C.P. Sen, J.
1. By this petition under Articles 226 and 227 of the Constitution, the petitioner has prayed for quashing of the grant of permits to the respondents 6 to 8 by the State Transport Appellate Tribunal. The connected petitions of Mohanlal and Ors. v. S.T.A.T. and Ors. M.P. No. 528 of 1975, Rangnath v. S.T.A.T. and Ors. M.P. No. 775 of 1975 and Samrathmal Agarwal v. S.T.A.T. and Ors. M.P. No. 1354 of 1975 are also disposed of as they arise out of the same order and common questions are involved. The said petitioners are also parties in this petition.
2. The Regional Transport Authority, Indore invited applications for three return trip permits on the regional route Dhar-Badwani (via Mangod, Amzera, Zirabad, Awalda, Manawar, Singhana, Chikalda, Rajghat). There were as many as 43 applicants and the R. T. A. by order dated 22-5-1972 granted one permit to each of the respondents 3 to 5 i.e. Mohanlal, Bhoj Yatayat Sahakari Samiti Ltd. and Gendalal for a period of three years. Appeals were preferred against the order by the present petitioner and the respondents 6 to 11. The State Transport Appellate Tribunal has set aside the order of the R.T.A. and instead granted permits to the respondents 6 to 8 i. e. Abdul Hakim, M/s. Dayabhai & Co. and Ramcharanlal by order dated 27-5-1975. Here it may be mentioned that during pendency of the appeals, the M.P.S. R.T. Corporation published the draft Scheme No. 80 in M.P. Rajpatra on 18-5-1973, proposing nationalisation of the inter-State routes Ujjain-Ahmadabad via Indore, Dohad etc. The present route i. e. Dhar-Badwani overlapped the proposed routes on the portion between Dhar and Mangod for a distance of 15 miles. Aggrieved by the order, the original grantees i. e. the respondents 3 to 5 have preferred M.P. No. 528/75, respondent No. 10 Rangnath M. P. No. 775/1975, respondent No. 11 Samrathmal M.P. No. 1354/1975 and the present petition by the M.P.S.R.T. Corporation.
3. The case of the M.P.S.R.T. Corporation is that its claim has been rejected on untenable and flimsy grounds by both the R.T A. and the S.T.A.T. and the Appellate Tribunal also erred in granting permits to the respondents 6 to 8 as there was bar in granting the permits in view of Sub-section (1-D) of Section 68-F of the Motor Vehicles Act, 1939, because the draft scheme No. 80 was published during pendency of appeals and the present route overlapped a portion of the proposed nationalised routes. The original grantees i.e. Mohenlal, Bhoj Yatayat Sahakari Samiti Ltd. and Gendlal in their petition further submitted that their grants have been wrongly set aside by the Appellate Tribunal, mainly because they were small operators and that Mohanlal had experience only on temporary permits. The respondents Rangnath and Samarathmal in their petitions have contended that both the authorities erred in rejecting their claims in spite of their being superiors in all respects in comparison to the original and the present grantees. Samarathmal has further contended that the authorities had no jurisdiction to consider the claims of those applicants who had applied in pursuance to the earlier notification dated 24-5-1968, which was quashed by this Court in M.P.S.R.T. Corporation v. R.T.A., Indore M.P. No. 352 of 1968 = (reported in AIR 1969 Madh Pra 182) and although it was clearly mentioned in the subsequent notification dated 7-2-1969 that all earlier applications made in pursuance to the repealed notification have stood cancelled. It is, however, contended by both of them that Sub-section (1-D) of Section 68-F is not attracted inasmuch as the proposed nationalised routes are inter-State routes whereas the present route is only regional one and so the present route is outside the draft scheme. Moreover, it is said that the proposed scheme can have no application to pending appeal, the original grant by the R.T.A. being prior to the publication of the draft scheme No. 80. In reply the respondents 3 to 5 i. e. the present grantees denied that the grants in their favour were illegal or invalid. The appellate Tribunal have taken into consideration all relevant facts in applying the correct principles. The route being regional one, the draft scheme No. 80 for inter-State route cannot affect the present route. It is also said that it is not open to this Court under its writ jurisdiction to reappraise the material on record and come to another conclusion on merits. The respondent No. 9 Balmukund has neither entered appearance nor has challenged the order of the S.T.A.T. by separate petition. It is further said that the petitions are liable to be rejected on the short ground that all the claimants have not been joined as parties.
