JUDGMENT 1. :- There six special appeals are directed against the common order dated 24.1.1995 passed by a learned single Judge of this Court in 19 similar writ petitions filed by different petitioners, who are non-temporary stage carriage permit holders on different routes operating between Rajasthan and Haryana whereby it has been held that the inter-statal agreements entered into between the States of Rajasthan and Haryana in a joint meeting held on 5th, 6th, 7th and 8th February, 1968 were legally rescined by notice dated 7.6.1988 of six months which expired on 12.8.1988 and, therefore, the petitioner-appellants cannot enforce counter- signatures of their permits as provided by proviso to sub-section (4) of section 88 of the Motor Vehicles Act, 1988 (for short 'the Act'). However, it has been left open to the petitioners to approach the authorities for counter-signatures under section 88(1) of the Act by taking recourse to section 80 of the Act. It has been further held that it is for the countersigning authority to countersign the permits issued in favour of the petitioners by imposing the conditions as provided in section 72(2) of the Act and other conditions, which are applicable under Chapter IV of the Act, if necessary but if it refuses to countersign the permits of the inter-statal routes then provision of section 80(2) of the Act shall be attracted, which are to the effect that if the RTA refuses an application for grant of permit of any kind under the Act, it shall give to the applicant in writing its reasons for the refusal of the same and an opportunity of being heard in the matter. According to the learned single Judge, the order of the RTA refusing the countersignatures is appealable under section 89(1) of the Act and thus, it is not permissible for the RTA to refuse the counter-signatures of the permits on the inter-statal routes by oral order as complained by the petitioners. The RTA can refuse counter-signatures of the permits only after hearing the parties affected and that too, by an order in writing. The learned single Judge directed the petitioners to approach the counter-signing authorities for counter-signatures of the inter-statal route-permits granted to them by the State and Regional Transport Authorities of Rajasthan. 2. The RTA can refuse counter-signatures of the permits only after hearing the parties affected and that too, by an order in writing. The learned single Judge directed the petitioners to approach the counter-signing authorities for counter-signatures of the inter-statal route-permits granted to them by the State and Regional Transport Authorities of Rajasthan. 2. It may be stated here that in D.B. Civil Special Appeal No. 291 of 1995 reply to the writ petition has been filed on behalf of the respondents as also by Intervenors Yasin Khan and Hoshiyarsingh, who are represented by Shri R.N. Munshi, Advocate. In S.B. Civil Writ Petition No. 5116 of 1994 filed by petitioner Nirmal Kumar, an application has been filed on behalf of applicant New Vijay Laxmi Bhambhu Transport Co. and one Jai Prakash for impleading them as parties, but instead of impleading them as respondents, they have been permitted to intervene in the writ petition. 3. The facts, necessary to be noticed, for the disposal of these appeals briefly stated are : that the petitioner-appellants are the holders of non- temporary stage carriage permits, which have been granted to them by the Regional Transport Authorities of Rajasthan on inter-statal routes for plying their buses on different routes from Rajasthan to Haryana and back and they are covered by different vehicles. It is alleged that in view of the rapid economic development of the country and with a view to encourage movement of transport vehicles on inter-statal routes between Rajasthan and Haryana and to regulate and control their operation, it became necessary to enter into a reciprocal agreement between the two States and, therefore, in the aforesaid meetings held on 5th, 6th, 7th and 8th of February, 1968, the reciprocal transport agreement Annexure-1 was finalised and certain permits were orders to be sanctioned on reciprocal basis on certain inter-statal routes. However, their scopes were later on revised from time to time. Thereafter, a new agreement was arrived at on 5.8.1986, whereby mileage of routes were fixed, trips on different routes were fixed and scopes were also revised, increased and fixed. This agreement dated 5.8.1986 has been filed in S.B. Civil Writ Petition No. 5442 of 1994 filed by petitioner-appellant Rajesh Kumar and it has been marked as Annexure-3. Be that as it may, it has been contended that these reciprocal agreements were rescinded vide letter Annexure-R.2 dated 7.6.1988. This agreement dated 5.8.1986 has been filed in S.B. Civil Writ Petition No. 5442 of 1994 filed by petitioner-appellant Rajesh Kumar and it has been marked as Annexure-3. Be that as it may, it has been contended that these reciprocal agreements were rescinded vide letter Annexure-R.2 dated 7.6.1988. The letter Annexure R-2 reads as under : "As per clause(l) of the Inter-statal reciprocal transport agreement dated 5th, 6th, 7th and 8th February 1968, either State can rescind the said and all other subsequent agreements after issue of six months notice. Accordingly, six months notice is hereby given for rescinding the said agreement and all other agreements entered into between the transport authorities of Haryana and Rajasthan States. After the expiry of six months notice, all inter-state operation of vehicles shall cease between the two States. This notice may please be acknowledged." 