is inconsistent and, therefore, the private
operators are not entitled to the renewal of their permits. The exclusive
right, thereby, was given to the STU to ply their stage carriages, goods
carriages or contract carriages so as to avoid inconvenience and hardship
F
to the travelling public.

After giving careful and anxious consideration to the respective
contentions, we find that there is some force in the contention of the
respec:tive counsel for the appellants. It bears repetition to state that the
G approved scheme under the repealed Act or in the Act is a self-contained
and self-operative scheme. It is a law by itself. The schemes published
under the Repealed Act, as held earlier, are saved by Section 217(2)(a) of
the Act. Therefore, until they are modified or cancelled under Section 102,
the scheme should continue to be in operation in the notified area, route
H or part thereof. The right to apply for and obtain permit in the notified
GATRAJSINGHv. STA1E[K.RAMASWAMY,J.) W7

scheme was totally frozen to the private operators giving exclusive right to
the STU to apply for and obtain permits to run the stage carriages or
additional service under Section 101 of the Act on the notified area, route
or a ,part thereof and none else. With a non obstante clause in Section 101,
the right to apply for and obtain temporary permits under Section 87 by
private operators was taken away. There is no need for STU to obtain such B
permits, as an intimation to concerned RTA of its providing such addition-
al service oh special occasion like fair or religious gatherings for con-
veyance of passengers, is sufficient. Yet the scheme itself saved and
preserved the rights of the named existing operators in respect of over
lapping routes in the specified permits, subject to the corridor restrictions
of picking up and setting down the passengers en route the prescribed C
prohibited route. They became entitled to run their stage carriages subject
to the law. Though, their permits are saved, the named operators being
private operators, the Parliament appear to have thought that there was no
necessity to expressly retain in Chapter VI itself their right of renewal as
the same was already provided in Section 81 of the Act corresponding to D
Section 68F(1D) of Chapter IV-A of the Repealed Act. The reason ap-
pears to be obvious. Every private operators falls within the field covered
by Chapter V of the Act. It would seem that the Parliament is of the view
that the named operators,be.ing saved under the schemes, are entitled to
apply for and obtain necessary permit or renewal thereof to ply their stage E
carriages only on overlapped routes subject to the corridor restrictions
mentioned in the scheme itself. It may be stated that we do not find any
express indication of their rights being taken away under the Act; nor do
we find it by necessary implication in that behalf and to that effect. This
view does justice also to all concerned.
F
As far as the STU is concerned, they having had the monopoly to ply
stage carriages, goods carriages, contract carriages or special services in
the notified areas or route or part thereof under the scheme, it was thought
unnecessary to bother them to obtain renewal of permits for of stage
carriages etc. Section 101 itself provides for such an intention. Resultantly, G
the Legislature appears to have obviated the need to obtain periodical
renewals of permits for stage carriages etc. run by the STU. Parliament
was aware of the need to obtain the renewal of permits by the STU under
Section 68F (lF) of the Repealed Act and absence of such a provision in
the Act is further eloquent and self-explanatory. H
208 SUPREME COURT REPORTS [1996] SUPP. 6 S.C.R.

A In Krishan Kumar v. State of Rajasthan & Ors., [1991) 4 SCC 258, a
contention was raised that since Section 100(4) of the Act prescribes
limitation within which the State Government should hear and consider the
objections on the draft scheme, finalise the scheme and publish the same
in the official Gazette, after the· Act had come into force, the limitation" of
one year stood lapsed. Though Section 217(2)(e) empowers the State
B Government to finalise the pending draft schemes, they stood lapsed from
the date on which draft scheme was published. The contention was rejected
by this Court for the obvious reason that the Repealed Act did not
prescribed any limitation to finalise the draft scheme as indicated in
sub-section (4) of Section 100 of the Act. As years rolled by from tlie date
C of publication of draft scheme for finalisation, the Parlialhent for the first
time prescribed limitation in Section 100(4) putting a fetter on the exercise
of the power of the Government in approving the draft scheme and
publication thereof after complying with the ~equirements of law. The right
of the private operators and the remedy of finalisation of the draft scheme
D .· were harmoniqusly interpreted by this Court and it held that the limitation
of one year starts running from the ,date the Act had come into force,
namely, July 1, 1989. We are of the view that same harmonious interpreta-
tion is required to be adopted in this case al~o. Applying the same har-
monious interpretation, we hold that the rights of nanied.private operators
to apply for and obtain permits. and renewal of me specified stage carriage
E permits are saved and they alone are eligible to avail of that right and
remedy under Chapter V of the Act, while preserving monopoly of the
STU in Chapter VI.