4. First of all the main questionregarding effect of Sub-section (1-D) ofSection 68-F on the present grants istaken up. Sub-sections (1-A) to (1-D) wereadded to Section 68-F by amending ActNo. 56/1969, which came into force on2-3-1970. This was necessitated becauseprior to the amendment there was no barin granting permits or renewals thereofon any area or route covered by a draftscheme. It was only after publication ofthe approved or modified scheme thatsuch applications for grants or renewalsin contravention of the scheme could berefused. The permits so granted in theintervening period between publication ofthe draft scheme and the approved ormodified scheme were held to be notaffected by the final scheme inasmuch aspossibly such permits could not havebeen mentioned in the draft scheme forcancellation. So by amendment this difficulty has been got over and there is nowtotal prohibition under Sub-section (1-D)in granting permits or renewals in relation to an area or route or portion thereof till finalisation of the scheme. This issubject to one exception, namely, withregard to renewals falling due after thepublication of the draft scheme, onlysuch renewals could be granted but thesame also would cease to be effectiveafter publication of the approved ormodified scheme. Clearly, the Sub-sectionhas been introduced in order to avoidcomplications by creation of new competitors in the intervening period. Butin order that the interests of the travelling public are not affected in any wayduring the intervening period, provisionshave been made for granting temporarypermits to the State Road TransportCorporation or to private operators underthe new Sub-sections (1-A) to (1-C)Looking to the purpose and object behind the amendments, it is evident thatno permits can be granted or renewedin relation to area or route or portionthereof covered by the draft scheme. Ifthe new permit that has to be grantedoverlaps a portion of the proposednationalised route, then granting of thepermit has to be stayed till finalisationof the scheme. This will be so even ifthe overlapped portion is proposed to beof conjoint operation in the draft scheme.In such a case, permit could only begranted after finalisation of the schemeand not earlier in view of the prohibitioncontained in Sub-section (1-D); till thenneeds of the travelling public are to beserved by issuance of temporary permits.
5. The view we have taken finds support from two decisions of this Court. In M.P.S.R.T.C. v. R.T.A., Gwalior M.P. No. 325 of 1971, D/- 12-11-1971 (Madh Pra) it has been said that in view of provisions contained in Sub-section (1-D) to Section 68-F, from and after 2-3-1970 the R.T.A. could not have jurisdiction to grant permit under Section 48 in regard to a route covered by the proposed scheme. In that case, the amendment came into force while the application for the grant was pending before the R.T.A. Following this decision, in M.P.S.R.T.C. v. R.T.A., Gwalior, 1973 M.P. LJ (SN) 115 = MP No. 135 of 1971, D/- 25-2-1971 it has been held that the language of the Sub-section (1-D) does not make any distinction between a route reserved for exclusive operation and conjoint operation, it prohibits grant of any permit or renewal thereof between the publication of the scheme and its approval by the State Government in relation to a route or a portion of a route covered by the scheme, there is therefore no scope for holding that Section 68-F (1-D) only prohibits grant of permit on routes exclusively reserved for the Corporation. It is however contended here that the draft scheme No. 80 could not apply to pending appeals. This cannot be so because in appeal the permits of original grantees have been revoked and instead new permits have been given to the respondents 6 to 8. These new permits are not continuation of the old permits but they take effect after the date of the appellate order and for a full period of 3 years. Besides the appellate order wipes out the grant by the R.T.A. and substitutes its order in its place for all intents and purposes and such permits cannot be issued during finalisation of the draft scheme No. 80. In J.T. Development Co. v. S.T.A. Authority, AIR 1961 MP 23 it has been said that a condition could be implied in every permit that in the event of an appeal against the grant being allowed, the grant would lapse, the reason being that the reversing appellate order wipes out the order appealed against and stands in its place for all legal purposes, relying on V.C.K. Bus Service Ltd. v. R.T. A. AIR 1957 SC 489. The Supreme Court in Ali Ahmad & Sons v. R.S. Narain, AIR 1974 SC 1876 applied Section 68-F (1-D) in a case where proposed scheme came into operation during pendency of appeal in the Supreme Court and dismissed the appeal. The Appellate Tribunal had therefore no jurisdiction to grant permits to the respendents 6 to 8.