4. It has been contended by the petitioner-appellant that the procedure for grant of permits under the Motor Vehicles Act, 1988 has now been liberalised to such an extent that an intended operator can get a permit for asking irrespective of the number of operators already in the field and the rights of existing operators to file objections and provision to impose limit on the number of permits have been taken away. According to them the Statement and Objects and Reasons of the Act show that the purpose of bringing in the Act was to liberalise the grant of permits. They have, therefore, submitted that keeping in view the aforesaid purport of the Act, refusing to countersign the signatures on the permits was totally incorrect. The agreement that has been arrived at between the parties has not been properly rescinded. It should have been rescinded by mutual consent. Moreover, it is against the public policy and public interest. The third party interest as also the interest of the travelling public has been overlooked. The State of Haryana is plying its buses as usual, as per this reciprocal agreement whereas it is refusing to counter-sign the permits issued by the State and Regional Transport Authorities of Rajasthan, which is against the law. 5. The third party interest as also the interest of the travelling public has been overlooked. The State of Haryana is plying its buses as usual, as per this reciprocal agreement whereas it is refusing to counter-sign the permits issued by the State and Regional Transport Authorities of Rajasthan, which is against the law. 5. It has also been contended by the petitioner-appellants that as per the decision of this Court in Sahib Ram v. State of Rajasthan D.B. Civil Writ Petition No. 1309 of 1990, decided on August 28, 1992, a permit can be granted by the RTA concerned on a route or portion thereof which lies in the other region and the same can be operated in the other region, if it is counter-signed by the RTA of the other State of the concerned region or the State Transport Authority of that State, as the case may be. They have, therefore, submitted that concerned authorities of the State of Haryana are obliged to counter-sign the permits issued by the RTAs of Rajasthan. In this respect, reference has also been made to sub-s. (3-A) and (3-B) of section 63 of the Motor Vehicles Act, 1939 and section 88 of the Motor Vehicles Act, 1988. It has, therefore, been prayed that refusing to counter-sign the permits granted by the S.T.A. and RTAs of Rajasthan is illegal and hence, a direction deserves to be issued to the RTAs of the State of Haryana as also the State Transport Authority, Haryana to counter-sign these permits. 6. A reply to the writ petition has been filed on behalf of respondents No.1 and 2 in the writ petition filed by petitioner-appellant Gyansingh, wherein it has been contended that this Court has no territorial jurisdiction to decide the controversy involved in these cases. According to the respondents,' the inter-statal reciprocal agreement Annexure-1 arrived at between the States of Rajasthan and Haryana has been rescinded by a notice dated 7.6.1988. According to the respondents,' the inter-statal reciprocal agreement Annexure-1 arrived at between the States of Rajasthan and Haryana has been rescinded by a notice dated 7.6.1988. Even all subsequent reciprocal transport agreements entered into between the States of Haryana and Rajasthan have also been rescinded as per notice Annexure-R.2 dated 7.6.1988 and, therefore, when receiprocal agreement Annexure-1 stood rescinded after the expiroy of 6 months notice then the petitioner-appellants cannot claim counter-signatures of their permits as of right and the concerned RTAs as also the State Transport Authority of Haryana have all rights to refuse such counter-signatures under sub-s. (1) of section 88 of the Act. 7. According to the respondents, this controversy came up for consideration before a Division Bench of this Court in Bhagwan Devi v. State of Raj. D.B. Civil Writ Petition No. 3044 of 1989, decided on 5.11.1992, wherein it has been held that in view of the fact that by bringing the Motor Vehicles Act, 1988, procedure regarding grant of permits has been liberalised but so far as the grant of permit under inter-statal agreement is concerned, counter-signature by the concerned authorities of the other State is a matter of formality but in case, where there is no inter-statal agreement then the permit is only valid provided counter-signature is granted by the competent authority of the other State. It has been further held that in view of the Motor Vehicles Act, 1988 and the decision given in Sahib Ram's case (supra), the controversy involved is almost academic and the rescinding of the agreement had become redundant now. It is open to each or the States to grant permits on the portions of the routes, which lie in other State provided it is counter-singed by competent authority of another State. 8. It has been, therefore, contended by the respondents that rescinding of the agreement Annexure-1 has been virtually found to be valid by this Court in Bhagwan Devi's case (supra) and, therefore, the reciprocal transport agreement Annexure-1 has become ineffective and so refusal to countersign the permits by the concerned RTAs of the concerned regions of Haryana as also by the State Transport Authority, Haryana is neither illegal nor it results in failure to exercise the jurisdiction vested in them nor it is against the principles of natural justice. 9. 9. It has also been contended by the respondents that as per the provisions of section 88 of the Act, for entering into reciprocal inter-statal agreements between the two States, the procedure provided in section 88 of the Act is required to be followed but in this case, no document has been brought on record by the petitioner-appellants of the nature which may show that the reciprocal inter-statal agreements have been entered into between the States of Haryana and Rajasthan after following the procedure laid down in section 88 of the Act. 10. In the alternative, it has been submitted by the respondents that a quota/ceiling has been fixed so far as the distances of the routes between the two States are concerned. There is equal distribution of the distances and each State is entitled to grant permits upto the extent of ceiling/quota provided. However, the counter-signatures are permissible under the provisions of the Act. It has been, therefore, submitted by the respondents that no permit holder can be permitted to ply his vehicle beyond the ceiling limits in either of the States. 11. According to the respondents, alternative remedy of appeal has also not been availed by the petitioners under section 89 of the Act and so, on this ground also, this writ petition deserves to be dismissed. 12. A rejoinder has also been filed on behalf of the petitioner-appellant Gyansingh in Writ Petition No. 5091 of 1994 controverting the submissions made by the respondents in rely to the writ petition. It was submitted that the reciprocal transport agreement Annexure-1 has been held to be valid in Kanaram v. R.T.A. 1989(2) RLR 404 = AIR 1990 Raj.