Holding

The two notifications issued under s. 43‑A are ultra vires and void as they contravene the amended provisions of s. 43‑A and s. 47.

Summary

The Supreme Court examined two Uttar Pradesh Government notifications issued under section 43‑A of the Motor Vehicles Act, 1939 that directed all eligible applicants to be granted stage‑carriage permits without any upper limit and limited the factors transport authorities could consider to only certain clauses of section 47. The Court held that the amendments introduced by Uttar Pradesh Act 15 of 1976 (which replaced sub‑section (2) of s. 43‑A) and the Central Motor Vehicles (Amendment) Act 1978 (which added reservation and preference provisions to s. 47) clearly intended to restrict such blanket grant of permits and to require consideration of a broader public‑interest test. Consequently, the notifications were ultra vires and void. The appeals were allowed, setting aside the High Court’s decision.

Issues considered

Whether the State Government may, under s. 43‑A(1), issue directions to grant stage‑carriage permits to all eligible applicants without any limit, contrary to the amended s. 43‑A(2).
Whether the State can restrict the considerations of transport authorities to only clauses (a), (b), (d) and (f) of s. 47, ignoring the rest of the statutory factors and the reservation provisions introduced by the 1978 amendment.
Whether the two notifications issued in January 1981 are ultra vires the Motor Vehicles Act as amended.
Interpretation of the term ‘public interest’ in the context of s. 43‑A.

Legislation cited

Motor Vehicles Act, 1939s. 43, s. 43-A, s. 47, s. 57, s. 64, s. 64-A, s. 68
Motor Vehicles (Amendment) Act, 1978s. 47
Uttar Pradesh Act 15 of 1976s. 43-A
Uttar Pradesh General Clauses Act, 1904

Subjects

Motor Vehicles Actstage carriage permitspublic interestdelegation of statutory powerultra viressection 43-Asection 47reservationUttar Pradeshtransport authority

Judgment

A 418

RAMESHWAR PRASAD ETC., ETC.

v.

B STATE OF UTTAR PRADESH & OTHERS

February 24! 1983

[A.P. SEN AND E.S. VENKATARAMIAH, JJ.J

c Motor Vehi~s Act, 1939 as in force in the State of Uttar Pradesh-S. 43..A
as amended by U.P. Act 15 of 1976 read withs. 47 as amended by Cent;a/ Act 47
of 1978-lnterpretation of-Stdte Government cannot issue directions under
sub-s. (1) of s. 43-A for grant of stage carriage permits to all eligible applicants
after amendment of s. 43-A by U. P. Acl 15of1976-Whi/e isJuing directions under
su!J..s. (1) of s. 43-A State Government cannot r"gnore provisions contained in sub-
ss. (1) and {IA) to (1H) of s. 47.

D Interpretation-Rule of construction of an amnided provision.

Words and Phrases-' Public interest'-What It means in the context of
Motor Vehicles Act, 1939.

A 'stage carriage' under the Motor Vehicles Act, 1939 means a motor
vehicle which carries more than six persons for hire or reward at separate fares
E paid by or for individual passengers either for the whole journey or for stages of
the journey and for plying such a vehicle it is necessary to obtain a permit
from the appropriate Transport Authority. While considering an application
for such a permit, the Transport Authority must, under els. (a) to (f) of sub-s. (1)
of s. 47, have regard to the interest of the public generally, the advantages to
the public of the service to be provided, the adequacy of other passenger trans-
port services operating between the places to be served, the operation by the
applicant of other transport services, ,etC., and also take into consideration the
representations made by local or police authorities and by persons already
providing passenger transport facilities by any means along or near the proposed
route or area. The State Government may, under sub-s. (1) of s. 43, having
regard to the advantages offered to the public by the development of motor
transport, the desirability of preventing uneconomic competition among motor
G vehicles, etc., issue appropriate directions to the Transport Authority.

The subject matter of regulation of motor vehicles being within the scope
of entry 35 of the Concurrent List, the Act in its application to the State of
Uttar Pradesh was amended in 1972 by the U .P. Legislature by the.
H introduction of s. 43-A which was a new provision. While sub-s. (1) thereof
conferred power on the State Government to issue .directions of a general charac-
ter in public interest in respect of any matter relating to road transport, sub-s.
'

RAMESHWAR PD. V, U.P. STATE 419

(2) specifically conferred the power to issue directions regarding grant of stage A
carriage permits to all eligible applicants if the State Government was of the

' ) opinion that it was in the public interest to do so. Further, under sub·s. (2) of
s. 43·A, the provisions of s. 47 stood amended to the effect that while considedng
an api)Jication for permit, it was no longer necessary for the Transport Authority
to have regard to the adequacy of other passenger transport services operating
between the places to be served or to the operation by the applicant of other
-transport services; nor was the Transport Authority required to look into B
representations made by any one other than local or police authorities. The
State Government, acting under s. 43-A, ·issued directions in March, 1972 for
grant of permits to a11 eligible applicants without any restriction as to the
number of permits to be issui:d on any route. The validity of s. 43-A and the
directions issued tbereunder were upheld by the Court in HanJ Raj Kehar &
Ors v. State of UP. & Ors. (1975) I S.C.R. 916. But, within a short time, the
State Government realised the necessity of reviewing the policy of issuing permits
c
to all eligible applicants and amended s. 43-A with retrospective effect by the
Uttar Pradesh Act 15 of 1976. While subs. (!)was retained as such, sub-s. (2)
was substituted by an entirely new sub-section. The Statement of Objects and
Reasons appended to the Amending Act stated that it had become necessary to
reconsider the policy of granting bus permits liberally with a view to checking
unproductive capital expenditure and unnecessary consu.mption of fuel, preven-
ting elimination of sman operators as a consequence of unreasonable competi-
D
tion, efc. and authorising the State Government to issue necessary directions
from time to time in regard to the number of permits that may be granted in
respect of any route or area, the preference to be given to specifically deserving
categories, etc. The State Government thereafler issued directions to the
Transport Authorities to ensure that the operation of the total number of stage
carriages on any route was economically viable.
...._ __ ~ E
Section 47 was amended by the Central Act 47 of 1978. The proviso to
sub-s. (1) of s. 47 was amended by providing that in addition to a registered
cooperative· society, an application for a stage carriage permit from a person who
bas a valid licence for driving transport vehicles shall be given preference over
applications from individual owners. Parliament also introduced new sub-ss. (lA)
to (lH) in s. 47 providing for reservation of certain percentage of stage carriage F
permits for the Scheduled Castes and Tribes and weaker sections of the commu~
nity and empowered the State Government to frame rules for implementing
sub-ss. (lA) to (lH) of s.47. These amendments came into force on January
16, 1979.