6. Reliance has been placed on two decisions of this Court for the pro-position that the present route being a regional one and the proposed nationalised routes in the draft scheme being inter-State route, Sub-section (1-D) cannot be bar in issuing permits for the regional routes. It is contended that the bar under the sub-section would have applied if the present route was also an inter-State one. This is also view taken by the appellate Tribunal. In M.M. Asati v. S.T.A.T. 1975 MP LJ 478 = (AIR 1976 Madh Pra 18) this Court considered an approved scheme and not a draft scheme, it was also held that route in that case did not cover scheme No. 66. So question of application of Sub-section (1-D) did not arise in that case. Moreover, this sub-section was introduced during pendency of appeal in that case and in view of Sub-section (4) of Section 58 introduced by the same amending Act that the amended provision would not apply to appeals pending on the date of coming into force of the amendment, there was no question of applying this Sub-section (1-D). In Asghar Ali v. S.T.A.T., M.P. No. 1225 of 1975 D/- 3-12-1975 (Madh Pra) the question was whether an appeal could be dismissed in default by the Appellate Tribunal and it was answered in the negative. It was also contended in that case by one of the petitioners that since the draft scheme No. 72 has been published on 31-12-1965, the S.T.A.T. could not have given the permit to the respondent No. 5 in place of the original grantee. The Court was of the view that the route in question in that case was not covered by the scheme and so Section 68-F (1-D) has no application. So in both the above mentioned two cases; this Court had no occasion to construe Sub-section (1-D). Those two cases have also not laid down that because the proposed nationalised routes are inter-statal, they cannot cover the regional routes. On reading the schemes in those cases, the Court found that intra-statal routes were excluded from the purview of the schemes.
7. So we have to see the draft scheme itself to find out whether there is scope for other operators and whether the nationalised routes are to be of exclusive or conjoint operation. The relevant clauses of the scheme No. 80 is as under:--
'Clause-2:--- The State Road Transport Services shall be provided by the M.P. State Road Transport Corporation on the following inter-state routes of Indore region:--
(1) Ujjain -- Ahmedabad via Indore Dohad Nadiad,
(2) Ujjain -- Himmatnagar via Indore-Dohad, Jhalod; Santrampur.
Clause-3:-- The nature and extent of the State Road Transport Services to be provided by the M.P. State Road Transport Corporation on the routes mentioned in Clause (2) above are specified in the schedule annexed hereto. The provision of transport services otherwise than under the scheme is prohibited. Except (i) The vehicles of Gujarat State nominees plying under the terms of Reciprocal Agreement between the State of Madhya Pradesh and Gujarat covering routes or portions thereof mentioned in Clause (2) above, (ii) Vehicles plying in Gujarat State territory only covering portion of the routes specified in Clause (2) above, and (iii) Vehicles plying on the routes in Madhya Pradesh only not included in the scheme shall be allowed to ply.
Clause-4:-- NO person other than Madhya Pradesh State Road Transport Corporation 'State Transport Undertaking' will be permitted to provide Road Transport Services (Stage carriage or contract carriages) on the inter-state routes specified in Clause (2) above.
Clause-5:-- All Road Transport Services will be provided by Madhya Pradesh State Road Transport Corporation 'State Transport Undertaking' exclusively on the inter-state routes specified in Clause (2) above except as provided in Clause (3) above.'
