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T.N. Raghunatha Reddy Vs. Government of Andhra Pradesh and ors. - Court Judgment

LegalCrystal Citation
SubjectMotor Vehicles
CourtAndhra Pradesh High Court
Decided On
Case NumberWrit Petn. Nos. 3599, 5044, 5451, 5670, 6049 to 6056 of 1975 and 1174, 3391 of 1977
Judge
Reported inAIR1979AP92
ActsMotor Vehicles Act, 1939 - Sections 3, 45, 45(1), 45(2), 47, 47(1), 47(3), 58, 63, 63(3-B), 63-A, 63-C and 83(3); Constitution of India - Articles 19, 19(1) and 301
AppellantT.N. Raghunatha Reddy
RespondentGovernment of Andhra Pradesh and ors.
Appellant AdvocateD. Sudarshan Reddy, Adv. for ;P. Shivshanker, Adv., ;P. Ramakoti, ;P. Rajagopalachari and ;G. Suryanarayana, Advs.
Respondent AdvocateAdvocate General and ;S. Venkateswara Rao, Govt. Pleader for Transport
Excerpt:
(i) motor vehicles - validity of agreement - sections 3, 45, 45 (1), 45 (2), 47, 47 (1), 47 (3), 58, 63, 63 (3-b), 63-a, 63-c and 83 (3) of motor vehicles act, 1939 and articles 19, 19 (1) and 301 of constitution of india - petitioners were operating stage carriages on inter-state routes - an agreement made between two states - validity of such agreement challenged - contended that agreement was illegal and violates provisions of motor vehicles act - agreement not contrary to sections 45 (1) or 45 (2) - motor vehicles act does not lay down what the contents of interstate agreement with respect to route should be - no clause found in contravention to provisions of such act - held, agreement valid and enforceable. (ii) permit to specific persons - whether clause under agreement which.....madhava reddy, j.1. these writ petitions are for the issue of a writ of certiorari or any other appropriate writ, direction or order to quash the g.o.ms. no. 715 home (tr. ii department dated 2-5-1975 published in the andhra pradesh gazette part ii extraordinary dated 4-6-1975 in so far as it relates to the petitioners.2. the petitioners are operators of stage carriages on various inter-state routes covering-the states of andhra pradesh and tamil nadu under permits issued by the state of andhra pradesh and counter-signed by the state of tamil nadu.3. in order to appreciate the contentions raised in this hatch of writ petitions suffice to notice the facts relating to w.p. no. 3599/75. the petitioner there in is plying a vehicle apc 5472 on mote tirupathi to tiruvannamalai viz.......
Judgment:

Madhava Reddy, J.

1. These writ petitions are for the issue of a writ of certiorari or any other appropriate writ, direction or order to quash the G.O.Ms. No. 715 Home (Tr. II Department dated 2-5-1975 published in the Andhra Pradesh Gazette Part II Extraordinary dated 4-6-1975 in so far as it relates to the petitioners.

2. The petitioners are operators of stage carriages on various inter-State routes covering-the States of Andhra Pradesh and Tamil Nadu under permits issued by the State of Andhra Pradesh and counter-signed by the State of Tamil Nadu.

3. In order to appreciate the contentions raised in this hatch of writ petitions suffice to notice the facts relating to W.P. No. 3599/75. The petitioner there in is plying a vehicle APC 5472 on mote Tirupathi to Tiruvannamalai viz.. chandragiri, Chittoor and Vellore. That route was opened pursuant to an inter-State agreement between the Government of Andhra Pradesh and the Government of Tamil Nadu in the year, 1964. Under the said agreement, one permit was to be granted by the Transport Authorities in the State of Andhra Pradesh on the said route and another permit was to be granted by the Transport Authorities by the Tamil Nadu State accordingly the Regional Transport Authority, Chittoor granted permit by its order dated 24-5-1965 to the petitioner who was one of the applicants on the said mute. Likewise, the Transport Authorities of Tamil Nadu granted a permit on the said mute to one Tirumala Reddiyar, Subsequently, the authorities concerned increased the number of vehicles to be plied on the Said route and the Madras State Road Transport Corporation granted two permits on the said route which were subsequently varied up to Kadalur. Ever since, the petitioner had been plying the vehicle on the said route under renewals granted from time to time. The Government of Andhra Pradesh issued G.O.Ms No. 403. Home (Transport-I) Department dated 24-3-1972 published in the Andra pradesh Gazette Extraordinary dated 1-4-1972 stating that one permit has to be operated by the State of Andhra Pradesh and another by the State of TamiI Nadu. By the date the writ petition was died the petitioner was holding a permit valid up to 2-6-1977. Subsequently, the Government of Andhra Pradesh issued G.O.Rt No.2364, Home (Transport-I Department dated 21-8-1972 published in the Andhra Pradesh Gazette dated 1-9-1472 proposing to enter into an inter State agreement with the State of Tamil Nadu in suppression of the agreement entered into between both the States on 1-4-1972. In the revised agreement peel posed to be entered into between the two States, the route Tirupathi to Tiruvannamalai which is included as Item No, Q in Appendix B to the said GO., is allotted to the State of Tamil Nadu. Representations by persons affected by the proposed agreement were invited to be made within thirty days from the date of publication. As the petitioner was an existing operator directly affected by the proposed agreement, he bled his representation on 26-9-1872 against the proposed agreement. The Government of Andhra Pradesh thereafter issued the impugned GO., in suppression of the inter-State agreement dated 1-4-1972 approving the draft agreement published in G.O.Rt. No. 2361 dated 21-8-1972 referred to above. As per the impugned inter-State agreement, the route Tirupathi to Tiruvannamalai has to be operated only by the State of Tamil Nadu and the existing permits including that of one petitioner would continue m be valid till their dates of expiry. As a result of the above, the petitioner is deprived of his right to apply for renewal of the said permit and ply his vehicle on the said route.

