VISHNU DUTT AND ORS.versusSTATE OF RAJASTHAN AND ORS.

                       VISHNU DUTT AND ORS.                                     A
                                     v.
                  STATE OF RAJASTHAN AND ORS.

                          DECEMBER 15, 2005

              (ASHOK BHAN AND C.K. THAKKER, JJ.]                                B


     Motor Vehicles Act, 1988-Section 88:

      Inter-State stage carriage permits-Grant of-Under reciprocal
transport agreement between States of Rajasthan and Haryana-To buses C
belonging to State of Rajasthan-Ceiling of 13 permits fixed-All permits
granted to Rajasthan State Road Transport Corporation(RSRTC)-Permits
not counter-signed by the "other State" (State qf Haryana) as required under
the agreement-Validity of-Held, invalid-Hence to be ignored-Permits
subsequently issued in favour ofprivate operators (respondents) countersigned D
by State of Haryana-Hence valid irrespective of the stipulation therein that
they were in excess of ceiling fixed under the agreement-Constitution of
India, 1950-Artic/e 136.

     Inter-State stage carriage permits-Grant of-State Transport Appellate
Tribunal (STAT) remitted matter to Regional Transport Authority (RTA) for       E
reconsidering applications ofprivate operators-Writ petitions thereagainst-
High Court passed interim order staying further proceedings before RTA-
But RTA granted permits to Appellants-private operators being purportedly
unaware qf the interim order-Validity of-Held, invalid-Even if RTA was
not made aware of the interim order, since order of STAT remitting the matter   F
to RTA was finally quashed by High Court in the writ petitions, all
consequential actions must be held illegal-Code ofCivif Procedure, 1908-
0rder XL/, Rule 5.

      Reciprocal Transport agreement entered between the States ofRajasthan
and Haryana in the year 1968 stipulated grant of inter-State stage carriage G
permits to buses belonging to the State of Rajasthan. Ceiling of 13 permits
was fixed under the agreement. Rajasthan State Road Transport Corporation
(RSRTC) was granted all the permits, but without counter-signature by State
ofHaryana as required under the agreement. Subsequently, additional permits

                                    773                                         H
    774                     SUPREME COURT REPORTS (2005] SUPP. 5 S.C.R.

A were granted to private operators including Respondents with a stipulation
    that they were beyond the ceiling fixed under the agreement.

            But after a fresh agreement was entered into between the two States in
    1997, the Transport Authority (RTA) declined to grant permits to any private
    party. On appea~ the Tribunal (STAT) directed RTA to reconsider applications
B   of private parties. Against that order, RSRTC and another aggrieved party
    filed writ petitions, whereupon an interim order was passed by High Court
    staying further proceedings before RTA. But RT A granted permits to the
    Appellants, being purportedly unaware of the interim order. Legality of the
    order passed by RT A was challenged. High Court vacated the interim order
C   and finally disposed of the writ petitions directing STAT to re-examine the
    whole issue and determine the 13 permit-holders having valid permits. STAT
    holding grant of permits to RSRTC, Respondents and Appellants to be all
    illegal, remanded the matter to RTA for reconsideratio.n of earlier applications.
    Against that order, RSRTC filed writ petition which was dismissed. Appellants
    and Respondents too filed writ petitions. High Court by a common order
D   dismissed the writ petitions filed by the appellants but allowed the petitions
    filed by the Respondents.

         Questions pertaining to validity of the permits granted to RSRTC, the
    Respondents and the Appellants arose for consideration in the present appeals.

E         Dismissing the appeals, the Court

          HELD: 1. The orders of t:-ie High Court are legal, valid, proper and do
    not deserve interference by this Court under Article 136 of the Constitution.
                                                                       [789-B, CJ

F           2. Under the 1968 Agreement, 13 permits were granted in favour of
     RSRTC, but as has-been rightly held by the High Court, those permits could
     not be termed valid permits inasmuch as they were not countersigned by the
    State ofHaryana. Since 13 inter-State permits could be granted under 1968
    Agreement, the High Court.was justified in taking into account permits
G   granted in favour of respondents which were countersigned by the State of.
    Haryana. The High Court was right in observing that the fact that in those
    permits, it was stated that they were in excess of quota under 1968 Agreement,
    was of no consequence since those permits were not in excess of quota if
    invalid permits issued in favour of RSRTC were to be excluded and ignored.
    It is settled law that inter-State permits must be countersigned by the other
H   State. The High Court was, therefore, fully justified in granting relief to the
                  VISHNU DUTT v. ST ATE OF RAJAS THAN                      775
·respondents and no grievance can be raised by the appellants against such        A
 relief granted to the respondents.1784-B-E)

        T.N.R. Reddy v. Mysore State Transport Authority, 11970) l SCC 541 :
AIR (1971) SC 1662, relied on.