On January 19, 1981 the State Government issued a notification .directing
the Transport Authorities to issue stage carriage permits to all eligible applicants G
and specifying that there should be no upper ·limit to tbo number of stage
carriages for which permits might be granted. On January,23, 1981, by another
notification, of the ~ransport Authorities were directed to have regard only to
matters refferred tom els. (a), (b), (d) and (f) of sub-s. (I) of s. 47 arid to take
into consideration representations made by local or police authorities only. The u
appellants challenged the notifications under Article 226. , ~·
'

420 SUPREME COURT REPORTS [19831 2 s.c.R.

A The High Court dismissed tt1e petitions repelling the contc~tion that in

,
the absence of reservation of the required percentage of permits for persons
belonging to the Scheduled Castes, tbe Scheduled Tribes and weaker sections as
provided ins. 47 the grant of permits would be vitiated. Accordina: to the High
Court the question of reservation would arise only in those cases where the seats
or articles are limited for distributio11 or allotment but where there is no limit or
no fixed number. -the question of reservation would not arise. The High Court
B said that the Statement of Objects 8nd Reasons appended to the Amending Act
15 of 1976 cannot override the clear provisions of s. 43-A as amended by that
Act and held that though the two impugned notifications did not follow the
procedure prescribed by sub·s. (2) of s. 43-A, they could be sustained under
sub-s. (1) ofs.43-A. It relied on the decision in Hans Raj Kehar's case to hold
that large number of buses operating on different routes would be for the con-
venience and benefit of the travelling public.
c Allowing the appeals,

HELD : Whenever a court is called upon to interpret an amended
provision it bas to bear in mind the history of the provision, the mischief which
the legislature attempted to remedy, the remedy provided by the amendment and
the reason for providing such remedy. Section 43-A or the Act as in force in the
D State of U.P. was amended by the U.P. Act IS· of 1976. By the substitution of the
former sub-s. (2) by the new sub·s (2) in s. 43-A the legislature clearly expressed
itself against the policy of granting permits to all eligible applicants without any
c0nsideration to the needs of any particular Jocality or route or to the qualifica·
tions of applicants. After the amendment, sub-s. (1) of S. 43-A did not compre-
hend within its scope the power to issue directions for issuing permits to all
eligible applicants without any sort of restriction relevant to the scheme of the
Act, - The sub-section states that the: State Government may issue such directions
E of a general character as it may consider necessary in the public interest. 'Public
interest' under the Act does not mean the interests of the operators or of the
passengers only. It takes within its fold several factors such as, the maximum
number of permits that may be Issued on a·route or in any area having regard to
the needs and convenience of the travelling public, the non-availabiJily of sufficient
number of stage carriages in other routes or areas wbich may be in need of
running of additional services, tbc: problems of law and order, availability of
F fuel, etc. To say that larger the number of stag~ carriages in any route or area
more convenient it would be to the 1nembers of the public is an over~simplifica
tion of a problem~with myriad facetS affecting the general public. The Act itself
contains provisions relating to lic~nsing of drivers and conductors, specifications
of motor vehicil!S, co ordination of road and rail transport, prevention of deterio~
ration of road systen1, prevention of uneconomic competition among motor
G vehicles, etc. Any direction given by the State Government under s. 43-A should,
therefore, be in conformity with all matters regarding which the statute bas made
provision. In this situation.to say that any number of permits can be issued to
any eligible Operator without any upper limit is to overstep the limits of delega-
tion of statutory power. [444 A-H; 445 A-El

B In the instant case, a reading of the two notifications shows that the
State Government ignored the legi'Slative policy underlying the U.P. Act 15 of

'
RAMESHWAR PD. V. U,P. STATE 421

1976 by which the new sub·s. (2) of s. 43·A was enacted in substitution of the A
former sub·s. (2) with retrospective effect. The new sub-s. (2) was introduced
by the State legislature after it had realised the mistake committed by the State
Government in issuing the notificat.ion in the year 1972 directing the issue of bus
permits liberally in favour of all eligible applicants which bad resulted in investR
ment of unproductive capital expenditure and under-utiJisation of capital and
fuel and in unreasonable competition which eventually eliminated ~man operators
from business. [441 D-F] B

(ii) The State Government also ignored the new policy governing the
issue of permits introduced by Parliament by amending s. 47 of the Act in 1978.
The High Court erred in not noticing that by issuing the notification containing a
direction to the Transport Authorities to issue Jiaiitless number of permits, the
State Government bad attempted to circumvent sub-ss. (I) and (IA) to (IH) of G
s. 47. The observation of the High Court that preferences have to be shown and
reservations have to be made only when there is scarcity of permits and since
there were no restrictions on the number of permits to be issued· there was no .
necessity to make any such provision is shocking. Preferences and reservations
have value only when there is a limit on the number of permits to be issued
and in the context of the Act there should necessarily be a lilnit on the issue
of permits to operate motor vehicles in respect of any route or area. By the D
method adopted by it the State Government has virtually allowed the rich and
well·to-do businessman who can bear the loss for some time to introduce any
number or vehicles on a route or in any area until all the small operators who
also may take the permits to ]eave tQe field owing to the inevitable loss that
ensues by the operation of an unlimited· number of vehicles. The two notifications
in question are clearly outside the scope of the Act. [445 F-H; 446 A-El
E
(iii) The o~servations in Hans Raj Kehar's case are inapplicable to the
present cases. In that case the Court was concerned with sub-s. (2) of s. 43-A as
it stood then. At that time, the sub-section contained a clear legislative policy
which considered that there could be no public prejudice if all eligible applicants
were granted permits. Whatever the Court may have observed while considering
that provision would not apply now as there is a clear departure made by the F
legislature from that policy when it enacted the new sub·s. (2) of s. 43·A. In the
face of this amendment by which the former sub-s, (2) of s.43-A which specifically
~uthorised the State Government when it was satisfied that it was necessary to do
so in the public interest to issue directions to the Transport Authorities to grant
permits to all eligible applicaµts was deliberately taken away by the State legis-
la!ure, the High Court was wrong in holding that such power was still available
under sub-s. (!)of s. 43-A which was widely worded. [443 C·Hl G

'Hans Raj Kehar & Ors. v. State of U.P. & Ors. [1975] 2 S.C,R. 916, held
inapplicable.

CIVIL APPELLAW JURISDICTION: Civil Appeals Nos. 1269-71
of 1982.
422 . SUPREME COURT REPORTS (1983) ~ s.c.1 .

A Appeals by Special leave from the Judgment and Order dated
23rd the March, 1982 of the Allahabad High Court in Civil Mis·
cellaneous Writ Petition Nos. 2328, 2424 and 1998 of 1981.

Shanti Bhusan and R.K. Jain for the Appellants.

B Mrs. Shobha Dikshit for the Respondents.

The Judgment of the Court was delivered by

VENKATARAMIAH, J. In these appeals by special leave filed against
the common judgment dated March 23, 1982 of the Allahabad
c High Court, the validity of two Notifications issued by the Gov~rn
ment of Uttar Pradesh under section 43·A of the Motor Vehicles
Act, 1939 (Act IV of 1939) (hereinafter referred to as 'the Act') as
in force in the State of Uttar Pradesh arises for consideration. The
two impugned Notifications are reproduced below :

D I. "Notification

No. 68 T/XXX·4-15-KM/79

Dated: Lucknow: January 10, 1981.

E Whereas, the Government of Uttar Pradesh is of opinion
th&t it is in the public interest to grant stage carriage
permits (except in respect of routes or areas for which
schemes have been published under section 68-C of the
Motor Vehicles Act, 1939) to all eligible applicants:
F Now, therefore, in exercise of the powers under section
43·A of the Motor Vehicles Act, 1939, the Governor of
Uttar Pradesh is pleased to direct that the stage carriage
permits (except in respect of routes or areas for
which schemes have been -published under section 68-C of
the Motor Vehicles Act, 1939) shall be granted according
G to the provisions of the Act to all eligible applicants and
there shall be no upp"r limit to the number of stage carri-
ages for which permits may be granted.