4. The routes involved in the batch of omit petitions are as follows:

S1. No. Writ Petition No. Route. Item No. in the State to Schedule to G.O. which allotted.1.W.P.No.5044/75 Chittoor to N.N.Kandriga 33 Part.B Tamil Nadu2.W.P.No.5451/75 Madras to Naidupet 3 Part.B Tamil Nadu Madras to Kalahasthi 13 Part.B Tamil NaduMadras to Varadaipalem. 6 Part.B Tamil NaduMadrastoSatyaveedu 11 Part.B Tamil Nadu 3.W.P.No.5460/75 Arkonam to Tirupathi. 3 Part.A Andhra Pradesh All allotted to Andhra Pradesh 4.W.P.No.6049/75 Tirupathin to Kanchipuram 10 Part.A Andhra Pradesh 5.W.P.No.6050/75 Tiruttani to Nagulapuram 23 Part.B Tamil Nadu 6.W.P.No.6051/75 Chittor to Tiruttani. 36 Part.B Tamil NaduChittor to Kanakamma Satram. 32 Part.B Tamil Nadu7.W.P.No.6052/75 Chittor to Salem 15 Part.B Tamil NaduChittor to Arkonam 9 Part.A Andhra Pradesh8.W.P.No.6053/75 Chittor to Arkonam 41 Part.B Tamil NaduChittor to Tirupathi 36 Part.B Tamil NaduTirupathi to Arkonam 9 Part.A Andhra Pradesh9.W.P.No.6054/75 N.N.K.andriga to Chittor 33 Part.B Tamil Nadu10.W.P.No.6055/75 Kalahasthi to Kanchipuram 35 Part.A Andhra Pradesh11.W.P.No.6056/75 Tirupathin to Arkonam 9 Part.A Andhra Pradesh12.W.P.No.1174/77 Tirupathi to Keelapudi varied up to T.P.Kota. Andhra Pradesh13.W.P.No.3391/77 Pallipat to TirupathiProdduturpet to ChittorProddurpet to Pallipet 34.Part.B Tamil Nadu

5. The agreement purported to have been entered under 6. 63 (3-B) of the Motor Vehicles Act provides that the inter-State carriages would be operated by both the States as shown in the Appendix. Routes specified in Parts 'A' and 'B' of the Appendix shall be operated by the Andhra Pradesh operators and the Tamil Nadu operators respectively, It is contended that the agreement in so far as it allots the routes or permits to one State or the other is invalid and op posed to the provisions of the Motor Vehicles Act, It is further contended that in any case such an agreement cannot affect the existing permits and the rights of the permit-holders therein to obtain renewal of the permits from time to time in accordance with the Act The petitioners also contend that S. 63 (3-A) empowers the concerned States under the agreement only to fix the number of permits which are permitted to be granted or countersigned in respect of a particular route. It does not empower the State either to allot the route to one State or the other or to prohibit or restrict the right of an existing permit holder to have his permit renewed after the expiry of the permit under S. 58 of the Act. In so far as the agreement impliedly prohibits renewal of the permits after the expiry or the period for which they are valid it is illegal and beyond the scope of S. 63 (3-A) of the Act. Sec. 63 of the Act does not empower the respondents to extinguish the vested right of the petitioners.

6. The petitioners contend that the Inter-State agreement was approved without giving an opportunity or notice of hearing to the petitioners and this violates the principle of natural justice. They contend that the respondents failed to follow the procedure prescribed under the Motor Vehicles Act in this behalf and thus is illegal and violative of the provisions of the Motor Vehicles Act.

7. It is also contended that the agreement results in nationalisation of the said mutes without following the procedure prescribed in Chapter IV-A of the Motor Vehicles Act. In fact. subsequent to the said agreement, in respect of some of the inter-State mutes referred to above, the State of Tamil Nadu has published a Draft Scheme No. VI (iii)/19/(1) of 1977 dated 15-4-1977 of the Pallavan Transport Corporation Ltd., Madras for opinion of the public as required under S. 68-C of the Motor Vehicles Ad. Some of the petitioners herein have filed W.P, Nos. 1328/77 and hatch impleading the State or Tamil Nadu, the Pallavan Transport Corporation Ltd. and the State Road Transport Authority, Andhra Pradesh seeking a writ of prohibition or any other appropriate direction prohibiting the respondents from approving the said scheme in so far as it related to the petitioners therein.

8. In the counter-affidavit filed on behalf of the respondents, it is contended that the procedure required to be followed under S. 63 (3-B) of the Act has been strictly adhered to in entering into the above agreement and no principles of natural justice were violated. The draft agreement was published and after considering the representations made by the existing operators and others interested, the final agreement was approved and entered into. It is submitted by the respondents that the main object and purpose of an inter State agreement is to provide coordinated and efficient transport service on inter-State mutes without the necessity of following the procedure contemplated under Chapt. IV of the Act twice, and to provide facility of single point taxation to be paid in the original State and consequential exemption from taxation by the reciprocating State. It is submitted that after having considered in detail, the operational convenience as well as the interests of the traveling public on inter-State routes and after mutual discussions, both the States have entered into the aforesaid agreement. It is in particular asserted that in view of the inter-State agreement, the procedure prescribed far counter-signature need not be followed in respect of a permit granted in pursuance of the inter-State agreement. This postulates the allocation of the routes or number of buses to particular State with the consequential obligations on the reciprocating State to countersign the same. The contention that the State Government has no jurisdiction or power to allocate routes or grant permits to one or the other States is incorrect and untenable. It is also denied that as a result of the allotment, any vested right of the petitioners is affected. It is contended that a permit holder has no vested right to the renewal of a permit. It is also urged that simply because the number of trips or buses on a particular route is increased under the inter-State agreement, the permits for such increased number of buses or trips would have to be granted in accordance with the inter-State agreement and the same is not contrary to the provisions of the Act. The contention that the arrangement now made under the inter-State agreement amounts to nationalising the route and would be allotted to the State Road Transport Undertakings of the concerned State and that the same is violative of Chap. IV-A of the Act is incorrect, As a fact, it is stated that the agreement which was in force immediately prior to the impugned agreement came into effect on 1-4-1972. There was no other agreement.