     ,4.shwani Kumar v. Regional Transport .wthority, Bikaner, (1999) 8 SCC       B
364 and Mis. Zamindara Motor Transport Co-operative Society v. Regional
Transport Authority, (1999) 2 RLW 1329, referred to.

      3.1. Regarding permits granted in favour of the appellants and
countersigned by the State of Haryana, it is clear that the same was issued by
RT A in accordance with the direction issued by STAT. But tbe order of ST AT      C
was challenged by RSRTC as also by other parties in the High Court by filing
writ petitions. The High Court, not only entertained writ petitions, but even
granted prohibitori interim orders and RT A was restrained from considering
the applications as directed by STAT. (784-F, G)

       3.2. Even if the contention of the appellants is held to be well founded   D
that RTA was not made aware of interim order passed by the High Court and
hence it could consider the applications and pass appropriate orders thereon,
since the order of STAT remitting the matter to RTA was finally quashed and
set aside by the High Court in the writ petitions, all consequential actions
must be held illegal and of no effect. The High Court was perfectly right and     E
wholly justified in ignoring the directions issued by STAT and grant of permits
by RTA in favour of the appellants. On STAT direction being set aside, there
could not be said to be an order of reconsideration of applications by RT A.
Hence, an order granting applications and issuing permits in favour of the
appellants had no legal effect whatsoever and the appellants cannot derive any
benefit under the said order. [785-A-C]                                           F
     Mu/raj v. Murti Raghunathji Maharaj, (1967) 3 SCR 84: AIR (1967)
SC 1386 and Nawabkhan Abbaskhan v. State of Gujarat, [19741 2 SCC 121:
AlR (1974) SC 1471, referred to.

        CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 1159-1170 of G
2004.

      From the Judgment and Order dated 3.5.2002 of the Rajasthan High
Court in D.B.C.S.A. No. 662/2001 and Order dated 17/20.5.2002 in D.B.C.S.A.
Nos. 890, 903, 904, 905, 906, 907, 908, 909, 910, 911 and 912 of2001.       H
    776                     SUPREME COURT REPORTS [2005] SUPP. 5 S.C.R.

A                                        WITH
          C.A. No. 1172 of2004.

          Dushyant Dave, Nidhesh Gupta, Vinod Shukla and Bharat Singh for Ms.
    S. Janani with him for the Appellants.

B        Mrs. Rani Chhabra, Ms. Gauri Chhabra and Ms. Sudha Pal for the
    Respondents.

          Ms. Madhurima Tatia and Aruneshwar Gupta for State of Rajasthan.

          The Judgment of the Court was delivered by
c
          C.K. THAKKER, J. All these appeals have been filed against the orders
    passed by the Division Bench of High Court of Rajasthan in the D.B. Civil
    Special Appeal No. 662 of 200 I and cogi;lte matters by which the Division
    Bench dismissed all appeals and confirmed the common order passed by the
D   learned single Judge in various Writ Petitions.

           The litigation has a chequered history. By a Reciprocal Transport
    Agreement dated 5th/8th February, 1968 (hereinafter referred to as '1968
    Agreement') entered into between the State of Rajasthan and the State of
    Haryana, Hanumangarh • Dabbwali via Sangaria inter-State route opened to
E   traffic with a view to encourage movement of transport vehicles on such
    routes and to regulate and control their operation. The agreement stip11lated
    that four return trips and eight single services will be allowed to buses
    belonged to State of Rajasthan and 13 permits will be granted. In accordance
    with the said agreement, the Rajasthan State Road Transport Corporation
    ('RSRTC' for short) was granted 13 ~tage carriage permits. On February 29,
F   1996, the Regional Transport Authority, Bikaner ('RTA' for short) granted
    additional stage carriage permits to private vehicle operators including the
    respondents in the present appeals. There was a clear stipulation on the
    permits that they were granted beyond the ceiling fixed under 1968 Agreement.

           On July 14, 1997, the State of Rajasthan and the State of Haryana
G   entered into a fresh inter-State agreement (hereinafter referred to as '1997
    Agreement') in supersession of 1968 Agreement for 13 permits with 16 single
    trips. Clause 4 (iv) clarified that all previous stage carriage permits which were
    counter signed by either State before the coming into force of 1997 Agreement
    shall remain in force till the valid period of such permits. According to the
H   appellants, under 1997 Agreement, the route was made open exclusively for
        VISHNU DUTT v. STATE OF RAJASTHAN [THAKKER, J.]                 777
private operators. It was also their case that under 1968 Agreement, only A
RSRTC was granted permits which was within the scope and ceiling fixed by
that Agreement and the respondents had no right to ply vehicles.