H By Order
Karnail Singh,
Sachiv
•
RAMESHWAR PD. v. U:P' STATE (Venkataramiah, J.) 423

A
II. Notification

No. 241 T/XXX-4-15-P/79

Dated : January 23, 1981

The Governor being satisfied that it is expedient in the B
public interest so to do, is pleased to direct in exercise of
the powers under section 43.A of the Motor Vehicles
Act, 1939 (Act No. 4 of 1939) that while considering appli-
cations for stage carriage permits, the State Transport
Authority or a Regional Authority :
c
(i) shall have regard only to matters referred to in clauses
(a), (b), (d) and (f) of sub-section (1) of section
47 of the said Act and shall also take into considera·
tion representations made by the local authority or
police authority within whose jurisdiction any part of
the proposed route or area lies; and D

(ii) shall be deemed to have made sufficient compliance
of the provisions of section 57 of the said Act, if it
intimates the particulars of the application> to such
local authority and police authority for making
representations, if any, within a period of fifteen E
days from the date of despatch of the intimation with
the stipulation that if no representation is received with-
in the prescribed period of time, it shall be presumed
that they have no representation to make, and has
considered any representation made by such local F
authority and police authority,

By Order
Karnail Singh,
Sachiv."
G.
The appellants who are stage carriage operators challenged
the validity of the above Notifications in the writ petitions filed by
them under Article 226 of the Constitution before the High Court
' i1'ter alia on the ground that they were 11/tra vires the provisions
H
of the Act under which they had been issued. The High Court
dismissed the writ petitions after ne¥ativing the contentions of thq
•
424 iUPREME COURT REPORTS (1983) 2 S,C,R.

A appellants. Aggrieved by the decision of the High Court the appel-
lants have preferred thes1i appeals by special leave as stated above.

It is necessary at this stage to give a resume of the relevant
statutory provisions to understand the rival contentions of the
. parties. On finding that the Indian Motor Vehicles Act, 1914 which
B was brought into force at an early stage of development of motor
transport was inadequate to meet the new situation created by the
growth of mo.tor. transport by the year 1939, the Central Legislature
passed the Act for the purpose of regulating motor traffic in the
interests alike of the safety and convenience of the public and of
the development of a coordinated system of transport. The Act
c underwent major alterations in 1956 and 1969. Broadly the Act
provided inter a/ia for registration of motor vehicles, licensing of
drivers and conductors, grant of permits to ply public service
vehicles and public earners, operation of road transport service
by State transport undertakings in any area or on any route to the
exclusion, complete or partial of other persons, construction,
D
equipment and maintenance of motor vehicles, control of traffic,
insurance of motor vehicles against third party risks and offences,
penalties and procedure. The State Governments were entrusted
with the duty of framing rules on various matters connected with
the topics dealt with by the Act. The subject of regulation of motor
B vehicles being within the scope of Entry 35 - mechanically pro-
pelled vehicles including the principles on which taxes on such
vehicles are to be levied-in List III of the Seventh Schedule to
the Constitution, various amendments were made from time to time
by several State Legisla1tures with the assent of the President of
India either adding to or modifying the provisions of the Act.
F' Chapter IV of the Act which includes section 42 to section 68 con-
tains provisions pertaining to the control of motor vehicles. Section
42 of the Act provides that no owner of a transport vehicle shall
use or permit the use of the vehicle in any public place whether or
not such vehicle is actually carrying any passenger or goods save
in accordance with the conditions of a permit granted or counter-
G signed by a Regional or State Transport Authority or the Commis- ·
sion authorising the use of the vehicle in that place in the manner
in which the vehicle is being used. A 'transport vehicle' is defined
in section 2(33) of the Ai:t as a public service vehicle or a goods
vehicle. A 'public servic,e vehicle' is defined in section 2(25) of the
Act as any motor vehicle used or adapted to be used for the carriage
RAMESHWAR PD. v. U.P. STATE (Venkataramiah, J,) 425

of passengers for hire or reward, and includes a motor cab, contract A
) carriage and stage carriage. Seption 2(29) of the Act states that a
'stage carriage' means a motor vehicle carrying or adapted to carry
more tran six persons excluding the driver which carries passengers
for hire or reward at separate fares paid by or for individual passen-
gers, either for the whole journey or for stages of the journey.
Section 45(1) of the Act prescribes that every application for a 8
permit shall be made to the Regional Transport Authority of the
region in which it is proposed to use the vehicle or vehicles. When
the vehicle is to be used in two or more regions, the applications
for permits may be made as. provided in the provisos to section
45(1) or section 45(2) of the Act, as the case may be. The constitu·
tion of the Regional Transport Authorities and the State Transport
c
Authorities is dealt with by section 44 of the Act. A State Trans-
port Authority or a Regional Transport Authority shall consist of
a Chairman who has had judicial experience or experience as an
appellate or revisional authority under any law relating to land
revenue and in the case of a State Transport Authority, such other D
officials and non-officials, not being less than two, and, in the case
of Regional Transport Authority such other persons (whether offi-
cials or not) not being less than two, a~ the State Government may
think fit to appoint. An application for a stage carriage permit shall
have to contain the particulars mentioned in section 46 of the Act.
• Prior to its amendment in 1978, section 47 as amended by Act JOO E
of 1956 read as follows :

"47. Procedure of Regional Transport Authority in
considering application for stage carriage permits.-(!) A
Regional Transport Authority shall, in considering an
application for a stage carriage permit, have regard to the F
-' following matters, namely :

(a) the interest of tbe public geuerally;

(b) the advantages to the public of the service to be pro·
vided, including the saving of time likely to be effected
G
thereby and any convenience arising from journeys not
being broken;

(c) the adequacy of other passenger transport services
op~rating or likely to operate i~ th,e n~a,y future,
426 SUPREME COURT llBPOllTS (1983) 2 S.C.ll'.

A wh~ther by road or other means, between the places
to be served.

(d) the benefit to any particular locality or localities likely
to be afforded by the service;
B (e) the operation by the applicant of other transport
services, including those in respect of which applica-
tions from him for permits are pending;

(f) the condition of the roads included in the proposed .-+'
route or area;
c
and shall also take into consideration any representa-
tions made by persons already providing passenger
transport facilities by any means along or near the
proposed route or area, or by any association represent-
ing persons interested in the provision of road trans-
D port facilities recognised in this behalf by the State
Government, or by any local authority or police
authority within whose jurisdiction any part of the
proposed route or area lies :

Provided that other conditions being equal, an appli-
cation for a stage carriage permit from a cooperative
society registered or deemed to have been registered under
any enactment in for,~e for the time being shall, as far
as may be, be given preference over applications from
individual owners.

(2) A Regional Transport Authority shall refuse to
grant a stage carriage: permit if it appears from any time-
table furnished that the provisions of this Act relating to
the speed at which vehicles may be driven are likely to be
contravened :
G
Provided that before such refusal an opportunity shall
be given to the applicant to amend the time-table so as to
conform to the said provisions.

H (3) A Regional Transport Authority may, having
regard to the matters mentioned in sub-section (1), limit th~
itAMESHWAR PD· v. U.P ••STATE (Venkataramiah, J.) 427
A
number of stage carriages generally or of any specified
type for which stage carriage permits may be granted in
the region or on any specified area or on any specified
route within the region."