9. Lastly it is submitted that the said agreement is not subject to judicial review. It is, therefore, prayed that the writ petitions be dismissed.

10. Pending disposal of the above writ petitions the operation of the Impugned G.O., was suspended in 50 far as the petitioners are concerned.

11. Under the previous agreement between the State of Andhra Pradesh and the State of Tamil Nadu which came into effect on 1-4-1972, 55 inter-State mutes were agreed to be operated under Primary permits issued by the Road Transport Authorities of Andhra Pradesh and 39 routes were agreed to be operated under primary permits issued by the Road Transport Authorities of Tamil Nadu. Now under the unpugned agreement two routes were increased on the whole and out of a total or 96 routes, 50 are allotted to Andhra Pradesh and 46 mutes are allotted to Tamil Nadu. In this Process under the present agreement 8 routes with 14 Permits which were hitherto under the control of Tamil Nadu are allotted to Andhra Pradesh and 17 routes with 21 permits which were hitherto under the control of Andhra pradesh are allotted to Tamil Nadu. As a result of the agreement, the Regional Transport Authority of the particular area of the State to which the particular allotted would have the dominant role in regulating the traffic. The Motor Vehicle Tax also would be Paid to the respective States to which the route is allotted and exemption is granted in the other State. The routes themselves allotted to one State or the other on the basis of the major portion of the route lying in that particular State. The agreement is entered into mainly with a view to provide better transport facilities for the passenger-traffic between the two States and with a view to relieve the hardship of the operators by permitting than to pay tax only in one State and granting exemption to then in the other. It also obviates the necessity of following the procedure prescribed for counter-signature of the permits issued by the concerned Transport Authority as per the agreement.

12. Under the provisions of the Motor Vehicles Act, permits for the operation of stage carriage. may be issued by the R.T.A. concerned and such permits would be valid and effective within the region over, which the said R.T.A. has jurisdiction.

13. There is also provision in S. 63 of the Act for validation of the permits outside the region in which it was granted. S. 63 m so far as it is relevant for our present purpose reads as follows:

'63. Validation of permits for use outside region in which granted:--

(1) Except as may be otherwise prescribed, a permit granted by a R.T.A. of any one region shall not be valid in any Other region unless the permit has been countersigned by the R.T.A of that Other region, and a permit granted in any one State shall not be valid in any other State unless countersigned by the S.T.A. of that other State or by the Regional Transport Authority concerned:

Provided, that a private carrier's permit granted by the R.T.A. of any one region with the approval of the State Transport Authority, for any area in any other region or regions within the same State shall be valid in that area without the counter-signature of the R.T.A. of the other region or of each of the other regions concerned.

Provided further that where both the starting point and the terminal point of a route are situate within the same State, but part of such route lies in any other State and the length of such part does not exceed sixteen kilometers, the permit shall be valid in the other State in respect of that part of the route which is in that other State notwithstanding that such permit has not been countersigned by the State Transport Authority of the R.T.A of that other State.

(1-A) to (2) ** ** **

(3) The provisions of this Chapter relating to the grant, revocation and suspension of permits shall apply to the grant, revocation and suspension of counter-signatures of permits Provided that it shall not be necessary to follow the procedure laid down in Section 57 for the grant of counter-signatures of permits, where the permits granted in any one State are required to be countersigned by the S.T.A. of another State or by the Regional Transport Authority of another State or by the Regional Transport Authority concerned as a result of any agreement arrived at between the States after complying with the requirements of subsec. (3-A), or for the grant of countersignature of permits in pursuance of any direction issued by the Commission under C1 (c) of sub-sec. (2) of S. 63-A

(3-A) Every proposal to enter into an agreement between the States referred to in the proviso to sub-sec. (3) and every proposal in such agreement to fix the number of permits which is proposed to be granted or counter-signed m respect of each route or area shall be published by each of the State Governments concerned in the Official Gazette together with a notice of the date before which Representations in connection there with may be submitted, and the date, not being less than thirty days from the date, Of such publication, on which, and the authority by which, and the time and place at which, the proposal and any representations received in connection there with will be considered:

Provided that no person, association or authority, other than those mentioned hereunder, shall have a right to make such representation, namely:--

(i) any person already providing passenger or goods transport facilities by any means in the proposed area or along or near the proposed route;

(ii) any association representing per sons interested in the provision of road transport facilities recognised in this be half by State Government;

(iii) any local authority or police authority within whose jurisdiction any part of the proposed area or route lies.

(3-B) Every agreement arrived at between the States shall, in so far as it relates to the grant of counter-signature Of permits, be published in the official Gazette by each of the States concerned and the State Transport Authority of the State and the Regional Transport Authority concerned shall give effect to it

(4) to (15) ** ** **'

14. S.63 of the Motor Vehicles Act thus provides for the validation of the permit for use outside the region in which it is granted upon the said permit being counter-signed by the Regional Transport Authority of the other region and a permit granted in any one State to be valid in any other State only upon counter-signature by the Transport Authority of the other State. S. 63 (1) declares that unless the permit issued by one Regional Transport Authority is countersigned by the R.T.A of the other region and a permit granted in any one State is countersigned by the S.T.A. of the other State or the R.T.A. concerned, they shall not be valid. Procedure for counter-signature of permits is the same as is provided for the grant of permits and that is as laid down in S. 57 of the Act, The proviso to sub-sec. (3) of S. 63, however, declares that it shall not be necessary to follow the said procedure in case of permits granted pursuant to inter-State agreements.