        After coming into force of 1997 Agreement, several applications were
 made by private vehicle operators for grant of permits. RTA, however, vide
 its orders dated April 25, 1998 and November 18, 1998 declined to grant permit B
 to any applicant under Section 88 of the Motor Vehicles Act, 1988 on the
 ground that there was no vacancy in existence for the grant of such permits.
 Being aggrieved by the above orders passed by RTA, appeals were filed
 before the State Transport Appellate Tribunal, Rajasthan, Jaipur ('STAT' for
 short) by the persons whose applications were rejected. The main appeal was C
 Appeal No. 398of1998 titled Sohanlal v. RTA. STAT, vide its order dated July
 24, 1999 set aside the order passed by RTA and remitted the matter to RTA
 with a direction to reconsider all the applications under 1997 Agreement for
 grant of 13 permits with 16 trips. Against the order passed by STAT, RSRTC
 filed a Writ Petition in the High Court of Rajasthan. A Writ Petition was also
 filed by Sohanlal. The learned single Judge of the High Court passed an D
 interim order on September 9, 1999 and stayed further proceedings before
 RT A consequent to the order of remand made by STAT directing RT A to
reconsider applications and to pass orders in accordance with law. It is,
however, the case of the appellants that the order of interim_~lief granted by
a single Judge of the High Court on September 9, 1999 was not communicated E,
 immediately to RTA and RTA was not made aware of any such interim order
 passed by the High Court. Accordingly, on September 16, 1999, RTA held a
 meeting in which appellants as well as respondents participated and the
parties were heard. By an order dated November 2, 1999, RTA, considering
the case of the appellants on merits, was pleased to grant 11 permits to them
and the remaining two permits were granted in favour of other persons. F
According to the appellants, they were not made parties in the proceedings
before the High Court in the writ petitions and they were not aware of interim
order dated September 9, 1999. It was also asserted by the appellants that
neither RSRTC nor Sohanlal produced the order of the High Court before
RTA on September 16, 1999 when the hearing took place, nor on November G
2, 1999 when the order was passed in favour of appellants granting permits
in their favour. According to the appellants, therefore, the order dated
November 2, 1999 was legal, valid, proper and in accordance with law. It is
the case of the appellants, that the interim order of the High Court was
communicated to RTA only on November 13, 1999 but by that time, the order
dated November 2, 1999 had already been passed by RTA. ln view of the final H
    778                    SUPREME COURT REPORTS [2005) SUPP. 5 S.C.R.

A   order passed by RTA, RSRTC filed an application in the writ petition pending
    in the High Court seeking amendment of the petition, challenging the legality
    of the order dated November 2, 1999 by which RT A had granted 11 permits
    in favour of the appellants. The said application was made on November 29,
    1999. The High Court granted the application on December 13, 1999 and
B   vacated interim relief which was granted on September 9, 1999 in the light of
    the order dated November 2, 1999 passed by RTA but fixed the matter for final
    hearing. On December 24, 1999, the competent authority countersigned the
    permits in favour of the appellants taking into account the fact that interim
    relief had been vacated by the High Court. The matter was then heard by the
    learned single Judge on January 27, 2000. During the course of hearing, it was
C   noticed by the learned single Judge that as against 13 permits under ·1997
    Agreement, 50 vehicles were plying on Hanumangarh - Dabawali via Sangaria
    inter-State route as on January 27, 2000 on the basis of the permits granted
    by RTA, which were outside the scope of the ceiling fixed by inter-State
    agreement. Under the circumstances, the learned single Judge directed the
    Secretary,-RTA to give exact figures and details about the permits granted
D   within the quota and outside the ceiling fixed by I 968 Agreement as well as
     I 997 Agreement. The RTA submitted two separate Schedules marked 'A' and
    'B'. In Schedule 'A', the names of the persons who were granted permits
    outside the scope and ceiling fixed by 1968 Agreement was filed. In Schedule
    'B', the names of persons who were granted permits within the scope and
E   ceiling fixed by 1997 Agreement were mentioned. In the light of the query
    raised by the Court and information supplied by RTA, the High Court finally
    disposed of the petitions on Feburary 14, 2000, inter alia, observing as under:

            "In the facts and circumstances of the case, it is desirable that the
            learned State Transport Appellate Tribunal be requested to examine
F           the whole issue afresh and determine who are 13 permit-holders who
            have valid permits for the aforesaid inter-State route under the
            reciprocal agreement and who should be allowed to ply vehicles on
            the said inter-State route under such valid permits". .