-143 as also in Bhagwan Devi's case (supra) and in Bhagwan Devi's case (supra), it has been clearly held by this Court that the notice dated 7.6.1988 has become redundant. This legal position has not been denied by the respondents. Thus, in view of the decisions of this Court in Kanaram's case (supra), Bhagwan Devi's case (supra) and Sahib Ram's case (supra), the stand taken by the transport authorities of the State of Haryana cannot be sustained. This legal position has not been denied by the respondents. Thus, in view of the decisions of this Court in Kanaram's case (supra), Bhagwan Devi's case (supra) and Sahib Ram's case (supra), the stand taken by the transport authorities of the State of Haryana cannot be sustained. It has also been submitted that the Bus-operators of Haryana are plying their buses on the inter-statal routes in question and, therefore, the action of the concerned transport authorities of the State of Haryana in refusing to counter-sign the permits of the petitioner-appellants is void, illegal and results in failure to exercise the jurisdiction vested in them. 13. A detailed reply has also been filed on behalf of the Intervenors but since their rights as against the petitioner-appellants have not been decided by the learned single Judge, we are not going to address ourselves on this aspect of the matter. The learned single Judge has only addressed himself as to whether the reciprocal inter-statal agreement (Annexure-1) has been validly rescinded or not and it has been held that it has been validly rescinded. However, the learned single Judge has not recorded any finding that the subsequent agreemtns have also been validly rescinded. Although, on the basis of the leiter Annexure- R.2 dated 7.6.1988, it has been claimed on behalf of the respondents that subsequent agreements have also been rescinded. Be that as it may, the learned single Judge has held that buses can be plied on the inter-statal routes by the holders of the permits, which have been granted by the State Transport Authority or the concerned Regional Transport Authorities of one State in the other State only when the State Transport Authority or the concerned Regional Transport Authorites of that State countersign those permits and if counter signatures are refused then reasonable opportunity of hearing is to be given and reasons for refusal have to be recorded. 14. We have heard Mr.B.L. Maheshwari, the learned counsel appearing for the petitioner-appellants; Mr.R.N. Munshi, the learned counsel for the Intervenors and Mr.R.L. Jangid, the learned counsel for the respondents and have carefully gone through the record of the case. 15. 14. We have heard Mr.B.L. Maheshwari, the learned counsel appearing for the petitioner-appellants; Mr.R.N. Munshi, the learned counsel for the Intervenors and Mr.R.L. Jangid, the learned counsel for the respondents and have carefully gone through the record of the case. 15. It may be stated here that Mr.B.L. Maheshwari, the learned counsel appearing for the petitioner-appellants as also Mr.R.N. Munshi, the learned counsel for the Intervenors, both have addressed the court on the point as to whether the reciprocal inter-statal transport agreement Annexure-1 has been validly rescinded or not ? 16. It has been contended by Mr. Jangid, the learned counsel for the respondents that although certain other agreements arrived at between the two States have been filed by the petitioner- appellants but the petitioners have failed to show that those agreements have been arrived at in accordance with the provisions of sub-ss. (3-A) and (3-B) of section 63 of the Motor Vehicles Act, 1939 or section 88 of the Motor Vehicles Act, 1988. 17. The learned single Judge has referred to clause (1) of the Agreement Annexure-1, which is as under : "This agreement shall be valid till such time as a new agreement between the two States is arrived at or the existing one is irescinded after issue of six months' notice on either side provided that it may be reviewed or modified at the instance of either State and by mutual agreement at any time." While interpreting this clause, the learned single Judge has held that the agreement could be reviewed or modified at the instance of either State and by mutual agreement at any time. On a plain reading of this clause (1), the mutual agreement was necessary for review or modification of the terms of the agreement and not for rescission of the agreement between the two States. It is manifest from the language used that either side to the agreement can rescind the agreement by giving six months' notice, for that purpose, the mutual agreement of the two States is not a necessary condition. It is manifest from the language used that either side to the agreement can rescind the agreement by giving six months' notice, for that purpose, the mutual agreement of the two States is not a necessary condition. This is so, because if the parties do not want to continue the agreement, it can be terminated by anyone of them, but only after giving six months' notice so that the rights, expectations and obligations interse can be adjusted, whereas the mutual consent of the parties is essential condition, where although the agreement continues but the terms of the agreement are reviewed or modified because in that case, both the parties shall be bound by the terms of the continued agreement. The learned single Judge has further held that there is nothing in sub-sections (5) and (6) or in other provision of the Motor Vehicles Act that for rescinding the reciprocal agreement, the same procedure shall be followed. Section 21 of the General Clauses Act, 1897 also does not provide such procedure for the rescission of the agreement. Section 21 of the General Clauses Act, 1897 lays down that where, by any Central Act or Regulation, a power to issue notifications, orders, rules, or bye-laws is conferred then that power includes a power, exercisable in the like manner and subject to the like sanction and conditions (if any), to add to amend, vary or rescind any notifications, orders, rules or bye-laws so issued. This section provides that the power to rescind shall be exercised in the like manner. To bring about an effective addition, amendment or cancellation of statutory orders, rules or bye-laws, the order or rule or bye-law effecting addition, amendment or cancellation must be made in the manner the original order or rule is required to be made. Section 21 of the General Clauses Act, 1897 in terms applies to the statutory rules or bye-laws, notifications, orders and not to the contracts entered between the parties. It is not necessary to adopt and apply a similar procedure to rescind the agreement entered between the States as provided by sub-s. (5) of section 88 of the Act. It has also been held by the learned single Judge that as the Agreement Annexure-1 has been validly rescinded by the State of Haryana vide its letter dated 7.6.1988, the Agreement Annexure-1 does not exist. 