Holding

No prior agreement between Regional Transport Authorities is required; the RTA having jurisdiction under section 45 may consider the application, and the permit becomes valid in the other region only after counter‑signature as mandated by section 63.

Summary

The North Bihar Regional Transport Authority (RTA) advertised for applications to grant stage‑carriage permits on routes that crossed into South Bihar. The petitioner challenged the authority’s power to issue such inter‑regional permits without a prior agreement with the South Bihar RTA, arguing that the Motor Vehicles Act, 1939 required such an agreement. The Supreme Court examined the provisions of sections 45(1) and 63 of the Act, noting that an application may be made to the RTA having jurisdiction over the major portion of the route and that a permit granted by one RTA is not valid in another region unless it is counter‑signed under section 63. The Court held that the Act contains no requirement for a prior inter‑RTA agreement before an application is considered, and that the North Bihar RTA was correctly empowered to entertain the applications. The permit becomes effective in the other region only after the required counter‑signature. Consequently, the High Court’s dismissal of the writ petition was affirmed and the special leave petition was dismissed.

Issues considered

Whether a prior agreement between two Regional Transport Authorities is necessary before one RTA can grant an inter‑regional stage‑carriage permit under the Motor Vehicles Act, 1939.
Interpretation of section 45(1) of the Act concerning the jurisdiction for filing inter‑regional permit applications.
Effect of section 63 on the validity of permits across regions and the need for counter‑signature.
Whether the High Court erred in dismissing the writ petition challenging the North Bihar RTA’s authority.

Legislation cited

Motor Vehicles Act, 1939s. 45(1), s. 46, s. 47, s. 57, s. 63, s. 63A, s. 63B, s. 63C, s. 68

Subjects

Motor Vehicles Actinter‑regional permitRegional Transport Authoritycounter‑signaturestage carriageprior agreementSection 45Section 63transport law

Judgment

GOVERDHAN LAL OHAWAN A
v.
STATE OF BIHAR & OTHERS

JULY 27, 1988
B
[E.S. VENKATARAMIAH AND M.M . DUTT, JJ.]

Motor Vehicles Act, 1939-Whether without a prior agreement
;
between two or more Regional Transport A!tthorities of regions tflrqugh
which an inter-regional route patses, it is ()pen t() q11yone 9f the said
Regional Transport Authority to grant a permit to ply a st(lg~ cqrriag_e
on the said inter-regional route, under provisions of.. · - C

The short point which arose for consid.eration iJ,t tll.i.s ci1se was
whether withont a prior agreement between two or me>re R~i.on11I
Transport Authorities of the regions throug)l which. 81! inter.regioJ,llll
route passes, it was open to any one of the said Regional Transport I)
Authorities to grant a permit to ply a stage carriage on tbe sold int.er•
regional route under the provisions of the Motor Vell.i_cles. A_ct, 1.939
('the Act').

The North Bihar Regional Transport Authority invited applicll-.
tions for granting stage carriage permits iJ,t respect of int'-r·~ol'!al e
routes connecting certain plac.,,. withiJ,t its jurisd,iction aJ,td ~ertllil'I e>ther
places within .the jurisdiction of the Soutll. !lillar Regional Transport
Authority. The petitioner filed a wriJ petition in the Hig)l C()urt, q11¢s-
tioning the power of th.e North Bihar Regional Transport A11th()rity to
grant permits above-said with90 t 11 prior agree111ent ~twee11 it alt4 tile
South Bihar Regional TrllllSport Auth9rity. The High_ Co0 rt. c!is111issed p
the writ petition- Aggrieved by the order of the ftigh Court, the
petitioner moved this Court for relief by this petition for special leave.

Dismissi~ the ™'titie>n, the Court,

HELD: Under section 45(1) of tile Act, an applic.atioJ,t for l! G
permit for a vehicle propose(I to be used. in tw0 o.r m11re regions within
the same State, has to be made to the Regionaj Tr3"'Sport Authority of
the region in which. tile major pC)rtioJ,t of the proPC>se'l rQl!l.e or area ~.
and in case tlte portion of the proposed r11utec ·o.r 11r-ea i_l! e..c.h_ (If tlte
r.egie>i:isis apprQXim11tely equal, to ti!e R~ional. Trl!!lsPtlrt. A.11t!wl'itY of
the regionJn_ which it,is proposed t.o keep tile vehicle. (5~6F'-(;J_ H

593
594 SUPREME COURT REPORTS (1988] Supp. 1 S.C.R.