15. S. 63-A of the Motor Vehicles Act makes provision for the Constitution of the Inter-State Transport Commission for the purpose of developing, coordinating and regulating the operation of the transport vehicles in respect of any area or route common to two or more States referred to as inter-State region and for performing such other functions as may be prescribed under S. 63-C. Such a Commission not having regulated the operation of transport vehicles on inter-State routes between the Andhra Pradesh and Tamil Nadu it is the inter State agreements that govern the grant of permits on such routes as also the counter-signatures of such permits. While rules are framed for grant of permits on inter-region routes within a State, no rules are framed for regulating the operation of stage-carriages on inter State routes.

16. In Mohd. Ibrahim v. S.T.A. Tribunal. Madras, : [1971]1SCR474 , the Supreme Court laid down that (at p. 1547),

'These provisions establish that in the case of an inter State permit an application has to be made to the R.T.A. of a State as mentioned in S. 45 of the Act and the permit is to be counter signed by the S.T.A of the other State or by the R.T.A concerned as mentioned in Section 63 of the Act...... The effect of the proviso to S. 63 (3) is that in the case of inter-State permits where an agreement has been arrived at between the States the provisions of S. 57 of the Act need not be followed for the grant of counter-signatures of the permits. In other cases, the procedure in S. 57 of the Act will apply in regard to grant, revocation and suspension of permits and to counter-signatures of permits as well. S. 48 of the Act which relates to the power to grant of stage carriage permits will also apply to inter-State permits The provisions contained in sub-sec (1) generally and subsec. (2) of S. 47 will apply to the R.T.A. at the time of consideration of an application for inter-State carriage permit. Section 47 (3) of the Act will not in our opinion apply to inter-State permits because, that provision relates to a R.T.A. limiting the number of stage carriages for which stage carriage permits may be granted in the region or m any specified area or on any specified route within the region. In other words, 6. 47 (3) of the Act is confined in its operation in or within the region. The provisions of S. 47 (3) do not apply to inter-State permits because an interstate permit cannot be effective unless It is countersigned by the authority of the other State......... The combined effect of Ss. 63, 63-A, 63-B and 63-C is that the inter-State Commission will deal with inter-State permits. The Central Government under S. 63-C of the Act is authorised to make rules in regard to the procedure to be followed in considering an application for grant and counter-signature of permits. In the absence of specific rules, the best way of harmonising the powers and functions is to allow these inter-State authorities to exercise their power within their respective spheres in regard to grant and counter-signature of permits by agreement and accord.'

What S. 47 (5) lays down is that the R.T.A. may having regard to the matters stated in sub-section (1) of Sec. 47, limit the number of stage carriages generally or of any specified type for which the stage carriage permits may be granted in the region or in any specified area or an any specified route the region. It is this provision which according to the decision of the Supreme Court referred to above is not applicable to inter-State routes. The question as to number of permits that may be granted on an inter-State route in the absence of an Inter-State Commission envisaged by S. 63-A as pointed out by the Supreme Court would be determined only by inter-State agreements. The impugned agreement in so far as it determines the number of permits and the stage carriages that may ply on the inter-State routes in question does not contravene any provision of the Motor Vehicles Act. In fact, the Motor Vehicles Act leaves scope for such inter-State agreement to regulate the operation of the stage carriages on inter State routes.

17. It is contended by Mr. G. Suryanarayana, learned counsel for the petitioners that the impugned agreement, instead of determining the number of permits that may be granted on a particular inter-State route, allots the inter-State route itself to either the State of Andhra Pradesh or the State of Tamil Nadu and that is not envisaged by any provision of the Motor Vehicles Act. He also contends that in view of such allocation of the routes to a particular State, the application for renewal of permit has now necessarily to be made to the transport authorities in the particular State to which the route is allotted. That in effect takes away the right of the existing operators to apply for renewal of their existing permits to which they are entitled under the provisions or the Motor Vehicles Act. How far the petitioners have a vested right to the renewal of their existing permits and how far the provisions of the inter-State agreement infringe or take away that right, would be considered Later. However, it must even at this stage be pointed out that there is no express clause in the impugned inter-State agreement that the application for permits on the routes referred to in Parts A and B of the Appendices to the agreement shall be made to one or the other authority. Cl. (1) (a) of the agreement merely stipulates that 'inter-State routes for operation of stage carriages of both the States shall be as shown in the Appendix. The routes specified in Parts A and B of the Appendices shall be operated by the Andhra Pradesh operators and the Tamil Nadu operators respectively. Permits for playing the stage carriage services on the existing routes will continue to be valid till their re-allocation between the two States'.

There is no clause in the agreement that the application should be made to any particular transport authority in respect of any route. Consequently, any right vested in the petitioners with regard to the renewal of the permits is not affected by anything contained in the agreement.

18. No doubt, as contended by Mr. G. Suryanarayana learned counsel for the petitioners, the provisions contained in S.45 of the Act relating to applications for permits also apply for the grant of permits on inter-State routes. Mr. Suryanarayana therefore contends that the inter-State agreement inasmuch as it allots the routes to either Andhra Pradesh State or the Tamil Nadu, irrespective of the length of the routes lying in each State, contravenes the provisions of the Act and therefore invalid.

19. Sub-secs. (1) and (2) of S. 45 of the Act which are relevant in this behalf read as follows:--

'45. General provisions as to application for permits:--

1. Every application for a permit shall be made to the Regional Transport Authority of the region in which it is proposed to use the vehicle or vehicles:

Provided that if it is proposed to use the vehicle or vehicles in two or more regions lying within the same State, the application shall be made to the R.T.A. of the region in which the major portion of the proposed route or area lies and in case the portion of the proposed route or area in each of the regions is approximately equal, to the R.T.A. of the region in which it is proposed to keep the vehicle or vehicles:

Provided further that if it is proposed to use the vehicle or vehicles in two or more regions lying in different States the application shall be made to the R.T.A of the region in which the applicant resides or has his principal place of business.

