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1963 DIGILAW 345 (KER)

Cannanore District Motor Transport Employees Co Operative Society Ltd v. State Transport Appellate Tribunal

1963-11-04

C.A.VAIDIALINGAM

body1963
JUDGMENT C.A. Vaidialingam, J. 1. In both these writ petitions, the respective petitioners, who were applicants for grant of a permit over the route in question, namely Cannanore Azhikkal and whose claims have not been recognised by the State Transport Appellate Tribunal, challenge the order of that tribunal granting the permit in favour of the constesting respondent in these proceedings, namely applicant No. 12. In these writ petitions, we are concerned only with the competing claims of applicant Nos. 2, 9, and 12. 2. In respect of the route Cannanore-Azhikkal, which is stated to be of about 8 miles, in response to the notification issued by the Regional Transport Authority, Cannanore, calling for applications for grant of one permit, there were as many as 20 aspirants for this single permit to be given. The Regional Transport Authority set before itself the principle that inasmuch as this is a mofussin route of a very short length, namely 8 miles, a new entrant with all necessary facilities will be able to operate on this route. Therefore the Regional Transport Authority considers the claims of such persons who could be characterised as new entrants according to the test laid down by that authority. Quite naturally, in view of this principle laid down by the Regional Transport Authority, the claims or several other operators, who were also applicants were rejected. Ultimately the Regional Transport Authority treated applicant No. 2, who is also a co-operative society, as a new entrant. Having treated applicant No. 2 as a new entrant, it will also be seen that the Regional Transport Authority took into account the claim made by that applicant on the basis of the experience gained by it by operating certain services on the basis of grants made in its favour by the Regional Transport authority concerned. Having due regard to the fact that the Regional Transport Authority was of the view that applicant No. 2, apart from being a new entrant, has also to its credit certain qualifications, and also having due regard to the fact that it is a co-operative society, which is entitled to preference under the proviso to Section 47 (1) of the Motor Vehicles Act, the Regional Transport Authority granted the permit in favour of applicant No. 2. 3. 3. There were quite naturally several appeals taken as against this grant made by the Regional Transport Authority, before the State Transport Appellate Tribunal, among whom were applicants 9 and 12. The Appellate Tribunal was also of the view that in view of the shortness of the route in question, a new entrant can be preferred and given an opportunity to serve the public. On this basis, the Appellate Tribunal again screened several operators, who, according to it, should be considered to be fleet-operators. In particular, notwithstanding the fact that the Appellate Tribunal was of the view that applicant No. 9 who is the petitioner in O.P.1689/63-can be considered to have superior qualifications, nevertheless, inasmuch as the Tribunal was agreeing with the view of the Regional Transport Authority that the grant of the permit in respect of this route should be given in favour of a new entrant, the claim of applicant No. 9 to be given the permit, was rejected. The Appellate Tribunal was also of the view that the treating of applicant, No. 2 by the Regional Transport Authority as a new entrant, was erroneous. Because, according to the Appellate Tribunal, there cannot be a new entrant, who can also claim experience in the industry. In fact, the claim to be a new entrant and the claim for experience, according to the Appellate Tribunal, are mutually contradictory and exclusive, and cannot stand side by side. Therefore, the Appellate Tribunal took the view that in this case, inasmuch as the applicant No. 2 has been having two services, on the basis of permits granted in its favour, one in respect of the route Cannanore-Panur and the other in respect of the route Cannanore-Chalode, it cannot be considered that applicant No.2 is a new entrant, as that expression is understood in law. Therefore the Appellate Tribunal proceeds to consider the claims only of new entrants in the sense that they are persons who I are aspiring for permit for the first time in the industry itself. On this basis, the Appellate Tribunal considers the claims among others, of applicant No. 12; and it is of the view that applicant No. 12 has got all the basic qualifications necessary for being entrusted with running a transport service, and therefore the permit for the route in question has to be granted in favour of that applicant. On this basis, the Appellate Tribunal considers the claims among others, of applicant No. 12; and it is of the view that applicant No. 12 has got all the basic qualifications necessary for being entrusted with running a transport service, and therefore the permit for the route in question has to be granted in favour of that applicant. Ultimately, the Appellate Tribunal reversed the grant made in favour of applicant No. 2 by the Regional Transport Authority, and granted, in turn, the permit in favour of applicant No. 12. It is this grant that has been made in favour of applicant No. 12 that is attacked by applicant No. 2, by his learned counsel Mr. K. Velayudhan Nair in 0. P. No. 1355/63, and by applicant No. 9 by his learned counsel Mr. V. R. Krishna Iyer, in O. P. No, 1689/63. 