A
Under section 63 of the Act, in the absence of any rules to the
contrary under the Act, a permit granted by the Regional Transport
Authority of one region is not valid in any other region unless the
permit has been counter-signed by the Regional Transport Authority of
the other region, while counter-signing a permit, it is open to the
Regional Transport Authority of the other region to impose its own
B conditions which it might have imposed if it bad granted the permit.
If there are any rules framed by the State Government under the Act,
they supersede the provisions of section 63. If there is an agreement
between the States concerned with regard to the grant and the counter-
signature of the permits, then it is not necessary to comply with the
procedure prescribed by section 63, for counter-signature of permits.
C In this case, the provisions of section 63 of the Act applied to all the
inter-regional permits in the State of Bihar, as no rule framed under the
Act by the State of Bihar regarding the procedure to be followed in the
case of counter-signature of permits was brought to the notice of the
Court. l598E-H; 599A]

D Section 47(3) being inapplicable to the inter-State or inter-
regional permits, it is open to the Regional Transport Authority con-
cerned to decide whether there is any necessity to issue the permit
applied for. The Act does not contain any procedure for two or more
Regional Transport Authorities entering into an agreement before an
application for an inter-regional permit is granted. The only provision
E which provides for an agreement to be arrived at for purposes of
counter-signature is the agreement between two or more States referred
to in the first proviso to sub-section (3) of section 63 of the Act. An
inter-State agreement of that nature can be arrived at only after follow-
ing the procedure prescribed under sub-section (3A) of section 63 when
it is open to the parties affected by the proposal to make representa-
F lions. In one sense, the procedure prescribed in sub-section (3A) of
section 63 takes the place of procedure to be followed by a Regional
Transport Authority while granting or counter-signing permits. In
this case, since there is no provision in the Act or in the Rules made by
the State Government, requiring the existence of such a prior agree-
ment, it is difficult to bold that in the absence ofsuch a prior agreement
G between the Regional Transport Authorities concerned, an application
for the grant of an inter-regional permit should not be taken up for
consideration by a Regional Transport Authority which had the juris-
diction to grant it under section 45 of the Act. If a permit is issued by a
Regional Transport Authority and it is not counter-signed by the other
Regional Transport Authority, the permit will not be effective in the
H other region. What has been observed above is in accord with t~e deci-
G.L. DHAWAN v. STATE OF BIHAR [VENKATARAMIAH, J.] 595

sion of a Constitution Bench of this Court in Mis. Bundelkhand Motor
A
Transport Co., Nowgaon v. Behari Lal Chaurasia and Anr., [1986] I
SCR485. [S99B; 601F-G; 602E-G]

The North Bihar Regional Transport Authority had jurisdiction
to consider the applications for the grant of the inter-regional permits in
question. After they were granted, it was open to the South Bihar B
Regional Transport Authority to consider whether they should he
counter-signed or not after following the prescribed procedure. The
High Court was right in dismissing the Writ Petition. [603C-D]

Mohd. Ibrahim etc. v. State Transport Appellate Tribunal,
Madras, etc., [1971] 1 SCR 474; M/s. Bundelkhand Motor Transport
Company, Nowgaon v. Behari Lal Chaurasia and Another, [1966] 1
c
SCR 485, referred to. ·

CIVIL APPELLATE WRISDICTION: Special Leave Petition
(Civil) No. 6495 of 1988.
D
From the Judgment and Order dated 3.5.1988 of the Patna High
Court in C.W.J.C. No. 2063/88.

K.K. Gupta for the Petition et.

The Judgment of the Court was delivered by E

VENKATARAMIAH, J. The short point which arises for consi-
deration in this case is whether without a prior agreement between two
or more Regional Transport Authorities through which an inter-
regional route passes it is open to any one of the said Regional Trans-
port Authorities to grant a permit to ply a stage carriage on the said F
inter-regional route under the provisions of the Motor Vehicles Act,
1939 (hereinafter referred to as 'the Act').