In Chapter V, permits are required to be obtained on non-
F nationalised routes. The STU ~so has the right to apply for and obtain
permits to run the stage carriages, goods carriages or contract carriages
on permits, as the case may be, and in some instances the preferential right
under the Act is given to the STU. In respect of permits had under the
Repealed Act or the Act, the need to apply for and obtain renewals of the
G stage carriage permits, goods carriages or contract carriage permits for
plying on non~nationalised routes was to comply with the procedure
prescribed in Chapter V, which should be adhered to. This is in relation
to non nationalised routes only. But as regards the approved schemes, in
Chapter VI or continued schemes saved by section 217(2)(a) read with
sub-section (4) read with Chapter IVA of the Repealed Act, there is no
H need for STU to obtain periodical renewals of permits of stage carriages,
GATRAJSINGHv. STATE[K RAMASWAMY,J.) 209

contract carriages, or goods carriages in respect of the notified area, route A
or portion thereof, notwithstanding anything contained in Chapter V. The
STU retains its exclusive right to ply the stage carriages or special service
or goods carriage or contract carriage on the notified area or route or part
thereof, until the scheme is duly modified or cancelled in accordance with
law prescribed in Section 102 "of Chapter VI. B
It is required to be stated that along with the application under
Section 70 filed for grant of permit under Section 72 or renewal under
Section 81 made by the named holder of a specified permit in an approved
scheme, he should enclose an authenticated copy of the approved scheme,
the details of the route on which he was plying his stage carriage with C
corridor restrictions. The RTA or STA, as the case may be, should verify
the regional scheme under which the named operator, whose specified
permit was saved, whether he is entitled to ply the stage carriage in the
approved scheme with the condition of the corridor restrictions imposed
in the notified scheme and if so to what extent. What is the duration of his
right saved in the approved scheme? Whether he had plied his stage D
carriage on complying with the law in force? His right to permit under
Section 72 or renewal under Section 81 cannot be higher than the original
right saved in the approved scheme. The STU also should be heard in that
behalf. On consideration of these and all other relevant facts in relation to
grant of stage carriage permit or renewal thereof, the appropriate authority E
may grant or reject. In the later event, for reasons to be recorded m
support of the rejection.

In Mithilesh Garg's case (supra) a Bench of three Judges considered
the right of the existing operators in conformity with Article 19(1)(g) of
the Constitution and the procedure prescribed under the liberal policy for F
grant of permits to the new entrants, while continuing the same right to
existing operators under the new provisions in the Act. It was harmoniously
interpreted and this Court had held that there was no cause for complaint
by the existing operators when the liberal policy had given right to apply
for and obtain permits under Chapter V on the non-nationalised routes to
augment facility to the travelling public. Section 104 does not stand in the G
way of the named private operaters whose specified permits were/are saved
in that behalf. On the contrary, it would say "except in accordance with the
provisions of the scheme."

Thus considered, we are of the view that the rights of the existing H

J
210 SUPREME COURT REPORTS (1996) SUPP. 6 S.C.R.

A named operators saved in the appropriate approved schemes in respect of
specified permits were not destroyed. By necessary implication of Section
104, they were saved. They became entitled to avail of their right to apply
for grant of permit in accordance with the procedure prescribed under
Sections 70 and 71 and to obtain permit under Section 72, before the expiry
of the permit or renewed permit saved under the approved scheme and
B
should obtain permit afresh to ply their stage carriages before expiry of the
period mentioned therein; periodical renewals froni time to time should be
obtained under Section 81 of the Act in accordance with the operation of
the law. The RTA or STA, as the case may be, should consider and may
grant permits or renewal of permits as per law or rejection thereof for
c reasons to be recorded in that behalf.

It is true that some renewals of stage carriage permits to the hold~rs
of permits or renewed permits under the Repealed Act were granted under
Section 81. Some of them are still in operation. With a view to prevent
D hiatus in operational efficacy we would declare that though renewals of
state carriage permits were granted under Section 81, they must be deemed
to be temporary permits granted under Section 87, till regular permits are
granted or refused. The ratio of Gwucltaran's case (supra), does not help
the appellants. Therein the application for renewal of stage carriage permit
under Section 58(2) of the Repealed act was pending consideration as on
E 1st July, 1989. Consequently, Section 6 of the GC Act saved its operation.
This Court had, therefore, held that applications for renewal filed under
Section 58 of the Repealed Act must be disposed of under Section 80 read
with Section 81 of the Act. However, it is stated that disposal must be taken
to be, not of a permit granted under the Act, but one under deemed fiction.
There would be no further fiction of law created under the Act to be a
F
deemed renewal of permit under the Act.

In Quillan's case (supra) this Court did not have the occasion to
consider the effectof Section 6 of the GC Act and clause (a) of sub-section
G (2) of Section 217 since the case fell under clause (b). Therein, the proviso
to unamended Section 71(1) prohibited the Society to obtain a permit.
Consequently, it could not obtain renewal of stage carriage permit, being
inconsistent with the provisions of the Act It was held that the stage
carriage permit issued under the Repealed Act would remain operative for
the period for which it was granted as if the Act had not been passed. After
H its expiry, the appellant therein was required to obtain a permit under
GAJRAJ SINGH v. STATE [K. RAMASWAMY, J.] 211

Section 72 of the Act. Thereby, it was held that the Society was not entitled A
to the renewal under Section 81 of the Act. In view of the consideration of
the operation of the relevant provisions mentioned hereinbefore, there is
no conflict between Gurcharan Singh 's case and Quillon 's case. the inter-
pretation in Quilon's case is also consistent with the consideration herein-
before made.
B
The next contention of S~ri Venugopal is that the Act intends that
all permits issued under the Repealed Act would be continued under the
Act and be given effect in toto so long as such of those permits or
certificates or licences are not inconsistent with the provisions of the Act.
To that extent, their operations are saved giving. limited operation under C
clause (b) of sub-section (2) of Section 217. However, notifications etc.

