B.D. Agarwal, J.
1. Charkhari-Chhatarpur Route is an inter-Statal route -- partly falling in the State of Uttar Pradesh and partly in the State of Madhya Pradesh, 18 miles of the route being in the State of Madhya Pradesh and the remaining portion in the State of U. P. In the meeting held on April 18/19, 1973, the Regional Transport Authority, Jhansi, purporting to act under the provisions of the Motor Vehicles Act (U P. Amendment) Act, 1972 (U. P. Act No. XXV of 1972) granted 42 permanent stage carriage permits on this route. The resolution, by which the aforesaid permits were granted, was challenged by respondent No. 3 in revision before the State Transport Appellate Tribunal U. P. Lucknow. The respondent No. 3, was, at the relevant time, an operator of the Mahoba-Chhatarpur route, which is overlapped by the aforesaid inter-Statal route to the extent of 22 miles between Srinagar and Chhatarpur. Subsequent to the filing of the revision, the respondent No. 3 transferred her permit in favour of one Sri Rajendra Kumar.
2. The State Transport Appellate Tribunal allowed the revision filed by the respondent No. 3 and quashed the resolution of the Regional Transport Authority, Jhansi dated April 18/19, 1973 granting stage carriage permits on the aforesaid inter-statal route.
3. The petitioner who has filed the present petition under Article 226 of the Constitution challenging the judgment and order dated June 24, 1974 of the State Transport Appellate Tribunal U. P. Lucknow is one of such grantees of permanent stage carriage permits on the aforesaid inter-statal route. The Tribunal in similar cases relating to inter-statal routes had taken the view that the directions of the State of U. P. dated March, 30, 1972 issued under Section 43-A of the Motor Vehicles Act could not be held applicable to inter-statal routes and the Regional Transport Authority was in error in granting free permits on inter-statal routes in pursuance of these directions. This decision of the Tribunal was followed in the instant revision filed by opposite party No, 3, by which the grant of permanent stage carriage permits on the Charkhari-Chhatarpur inter-statal route was set aside.
4. The only question as has urged by the learned counsel for the petitioner, which calls for decision in the present case is as to whether as a result of amendment of the Motor Vehicles Act by U. P. Act No. XXV of 1972 it was open to the Regional Transport Authority to grant permits to eligible applicants irrespective of the provisions contained in the Motor Vehicles Act in respect of inter-statal routes. In other words, the question to be decided is as to whether the provisions of law as Introduced by U. P. Act No. XXV of 1972 in relation to grant of permits would be applicable to a case of grant on inter-statal routes also.
5. Section 45 of the Motor Vehicles Act lays down general provisions in regard to applications for permits, which inter alia provides for the authority to whom the application for inter-statal permit has to be made. Section 46 enumerates the particulars to be mentioned in an application for stage carriage permits, Section 47 lays down the procedure to be followed by the Regional Transport Authority in considering the application for stage carriage permit. Sub-section (3) of this section as unamended by the State of U. P. enables a limit to be fixed in respect of the number of such stage carriages for which permits may be granted, in the region or in any specified area or on any specified route within the region. Section 48 provides for the grant of stage carriage permit subject to the provision of Section 47, U. P. Act No. XXV of 1972 was enacted. This received the assent of the President on 1st May, 1972 and was published in the U. P. Gazette of the same date. By this Act, certain amendments were made in the Motor Vehicles Act, so far as its application to U. P. State is concerned. Section 43-A was inserted. Sub-section (2) of this section as inserted, so far as it is relevant for the present purpose, provided that upon a direction being issued by the State Government by a notification, the transport authorities as well as the State Transport Tribunal, shall proceed to consider and decide all applications for grant of stage carriage permits, appeals and revisions in that behalf as if in Section 47, Sub-section (3) were omitted. The State Government issued such notification dated March, 30, 1972 under the aforesaid provisions. The result thereof was that the consequences enumerated in the various clauses of Sub-section (2) of Section 43-A followed. One of the consequences was that Sub-section (3) of Section 47 stood omitted and hence it became no longer necessary for the Regional Transport Authority to put a limit on the number of state carriage permits and hence it became permissible to issue any number of State carriage permits, having regard to the considerations mentioned in Sub-section (1) of Section 47 as substituted by U. P. Act No. XXV of 1972. The validity of Section 43-A as inserted, and the notification dated March 30, 1972 was upheld by this Court and later this view was affirmed in appeal by the Supreme Court in Hansraj v. State of U. P., (AIR 1975 SC 389).
6. Section 63 of the Act lays down that a permit granted in any one State shall not be valid in any other State unless counter-signed by the State Transport Authority of that State or by the Regional Transport Authority concerned. Proviso to Sub-section (3) of this section lays down that the procedure laid down in Section 57 for the grant of countersignatures of the permits shall not be required to be followed in cases, where permits granted in any one State are required to be countersigned by the State Transport Authority of another State or by the Regional Transport Authority concerned, as a result of any agreement arrived between the States, after complying with the requirements of Sub-section (3-A) or for the grant of counter-signatures of permits in pursuance of any direction issued by the commission under Clause (c) of Sub-section (2) of Section 63-A.
7. Sub-section (3-A) and Sub-section (3-B) were inserted by Act No. 56 of 1969 with effect from March 2, 1970. These sub-sections detailed the procedure to be followed while entering into the agreement between the states. Such an agreement arrived at between the States, in so far as it relates to grant or countersignatures, requires publication in the official gazette by each of the States concerned, and the State Transport Authority of the State and the Regional Transport Authority concerned are bound to give effect to it.