The procedure in applying for and granting permits is set B
out in section 57 of the Act. Section 48 of the Act . provides that
subject to section 47, a Regional Transport Authority may, on an
· application made to it under section 46, grant a stage carriage per-
mit in accordance with the application or with such modifications
as it deems fit or refuse to grant such a permit. If the Regional
Transport Authority decides to grant a stage carriage permit, it
c
may· attach to it all or any of the conditions mentioned in section
48(3) of the Act. The proceedings before a Regional Transport
Authority are quasi judicial in character. While considering
the application for the grant of a stage carriage permit the
Regional Transport Authority has to consider all representations D
referred to in section 57(3 ). Sub-section (5) of section 57 of the
Act provides that when any representation such as is referred to
in sub-section (3) thereof is made, the Regional Transport Authority
shall dispose of the application at a public bearing at which the appli-
cant and the persons making the representations shall have an oppor-
tunity of being heard either in person or by a duly authorised repre- I
sentative. Representations can .be made among others by any
person who is providing transport facilities on the route or in the
area, any rival applicant, police authorities and local authorities.
Any person who satisfies the qualifications mentioned in section 64
of the Act and who is aggrieved by the resolution of the Regional
Transport Authority may file an ap~eal before the State Transport
Appellate Tribunal which should consist of a wholetime judicial
officer not below the rank of a District Judge. An order ofa Regional
'
Transport Authority or of a State Transport Authority against
which no appeal can be filed is subject to revision by the State
Transport App~llate Tribunal under section 64-A of the Act. Sub-
section ( !) of section 43 of the Act which coofere power on the G
State Government to control transport reads thus :

"43. Power to State Government to control transpo~t-
H
. (I) A State Government having regard to :
428 SUPRBMB COURT REPORTS [1983) 2 S.C.R.
A
(a) the advantages offered to the public, trade and
. industry by the development of motor transport,

(b) the desirability of coordinating road and rail trans-
port,
B (c) the desirability of preventing the deterioration of
the road system, and

(d) the desirability of preventing uneconomic com-
c petition among motor vehicles, may, from time to
time, by notification in the Official Gazette, issue
directions to the State Transport Authority :

(i) regarding the fixing of fares and freights
(including the maximum and minimum in
respect thereof) for stage carriages, contract
D carriages and public carriers; ,_
(ii) regarding the prohibition or restriction, sub-
ject to such conditions as may be specified
in the directions, of the conveying of long-
distance goods traffic generally, or of specifi-
I ed classes of goods, by private or public
carriers;

(iii) regarding the grant of permits for alternative
routes or areas, to persons in whose cases
the existing permits are not renewed in pur-
suance of the provisions of sub-section (1-D)
of sectio11 68-fl, or are cancelled or the terms
thereof are modified in exercise of the
powers conferred by clause (b) or clause (c)
of sub-section (2) of section 68-F;

G (iv) regarding any other matter which may appear
to . the State Government necessary or
expedient for giving effect to any agreement
entered into with the Central Govern-
ment or any other State Government or the
H Government of any other country relating to
the regulation of motor. transport generally, ·
RAMESHWAR PD. v. u.P. STATE Wenkataramiah, J.) 429
and in particular to its coordination with A
other means of transport and the conveying
of Jong distance goods traffic :

Provided that no such notification shall be issued
unless a draft of the proposed directions is published in the B
Official Gazette specifying therein a date being not less
than one month after 'Such publication, on or after which
the draft will be taken into consideration and any objec-
tion or suggestion which may be received has, in consulta-
tion with the State Transport Authority, been considered
after giving the representatives of the interests affected an C
opportunity of being heard."

In the year 1972, however, the Act was amended by the
Legislature of the State of Uttar Pradesh introducing a new section
being section 43-A by the Motor Vehicles (U.P. Amendment) Act,
1972 with the assent of the President. The material part of section
D
43-A which was newly introduced by the said amending U.P. Act
read as under :

"43-A. (I) The State Government may issue; ~uch
directions of a general character as it may consider neces-
sary or expedient in the public interest in respect of any E
matter relating to road transport to the State Transport
Authority or to any Regional Transport Author)ty, and
such Transport Authority shall give effect to all such
directions.

(2) Without prejudice to the generality of the fore- F
going power, where ·the State Government is of opinion
- that it is in the public interest to grant stage carriage per-
mits (except in respect of routes or areas for which schemes
have been published under section 68(C) or contract carriage
permits or public carrier permits to all eligible applicants, it
may by notification in the Gazette issue a direction accor- G
dingly, and thereupon all transport authorities as well as
the State Transport Appellate Tribunal .constituted under
section 64 shall proceed to consider and decide all applica-
, tions, appeals and revisions in that behalf (including any
pending applications, appeals and revisions) as if - H
SUPREME COURT REPORTS (1983] 2 s.c.R.

• (a) in section 47 -
(i) • for sub-section (I) the following sub-sections were
substituted :

(ii) A Regional Transport Authority ·shall in consi·
B dering an application for a stage carriage permit,
have regard to the following matters, namely -

(a) the interest of the public generally;

(b) the advantage to the public of the service
to be provided including the saving of time
likely to be effected thereby and any con-
venience arising from journeys .not being
broken;

(c) the benefit to any particular locality or
localities likely to be afforded by the service;

and shall also take into consideration any represent&·
lion made by any local authority or police authority
within whose jurisdiction any part of the proposed
route or area lies ; and

(ii) sub-section (3) were omittted"

"

F The above U.P. Act was preceded by the U.P. Ordinance
which contained more or less the same provisions. The Ordinance
was substituted by the said U.P. Act. The object of enacting section
43-A of the Act was set out in the Statement of Objects aild
Reasons attached to the relevant U.P. Bill which read as follows :

G "Objects and Reasons-Operators engage in the race
for securing permits for stage carriage on non-nation-
alised routes. Due to limitation OD the number of permits
this business is controlled by a few persons. Complaints in
this regard are made every other day. Therefore, with a
H view to making it easier to secure permits in respect of non,
nationalised routes and to introducing simplicity in pro-
cedure and to providing greater employment and securing
l!.AMBSHWAR PD. v. U.P. STATE (Venkataramfah, J.) 431

equitable distribution thereof it was considered necessary
to amend sections 47, 50, 55 and 64 of the Motor Vehicles
Act, 1939, suitably. Accordingly, in the public interest
and with the aforesaid object in view, the Motor Vehicles
(Uttar Pradesh Amendment) Ordinance, 1972, was. pro-
mulgated. This Bill is introduced to replace the said
Ordinance.'' B

Pursuant to the. power conferred on it by section 43-A of
the Act, the Government of the State of Uttar Pradesh issued the
following directions on March 30, 1972 by a Notification, the
relevant part of whi.ch reads as under :

"Whereas the State Government is of opinion that it
is in the public interest to grant stage carriage permits
(except in respect of routes or areas for which schemes
have been published under section 68-C of the Motor
Vehicles Act, 1939) contract carriage permits and public
D
carrier permits to all eligible applicants.

Now, therefore, in exercise of the power conferred
. by section 43-A of the Motor Vehicles Act, 1939 the
Governor is pleased to direct that stage carriage permits
(except in respect of routes or areas aforesaid) contract
carriage permits and public carrier permits shall be granted
according to the provisions of the said Act to aJl eligible
applicants."

