T. B. Ibrahim vs Regional Transport Authority, Tanjore

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Civil Appeal No. 16 of 1952

Decision Date: 5 December 1952

Coram: Ghulam Hasan, M. Patanjali Sastri, B.K. Mukherjea, N. Chandrasekhara Aiyar, Vivian Bose

In T. B. Ibrahim versus Regional Transport Authority, Tanjore, decided on 5 December 1952, the Supreme Court of India, with a bench comprising Ghulam Hasan, M. Patanjali Sastri, B. K. Mukherjea, N. Chandrasekhara Aiyar and Vivian Bose, delivered its judgment. The petitioner, T. B. Ibrahim, challenged an order of the Regional Transport Authority, Tanjore. The citation of the decision is 1953 AIR 79 and 1953 SCR 290, with subsequent citations including R 1959 SC 300, F 1965 SC 458, E 1967 SC 1368, R 1973 SC 2420 and F 1987 SC 1339. The case involved the Madras Motor Vehicles Rules of 1940, specifically rule 268, which had been amended in 1950 to empower the Transport Authority to alter the starting places or termini of motor vehicles. The question presented was whether the amendment was ultra vires of the rule-making powers conferred by sections 68(1) and 68(2)(r) of the Madras Motor Vehicles Act, 1939, and whether it infringed the constitutional guarantee under Article 19(1)(g) of the Constitution of India, which protects the right to practise any profession, trade or business.

The factual background showed that the appellant owned a bus-stand in a municipality that had for several years served as the starting point and terminus for motor buses operating to and from that municipality. After giving notice to the appellant, the Transport Authority issued a resolution altering the designated starting place and terminus in order to serve the convenience of the public. The appellant filed a petition for a writ of certiorari, alleging that the amended rule 268 exceeded the authority’s powers under section 68(2)(r) of the Motor Vehicles Act and that it was inconsistent with Article 19(1)(g). The Court held that the fixing and alteration of bus-stands was not a purpose foreign to the control of transport vehicles, which is the object of the rule-making power under section 68(1). The power to make rules prohibiting the picking up or setting down of passengers at specified places, as expressed in section 68(2)(r), necessarily includes the power to alter the location of bus-stands; consequently, the amendment of rule 268 did not go beyond the authority granted by section 68(2)(r). Further, the Court observed that the restriction on the use of the bus-stand for boarding or alighting passengers on outward journeys did not constitute an unreasonable restriction on the petitioner’s right to carry on his profession, trade or business, and therefore the rule was not repugnant to Article 19(1)(g). The expression “duly notified stand” in the Madras Motor Vehicles Act was construed to mean a stand duly notified by the Transport Authority, and the Court rejected any view that the term implied a stand notified by the municipality.

The Court noted that sections 270(b), (c) and (e) of the Madras Municipalities Act did not limit the authority of the Transport Authority to control traffic or to impose conditions on the licence of cart-stands. The appeal, identified as Civil Appeal No 16 of 1952, was filed under special leave pursuant to article 136(1) of the Constitution and challenged the order dated 6 February 1951 of the Madras High Court, which had dismissed the appellant’s petition under article 226 that sought a writ of certiorari to set aside the order dated 10 November 1950 issued by the Regional Transport Authority, Tanjore. The appellant, who leased a parcel of land in the town of Tanjore, Madras State, operated a bus-stand on that site. Originally the bus-stand had been property of the Tanjore Municipality, and the appellant possessed only a licence issued by the municipal authority. When a third party questioned the municipal title, a civil suit resulted in the municipality’s title being nullified. Consequently, the appellant acquired the lease-hold rights from the rightful owner and erected a bus-stand that conformed to a design approved by the municipality, including passenger and vehicle sheds and other facilities. The stand was located near the railway station and served as both the origin and terminus for most buses departing Tanjore for out-station journeys; both the municipality and district officials had deemed the location convenient and suitable. The appellant obtained annual licences for operating the bus-stand. In 1939 the municipality issued a licence for only four months, contrary to the one-year period required by section 270(c) of the Madras Municipalities Act (V of 1920). The appellant successfully challenged this restriction in the Civil Court, obtaining an injunction and an order directing the municipality to issue a licence for the full year 1940-41. He continued the business without interruption until 1950, when the municipality refused to renew the licence. The appellant obtained a mandatory injunction from the Civil Court on 7 October 1950, compelling the municipality to grant a licence for 1950-51. On 21 February 1950, however, the Regional Transport Authority, Tanjore, declared the bus-stand unsuitable with effect from 1 April 1950, altered the designated starting and terminating points, and thereby forced the closure of the appellant’s bus-stand. The appellant contested the validity of the authority’s resolutions, arguing that they were made without jurisdiction and violated natural justice because no notice or opportunity to be heard was given. The resolutions were purportedly issued under section 76 of the Motor Vehicles Act, 1939, which empowers the provincial government or authorized authority, in consultation with the local jurisdictional authority, to determine places where motor vehicles may stand either indefinitely or for a limited period.