8. On reading the aforesaid clauses, it is clear that under Clause 4 no person other than the M.P.S.R.T. Corporation will be permitted to provide Road Transport Services on the inter-state routes specified in Clause 2. Clause 5 provides that all Road Transport Services will be provided by the M.P.S.R.T. Corporation exclusively on the inter-state routes specified in Clause 2, except as provided in Clause 3. The exceptions mentioned in Clause 3 are as follows:--
(i) Vehicles of Gujarat State nominees plying under the terms of Reciprocal Agreement between the two States covering the proposed nationalised routes.
(ii) Vehicles plying in Gujarat State territory only covering portion of the proposed nationalised route and
(iii) Vehicles plying on the routes in M.P. only not included in the scheme.
It is evident from above that intra-statal routes plying in Gujarat State only have been excluded from the operation of the scheme i. e. portion of the proposed nationalised routes in the Gujarat State will be of conjoint operation. So far as Madhya Pradesh is concerned, Vehicles plying on routes not included in the scheme alone are excluded i. e. vehicles plying on portions of the proposed nationalised routes in M.P. are not to be excluded, otherwise there is no reason as to why same language has not been used in Sub-clauses (ii) and (iii). Therefore while vehicles on the regional routes in Gujarat are totally excluded that is not so in case of vehicles on the regional routes in M.P. and are not totally excluded, only those vehicles plying on routes not included in the scheme alone are excluded. Which means those routes having one of their termini outside the nationalised routes and overlapping only a portion of the proposed nationalised routes in M.P. alone are exempted. If both the termini of these regional routes are on the nationalised routes and the route completely overlaps portions of the proposed nationalised routes, then such vehicles are excluded. Under Clause (28-A) of Section 2, route means a line of travel which specifies the highway which may be traversed by a motor vehicle between one terminus and another. The Supreme Court in C.P.C. Motor Service v. State of Mysore, 1962 Supp (1) SCR 717 = (AIR 1966 SC 1661) has held that by 'route' is meant not only the notional but also the actual road over which the omnibus runs. In Nilkanth Prasad v. State of Bihar, AIR 1962 SC 1135 it has further been held that portion of route of private operator forming part of notified scheme--Private operator is completely excluded from the portion--the portions are not different routes. The Supreme Court in Mysore State Road Transport Corporation v. Mysore Revenue Appellate Tribunal, (1975) 4 SCC 192 has held:--
'A difference in the two termini will make two routes different even if there is overlapping surface of the road common to two routes. In other words, two termini are an essential part of the concept of the route.' The Supreme Court in Mysore S.R.T. Corpn. v. Mysore S.T.A. Tribunal, AIR 1974 SC 1940 has held:--
'State Transport Undertaking granted exclusive right to run on certain route--Private operator cannot be granted permit on such route if his route overlaps even a very small portion of notified route.' As in the route in the present case, both the termini are outside the proposed nationalised routes and only a small portion overlaps the notified routes, so this route is saved from nationalisation if the draft scheme is approved as it is. On publication of the approved scheme, the R.T.A. is free to grant permits on this route.
9. Now about the question on merits of respective operators as decided by the S.T.A.T. and the R.T.A. The Supreme Court in Patiala Bus Pvt. Ltd. v. S.T.A. Tribunal, Punjab, AIR 1974 SC 1174 has laid down:--
'The main considerations required to be taken into account in granting permit under Section 47 are the interest of the public in general and the advantages to the public of the service to be provided. These would include inter alia consideration of factors such as the experience of the rival claimants, their past performance, the availability of stand-by vehicles with them, their financial resources, the facility of well equipped workshop possessed by them etc. Failure to take into account any of these considerations and proceeding as if the stage carriage permits were a largesse to be divided fairly and equitably amongst the rival claimants is a wholly erroneous approach suffering from an infirmity.'