                                                              (emphasis supplied)
G
          The Court noted that "with the consent of learned counsel for the
    parties", the case was remitted to STAT with the request to dispose of the
    matter expeditiously, preferably within three months, keeping in view the
    decision of this Court in Ashwani Kumar v. Regional Transport Authority,
    Bikaner, [ 1999] 8 SCC 364 and the decision of the High Court of Rajasthan
H
        VISHNU DUTT v. STATE OF RAJASTHAN [THAKKER, J.)                   779
in Mis Zamindara Motor Transport Co-operative Society v. Regional A
Transport Authority, ( 1999) 2 RL W 1329. Till the matter was to be decided by
STAT, Jaipur, RTA, Bikaner was restrained from granting any temporary or
permanent permit on the route in question to any person. In pursuance of the
order passed by the learned single Judge, STAT issued notices to all 50 permit
holders. After hearing them, STAT, by an order dated May 29, 2000, held that
13 perm its issued in favour of RSRTC were within the ceiling fixed by 1968 B
Agreement. Those permits, however, were not countersigned by the State of
Haryana and hence they cou Id not be said to be val id penn its. When 1997
Agreement came into force, permits granted under 1968 Agreement in favour
of RSRTC were considered, but since the earlier permits were not valid, the
new permits also could not be said to be valid permits and were not saved C
under Clause 4(iv) of 1997 Agreement. So far as the permits granted in favour
of respondents were concerned, according to STAT, they were countersigned
by the State of Haryana but those permits were outside the ceiling fixed by
1968 Agreement and, therefore, those permits also could not be said to be
valid in the light of the ratio laid down in Ashwani Kumar as also Mis.
Zamindara Motor Transport Co-operative Society.                                D

       As to order dated November 2, 1999 passed by RTA granting permits
in favour of the appellants, STAT held that the said order was in violation
of interim order dated September 9, 1999 passed by the High Court in writ
petitions. ST AT noted that the interim order was vacated by the High Court E
on December 13, 1999 keeping in view the order passed by RTA on November
2, 1999 but such vacation would not make order dated 2nd November, 199:/
valid and would not cure the defect as the writ petition was finally allowed
by the High Court. According to ST AT, when the order dated July 24, 1999
passed by STAT remanding the matter to RTA was set aside by the High
Court, no order could have been passed by RTA considering the applications F
and granting permits in pursuance of the order passed by STAT since that
order was quashed by the High Court. No party, hence, could get benefit of
an order dated November 2, 1999. The appellants, therefore, could not claim
the benefit under the said order. ST AT, therefore, by an order dated May 29,
2000, again remanded the matter to RTA directing it to consider the applications G
which were decided on November 2, 1999. A direction was also issued to RTA
not to consider any application filed prior to July, 1997 i.e. before coming into
force of 1997 Agreement.

    The order dated May 29, 2000 passed by STAT was challenged by
RSRTC by filing a writ petition. The learned single Judge, however, held that H
    780                    SUPREME COURT REPORl:S [2005] SUPP. 5 S.C.R.

A   a finding had been recorded by STAT that the permits granted in favour of
    RSRTC had never been countersigned by the State of Haryana and hence
    RSRTC had no right to ply its vehicle on the said route. So far as 1997
    agreement was concerned, permits were to be granted to private vehicle
    operators and hence, RSRTC had no right to claim any permit under the said
B   agreement. The Court accordingly dismissed the petition filed by RSRTC.

          The order dated May 29, 2000 passed by ST AT was also challenged by
    the appellants as well as by respondents by filing writ petitions. The learned
    single Judge heard the parties and disposed of all writ petitions by a common
    order. The learned single Judge, inter a/ia, held as under:

C           I.   Permits granted on November 2, 1999 in favour of the appellants
                 cannot be said to be legal and valid.
            2.   11 permits granted in favour of private operators (respondents
                 herein) on February 29, 1996 had never been challenged on any
                 ground whatsoever before any forum and it was only because
D                an order was passed by learned single Judge on February 14,
                 2000 in the light of the fact that as against 13 operators, 50
                 vehicles were plying, STAT was directed to find out as to who
                 those 13 persons were who held legal permits and had right to
                 ply vehicles.
E           3.   As the respondents-private vehicle operators were holding valid
                 permits, which were countersigned by the State ofHaryana, their
                 permits were legal and valid.
            4.   Mere stipulation in the permits that they were over and above
                 the ceiling under the Agreement would not disentitle private
F                operators- from continuing operation as the said provision had
                 to be read in accordance with the agreement. Once it was held
                 that 13 permits granted in favour of RSRTC were not
                 countersigned, they could "not be said to be legal permits under
                 1968 Agreement and hence they were required to be excluded.
G           5.   In view of exclusion of 13 permits issued in favour of RSRTC,
                 permits issued in favour of respondents-private operators,
                 counter-signed by the State of Haryana, must be treated as legal.
            6.   The respondents were permit-holders and plying their vehicles
                 since March 16, 1963 and they could not be thrown out on any
H                technical ground.
        VISHNU DUTT v. STATE OF RAJASTHAN [THAKKER, J.]                  781

     Resultantly, writ petitions filed by appellants came to be dismissed and A
the writ petitions filed by respondents were allowed.

