Shrinivasa Reddy And Others vs The State Of Mysore And Others

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

Court: supreme-court

Case Number: Petition No. 95 of 1959

Decision Date: 6 November 1959

Coram: K.N. Wanchoo, Bhuvneshwar P. Sinha, Syed Jaffer Imam, J.L. Kapur, K.C. Das Gupta

In the matter titled Shrinivasa Reddy and Others versus the State of Mysore and Others, the Supreme Court of India delivered its judgment on the sixth day of November, 1959. The opinion was authored by Justice K. N. Wanchoo and the bench comprised Justices K. N. Wanchoo, Bhuvneshwar P. Sinha, Syed Jaffer Imam, J. L. Kapur, and K. C. Das Gupta. The petitioners were Shrinivasa Reddy and several other individuals, and the respondents were the State of Mysore together with other parties. The citation for this decision appears as 1960 AIR 350 and also as 1960 SCR (2) 130, with subsequent citator references including R 1961 SC 82, RF 1961 SC 1556, and D 1973 SC 974. The case concerned provisions of the Motor Vehicles Act of 1939, as amended by the Motor Vehicles (Amendment) Act of 1956, specifically sections 68C, 68F(1), and 57(2). The headnote explains that the stage‑carriage permits held by the petitioners, who were also litigants in Writ Petition No. 75 of 1959, were originally due to expire on 31 March 1958 and had been renewed until 31 March 1959. After a new scheme of nationalisation was approved and published under section 68C of the Act, the Regional Transport Authority, aiming to prevent inconvenience to the public, granted the petitioners temporary permits pending the issuance of permits to the State Transport Department. The Department applied for such permits under section 68F(1) of the Act less than six weeks before the scheme’s effective date, thereby contravening the requirement of section 57(2) that an application be made at least six weeks in advance. The petitioners also filed renewal applications for their own permits, which the Regional Transport Authority rejected while issuing permits to the Department. Consequently, the petitioners filed a writ petition under Article 226 of the Constitution seeking to set aside the Authority’s order. The High Court held that the Department’s issuance of permits was invalid because the provisions of section 57(2) had not been observed, and it also found the refusal to renew the petitioners’ permits to be erroneous; however, the Court dismissed the writ on the ground that any relief that could be granted would be only temporary. The petitioners then sought a certificate to enable an appeal to this Court, and while that application was pending they approached the Supreme Court under Article 32 of the Constitution. They argued that before rejecting the petitioners’ renewal applications and granting permits to the Department under section 68F(1), the Department must first apply for permits for all routes covered by the scheme, so that no discrimination could arise between operators, which would violate Article 14 of the Constitution and also impinge upon the petitioners’ right to carry on their business under Article 19(1)(g). They further contended that the failure to comply with section 57(2) rendered the Department wholly unentitled to any permits.

The Court observed that the language of section 57(2) of the Motor Vehicles Act expressly removed the Department’s authority to grant any permits at all. The Department, however, argued that it could implement the nationalisation scheme in stages and denied that such a staged implementation would result in discrimination, nor did it accept that section 57(2) should apply to an application made under section 68F(1) of the same Act. The Court, speaking through Chief Justice Sinha, Justice Imam, Justice Wanchoo and Justice Das Gupta, held that the wording of section 68F of the 1939 Motor Vehicles Act makes it clear that an application by a State Transport Undertaking for a permit must be filed in the manner prescribed by Chapter IV of the Act. Accordingly, there could be no doubt that any such application necessarily falls within the scope of section 57(2). As a result, the orders that had granted permits to the State Transport Department in the present case, which were admittedly issued in breach of section 57(2), were liable to be set aside on that sole ground. The Court further explained that section 68C envisions that when an operator does not intend to run an entire route but only a portion, the specific portion alone must be identified as the route, rather than the whole route or any larger segment, as had occurred here. Nevertheless, the scheme itself clearly intended that all routes in their entirety were to be taken over, rendering the qualifying words in section 68C surplusage. Justice Kapur, speaking separately, interpreted sections 68C and 68F together and concluded that the Legislature did not intend the approved scheme to be implemented either all at once or not at all. He argued that a rigid, all‑or‑nothing approach would be impracticable and that some flexibility must be implied; otherwise the policy of nationalising transport services, which the State had adopted, would be indefinitely delayed or defeated. The language of section 68F, he noted, does not support a requirement that the whole scheme be executed in one step, nor do the words “in pursuance of” within that provision compel full implementation before any part can be acted upon. Citing Bradford Corporation v Myers (1916) 1 A.C. 242, the Court observed that if the State were unable to take over routes for which applications could be made immediately, the takeover would become not only difficult but also extremely costly, as other interests might intervene. Accordingly, where the State intends to carry out a scheme within a reasonable period, there is no justification for prohibiting it from applying for separate routes at reasonable intervals, provided it proceeds honestly, fairly and without ulterior motives. Since the State Undertaking in the present matter had already carried out a portion of the scheme and had subsequently filed new permit applications in accordance with the procedure required by section 57(2) and the relevant provisions of the Act, the Court found no basis to issue a formal order quashing the permits that had been granted in its favour.

