Holding

Rule 174(2)(c) of the Kerala Motor Vehicle Rules, 1989 is intra‑vires the Motor Vehicles Act, 1988 and does not contravene Section 83.

Summary

The Regional Transport Authority sought to replace a stage‑carriage vehicle under a permit, but the applicant's request to use an older vehicle was rejected under Rule 174(2)(c) of the Kerala Motor Vehicle Rules, 1989. The High Court held the rule ultra‑vires the Motor Vehicles Act, 1988, a view the Supreme Court rejected. The Court held that Section 83 is an enabling provision allowing replacement of a vehicle of the same nature, and the State‑made rule merely ensures the replacement does not dilute the conditions of the existing permit. The rule does not encroach on the Central Government’s exclusive power to fix vehicle age or fitness under Sections 56 and 59. Consequently, Rule 174(2)(c) is intra‑vires, the High Court judgment is set aside, and the appeals are allowed.

Issues considered

Whether Rule 174(2)(c) of the Kerala Motor Vehicle Rules, 1989 is ultra‑vires the Motor Vehicles Act, 1988 as the power to prescribe vehicle age limits lies exclusively with the Central Government.
Whether Rule 174(2)(c) is contrary to or goes beyond Section 83 of the Motor Vehicles Act, 1988.
What is the scope of the discretion vested in the Transport Authority under Rule 174(2)(c).
Whether the respondents could challenge the legality of Rule 174(2)(c) without specifically praying for it in the writ petition.
Whether the prior judicial acceptance of the High Court’s view constitutes a ground to reject the present appeals.

Legislation cited

Central Motor Vehicles Rules, 1989
Kerala Motor Vehicle Rules, 1989s. Rule 143, s. Rule 144, s. Rule 159, s. Rule 174(2)(c), s. Rule 180
Motor Vehicles Act, 1988s. 56, s. 59, s. 64, s. 65, s. 66, s. 67, s. 68, s. 70, s. 71, s. 72, s. 81, s. 82, s. 83, s. 88, s. 90, s. 94

Subjects

Motor Vehicles ActRule‑making powerSubordinate legislationUltra viresSection 83Vehicle replacementTransport permitState vs Central competenceStatutory interpretationDiscretion of authority

Judgment

[2022] 9 S.C.R. 785 785

REGIONAL TRANSPORT AUTHORITY & ANR. A
v.
SHAJU ETC.
(Civil Appeal Nos. 1453 -1454 of 2022)
FEBRUARY 17, 2022 B
[K. M. JOSEPH AND
PAMIDIGHANTAM SRI NARASIMHA, JJ.]
Motor Vehicles Act, 1988 – s.83 – Kerala Motor Vehicle Rules,
1989 – r.174(2)(c) – Whether r.174(2)(c) is ultravires the provisions
C
of the Act as the power with respect to prescription of age limit of a
motor vehicle is in the exclusive domain of the Central Government
– Held: No – r.174 (2) (c) made by the State Government to enable
replacement of the vehicle under a Transport permit, does not
impinge upon the powers of the Central Government with respect to
fixation of the age of the vehicle, or fitness of the vehicle conferred D
upon it u/ss. 56 and 59 in Chapter IV – The scrutiny under r.174 is
only to enable the Authority to ensure that the subsisting permit is
not interrupted and at the same time public interest is not
compromised by deviating from the permit – The Rule will have no
bearing on the power of the Central Government and as such it
E
would not be ultra vires the provisions of the Act – Thus, r.174 (2)
(c) is intra vires the provisions of the Act and also s.83 of the Motor
Vehicles Act – It is valid and salutary.
Motor Vehicles Act, 1988 – Kerala Motor Vehicle Rules, 1989
– Whether r.174(2)(c) of the 1989 Rules, travels beyond and contrary
F
to s.83 of the Motor Vehicles Act, 1988 – Held: No – The rule is
neither beyond nor contrary to s.83.
Kerala Motor Vehicle Rules, 1989 – r.174(2)(c) – Discretion
exercised by Authority – Scope of – Discussed.
Motor Vehicles Act, 1988 – ss.64, 65 – Distinction between G
rule making power of Central government and State government –
Discussed.
Motor Vehicles Act, 1988 – s.83 – Kerala Motor Vehicle Rules,
1989 – r.174(2)(c) – Subordinate Legislation – Principles of
construction – Held: Reasoning adopted by the Division Bench in H
785
786 SUPREME COURT REPORTS [2022] 9 S.C.R.

A the impugned order that r.174 (2) (c) has overridden the Act is not
correct because a subordinate legislation must be interpreted to
effectuate the statutory purpose and objective – The Rule should
enable the transport Authorities considering applications for
replacement to insist upon the permit holder to abide by the same
rigour and regulation that he was put to when the permit was granted
B
– High Court did not appreciate the context in which r.174 (2) (c)
r/w s.83 is to be construed – Judgment of High Court set aside –
Interpretation of Statutes.
Motor Vehicles Act, 1988 – ss.70, 71, 83 – Kerala Motor
Vehicle Rules, 1989 – r.174(2)(c) – Held: r.174(2)(c) is intended to
C ensure that the conditions under which a transport permit is granted
is not diluted when the vehicle covered by the permit is sought to be
replaced by a new vehicle – Purpose and object of mandating
replacement by a vehicle of the same nature in s.83 is only to ensure
that the scrutiny and the conditions that were undertaken and
D imposed at the time of the grant continue even during the subsistence
of the permit – Statutory scheme u/s.70 requiring an application for
a transport permit to provide material particulars include the
requirement of indicating the type of vehicle is also incorporated in
the Rules made by the State Government – The Rules, followed by
the Forms require details of the type of the vehicles to be furnished.
E
Words and Phrases – “of the same nature”, “same”, “nature”
– Motor Vehicles Act, 1988 – s.83 – Discussed – Interpretation of
Statutes.
Allowing the appeals, the Court
F HELD: 1.1 Section 83 is an enabling provision. It allows a
permit holder to replace the vehicle covered under the transport
permit. The right to replace the vehicle under a permit is subject
to the permission of the Authority. The right, as well as the power
to grant permission, are subject to the condition that the vehicle
G to be replaced is ‘of the same nature’. The expression, ‘of the
same nature’ can have multiple meanings. This phrase, in its
natural expression would only mean having similar features. But
then, would ‘same’ mean similar, identical, equivalent, comparable,
interchangeable or related? Likewise, would the expression
“nature” mean type, feature, texture, make, model, design, or
H
REGIONAL TRANSPORT AUTHORITY & ANR. v. SHAJU ETC. 787

generation? These are open textual expressions, used in the A
normal course to convey a meaning which the legislature would
not have intended to be read in a pedantic manner. When the
words in the Section allow multiple interpretations, Courts of Law
have developed the art and technique of finding the correct
meaning by looking at the words in their context. As the text by
B
itself has not conferred certainty to the meaning of the expression
– of the same nature, the phrase has to be examined in context of
the words in the Section, the neighboring provisions, the
Chapters, Parts and its location in the Statute as a whole. For the
purpose of this case, it is sufficient to examine the phrase in the
context of Chapter IV relating to Registration of Motor Vehicles C
and Control of Transport Vehicles in Chapter V. [Paras 8.1-8.3, 9
and 10][798-E-G; 799-A-B, G; 800-A, C]
Reserve Bank of India v. Peerless General Finance
Investment Co. Ltd and Ors. (1987) 1 SCC 424 : [1987]
2 SCR 1 – relied on. D
1.2 Following the power vested in it, the Central
Government enacted the Central Motor Vehicles Rules, 1989.
There is a distinction between the rule-making power given to
the Central Government on one hand and to the State Government
on the other. Section 64 is the rule-making power of the Central E
Government, enabling it to lay down the norms and procedures
to be followed for implementation of provisions in the Act. Sub-
sections (m) and (n) of Section 64 are relevant for present
purposes. In contrast, the rule-making power of the State
Government is as the executing agency for implementing of the
provisions of the Act. For this purpose, Section 65 enables the F
State Government to make such Rules as are necessary for
execution. [Paras 11.2, 11.4, 11.5][800-H; 801-E, G-H; 802-A]
1.3 Chapter V relates to the regulatory regime of the State
Governments with respect to Transport vehicles. It prohibits
transportation without a valid permit under Section 66. Under G
this Chapter State Government alone has power to make rules.
While Section 95 relates to the rule making power of the State
Government with respect to stage and contract carriages, Section
96 relates to the general power of the State Government to make
H
788 SUPREME COURT REPORTS [2022] 9 S.C.R.