4. From what is stated above, it will be seen that applicant No. 2 got, no doubt, the permit in the first instance at the hands of the Regional Transport Authority, and that permit has been cancelled by the Appellate Tribunal; whereas so far as applicant No. 9 is concerned, he has not got a permit either at the hands of the Regional Transport Authority or at the hands of the Appellate Tribunal. 5. The contentions that have been urged by Mr. K. Velayudhan Nair, learned counsel for applicant No. 2, who is the writ petitioner in O. P. 1355/63, will be taken up first; and the contentions that have been raised by Mr. V. R. Krishna Iyer, learned counsel, on behalf of applicant No. 9, who is the writ petitioner in O. P. 1689/63 will be taken up later. 6. The main contention of Mr. K. Velayudhan Nair, learned counsel for applicant No. 2, is that the Appellate Tribunal committed a fundamental error in proceeding on the basis that there cannot be a new entrant who can also claim previous experience in the industry. On the other hand, according to the learned counsel, in this case a perusal of the order of the Regional Transport Authority will clearly show that the Tribunal was treating his client, namely applicant No.2 as a new entrant, in the sense that he was not having a permit on the material date. On the other hand, according to the learned counsel, in this case a perusal of the order of the Regional Transport Authority will clearly show that the Tribunal was treating his client, namely applicant No.2 as a new entrant, in the sense that he was not having a permit on the material date. In that connection according to the petitioner, the Tribunal considers the case of applicant No. 2 as a new entrant and proceeds on the basis that the claims of persons who are having a permit at the material date do not require any favourable consideration at the hands of the Tribunal. 7. One of the questions arising for consideration in O. P. 1355/63 at the instance of applicant No.2, is as to whether the Regional Transport Authority has really proceeded on the basis that a new entrant which principle it has set before itself is not really a person in the industry itself and it is only used as opposed to existing operators. In my view, a perusal of the order of the Regional Transport Authority, as well as the manner in which this question has been discussed by the Appellate Tribunal and the stand taken by applicant No.2 before those authorities, clearly shows that all parties proceeded on the basis that the claim of a new entrant, in the sense that he is a new entrant not in respect of a particular region or route, but a new entrant in the industry itself, was being considered and pressed before the authorities for grant of the permit in their favour. Because it will ultimately be seen that so far as applicant No. 12, in whose favour the grant has been made by the Appellate Tribunal, is concerned, he was not an operator having any service either in the region or in the route, but was a new entrant, in the sense that . he was new to the transport industry itself. 8. No doubt, Mr. K. Velayudhan Nair, learned counsel for applicant No. 2 urged that the view of the Appellate Tribunal that there cannot be a new entrant who can claim also previous experience is erroneous. he was new to the transport industry itself. 8. No doubt, Mr. K. Velayudhan Nair, learned counsel for applicant No. 2 urged that the view of the Appellate Tribunal that there cannot be a new entrant who can claim also previous experience is erroneous. I am prepared to accept this contention of the learned counsel to the limited extent that the large proposition laid down by the Appellate Tribunal that under no circumstances, a person can be a new entrant and also claim previous experience, is not fully correct. It is really necessary to note that the expression new 'entrant' cannot be considered as such in abstract but must be really understood in the context in which such a claim is being considered. There can be a new entrant in respect of a particular State, or there can be a new entrant in respect of a particular region; again, there can be a new entrant in respect of a particular route. In all those cases, if the applicant has been having services outside the State, or region, or route, his previous experience, if any, can certainly be pressed into service in requesting a grant to be made in his favour. But there may also be a case where a new entrant, as understood not in the context erred to by me above in the three instances, but in a totally different context, namely persons coming into the transport field for the first time. In such a case, in my view, the Appellate Tribunal is perfectly justified in coming to the conclusion that in respect of such a new entrant, he cannot claim any previous experience, because it stands to reason that if the applicant is coming into the transport field for the first time, he cannot claim any previous experience of having been an operator. If he had been an operator previously, he also ceases to be a new entrant, i.e., a person coming into the transport field for the first time. 9. No doubt, Mr. Velayudhan Nair, learned counsel referred me to the observations of the Supreme Court in the decision reported in Jagannatham v sowdambigai Motor Service (1963 II S. C. W. R. 199) in support of his contention at there can be a new entrant with previous experience, in respect of a route. 