10. In the present case, the Appellate Tribunal rejected the claim of the M.P.S.R.T. Corporation on the basis of general and vague allegations without any material on record to sustain the allegations, though at the same time the Tribunal observed that it is the largest operator, it has well equipped depot at both the terminals and it has coverage on parts of the route by many buses. Similarly, the claims of Rangnath and Samrathmal have been rejected simply because they are not residing on the route, without considering that these two operators have their establishments on the route and they have also coverage on the route, but in their case also the Tribunal found Rangnath and Samrathmal to be experienced and competent operators. The case of the original grantees i. e. the respondents 3 to 5, have also been rejected because they happen to be small and comparatively new operators, failing to consider that if the smaller operator is efficiently operating the service, larger resources of the other would not put him in superior position. The Tribunal could not have altogether ignored the experience gained by the respondent No. 3 on temporary permits, but such experience ought to have been compared with the experiences of other operators, whether temporary permit obtained by him were valid or not could not be gone into in the present proceedings. The Tribunal did not consider that possession of latest model was a relevant consideration. The appellate tribunal gave preference to the respondents 6 to 8 mainly because they happened to be residents of Dhar District and it was said that they had better social contacts in the District. On the other hand, the R.T.A. brusquely rejected the claims of the M.P.S.R.T. Corporation and respondents M/s Dayabhai & Co. and Ramcharanlal because they were earlier granted certain permits, without specifying when and in respect of which routes such grants were made. Similarly, the claims of all the respondents except the respondents 3 to 5 were rejected because they were not residing at one of the termini on the route. The R. T. A. failed to consider that these respondents have establishments and coverage on the route. Preference was given to the respondents 3 to 5 because they were residing in one of the termini or near about and they had paid high percentage of passenger taxes. The respondent No. 4 was preferred because it is a co-operative society, without considering that only when other conditions are equal then alone a cooperative society has to be given preference. Therefore, both the authorities have not applied correct principles in assessing relative merits and have ignored material and relevant facts and have based their findings on irrelevant considerations. Under the circumstances, the grants of the R.T.A. and the Appellate Tribunal have to be quashed.
11. Regarding the last objection about tenability of applications filed in pursuance to the notification of 24-5-1968, the submission is factually incorrect. What was cancelled by the subsequent notification dated 7-2-1969 was cancellation of all applications prior to 24-5-1968 and not applications in pursuance to the notification of that date. As the parties here had filed their applications for the grant after 24-5-1968, their applications were not cancelled by the notification of 7-2-1969. Even otherwise, this Court in Madanmohan v. S.T.A.T., 1973 MPLJ 1033 has held that striking down of notification dated 24-5-1968 by High Court did not mean that the applications filed in pursuance to the repealed notification were also liable to be cancelled and that for those who had already applied, no fresh application in pursuance to the subsequent notification dated 7-2-1969 was necessary. The objection is without any substance. The other objection regarding non-joinder of all claimants as parties is also without any merit in view of decision of the Supreme Court in Cumbum Roadways Ltd. v. Somu Transport Ltd., AIR 1966 SC 1366 that such of the par-ties who have not challenged the grants are not necessary parties. Since the orders of both Appellate Tribunal and the R.T.A. are being set aside, the applications of the parties in these petitions are to be kept pending till publication of the approved or modified scheme. Only thereafter, the R.T.A. will have to consider the relative merits of the present parties afresh in accordance with law. This Court in M.P.S.R.T.C. Gwalior v. S.T.A., M.P. 1974 MP LJ 862 - (AIR 1975 Madh Pra 181) has held:--
'Effect of Section 68-F (1-D)-Only prohibits grant of or renewal of permit and does not provide for dismissal of application for renewal of permit expiring before publication of scheme. Such application should be kept pending till approval of scheme.'
12. Accordingly, the petition ispartly allowed, the orders of the StateTransport Appellate Tribunal and theRegional Transport Authority, Indore,are set aside and the matter is remittedto the Regional Transport AuthorityIndore for decision on merits afresh afterpublication of the approved or modifiedscheme. Till such time, the R. T. A. isfree to grant temporary permits underSub-sections (1-A) to (1-C) of Section 68-Fof the Act to the M.P.S.R.T. Corporation or private operators if he is satisfied that it is necessary to grant temporary permits in the public interest. Thereshall be no order as to costs. The outstanding security deposit be refunded tothe petitioner.