(2) Notwithstanding anything contained in sub-sec. (l),the State Government may, by notification in the official Gazette, direct that in the case of any vehicle or vehicles proposed to be used m two or more regions lying in different States, the application under that sub section shall be made to S.T.A, of the region in which the applicant resides or has his principal place of business.'

It would be seen that in view of the first proviso to sub-sec. (1) of S. 45 of the Act, only in the case of routes lying in two or more regions within the same State, application has to be made to the Regional Transport Authority of the region in which the major portion of the route lies. In the case of a route lying in two or more regions of different States, the application has to be having regard to the second proviso S. 45 (l)of the Act to the R.T.A of region in which the applicant resides or has his principal place of business. The fact that the major portion of the route lies in a particular State is not the criterion for determining as to which Transport authority is the competent authority to receive the application for the grant of a permit on an inter route, it is the place where the applicant resides or carries on business, that is the determining factor for making the application. Notwithstanding anything contained in sub-sec (1) of S 45, the State Government is empowered in respect of the routes lying in two or more regions of different States to authorise the application being made to the S.T.A. of the region in which the applicant resides or has his principal place of business. The impugned inter-State agreement as such does not provide anything contrary to what is stated in S. 45 (1) or S. 45 (2) of the Motor Vehicles Act.

20. The petitioner's contention that the allotment of certain routes under the inter-State agreement to the State of Andhra Pradesh and certain other routes to the State of Tamil Nadu contravenes the provisions of the Motor Vehicles Act in our view is also without any substance. The Motor Vehicles Act does not lay down what the contents of the interstate agreement with respect to the routes should be. Nor does it impose any limitation on the power of the States to fix the number of permits that may be granted on any route covered by the inter-State agreement. S. 45 of the Act which lays down the general provisions as to applications for permits, among others, refers to routes covering two or more regions lying in different States and S. 63 (3) and S 63 (3-A) refer to counter-signatures of permits granted as a result of the agreement arrived at between the States and the procedure to be followed by the two States before entering into any such interstate agreement. But there is no provision therein as to what the contents of an inter State agreement should be. So far as the present agreement is concerned, it is seen that the procedure prescribed under S. 63 (3-A) is followed before entering into the said agreement. The petitioners have made their representations and they have been considered by the competent Authorities before the agreement was finalised The permits and the counter-signatures are sought to be granted in accordance with that agreement. The agreement between the two States is entered into in exercise of the executive power of the two States. In the absence of any statute restricting the power of the States to enter into such an agreement with respect to matters enumerated in the State List and the concurrent list of the Constitution and in the absence of any provision under the Motor Vehicles Act as to the contents of the said agreement, no such limitation on the power of the two States could be implied merely because the procedure to be followed by the respective States in this behalf has been laid down under the Motor Vehicles Act. In fact, that would give an indication of the legislative intent that in all other respects the Legislature did not intend to restrict the power of the States in this regard. It is also significant to note that the provisos to S. 45 (1) and Section 45 (2) refer to the plying of vehicles in two or more regions lying in different States and not in particular to routes covered by inter-State agreements As there is no provision in the Motor Vehicles Act restricting the power of the respective States restricting their right to the allotment of inter-State routes to one or the other State obviously it is that State to which the route is allotted that would grant the permit. The Motor Vehicles Act does not provide for making an application to any particular authority for grant of permit on such routes. Obviously because the grant of permits on such routes is intended to be regulated by inter-State agreements reached in accordance with the procedure laid down under Sec. 63 (3-A) and 63 (3-B) it is declared under the proviso to S. 63 (3) that it shall not be necessary to follow the procedure laid down in S. 57 for the grant of countersignatures of such permits. S. 45 or any other provision of the Motor Vehicles Act does not prescribe the authority before which an application for the grant of a permit on an inter-State route should be made, obviously for the reason, that the inter-State agreement itself which allots a particular interstate route to a particular State, may provide that that State may issue permits or leave it to be issued in accordance with the Act and the Rules made thereunder In this context it is pertinent to recall that the Supreme Court in Mohd. Ibrahim v. S.T.A. Tribunal, Madras, : [1971]1SCR474 , declared (at p 1547):

'In the absence of any specific rules the best way of harmonising the powers and functions is to allow these interState authorities to exercise their power in the respective spheres in regard to grant (emphasis ours) and counter-signature of permits by agreement and accord.'

21. Under the inter-State agreement in question the tax shall be paid to the State to which the route is allotted and they would be exempt from payment of any tax to the reciprocating State Tax free tokens for single point tax vehicle would be issued in the Home State itself an behalf of the reciprocating State. The routes themselves are allotted to each of the States on route-kilometre parity which is a rational basis. None of these clauses, in our view, contravene the provisions of the Motor Vehicles Act.

22. The contention that the agreement in question contravenes either S. 45 or S. 47 or S. 63 of the Motor Vehicles Act in so far as it provides for certain inter-State routes partly lying in Andhra Pradesh and partly lying in Tamil Nadu State being allotted to the State of Andhra Pradesh or Tamil Nadu does not merit acceptance and it is accordingly rejected.

23. We may next turn to the principal contention of the learned counsel the petitioners that inasmuch as routes are allotted to the State of Andhra Pradesh or Tamil Nadu their to renewal of their existing permits destroyed. That right according to them is a vested right which cannot be taken away or infringed by any inter-State agreement. In this context, it becomes necessary to consider how far the right to ply a stage carriage on a public route is a fundamental right and what restrictions if any, may be placed on this right in conformity with the provisions of the Constitution and the provisions of the Motor Vehicles Act. No doubt, the right to carry on trade or business is a fundamental right and the right to ply a stage-carriage is a right to carry on transport business and a citizen has fundamental right guaranteed to him under Art. 19(1)(g) of the Constitution. But at the same time the Constitution of India itself postulates reasonable restrictions being placed on the exercise of such right.