9. No doubt, Mr. Velayudhan Nair, learned counsel referred me to the observations of the Supreme Court in the decision reported in Jagannatham v sowdambigai Motor Service (1963 II S. C. W. R. 199) in support of his contention at there can be a new entrant with previous experience, in respect of a route. So as that proposition is concerned, I have already indicated that the expression new entrant' will have to be understood in the context in which that expression is understood, and it cannot be understood in the abstract. The question is whether the two authorities concerned have treated the parties to be preferred as new entrants the sense of their coming into the field of transport industry for the first time. 10. No doubt, Mr. Velayudhan Nair, learned counsel for the applicant No.2, urged that the Regional Transport Authority has not proceeded on that basis but has merely grouped the applicant in two categories, viz., (a) in the sense that he does not have a permit on the material date, and (b) was running services on the basis of permits either in the route or in various parts of the same region itself. Such classification is, in my view, absolutely arbitrary and does not satisfy the test of new entrants. I have already indicated that the approach made by the Appellate Tribunal, the stand that was taken by that applicant before the authority, as well as the manner which this question has been discussed by the Tribunal, leave no room for doubt in my mind to come to the conclusion that all the parties and all the authorities have understood the expression new entrant' as an operator who is coming into the field for the first time. If that is so, the view of the Appllate Tribunal that there cannot be such a new entrant, claiming also previous experience in the industry is perfectly justified. If that is the test to be applied in the circumstances of the case, it follows at the grant of the permit by the Regional Transport Authority, treating applicant No. 2 as a new entrant in the transport industry, and also having previous experience, cannot certainly be justified. Therefore, notwithstanding the strenuous efforts made by Mr. If that is the test to be applied in the circumstances of the case, it follows at the grant of the permit by the Regional Transport Authority, treating applicant No. 2 as a new entrant in the transport industry, and also having previous experience, cannot certainly be justified. Therefore, notwithstanding the strenuous efforts made by Mr. K. Velayudhan Nair, learned counsel for applicant No. 2, to convince this Court that the approach made by the Appellate Tribunal in negativing the grant already made by the Regional Transport Authority in favour of applicant No. 2 is not satisfactory and is illegal. I am not satisfied that the learned counsel has been able to sustain this plea. It therefore follows that once both the authorities, namely the Regional Transport Authority and the Appellate Tribunal, came to an unanimous conclusion that the grant in respect of this short route is to be given to a new, entrant, the elimination of applicant No. 2 on the ground that he does not satisfy the expression new entrant' in the sense of his coming into the field of transport industry for the first time, is perfectly justified. Therefore, O. P. No. 1355/1963 will have to be dismissed. 11. Coming to O. P. No. 1689/63, which as I have already indicated is the writ petition filed by applicant No. 9 who did not get a permit at the hands of either of the authorities concerned, Mr. V. R. Krishna Iyer, learned counsel for that party, has raised three contentions namely (1) that the characterisation by the two authorities of the route in question as a mofussil route is absolutely arbitrary and illegal. (2) The second contention raised by the learned counsel is that his client, namely applicant No. 9, has specifically and categorically referred to the possession of a bus, in his application itself, and that is a very relevant circumstance to be taken into account, as held by my learned brother Madhavan Nair J., in the Division Bench decision reported in Vypeen Transport Corporation v S. T. A. T. (1960 K. L. J. 1214). According to the learned counsel for the petitioner, both the authorities brae not cared to advert to this circumstance, and therefore, the non-consideration of that very relevant circumstance, as laid down by this Court in the derision referred to above, makes the orders under attack illegal and void. According to the learned counsel for the petitioner, both the authorities brae not cared to advert to this circumstance, and therefore, the non-consideration of that very relevant circumstance, as laid down by this Court in the derision referred to above, makes the orders under attack illegal and void. (3) The third and last contention urged by the learned counsel for the petitioner is that both the "authorities have not certainly considered the claims inter se of his client, namely applicant No: 9, and the grantee, namely applicant No. 12 and adjudicated upon the preferential claims of applicant No.9 On the other hand, according to the learned counsel, what both the authorities have done in the present case, was to summarily reject the persons like the petitioner (applicant No. 9) on the ground of