In this case the Regional Transport Authority of Tanjore, which was the respondent, issued a declaration that the appellant’s bus-stand was unsuitable with effect from 1 April 1950 and, on the same date, altered the designated starting and terminating points for the services that used the stand. The effect of that declaration was the closure of the appellant’s bus-stand. The declaration had been made by a resolution, and a second resolution confirming the first had been passed on 31 March 1950. The appellant challenged the validity of those resolutions by filing a petition under article 226 of the Constitution before the Madras High Court, contending that the resolutions were beyond the authority’s jurisdiction and violated the principles of natural justice because they were passed without notice to the appellant and without affording him an opportunity to be heard. The resolutions were said to have been made under section 76 of the Motor Vehicles Act, 1939, which provides that “The Provincial Government or any authority authorised in this behalf by the Provincial Government may, in consultation with the local authority having jurisdiction in the area concerned, determine places at which motor vehicles may stand either indefinitely or for a specified period of time, and may determine the places at which public service vehicles may stand either indefinitely or for a specified period of time, and may determine the places at which public service vehicles may stop for a longer time than is necessary for the taking up and setting down of passengers.” The Division Bench of the Madras High Court, composed of the Chief Justice and another Judge, set aside both resolutions in favour of the appellant, holding that the orders had been passed ex parte and that section 76 did not empower the authority to close a permanent bus-stand. The Court explained that section 76 relates only to provisions for parking places and halting stations and does not apply to a permanent bus-stand, which functions as a central hub for the town’s bus traffic, and therefore the Regional Transport Authority could not, under that section, fix the starting and terminating points for motor-buses. During the arguments reference was made to rule 268 of the Madras Vehicles Rules, 1940. The Judges observed that while rule 268 does authorise the Transport Authority to fix starting places and termini for public service vehicles other than motor cars, such authority may be exercised only where the starting places and termini have not already been fixed under any statutory provision. In the present matter, the starting points and termini had previously been fixed pursuant to rule 27-D of the Motor Vehicles Rules, 1923; consequently the Transport Authority could not create new starting places and termini under rule 268 of the 1940 Rules. The Bench further noted that rule 268 was defective because it would create a deadlock if existing starting places and termini became unsuitable and needed to be changed, and therefore the Court suggested that the rule ought to be amended.