       Two batch of original side appeals were filed by the appellants being
aggrieved by the order passed by the learned single Judge. In one set of
appeals, it was contended that the learned single Judge had committed an
error of law in dismissing the writ petitions filed by the appellants as after B
considering the applications filed by the appellants in accordance with 1997
Agreement, their cases were considered by the RTA and permits were granted
in their favour. The order which was passed on November 2, I 999 without any
knowledge as to interim order passed by a single Judge of the High Court
was legal and valid and could not have been invalidated by the learned single C
Judge. Their appeals were, therefore, required to be allowed.

       Regarding writ petitions filed by respondents, it was contended by the
appellants before the Division Bench that admittedly they were holding permits
over and above the ceiling fixed by 1968 Agreement. An express stipulation
was made in the Agreement that they were in excess of quota under the said D
Agreement. It was submitted that it was the case of RSRTC that 13 permits
were granted in favour of Corporation and as under I 968 Agreement only 13
permits could be granted, even if it is held that those pennits were not as per
the Agreement, the respondents could not claim benefit of the fact-situation
that the pennits, in favour of RSRTC were held illegal, they must get the E
benefit and permits issued in their favour should be held legal. The learned
single Judge, therefore, was in error in granting relief in favour of the
respondents.

       The Division Bench considered the question in detail and held that the
learned single Judge was right in dismissing the writ petitions filed by the F
appellants-petitioners and also in allowing the petitions filed by the
respondents (petitioners before the High Court). The Division Bench observed
that since RTA was not aware of interim order dated September 9, 1999 passed
by the learned single Judge in the writ petition, consideration of applications
of the appellants on September 16, 1999 and grant of permits on November
2, 1999 might not be treated as an order passed by RTA in disobedience of G
interim order passed by the learnedi single Judge of the High Court. But the
fact remained that the order of STAT remanding the matter to RT A and the
direction to reconsider the applications of all applicants on merit; was finally
quashed and set aside by the High Court. Hence, the order passed by RTA
could not be said to be valid in the eye of law and, hence,'. could not operate H
    782                    SUPREME COURT REPORTS (2005) SUPP. S S.C.R.

A   or be implemented. The appellants, therefore, could not base their claim on
    the said order. The order passed by the learned single Judge dismissing the
    petitions of the appellants-petitioners, therefore, could not be held contrary
    to law and accordingly their appeals were liable to be dismissed.
                     '                                                  '

          As far as the petitions of the respondents and grant of relief in their
B favour, which was objected by the appellants, the Division Bench observed
    that the learned single Judge was right in allowing their petitions. The Bench
    noted that under 1968 Agreement, only 13 permits could be granted. As per
    the Agreement, the permits could be said to be valid and effective only if they
    were countersigned by either State. Though it was the case of RSRTC that
C   13 permits were granted to the Corporation, admittedly, they were not
    countersigned by the State of Haryana. The said permits, therefore, rightly
    held to be not as pert.he Agreement. Obviously, therefore, 13 permits which
    were issued in favour of respondents and countersigned by the State of
    Haryana must be held legal and valid irrespective of mentioning of the fact
    in the permits that they were in excess of quota. Once it was held that permits
D   granted in favour of RSRTC were not in accordance with agreement, permits
    i~ued to respondents countersigned by the State of Haryana must be held
    valid. If it is so, the learned single Judge was right in granting the relief in
    favour ofrespondents, rnled the Division Bench. In view of the said findings,
    the Division Bench disposed of all Appeals.

E         Being aggrieved by the said orders, the appellants have approached
    this Court. Notices were issued by this Court on November 18, 2002 and after
    hearing the parties, leave was granted. The matters have been placed before
    us for final hearing.

          We have heard learned counsel for the parties.
F
          Two questions, which were raised before the learned single Judge as
    well as before the Division Bench of the High Court, were raised before us
    by the learned counsel for the appellants. Firstly, it was contended that in
    pursuance of inter-State Agreement of 1997 entered into between the State
G   of Haryana and State of Rajasthan, applications were invited from private
    operators and the appellants submitted applications. Jn accordance with the
    Agreement, applications of the appellants were considered by the RTA, Bikaner
    along with other applications and permits were granted in their favour which
    were duly countersigned by the State of Haryana. Those permits, therefore,
    were legal and valid and could not have been declared illegal. The High Court
H   ought to have granted relief to the appellants rejecting the contention of
        VISHNU DUTT v. STATE OF RAJASTHAN [THAKKER, J.]                      783
RSRTC and of the respondents. Since the High Court did not grant relief in         A
favour of the appellants, the orders deserve to be quashed and set aside.