A rules for the purpose of Chapter V. There is no power for the
Central Government to make rules under Chapter V.
Replacement of a vehicle under a permit with any other vehicle,
the provision with which the Court is concerned in this case, is
provided in Section 83. [Paras 12.1, 12.3][802-B, E-F; 803-B]
B 1.4 The statutory scheme under Chapter V generally
provides for the powers of the State Government to deal with
transport vehicles except under Section 88 of the Act where the
powers are subject to the rules made by the Central Government.
It provides not only the procedure for grants of permits, but also
the mechanism by which vehicles used for transportation are
C regulated. It is in this context that Section 83 relating to
replacement of a vehicle occurs. The placement of Section 83 in
Chapter V is a recognition of the need to provide a seamless
mechanism for replacement of a vehicle during subsistence of a
transport permit. Seen in the context of Chapter V relating to
D transport vehicles, it becomes clear that the provision is intended
only to enable the owner to work his permit without any
interruption even if there is a need to replace the vehicle covered
by the permit. There is no other purpose. It is intended to be a
simple transaction and this is reason why the scope of scrutiny is
limited only to examining if the vehicle is of same nature as in
E the permit. This is all that is required. It is but natural that the
replacement would require the Authority to grant the necessary
permission as they are the regulators. When an application made
under Section 83 is taken up, the Authority is cognizant of the
fact that there is a valid and a subsisting permit and the permit
F holder seeks to continue operating the permit and it is only for
this reason that he is seeking replacement of the vehicle. The
context in which his scrutiny is called upon, is only to ensure that
the conditions of the permit are not deviated from. Therefore,
when the statute says same nature, it is only relatable to the
permit. The scrutiny is not of the vehicle in itself but the vehicle
G in relation to the permit. It is for this reason that a scrutiny of the
vehicle, stand alone, irrespective of its relation with the permit
becomes an irrelevant consideration for the purpose of Section
83. The phrase, of the same nature seen in the context of
provisions proximate to Sections 83, relating to duration and
H
REGIONAL TRANSPORT AUTHORITY & ANR. v. SHAJU ETC. 789

renewals of permits (Section 81), transfer of permits (Section 82) A
lend clarity to the meaning of the expression. Same nature must
necessarily relate to the same nature of the vehicle in the permit.
The question to be asked is the nature of the vehicle under the
permit. What kind of a vehicle was that? How was that connected
to the permit granted? Does the new vehicle serve the same
B
purpose as the old vehicle was serving under the permit? [Paras
13.2-13.4][803-C-H; 804-A-C]
1.5 Questions relating to the vehicle or about the vehicle
are matters of concern in Chapter IV, under which the Central
Government is empowered to set the norms for the fitness or
the age limit of the vehicle. Chapter V, on the other hand contains C
the legal regime with respect to operations of transport vehicles.
It is under this Chapter that the Parliament intended that there
must be a provision for replacement of a vehicle covered under a
permit so that the permit granted could continue and subsist till
the end of its tenure. Chapters IV and V operate in their own D
field subserving the purpose and objects mentioned therein. Rule
174 (2) (c) made by the State Government to enable replacement
of the vehicle under a Transport permit, does not impinge upon
the powers of the Central Government with respect to fixation of
the age of the vehicle, or fitness of the vehicle conferred upon it
under Sections 56 and 59 in Chapter IV. The scrutiny under Rule E
174 is only to enable the Authority to ensure that the subsisting
permit is not interrupted and at the same time public interest is
not compromised by deviating from the permit. The Rule will
have no bearing on the power of the Central Government and as
such it would not be ultra vires the provisions of the Act. There F
is yet another aspect which can lend a certain amount of clarity to
this position. The vehicle which the Authority may not approve
for replacement under section 83 on the ground that it is older
than the vehicle covered under the permit, can be used as a
transport vehicle within the State. There is no prohibition for
such a usage as the said vehicle may continue to be fit and within G
the age limit prescribed by the Central Government. The rigour
of Rule 174 (2) (c) is only in the context of a subsisting transport
permit and not as a condition for transport vehicles as such. For
the reasons stated above, the submission that Rule 174(2)(c) is
ultra vires the provisions of the statute is not accepted. Rule H
790 SUPREME COURT REPORTS [2022] 9 S.C.R.

A 174(2)(c) of the Kerala Motor Vehicle Rules,1989 is valid and
salutary and does not go beyond the scope of Section 83. [Paras
13.5-13.8][804-C-H; 805-A-B]
2.1 By the order impugned, the Division Bench of the High
Court held that Rule 174 (2) (c) being inconsistent with the Act
B should be held to be inoperative. Rule 174 (2) (c) is intended to
ensure that the conditions under which a transport permit is
granted is not diluted when the vehicle covered by the permit is
sought to be replaced by a new vehicle. The purpose and object
of mandating replacement by a vehicle of the same nature in
Section 83 is only to ensure that the scrutiny and the conditions
C that were undertaken and imposed at the time of the grant
continue even during the subsistence of the permit. The legal
regime involved in the grant of the permit as evidenced by the
statutory provisions, rules, forms and certification establish this
principle. Section 83 is to be understood only in the context of a
D subsisting permit. The present is a case of a stage carriage permit,
the application for which is to be made under Section 70. As per
the P.St.S.A form provided for in Rule 144 for grant of a stage
carriage permit is formulated and appended, which comprises of
various particulars that an applicant must fill and submit. The
statutory scheme under Section 70 requiring an application for a
E transport permit to provide material particulars include the
requirement of indicating the type of vehicle is also incorporated
in the Rules made by the State Government. The Rules, followed
by the Forms require details of the type of the vehicles to be
furnished. The need to call for information about the vehicle
F becomes relevant when the requirement of Section 71 is noticed,
relating to the procedure and consideration of the applications.
Under Section 71, if the Central Government, in exercise of its
powers restricts the number of vehicles depending on the road
conditions and other relevant factors, the State Government shall
direct the Authorities to limit the number of stage carriages etc.
G The consequence of limiting the stage carriages, coupled with
the provision for reservation in favour of Schedule Castes and
Schedule Tribes will necessarily compel the Authorities to
prioritize competing applicants on the basis of certain
prescriptions. These are statutorily prescribed under Section 71
H (3)(d) read with proviso. Having considered the applications under
REGIONAL TRANSPORT AUTHORITY & ANR. v. SHAJU ETC. 791

Section 70, following the procedure laid down under Section 71, A
the stage carriage permission is granted by the authority under
Section 72. Even at the stage of grant, the Authority is empowered
to prescribe certain conditions for the operation of the grant. In
compliance of Section 72, when a stage carriage permit is granted,
Rule 159 of Kerala Motor Vehicle Rules, 1989 mandatorily
B
prescribes that a permit shall bear the registration mark of the
vehicle. Grant of a transport permit is an important function that
the statutory authority under the Act would perform. [Paras 14,
15, 16.1, 16.3, 17.1-18.1][805-C, G-H; 806-A-B; 807-E; 808-A-
B; 809-F-H; 810-A, F; 811-D]
S. Rajaseekaran v. Union of India and Ors. (2018) 13 C
SCC 532 : [2017] 13 SCR 508; Subhash Chandra v.
State of U.P and Ors. (1980) 2 SCC 324 : [1980] 2
SCR 1024; Maharashtra State Road Transport
Corporation v. Babu Goverdhan Regular Motor Service
and Ors. (1969) 2 SCC 746 : [1970] 2 SCR 319 – relied D
on.
Shaheed Khan v. State of MP (2011) SCC Online MP
2228 – approved.
Sheelchand and Co. v. State Transport Appellate
Authority, Gwalior and Anr. (1963) SCC Online MP E
44 – referred to.
2.2 The reasoning adopted by the Division Bench in the
impugned order that Rule 174 (2) (c) has overridden the Act is
not correct because a subordinate legislation must be interpreted
to effectuate the statutory purpose and objective. The Rule should F
enable the transport Authorities considering applications for
replacement to insist upon the permit holder to abide by the same
rigour and regulation that he was put to when the permit was
granted.The High Court has not appreciated the context in which
Rule 174 (2) (c) read with Section 83 is to be construed. The G
Section as well as the Rule are to be seen in the context of
Chapter V relating to control of transport vehicles with respect
to which the State Government has the jurisdiction and power
grant and regulate transport permits. Rule 174 (2) (c), gives effect
to that regulatory regime of the State. Replacement of a vehicle
during the subsistence and continuation of a transport permit is H
792 SUPREME COURT REPORTS [2022] 9 S.C.R.