The validity of section 43-A of the Act introduced · by
the U. P. Legislature and of the Notification dated March
30, 1972 issued by the Government of Uttar Pradesh pursuant
to that section was questioned in some writ petitions filed
by some motor operators in the High Court of Allahabad. Those
petitions were dismissed. On appeal this Court upheld the validity
of section 43-A of the Act as well as the Notification by its judg-
ment in Hans Raj Kehar & Ors. v. The State of U.P. & Ors.(') G
which was delivered on December 4, 1974. Within about three and
half years from the date of the above said notification the Govern-
ment of Uttar Pradesh realised that it was necessary to review the
., whole question of issuing permits to all eligible applicants. Accor·
H
(I) [197SJ 2 S.C.R. 916.
431 SUPREME COURT REPORTS {!983) 2 S.C.l\

A dingly the State Government issued a Notification on September
24, I 975 which ran as follows :

"Whereas, in exercise of the power conferred by Section
43-A of the Motor Vehicles Act, 1939 the State Govern·
ment was by notification No. 1188-T/XXX-4, dated March
B 30, 1972, pleased to direct that stage carriage permits (except
in respect of routes or areas aforesaid) contract carriage
permits and public carrieir permits shall be granted accord·
ing to the provisions of the said Act to all eligible
applicants :
c And whereas, on further consideration the State
Government is of opinion that the policy of granting such
permits to all eligible applicants requires review with a
view to:

D (a) Preventing unproductive expenditure and under utiliza·
tion of capital and fuel.

(b) Preventing elimination of small operators due to
unfair competition resulting from the issue of
more permits than required for a route.
E
(c) Facilitating long term planning of passenger road A -
transport services.

And whereas, such review is likely to take some time
· and in the mean time it is necessary to stay the , disposal of
F all pending applications for permits or entertainment of
fresh applications.

Now, therefore, in exercise of the powers conferred by
the said Section 43-A of the Motor Vehicles Act, 1939, read
with Section 21 of the U.P. General Clauses Act, 1904, the
G Governor is pleased to direct that :

I. The Notification No. 1198 T/XXX-4, dated 30th ·
March, 1972 be and ;_is hereby rescinded with immediate
effect.
JI
llAMBSHWAR PD. v. U.P. STATB (Venkataramiah, J,) 433

2. The consideration of applications for stage carri- A
age permits pending with any Transport Authority shall
stand postponed until further directions are issued in this
behalf by the State Government.

3. No fresh applications for such permits shall be B
entertained until further directions are issued in this behalf
by the State Government."

The above Notification shows that as a consequence of the
policy of granting permits to all eligible applicants, necessity had
arisen to take measures (i) to prevent unproductive expenditure and c
under utilisation of capital and fuel, (ii) to prevent elimination of
small operators due to unfair competition res!llting from the issue
· of more permits than required for a route; and (iii) to embark upon
long term planning of passenger road transport services.

It is stated that by U.P. Ordinance 35 of 1975, section 43-A
D
was amended. This Ordinance was replaced by the Uttar Pradesh
Act 15 of 1976. By this Act, sub-section (2) of section 43-A which
had been added in 1972 was substituted with retrospective effect
from the date of its original enactment. Section 43-A after it was

-
amended by the U.P. Act 15 of 1976 read as under:. lil
"43·A. Power of State Government to issue directions
to Transport Authorities-()) The State Government may
issue such directions of a general character as it may consi-
der "necessary or expedient in the public interest in respect
of any matter relating to road transport to the State Trans-
port Authority or to any Regional Transport Authority,
and such Transport Authority shall giv~ effect to all such
directions.

(2) Without prejudice to the generality of the provi-
sions of sub-section (1) such directions may be given in res· G
pect of any of the following matters, namely :

(a) the n~mber of stage carriage or contract carriage
permits that may be granted in \respect of any
route or area. H
434 SUPilEMB COURT REl'ORTS [1983} 2 s.c.a.
A '
(b) the preference or the order of preference to be
given to or the quota to be fixed for, specially
deserving categories, such as Ex. Army personnel,
educated unempl.oyed persons, such persons hol-
ding driving licences as are members of cooperative
societies formed for passenger transport business,
8
persons belonging to the Scheduled castes and
Scheduled Tribes.

(c) the procedure for grant of permits, and for selec-
tion from among the applicants, including selection
c by drawing of lots from among persons belonging
to the same category.

(3) Any direction under sub-section (l) may be issued
with retrospective effect.
D
(4) Where any direction is issued under sub-section (l)
to any Transport Authority, then any appeal or revision
pending before the State Transport Appellate Tribunal shall
also be decided in su·ch manner as to give effect to such
directions.
E
(5) Where any direction is issued under sub-section (I)
with retrospective effect then .A -

(a) any Transport Authority or the State Transport
Appellate Tribunal may review any order passed
F
earlier by it with a view to making it conform to
such direction and may for that purpose cancel
any permit already issued.

(b) any Transport Authority may apply to the High
G Court earlier with a view to enabling such autho-
rity .to comply with such direction.

'(6) The provisions· of this section shall have effect not-
withstanding anything contained in sections 47, 50 and 57."

ff The policy behind the above amendment was stated in the
Statement of Objects and Reasons placed befor.e the State Legis-
lature as follows :
RAMESHWAR PD. v. U.P. STATE (Venkataramiah, J.) 435

"(5) In 1972 the State Government had accepted a A
policy of granting bus permits liberally. Reconsideration of
the said policy however, became necessary with a view to
checking unproductive capital expenditure and unnecessary
consumption of fuel and preventing the elimination of
small operators as a consequence of unreasonable competi-
B
tion and to removing difficulties in the implementation of
long. term plans pertaining to passenger road transport ser·
vices. It was accordingly considered necessary to amend •
the Motor Vehicles 'Act, 1939, to authorise the State
Government to issue directions from time to time in regard
to the number of permits that ma{ be granted in respect of
any route or area, the preference to be given to specially
c
deserving categories and the procedure for grant of per·
mits."

Pursuant to the said amended section 43-A of the Act, the
Government of Uttar Pradesh issued a Notification containing direc· D
tions on March 12, 1976 in the following terms :

"Whereas, in exercise of the powers conferred by sec-
tion 43-A of the M.V. Act, 1939, the State Government

- had by a notification No, 4251-T/XXX-4-9P/72 dated
September 24.1975, as amended by notification No. 4530-T/
XXX-4-75 dated ·October 6,1975 postponed the considera-
tion of applications for permits by any transport authority
in respect of non-notified routes until further directions in
· this behalf of the State Government.
F
Now, therefore, in exercise of the powers conferred by
the sai.d section 43-A (2) of the M.V. Act, 1939 read with •
section 21 of the General Clauses Act, 1904, the Governor
is pleased to direct :
.. (1) That the S.T.A. and R.T. As. while fixing the G
number of Additional Stage Carriage permits to be issued
at a given time on non-notified routes, shall in addition to
the consideration of the matter mentioned in sub-section (I)
of section 47 of the M.V. Act, ensure that the operation of
!'1• total number of stage carriages on any route, takin9
436 SUPREME COURT REPORTS (1983] 2 S,C.R.

A into consideration the existing as well as the additional per-
mits proposed to be iissued, would be economically viable
on the existing fare-structure as per the norms as laid down
by the State Government from time to time... . ........... "

The above notification also contained directions regarding the
B principle to be foJ!owed irn determining the number of permits that
could be issued and reservation of permits for operators displaced
• by nationalisation, educated unemployed, mem"ers belonging to the
Scheduled Castes, the Scheduled Tribes and other backward classes,
unemployed army drivers and cooperative societies.

c These directions were superseded by the issue of a fresh noti-
fication under section 43-A by .the State Government on October 12,
1977 which was superseded by a Notification dated October
15, 1978.