24. The Supreme Court in Raman and Raman Ltd v, State of Madras (AIR 1959 9C 694), held (at p. 697):

'....... a citizen has fundamental right to ply motor vehicles on public pathways under Art. 19(1)(g) of Constitution and any infringement of that right by the State can be justified only it was within the scope of Article 19(6) thereof. The appellant had a fundamental right to carry on his motor transport business Subject to reasonable restrictions imposed upon that right by law.'

25. It is, therefore, too late in the day to contend that a right to ply stage carriage on inter-State route is right which cannot be regulated and upon which reasonable restrictions could not be placed. The Vehicles Act which regulates the of permits and renewal of permits does not affect any fundamental right. It is a right which is regulated by a statute and the right if any, to a renewal of an existing permit must be found within the four corners of the Motor Vehicles Act and the Rules made there under. It may be noticed even at this juncture that with regard to the existing permits the impugned inter-State agreement stipulates as follows:--

'permits for plying stage-carriage services on existing routes will continue to be valid till their dates of expiry notwithstanding their reallocation between the two States.'

There is no specific clause in the agreement to the effect that the existing permit-holders shall not be entitled to apply for renewal of their permits; nor is there any specific provision authorising or assuring them of renewal of permits. It is, however, pointed out by Sri G. Suryanarayana, learned counsel for the petitioners that some of the routes on which the petitioners are piping their stage-carriages having been allotted to the other State, the applications for renewal have now to be made to the Transport Authorities of that other State and inasmuch as under the provisions of the Motor Vehicles An and the Rules made thereunder, applications for renewal of permits have to be made to the authority which granted the primary permit, no application for renewal can be made under the Act. If that the consequence of the allocation of the routes to one or the other States, it can. not be said that the agreement itself takes away the so-called right of the Petitioner to a renewal. That apart the very assumption of the petitioner on which the entire argument is built viz., that the petitioners have a vested right to renewal of a permit even on the data when they were granted the primary permit is itself not correct.

26. A reading of S. 58 of the Vehicles Act itself makes it clear that renewal of a Permit is neither smatter of course nor of right. It lays down that an application for renewal has to be disposed of as if it were an application for the grant of a permit and only other conditions being equal, an applicant for renewal shall be given preference over new applicants for permits. Thus irrespective of whether there is an State agreement or not, the existing operator holding a stage-carriage permit has no vested right to a renewal of his permit He has to apply for renewal take his chance along with the applicants for permit; only when conditions are equal he is entitled preference and not otherwise. The called right to a renewal is liable to defeated by the superior claims of a new applicant. This clearly shows there is no vested right to a renewal of a permit. Further, there is nothing in S. 58 which in any way impinges upon the right of the two States to enter into an agreement and vary the inter State route on stipulate any terms and conditions with respect to route or routes over which a permit has been granted earlier and in respect of which an application for renewal is pending.

27. In N.O.T.C. Private Ltd. v. R.T.A. Cuttack, : AIR1957Ori121 , a Bench of the Orissa High Court held that no one has an inherent right to a permit to ply a motor vehicle or to its renewal. The grant of a permit is entirely within the descretion of the Regional Transport Authority. The provisions of S. 58 for renewal of a permit are procedural. No one has a vested right in it. The Court further held that

'where therefore an application for renewal of a permit made and there is another application by the State Transport Authority, the applicant would not be entitled to renewal of his permit The application would be decided according to the provisions of S. 58 (2) as they then stood'

In J.M.T. Union LM. v. State of Saurashtra, AIR 1955 Sau 57, a similar view was taken. While it is true that a vested right cannot be impaired by implication and must be expressly taken away by statute, it is equally well settled that the right to a permit is neither a fundamental right nor a vested right. No doubt, as the agreement provides that certain inter-State routes are allotted to a particular State, certain petitioners may be deprived of their opportunity to make an application for renewal inasmuch as the application for renewal has to be made to the authority which granted the permit and in respect of those routes, the authority which may now grant permit under the agreement may be the Regional Transport Authority of the other State and the existing operators may not be in a position to apply for renewal But that does not mean that their existing right to a permit is taken away for neither S. 58 gives a vested right for renewal of a permit nor the statute affects the inter-State agreements in this behalf. Any such procedure prescribed for applying for renewal of permit cannot take away the right of the States to enter into an agreement. If on account of the changed situation and coming into being of an inter-State agreement with respect to a Particular route, the petitioner cannot apply for renewal, it does not mean that any vested right of his is taken away nor does it amount to his being deprived of his right to carry on trade or business. In as much as sub-secs. (3-A) and (3-B) of S. 63 make a special provision for the procedure to be followed, in the matter of inter-State agreements, with regard to the inter-State routes. this special provision would prevail over the general provision contained in S. 45 of the Ad with regard to applications for the grant of permits or counter-signatures thereon and the procedure to be followed with regard to renewal of permits as contemplated by S. 58 of the Act. The procedure for the grant of permits has to be in accordance with that agreement,

28. The contention of the petitioners that their vested right for renewal of the existing permits is taken away by the impugned inter-State agreement is therefore rejected.

29. In this context we may consider the provisions of S .63 (3-A) and (3-B) of the Motor Vehicles Act, Sub-sec. (3-A) of S. 63 declares that every proposal to enter into an inter-State agreement as also the agreement to fix the number of permits proposed to be granted or countersigned in respect of each route shall be published in the Gazette together with a notice of the date before which representations may be made in connection therewith Only the persons specified in sub-cls. (i), (ii) and (iii) of the proviso thereto are given the right to make a representation Agreement with regard to counter-signatures is also required to be published in the official Gazette under sub-sec. (3-B) of S. 63 of the Act. The representations made are required to be considered before the agreement is finalised. Thus, this provision gives an opportunity to persons already providing transport facilities to make a representation against the finalisation of the proposed inter-State agreement. This provision gives ample opportunity to existing operators to make their representations and enjoins the respective State Governments to take into account those representations before finalising the agreement with regard to the inter-State routes. In entering into the impugned agreement this procedure has been followed. The draft agreement was published on 1-9-1972 in the Andhra Pradesh Gazette. The petitioners on their own showing have made their representations and the same have been considered before entering into the agreement. The procedure laid down by the Statute has been strictly followed. The representations made by the petitioners having been duly taken into consideration, we do not find any merit in the contention that the principles of natural justice have been violated in reaching the inter State agreement in question.