The Court observed that the rule governing the fixing of starting places and termini for public service vehicles required amendment so that the appropriate authority would possess the necessary power to modify those places from time to time. The suggestion to amend the rule was supported by the earlier decision in T. E. Ebrahim Saheb v. The Regional Transport Authority Tanjore (1). Within two months after that High Court decision, the Government altered rule 268. Before the amendment was made, the bus-stand had already been shifted to a location owned by the Municipality in another part of the town. The original form of rule 268 read as follows: “In the case of public service vehicles (other than motor cabs) if starting places and termini have not been fixed in accordance with the provisions of any statute, the transport authority may, after consultation with such other authority as it may deem desirable, fix starting places and termini between which such vehicles shall be permitted to be used within its jurisdiction. A list of such places shall be supplied by such authority to every holder of a permit for such vehicles. When such places have been fixed, every such vehicle shall start only from such places.” By the amendment, the words “if starting places and termini have not been fixed in accordance with the provisions of any statute” were deleted, and the words “and after notice to the parties affected, fix or alter from time to time for good and proper reasons,” were inserted. Consequently, the amended rule now provides: “268. In the case of public service vehicles (other than motor cabs) the transport authority may after consultation with such other authority as it may consider desirable, and after notice to the parties affected, fix or alter from time to time for good and proper reasons, the starting places and termini between which such vehicles shall be permitted to be used within its jurisdiction. A list of such places shall be supplied by such authority to every holder of a permit for such vehicles at the time of grant of or renewal of permits. (1) A.I.R. 951 Mad. 419. When such places have been fixed every such vehicle shall start only from such places.”

Following the amendment, the respondent issued a notice to the appellant on 25 October 1950, requiring the appellant to show cause why the existing bus-stand should not be shifted. The notice stated that the stand was not satisfactorily maintained, was situated in a limited space insufficient to accommodate all the buses, and did not permit any improvements. The appellant responded with a detailed written statement disputing those grounds and challenging the notice. Subsequently, the respondent sent a fresh notice on 2 November 1950, withdrawing the original reasons and substituting a single ground: that the shift was required “from the point of convenience of the travelling public.” After hearing arguments from both the appellant and the Municipality, the Board adopted a resolution in November 1950, holding that for good and proper reasons—specifically, the convenience of the travelling public—the Transport Authority was justified in altering the starting places and termini of all public service vehicles (other than motor cabs) arriving at and departing from Tanjore, moving them from the appellant’s bus-stand to the Municipal bus-stand situated elsewhere in the town.

In the present case, the Board decided to change the locations from which all public service vehicles, except motor cabs, started and terminated their journeys to and from Tanjore. The change required that the vehicles use the municipal bus-stand situated in another part of the town instead of the bus-stand owned by the appellant. The Board’s order prompted the appellant to file a fresh petition in the Madras High Court, seeking a writ of certiorari under article 226 of the Constitution. The appellant challenged the Transport Authority’s jurisdiction to issue the order and advanced two main objections. First, it contended that rule 268, as amended, exceeded the rule-making authority conferred by section 68(r) of the Motor Vehicles Act. Second, it argued that the rule conflicted with article 19(1)(g) of the Constitution, which guarantees the right to freedom of movement. The High Court rejected both submissions and dismissed the petition. The same arguments were raised before the Supreme Court, and the Court found no satisfactory reason to depart from the High Court’s conclusion. The Court then turned to the statutory framework. The Motor Vehicles Act comprises ten chapters, and Chapter IV governs the control of transport vehicles. Section 47(1) provides that, when deciding whether to grant or refuse a stage-carriage permit, the Regional Transport Authority must consider several factors, including the general public interest and other matters listed in sub-clauses (b) to (f). Under Section 48, after weighing the considerations enumerated in Section 47, the Authority may impose any prescribed condition on a stage-carriage permit, including one or more of the specific conditions set out in the regulations. Among those conditions, clause (v) is relevant here; it stipulates that, within municipal limits and any other areas prescribed, passengers may be picked up or set down only at designated points. The Court then examined the relevant portion of section 68, which reads: “(1) A Provincial Government may make rules for the purpose of carrying into effect the provisions of this Chapter. (2) Without prejudice to the generality of the foregoing power, rules under this section may be made with respect to all or any of the following matters, namely: (r) prohibiting the picking up or setting down of passengers by stage- or contract-carriages at specified places or in specified areas or at places other than duly notified stands or halting places ….” A plain reading of sub-section (1) shows that the government possesses full authority to formulate rules to give effect to the provisions of Chapter IV, which deals with the control of transport vehicles. Sub-section (2) further confirms that, without limiting that power, the government may prescribe rules concerning any of the matters listed in clauses (a) through (za), including the matter in clause (r). The Court noted that the Act does not follow the usual pattern of granting rule-making power at the end of the entire Act; instead, each chapter, including Chapter IV, reserves to the Provincial Government the specific authority to make rules necessary to implement the provisions of that chapter. Accordingly, the Court concluded that the power to prescribe the fixing or alteration of bus-stands falls within the scope of the authority granted by section 68(r) and is not ultra vires.