-
......
issued under the Repealed Act and saved by clause (a) of sub-section (2)
of Section 217, as mentioned earlier, are distinct from the permits issued
in furtherance of the orders passed by the STA or RTA, as the case may
be. The further contention that such a construction creates and brings
about invidious discrimination offending Article 14 of the Constitution is
D

without force. Section 217(2)(a) read with Section 217(4) of the Act
manifest the distinction between the acts done or actions taken consistent
with the provisions of the Repealed Act but inconsistent with Act. The Act
saves only acts done or actions taken etc. which are consistent with the
provisions. By implication, all inconsistent acts done or actions taken, E
except those completed and closed, would not be considered to be done
or taken under the Act and consequently could not be operative under the
Act. They are obliterated completely from statute as if they never existed
except to the extent of limited operation provided in the appropriate
clauses in sub-section (2) of Section 217 of the Act. F

Accordingly, we hold that the named transport operators whose
permits were saved in the relevant scheme shall apply for permits under
Sections 70 and 71 and obtain permits afresh under Section 72 of the Act

- before the expiry of the period mentioned in the permit issued either under
Section 47 or Section 48 or renewal under Section 58 or Section 68F(1D)
of the Repealed Act. No third party/private operators are entitled to apply
G

for permits on the same notified route or part thereof, nor are they entitled
to compete with them for grant of permit, since the right of all other private
operators to apply for and operate in the approved notified area, route or
a part thereof, has been frozen. The right is reserved only in relation to the H
212 SUPREME COURT REPORTS (1996) SUPP. 6 S.C.R.

A named operators and that too for specified permit, and none else. Along
with the application under Section 70 filed for grant of permit under
Section 72 or renewal under Section 81 made by the named holder of a
· specified permit in an approved scheme, he should enclose an authenti-
cated copy of the approved scheme, the details of the route on which he
was plying his stage carriage with corridor restrictions on over lapping
B routes. The RTA or STA, as the case may be, should verify the original
scheme under which the named operator, whose specified permit was
saved, whether he is entitled to ply the stage carriage in the approved
scheme with the condition of the corridor restriction on the notified
scheme and if so to what extent. What is the duration of his right saved in
C the approved scheme? Whether he had plied his stage carriage on comply-
ing with the law in force? His right to permit under Section 72 or renewal
under Section 81 cannot be higher than the original right saved in the
approved scheme. The STU also should be heard in that behalf. On
consideration of these and all other relevant facts in relation to grant of
.....
t--
D stage carriage permit or renewal thereof, the appropriate authority may
grant or reject; in the later event, for reasons to be recorded in support of
the rejection. The authorities should consider their applications in accord-
ance with the law and the prescribed procedure and may grant new permits
under Section 72 and later on before the expiry thereof, to renew it in
accerdance with the procedure prescribed in Sections 80 and 81, that too
E on compliance with law, until the scheme is duly modified or cancelled in
accordance with law. We reiterate that this right is available exclusively to
the named private operators and that too in respect of the specified permits
and with same restrictions continued in the scheme none else and no more.

F Since the appellants had obtained permits by mistake of the law and
misconception of law on the part of the competent authorities applied
under Section 81 and had been granted renewal of their respective permits
under Section 81 after July 1, 1989, such grant of renewal of the permit
should be treated to be temporary permits under Section 87 of the Act.
Therefore, the private operators, be they covered by Chapter V or VI,
G should apply for and obtain afresh permits before the expiry of the period
mentioned in their respective permits or renewed for consideration under
Section 71 and grant under Section 72 of the permits afresh consistently
with Section 2(31) of the Act. Such permit alone would be a permit defined
in Section 2 (31) of the Act. Thereafter, before expiry thereof, they shall
H apply for and the concerned STNRTA person authority may grant or
GAJRAJ SINGH v. STATE [K. RAMASWAMY, J.] 213

refuse renewals of permit for reasons to be recorded under Section 81 of A
the Act.

This interpretation of the law would relieve undue hardship to all the
operators and at the same time it would also be consistent with the scheme
of the Act to subserve the rights and protection provided under the Act so
as to avoid rigour in the operation of the law. B
Thus considered, for the reasons given above, the view taken by the
High Court is in conformity with law but subject to above modification in
1 the judgment.

The appeals and the writ petition are accordingly disposed of but, C
under the circumstances, without costs.

v.s.s. Appeal and petition disposed of.

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