A only an incident in the working of a transport permit. While
addressing such an incident, the Authority cannot be oblivious of
the history and background in which the permit is granted. [Paras
21.1, 21.2][816-E-H]
2.3 Further, the assumption in the impugned judgment that
B the expression “same nature” is confined only to, mean “a bus
by bus, a mini-bus by mini-bus and not bus by a minibus….” is
not a correct way to read the provision. There is no need to
restrict the meaning of an expression same nature. In fact,
expressions such as this are better kept open ended to enable
courts to subserve the needs of changing circumstances. Having
C examined Rule 174 (2) (c), intended to implement the purpose of
section 83 and also having examined Section 83 in the context of
Chapter V, in contrast to Chapter IV, the Court is of the view that
the rule is neither beyond nor contrary to Section 83. [Paras 21.3,
21.4][817-A-C]
D 3. Scope of the discretion exercised by the authority in
exercise of its power under Rule 174(2)(c) of the Kerala Motor
Vehicles Rules, 1989- Discretion is to be exercised wherever
necessary in order to render the exercise of power reasonable,
fair and non-arbitrary. Discretion could be express or implied.
E Rule 174(2) is a provision where the Government has expressly
enabled the Authority to apply discretion, wherever necessary,
while exercising the power to grant replacement of a vehicle
under a permit. This discretion will have to be exercised
reasonably, fairly as the facts and circumstance would clearly
demonstrate. For instance, where the vehicle sought to be
F substituted is marginally and inconsequentially older than the
vehicle covered under the permit, the Authority may perhaps be
justified in permitting such an application. The Authority will also
bear in mind the circumstances in which the permit holder was
chosen in cases of comparative merit under which the rival
G applicants would have offered their own vehicles. If the exercise
of the discretion is not based on just reasonable and non-arbitrary
principles, such a decision would be vulnerable and subject to
correction in appeal and a further review. [Para 22.2][817-E-G;
818-A-B]

H
REGIONAL TRANSPORT AUTHORITY & ANR. v. SHAJU ETC. 793

4. Whether the fact that the impugned judgment which has A
held the field over last few years and has been followed in
subsequent orders is in itself a sufficient ground to reject the
appeals? The Special Leave Petition against the order impugned
was filed immediately after the decision of the Division Bench of
the High Court and the matter has been pending adjudication
B
before this Court. As the judgment of the High Court is contrary
to law, it is compelling and inevitable that the judgment is set
aside. The judgment of the High Court is set aside, by holding
that Rule 174 (2) (c) is intra vires the provisions of the Act and
also Section 83 of the Motor Vehicles Act. [Para 24][818-D-E, F-
G] C
Geeta B. Rao v. Secretary, Karnataka State Transport
Authority, 1994 2 Karn LJ 703; Yeshodhara Kadamba
v. KSRAT, ILR1988 KAR 2447; Municipal
Corporation of City of Hubli v. Subha Rao
Hanumatharao Prayag and Others (1976) 4 SCC 830 D
: [1976] 3 SCR 883; Vijayawada Municipal
Corporation v. Andhra Pradesh State Electricity Board
and Another (1976) 4 SCC 548 : [1977] 1 SCR 846;
Bheem Singh Bhati v. State of MP and Ors. (2013) SCC
Online MP 8381; Ushakumari v. Abdul Azeez & Amp;
Ors. (2000) SCC Online Ker 269; Madan Singh E
Shekhawat v. Union of India (1999) 6 SCC 459;
Kailash Chand and Anr. v. Dharam Dass (2005) 5 SCC
375 : [2005] 3 SCR 1182; Bangalore Turf Club Limited
v. Regional Director, Employees’ State Insurance
Corporation (2014) 9 SCC 657 : [2014] 8 SCR 1021 – F
referred to.
Case Law Reference
[1987] 2 SCR 1 relied on Para 8.3
[1976] 3 SCR 883 referred to Para 8.3 G
[1977] 1 SCR 846 referred to Para 8.3
[2017] 13 SCR 508 relied on Para 18.1
[1980] 2 SCR 1024 relied on Para 20.1
[1970] 2 SCR 319 relied on Para 20.2 H
794 SUPREME COURT REPORTS [2022] 9 S.C.R.

A (1999) 6 SCC 459 referred to Para 21.3
[2005] 3 SCR 1182 referred to Para 21.3
[2014] 8 SCR 1021 referred to Para 21.3
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 1453-
B 1454 of 2022.
From the Judgment and Order dated 18.07.2017 of the High Court
of Kerala at Ernakulam in W.A. Nos. 1466 and 1470 of 2017.
Santosh Krishnan, Adv. (Amicus Curiae).
G. Prakash, Ms. Priyanka Prakash, Ms. Beena Prakash, Mohit
C
Kumar Gupta, Advs. for the Appellants.
The Judgment of the Court was delivered by
PAMIDIGHANTAM SRI NARASIMHA, J.
1. Leave granted.
D
2. Section 83 of the Motor Vehicles Act, 1988 enables replacement
of the vehicle covered under an existing transport permit by another
vehicle of the same nature. Can a State Government make Rules,
enabling the road transport authority to reject an application for
replacement if the proposed vehicle is older than the one covered under
E the existing permit? This is the question we are tasked to answer. For
the analysis and the reasoning that will follow, we have held that Rule
174(2)(c) of the Kerala Motor Vehicle Rules,1989 is valid and salutary
and does not go beyond the scope of Section 83. We will first refer to
the basic facts and the statutory provisions before analyses and
F determination.
Facts:
3.1 The Respondent was granted a stage carriage operator permit,
P.St. 7/362/2012 dated 7.5.2017 in respect of vehicle number KL-41L-
1017, a 38-Seater, 2016 model by the Regional Transport Authority
G (hereinafter referred to as ‘Authority’) to conduct transport service on
the route Pattimattam-Kakkanad in Kerala. On 19.5.2017, the Respondent
applied to the Authority under Section 83 of the Motor Vehicles Act,
1988 (hereinafter referred to as ‘Act’) read with Rule 174 of the Kerala
Motor Vehicle Rules, 1989 (hereinafter referred to as ‘Rules’) for grant
of permission to replace the vehicle covered under his permit with another
H
REGIONAL TRANSPORT AUTHORITY & ANR. v. SHAJU ETC. 795
[PAMIDIGHANTAM SRI NARASIMHA, J.]

vehicle KL-17E-997, a 33-Seater, 2006 model. Alleging inaction on the A
part of the Authority, the Respondent filed a Writ Petition before the
High Court of Kerala on 12.6.2017. The Learned Single Judge disposed
of the writ petition on 13.06.2017 by merely directing the State and the
Authority to consider the application on the ground of road-worthiness
alone and without reference to the model of the vehicle.
B
3.2 Aggrieved by the Single Judge’s decision, the Authority
preferred Writ Appeals No.1466/2017 before the Division Bench of the
High Court of Kerala. Another Writ Appeal No.1470/2017 dealing with
similar facts and issues was also taken up along with this case. The
Division Bench by the impugned judgment dated 18.07.2017 dismissed
the Writ Appeals holding that Rule 174(2)(c) of the Kerala Motor Vehicle C
Rules, 1989 goes beyond the provision of the Act. The Court concluded:-
“When in exercise of delegated authority, the subordinate
authority i.e., the State, makes the rules, the rules have to be
consistent with the Act. The Rules cannot override the Act or
restrict the ambit of the Act. When the expression is vehicle of D
same nature, then if Rule l74(2)(c) restricts that an older
vehicle cannot be brought in, it would be restricting the right
conferred to a person by the provisions of the Act. Surely
such an exercise by a delegate cannot be permitted. Rules
have to be consistent with the Act and not restricting or in E
derogation thereto. Rules to that extent cannot thus be held
to be consistent with the Act and would have to be held to be
inoperative.”
3.3 With these findings the Division Bench dismissed the Appeals.
It is this order that is challenged before this Court. We heard Sh. G F
Prakash, Advocate for the appellant State and the Authorities and
Sh. Santosh Krishnan, Amicus Curiae.
Contentions:
4.1 Shri G. Prakash, learned counsel on behalf of the State and
Authority submitted that the purpose of Rule 174(2)(c) is to ensure the G
safety of the travelling public and therefore the prohibition for replacement
of a vehicle covered under a permit with an older model would be legal
and justified as it will also ensure that the vehicle of the ‘same nature’ as
prescribed under Section 83. Alternatively, it is also submitted that the
requirement under Rule 174(2)(c) must be seen in the context of
H
796 SUPREME COURT REPORTS [2022] 9 S.C.R.