        Secondly, it was submitted that the High Court was in error in granting
 relief to the respondents. Under 1968 inter-State Agreement, only 13 permits
 could have been granted. Admittedly, those 13 permits under the Agreement
 were granted in favour ot RSRTC. The said fact was neither disputed before B
 the authorities, nor before the High Court. It is true that 11 permits were
·granted to private operators-respondents herein, and they were countersigned
 by the State of Haryana, but it was expressly stipulated in those permits that
 they were in excess of quota and hence no right would flow from those
 permits. Hence, even if it is held that 13 permits issued in favour of RSRTC C
 were not legal and valid, since they were not countersigned by the State of
 Haryana, private operators-respondents could not get the benefit as their
 permits were in excess of quota under the Agreement. The High Court was,
 therefore, in error in granting relief in their favour. It was, therefore, submitted
 by the learned counsel for the appellants that the orders require interference
 by declaring the permits issued in favour of respondents as illegal and by D
 granting relief in their favour declaring the permits issued by RTA, Bikaner
 in their favour and countersigned by the State of Haryana as legal and valid.

      The learned counsel for the contesting respondents, on the other hand,
submitted that the High Court was right in dismissing the writ petitions filed
by the appellants and allowing the writ petitions of the respondents and in E
granting benefit in their favour. According to the counsel, under 1968
Agreement, 13 permits could be granted. They were required to be
countersigned by the State of Haryana. True it is that 13 permits were granted
by RTA, Bikaner to RSRTC, but admittedly they were not countersigned by
the State of Haryana. On the other hand, permits granted to respondents were F
countersigned by the State of Haryana. Therefore, only those permits were
legal and valid and could be said to be 'under the Agreement'. A statement
to the effect that permits granted in favour of respondents were in excess of
quota, therefore, had no relevance. Once it is held that permits issued in
favour ofRSRTC were not valid, other permits issued in favour ofrespondents
and countersigned by the State of Rajasthan, must necessarily be treated as G
valid and in accordance with the terms of the Agreement. The High Court
was, therefore, justified in granting relief to the respondents.

     The learned counsel for the State of Rajasthan also supported the
respondents and submitted that the orders passed by the High Court are legal       H
    784                    SUPREME COURT REPORTS [2005) SUPP. 5 S.C.R.

A and proper and no interference is called for.
          Having heard the learned counsel for the parties, in our opinion, the
    orders of the High Court are legal, valid, proper and do not deserve interference
    by this Court under Article 136 of the Constitution.

B          As is clear from the facts enumerated 11ereinabove, under 1968
    Agreement, 13 permits were granted in favour of RSRTC, but as has been
    rightly held by the High Court, those permits could not be termed valid
    permits inasmuch as they were not countersigned by the State of Haryana.
    Since 13 inter-State permits could be granted under 1968 Agreement, the High
C   Court was justified in taking into account permits granted in favour of
    respondents which were countersigned by the State of Rajasthan. To us, the
    High Court was right in observing that the fact that in those permits, it was
    stated that they were in excess of quota under 1968 Agreement, was of no
    consequence since those permits were not in excess of quota if invalid
    permits issued in favour of RSRTC were to be excluded and ignored. It is
D   settled law that inter-State permits must be countersigned by the other State.
    In this connection, the High Court relied on Ashwani Kumar wherein this
    Court expressly held that reciprocal agreement is a condition precedent for
    grant of permits and if such agreement provides for countersignature of the
    other State, obviously that condition has to be fulfilled. Reference was also
    made to T.N.R. Reddy v. Mysore State Transport Authority, [1970] 1 SCC 541
E   : AIR (1971) SC 1662. The High Court was, therefore, fully justified in granting
    relief to the respondents and no grievance can be raised by the appellants
    against such relief granted to the respondents.

          Regarding permits granted in favour of the appellants and countersigned
F   by the State of Haryana, it is clear that the same was issued by RTA in
    accordance with the direction issued by STAT vide its order dated July 24,
    1999. By the said order, STAT quashed the orders passed by RTA on April
    25, 1998 and November 18, 1998 and directed RTA to reconsider the applications
    submitted by various private parties. But it has come on record that the order
    of STAT was challenged by RSRTC as also by other parties in the High Court
G   of Rajasthan by filing writ petitions. The learned single Judge, not only
    ente11ained writ petitions, but even granted prohibitory interim orders on
    September 9, 1999 and RT A was restrained from considering the applications
    as directed by STAT. It is true that the said interim order had not been
    communicated immediately to RTA and RTA was not made aware of the
H   interim order passed by the learned single Judge. Though it was stated by
             VISHNU DUTT v. STATE OF RAJASTHAN [THAKKER, J.]                     785

     the learned counsel for the respondents that the interim order was passed by A
     the learned single Judge in presence of the learned counsel appearing for RTA
     and as such RT A must be deemed to be aware of the interim order and the
     learned single Judge has also taken into account the said fact, we may not
     enter into larger question since in our opinion, the Division Bench was right
     in observing that even if it is held that RTA was not aware of interim order
     passed by the learned single Judge and hence it could· consider the applications B
     submitted by the appellants and other applicants, when the petitions were
     allowed and the order of STAT remitting the matter to RTA for reconsideration
     was quashed and set aside, the action taken by RTA had no effect in the eye
     of law. On STAT direction being set aside, there could not be said to be an
     order of reconsideration of applications by RTA. Hence, an order granting C
     applications and issuing permits in favour of the appellants had no legal
     effect whatsoever and the appellants cannot derive any benefit under the said
     order of November 2, 1999.