The Court referred to the decision in K. N. Guruswamy v. The State of Mysore, [1955] 1 S. C.R. 305. The matter before the Supreme Court was an original jurisdiction case designated as Petition No. 95 of 1959. The petition was filed under Article 32 of the Constitution for the enforcement of Fundamental Rights. Counsel for the petitioners consisted of C. K. Daphtary, Solicitor‑General of India, and B. R. L. Iyengar. Counsel for respondents 1 and 2 comprised H. N. Sanyal, Additional Solicitor‑General of India, together with R. Gopalakrishnan and T. M. Sen. The judgment was pronounced on 6 November 1959. The judgment of the Court, composed of Chief Justice Sinha, and Justices Imam, Wanchoo and Das Gupta, was delivered by Justice Wanchoo, while Justice Kapur rendered a separate judgment. Justice Wanchoo observed that the present petition under Article 32 was a sequel to Writ Petition No. 75 of 1959, which was also being disposed of on the same day. He noted that it was unnecessary to recount the early history of the dispute because that history had already been set out in the judgment of Petition No. 75. He therefore proceeded to address the matters raised in the current petition without reiterating the background already recorded.

The petitioners, who were the same transport operators as in Petition No. 75, operated stage‑carriage services in the Anekal pocket of the State of Mysore. They possessed stage‑carriage permits for a number of routes that were due to expire on 31 March 1958, and they received a renewal of those permits extending up to 31 March 1959. In the interval, the Government took steps to devise an approved scheme under Chapter IV‑A of the Motor Vehicles Act, No. IV of 1939 (hereinafter referred to as “the Act”). This scheme obtained final approval and was published on 23 April 1959. To prevent inconvenience to the public, the petitioners were granted temporary permits after 31 March 1959 for a period of four months or until the Mysore Government Road Transport Department (hereinafter “the Department”) obtained permits under section 68F of the Act, whichever occurred first. Before 23 June 1959, the Department applied for permits in accordance with the scheme, while the petitioners simultaneously applied for renewal of their permits. The Regional Transport Authority, Bangalore (hereinafter “the Authority”) on 23 June 1959 issued permits to the Department and rejected the petitioners’ renewal applications. The petitioners responded by filing a writ petition in the High Court of Mysore challenging both the issuance of permits to the Department and the denial of their renewals. The High Court disposed of that petition on 14 July 1959, holding that the Department’s permits were invalid and that the rejection of the petitioners’ renewals was erroneous; however, the Court dismissed the petition on the ground that any relief granted would be short‑lived. Subsequently, the petitioners applied for a certificate to enable an appeal to this Court, and that application remained pending. The present petition was filed on 3 August 1959. The petitioners’ first contention in the current petition was that, after the scheme had been approved and published under the Act, the Department was obligated to apply for permits under section 68F for all routes covered by the scheme.