18. So far as the contention of Mr. It has also been held by the learned single Judge that as the Agreement Annexure-1 has been validly rescinded by the State of Haryana vide its letter dated 7.6.1988, the Agreement Annexure-1 does not exist. 18. So far as the contention of Mr. Jangid regarding territorial jurisdiction is concerned, we are of the opinion that at present, we are hearing special appeal and this point could have been pressed before the learned single Judge but probably, it has not been pressed before him. Be that as it may, this controversy is no more res integra in view of the decision of this Court in Kanaram V. R.T.A. ( AIR 1990 Raj. 143 ), wherein this Court has observed as under : "There is no dispute that each of the petitioners in these cases, reside and have their principal place of business in Rajasthan and, therefore, even on inter-State route/routes, in these cases all the routes in dispute are inter-statal routes, falling in between State of Rajasthan and State of Haryana, the Regional Transport Authority has jurisdiction to grant the permit. It has not been disputed so far as the validity of the permit so granted by the Regional Transport Authority, Jaipur is - concerned, it will be only valid in the State of Haryana on the permits being counter-signed by the Regional Transport Authority/Authorities in that State. If the permits would not have been granted by the Regional Transport Authority on Inter-statal route, the question of counter-signing by the Regional Transport Authority of the other State would not have arisen. So, therefore, in such cases where permit has been granted by the Regional Transport Authority of one State and is to be counter-signed by the Regional Transport Authority of other State, a part of cause of action can be said to have arisen in either of the two states." The validity of Agreement (Annexure-1) was also under challenge in Kanaram's case (supra) and in that case, it was pleaded on behalf of the State of Haryana that this agreement has been rescinded by giving a notice of six months. The learned Judges of the Division Bench of this Court have observed as under : "The inter-statal agreements of 1968 as well of 1969 modified in 1981 on the routes in question are valid agreements unless they are modified or rescinded in accordance with law. The learned Judges of the Division Bench of this Court have observed as under : "The inter-statal agreements of 1968 as well of 1969 modified in 1981 on the routes in question are valid agreements unless they are modified or rescinded in accordance with law. If, therefore, on such routes, the permits have been issued renewed by the RTA Jaipur Region, Jaipur, the RTA Faridabad/Hissar or for that matter, any other RTA in Haryana is bound to countersign them for the duration of permits. It has been further held by this Court that the agreements of 1968 and 1969 entered prior to March 2, 1970 when sub-sections 3A and 3B were inserted in section 63 of the Motor Vehicles Act, 1939 and therefore, these agreements which have been entered prior to 2.3.1970 are valid. In Para 15 of the judgment, the Division Bench has also observed as under : "In case, there was a valid agreement and we have said that there are valid agreements of 1968 and 1969 in respect of the routes in between the State of Rajasthan and the State of Haryana,, if permits were issued by the RTA Jaipur Region, Jaipur, the RTA, Faridabad/ Hisar/Delhi are bound to countersign them and in that case, it will not be necessary to follow the procedure prescribed under section 57 of the Act for grant of permits while granting the counter-signature but the fact is that on almost all the routes and almost on majority of inter-statal routes, there was approved scheme notified under section 68D(2) and (3) of the Act for portion of the route in Haryana State." In para 16 of the judgment, the learned judges of the Division Bench have further observed as under : "It may be stated that even if in case of valid agreement, and 1968 agreement has been held to be valid by us and we have refused to say anything about the alleged recession of above agreement after six months notice on December 8, 1988, as stated by Mr. Khan, counter-signatures were done only for periods of four months i.e. for less than three years or for duration of permits. Such counter-signatures will be considered to have been done for the duration of permits in this case five years." 19. Khan, counter-signatures were done only for periods of four months i.e. for less than three years or for duration of permits. Such counter-signatures will be considered to have been done for the duration of permits in this case five years." 