A discretion to be exercised by the Authority while considering the
application for replacement. It is his case that rejection is not automatic
as it is within the power of the Authority to either accept or reject the
request the application for a good and a valid reason. He further submits
that as there was no specific challenge to Rule 174(2)(c), the High Court
was not justified in declaring the Rule as inoperative. In light of these
B
submissions, he urged for the impugned judgment to be set-aside and the
Rule be upheld.
4.2 Since there was no appearance on behalf of the Respondents,
we requested Shri Santosh Krishnan to assist us as Amicus Curiae and
he readily accepted the assignment and ably assisted us by filing written
C submissions supporting the judgment of the High Court. The primary
submission of the Amicus Curiae is that the State Government does not
have the legislative competence to make the impugned Rule. He argued
that matters relating to prescription of conditions, methodology for
verification and even certification of fitness of vehicle (Section 56 read
D with the Rule 62) as well as the power to fix the age limit of a motor
vehicle (Section 59) fall within the province of the Central Government
and therefore, the State Government does not have the competence to
make Rules 174(2)(c). He would urge that a collateral challenge to the
impugned order on the ground of competence is legally permissible. He
drew our attention to Rules made in other States to demonstrate that
E none of them have made a Rule akin to Rule 174(2)(c) that touches
upon the fitness of a vehicle. He concluded by submitting that the
impugned decision of the High Court has held the field for over four
years and has also been followed in subsequent cases and therefore this
Court may not interfere while exercising jurisdiction under Article 136.
F 5. The following issues arise for our consideration:
i. Whether Rule 174(2)(c) of Kerala Motor Vehicles Rules,
1989 is ultra-vires the provisions of the Act as the power
with respect to prescription of age limit of a motor vehicle
is in the exclusive domain of the Central Government?
G ii. Whether Rule 174(2)(c) of the Kerala Motor Vehicles
Rules, 1989 travels beyond and contrary to Section 83 of
the Motor Vehicles Act, 1988?
iii. What is the scope of the discretion exercised by the
Authority in exercise of its power under Rule 174(2)(c) of
H the Kerala Motor Vehicles Rules, 1989?
REGIONAL TRANSPORT AUTHORITY & ANR. v. SHAJU ETC. 797
[PAMIDIGHANTAM SRI NARASIMHA, J.]

iv. Whether the Respondents can challenge the legality of Rule A
174(2)(c) without specifically praying for the same in the
Writ Petition and whether the High Court is justified in
permitting such a submission?
v. Whether the fact that the impugned judgment has held the
field over last few years and has been followed in subsequent B
orders is in itself a sufficient ground to reject the appeals?
Act and the Rules:
6.1 Rule 174(2)(c) of the Kerala Motor Vehicles Rules, 1989
provides as under: -
C
“Rule 174. Permit Replacement of vehicles:
(1) If the holder of a permit desires at any time to replace a
vehicle covered by the permit with another vehicle, he shall
forward the permit and apply in Form “P.V.A.” with the fee
prescribed in Rule 180 to the Transport Authority which D
granted the permit stating the reasons for the proposed
replacement and shall,
(a) if the new vehicle is not in his possession, state the
material particulars in respect of which the new vehicle
differs from the old: and
E
(b) if the new vehicle is in his possession, forward the
certificate of registration hereof
(2) Upon receipt of the application, the Transport Authority
may in his discretion, reject the application –
(a) if it has previous to the date of receipt of the application F
given reasonable notice of its intention to reduce the number
of Transport Vehicles of that class generally or in respect
of the route or area to which the permit applies; or
(b) if the new vehicle proposed differs in the material
respects from the old; or G

(c) if the new vehicle proposed is older than the one sought
to be replaced; or
(d) if the holder of the permit has contravened the
provisions thereof or has been deprived of possession of
H
798 SUPREME COURT REPORTS [2022] 9 S.C.R.

A the old vehicle under the provisions of any agreement of
higher purchase, hypothecation or lease.
(3) if the new vehicle proposed does not differ in material
respects from the old, the application for replacement of the
vehicle may be allowed. If there is material difference between
B the two vehicles, the application shall be treated as if it were
for a fresh permit.”
6.2 The power relatable to replacement of the vehicle is provided
in Section 83 of the Act: -
“83. Replacement of vehicles: The holder of a permit may,
C with the permission of the authority by which the permit
was granted, replace any vehicle covered by the permit by
any other vehicle of the same nature.”
7. Having noticed the Rule in question and the relatable statutory
provision, we will now consider the issues in seriatim.
D
Issue (i): Whether Rule 174(2)(c) of Kerala Motor Vehicles
Rules 1989 is ultra-vires the provisions of the Act as the
power with respect to prescription of age limit of a motor
vehicle is in the exclusive domain of the Central
Government?
E
8.1 Section 83 is an enabling provision. It allows a permit holder
to replace the vehicle covered under the transport permit. The right to
replace the vehicle under a permit is subject to the permission of the
Authority. The right, as well as the power to grant permission, are subject
to the condition that the vehicle to be replaced is ‘of the same nature’.
F
8.2 The expression, ‘of the same nature’ can have multiple
meanings.1 This phrase, in its natural expression would only mean having
similar features. But then, would ‘same’ mean similar, identical,
1
In Geeta B.Rao v. Secretary, Karnataka State Transport Authority, 1994 2 Karn LJ
703, the Karnataka High Court, while following an earlier judgment Yeshodhara Kadamba
G v. KSRAT, ILR1988 KAR 2447 held that the expression “nature” is distinct from the
expression “capacity” that existed prior to its amendment and observed, “firstly, on a
plain understanding of the meaning of the Section can mean, vehicle of a similar type,
i.e., a passenger vehicle. It only means that a tourist vehicle cannot be replaced by a
stage carriage or a goods-vehicle. In other words, the ‘character’ of the vehicle cannot
be changed. The meaning intended to be conveyed is that the characteristic of the vehicle
H should not be lost.”
REGIONAL TRANSPORT AUTHORITY & ANR. v. SHAJU ETC. 799
[PAMIDIGHANTAM SRI NARASIMHA, J.]

equivalent, comparable, interchangeable or related? Likewise, would the A
expression “nature” mean type, feature, texture, make, model, design,
or generation?
8.3 These are open textual expressions, used in the normal course
to convey a meaning which the legislature would not have intended to be
read in a pedantic manner. When the words in the Section allow multiple B
interpretations, Courts of Law have developed the art and technique of
finding the correct meaning by looking at the words in their context. This
approach is beautifully expressed by Justice O. Chinnappa Reddy in the
case of Reserve Bank of India v. Peerless General Finance
Investment Co. Ltd And Ors.2:
C
“33. Interpretation must depend on the text and the context.
They are the bases of interpretation. One may well say if the
text is the texture, context is what gives the colour. Neither
can be ignored. Both are important. That interpretation is best
which makes the textual interpretation match the contextual.
A statute is best interpreted when we know why it was enacted. D
With this knowledge, the statute must be read, first as a whole
and then section by section, clause by clause, phrase by phrase
and word by word. If a statute is looked at, in the context of
its enactment, with the glasses of the statute-maker, provided
by such context, its scheme, the sections, clauses, phrases E
and words may take colour and appear different than when
the statute is looked at without the glasses provided by the
context. With these glasses we must look at the Act as a whole
and discover what each section, each clause, each phrase
and each word is meant and designed to say as to fit into the
scheme of the entire Act. No part of a statute and no word of F
a statute can be construed in isolation. Statutes have to be
construed so that every word has a place and everything is in
its place……”
9. As the text by itself has not conferred certainty to the meaning
of the expression – of the same nature, we have to examine the phrase G

2
Reserve Bank of India v. Peerless General Finance Investment Co. Ltd (1987) 1 SCC
424. We would notice similar approach adopted by this Court in Municipal Corporation
of City of Hubli v. Subha Rao Hanumatharao Prayag and others (1976) 4 SCC 830
Vijayawada Municipal Corporation v. Andhra Pradesh State Electricity Board and
Another (1976) 4 SCC 548. H
800 SUPREME COURT REPORTS [2022] 9 S.C.R.

A in context of the words in the Section, the neighboring provisions, the
Chapters, Parts and its location in the Statute as a whole.
10. The Motor Vehicles Act, 1988 regulates matters such as,
licensing of the drivers of motor vehicles in Chapter II, licensing of
conductors of stage carriages in Chapter III, registration of motor vehicles
B in Chapter IV, control of transport vehicles in Chapter V, state transport
undertakings in Chapter VI, control of traffic in Chapter VIII, no fault
liabilities in Chapter X, insurances in Chapter XI, establishments of
Tribunals in Chapter XII, penalties in Chapter XIII, apart from the
miscellaneous provisions in Chapter XIV. For the purpose of this case, it
is sufficient to examine the phrase in the context of Chapter IV relating
C to Registration of Motor Vehicles and Control of Transport Vehicles in
Chapter V.
11.1 Chapter IV lays out the general regulatory regime for
registration of motor vehicles, transfer of ownership, certification of
fitness, age limit of vehicles and also provides for the rulemaking powers
D of the Central as well as the State Governments. The purpose and object
of this Chapter is to regulate driving of a motor vehicle in any public
place and with this endeavor. Section 39 prohibits any person from driving
a motor vehicle without its registration. The Central Government is
empowered to lay down norms and prescribe procedures for registration,
E fees, maintenance of registers, registration numbers (RC), time limits
for renewal etc. Fixing the terms and conditions for grant of Certificate
of fitness and fixation of age limits of the vehicle is the exclusive domain
of the Central Government under Sections 56 and 59.
“Section 56. Certificate of fitness of transport vehicles:
F (1) Subject to the provisions of sections 59 and 60, a transport
vehicle shall not be deemed to be validly registered for the
purposes of section 39, unless it carries a certificate of fitness
in such form containing such particulars and information as
may be prescribed by the Central Government, issued by the
G prescribed authority, or by an authorized testing station
mentioned in sub-section (2), to the effect that the vehicle
complies for the time being with all the requirements of this
Act and the rules made thereunder;….”
11.2 Following the power vested in it, the Central Government
enacted the Central Motor Vehicles Rules, 1989. Rule 62 laying down
H
the procedure for grant of a certificate.
REGIONAL TRANSPORT AUTHORITY & ANR. v. SHAJU ETC. 801
[PAMIDIGHANTAM SRI NARASIMHA, J.]