According to Chapter IV‑A of the Act, the Department was required to submit applications under section 68F for every route that was covered by the approved scheme, and only after the Department had applied for all such routes could the Authority consider rejecting the petitioners’ renewal applications. In the present case the Department submitted applications for only a portion of the routes; in fact, it was observed that no application had been filed for one of the fourteen routes included in the scheme. The petitioners therefore argued that the Department, by selecting certain routes for application and omitting others, was discriminating against the operators whose routes were included and favouring those whose routes were excluded. They further contended that, by granting permits to the Department under those circumstances, the Authority was denying the petitioners equality before the law, thereby violating Article 14 of the Constitution and also infringing the petitioners’ right to carry on business guaranteed by Article 19(1)(g). The petitioners also maintained that the Authority could not lawfully issue the permits because the requirements of sections 57(2) and 57(3) had not been satisfied. Consequently, they prayed that the order of the Authority granting permits to the Department under section 68F and refusing the petitioners’ renewal applications be set aside. The Department opposed the petition and argued that, although an approved scheme may encompass many routes, it was permissible for the Department to implement the scheme in stages and that it was best placed to decide which route should be taken over first. The Department asserted that no discrimination occurred so long as the holders of stage‑carriage permits on a particular route were treated equally among themselves in accordance with the approved scheme. It further submitted that subsections (2) and (3) of section 57 did not apply to applications for permits made under section 68F(1). The Court next turned to the second contention. Section 68F provides that where, in pursuance of an approved scheme, any State Transport Undertaking applies for a stage‑carriage permit in the manner specified in Chapter IV for a notified area or route, the Regional Transport Authority shall issue such permit notwithstanding any contrary provision in Chapter IV. This provision makes clear that the Undertaking must apply for permits in the manner prescribed by Chapter IV, even though the Authority may be obliged to grant the permits on that basis. The analysis then proceeded to section 45, which specifies the authority to which an application must be addressed, and to section 46, which enumerates the particulars that the application must contain. Accordingly, the Undertaking is required to comply with the requirements of sections 45 and 46 when filing its applications. The discussion then moved on to section 57(2).

Section 57(2) stipulated that an application for a stage‑carriage permit, the type of permit at issue in the present case, had to be filed not less than six weeks before the date on which the applicant desired the permit to become effective, unless the Regional Transport Authority set specific dates for the receipt of such applications, in which event the application had to be filed on those dates. In the facts before the Court, the Regional Transport Authority had not fixed any date for the filing of applications. Accordingly, the Undertaking was required to submit its application at least six weeks prior to the date on which it intended to commence the service. This six‑week period was intended to give the Authority sufficient time to consider the application and, if necessary, to inform persons who might be affected under section 68F(2) so that they could prepare for the change. The provision in section 68F(1) that the applications must be made in the manner laid down in Chapter IV therefore complemented the requirement of section 57(2) and was unrelated to the publication requirement of section 57(3), which served a different purpose. The learned Solicitor‑General argued that the procedure in section 57(3) also applied because it was not inconsistent with the provisions of Chapter IV‑A, referring to section 68B. The Court deemed it unnecessary to examine that contention, as it was undisputed that the applications for the permits in this case had not been filed at least six weeks before the intended date of effect. Consequently, the applications were not made in accordance with Chapter IV and were in breach of section 57(2). On that basis, the Court held that no permits could lawfully be issued on those applications and that the orders granting permits to the Department had to be set aside solely on this ground.

The Court therefore found it unnecessary to rule on the first contention raised by the parties. However, the Court wished to highlight the inherent dangers in the Department’s claim regarding the preparation of a scheme. Under section 68C, a scheme could be prepared by the Undertaking when it was of the opinion that, for the purpose of providing efficient, adequate, economical and properly coordinated road‑transport services, it was in the public interest that road‑transport services in general, or any particular class of such services relating to a specific area, route or portion thereof, be operated by the Undertaking, either exclusively or partially, to the exclusion of other persons. This provision gave the Undertaking the authority to devise a scheme concerning a particular area, route or portion thereof. The statute did not oblige the Undertaking to prepare a scheme covering the entire State at one time; instead, it empowered the Undertaking to select specific types of services, a particular area, particular routes, or even portions of routes, recognizing that it might not be feasible to operate services throughout the State simultaneously. Thus the Undertaking could frame a scheme limited to a district, a part of a district, or even to certain routes within a part of a district, provided that it could demonstrate that the scheme was efficient, adequate, economical and properly coordinated for road‑transport service. This flexibility explained why the scheme needed to be capable of being implemented in its entirety at once, and why the Undertaking was not bound to prepare a State‑wide scheme at the outset.