19. In para 17 of the Judgment, certain principles governing such type of cases were formulated and those principles are as under : "17. Consequently, we hereby lay down the following principles which will govern the cases in hand and all other similar cases : (i) The inter-statal agreements of February 1968 as well as of 1969 modified in 1981 on the routes in question are valid agreements unless they are modified or rescinded in accordance with law. If therefore, on such routes the permits have been issued/renewed by the RTA Jaipur Region, Jaipur, the RTA Faridabad/Hisar or for that matter any other RTA in Haryana is bound to counter-sign them for the duration of permits and is directed to counter-sign the permits as aforesaid. This is so-even for the routes in respect of which there are approved nationalisation schemes because they exclude the vaid interstatal agreement. (ii) The inter-statal agreements entered into on or after March 2,1970 for such of the routes covered by them are not valid agreements, having not been made in accordance with the provisions of sub-sections 3(A) and 3(B) of section 68 of the Act and being not in conformity with those provisions. Therefore, notwithstanding by the RTA, Jaipur Region, Jaipur, the RTA Faridabad/Hissar or for that matter any other RTA in Haryana is not bound to countersign them. Even, if the counter- signatures on such permits for a shorter duration i.e. for a period of four months have been done, they cannot be said to have been done for the entire duration of the permits or for the period of three years and, there being approved nationalised schemes under section 68D(2)(3) of the Act, the permit-holders have no right of counter-signatures and the RTA Hissar/Faridabad or for that matter any other RTA cannot be directed to counter-sign the permits and it cannot be said that though the procedure under section 57 of the Act was not followed the counter-signature for shorter duration shall be considered for the entire duration of the permit or for the period of three years. (iii) If there is no nationalised approved scheme under section 68-D(2) and (3) of the Act on any portion in Haryana State of the route in question and counter-signature even for a shorter duration have been done on such permits issued/renewed by the RTA Jaipur Region, Jaipur without following the procedure prescribed under section 57 of the Act, the countersignatures shall be deemed to have been done for a period of at least three years." Thus, although the point regarding recession of the Agreements of 1968 and 1969 was raised in Kanaram's case but the Court did not record any categorical finding about it. However, by implication, the Court held that agreements have not been validly rescinded and it was because of this that a direction was issued to the RTA Faridabad/Hissar or for that matter any other RTA to counter-sign the permits for the duration of the permits. 20. A similar controversy was also raised in Bhagwan Devi's case (supra) and in that case, it has been held that in view of the Motor Vehicles Act, 1988 and the decision given in Sahib Ram's case (supra), the controversy involved in this writ petition it almost academic and the rescinding of the agreement had become redundant now. With due respect to the Hon'ble Judges of the Division Bench of this Court in Bhagwan Devi's case (supra), we may state here that the controversy has not at all become redundant. It was pointedly raised and was required to be answered because if it is held that the interstatal agreement Annexure-1 has not been validly rescinded then counter-signature of the permits within the scope fixed by the two States is available as of right. It is only when the permits are granted beyond the scope fixed by the two States then those permits have to be put up before the counter-signing authority of other State and it is for the counter-signing authority of that State to put any conditions at the time of counter-signatures. This is what has been held in Sahib Ram's case (supra) and this is what has been directed by the learned single Judge in this case. Thus, this controversy was not at all redundant. This is what has been held in Sahib Ram's case (supra) and this is what has been directed by the learned single Judge in this case. Thus, this controversy was not at all redundant. What has been held in Sahib Ram's case (supra) is that if there is a valid inter-statal agreement entered into between the two States, the State Transport Authority or the Regional Transport of the one State may grant permit on the interestatal routes but the those permit holders will have a right to ply their buses on the said route in the other State beyond the agreed scope of the interstatal agreement entered into between the two States only when those permits are counter-signed by the other State. Otherwise, those operators can ply their buses within that State, which granted them those permits. Thus, it is clear that not only in Bhagwan Devi's case but also in Sahib Ram's case, this controversy was specifally raised but it has not been answered and this is what has been lamented by the learned single Judge in his judgment and this is what has been strenuously canvassed by Mr.Jangid, the learned counsel appearing for the respondents before us. However, we would like to decide this controversy which has been raised before us and which has been decided by the learned single Judge. 21. No doubt, it is true that in column No. (1) of the reciprocal interstatal transport agreement (Annexure-1), it has been specifically provided that this agreement shall be valid till such time as a new agreement between the two States is arrived at or the existing one is rescinded after issue of six months' notice on either side provided that it may be reviewed or modified at the instance of either State and by mutual agreement at any time. Thus, it is dear that the agreement (Annexure-1) is valid until a new agreement between the two States is arrived at or the existing one i.e. the agreement dated 5th, 6th, 7th and 8th February 1968, is rescinded by six months' notice on either side. It is further clear that under clause (1), this agreement could be reviewed or modified at the instance of either State and by mutual agreement at any time. It is further clear that under clause (1), this agreement could be reviewed or modified at the instance of either State and by mutual agreement at any time. The mutual agreement was necessary for review or modification of the terms of the agreement and not for rescission of the agreement between the two States. It is clear from the language used in clause (1) of the Agreement that either side to the agreement can rescind the agreement by giving six months' notice and for that purpose, the mutual agreement of the two States is not a necessary condition. Section 21 of the General Clauses Act does not apply to such mutual agreements even if they are arrived at by two States. That section is applicable to statutory orders, rules, notifications, or bye-laws etc. and not to the contracts arrived at between the parties and thus, to this extent, the view taken by the learned single Judge appears to be correct. 