30. The next question that has to be considered is, whether the terms of the inter-State agreement in any way extinguish the petitioner's right to carry on transport business. It is seen that even under the inter-State agreement permits are intended to be granted It does not debar any individual from applying for a permit on the said route. No doubt, as contended by the learned counsel for the petitioners, only under Chapter IV-A of the Motor Vehicles Act, special provision relating to State Transport undertakings may be made vesting exclusive jurisdiction In a State Transport Undertaking to provide transport facilities on any route. Under the agreement itself, nothing of that sort is sought to be done. The agreement does not modify the terms of the existing permit; nor does it curtail the existing route under the permit. The existing permits will have full effect until the expiry of that term. As already held above, renewal of a permit not being a fundamental right or a vested right any clause of the agreement resulting in the existing operators not being able to obtain a renewal is not of itself illegal or violative of any right of the petitioners. This contention is also in our view, without any merit.

31. The contention of the petitioners that the allotment of routes to the respective States results in reserving the said routes for State Transport Undertakings without following the procedure prescribed by Chapter IV-A does not merit acceptance. The inter-State agreement itself does not make any such provision. It merely allots the said routes to particular States. If in respect of mute allotted to a particular State, any State Transport Undertaking comes forward with a Scheme, then that would have to be dealt with under the provisions of the Motor Vehicles Act But the State is not necessarily obliged to approve that scheme or exclude the private operators. It is far the State to decide whether the routes allotted to it under the agreement should be allowed to be operated by the private operators or approve any scheme presented by a State Transport Undertaking as envisaged by Chapter IV-A If on any of these routes, the State Transport Undertaking is permitted to ply to the exclusion of any other operator how far that action is valid in the light of the provisions of the Motor Vehicles Act would be a matter for consideration as and when such a scheme is finalised or implemented. Suffice to say that the terms of the impugned agreement by themselves do not bring into effect any scheme or exclude any person interested in providing transport facilities from applying for permits on the said routes, This contention of the petitioners is, therefore, rejected.

32. The last contention that remains to be considered is 'Whether cl. 1 (a) of the agreement affects the fundamental right of the petitioner to carry on business?' That clause reads as follows:

'1 (a) Inter-State routes for operation of stage-carriages of both the States shah he as shown in the appendix The routes specified in Parts A and B of the said Appendix shall be operated by the Andhra Pradesh Operators and the Tamil Nadu Operators respectively.

Permits for plying stage-carriage services on existing mutes will continue to be valid till their dates of expiry not withstanding their reallocation between the two States.'

In view of this clause, it cannot be denied that the routes in Part 'A' shall be granted to the operators of Andhra Pradesh and permits on routes specified in Part B shall be granted to the operators of Tamil Nadu. in other words operators of States other than Andhra Pradesh are deprived of their right to apply for permits on routes Specified in Part 'A' and operators of States other than Tamil Nadu are deprived of their right to apply for permits on routes specified in Part-B. The right to carry on the business of transport by Motor Vehicles is a fundamental right. The right to ply a stage carriage being fundamental right, the same cannot be denied to any citizen except is accordance with law. However, reasonable restriction could be placed on the exercise of such a right and the regulation of operation of stage carriages by the grant of permits under the provisions of Motor Vehicles Act have been recognised as reasonable restrictions.

33. The restriction that is now imposed under the agreement that only the operators of the State of Andhra Pradesh would be permitted to ply on certain routes and the operators of Tamil Nadu would has allowed to ply on other routes is not imposed by law but is one imposed by virtue of the agreement in respect of inter-State routes.

34. The respondents, however, rely upon the decision of the Supreme Court in A. Viswanath Rao v. State of Mysore, : [1968]3SCR198 in support of their contention that such a term is not violative of the fundamental right to carry on business guaranteed to a citizen or amounts to a discrimination violative of Art. 14 of the Constitution of India. in that case in relation to inter-State routes covering the States of Mysore and Andhra Pradesh a scheme which provided for complete exclusion of private operator on the portion of the routes located in Mysore State and permitted those plying their vehicles on the portion of the route lying in the State of Andhra Pradesh the Supreme Court held that was not violative of Article 14 of the Constitution. It would be seen that there the Supreme Court was considering an entirely different situation, There the exclusion was of all operators on a particular portion of the route and not of operators of any particular State. Irrespective of whether the operator was of Mysore or of Andhra Pradesh State, all operators were totally excluded from plying on that particular portion of the route. In the instant ease, the prohibition is not against all operators; the operators of Andhra Pradesh in regard to routes in Appendix 'A' and the operators of Tamil Nadu in regard to routes in Appendix 'B' of the agreement are alone preferred and all other operators are excluded from even applying for permits. That right to ply is reserved exclusively to the operators of a particular State to the exclusion of the operators of all other States. This is a restriction solely based on the fact that a person is carrying on the business of a Motor Transport operator within a particular State, It has no nexus to the object sought to be achieved, that is providing more efficient and coordinated transport facilities to the public in gene Article 301 of the Constitution declares as follows:

'Subject to the other provisions of this Part, trade, commerce and inter course throughout the territory of India shall be free.'

An exception however, to this is provided in Art. 302 of the Constitution by making a provision for the imposition of restrictions in Public interest by law made by the Parliament in the following words:

'302. Parliament may by law impose such restrictions on the freedom of trade, commerce or intercourse between one State and another or within any part of the territory of India as may be required in the public interest.'

