Holding

The transport authority must not delay granting regular stage carriage permits; it must invite applications suo motu under s.57(2) and grant regular permits to eligible applicants, and cannot rely on the absence of a state policy to issue only temporary permits.

Summary

Jagjit Bus Service, a stage carriage operator, applied for renewal of its permit on a Punjab route but was repeatedly granted only temporary permits. The State Transport Commissioner justified this by citing two incomplete schemes under s.68(2) of the Motor Vehicles Act, 1939, and the absence of a finalized state transport policy. The appellant filed a writ petition seeking a mandamus directing the Commissioner to consider applications under s.46, s.57(2) and s.58 and to grant regular permits where a permanent need existed. The Punjab and Haryana High Court dismissed the petition at the admission stage. The Supreme Court allowed the appeal, holding that statutory transport authorities must discharge their duties under the Act without waiting for a state policy and must grant regular stage‑carriage permits where there is a permanent need, directing the authority to invite applications suo motu and to cease issuing fresh temporary permits after four months.

Issues considered

The Regional Transport Authority may refuse to grant regular stage carriage permits and issue only temporary permits on the ground that the State Government has not announced a transport policy or completed schemes under s.68(2).
Whether the schemes published under s.68(2) are sufficient to limit private operators and justify the issuance of only temporary permits.
Whether the authority is obligated to consider applications under s.46, s.57(2) and s.58 and grant regular permits where a permanent need exists.
Whether the repeated issuance of temporary permits violates the language and spirit of s.62 of the Motor Vehicles Act and the fundamental right to carry on motor transport business.

Legislation cited

Motor Vehicles Act, 1939s. 46, s. 57(2), s. 57(3), s. 58, s. 62, s. 68(2)

Subjects

stage carriage permitsMotor Vehicles Acttemporary permitsregular permitstransport policystatutory authorityfundamental rightpublic interestmandamus

Judgment

JAGJIT BUS. SERVICE (REGD.) AMRITSAR, THROUGH A
ITS MANAGING PARTNER SHRI JAGJIT SINGH, SON OF
SHRI KARTAR SINGH, RESIDENT OF SHARIFPURA,
AMRITSAR (PUNJAB)
v.
STATE TRANSPORT COMMISSIONER, PUNJAB AND ANR.
B
JULY 27, 1987

[E.S. VENKATARAMIAH AND K.N. SINGH, JJ.]

Motor Vehicles Act, 1939-Issue of Stage Ca"iage Permits-
c
- Statutory Authorities should discharge duties imposed on them by the
Act by giving primary consideration to public interest and also to funda-
mental rights of citizens to carry motor transport business in accordance
with law.

The appellant, a stage carriage operator, applied for renewal of a
permit to ply his bus on a particnlar route but was granted only a D
temporary permit to do so. Thereafter he applied for issue of a regular
permit, but once again, action was initiated for issue of a temporary
permit only. Aggrieved by this approach of respondent No. 1, who was
exercising the power of the Regional Transport authorities in the State,
the appellant filed a writ petition seeking a direction that respondent
No. 1 should consider and grant stage carriage permits to eligible E
persons under s. 46 read withs. 57(2) and grant renewal of such permits
under s. 58 of the Motor Vehicles Act, 1939. The High Court dismissed
the petition at the admission stage.

Respondent No. 1, in his counter amdavit, stated that the State
Government had approved and published two Schemes under s. 68(0) F
(2) of the Act for grant of stage carriage permits in favour of State
Transport Undertakings and private operators in two specified areas of
the State which envisaged the complete take over of all the routes by the
State Transport Undertakings in a phased manner within 3 years of the
expiry of the Scheme. Since the State Transport Undertakings had not
taken over the operations from the private operators in accordance with G
the two Schemes and the State Government had neither announced new
--' schemes to replace them, nor declared its transport policy, Respondent
No. 1 had considered it inadvisable to grant regular permits on long
term basis and was Issuing temporary permits only.

Allowing the appeal by special leave, H
•
661
662 SUPREME COURT REPORTS [1987] 3 S.C.R.