22. Technically speaking, the view taken by the learned single Judge appears to be correct that one of the parties to the Agreement (Annexure-1) has a right to rescind the contract by giving a notice of six months but on a deeper probe and examination of the facts, this hyper-technical view cannot be sustained. It may be stated here that the Agreement (Annexure-1) starts with preamble to the agreement, which says that in view of the rapid economic development of the country and with a view to encourage movement of transport vehicles on Inter-state routes between Rajasthan and Haryana and to regulate and control their operations, it is necessary to enter into a reciprocal agreement between the two States. Thus, reciprocal agreement has been entered into between the two States keeping in view the rapid economic development of the country and to encourage movement of transport vehicles on Inter-state routes between Rajasthan and Haryana. Thus, the main purport for entering into the contract between the two States was 'Public interest'. This is what was been held by their lordshps of the Supreme Court in Ajantha Transports V. T.V.K. Transports AIR 1975 SC-122 that in such matters, the dominant object should be interests of public generally. This very view has been reiterated by a learned single Judge of this Court in Prahalad Prasad V. U.O.I. 1983 WLN- 52. This is what was been held by their lordshps of the Supreme Court in Ajantha Transports V. T.V.K. Transports AIR 1975 SC-122 that in such matters, the dominant object should be interests of public generally. This very view has been reiterated by a learned single Judge of this Court in Prahalad Prasad V. U.O.I. 1983 WLN- 52. We may state frankly that after entering into this reciprocal interstatal agreement (Annexure-1), not only the State Road Transport Corporations of both the States but also some Private Operators also obtained permits for plying their buses on the interstatal routes and a huge amount was invested in plying buses on the routes in question and this has been done in order to serve the interest of the general public. In such matters, if any of the party intends to rescind the agreement, even if unilaterally, it must rescind it after giving a notice of six months to the other party and must give valid reasons for it rescission. 23. It has been strenuously urged by Mr.Maheshwari and Mr.Munshi that not only the private Operators but also the State Road Transport Corporation, Haryana, who have been granted permits by the competent authorities of the State of Haryana under the Agreement Annexure-1 are still plying their buses on the inter- statal routes without any impediment but the transport Operators of Rajasthan, who have been granted permits on the interstatal route by the competent authorities of the State of Rajasthan are being refused to countersign their permits by the concerned transport authorities of the State of Haryana, which is totally discriminatory. We can understand the alternate submission made on behalf of the State of Haryana that if the permits are granted by the competent authorities of the State of Rajasthan beyond the agreed scope fixed between the two States then those permit holders can ply their buses on the route falling in other State only when their permits are counter-signed by the competent authorities of that other State and if those permits are granted within the scope agreed between the two States then these operators are entitled to the counter-signatures of their permits as of right. 24. As stated above, the impugned agreement (Annexure-1) was arrived at between the two States prior to the insertion of the provisions of sub-ss. 24. As stated above, the impugned agreement (Annexure-1) was arrived at between the two States prior to the insertion of the provisions of sub-ss. (3-A) and (3-B) to section 63 of the Motor Vehicles Act, 1939 and therefore, compliance with those provisions by inviting objections from existing operators and hearing them etc. was not necessary. This is what has been held by a Division Bench of this Court in Samarathmal V. Jugaldas ( AIR 1974 Raj. 104 ). , wherein it has been held that where reciprocal agreement between the States of Rajasthan and Madhya Pradesh for counter-signature on permits for inter-Statal route was made prior to the insertion of sub-s. (3-A) in section 63, compliance with those provisions by inviting objections from existing operators and hearing them et. was not necessary. Grant of counter-signature could not be invalid for the reason of non-compliance of sub-s. (3-A), which being not purely procedural but of composite nature embracing substantive as well as procedural provision is not retrospective so as to affect the validity of the prior agreement. 25. Mr. Munshi drew our attention to a Division Bench decision of Gauhati High Court in Nagendra Nath V. Dy. Secy., Govt. of Assam 1984 Lab. I.C.-829 and a decision of their lordships of the Supreme Court in K.M. Chikkaputtaswamy V. State of A.P. AIR 1985 SC-956 . These two authorities have nothing to do with the receiprocal interstatal agreements and, therefore, they have no application to the facts of the present case. 26. Reference was also made to a single Bench decision of this Court in Mohd. Shafi V. State AIR 1977 Raj.-6 . This authority too has no application to the facts of the present case because it only says that even if there is an approved scheme under section 68-D(3) of the Motor Vehicles Act, 1939, the reciprocal agreement between two States in respect of inter-state route does not override provisions of such scheme. Our attention was also invited to a decision of their lordships of the Supreme Court in K.L. John., Asst. Public Prosecutor, Grade-I, Palai V. State of Kerala AIR 1990 SC-1902, wherein it has been held that the post of Public Prosecutor can be kept as a tenure post. This authority has no application to the facts of the present case. 27. Public Prosecutor, Grade-I, Palai V. State of Kerala AIR 1990 SC-1902, wherein it has been held that the post of Public Prosecutor can be kept as a tenure post. This authority has no application to the facts of the present case. 27. What is material for the decision of this case is that if any statutory authority, which may be Corporation or a State, acts administravively