8. Sections 63-A, 63-B, 63-BB and 63-C deal with the constitution of Inter State Transport Commission, delegation of powers by it, appeals against the decisions, directions and orders under Section 63-A and the powers of the Central Government to make rules in that regard.
9. In Mohd. Ibrahim v. State Transport Appellate Tribunal, Madras, (AIR 1970 SC 1542), the Supreme Court had an occasion to interpret the provisions of Section 47 (3) of the Motor Vehicles Act. A question arose before it for consideration as to whether an order under Section 47 (3) of the Act is contemplated for inter-State permits. It was held that Section 47 (3) would not apply to inter-State permits because that, provision relates to Regional Transport Authority limiting the number of stage carriage permits for which stage carriage permits may be granted in the region or in any specified area or on any specified route within the region; namely, that Section 47 (3) is confined in its operation in or within the region. The Supreme Court observed:
'The provisions of Section 47 (3) of the Act do not apply to inter-State permits because an inter-State permit cannot be effective unless it is countersigned by the Authority of the other State. The suggestion that in regard to inter-State permits a limit has to be fixed in regard to number of stage carriage for inte-State routes will have the effect of adding words to the provisions in Section 47 (3) of the Act. That will not be the proper way of giving effect to Section 47 (3) of the Act. It will be misreading Section 47 (3) of the Act if it will be applied to inter-State permits. The combined effect of Sections 63, 63-A, 63-B and 63-C is that the inter-State Commission will deal with inter-State permits. The Central Government under Section 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 countersignatnre 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 countersignature of permits by agreement and accord.'
10. In our opinion, therefore, in the matter of grant of permits on inter-statal routes, the provisions of the Motor Vehicles Act would continue to govern. The power to grant permits to all eligible applicants as if the provisions of Sub-section (3) of Section 47 were omitted as a result of issuance of the directions under a notification issued under Sub-section (2) of Section 43-A as inserted by U. P. Act No. XXV of 1972, would have no effect on the grant of stage carriage permits in respect of inter-statal routes,
11. In the instant case, it is clearly borne out on the record that there was no agreement duly published in the gazette for increasing the number of vehicles on inter-statal route in question. It has further been clearly averred that no such agreement was even executed between the two States, much less such an agreement being published.
12. In view of what has been observed by us above, any argument based on Article 254 of the Constitution ceases to have any significance. On the view taken above, no question of repugnancy of any provision of U. P. Act No. XXV of 1972 to any provision of Motor Vehicles Act as made by the Parliament could arise.
13. We may now deal with the submission that if as a result of U. P. Act No. XXV of 1972, the permits could be granted to all eligible candidates without any number being fixed, even in respect of inter-statal routes, then in fact, its operation would be extra-territorial and would suffer by the vice of extra-territoriality. This submission is sought to be repelled on the ground of the existence of a nexus.
14. Cooley in his (Treatise on the Constitutional Limitations) has observed:
'The legislative authority of every State must spend its force within the territorial limits of the State. The Legislature of one State cannot make laws by which people outside the State must govern their actions, except as they. may have occasion to resort to the remedies which the State provides, or to deal with the property situate within the State.'
15. In State of Bombay v. R.M.D. Chamarbaugwala, (AIR 1957 SC 699), Bombay Lotteries and Prize Competitions Control and Tax Act was challenged on the ground of extra-territorial operation inasmuch it purported to control and tax business activities of the petitioners who were printers and publishers of a Newspaper outside the State of Bombay. The Supreme Court took the view that inasmuch as collection depots had been set up and local collectors had been appointed and entries were invited in the State of Bombay, that afforded sufficient territorial nexus for the impugned legislation.
16. In State of Bihar v. Smt. Charu-sila Dasi, (AIR 1959 SC 1002), Bihar Hindu Religious Trust Act came up for challenge on the ground of extraterritorial operation. The Supreme Court, following the principles laid down in the case of State of Bombay v. R.M.D. Chamarbaugwala, (AIR 1957 SC 699) (supra) upheld the legislation on the ground that since religious endowments in question were situate in Bihar and the trustees function in Bihar, that afforded sufficient territorial nexus.
17. In Duley Singh v. State, (AIR 1977 All 251), a Division Bench of this Court, repelled the submission of extraterritorial operation in relation to U. P. Motor Vehicles (Special Provisions) Act (Act No. XXVII of 1976) on the ground that the operators of Rajasthan who stood affected by the framing of the Scheme also plied their buses within the State of Uttar Pradesh on the part of the inter-State route inside of U. P. This according to the Bench constituted sufficient territorial nexus. What weighed more with the Bench was that the principle of extra-territoriality could not appropriately be applied to the scheme framed by the State under powers conferred by a law enacted by the Parliament. Such is not the position in the present case.
18. Further, in our opinion, the mere fact that under the Motor Vehicles Act, stage carriage permits can be granted on inter-statal routes, that, by itself can afford no nexus, as is necessary in law to be established, before a defence to a plea of extra-territorial operation can succeed.
19. In our opinion, it is not within the competence of any State legislature to take away by force of a legislation enacted by it, power of other State to enter into an agreement and to fix the number of stage carriage permits which it would permit on the portion of the inter-statal route lying within that State as such a legislation would have extra-territorial operation.
20. No other point was pressed before us in support of this petition.
21. We are, hence, unable to find any1 error in the judgment of the State Transport Appellate Tribunal while allowing the revision of the respondent No. 3 and setting aside the resolution of the Regional Transport Authority, Jhansi granting permanent stage carriage permits on the inter-statal route Charkhari-Chhatarpur.
22. This petition, hence, fails and is dismissed. In the circumstances, we make no order as to costs.