A HELD: The Transport Authorities which are statutory autho·
rities have to discharge the duties imposed on them by the Act without
waiting for any policy to be announced by the State Government. In
doing so, primary consideratiou should be given to the public Interest
and also to the fundamental right of the citizens to carry on motor
transport business in accordance with law. This Court has observed in
B several decisions that a Regional Transport Authority would be falling
in its duty if it grants repeatedly temporary permits to ply stage car·
riages on routes even though it is aware of the fact that there is a
permanent need for granting regular permits in respect of the said
routes. [666E; G]

C The entire policy followed by the State Government and the 1st
Respondent is contrary to the general scheme of the Act. The schemes
said to have been published under s.68·D do not specify any notifted
routes or any notified areas. It is not possible also to find out from the
said schemes whether private operators have been excluded from any
particular area or route. The schemes appear to be incomplete and,
D therefore, are ineffective. In the above situation the Regional Transport
authorities whose functions have been delegated under the Act to the
State Trausport Commissioner, Punjab, cannot decline to grant stage
carriage permits on applications properly made to them by intending
operators only because the State Government has not announced its
transport policy. The State Government cannot have any policy difl'e·
E rent from or independent of the provisions contained in Chapters IV
and IV·A of the Act. [666B·E]

In the instant case, it is not denied that there Is a permanent nttd
to grant permits to ply stage carriages on the several routes in the State
of Punjab. The policy adopted by the 1st Respondent, namely, issuing
F of temporary permits from time to time, is highly irregular and Is
against the language and spirit of s. 62 of the Act, which prbvldes for
the grant of temporary permits. (666FJ

CIVIL APPELLATE JURISDICTION:Civil Appeal No. 1522
of 1987.
G
From the Judgment and order dated 29.7.1986 of the Punjab and
Haryana High Court in Civil Writ Petition No. 3464 of 1986.

Mohan Pandey and Baldev Kapoor for the Appellant.

H N.K. Sodhi, Mrs. lndu Goswarny for the Respondent.
JAGJIT BUS SERVICE v. S.T. COMMR. 663

The following Order of the Court was delivered: A

ORDER

Special leave granted. The appeal is heard.

This appeal by special leave is filed against the Order dated B
29.7.1986 passed by the High Court of Punjab and Haryana rejecting
the writ petition filed by the appellant inter alia for the issue of the writ
in the nature of mandamus, directing the State Transport Commis-
sioner, Punjab, who is exercising the powers of the Regional Trans-
port authorities in the State of Punjab to grant permits to ply stage
carriages on the route Taran Taran -Muktsar via Ferozepur and c
Sadiq under Chapter IV of the Motor Vehicles Act, 1939 (hereinafter
referred to as 'the Act') and to dispose of the applications for renewal
of stage carriage permits which are pending before the Regional
Transport authorities.

The appellant was a transferee of a bus along with two permits to D
-'("operate one return trip on the route Taran Taran-Muktsar via
Ferozepur and Sadiq. Those permits could not be renewed owing to
the default on the part of the transferor to make within time an appli·
cation for the renewal of the said permits before the permits were
actually transferred. Therefore, the State Transport Commissioner,
Punjab, who was exercising the powers of the Regional Transport E '
authorities instead of granting regular permits on applications made
under section 46 of the Act granted temporary permits in favour of the
appellant on the route in question. Thereafter despite the request of
the appellant to issue regular permits the State Transport Commis-
sioner proceeded to invite applications for the grant of temporary
stage carriage permits. Pursuant to the said notification the appellant F
and some others made applications. For some reasons which need not
be set out here the application of"the appellant was rejected and the
temporary permits were granted in favour of the 2nd respondent. The
appeals filed against the order granting temporary permits in favour of
the 2nd respondent became infructuous as the period for which they
-( had been granted expired before the appeals could be disposed of. G

Be that as it may, the main grievance of the appellant has been
that the State Transport Commissioner, Punjab, who is exercising the
powers of the Regional Transport authorities has failed to discharge
his duty under the Act,which requires him to consider and grant stage
carriage permits on applications made under section 46 read with sec- H

--..- ....
664 SUPREME COURT REPORTS [1987) 3 S.C.R.

tion 57(2) of the Act where there is need to do so to applicants who
A are eligible to be granted such permits and to grant renew~! of such
permits on applications for renewal made under section 58 of the Act.
The appellant, therefore, filed the writ petition, out of which this
appeal arises, before the High Court of Punjab and Haryana for ap-
propriate relief. The said writ petition was dismissed at the stage of
B admission. Aggrieved by the order of the High Court the appellant has
filed this appeal by special leave.