“Rule 62. Validity of certificate of fitness: A
(1) A certificate of fitness in respect of a transport vehicle
granted under Section 56 shall be in Form 38 and such
certificate when granted or renewed shall be valid for the
period as indicated below……...”
11.3 Similarly, we notice the power of the Central Government to B
prescribe age limit of a vehicle is in Section 59. The provision to the
extent it is relevant for the purpose of the case is as under: -
“Section 59: Power to fix the age limit of motor vehicle—
(1) The Central Government may, having regard to the public C
safety, convenience and objects of this Act, by notification in
the Official Gazette, specify the life of a motor vehicle reckoned
from the date of its manufacture, after the expiry of which the
motor vehicle shall not be deemed to comply with the
requirements of this Act and the rules made thereunder:
D
Provided that the Central Government may specify different
ages for different classes or different types of motor vehicles.”
11.4 There is a distinction between the rule-making power given
to the Central Government on one hand and to the State Government on
the other. Section 64 is the rule-making power of the Central Government,
E
enabling it to lay down the norms and procedures to be followed for
implementation of provisions in the Act. Sub-sections (m) and (n) of
Section 64 are relevant for our purposes, wherein it is provided that: -
“Section 64: Power of Central Government to make rules:
The Central Government may make rules to provide for all or F
any of the following matters namely: -
(m) the form in which the certificate of fitness shall be issued
under sub-section (1) of Section 56 and the particulars and
information it shall contain;
(n) the period for which the certificate of fitness granted or G
renewed under Section 56 shall be effective.”
11.5 In contrast, the rule-making power of the State Government
is as the executing agency for implementing of the provisions of the Act.
For this purpose, Section 65 enables the State Government to make
H
802 SUPREME COURT REPORTS [2022] 9 S.C.R.

A such Rules as are necessary for execution. Crucial words in the Rule
making power of the State are noted below with added emphasis: -
“Section 65: Power of State Government to make rules: (1) A
State Government may make rules for the purpose of carrying
into effect the provisions of this Chapter other than the matters
B specified in Section 64.”
12.1 Chapter V relates to the regulatory regime of the State
Governments with respect to Transport vehicles. It prohibits
transportation without a valid permit under Section 66. Control of road
transport vested in the State Government under Section 67, is to ensure,
C (a) advantages to the public, trade and industry by the development of
motor of transport, (b) coordination of road and rail transport, (c) prevent
deterioration of the road system and also to (d) prevent uneconomic
competition among holders of permits. For this purpose, the State
Government can issue directions to the State and Regional Transport
D Authorities established under Section 68. Right to Appeal against the
decisions of State or Regional Transport Authority is provided under
Section 89 and Revisional powers are under Section 90, followed by a
bar on Civil Courts Jurisdiction under Section 94. Under this Chapter
State Government alone has power to make rules. While Section 95
relates to the rule making power of the State Government with respect
E to stage and contract carriages, Section 96 relates to the general power
of the State Government to make rules for the purpose of Chapter V. It
is important to note that there is no power for the Central Government to
make rules under Chapter V.
12.2 There are different types of transport vehicles, for which
F there are different requirements and separate permits to be granted. For
example, (i) applications for stage carriages permits are covered under
Section 70, procedure for the same is provided under Section 71 and the
power to grant the transport permit for stage carriages is provided under
Section 72. (ii) Applications for contract carriages are covered under
G Section 73 and the power to grant is in Section 74. (iii) Scheme for
renting motor cabs is under Section 75, (iv) private service vehicle permits
are covered under Section 76, (vii) applications, consideration and grant
of goods carriage permits are provided in Sections 77, 78 and 79.

H
REGIONAL TRANSPORT AUTHORITY & ANR. v. SHAJU ETC. 803
[PAMIDIGHANTAM SRI NARASIMHA, J.]

12.3 The general norms with respect to applications and the A
procedure to be followed is provided under Sections 79 and 80. Duration
and renewal of permits is governed by Section 81 and the transfer of a
permit is prescribed in Section 82. Replacement of a vehicle under a
permit with any other vehicle, the provision with which we are concerned
in this case, is provided in Section 83. General conditions applicable to all
B
permits, the forms in which the permits may be granted, and the power
and procedure of cancellation are provided in Sections 84, 85 and 86.
The legal regime relating to operation and use of permit outside the
region is provided in Sections 87 and 88.
13.1 It is in the above referred statutory scheme that the submission
of the Amicus needs to be considered. C

13.2 The statutory scheme under Chapter V generally provides
for the powers of the State Government to deal with transport vehicles
except under Section 88 of the Act where the powers are subject to the
rules made by the Central Government. It provides not only the procedure
for grants of permits, but also the mechanism by which vehicles used for D
transportation are regulated. It is in this context that Section 83 relating
to replacement of a vehicle occurs. The placement of Section 83 in
Chapter V is a recognition of the need to provide a seamless mechanism
for replacement of a vehicle during subsistence of a transport permit.
Seen in the context of Chapter V relating to transport vehicles, it becomes E
clear that the provision is intended only to enable the owner to work his
permit without any interruption even if there is a need to replace the
vehicle covered by the permit. There is no other purpose. It is intended
to be a simple transaction and this is reason why the scope of scrutiny is
limited only to examining if the vehicle is of same nature as in the permit.
This is all that is required. F

13.3 It is but natural that the replacement would require the
Authority to grant the necessary permission as they are the regulators.
When an application made under Section 83 is taken up, the Authority is
cognizant of the fact that there is a valid and a subsisting permit and the
permit holder seeks to continue operating the permit and it is only for this G
reason that he is seeking replacement of the vehicle. The context in
which his scrutiny is called upon, is only to ensure that the conditions of
the permit are not deviated from. Therefore, when the statute says same
nature, it is only relatable to the permit. The scrutiny is not of the vehicle
in itself but the vehicle in relation to the permit. It is for this reason that H
804 SUPREME COURT REPORTS [2022] 9 S.C.R.

A a scrutiny of the vehicle, stand alone, irrespective of its relation with the
permit becomes an irrelevant consideration for the purpose of Section
83.
13.4 The phrase, of the same nature seen in the context of
provisions proximate to Sections 83, relating to duration and renewals
B of permits (Section 81), transfer of permits (Section 82) lend clarity to
the meaning of the expression. Same nature must necessarily relate to
the same nature of the vehicle in the permit. The question to be asked is
the nature of the vehicle under the permit. What kind of a vehicle was
that? How was that connected to the permit granted? Does the new
vehicle serve the same purpose as the old vehicle was serving under the
C permit?
13.5 Questions relating to the vehicle or about the vehicle are
matters of concern in Chapter IV, under which the Central Government
is empowered to set the norms for the fitness or the age limit of the
vehicle. Chapter V, on the other hand contains the legal regime with
D respect to operations of transport vehicles. It is under this Chapter that
the Parliament intended that there must be a provision for replacement
of a vehicle covered under a permit so that the permit granted could
continue and subsist till the end of its tenure. Chapters IV and V operate
in their own field subserving the purpose and objects mentioned therein.
E 13.6 For the reasons stated above, we are of the view that Rule
174 (2) (c) made by the State Government to enable replacement of the
vehicle under a Transport permit, does not impinge upon the powers of
the Central Government with respect to fixation of the age of the vehicle,
or fitness of the vehicle conferred upon it under Sections 56 and 59 in
F Chapter IV. The scrutiny under Rule 174 is only to enable the Authority
to ensure that the subsisting permit is not interrupted and at the same
time public interest is not compromised by deviating from the permit.
The Rule will have no bearing on the power of the Central Government
and as such it would not be ultra vires the provisions of the Act.

G 13.7 There is yet another aspect which can lend a certain amount
of clarity to this position. The vehicle which the Authority may not approve
for replacement under section 83 on the ground that it is older than the
vehicle covered under the permit, can be used as a transport vehicle
within the State. There is no prohibition for such a usage as the said
vehicle may continue to be fit and within the age limit prescribed by the
H
REGIONAL TRANSPORT AUTHORITY & ANR. v. SHAJU ETC. 805
[PAMIDIGHANTAM SRI NARASIMHA, J.]