their being fleet operators, and to make the grant in question in favour of applicant No. 2 by the Regional Transport Authority in the first instance, and in favour of applicant No. 12 later by the State Transport Appellate Tribunal merely on the ground that the operation of the service over the route in question is to be entrusted to a new entrant and holding that whoever satisfies the definition of that expression should be given the permit 12. I have no hesitation to reject every one of these contentions raised by Mr. V. R. Krishna Iyer, learned counsel for the petitioner in this writ petition. It is not as if both the authorities have characterised the route in question as a mofussil route without any reason whatsoever. The learned counsel himself was prepared to accept the position that there are no principles laid down by the statute or the relevant rules to indicate as to which particular types of route are to be characterised as mofussil and non-mofussil routes. If that is so, in my view, so long as it is not established that the authorities concerned have acted arbitrarily and it is seen that having due regard to the particular nature of the route, they have come to the conclusion that the route in question has to be treated as a mofussil route, there is absolutely no scope for interference with the discretion exercised by those authorities. 13. The second contention urged by Mr. 13. The second contention urged by Mr. V. R. Krishna Iyer, learned counsel for applicant No. 9, is that there is absolutely no reference to the claim made by his client regarding the possession of a bus, made in his application itself. No doubt, one of the circumstances that has to be taken into account, as laid down by this Court in Vypeen Transport Corporation v S. T. A. T. (1960 K. L. J. 1214), in considering the claims of competing operators for grant of a permit, is the possession of a vehicle on the date of the application itself. There is also no controversy that if a relevant circumstance has not been taken into account in the matter of the adjudication of the claims of the other operators, then it will certainly vitiate the order under attack. But the question is as to how far the non-consideration of this circumstance can be considered to have vitiated the grant in this case. 14. I have already adverted to the fact that both the authorities were not inclined to grant the permit in favour of applicant No. 9. Notwithstanding the fact that the said applicant appears to have made a claim regarding the possession of a bus, it is seen that at no material stage much less before the Appellate Tribunal-was this claim pressed by that party. But, apart from all these circumstances, there is this circumstance, namely the reasons given by the two authorities for eliminating persons like applicant No. 9. If that is a question of detail, i.e., going minutely into the claims of each of the applicants, and adjudicating upon that basis, surely there was an obligation on the part of the authorities to take into account all these circumstances. But it will be seen that both the authorities have agreed that it is desirable in the interests of the public that this mofussil route can be safely entrusted to a new entrant. If that is so, the question is whether the elimination of persons like the applicant No. 9 on the ground that the route in question can be entrusted to a new entrant, is illegal or invalid. 15. If that is so, the question is whether the elimination of persons like the applicant No. 9 on the ground that the route in question can be entrusted to a new entrant, is illegal or invalid. 15. That under proper circumstances, there is jurisdiction in the authorities concerned to consider, in respect of particular routes, having due regard to public interest, the claims of either a small operator or a new entrant, has been recognised by the Supreme Court itself in the decision reported in Raman and Raman Ltd., v State of Madras (A. I. R. 1959 S. C. 694). That was a case where the grant was made in favour of an 'applicant who was considered to be a small operator in preference to fleet owners who had certainly superior qualifications. The Supreme Court expressed the view that so long as the provisions of Section 47 (1) have not been violated and so long as the authorities in the matter of choosing a small operator had the paramount interest of the public in mind, which is an essential factor in making the grant, it cannot certainly be stated that the mere fact that a small operator of a new entrant was chosen as against an experienced or a fleet operator, does not make the grant illegal or void. Therefore, from the decision of the Supreme Court referred to above, it follows that the authorities, in the particular circumstances and having due regard to the nature of the route and also the interests of the public, decided to choose a new entrant, as they have done in this case, it cannot be stated that the decision by itself is in any manner illegal or void. 16. Mr. V. R. Krishna Iyer, learned counsel for applicant No. 9 very strenuously relied upon the recent decision of the. Supreme Court in Jagannatham v Sowdambigai Moror Service (1963 II S. C. W. R. 199), and urged that in the case before me there has been no proper consideration of the claims inter se of his client, namely applicant No. 9, and the grantee applicant No. 12. Supreme Court in Jagannatham v Sowdambigai Moror Service (1963 II S. C. W. R. 199), and urged that in the case before me there has been no proper consideration of the claims inter se of his client, namely applicant No. 9, and the grantee applicant No. 12. The learned counsel also urged, on the basis of the Supreme Court decision referred to above, that in this case the grant suffers from the same infirmity that was pointed out by the Supreme Court, namely that the grant was made on the ground that applicant No.12 is a new entrant. After going through the decision of the Supreme Court referred to above, and having due regard to the approach made by the Appellate Tribunal in the matter of finally making the grant in favour of applicant No. 12, I have no hesitation in rejecting this contention of the learned counsel. A perusal of the judgment of the Supreme Court relied upon by the learned counsel will show that in that case the Regional Transport Authority did not think it necessary to grant the permit in favour of a new entrant, on the ground that the entrustment of the operation of service on the route in question requires some experienced operator, and it was on that ground that the claims of the new entrant in that case were rejected. Whereas, on appeal by the new entrant before the Appellate Tribunal, the latter authority, merely on the assumption that a new entrant will have to be preferred and without any further consideration of the public interest or the claims of the other operators, made the grant in favour of the new entrant. It was this grant made, on the basis of an operator being a new entrant, by the Appellate Tribunal, that was the subject of attack before a learned Single Judge of the Madras High Court in the first instance, and later before a Division Bench of two learned Judges. In that context, it will be seen that the Madras High Court, if I may say so with respect quite pertinently observed that there was no adjudication inter se of the claims of the parties, before the Appellate Tribunal decided to make the grant in question. In that context, it will be seen that the Madras High Court, if I may say so with respect quite pertinently observed that there was no adjudication inter se of the claims of the parties, before the Appellate Tribunal decided to make the grant in question. The Madras High Court, whose observations have been extracted in the judgment of the Supreme Court, has also stated that the Appellate Tribunal in that case has proceeded on the basis that as a rule of law new entrants should invariably be preferred, as that would give them an enthusiasm, and also surcharge the atmosphere with a healthy competition. The Madras High Court has also stated that the paramount question to be considered in such circumstances was the interest of the public. And it is under those circumstances that the learned Single Judge in the first instance and the learned appellate Judges at the second stage, set aside the order of the Appellate Tribunal that was under attack. That decision of the Madras High Court was challenged before the Supreme Court by the new entrant whose permit had been set aside. The Supreme Court gives its approval to the various observations made by the Madras High Court, and ultimately it is also of the view that the Appellate Tribunal has granted the permit to the party in question merely .on the basis that a new entrant has to be preferred in respect of that route. That approach of the Tribunal has been criticised by the Supreme Court. Ultimately the Supreme Court emphasises that there should be a proper determination of the only question which requiries to be determined in the case, namely why one operator should be preferred to another. 17. That approach of the Tribunal has been criticised by the Supreme Court. Ultimately the Supreme Court emphasises that there should be a proper determination of the only question which requiries to be determined in the case, namely why one operator should be preferred to another. 17. The question in this case is whether the contention of the learned counsel for the petitioner, namely applicant No. 9, that the grant that has been made by the Appellate Tribunal in favour of applicant No. 12 is quite opposed to the principles laid down by the Supreme Court in the decision referred to above, can be accepted I do not think it necessary to go into this matter in any great detail because, the Appellate Tribunal has considered the question regarding the nature of the router as well as the plea raised by applicant No. 9, viz., that the interests of the public can be best served by choosing an experienced operator like applicant No. 9 in respect of that route. That aspect has been considered very elaborately by the Appellate Tribunal, and it has come to the conclusion that inasmuch as applicant No. 12 has I got all the essential basic qualifications for being entrusted with a transport service, and having due regard to the nature of the route and the interests of the public, the operation of the service can be entrusted to applicant No. 12, Therefore, none of the infirmities pointed out either by the Madras High Court or by the Supreme Court in the decision referred to above, are present in the matter of the grant made by the Tribunal in this case in favour of applicant No. 12. If that is so, it follows that this writ petition will also have to be dismissed. 18. In the result, both the writ petitions are dismissed, and the parties will bear their own costs.