then its acts must be informed by reasons. Those actions must be just and fair and if they are not; then they are required to be struck down. In this connection, we may refer to a decision of their lordships of the Supreme Court in Bangalore Medical Trust V. B.S. Muddappa AIR 1991 SC-1902, wherein their lordships of the Supreme Court have observed that the executive or the administrative authority must not be oblivious that in a democratic set up, the people or community being sovereign the exercise of discretion must be guided by the inherent philosophy that the exercise of discretion is accountable for his action. It is to be tested on anvil of rule of law and fairness or justice particularly if competing interests of members of society is involved. In para 47 of the judgment, their lordships have further observed that in modern State, activity discretion with executive and administrative agency is a must for efficient and smooth functioning but the extent of discretion or constraints on its exercise depends on the rules and regulations under which it is exercised. It has been also observed that any action or exercise of discretion to alter the scheme must have been backed by substantive rationality flowing from the Section. Public interest or general good or social betterment have no doubt priority over private or individual interest but it must not be a pretext to justify the arbitrary or illegal exercise of power. It must withstand scrutiny of the legislative standard provided by the Statute itself. 28. In this respect, reliance has also been placed on a decision of this Court in B.L. Bakiwala V. Jaipur Development Authority & Ors. 1993(1) Western Law Cases (Raj.)-3061993(2) RLR 680 , wherein it has been held that the decision of the local authority-affecting others must be informed by reasons and satisfy the test of reasonableness. 29. Our attention has been next drawn to a decision of this Court in Nizam & Ors. 1993(1) Western Law Cases (Raj.)-3061993(2) RLR 680 , wherein it has been held that the decision of the local authority-affecting others must be informed by reasons and satisfy the test of reasonableness. 29. Our attention has been next drawn to a decision of this Court in Nizam & Ors. V. Jaipur Development Authority & Ors. WLR 1993 (Raj.)-542.1993(1)RLR 58 , wherein while referring to Bangalore Medical Trust's case (supra), a learned single Judge of this Court has quoted the above-referred observations made by their lordships of the Supreme Court. In addition to this, in para 37 of the judgment, the learned Judge has observed that it can no longer be doubted at this point of time that Article 14 of the Constitution of India applies also to matters of governmental policy and if the policy or any action of the Govt. even in contractual matters, fails to satisfy the test of reasonableness, it would be unconstitutional. In this respect, reliance has been placed on the decisions of their lordships of the Supreme Court in Ramana Dayaram Shetty V. The International Airport Authority of India AIR 1979 SC-1628 and Kasturi Lal Lakshmi Reddy V. State of J&K AIR 1980 SC-1992. 30. Reference may also be made to a recent decision of their lordships of the Supreme Court in Shrilekha Vidyarthi V. State of U.P. AIR 1991 SC-537 , wherein it has been held that it is now too well settled that every State action in order to survive must not be susceptible to the vice or arbitrariness which is the crux of Article 14 of the Constitution and basic of the rule of law, the system which governs us. Arbitrariness is the very negation of the rule of law. Satisfaction of this basic test in every State action is sine qua non to its validity and in this respect, the State cannot claim comparison with a private individual even in the field of contract. This distinction between the State and a private individual in the field of contract has to be borne in the mind. 31. Satisfaction of this basic test in every State action is sine qua non to its validity and in this respect, the State cannot claim comparison with a private individual even in the field of contract. This distinction between the State and a private individual in the field of contract has to be borne in the mind. 31. In M/s Dwarkadas Marfatia & Sons V. Board of Trustees, Bombay Port AIR 1989 SC-1642, it has been held by their lordships of the Supreme Court that being a public body even in respect of its dealing with its tenant, it must act in public interest, and an infraction of that duty is amenable to examination either in civil ' suit or in writ jurisdiction. Their Lordshps have further observed in para 27 of, the judgment as under : "We are inclined to accept the submission that every activity of a public authority especially ip the background of the assumption on which such authority enjoys immunity from the rigours of the Rent Act, must be informed by reason and guided by the public interest. All exercise of discretion or power by public authorities as the respondent, in respect of dealing with tenants in respect of which they have been treated separately and distinctly from other landlords on the assumption that they would not act as private landlords must be judged by that standard. If a governmental policy or action even in contractual matters fails to satisfy the test of reasonableness it would be unconstitutional. See the observations of this Court in Kasturilal Lakshmi Reddy (AIR 1980 SC-1992) (supra), and R.D.Shetty V. International Airport Authority of India, (1979) 3SCR-1014 at p.1034 (AIR 1979 SC-1628 at pp. 1637-38. " Reference has been made to a decision of their lordship of the Supreme Court in Mahabir Auto Stores V. Indian Oil Corporation AIR 1990 SC-1031, wherein it has been observed as under : "The State acts in its executive power under Article 298 of the Constitution in entering or not entering in contracts with individual parties. Article 14 of the Constitution would be applicable to those exercise of power. Therefore, the action of State oran can be checked under Article 14. Every action of the State executive authority must be subject to rule of law and must be informed by reason. Article 14 of the Constitution would be applicable to those exercise of power. Therefore, the action of State oran can be checked under Article 14. Every action of the State executive