Central Government. The rigour of Rule 174 (2) (c) is only in the context A
of a subsisting transport permit and not as a condition for transport vehicles
as such.
13.8 For the reasons stated above, we are not inclined to accept
the submission that Rule 174(2)(c) is ultra vires the provisions of the
statute. B
Issue (ii): Whether Rule 174(2)(c) of the Kerala Motor
Vehicles Rules, 1989 travels beyond and contrary to Section
83 of the Motor Vehicles Act, 1988?
14. By the order impugned, the Division Bench of the High Court
held that Rule 174 (2) (c) being inconsistent with the Act should be held C
to be inoperative. The reasoning adopted by the High Court is as under:
“9. We may now come to the Act. Section 83 clearly predicates
replacement of the vehicle by vehicle of the “same nature”.
The Legislature have used the expression purposely. They
could have used various other expressions. To us, the D
expression is clear. Same nature would mean; a bus by a bus,
a mini bus by a mini bus, an air-conditioned bus by an air-
conditioned bus, a truck by a truck and not a bus by a mini
bus and an air-conditioned bus by a non-air-conditioned bus
or mini bus by a regular bus; that is the only restriction. When E
in exercise of delegated authority the subordinate authority
i.e. the State, makes the rules, the rules have to be consistent
with the Act. The Rules cannot override the Act or restrict the
ambit of the Act. When the expression is vehicle of same nature,
then if Rule, l74(2)(c) restricts that an older vehicle cannot
be brought in, it would be restricting the right conferred to a F
person by the provisions of the Act. Surely such an exercise
by a delegate cannot be permitted. Rules have to be consistent
with the Act and not restricting or in derogation thereto. The
Rules to that extent cannot thus be held to be consistent with
the Act and would have to be held to be inoperative.” G
15. We are of the opinion that Rule 174 (2) (c) is intended to
ensure that the conditions under which a transport permit is granted is
not diluted when the vehicle covered by the permit is sought to be replaced
by a new vehicle. The purpose and object of mandating replacement by
a vehicle of the same nature in Section 83 is only to ensure that the
H
806 SUPREME COURT REPORTS [2022] 9 S.C.R.

A scrutiny and the conditions that were undertaken and imposed at the
time of the grant continue even during the subsistence of the permit.
The legal regime involved in the grant of the permit as evidenced by the
statutory provisions, rules, forms and certification establish this principle.
We will explain this position.
B 16.1 Section 83 is to be understood only in the context of a subsisting
permit. The present is a case of a stage carriage permit, the application
for which is to be made under Section 70. When an application under
Section 70 for grant of a stage carriage permit is made, it shall contain
particulars such as (i) the type and seating capacity of the vehicle [Section
70(1)(b)]; (ii) the number of vehicles to be kept in reserve; and (iii) such
C other details as may be prescribed. Such application should also be
accompanied by the documents as may be prescribed [Section 70(2)].
Section 70 of the Act may be noticed:
“Section 70. Application for stage carriage permit: (1) An
application for a permit in respect of a stage carriage (in this
D Chapter referred to as a stage carriage permit) or as a reserve
stage carriage shall, as far as may be, contain the following
particulars, namely:—
(a)…

E (b) the type and seating capacity of each such vehicle;
(c) the minimum and maximum number of daily trips
proposed to be provided and the time-table of the normal
trips.
….
F
(f) such other matters as may be prescribed.
(2) An application referred to in sub-section (1) shall be
accompanied by such documents as may be prescribed.”
16.2 In furtherance of the statutory prescriptions under Section
G 70, and in exercise of the power to make Rules, the State Government
made the Kerala Motor Vehicle Rules, 1989. In Chapter V of the Rules
relating to control of transport vehicle, Rule 143 prescribe the application
for permits and Rule 144 provides the Forms of such permits.
Rule 143. Application for permits –– The application for a
H permit shall be in the following form
REGIONAL TRANSPORT AUTHORITY & ANR. v. SHAJU ETC. 807
[PAMIDIGHANTAM SRI NARASIMHA, J.]

Permit Form A
(a) stage carriage P.St.S.A
(b)contact carriage P.Co.S.A
(c) private service vehicle permit P.Pr.S.A
(d) goods carriage P.Gd.S.A B
(e) temporary permit P.Tem.A
(f) spl perm u/s 88 (8) of the Act P.Sp.A
Rule 144. Form of permits –– Permits shall be issued in the
following forms: C
Permit Form
(a) stage carriage P.St.
(b)contact carriage P.Co.
(c) private service vehicle permit P.Pr.S.A D
(d) goods carriage P.Gd.S.A
(e) temporary permit P.Tem.A
(f) spl perm u/s 88 (8) of the Act P.Sp.A
E
16.3 As per the P.St.S.A form provided for in Rule 144 for grant
of a stage carriage permit is formulated and appended, which comprises
of various particulars that an applicant must fill and submit. The Form is
as under: -
“FORM P.St.S.A
F
APPLICATION FOR PERMIT IN RESPECT OF STAGE
CARIAGE/RESERVE STAGE CARRIAGE
1. Full Name
…..
G
7. Type of vehicle
8. (i) Seating capacity (Excluding Driver and Conductor)
(ii) Maximum laden weight
9. Time table proposed
….” H
808 SUPREME COURT REPORTS [2022] 9 S.C.R.

A 17.1 It is evident from the above, the statutory scheme under
Section 70 requiring an application for a transport permit to provide
material particulars include the requirement of indicating the type of
vehicle is also incorporated in the Rules made by the State Government.
The Rules, followed by the Forms require details of the type of the
vehicles to be furnished. The need to call for information about the
B
vehicle becomes relevant when we notice the requirement of Section
71, relating to the procedure and consideration of the applications. Section
71 is as under:
“Section 71. Procedure of Regional Transport Authority in
considering application for stage carriage permit.—
C
(1) A Regional Transport Authority shall, while considering
an application for a stage carriage permit, have regard to
the objects of this Act:
(2) A Regional Transport Authority shall refuse to grant a
D 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:
Provided that before such refusal an opportunity shall be given
to the applicant to amend the time- table so as to conform to
E the said provisions.
(3) (a) The State Government shall, if so directed by the
Central Government having regard to the number of vehicles,
road conditions and other relevant matters, by notification in
the Official Gazette, direct a State Transport Authority and a
F Regional Transport Authority to limit the number of stage
carriages generally or of any specified type, as may be fixed
and specified in the notification, operating on city routes in
towns with a population of not less than five lakhs.
(b) Where the number of stage carriages are fixed under clause
(a), the Government of the State shall reserve in the State
G
certain percentage of stage carriage permits for the scheduled
castes and the scheduled tribes in the same ratio as in the
case of appointments made by direct recruitment to public
services in the State.

H
REGIONAL TRANSPORT AUTHORITY & ANR. v. SHAJU ETC. 809
[PAMIDIGHANTAM SRI NARASIMHA, J.]

(c) Where the number of stage carriages are fixed under clause A
(a), the Regional Transport Authority shall reserve such
number of permits for the scheduled castes and the scheduled
tribes as may be fixed by the State Government under sub-
clause (b).
(d) After reserving such number of permits as is referred to in B
clause (c), the Regional Transport Authority shall in
considering an application have regard to the following
matters, namely:—
(i) financial stability of the applicant;
(ii) satisfactory performance as a stage carriage operator C
including payment of tax if the applicant is or has been an
operator of stage carriage service; and
(iii) such other matters as may be prescribed by the State
Government:
D
Provided that, other conditions being equal, preference shall
be given to applications for permits from—
(i) State transport undertakings;
(ii) co-operative societies registered or deemed to have been
registered under any enactment for the time being in force; E
(iii) ex-servicemen; 2[or]
[(iv) any other class or category of persons, as the State
government may, for reasons to be recorded in writing
consider necessary;]”
F
17.2 Under Section 71, if the Central Government, in exercise of
its powers restricts the number of vehicles depending on the road
conditions and other relevant factors, the State Government shall direct
the Authorities to limit the number of stage carriages etc. The consequence
of limiting the stage carriages, coupled with the provision for reservation
in favour of Schedule Castes and Schedule Tribes will necessarily compel G
the Authorities to prioritize competing applicants on the basis of certain
prescriptions. These are statutorily prescribed under Section 71 (3)(d)
read with proviso.
17.3 Having considered the applications under Section 70, following
the procedure laid down under Section 71, the stage carriage permission H
810 SUPREME COURT REPORTS [2022] 9 S.C.R.