When the Special Leave Petition came up for hearing on
September 16, 1986 notice was issued to the State Transport Commis-
sioner requiring him to show cause as to why he should not be directed
to take action on applications made under section 46 of the Act for
C granting permits to ply stage carriages instead of issuing temporary
permits under section 62 of the Act periodically, even though there
was permanent need to grant regular stage carriage permits. In reply
to the said notice the 1st Respondent has filed a counter-affidavit, the
relevant portion of which is as follows:
D
" In the State of Punjab two separate schemes with -..,.
regard to the grant of stage carriage permits in favour of
the State Transport Undertakings and the Private Opera-
tors were approved by the Government of Punjab under
, sub-section (2) of section 68(0) of the Motor Vehicles Act,
E 1939. Out of the two schemes one is called 'Punjab Road-
ways Scheme' operative in the erstwhile Punjab areas and 1·
the other is called 'Pepsu Road Transport Corporation
Scheme' operative in the erstwhile Pepsu areas. The
schemes for Punjab Roadways and Pepsu Road Transport ~·
Corporation were published on 19.11.1969 and 18.2.1972
F
respectively. A copy of both the schemes are exhibited as
Annexure R 1 and R2.

According to the above notifications the Punjab
Government had announced that:

(i) 60% operation will be undertaken by the Punjab )....
G
Roadways and the remaining 40% by the existing pri-
vate operators and new entrants in the ratio of 30: 10,
respectively in the areas of erstwhile Punjab State.

(ii) 60% operation will be undertaken by the Pepsu
H Road Transport Corporation and 40% by the private
operators in Pepsu territory.

-1r 111
JAGJIT BUS SERVICE v. S.T. COMMR. 665

(iii) Notifications further provided that the schemes A
will have the effect for a period of 7 years (upto
18.11.1976) in Punjab State and will last till 30th June
1977 in the Pepsu territory.

(iv) After the expiry of 7 years (upto 18.11.1976) in
the case of Punjab Scheme and from Ist July, 1977 in B
the Pepsu territory, 1/3rd operations of the private
operators will be taken over by the Punjab Road-
ways/Pepsu Road Transport Corporation every year
to complete the take over in three years.

Neither the Punjab Roadways nor the Pepsu Trans- C
port Corporation have taken over the operations from the
private operators in the terms of above mentioned notifica-
tions nor new schemes have been announced by the
Government. The transport operations have, however, to
be continued as at present to save the public from incon-
venience. At the same time it will not be advisable to grant D
regular permits on long terms basis in the absence of any
transport policy announced by the Punjab Government.
Under these circumstances I am granting/issuing permits
on temporary basis after following the prescribed proce-
dure laid down under section 47 of the Motor Vehicles Act,
1939 and after giving due hearings to all the applicants at E
the time of initial grant. As soon as the new transport
policy is finalised by the Government all the stage carriage
permits granted on temporary basis due to non-finalisation
of transport policy will be granted on regular basis after
following the procedure as laid down under sections 57(2)
and 57(3) of the Motor Vehicles Act, 1939. It may, how- F
ever, be added here that the State Government is in the
process of finalising a new Transport policy."

A reading of the counter-affidavit filed by the State Transport
Commissioner, Punjab practically does not set-up any.defence at all to
the prayer made by the appellant. The counter-affidavit refers to two G
schemes, namely, the Punjab Roadways Scheme and the Pepsu Road
Transport Corporation Scheme approved under section 68-0 of the
Act, which were published on 19 .11.1969 and 18.2.1972 respectively.
It is, however, admitted that neither the Punjab Roadways nor the
Pepsu Road Transport Corporation have taken over the operations
from the private operators in terms of the above-mentioned notifica- H

. .. T
666 SUPREME COURT REPORTS [1987] 3 S.C.R.