The Court observed that the Act did not place the rule-making authority solely at its conclusion; instead, each chapter, including Chapter IV, expressly reserved to the Provincial Government the power to make rules for giving effect to the provisions of that particular chapter. Chapter IV was described succinctly as dealing with the “control of transport vehicles,” and the Provincial Government therefore possessed plenary authority to frame rules necessary to achieve that purpose. In light of this, the Court was not prepared to hold that the fixing or alteration of bus-stands fell outside the scope of the chapter’s purpose. The petitioners contended that Section 68, subsection 2(r), did not empower the Transport Authority to direct the fixing or alteration of a bus-stand and that consequently Rule 268, made under that subsection, was ultra vires. The Court declined to accept this submission. Subsection 2(r) was read as covering three clear situations: it prohibited the picking up or setting down of passengers (i) at specified places, (ii) in specified areas, and (iii) at places other than duly notified stands or halting places. By granting the Government the power to make rules on these matters, the provision inevitably allowed a specified place to be barred from use for picking up or setting down passengers, which effectively meant closing that place for that purpose; the same logic applied to a specified area. The expression “duly notified stands” was not defined in the Act, but the Court reasonably presumed that a duly notified stand would be one notified by the Transport Authority and not by any other body, rejecting the notion that municipal notification was required. Reference was made to sections 270(b), 270(c), and 270(e) of the Madras District Municipalities Act 1920, on the basis that the municipality might be the authority to fix a stand. Section 270(b) enabled a Municipal Council to construct or provide halting places and cart-stands, the explanation to that provision extending the term to includes stands for motor vehicles. Section 270(c) merely provided that where a Municipal Council had provided a public landing place, halting place or cart-stand, the executive authority could prohibit use of the same within a distance determined by the Council. Section 270(e) stipulated that no person could open a new private cart-stand or continue to operate one without obtaining a licence from the Council. The Court held that these municipal provisions did not diminish the Transport Authority’s power to regulate traffic control or to impose licensing restrictions on any such cart-stand, and therefore did not preclude the Authority from exercising its rule-making under Section 68, subsection 2(r).

The Transport Authority was held to have the power to regulate traffic control and to impose restrictions on the licence of any cart-stand. Because rule 268 was enacted by the authority that possessed the statutory rule-making power, the Court concluded that the rule could not be struck down on the ground that it conflicted with some general law. The petitioners relied on a passage on page 299 of Craies on Statute Law, which says that a by-law must not be repugnant to the statute or to the general law. The Court explained, however, that by-laws and rules made under a statutory rule-making power are not on the same level, since such rules are considered part of the statute itself. Section 68, sub-section 2(r) of the Act contains both a general prohibition—that the stand shall cease to exist—and a specific prohibition that passengers may not be picked up or set down at a particular point. The order issued by the Transport Authority was properly construed as falling within the scope of section 68, sub-section 2(r). Rule 268, under which the challenged order was made, was framed under the plenary rule-making power referred to in section 68, sub-section 1. Sub-section 2(za) provides that a rule may be made concerning any matter that is to be or may be prescribed, thereby demonstrating a residuary power vested in the rule-making authority. Consequently, the Court held that rule 268 lies within the powers conferred by section 68 of the Act. The petitioners further alleged that the order conflicted with article 19(1)(g) of the Constitution, which guarantees every citizen the right to practice any profession or to carry on any occupation, trade or business. The Court observed that the appellant was not barred from operating the bus-stand business; what was prohibited was the use of the bus-stand at the specific site for picking up or setting down passengers for out-station journeys because the location was deemed unsuitable for public convenience. There was no prohibition on using the stand for transporting passengers within the town or for other purposes. The restriction on using the stand for outward journeys was therefore not an unreasonable limitation. Although the appellant may have lost income because the stand could no longer be used for outward journeys from Tanjore, this loss does not constitute a violation of the fundamental right under article 19(1)(g). The Court affirmed that no citizen possesses an absolute right to carry on business wherever he wishes; such a right is subject to reasonable restrictions imposed by the executive authority.