The Constitution, however, restricts the power of the Parliament to make law in this behalf by enacting Art. 303 which reeds as follows:

'303 (1) Notwithstanding anything in Art 302 neither Parliament nor the Legislature of a State shall have power to make any law giving or authorising the giving of, any preference to one State war another, or making or authorising the making of, any discrimination between one State and another, by virtue of any entry relating to trade and a commerce in any of the Lists in the Seventh Schedule.

(2). Nothing in cl. (1) shall prevent Parliament from making any law giving or authorising the giving of any preference or making, or authorising the making of any discrimination ii it is de. dared by such law that it is necessary to do so for the purpose of dealing with a situation arising from scarcity of goods in any part of the territory of India.'

35. It would be seen that while some restrictions may be imposed on the freedom of trade, commerce and intercourse between one State and another by a law made by the Parliament. Article 303 declares that this authorisation does not entitle the Parliament or the Legislatures concerned to give any preference to one State over the other or to make any discrimination between one State and the other by such law. Of course, the only exception to this prohibition is what is contained in Article 303(ii) which permits discrimination under law which is necessitated for the purpose of dealing with a situation arising from Scarcity of goods in any part of the territory of India. Obviously the preference that is sought to be given to the operators of either the State of Andhra Pradesh or the State of Tamil Nadu in the matter of granting stage-carriage permits on the inter-State routes allotted under Part 'A' or Part 'B' of the agreement, is neither covered by legislation nor is one intended to deal with the situation arising from scarcity of goods in any part of the territory of India Consequently the discrimination made or preference given to the operators of one State over ' the operators other States is an interference with the free trade, commerce and intercourse ensured under Art, 301 of the Constitution.-

36, Dealing with a somewhat similar situation in the context of S. 68-C of the Act, which authorises the State Transport Undertaking to prepare and Publish a proposal providing for partial exclusion of private operators Bench of this Court in B. S Padmavathamma V. Andhra Pradesh State Road Transport Corporation, (1978) I APLJ (HC) 492, held:

'........ but such partial exclusion must be reasonable in the circumstances in other words, if the route, in the present case, Hindupur to Devanagere is sought to be taken over, it may say that the town services operating within Hindupur town or within Devanagere town shall be excluded, or that the operators on routes overlapping the said route for a short distance are excluded. But, it cannot say that of the two existing operators on the said route, 'A' and 'B' only. 'A' shall be eliminated, but not 'B'. It must be emphasized in this context, that the identity of the permit issuing authority is immaterial Nor does the inter-State agreement cure or condone such a discrimination. The result of such an exclusion in the present care is that on the same route the buses of both the Andhra Pradesh State Transport Undertaking, as well as the private operators from Karnataka State, would be plying......... Thus the fact that the proposed scheme brings about a discrimination between the operators plying under permits issued by this State and Operators plying under permits issued by the Karnataka State on the very Same route is undeniable.'

The Supreme Court in District Collector, Hydrabad v, Ibrahim & Co., : [1970]3SCR498 , held (at pp. 1278, 1279):--.

'The freedom declared by Art. 301 is in widest terms and applies to all forms of trade, commerce and intercourse, but it is subject to certain restrictions specified in Arts. 302 to 305. These provisions clearly show that that the guarantee under Art. 301 cannot be taken away by executive action. The guarantee under Art. 301 which imposes a restriction upon legislative power of the Parliament or the State Legislature and the declaration of freedom is not merely an abstract declaration. There is no reason to think that while placing a restriction upon legislative power the Constitution guaranteed freedom in the abstract and not of the individuals.'

In that view of the matter, the Supreme Court declared that G.O. No. 2976 dated 30-12-1964 which declared that the sugar quota allocated to the Twin Cities of Hyderabad and Secunderabad be given in its entirety to the Greater Hyderabad Consumers' Central Co-operative Stores Ltd, Hyderabad being merely an executive order violated the guarantee under Art. 301 of the Constitution.

37. We are therefore of the view that 301 does not permit any discrimination or preference to the operators one State over the other on the ground of residence or place of business 1 (a) of the impugned inter-State agreement is, therefore, struck down as violative of Art, 301 of the Constitution India and is not saved by any of the provisions of Part XIII of the Constitution of India. We do not propose to express any opinion on the question whether this discrimination also violates Art. 14 of the Constitution of India.

38. The next question that has to be considered is whether on account of Cl. 1 (a) of the agreement being held to be violative of Art. 301 of the Constitution the entire agreement is rendered void. No doubt, the said clause is a very important term of the agreement. The allotment of the routes to the State of Andhra Pradesh and the State of Tamil Nadu as specified in Parts A and B and the stipulation that they shall be operated by the Andhra Pradesh operators and the Tamil Nadu operators respectively is the very basis of the entire agreement. Though that clause is violative of the Provisions of the Constitution, the inter-State agreement being otherwise perfectly legal and valid, it is not necessary to strike down the entire agreement. That clause is easily severable and severance can be effected without affecting the rest of the agreement which can still be given full effect. In view of the remaining terms of the agreement which allot certain routes exclusively to either Andhra Pradesh or Tamil Nadu, the respective States may still allow operators from all States to apply for permits on the said routes and consider the said applications on their permits or take other steps in conformity with the Motor Vehicles Act to provide transport, facilities on the said routes. Such steps may include those envisaged by Chap, IV-A of the Motor Vehicles Act. We, therefore, strike down only Cl. 1 (a) of the agreement as clarified below and not the entire agreement.

39. In the result Cl. 1 (a) of the agreement in so far as it directs that on routes specified in Part 'A' only the operators of Andhra Pradesh shell be permitted to ply and an the routes specified in Part 'B' the operators of Tamil Nadu shall be permitted to ply is declared void and inoperative and accordingly struck down; but in other respects the impugned inter-State agreement stands and may be given effect to.

40. These writ petitions are accordingly allowed to the extent indicated above. There will be no order as to costs. Advocate's fee Rs. 150/- in each.

41. Petitions partly allowed


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