When the Undertaking resolved to prepare a scheme, it was obliged to examine the amount of manpower, material assets and financial resources at its disposal and to draft a scheme only to the extent that it could be implemented completely. For illustration, if the Undertaking possessed sufficient capacity to execute a scheme covering the entire State in a single step, it could formulate a State‑wide scheme. Conversely, if such total capacity was lacking, the Undertaking was permitted to limit the scheme to a single district, and even where resources fell short of covering an entire district, it could further confine the scheme to a portion of that district. Within that portion, the scheme might address selected routes rather than every possible route. Provided that the Undertaking could demonstrate that the proposed scheme was efficient, adequate, economical and properly coordinated for the provision of road transport services, it retained the authority to frame a scheme that covered only a segment of the transport services operating within the State. Consequently, the scheme had to be one capable of being carried out in its entirety at once, which explained why the legislation granted the Undertaking power to devise a scheme for a specific area, route or even a fragment thereof. After the scheme had been prepared, it required approval and publication by the State Government. Following such approval, the Undertaking assumed the duty of implementing the scheme and, in accordance with that duty, it applied for the necessary permits under section 68F(1). If, at that stage, the Undertaking possessed the ability to implement the scheme piecemeal, it could potentially misuse its implementation power, favor certain operators while discriminating against others included in the scheme, and thereby disrupt the integrity of the scheme in contravention of section 68E. No difficulty arose for the Undertaking to apply for permits covering the whole scheme at one time, because the manner in which the scheme was prepared under section 68C already accounted for the various challenges that might be encountered during implementation and, with that purpose, provided for the takeover of particular types of transport services in relation to defined areas, routes or portions thereof. The Court noted that further elaboration on this point was unnecessary for the present occasion. Before addressing the additional issue raised in the petition, the Court briefly referred to a characteristic of the scheme that had been brought to its attention. That characteristic was the observation that, although the scheme listed fourteen routes together with their termini, intermediate points and total lengths, each of the fourteen routes contained a repetitive phrasing “or any portion thereof.” The Court pointed out that it was incumbent upon the Undertaking, when preparing a scheme under section 68C, to decide whether it would assume control of an entire route or merely a segment of it. If the Undertaking chose to take only a segment—provided, however, that the conditions of efficiency, adequacy, economy and proper coordination were satisfied—then the scheme should expressly identify that particular segment. Section 68C did not envisage that the routes be described in the repetitive manner observed in this case, such as “Bangalore to Anekal or any portion thereof.” If the intention had been to operate only a part of the Bangalore‑Anekal corridor, the scheme should have specified the exact segment to be taken over. In the present case, however, the Court concluded that the intention was clearly to assume control of the entire route for each of the fourteen listed routes, as evident from the lengths recorded in the schedule to the scheme. Therefore, the repeated words “or any portion thereof,” which appeared throughout the schedule as if they possessed some special effect, were deemed surplusage in view of the specified lengths and could be disregarded, allowing the scheme to be interpreted as applying to the full extent of each of the fourteen routes.

In this matter the Court examined the requirements of section 68C, which obliges an undertaking preparing a scheme to specify whether it will take over an entire route or only a portion of it, provided that the conditions of efficiency, adequacy, economy and proper coordination are satisfied. The Court observed that the language of the statute does not require routes to be described in the repetitive form used in the present schedule, such as “Bangalore to Anekal or any portion thereof.” If the intention were to take only a part of a route, the scheme should have identified that specific segment. However, the Court found that the length of each of the fourteen routes, as set out in the schedule, demonstrated that the intention was to assume control of the whole route in every case. Consequently, the Court held that the phrase “or any portion thereof,” which appeared throughout the schedule, was surplusage in light of the specified lengths and could be disregarded, so that the scheme applied to the entire length of each of the fourteen routes.

The Court then turned to the appropriate order to be made. The Department contended that, because the petitioners’ writ petition had been dismissed by the High Court and their application for a certificate to appeal to this Court was pending, the Supreme Court should dismiss the present petition and direct the petitioners to seek relief either through a certificate granted by the High Court or, if the certificate were denied, by filing a special leave application. The Court indicated that it was not necessary to resolve this general procedural question, given the special circumstances of the case. The High Court’s judgment, although it formally dismissed the writ, had actually held that applications under section 68F should have complied with section 57(2) of the Act and therefore should have been filed at least six weeks before the date on which the scheme was to be implemented. On that basis, the High Court concluded that the issuance of permits to the Department was not lawful and that the refusal to renew the petitioners’ permits was illegal. Nevertheless, the High Court declined to grant an order in the petitioners’ favour because it considered the relief to be of short duration.

In effect, the Court noted that the High Court’s decision was substantively in favour of the petitioners, despite the formal dismissal of the writ. Considering that the petitioners’ fundamental right to carry on their business was engaged, the Court determined that it would be inappropriate to refuse relief on the ground that their writ had been dismissed by the High Court and that they had not yet obtained a certificate permitting an appeal to this Court.