Within a fortnight from the date of the last Notification refer-
D red to above Parliament amended the Act by enacting 1he Motor
Vehicles (Amendment) Act, 1978 (Act 47 of 1978) which inter a/ia
amended the proviso to sub section (I) of section 47 of the Act and
inserted sub·sections (IA) to (IH) in that section. After this amend-
ment, the proviso to sub·section (!J of section 47 of the Act reads
thus:
E
"47. (!) ...................... .

Provided that other conditions being equal, an appli-
cation for a stage carriage permit from a co-operative
society registered or deemed to have been registered under
, any enactment in force for the time being and an applica-
tion for a stage carriage permit from a person who has a
valid licence for driving transport vehicles shall, as far as
may be, be given preference over applications from indivi-
dual owners."
G
The new sub-sections {IA) to (IH) of section 47 of the Act
read:

"47. (I) .................. "
RAMESBWAR PD. v. U.P. STATE (Venkataramlah, J.) 437
A
(I A) The Government of a State shall reserve in that

. State certain percentage of stage carriage permits for the
Scheduled Castes and the Scheduled Tribes .

Explanation-In this section and in sections 55 and 63,
'Scheduled Castes,' and 'Scheduled Tribes' have the mean- B
ings respectively assigned to them in Article 366 of the
Constitution.

(IB) The reservation of permits under sub·section (IA)
shall be in th.e same ratio as in the case of appointments
made by direct recruitment to public services in the State. c
(IC) The Government of a State may, having regard to
the extent to which persons belonging to economically
weaker sections of the community have been granted stage
carriage permits in that State:-
D
(a) reserve in that State such percentage of stage car-
riage permits, as may be prescribed, for persons
belonging tQ. economically weaker sections of the
community; or

(b) notwithstanding anything contained in the proviso B
to sub-section (I), give preference, in such manner
as may be prescribed, to applications for stage
carriage permits from such person.

Explanation I-In this section and in sections 55, 63
and 68, a person shall be deemed to belong to economically
weaker section of the community, if and only if, on th'e
prescribed date:-

(a) the annual income of such person together with
the annual income, if any, of the members of bis
family; or G.
"
(b) the extent of land (whether in one class or in diffe-
• 1
rent classes), held by such· person together with
that, if any, held by the members of his · fa~ily;
or H
438 SUPRBI03 COURT REPORTS [1983] 2 s.c.R.

(c) the annual income and the extent of land afore-
said, does, or do not exceed such limit as may be
prescribed.

Explanation 11.-For the purposes ·of Explanation I,
"family'', in relation to an individual, means the wife or
B husband, as the case may be, of such- individual and the
minor children of such individual.

, (ID) The number of permits reserved under sub-section
(I BJ and clause (a) of sub-section (IC), shall not exceed
c fifty per cent of the total number of stage carriage permits
granted during a calendar year.

(IE) In giving effect to the provisions of sub-section
(IB) and· clause (a) of sub-section (IC) the Regional
Transport Authority or the State Transport Authority may,
D if it considers necessary or expedient so to do, group the
various routes within its jurisdiction.

(IF) Where any stage carriage permit is to be granted
from the quota reserved under sub-section (IB) or clause(a)
of sub-section (IC) to any cooperative society registered or
deemed to have been registered under any enactment in
force for the time being or any firm to which the provisions
of the Indian Partnership Act, 1932 (9 of 1932), apply, no
permit shall be granted to such society .or firm unless the
members of the co-operative society or the partners of the
firm belong to the Scheduled Castes, the Scheduled Tribes
F
or economically weaker sections of the community :

Provided that where the members of such co-operative
society or the partners of: such firm are partly from

G
the ·scheduled Castes, partly from the Scheduled Tribes
and partly from the economically weaker sections of the
community, or from any two of these categories, any
..
permit under this sub-section shall be granted to such
society or firm only- from the quota reserved for the cate·
gory to which the largest number of members of the co-
' )
8 operative society, or as the case may be, partners of the
firm belong :
..,_

. . PD. v. U.P. STATE (Venkataramiah,
RAMBSHWAR ~
J.) 439

Provided further that where no reservation _has been
made in the State for economically' weaker sections of the-
commu~ity Under clause (a) of sub-section (i C), no permit
under this sub-section. shall be granted to a co-operative
society or firm unless the members of such society or
_ partners of _such firm belong to ihe' Scheduled Castes B
or the Scheduled Tribes or partly to the Scheduled Castes
and partly -to. the Scheduled Tribes and the permit to such
socieiy ~r firm· shall be granted only from the quota
reserved for the Scheduled Castes or the Scheduled Tribes
according as to whether the larger nu_mb~r of the members
of tije co-operative society, or partners of the firm, belong c
·to the Scheduled Castes or the Scheduled Tribes,

(I.(}) The circumstances under Which, t' e manner in
which, and the extent to- which, reservation under sub·
section (IA) and clause (a) of sub-section (IC) may be
carried forward shall be such as niay be prescribed. D

_,(!HY Notwithstanding anything contained in this _
- section, an application for siage Qarriage jler::iit from a
siat; transpurt undertaki~g ·ror operating in any inter-State
route shall be gi;veii pre~erence over all other applications :
E
Provided that the authority shall not grant a permit _
under this sub-section unless it is satisfied ~hat the State :
transport undertaking would be able to operat~ in the
inter-State route witho11t detriment to its respol)sibility for
providing efficient and adequate rqad··_transport service in
any notified area or notified route as is referred to in sub' -- :
section (3) of section 68_D where lhe undertaking
~-, ' .
operates ·.
the service. _ '

Explanation.-for the purposes -of this sub-sectiop, '
'inter-State route' means any route lying, -conliiluously in G ,,
.t_wo or more States,",_ ,.
as
By the amendment of section 47- of the Act stated abovr, '
Parliament directed, that the Regional-·Transport Authority while
considering applica lions for stage carriage permits should, provided
_that other conditions b~in~ equal, give rir~fereqce to an application
.,
440 SU~RBMB COURT REPORTS . (1983) 2 S,C.R.
A from a person who has a valid licence for driving. transport vehicles .
ov!r applica1ions from ind.ividual owners. Parliament also provided
for reservation of certain percentage of permits for stage carriages in
favour of perso.ns belonging "to the Scheduled Ca8'1es and the
Scheduled Tribes in the same ratio as in the case of appointments
ma<)e by direct recruitment by a State Government to public servi~es
B in that State. Since it was considered necessary to promote the
well being of economically weaker sections of the community, the
· Stat.e Government was empowered under certain.circumstances either
to reserve certain' percentage of permits for stage-carriages for.
persons belonging to economically weaker sections of the community
c -or to give preference to them in the 'prescribed manner. It was, •
however, provided that the nurnber of permits reserved under section.
'47(1B) and (IC)(a) of the Act should not exceed fifty per cent of the
total number of stage carriage permits granted in a cralendar year.
It was also provided that if a State.Transport' Undertaking applied
for a stage carriage permit operating in 3ny inter-State route, such
D application should be given preference over all other applications .
' provided the authority was satisfied that the Undertaking would be
able to ·operate in the inter.State route without detriment to its
res)lonsibility for 'providing efficient ·and adequate road transport
service in any notified area or notified route as is· referred' tO in sub-
section (3) of section 68-D of the Act ·where the Undertaking
operated its service. By t.he very same amending Act of 1978
·- Parliament also amended section ,68 of (he Act by inserting clauses
(ci) , (cii), (ciii) and (civ) enabling . the State Governments to frame
rules for implementing sub-sections (IA) to (IH) of section 47 of the
Act. The above said ·amendments. made to sections 47 and 68 came
--4- .·
into force on January 16, 1979. It is conceded by the learned Attar·
ney General.who. appeared for the. State Gove(l)ment that these
amendments which were made . by Parliament would have an over:
riding effect on section 43-A of the Act introduced earlier by the
State Legislature a'.nd that section 43-A should be read subject to
tho.se later amendments made by· Parliament. Curiously the State
Government-issued on January. 10, 1981 and January 23, 1981 the
G impugned notificaiions which are set out at the commencement of
.,
this judgment. By the first notification, the State Government
directed the Regional. Transport Authorities of the State of Uttar
Pradesh to .issue stage carriage' permits (except in respect of routes or
areas for which schemes had been published under section 68-C of ·
H
the Act) to all eligible applicants and that there should be no upper
~limit to the number of sta{le carria$es for; which permits might be
RAMESHWAR PD. v. u.p, STATE (Venkataramiah, J.) 4 41

