( 1 ) IN this petition under Art. 226 (1) (b) and (c) of the Constitution of lndias the petitioner has challenged, the validity of the, order passed by the state Transport Authority, Bangalore, dated 3-5-1976 in subject No. 1/76-77 and that of the, Karnataka State, Trnansport Appellate Tribunal dated, 7-2-1978, passed in Appeal No 461 of 1976. ( 2 ) THE petitioner filed an application for grant of a National Permit in pursuance of the Notification issued by the State Transport Authority under S. 57 of the, Motor Vehicles Act, 1939 (hereinafter referred to as 'the Act' ). The application of the petitioner came to be rejected by the state Transport Authority on the ground that the petitioner was the holder of an Inter-State permit and he sold the same and that the said sale was made for profit and as such, the petytioner was not entitled for the grant of national permit. Accordingly, the State Transport Authority rejected the application. In the appeal also the Karnataka, State Transport appellate Tribunal has adopted the same reasoning and has rejected, the appeal. ( 3 ) IT was submitted by Sri Gupta, the learned Counsel appealing for the petitioner that the inter-state permit that was transferred, by the petitioner was due to the fact that the vehicle had become very old and he was not entitled to replace the vehicle; there fore, with the permission of the 2nd respondent, the permit was transferred by the petitioner. Hence it was submitted that when the permit was transferred with the permission of the State Transport Authority, the respondents could not have refused to grant the national permit on the aforesaid ground. It was also submitted by the learned counsel that there was no material before the respondents to come to the conclusion that the transfer of the inter-state permit by the petitioner was for the purpose of making profit. He also submitted that in the matter of transfer of earlier permit, there) was no clandestine transaction whatsoever and at any rate thepre was no material before the respondents to justify such an inference. He also submitted that in the matter of transfer of earlier permit, there) was no clandestine transaction whatsoever and at any rate thepre was no material before the respondents to justify such an inference. It was further submitted by the learned Counsel that both the authorities below have failed to look into the provisions of sub-section (11) and (12) of Section 63 of the Act, which came to be introduced, by the motor Vehicles (Amendment) Act, 1966 which came into force on 28th september 1975. The relevant portions of sub-section (11) and (12) of section 63 of the Act, as introduced by the amendment, read as; follows: -" (11) Notwithstanding anything contained in sub-section (1), but subject to the rules that may be made by the Central Government under sub-section (15), the appropriate authority may, for the purpose of encouraging long distance inteor-State road. Transport, grant to the public carriers in a State such number of national permits as the Central Government may specify in this behalf in relation to that State and the provisions of Sections 54, 55, 56, 57, 58, 59, 59a 61 and 64 shall, as far as may be, apply to or in relation to the grant of national permits: provided that the number of national permits specified for a state shall not be varied or modified except after consultation with the concerned State Government. Explanation.- In this section- (a) "national permit means a permit granted by the appropriate authority to a public carrier authorising him to operate as a public carrier throughout the territory of India or in such contiguous sates not being less than five in number (including the State in which the permitt is issued) as may be specified in such permit in accordance with the choice indicated by the public carrier to whom such permit is granted (b) "appropriate authority" in relation to a national permit means the, authority which is authorised by this Act to grant a public carrier's permit. (12) Without prejudice to the provisions of sub-seption (1) of section 55, the appropriate authority shall, in considering an application for a national permit, also have regard to the following matters namely:- (a) no national permit shall be issued- (i) to an individual owner if he already holds in his own name three or more valid national permits, or when he holds valid national permits as well as valid interstate region permits, if the aggregate number of such permits is three or more; (ii) to a company which already holds in its own name seven, or more valid national permits, or when it holds valid national permits as well as valid interstate region permits, if the aggregate; number of such permits is seven or more; (b) other conditions being equal, preference shall be, given to applicants who are ex-army personnel, or who have valid licences for driving transport vehicles. Explanation:- In this sub-section "company includes a body corporate, thus from the, reading of sub-section (12) it is clear that the grant, of the national permit cap, be rejected only on the grounds mentioned in subsection (1) of S. 55 of the Act and also on the grounds mentioned in subsection (12) (a) (i) (ii) of S. 63 of the Act. Further, clause (b) of subsection (12) of S. 63 of the act,, provides that Ofther conditions being equal preference, shall be given to applicants who are, ex-army personnel or who have vajid licences for driving transport vehicles. It is the ' case of the petitioner that he was the holder of a heavy motor vehicle driving licence bearing No. 1504163 and he has been a driver-cum-owner of transport vehicle, since 1963. The, reasons given by both the, authorities below do not fall in any one of the categories mentioned under sub-section, (12) of S. 63 and sub-section (1) of S. 55 of the, Act. That being so, it is clear that the State Transport Authority was not justified in law in refusing to grant the permit and the same reason was adopted by the, karnataka State Transport Appellate Tribunal. The finding recorded by the respondents was without any basis as there was no material on record to justify the said finding. That being so, it is clear that the State Transport Authority was not justified in law in refusing to grant the permit and the same reason was adopted by the, karnataka State Transport Appellate Tribunal. The finding recorded by the respondents was without any basis as there was no material on record to justify the said finding. ( 4 ) IT was contended by the learned Counsel appearing for the respondent that the wasons given by the State Transport Authority dp not fall under S. 55 (1) of the Act. . ( 5 ) AS already pointed out, the reasons given by the S. T. A. and K. S. T. A. T. are that the petitioner has transferred the inter-State permit and the said transfer was for making profit out of the said permit. As already pointed out the said reasons are not based on any material on record. Thus the impugned orders are vitiated by errors apparent on the face of the record. The 1st respondent was of the view that it was difficult to ascertain the motive behind the transfer but nevertheless confirmed the order of the 2nd respondent on the, very ground of suspicion. That being so, the impugned orders cannot at all be sustained. Consequently, the orders passed by the respondents are hereby quashed. The matter now stands remitted to the State Transport Authority with a direction to consider afresh the, application made, by the petitioner for issue of the, national permit, in accordancel with law and in the light of the observations made , in this order. No costs. --- *** --- .