           In this connection, we may refer to a decision of this Court in Mu/raj
     v. Murti Raghunathji Maharaj, [1967] 3 SCR 84: AIR (1967) SC 1386. In that         D
     case, execution proceedings were pending in the Executing Court. Stay was
     granted against execution by the appellate Court but the said order was not
     communicated to the Executing Court. A question which came up for
     consideration before this Court was whether further proceedings before the
     Executing Couit, after the order. was passed by the appellate Court, staying
     the execution had any sanctity in law? This Court, after drawing the distinction   E
     between 'stay' and 'injunction', observed:

..           "An order of stay in an execution matter is in our opinion in the nature
             of a prohibitory order and is addressed to the court that is carrying
             out execution. It is not of the same nature as an order allowing an F
             appeal and quashing execution proceedings. That kind of order takes
             effect immediately it is passed, for such an order takes away the very
            jurisdiction of the court executing the decree as there is nothing left
             to execute thereafter. But a mere order of stay of execution does not
             take away the jurisdiction of the court. All that it does is to prohibit
            the court. from proceeding with the execution further, and the court G
             unless it knows of the order cannot be expected to carry it out.
            Therefore, till the order comes to the knowledge of the court its
            jurisdiction to carry on execution is not affected by a stay order which
            must in the very nature of things be treated to be a prohibitory order
            directing the executing court which continues to have jurisdiction to H
    786                    SUPREME COURT REPORTS [2005] SUPP. 5 S.C.R.
                      •i                                                                •
A         stay its hand till further orders. It is clear that as soon as a stay order
          is withdrawn, the executing court is entitled to carry on execution and
          there is no question of fresh conferment of jurisdiction by the fact
          that the stay order has been withdrawn. The jurisdiction of the court
          is there all along. The only effect of the stay order is to prohibit the
          executing court from proceeding further and that can only take effect
B         when the executing court has knowledge of the order. The executing
          court may have knowledge of the order on the order bei.ng
          communicated to it by the court passing the stay order or the executing
          court may be informed of the order by one party or the other with an
                                                                                        ·'
          affidavit in support of the information or in any other way. As soon
c         therefore as the executing court has come to know of the order either
          by communication from the court passing the stay order or by an
          affidavit from one party or the other or in any other way the executing
          court cannot proceed further and if it does so it acts illegally. There
          can be no doubt that no action for contempt can be taken against an
          executing court, if it carries on execution in ignorance of the order of
D         stay and this shows the necessity of the knowledge of the executing
          court before its jurisdiction can be affected by the order. In effect
          therefore a stay order is more or less in the same position as an order
          of injunction with one difference. An order of injunction is generally
          issued to a party and it is forbidden from doing certain acts. It is well-
E         settled that in such a case the party must have knowledge of the
          injunction order before it could be penalized for disobeying it. Further
          it is equally well-settled that the injunction order not being addressed
          to the court, if the court proceeds in contravention of the injunction
          order, the proceedings are not a nullity. In the case of a stay order,        .
          as it is addressed to the court and prohibits it from proceeding further,
F         as soon as the court has knowledge of the order it is bound to obey
          it and if it does not, it acts illegally, and all proceedings taken after
          the knowledge of the order would be a nullity. That in our opinion is
          the only difference between, an order of injunction to a party and an
          order of stay to a court. In both cases knowledge of the party
          concerned or of the court is necessary before· the prohibition takes
G
          effect. Take the case where a stay order has been passed but it is
          never brought to the notice of the court, and the com t carries in
          proceedings ignorance thereof. It can hardly be said that the court
          has lost jurisdiction because of some order of which has no knowledge.
          This to our mind clearly follows from the words ofO. XLI R. 5 of the
H                                                                                            I
                                                                                             ~
        VISHNU DUTT v. STATE OF RAJASTHAN [THAKKER, J.)                    787
         Code of Civil Procedure which clearly lays down that mere filling of A
         an appeal does not operate as stay of proceedings in execution, but
        the appellate court has the power stay of execution. Obviously when
        the appellate court orders the stay of execution the order can have
        affect only when it is made known to the executing court. We cannot
        agree that an order staying execution is similar to an order allowing
        an appeal and quashing execution proceedings. In the case where the B
        execution proceeding is quashed, the order takes effect in immediately
        and there is nothing left to execute. But where a stay order is passed,
        execution still stands and can go on unless the court executing the
        decree bas knowledge of the stay order. It is only when the executing
        court has knowledge of the stay order that the court must stay its C
        hands and anything it does thereafter would be a nullity so Jong as
        the stay order is in force".