A
provided. By the second impugned notification dated January 23,
1981, the State Government directed the State Transport Authority
and the Regional Transport Authorities to have re gard only to
matters referred to in clauses (a), (b), (d) and {f) of sub-section ll)
of section 47 of the Act and should also take into consideration re
presentation made by the local authority or police authority within B
whose jurisdiction any part of the proposed route or area lay. It also
directed that section 57 should be deemed to have been complied
with if the Transport Authority concerned intimated the particulars
of the applications to such local authority and police authority for
making representations, if any, within a period of fifteen days from
the date of despatch of the intimation with the stipulation that if no c
representation was received within the prescribe_ d period of time, it
\_Vould be presumed that they had no representation to make and
considered any representation made by such local authority and
police authority.

A reading of these two notifications shows that the State D
Government ignored, first, the legislative policy underlying the Uttar
Pradesh Act 15 of 1976 by which the new sub-section(�) of section
43-A was en::cted in substitution of the former sub section (2) with
retrospective effect. As stated earlier, the State Legislature introduced
the new sub-section (2) of section 43-A after it realised the mistake
committed by the State Government in issuing the notification in the .
E
year l 972 directing :he issue of bus permits liberally in favour of all
eligible applicants which had resulted in in vestment of unproductive
capital expenditure and under utilisation of capital and fuel and in
unreasonable competition which eventually eliminated small
operators from ,business. The State Government also ignored the new
F
policy governing the issue of permits introduced by Parliament by
amending s�ction 47 of the Act. It was argued on behalf of the
State Government before the High Court that the State Government
bad not contravened either section 43-A or the provisions of section
47 as amended in the year 1978. The High Court dismissed the
writ petitions observing that the Statement of Objects and Reasons
G
attached to the Bill which was ultimately enacted as the U.P. Act
15 of 1976 conld not over-ride the clear provisions of section 43-A
as amended by that Act. The High Court upheld the notification
dated J�nuary JO, 1981 and further observed that since the schemes
of grant of free permits bad been upheld by it 'the State Govern H
m�I h?.d the power to prescribe t11e procedure to be follow�d in
442 SUPREME COURT REPORTS [ 1983] 2 S.C.R.

granting the same which has been provided for by the Notification
dated January 23, 1981'. ReP,elling the contention of the writ peti
tioners that in the absence of reservation of the required percentage of
permits for persons belonging to the Scheduled Castes, the Scheduled
Tribes and weaker sections as provided in section . 47 as amended
by Parliament in 1978, the grant of permits would be vitiated, the
High Court observed as follows :

"The questiqn of reservation, however, arises only in
those cases where the seats or articles are li mited for dis
tribution or allotment but where there is no limit or no
c fixed number, the question of reservation will not arise.
'
rn that event, every body would be served according to his
need and aspiration. Hence, if under section 43-A
a direction has been made 'for grant of stage carriage permit
to all eligible applicants without putting any fixed number
for the vehicles to ply, the interest of the Scheduled Castes
D and Scheduled Tribes would be sufficiently safeguarded. A
member of the Scheduled Caste or Scheduled Tribe as well
· as economically weaker section of the community would as
much be entitled to get a permit to run his vehicle as a
member of any other community. It is where the seats are
limited that the legislature thought of making a provision
E to reserve the grant of permits in their favour to the extent
of 25 per cent. The principle behind reservation in the
grant of stage carriage permits employed by the Parliament
appears to be the same as in reserving appolntment in the
Government service. If today government services are
availa
. ble in abundance, the question of reservation would
F not arise. It is only on account of the posts being limited
that the question of reservation has arisen. So we are not
able to agree with the submission of the petitioner's learned
counsel that there is a conflict between section 43-A, as
inserted by the U.P. Legislature and the amendments
G made in section 47 by Parliament in the Motor Vehicles
Act."

The High Court further proceeded to observe that though the
H to1A lm11ugMd notit\catious did nQt follow the procedure prescribeq
.
. RAMESHWAR PD. v. ti.P. STATE (Venkataramiah, l) 443