A is granted by the authority under Section 72. Even at the stage of grant,
the Authority is empowered to prescribe certain conditions for the
operation of the grant. Section 72, to the extent that it is relevant for our
purpose is as under:
“Section 72. Grant of stage carriage permits.
B (1) Subject to the provisions of section 71, a Regional
Transport Authority may, on an application made to it under
section 70, grant a stage carriage permit in accordance with
the application or with such modifications as it deems fit or
refuse to grant such a permit:
C Provided that no such permit shall be granted in respect of
any route or area not specified in the application.
(2) The Regional Transport Authority, if it decides to grant a
stage carriage permit, may grant the permit for a stage
carriage of a specified description and may, subject to any
D rules that may be made under this Act, attach to the permit
any one or more of the following conditions, namely:
(i)…..
(x) that vehicles of a specified type fitted with body conforming
to approved specifications shall be used
E
(xi) that specified standards of comfort and cleanliness shall
be maintained in the vehicles;
(xxiv) any other conditions which may be prescribed.”
17.4 In compliance of Section 72, when a stage carriage permit is
F granted, Rule 159 of Kerala Motor Vehicle Rules, 1989 mandatorily
prescribes that a permit shall bear the registration mark of the vehicle.
“Rule 159. Permits entry of registration marks compulsory:
Time for entry

G (1) No permit shall be issued before entering the registration
mark of the vehicle to which it relates has been entered therein.
(2) When the applicant is unable to produce the certificate of
registration on the date of his application for permit, owing
to the fact that he is not on that date in possession of the
H
REGIONAL TRANSPORT AUTHORITY & ANR. v. SHAJU ETC. 811
[PAMIDIGHANTAM SRI NARASIMHA, J.]

vehicle duly registered, or for some other reason, the A
applicant shall within one month of the sanctioning of the
application by the Transport Authority or such longer period
or periods not exceeding four months in the aggregate as the
Authority may specify, produce the certificate of registration
of the vehicle before that Authority so that the particulars of
B
the registration mark may be entered in the permit. In the
event of any applicant failing to produce the certificate of
registration within the period specified by the Transport
Authority, the Authority may revoke its sanction of the
application.
(3) The power vested in a Transport Authority under sub rule C
(2) shall also be exercised by its delegate in respect of orders
passed under the delegated powers.”
18.1 Grant of a transport permit is an important function that the
statutory authority under the Act would perform. This Court had an
occasion to consider the serious consequences of motor accidents leading D
to large number of deaths and injuries to human body. This unfortunate
fact was noted by this Court in S. Rajaseekaran v. Union of India
and Ors.3
“90. During this hearing, we sought to impress upon all
concerned that road safety issues should be taken seriously E
both by the Central Government as well as by the State
Governments. We also noted that huge amounts running into
hundreds of crores of rupees had been earmarked for road
safety and it was also highlighted that a very large number of
deaths had been taking place due to road accidents. We noted F
that the insurance companies had spent an amount of Rs.
11,480 crores by way of compensation for deaths, injuries,
third -party property damage and other damage due to road
accidents during the financial year 2015-2016.
91. On 7.11.2016 we again noted that there was one death G
almost every three minutes as a result of road accidents.
Unfortunately, the legal heirs of half the victims were not
compensated (perhaps being unaware of their entitlement)
…..”
3
S. Rajaseekaran v. Union of India (2018) 13 SCC 532 (Judgment dated 30.11.2017). H
812 SUPREME COURT REPORTS [2022] 9 S.C.R.

A 18.2 If this reality has to be addressed, the primary obligation is
on the transport regulates the Authorities. The scrutiny that they must
exercise in granting licences and permits in today’s world is much more
than ever. At the same time, Courts have the obligation to interpret the
provisions of the statute and the rules made thereunder in a manner that
will sub-serve an effective scrutiny by the regulator. This Court, as well
B
as the High Courts have approached the problem in this perspective and
in fact, the judgments that we will advert to, not only underline and
emphasise the importance of the information of the vehicle in the
application for permit, but also approved the condition of a maximum
age of the vehicle prescribed by the Authorities.
C 19.1 In the case of Sheelchand and Co. v. State Transport
Appellate Authority, Gwalior,4 the Division Bench of the High Court
of Madhya Pradesh upheld the condition of the Authority which prescribed
that the Bus must be of 1962 model. The Court held:
“Under section 48(3), the RTA may grant the permit for a
D service of stage carriages of a specified description… Clause
(xxiii) gives the RTA the authority to attach “any other
condition which may be prescribed”. The power to prescribe
such a condition flows not from any of the clauses of section
48(3) but from the substantive provision of sub-section (3)
E itself. That sub-section says that the RTA may grant a permit
for the service of sage carriages of a specified description.
If the stage carriage for which a permit can be granted can
be of a “specified description” then it follows that the RTA
has the power to say that the stage carriage for which the
permit has been granted shall be of a particular year of
F manufacture. Specific description of a stage carriage is not
confined to its class, name, maker, number of cylinders or
horsepower, but also includes the year of manufacture..... The
whole idea and requiring that the service of a stage carriage
shall be run with a stage carriage of a particular year of
G manufacture is to ensure reliability and efficiency of service
and the safety of the travelling public. Section 47 and 48 of
the Act, read together, clearly show that the statutory powers
to issue permits with certain conditions of stage carriages or

4
Sheelchand and Co. v. State Transport Appellate Authority, Gwalior and Anr. (1963)
H SCC Online MP 44.
REGIONAL TRANSPORT AUTHORITY & ANR. v. SHAJU ETC. 813
[PAMIDIGHANTAM SRI NARASIMHA, J.]

not meant for the benefit and protection of permit holders but A
are meant for the benefit of the general public.”5
19.2 The Division Bench judgment of the High Court of Madhya
Pradesh was approved by this Court in the case of Subhash Chandra
v. State of U.P,6 wherein Justice Krishna Iyer in his inimitable expression
observed as under: B
“3…. The State must remember that it has responsibilities not
merely to minibus owners, but also to avoid the daily tragedies
on the Indian highways under the little wheels of these
whirling carriages. Section 51(2) Motor vehicles act, 1939,
is geared to public safety, not private profits and cast a solemn C
duty not to be deterred by any pressure except the pressure of
social justice to Indian lives moving in buses, walking on
roads or even standing on margins. If the top killer – road
accident – is to be awarded death sentence, Section 51 and
like provisions must receive severe enforcement. In this spirit
– although backtracking from 4-year-old vehicles to 7-year- D
old models – the State imposed condition 18. This was
challenged artfully but unsuccessfully before the High Court
and is attacked before us as ultra-vires Section 51(2) of the
Act. We will examine briefly the submissions to reach the
conclusion that mere lexical legalism cannot sterilize the E
sensible humanism writ large on Section 51(2)(c). It is not
ultra vires Indian law every condition to save life and limb is
intra wires such salvation re-provision. This perspective of
social justice simplifies the problem and upholds the High
Court.
F
4…. The short question is whether the prescription that the
bus shall be at least a 7-year-old model one is relevant to the
condition of the vehicle and its passenger’s comparative safety
and comfort on our chaotic highways. Obviously, it is. The
older the model, the less the chances of the latest safety
measures being built into the vehicle. Every new model G
incorporates new devices to reduce danger and promote
comfort. Every new model assures its age to be young, fresh
5
M/s. Goa Highways Operators v. State Transport Authority, Goa, Daman, and Diu
(1976) SCC Online GDD 19.
6
Subhash Chandra and Ors. v. State of U.P. and Ors. (1980) 2 SCC 324. H
814 SUPREME COURT REPORTS [2022] 9 S.C.R.

A and strong, less likely to suffer sudden failures and breakages,
less susceptible to wear and tear and mental fatigue leading
to unexpected collapse… We have no hesitation to hold, from
the point of view of human rights of road users, that the
condition regarding model of the permitted bus is within the
jurisdiction and not to prescribe such safety clauses is
B
abdication of statutory duty.
5. ….We are clear that a later model is a better safeguard
and, more relevantly to the point, the year of the make and
the particulars of the model or part of the description.7"
C 20.1 The principles and observations made by the Full Bench of
the High Court of Kerala on the powers and duties of the Authorities
while considering competing applications for grant of a permit are
noteworthy. Of course, the Court was dealing with a slightly different
issue, i.e., whether an applicant for stage carriage permit who has given
the particulars of the vehicle he proposes to put on road should be
D preferred over an applicant who does not provide such information before-
hand. The Full Bench of the Kerala High Court held as under:
“10. As repeatedly pointed out in the various decisions of the
Supreme Court and the High Courts, the paramount
consideration that should weigh with the Regional/State
E Transport Authority in taking a decision regarding the grant
of a stage carriage permit is the advancement of public
interest. Such decision will have to be reached by the authority
on a comparative evaluation of the qualifications possessed
by the various applicants as on the date of consideration of
F the subject by it. If, on the date of consideration of the
applications, an applicant is found to be possessed of a vehicle
of the required specifications regarding its model, seating
capacity etc. and if in respect of other matters he is found to
be possessed of better qualifications than a rival applicant
who might have furnished the particulars of his vehicle in his
G application itself it will not be in the public interest and, hence,
also legally not right to overlook the superior claims of the
former and prefer the latter for the grant of the permit merely
on the ground of his having furnished in his application
7
This judgment is followed by this Court in a subsequent decision in the case S.K.
H Bhatia and Ors.v. State of U.P and Ors. (1983) 4 SCC 194.
REGIONAL TRANSPORT AUTHORITY & ANR. v. SHAJU ETC. 815
[PAMIDIGHANTAM SRI NARASIMHA, J.]