After the opening of the 'Mahatama Gandhi Sethu' connecting
South Bihar and North Bihar by road there was a great need for
granting permits to operate stage carriage services between places G
which are situated in North Bihar and the places in South Bihar.
Therefore, in order to satisfy the demand of the travelling public, the
North Bihar Regional Transport Authority issued an advertisement
inviting applications for granting stage carriage permits in respect of
inter-regional routes connecting certain places situated within its
jurisdiction and certain other places which are situated within the H
596 SUPREME COURT REPORTS [1988) Supp. 1 S.C.R.

A jurisdiction of South Bihar Regional Transport Authority. A number
of applications were received for the grant of the permits on the said
inter-regional routes. The North Bihar Regional Transport Authority
issued notices to all the persons concerned stating that the said applica-
tions would be taken llp for ~onsideration at its meeting to be held on
7th April, 1988.. The petitioner who was operating some stage
B carriages on some ot the inter-regional routes filed a writ petition In
C.W.J.C. No. 2063 of 1988 on the file of the High Court of Patna
questioning the power of the North Bihar Regional Transport Autho-
rity to grant permits on the inter-regional routes without a prior agree-
ment between it and the South Bihar Regional Transport Authority
and obtained a~ order of stay of the said proceedings from the High
C Court on 6th April, 1988 pending disposal of the Writ Petition. The
Writ Petition was heard by the High Court on 3.5.1988 and it was
dismissed. Aggrieved by the order of the High Court the petitioner has
filed this petition.

When the Writ Petition was filed before the High 'Court the
D petitioner did not implead the applicants who had made applications
for the grant of stage carriage permits. The applicants, however,
appeared before the High Court as interveners and made their sub-
missions. They contended that the Writ Petition was liable to be dis-
missed since they (the applicants for permits) had not been impleaded
as parties and that the contention of the petitioner that a prior
E agreemeut between the two Regional Transport Authorities was
necessary before any one of them could grant a permit was erroneous.
The High Court has upheld both the contentions.

Under section 45(1) of the Act every application for a permit has
to be made to the Regional Transport Authority of the region in which
F it is proposed to use the vehicle or vehicles but if it is proposed to use
the vehicle or vehicles in two or more regions lying within the same
State, the application has to be made to the Regional Transport
Authority of the region in which the major portion of the proposed
route or area lies, and in case the portion of the proposed route or area
in each of the re_gions is approximately equal, to the Regional Trans-
G · port Authority of the region in which it is proposed to keep the vehicle
or velricles. The application for stage carriage permit should contain
the particulars required to be furnished under section 46 of the Act.
Section 57 of the Act provides for the procedure to be followed for
granting permits. On receipt of an application for a stage carriage
permit the Regional Transport Authority should make the application
H available for inspection at the office of the Authority and is also
G.L. DHAWAN v. STATE OF BIHAR [VENKATARAMIAH, J.] 597

required to publish the application or the substance thereof in the
A
prescribed manner together with a notice of the date before which
representations in connection therewith may be submitted and the
date, not being less than thirty days from such publication, on which,
and the time and place at which, the application aotl aily representa-
tions received would be considered. The Regiona:I transport Autho-
rity should, while consideriag an application for a stage carnage B
permit,. have regard to the matters specified in section 47 of the Act,
namely, the interest of the public generally, the adequacy of the
passengers, the stage carriages operating or likely to operate in the
near future wbether by road or other means between the places to be
served, the benefit to any particular locality or localities likely to be
afforded by the service et~. At the hearing it.iS open to any one of the
parties who has objected to the grant of the perinit to raise all aonten" c
tions which are open to him under the Act including that there is no
need for issuing the permit applied for. Ubtter sub-section (3) of
section 47 of the Act a Regional Transport Authority may limit the
number of stage carriages generally or of any specified type for which
stage carriage permits may be granted in the region or in any specified D
area or on any specified route within the region. It has been held by
this Court in Mohd. Ibrahim etc, v. State Transport Appellate Tribunal,
Madras, etc., [197il 1 S.C.R. 474 iiiat sub-section (3) of section 47 is
confined in its operation lo the permits under which the stage carnages
are to be operated between two or more places within the same region
and that section 47(3) does not apply to applications for inter-State E
penD.its or to inter-regional permits. We shall refer to this decisiQn
again at a later stage. The relevant part of section ti3 of the Act reads
thus:

"63. Validation of permits for use outside region in
which granted -(1) Except as may be otherwise pres- F
cribed, a permit granted by the Regional Transport
Authority of any one region shall not be valid in any other
region, unless the permit has been counter-signed by the
Regional Transport Authority of that other region, and a
permit granted in any one State shall not be valid in any
other State unless counter-signed by the State Transport G
Authority of that other State or by the Regional Transport
Authority concerned .

. . . . . . . . . . . . . . . . . ....................... ......... .
; ;

(2) A Regional Transport ~ilthority when counter" H
598 SUPREME COURT REPORTS [1988] Supp. 1 S.C.R.

signing the permit may attach to the permit any condition
A
which it might have imposed if it had granted the permit,
and may likewise vary any c0ndition attached to the permit
by the Athority by whic:h' the permit was granted.

(3) The provisions of the Chapter relating to the
B grant, revocation and suspension uf permits shall apply to
the grant, revocation and suspension of countersignatures
of permits:

Provided that it shall not be necessary to follow the
procedure laid down in Section 57 for the grant of counter-
signatures ofpermits, where the permits granted in any one
c State are required to be counter-signed by the State Trans-
port Authority of another State or by the Regional Trans-
port Authority concerned as a result of any agreement
arrived at between the States after complying with the
requirements of sub-section (3-A), or for the grant of
D countersignatures of permits in pursuance of any direction
issued by the Commission under clause (c) of sub-section
(2) of section 63-A."

A reading of the provisions of section 63 of the Act, extracted
above, shows that in the absence of any rules to the contrary framed
E under the Act a permit granted by the Regional Transport Authority
of any one region is not valid in any other region. unless the permit has
been counter-signed by the Regional Transport Authority of the other
region and a permit granted in any one State is not valid in any other
State unless it is countersigned by the State Transport Authority of the
other State or of the Regional Transport Authority concerned. When
F countersigning a permit it is open to the Regional Transport Authority
of the other region to impose its own conditions which it might have
imposed if it had granted the permit. The provisions of Chapter IV
relating to the grant, revocation or suspension of permits apply to the
grant, revocation or suspension of the countersignature of the permits
also. If there are any rules framed by the State Government under the
(} Act they shall supersede the provisions of section 63 of the Act and the
rules framed in that regard have to be followed by the Transport
Authorities in the case of inter-regional permits. If There is an agree-
ment between the States concerned with regard to the grant and the
countersignature of the permits, then it is not necessary to comply with
the procedure prescribed by section 63 of the Act for countersignature
H of permits. No rule framed under the Act by the State of Bihar with
G.L. DHAWAN v. STATE OF BIHAR [VENKATARAMIAH, J.J 599

regard to the procedure to be foliowed in the case of countersignature
A
of permits has been brought to our notice. We shall, therefore, pro-
ceed on the basis that the provisions of section 63 of the Act would be
applicable to all inter-regional permits in the State of Bihar. Since
section 47(3) is held to be inapplicable to inter'State permits or inter-
regional permits it is open to the Regional Transport Authority con-
cerned to decide the question whether there is any nece:;sity to issue B
the permit applied for at the time of consideration of th~ application
for the grant of a permit in the light of the' representations made before
the Regional Transport Authority by the applicants, objectors and
other concerned parties. In Mohd. Ibrahim etc. v. State Transport
Appellate Tribunal, Madras etc., (supra) dealing with the question
whether there was any necessity for a piior determination of the max-
imum number of stage carriages which can be permitted to operate on c
an inter-State route, this Court observed at page 483 of the Report
thus:

"These provisions establish that in the case of an
inter-State permit an application has to be made to the D
Regional Transport Authority of a State as mentioned in
section 45 of the Act and the permit is to be countersigned
by the State Transport Authority of the other State or by
the Regional Transport Authority concerned as mentioned
in section 63 of the Act. Chapter IV consists of sections 42
to 6$. Section 57 deals with procedure for application and E
grant of permits. That section will, therefore, apply for the
grant of inter-State pertnits. The effect of the proviso to
section 63(3) is that in the case of inter-State permits where
an agreement has been arrived at between the State the
provisions of section 57 of the Act need not be followed for
the grant of countersignatures of permits. In other cases F
the procedure in section 57 of the Act will apply in regard
to grant, revocation and suspension of permits and to
countersignatures of permits as well. Section 48 of the Act
which relates to power to grant of stage carriage permits
will also apply to inter-State permits. The provisions con-
tained in sub-section (1) generally and sub-section (2) of G
section 47 will apply to the Regional Transport Authority
at the time of consideration of the application for inter-
State stage carriage pertnit. Sectio:i 47(3) of the Act will not
in our opinion apply to inter-State permits because that pro-
vision relates to a Regional Transport Authority limiting the
number of stage carriages for which stage carriage permits H
600 SUPREME COURT REPORTS [1988] Supp. 1 S.C.R.

may be g;anted in the region or in any spetified area or on
A
,any specified route within the region."
\underlining by us)

The Court .proceeded to observe:

"In otber words, section 47(3) of the Act is confined
in its operation in or within the region. The provisions of
section 47(3) of the Act do not apply to inter-State permits
because an inter-State petrnit cannot be effective unlesss it
is countersigned by the Authority of the other State. The
suggestion that in regard to inter-State permits a limit has
t to be fixed in regard to number of stage carriages for inter-
State routes will have the effect of adding words to the
provisions in section 47(3) of the Act. That will not be the
proper way of giving effect to section 47(3) of the Act. It
will be misreading section 47(3) of the Act if it will be
D applied to inter-State permits. The combined effect of
sections 63, 63-A, 63-B and 63-C is that the inter-State
Commission will deal with inter-State permits. The Central
tJovernnient under section 63-C of the Act is authorised to
make rules in regard to the procedure to be followed in
considering an application for grant and countersignature
E of permits. In the absence of specific rules, the best way of
harmonising the powers and functions is to allow these inter-
State authorities to exercise their power within their respec-
tive spheres in regard to grant and countersignature of
permits by agreement and accord,"
(underlining by us).

The last·sehten~e hi the above extract of the judgment contains
only a suggestion made by the Court to the inter-State authorities
concerned regarding the manner in which the inter-State authorities
should exercise their powers with regard to the grant and countersig-
nature of permits to avoid any possible difference of opinion between
G them. It does not, however, require a Regional Transport Authority in
ohe State to enter Into an agreement with the Regional Transport
Authority in the other State before granting an inter-State permit
under tbe Act. the observation referred to above is not a part of the
raiio of the dedsion, 1t may also be noted that a similar observation is
not made by the court While dealing with the case of ah inter-regional
H permit ~thin a State. In fact, irt the case of inter-State permits there is
G.L. DHAWAN v. STATE OF BIHAR IVENKATARAMIAH, J.J 601

already ali etjiress provision enabling two or more States to enter into
A
an inter-State agreement. In the same decision at Pages 483-484 the
·Court made the· following observations in respect of inter-regional
permits:

"In the case of inter-regional permits an application
under sectioa 45 of the Act has ti!> be made to the Regional B
'ifransport Authority of the region in which the major por-
tion of the proposed route or a:rea lies and in case the
portion of the propo~ed route or area in each of the regions
.is approximately equal, to the Regional Transport Autho-
rity of theregion in which it is proposed to keep the vehicle
or vehicles. Then under section 63 of the Act a permit
granted by the Regional Transport Authority of one region
c
shall not be valid in any (lther region unless the permit is
counter~igned by the Regional Transport Authority of that
other region. Section 63(3) of the Act makes the provisions
ot Chapter IV applicable relating to the grant, revocation
artll suspension of permits to the grant, revocation and D
suspension._ of cou:ntersignature of pennits. The result is
that sections 47 to 68 which occur in Chapter IV are there-
fore attracted ·in case of inter-regional permits. In view of