authority must be subject to rule of law and must be informed by reason. So, whatever be activity of the public authority, it should meet the test of Article 14 of the Constitution. If a Govt. action even in the matters of entering or not entering into contracts, fails to satisfy the test of reasonableness, the same would be unreasonable. Rule of reason and rule against arbitrariness and discrimination, rules of fair play and natural justice are part of the rule of law applicable in situation or action by State instrumentality in dealing with citizens. Even though the rights of the citizens are in the nature of contractual rights, the manner, the method and motive of a decision of entering or not entering into a contract are subject to judicail review on the touchstone of relevance and reasonableness, fair play, natural justice, equality and non-discrimination." It is, therefore, clear that even if the State of Haryana has power to rescind the contract (Annexure-1) arrived at between it and the State of Rajasthan and if it intends to recind it under clause (1) of the Agreement, it has to give reasons for rescinding it as to what circumstances impelled it to rescind the Agreement (Annexure-1) and as to how, by rescinding the contract, it is going to serve the interest of the general public and as to how, the interest of the third parties, i.e. Operators will be protected. Except the bald statement made in the reply to the writ petition that the contract has been rescinded after giving six months notice, no fact has been brought on record to show that what were the circumstances which impelled the State of Haryana to rescind the contract (Annexure-1). Moreover, under the garb of this Agreement (Annexure-1), when the State of Haryana itself is running its buses from Haryana to Rajasthan and Rajasthan to Haryana on the interstatal routes in question then it has to show why it is refusing the counter-signatures on the permits issued by the competent authorities of the State of Rajasthan, no specific reasons have been given by the respondents. It has been contended on behalf of the respondents that the contract has been rescinded after giving six months' notice and therefore, when it stands rescinded, the petitioner-appellants are not entitled to the counter-signatures of their permits. Rescission has to be informed by reasons and it has to be fair. In our considered opinion, neither it is just not it is fair. No reasons have been assigned to show that it is just, fair and reasonable. The technical view that the Agreement Annexure-1 has been rescinded after giving six months' notice and, therefore, the contract stands rescinded cannot be sustained. We are, therefore, of the view that the view taken by the learned single Judge is too technical. Under these circumstances, we are firmly of the view that the agreement Annexure-1 has not been properly rescinded. The agreement Anneuxre-1 is held to be valid. Even all subsequent agreements arrived at by mutual consent are also valid as no illegality has been pleaded against them and they cannot be held as validly rescinded by notice Annexure-2 dated 7.6.1988 as claimed by respondents No.1 and 2 as held hereinabove and, therefore, to the extent of those agreements, the permits granted by one State have to be countersigned by the competent authorities of the other State. However, if the permits have been granted beyond the agreed scope of the Agreement Annexure-1 as modified from time to time or as superseded by Agreement dated 5.8.1986 then of course, the permit-holders who have been granted permits by the competent authorities of the State of Rajasthan will not be entitled as of right to counter signatures of their permits from the competent authorities of the State of Haryana for playing their buses within the scope of the agreement as modified from time to time as per section 88 read with section 80 of the Act. They will be entitled to ply their buses in the State of Haryana beyond the agreed scope only when their permits are countersigned by the sate of- Regional Transport Authorities of Haryana State as per the provisions of new Motor Vehicles Act and the Rules framed thereunder. 32. In the result, these special appeals are allowed and the impugned judgment dated 24.1.1995 passed by the learned single Judge is set aside. 32. In the result, these special appeals are allowed and the impugned judgment dated 24.1.1995 passed by the learned single Judge is set aside. The State Transport Authority and the concerned Regional Transport Authorities of the concerned regions of the Haryana are directed to countersign the permits granted by the State Transport Authority or the concerned Regional Transport Authorities of the concerned regions of Rajasthan in favour of the petitioner-appellants as a matter of course, if these permits have been granted within the agreed scope of the agreement Annexure-1 as modified from time to time including Agreement dated 5.8.1986 and if it is beyond the agreed scope of the agreement Annexure-1 as amended from time to time or as provided by agreement dated 5.8.1986 then they will have discretion to countersign these permits as per the provisions of section 88 read with section 80 of the Act. 33. In the facts and circumstances of the case, the parties are left to bear their own cost of these appeals. 4.8.1995 : 34. The case comes up for orders on a review petition filed on behalf of the applicant-appellant. 35. Mr. R.L. Jangid is directed to accept notices on behalf of the respondents. He has been supplied with copy of the review petition. We have perused the impugned judgment dated July 4, 1995. In that judgment, at page Nos. 29 and 30, it has been held that the agreement dated 5.8.1986 is also valid whereas two Division Benches of this court in Kanaram v. R.T.A. (AIR 1990 Raj.-143) and Sahib Ram V. State of Rajasthan (D.B. Civil Writ Petition No. 1309 of 1990, decided on 28.8.1992) have specifically held this agreement to be invalid. Keeping in view these facts and circumstances of this case, in the impugned judgment dated July 4,1995 wherever it has been held that the agreement dated 5.8.1986 is valid will be of no consequence and to that extent, the judgment dated July 4, 1995 stands modified. 36. The review petition stands disposed of.Special appeals allowed *******