particulars of his vehicle. As already observed by us, an A
application for the grant of a stage carriage permit cannot
be treated as invalid merely on the ground that it does not
contain particulars of the vehicle proposed to be used for the
service nor can the applicant be disqualified or excluded from
consideration on the said ground. If all other qualifications
B
are equal as between the two applicants, one of whom had
furnished in his application the particulars of his vehicle and
the other had furnished such particulars only at a later stage
before the matter was taken up for consideration by the
Regional/State Transport Authority and the vehicle offered
by the latter is found to be of a later model and better quality C
(providing better comforts for the passengers) than the vehicle
offered by the former, the Regional/State Transport Authority
will be perfectly justified in taking the view that it will be in
the public interest to grant the permit to the applicant who
has offered the better vehicle (see Ikram Khan v. The State
D
Transport Appellate Tribunal, (1976) 4 SCC 1 : AIR. 1976
SC. 2333). However, if in such a case the vehicles offered by
both the applicants are found to be substantially of the same
type, quality, model etc. and if in respect of other matters
both the applicants are equally qualified it will be open to the
Regional/State Transport Authority in its discretion to prefer E
for the grant the applicant who had furnished the particulars
of his vehicle in the application itself treating the said
circumstance as aground for tilting the balance as between
the two persons whose qualifications are equal in all other
respects.”
F
20.2 The judgment of the Full Bench of the Kerala High Court
has been followed in a number of cases.8 In another case of Babu
Goverdhan,9 this Court emphasised on the importance of the requirement
of Form P.St.S.A along with the stage carriage permit application. It
was held that the Form is an integral part of the legal regime which the
State Government is authorised to take note of. The importance of G

8
Bheem Singh Bhati v. State of MP and Ors. (2013) SCC Online MP 8381; Ushakumari
v. Abdul Azeez & Ors (2000) SCC Online Ker 269.
9
Maharashtra State Road Transport Corporation v. Babu Goverdhan Regular Motor
Service and Ors. (1969) 2 SCC 746. H
816 SUPREME COURT REPORTS [2022] 9 S.C.R.

A furnishing all the details of a vehicle has also been affirmed in the case
of Shaheed Khan.10
“79. In the instant case we have already held that the
conditions imposed by the impugned amendments in the Rules
of 1994 are with a view to ensure safe, secure and convenient
B transport services to the passengers to provide cheaper and
safer facilities to rural public, to protect and preserve the
road conditions, for better traffic management and to reduce
traffic on long routes thereby reducing chances of untoward
incidents and accidents and as such are in the interest of
public at large. It is, therefore, clear that although we have
C already held that the petitioners do not have a fundamental
right to operate stage carriages even otherwise, the impugned
amendments in the rules are in consonance with and in
furtherance of the object and purpose of the Act and are
reasonable restrictions which can legitimately be imposed as
D provided by and permissible under Article 19(6) of the
Constitution of India on the fundamental right to trade and
commerce granted under Article 19(1)(g) of the Constitution
of India.”
21.1 The reasoning adopted by the Division Bench in the impugned
E order that Rule 174 (2) (c) has overridden the Act is not correct because
a subordinate legislation must be interpreted to effectuate the statutory
purpose and objective. The Rule should enable the transport Authorities
considering applications for replacement to insist upon the permit holder
to abide by the same rigour and regulation that he was put to when the
permit was granted. In our view, the High Court has not appreciated the
F context in which Rule 174 (2) (c) read with Section 83 is to be construed.
21.2 The Section as well as the Rule are to be seen in the context
of Chapter V relating to control of transport vehicles with respect to
which the State Government has the jurisdiction and power grant and
regulate transport permits. Rule 174 (2) (c), gives effect to that regulatory
G regime of the State. Replacement of a vehicle during the subsistence
and continuation of a transport permit is only an incident in the working
of a transport permit. While addressing such an incident, the Authority
cannot be oblivious of the history and background in which the permit is
granted.
H 10
Shaheed Khan v. State of MP (2011) SCC Online MP 2228.
REGIONAL TRANSPORT AUTHORITY & ANR. v. SHAJU ETC. 817
[PAMIDIGHANTAM SRI NARASIMHA, J.]

21.3 Further, the assumption in the impugned judgment that the A
expression “same nature” is confined only to, mean “a bus by bus, a
mini-bus by mini-bus and not bus by a minibus….” is not a correct
way to read the provision. There is no need to restrict the meaning of an
expression same nature. In fact, expressions such as this are better
kept open ended to enable courts to subserve the needs of changing
B
circumstances.11
21.4 Having examined Rule 174 (2) (c), intended to implement
the purpose of section 83 and also having examined Section 83 in the
context of Chapter V, in contrast to Chapter IV, we are of the view that
the rule is neither beyond nor contrary to Section 83.
C
Issue (iii): What is the scope of the discretion exercised by
the authority in exercise of its power under Rule 174(2)(c)
of the Kerala Motor Vehicles Rules, 1989?
22.1 Rule 174 (2) provides that, upon receipt of an application,
the Transport Authority may in his discretion reject an application, D
(c) if the new vehicle proposed is older than the one sought to be
replaced. Learned counsel on behalf of the State submitted that, it is not
as if applications seeking replacement of a vehicles, older than the one’s
covered by the Transport permit would stand rejected by the operation
of the rule. It is his case that the Authority is given the power to exercise
its discretion before rejecting an application on the said ground. E

22.2 Discretion is to be exercised wherever necessary in order to
render the exercise of power reasonable, fair and non-arbitrary. Discretion
could be express or implied. Rule 174(2) is a provision where the
Government has expressly enabled the Authority to apply discretion,
wherever necessary, while exercising the power to grant replacement F
of a vehicle under a permit. This discretion will have to be exercised
reasonably, fairly as the facts and circumstance would clearly
demonstrate. For instance, where the vehicle sought to be substituted is
marginally and inconsequentially older than the vehicle covered under
the permit, the Authority may perhaps be justified in permitting such an G
application. The Authority will also bear in mind the circumstances in

11
Madan Singh Shekhawat v. Union of India (1999) 6 SCC 459, Para 15; Kailash
Chand and Anr v. Dharam Dass (2005) 5 SCC 375, Para 12 and 13; Bangalore Turf
Club Limited v. Regional Director, Employees’ State Insurance Corporation (2014) 9
SCC 657, Para 61. H
818 SUPREME COURT REPORTS [2022] 9 S.C.R.

A which the permit holder was chosen in cases of comparative merit under
which the rival applicants would have offered their own vehicles.
Needless to say, that if the exercise of the discretion is not based on just
reasonable and non-arbitrary principles, such a decision would be
vulnerable and subject to correction in appeal and a further review. There
is no need to delve on this issue any further.
B
Issue (iv):Whether the Respondents can challenge the
legality of Rule 174(2)(c) without specifically praying for
the same in the Writ Petition and whether the High Court
is justified in permitting such a submission?
C 23. As we have held that Rule 174 (2) (c) is neither ultra vires
the Act, nor has overridden Section 83, as held by the High Court, there
is no need to deal with this issue.
Issue (v):Whether the fact that the impugned judgment
which has held the field over last few years and has been
D followed in subsequent orders is in itself a sufficient ground
to reject the appeals?
24. The Special Leave Petition against the order impugned was
filed immediately after the decision of the Division Bench of the High
Court and the matter has been pending adjudication before this Court.
E Apart from the fact that the matter has been sub-judice, the decision
that we have arrived at is based on the interpretation of statutory
provisions and the principles concerning construction of subordinate
legislation. As the judgment of the High Court is contrary to law, it is
compelling and inevitable that we set aside the judgment and rule upon
the correct position of law.
F
For the reasons stated above, we set aside the judgment of the
High Court in Writ Appeal Nos. 1466 and 1470 of 2017, by holding that
Rule 174 (2) (c) is intra vires the provisions of the Act and also Section
83 of the Motor Vehicles Act. The appeals are allowed.
25. Before parting with this case, we would like to record our
G
deep appreciation for extremely valuable assistance provided by the
learned Amicus Curiae, Shri Santosh Krishnan.

Divya Pandey Appeals allowed.
(Assisted by : Roopanshi Virang, LCRA)
H