A tions nor a11y new scheme has been announced by the Punjab Govern·
ment. The 1st Respondent further states that since there was general
inconvenience, the temporary permits were being issued after follow-
ing the prescribed procedure laid down under the Act. The affidavit
further says that due to the non· finalisation of the transport policy by
the State Government it was not possible to issue regular permits to
b run stage carriages by following the procedure prescribed under sec·
tions 57(2) and 57(3) of the Act. We are of the view that the entire
policy followed by the State Government and the 1st Respondent is
contrary to the general scheme of the Act. The schemes said to have
been published under section 68· D of the Act do not specify any
notified routes or any notified areas. It is not possible also to find out
C from the said scheme whether private operators have been excluded
from any particular area of route. The schemes appear to be incomp·
lete and, therefore, are ineffective. In the above situation the Regional
Transport authorities whose functions have been delegated under the
Act to the State Transport Commissioner, Punjab, cannot decline to
grant stage carriage permits on applications properly made to them by
D intending operators only because the State Government has not
announced its transport policy. The State Government cannot have
any policy different from or independent of the provisions contained in
Chapter IV and Chapter IV-A of the Act. The Transport Authorities
which are statutory authorities have to discharge the duties imposed
on them by the Act without waiting for any policy to be announced by
E the State Government. In doing so primary consideration should be
given to the public interest and also to the fundamental right of the
citizens to carry on motor transport business in accordance with law. It
is not denied that there is a permanent need to grant permits to ply
stage carriages on the several routes in the State of Punjab. In the
circumstances, the policy adopted by the 1st Respondent, namely,
F issuing of temporary permits from time to time, appears to be a high·
ly irregular one. It is against the language and spirit of section 62 of
the Act, wh.ich provides for the grant of temporary permits. This Court
has observed in several decisions that a Regional Transport Authority
would be failing in its duty if it grants repeatedly temporary permits to
ply stage carriages on routes even though it is aware of the fact that
G there is a permanent need for granting regular permits in respect of the
said routes. The fact that the State of Punjab is thinking of finalising a
new transport policy can have no bearing on the question in issue.
'
We are, therefore, of the view that the 1st Respondent cannot
successfully resist the writ petition out of which this appeal arises. In
H the circumstances we feel that it is appropriate to issue a writ in the
JAGJIT BUS SERVICE v. S.T. COMMR. 667

1 nature of mandamus to the Regional Transport authorities in Punjab, A
whose duties are being discharged by the State Transport Commis-
sioner, Punjab, to take immediate steps to invite applications suo motu
under section 57(2) of the Act for issuing regular stage carriage
permits to deserving applicants, to grant stage carriage permits to
deserving applications who make applications for the stage carriage B
permits in accordance with law and to dispose of the applications for
renewal, if any, made under section 58 of the Act by the holders of
stage carriage permits. We accordingly direct the Regional Transport
authorities in the State of Punjab to take immediate steps to invite
applications suo motu under section 57(2) of the Act for issuing regular
permits to deserving applicants to ply stage carriages in respect of
the routes where there is a permanent need, to dispose of the applica- C
tions made by persons who wish to ply stage carriages on the said
• routes in accordance with law and to dispose of the applications that
may be pending before the Regional Transport authorities for renewal
of stage carriage permits under section 58 of the Act. All these steps
should be 'taken within four months from today. The temporary
permits which are now in force shall cease on the expiry of the period D
"<' of four months and the Regional Transport authorities are directed not
to issue any fresh temporary permits where there is permanent need
for granting a stage carriage permits after four months.·

This appeal is allowed accordingly. There shall, however, be no
order as to costs. E

A copy of this order shall be sent to the Chief Secretary to the
State of Punjab within a week for information and implementation of
the above directions.

H.L.C. Appeal allowed. F