        The Co11rt then stated;

        "Though the court which is carrying on execution is not deprived D
        of the jurisdiction the moment a stay order is passed, even though it
        has no knowledge of it, this does not mean that when the court gets
        knowledge of it is powerless to undo any possible injustice that might
        have been caused to the party in whose favour the stay order was
        passed during the period till the court has knowledge of the stay
        order. We are ofopinion that section 151 of the Code of Civil Procedure E
        would always be available to the court executing the decree, for in
        such a case, when the stay order is brought to its notice it can always
        act under Section 151, and set aside steps taken between the time the
        stay order was passed and the time it was brought to its notice, if that
        is necessary in the ends of justice and the party concerned asks it to
        do so. Though, therefore, the court executing the decree cannot in our F
        opinion be deprived of its jurisdiction to carry on execution till it has
        knowledge of the stay order, the court has the power in our view to
        set aside the proceedings taken between the time when the stay order
        was passed and the time when it was brought to its notice, if it is
        asked to do so and it considers that it is necessary in the interests G
        of justice that the interim proceedings should be set aside."

     An interesting question came up for consideration before this Court in
Nawabkhan Abbaskhan v. State of Gujarat, [1974] 2 SCC 121 : AIR (1974)
SC 1471. In that case, an externment order was passed against N on September
5, 1967 under the Bombay Police Act, 1951. In contravention of the said order;   H
    788                     SUPREME COURT REPORTS (2005] SUPP. 5 S.C.R.

A   N entered the forbidden area on September 17, 1967 and was, therefore,
    prosecuted. During the pendency of the criminal proceedings, however, the
    extemment order passed against N was challenged in the High Court under
    Article 226 of the Constitution and was set aside on July 16, 1968. Taking note
    of the said fact, the trial Court acquitted N but an appeal filed by the State
    against the order of acquittal came to be allowed by the High Court holding
B   that when the contravention took place in September, 1?67, the order was very
    much operative and hence N was liable for committing breach of that order.
    He was, therefore, convicted by the High Court. N approached this Court.

          Allowing the appeal and reversing the decision of the High Court, this
C Court held that once the extemment order was declared illegal, it was of no
    effect, and N co_uld never be held guilty of flouting such order. Rubinstein
    was quoted by the Court who stated;
                                                                                          •
                "How does the validity or nullity of the decision affect the rights
            and liabilities of the persons concerned? Can the persons affected by
D           an illegal act ignore and disregard it with impunity? What are the
            remedies available to the aggrieved parties? When will the courts
            recognize a right to compensation for damage occasioned by an illegal
            act? Al! these questions revert to the one basic issue; has the act
            concerned ever had an existence or is it merely a nullity ?

E                 Voidable acts are those that, can be invalidated in certain
            proceedings; these proceedings are, especially formulated for the
            purpose of directly challenging such acts ...... On the other hand, when
            an act is not merely voidable but void, it is a nullity and can be
            disregarded and impeached in any proceedings, before any court or
            tribunal and whenever it is relied upon. In other words, it is subject
F           to 'collateral attack'."

          Kelson's pure theory of law was also considered who stated that when
    a Court holds an a.ct as nullity, it is not merely a declaration of nullity, "it is
    true annulment, an annulment with retroactive force".

G          Though, no final opinion was expressed on wide ranging problems in
    public law of illegal orders and violations thereof by citizens, the Court ruled
    that in the facts and circumstances of the case, when the order of extemment
    was held illegal by a competent Court on the ground that it was passed in
    violation of the principles of natural justice, it was of no effect. The Court
H   quashed the ordemot killed it then but performed the formal obsequies of the
         VISHNU DUTT v. STATE OF RAJASTHAN [THAKKER, J.)                     789

order which had died at birth. "The legal result is that the accused was never      A
guilty offlouting an order which never legally existed". (emphasis supplied)

        In the instant case, admittedly, the order passed by STAT was finally
 set aside by the High Court in writ petitions. Therefore, even if the contention
of the learned counsel for the appellants is held to be well founded that RTA,
Bikaner was not made aware of interim order passed by the learned single            B
Judge and hence it could consider the applications and pass appropriate
orders thereon, since the order of STAT remitting the matter to RTA was
finally quashed and set aside, all consequential actions must be held illegal
and of no effect. In our opinion, the High Court was perfectly right and wholly
justified in ignoring the directions issued by STAT and grant of pennits by         C
RTA in favour of the appellants.

      For the foregoing reasons, all the appeals deserve to be dismissed and
they are accordingly dismissed. In the facts and circumstances of the case,
however, there shall be no order as to costs.

B.B.B.                                                      Appeals dismissed.
                                                                                    D