- the fact that section 47(3) of theAct is restricted in its field
in or within the region, the provisions in terms do not
become applicable to inter-regional permits. Section 68 of E
the Act contemplates rules and conditions subject to which
and the extent t•o which, a permit shall be valid in another
region within the State without countersignature. We have
not been shown any rules to that effect. The reasons which
do not make section 47(3) applicable to inter-State permit
apply proprio vigore to inter-regional permits." F

It is significant that the Act does not contain any procedure for
two or more Regional Transport Authorities entering_into an agree-
mentbefore an application for an inter-regional petmit is granted. The
only provision which provides for an agreement to 'be arrived at, for
purposes of countersignatures is the agreement between two or more G
States referred to in the first proviso to sub-section (3) of section 63 of
the Act. An inter-State agreement of that nature can be arrived at only
after following the procedure prescribed under sub-section (3-A) of
section 63 of the A¢t which provides for the publication of the proposal
to enter into an agreement between the concerned States in the Offi-
cial Gazette and calling for representations in connection therewith ..H
602 SUPREME COURT REPORTS [1988] Supp. 1 S.C.R.

A .from the affected parties and also the publication of the time and place
at which the proposal or any representation is received in connection
therewith will be considered by the Government concerned. At that
stage it is open to the parties whO are affected by the proposal to make
all representations which they wish to make including the representa-
tion that there i.• no necessity to introduce any more stage carriage.s on
B the inter-State routes in question. In one sense the procedure pres-
cribed in sub-section (3-A) of section 63 of the Act takes thti place of
the procedure to be followed by a Regional Transport Authority while
granting o{ counter-signing permits. If any State Government is of
opinion that in the case of inter-regional permits within its, territory
there should be a similar agreement between the Regional Transport
C Authorities concerned before granting any inter-regional permit, it
may frame appropriate rules providing fqr publication of the proposal
to enter into an agreement, inviting objections to the proposal and
hearing objections and representations of the affected parties by the
concerned Regional Transport Authorties before entering into any
such agreement In the absence of any such rules being there, it is open
p to the affected parties to raise the contention that there is no necessity
to issue any additional inter-regional permit before the Regional
Transport Authority to which application for the grant of a permit is
made as well as the Regional Transport Authority to which an applica-
tion for counter-signature of the permit is made.

IE In the instant case since there is no provision in the Act or in the
Rules made by the State Government requiring the existence of such a
prior agreement, it is difficult to hold that in the absence of such a
prior agreement between the Regional Transport Authorities con-
cerned an application for the grant of an inter-regional permit should
not be taken up for consideration by a Regional Transport Authority
F which bas the jurisdiction to grant it under section 45 of the Act. If a
permit is issued by a Regional Transport Authority and it is not
countersigned by the other Regional Transport Authority the permit
will not be effective in the other region. What we have observed above
is in accord with the decision of a Constitution Bench of this Court in
Mis. Bundelkhand Motor Transport Company, Nowgaon v. Behari Lal
G Chaurasia and Another, [1966] I S.C.R. 485. In that case at Page 492
the Constitution Bench has observed thus:

"Under s. 63 a permit granted by the Regional Trans-
port Authority of one region is not valid in any other
region, unless the permit has been countersigned by the
H Regional Transport Authority of that other region. The
••
G.L. DHAWAN v. STATE OF BIHAR [VENKA:TARAMIAH, J.] 603

clearest implication of this provision is that even an inter- A
regional permit when granted is valid for the region over
which the Authority granting the permit has jurisdiction,
and when it is countersigned by the Regional Transport
Authority of the other region, the permit becomes valid for
the entire route. We are unable to agree with counsel for
B
the respondent that the permit has no validity whatever
until it is countersigned by the Regional Transport Autho-
rity of the other region."

The North Bihar Regional Transport Authority has, therefore,
jurisdiction to consider the applications for the grant of the inter-
regional permits in question. After they are granted, it is open to the C
South Bihar Regional Transport Authority to consider whether they
should be countersigned or not after following the prescribed
procedure.

The High Court was, therefore, right in dismissing the Writ Peti-
D
tion. This Special Leave petition, therefore, fails and it is dismissed.

S.L. Petition dismissed.
_,

....