In this case, the Court observed that a restriction imposed for the sake of public convenience might eliminate the previous use of the bus-stand, but such a restriction could not be deemed unreasonable so long as the authority that imposed it possessed the legal power to do so. The Court held that determining whether the removal of the stand served public convenience was a question exclusively for the transport authority, which was better positioned because of its knowledge of local conditions, and that the Court could not replace its own judgment with that of the authority. The petitioners further argued that Rule 268, even if within the powers of the authority, had not been complied with because the transport authority was required to consult another body before issuing the order. The Court noted that it was admitted that the transport authority had consulted the municipality before making the order, and therefore Rule 268 had been fully complied with. The petitioners then contended that the municipality was not the appropriate body to consult, alleging that the municipality was a party to the dispute and was trying to displace the appellant in order to establish its own bus-stand. The Court rejected that allegation, stating that the municipality was a public body concerned with public welfare and that any assistance it sought from the government or the transport authority to relocate the bus-stand was motivated solely by public interest. Although the transport authority could have consulted the district board or the panchayat, it was under no obligation to do so, and consulting the municipality fell within the scope of its powers. Moreover, the language of Rule 268 made consultation discretionary rather than mandatory. The petitioners also claimed that the municipality acted in bad faith, referring to paragraphs 18 and 19 of the appellant’s affidavit dated 20 November 1950, which spoke of the vagueness of the public-convenience ground and of an amendment to the rule that was not bona fide. The Court found no material to support the charge of bad faith. The fact that the first notice mentioned certain grounds that were omitted in the second notice, and that “convenience of the travelling public” alone was cited as the ground, did not lead to a conclusion of bad faith. The amendment of the rule had been made following a suggestion of the High Court to remedy the difficulty that arose from the lack of power to alter bus-stands. No allegation of bad faith had been raised before the High Court, and the issue was never discussed there. In the special leave petition, although reference was made to the vagueness of the inconvenience ground, there was no suggestion of bad faith. The Court therefore concluded that the allegation of bad faith had not been properly raised until paragraph 4(f) and (g) of the statement of the case.

The Court observed that the allegation of mala fides was first articulated in paragraphs four (f) and four (g) of the statement of the case. The Court held that the plea of mala fides had not been established. It was further submitted that the resolution was invalid because the District Collector, who had chaired the meeting of the Transport Authority that adopted the resolution, had also inaugurated the new municipal bus-stand on 1 April 1950. The submission implied that the Collector had failed to approach the question with an impartial and unbiased mind. The Court examined the role of the District Collector and concluded that he was not exercising judicial or quasi-judicial functions at the time, and therefore his actions were not subject to the level of scrutiny applicable to a judicial officer. The Court explained that the Collector was acting solely in his executive capacity, presiding over the Transport Authority meeting as part of his ordinary administrative duties, and opening the municipal stand in the authority vested in him as head of the district. Accordingly, the Court found that these actions did not affect the validity or fairness of the order that was challenged. The Court considered that the contention lacked any merit. Consequently, the appeal was dismissed with costs awarded against the appellant. The agents listed for the parties were M. S. K. Sastri for the appellant and G. H. Rajadhyaksha for the respondent.