by sub-section (2) of section 43-A as it•is now in force in the State of
A
Uttar Pradesh, they could lie sustained under sub-sec. (1) of section
43·A which authorised the State Government to issue such pfrecti_ons .
of a general character as it might consider necessary or expedient
in the public interest in respect of any matter relating to road.trans-.
port to the State Transport Authority or to the Regional Transport
Authority and which required such authority to give-elfect to any
B
such directions. The High Co.urt al~o relied upon t4e decision of
this Court in Hans Raj Kehar's case (supra) to hold that larger
number of buses operating · on different routes would be for the
convenience arid benefit of the travelling public.
c
. ,
We may here state that any observations made in Hans Raj
Kehar',s case (supra) would be inapplicable so far as these cases
'pr~s.en!J,J!l before us are concerned. In that case the Court was
boncerned with sub-section' (2).of section 43·A of the Act as it stood
then which was a.provision enacted by 'the Legislature. That sub·
·section provided that without prejudice 'to ihe generality. of the \
power c-Ontained in section 43·A(I). of the Act where the. State
Government was of opinidn that it was in public interest to grant
stage carriage permits (except) in re~pect of routes or areas for which
· schemes have been published under sectiOn ~8 (C) or.~contract carriage
permits or public carrier permits• to all eligible applicants it may E
issue appropriate directions as· stated therein. That S'ub·section .
. contained a clear legislative policy which considered that theiii'.
could. be no public prejµdice if iii! eligible applicants lferC.grant~d
permits. Without saying anything more on the point, itr .may be
stated that whitever this Court may have observed while consider·
iDg tliat provision WOUid Dot aJYply DOW as ther~ is a clear depar·
., ture made by the Legislature from that policy when it,nacted th~.
· ·' new sub<sectjon (2) of section 43·A. _ In the face of this 'l\tnendment
by which the former sub-section (2) of section 43·A which ·specifi·
cally authorised he State Government when it was ~tisfied
that it was necessary to do so in· lhe- public. interest to issue
G
directions to the 'Transport i\llthorities to grant permits 1 to
.. all'·. eligible applicants was deliberately taken 11way by the. State
Legislature, the High Court. was wrong in holding that such
power wa~ stin 11vailable under , s11b·section (J) of section 43·A.
" of the Act which was wiqely .worded. The High Coutt shut H
its eyes'to the realities of the situation when it observed that in
444 SUPREME COURT REPORTS [1983) 2 S.C.R.
A
this case the contents of the Statement of Objects and Reasons 'were
. irrelevant as the provisions of section 43-A (I) were very clear. Even
. without the aii! of the Statement of Objects and Reasons it ])as to
. be held .that. by the substitution of the former sub-section (2)
.by the new sub-section (2) in section 43-A the Legislature clearly
B ' expressed itself against the policy of granting permits to all eligible
ariplicants without any consideq1tion to the needs of any particular
loc.ality or route or to the qualificatio~s of applicants. It is a well
settled rule of construction of statutes that whenever a court is
calle'd upon to interpret an amended provision it has to bear in
mind the history of the provision, the mischief which the Legis-
c lature attempted to remedy, the remedy provided by the amendment
and the reason for,providing such remedy. Therefore, after the
amendment at any rate it has to be held that sub-section (!) of
section 43~A of the Act did ·not comprehend within its scope the
power to issue directions for issuing permits to all eligible applicants
without any sort of restriction rel~vant to the scheme otthe Act.
What does seotion 43-A(lj after all say ? It says that_ the State ·
Government may issue such directions of a general character as it
may consicfer necessary in the public interest. What is the mean-
ing of the term 'public interest'? In the.context of the Act, it takes
within its _fold several factors snch as, the maximum nnmber of
a
. permits that may be issued on rollte or in any area having regard .
E to the needs and convenience ~ the travelling public, the non-
availability of sufficient number of stage carriage services in other
: tbutes or areas which may be fa need of running of additional servi-
ces, the problems of law and order, availability of fuel, problems
arising out of 11tmospheric pollution caused by a' large number of
motor vehicles operating in anyroute or area, the condition of roads
and· bridges on the routes, uneconomic running of stage carriage
services leading to elimination of small operators and employment
of more c~ital than necessary in any sector leading to starvation
- of capital investment in other sect.ors etc. Public interest under
the Act: does not mean the interest of the operators or of the passen·
gers only. We have to bear in mind that like every ~ther economic
G activity the running: of stage carriage service is an activity which in·
volve~ use of scarce or limited productive resources. Motor Transport
involves a huge capital investment on motor vehicles, training of
competent drivers a!ld mechanics establishment of workshops, cons-
truction of safe roads and bridges: deployment of' sufficient number of
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kAMESHWAR Pb.~. t11P. STATE (Venkaiaramiah, J.). 44S

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policemen to prc&Fve Jaw and order and several other matters. To
say that larger. the number of stage carriages· in any route or.area
A '
more convenient it would be to .the members of the public is an over \
simplification of a problem with myriad facts affecting the general
. pµblic. lf we run through the various provisions Of the Act it becomes
cle!ir how much attpntion is given by it to various matters affecting
public intere'st. There!are provisions relating to licensing of drivers B
on the basis of thei~ competenceflicensing of condnctors; specifica· .
lions to which ,the motor vehicles should conform,, coordination of
't
road and rail ·transport, prevention of deterioration ·ofl 'the ·road .
system.-prevc!n~op of uneconomic competition among motor vehicles,
: fixation of re'asonabl~. fare, compliance by motor vehicles with the
prescribed time. table; construction of bus st:fods with. neces,ary
c :';. ' }-(
';~

amenities, maintenance of standards of comfort and cleanliness in
.the vehicles, development of inter-State tourist traffic and several
·other matters with the object of making available adequate and
efficient transport facilities U> all parts of the country. Any direction
·given by the State Gover11ment under ·section 43·A of the.Act
D
should, therefore, be in conformity with all matters regarding which .
the statute has mad~ provision. . In this situation '.to say that any
number of permits can be issued to any efigible operator without
any upper limit _is to overstep the limits of delegation c:>f statutory
·power and to. make a ·mockery of an ·important eco,nomic ac1ivity
like the motor transport. E
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It is surprising that the High Court has reached the conclusion
that the preferences and reservations to be observed .while granting
permits as stated in the proviso to sub-si:ction (I) to section 47 and in
~uh-sections (IA) to (lH) of section 47 have not been contravened·
as there is no. restriction on the number of, permits to be issued. F
The observation of the High Court that preferences. )lave· to be
- 1 shown and reservations have to bimade .only when there js scarcity
of permits and since there are no restrictions on the number of
permits to be issued there is no necessity to make any such provi·
sion really .shocks us .. The High Court erred in not noticing that it G
was dealing with a vital economic activity which could be carried
on at a huge cost jloth to the' operator and to the Government
and that by issuing the notification containing a direction ·io the
Transport Authorities. to issue lii;nitless number of permits, the
H
446 ~\J~REME cdultt RSPoRts [1~83) i S.C.R.
-~-~ ...
State Government had attempted to circumvent sub-sections (I}
and.(IA) to (lH) of section 47 of the Act. Preferences and
reservations have value only when there ls a limit on '!he
number of permits to be· issued and in the context of the Act
tlicre should necessarily be a limit on the issue of permits to
operate motor vehicles in respect of any -·route or area. By the
B method adopted by it the State Government h~s virtually allowed
the .rich. and well-to~do businessman who can bear the ·loss for
some time to introduce
' .
any number
.
of vehicle~ on a .route or in any
are11 until all the small operators who also may take the permits
to leave the field owing to the i11evitable Joss that; ensues by the
operaiion of an unlimited number of vehicles. The learned Attorney
deneral while conceding' that ·the. amendment made in 1978 to
section 47 of the Act-should prevail contended that they bad not
been violated by the impugned notifications. We do not agree
with the above submission. We are clearly of the view that the State .
Government has transgressed the provisions contained in sub-
D section (f} and sub-sections (IA) to (IH) of sectio11 47. It has
failed to comply with the duty imposed on it by those provi·
sions.

We a.re ofthe view that the two notifications are clearly outside
the scope of the Act. The first notification which directs that all. eli-
I gible' applicants shall be granted permits and that there shall be no
upper limii to the ·number of permits to be issued for stage carriages
and the secon.d notification which says that the Transport Authorities
shall have regard only to matters referred to in clauses (a), Sb),
..J '.
. (d) and (f) of sub-section (I) of section 47 of the Act and thereby
precludes the Transport Authorities to_ take into consideration
matters contained in the Noviso to section 47(1) and in sub-section
{IA) to {IH) of section 47 of the Act are ultra vire3 the Act and they
are liable_ to be struck _down. '

G ,
We, therefore, allow these appeals, sef aside the judgment of
the High Court in each of these cases and declare that the Notifica-
tion No. 68 T/XXX-4-15 KM/79 dated January I0,1981 and the
Notification No. 241 T/XXX-4-15-P/79 dated January 23,1981 issued
H by the Government of the State· of Uttar Pradesh under section

.· ,
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RAllESHWAR PD. v. U.P. STATE (Venkatai:amiah, J.) 447
,.- .1,

43'A ()f the.Act are ultra Vires and, therefore,. void and ineffec- A
tive.

'" '1n the circum:stances of the case, there will be 'no· order as to
cos'fs:

H;L,C. Appeals allowed. B

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