There were two reliefs sought in the present petition. The first relief asked that the proceedings of the Authority which had issued permits to the Department be set aside, and the second relief asked that the proceedings which had rejected the renewal applications of the petitioners also be set aside. The Court saw no reason to refuse the first relief and therefore ordered that the permits granted by the Authority to the Department on 23 June 1959 be declared void. In considering this question, the Court noted the earlier decision in K. N. Guruswamy v. The State of Mysore and Others (1955) 1 S.C.R. 305. In that case the Court, although it had ruled in favour of the petitioner, refrained from issuing a writ because only a fortnight remained before the related excise contract would expire, making any writ ineffective. The present case is distinguished from that precedent because the contract in Guruswamy’s case was to end within a few days, whereas here there is no basis to assume that the six‑week period prescribed as the minimum under section 57(2) of the Act would be the only time needed for the implementation of the scheme under section 68F(1). Consequently, the Court held that the prayer for setting aside the permits issued on 23 June 1959 should be granted. The second prayer, seeking to set aside the order rejecting the petitioners’ renewal applications, was found to be unnecessary in view of the Court’s earlier judgments in Petitions Nos. 54 and 75 of 1959. Accordingly, the petition was allowed, the order issuing permits to the Department was quashed, and each party was ordered to bear its own costs, especially considering that Petition No. 117 of 1959, filed by the petitioners concerning the validity of the scheme, had been withdrawn at a late stage and the parties were already directed to bear its costs.

Justice Kapur, after having read the judgment prepared by Justice Wanchoo, expressed a respectful dissent from the opinion expressed therein. He indicated that he would set out the reasons for his dissent without restating the detailed facts already contained in the draft judgment, but he would refer to certain key dates. On 28 August 1958 a draft of the scheme contemplated under Chapter IV‑A of the Motor Vehicles Act, 1939, as amended by Act 100 of 1956 (hereinafter referred to as “the Act”), was published. This draft scheme received approval on 24 October 1958; however, it was challenged before the High Court of Mysore and subsequently quashed on 3 December 1958. A fresh draft scheme was then published on 22 January 1959. After the Chief Minister examined the objections raised against this new draft, it was approved on 15 April 1959 and officially published on 23 April 1959. The fresh scheme was again subjected to challenge in the High Court, the proceedings of which were to be considered further.

The High Court of Mysore had earlier entertained Civil Writ Petition No. 315 of 1959, but that petition was dismissed on 1 June 1959. Subsequently, the Regional Transport Authority, acting on an application filed by the Mysore Government Road Transport Department—henceforth referred to as the Department—issued permits in favour of the Department on 23 June 1959 and rejected the applications submitted by the other road‑transport operators, who were the petitioners. The petitioners challenged that order before the High Court through Civil Writ Petition No. 463 of 1959, which they filed on 24 June 1959. On 14 July 1959 the High Court, although finding the petitioners substantially correct on almost every issue, declined to grant any relief and dismissed the petition on the ground that any relief would be effective for at most six weeks; nevertheless, the Court observed that the permits granted to the Department were invalid because the Department had not applied for them in the manner prescribed by section 57 of the Motor Vehicles Act and that the Regional Transport Authority had acted carelessly in exercising its powers. The petitioners then applied to the High Court for a certificate authorising an appeal to this Court, but that application remained pending before the High Court. While that request was pending, the petitioners filed the present petition before this Court under article 32 of the Constitution. The central issue presented to the Court concerned the legal consequences of framing a scheme under Chapter IV‑A of the Act and the manner in which such a scheme should be implemented. The petitioners argued that, on a proper construction of sections 68C and 68F, an approved scheme had to be implemented in its entirety at one time, or else it could not be implemented at all. The Department, by contrast, advanced a two‑fold submission: first, that the nature of the undertaking necessarily allowed the Department to implement the scheme in reasonably convenient stages; and second, that where the Department had applied for and obtained permits for certain routes contained in the scheme and had already carried out substantial implementation of those portions, that portion of the scheme could not be set aside. The resolution of these opposing contentions depended upon the interpretation of the various provisions contained in Chapter IV‑A. Chapter IV‑A comprised special provisions relating to State Transport Undertakings and had been inserted into the Act by section 62 of Act 100 of 1956. Section 68A provided definitions; section 68B gave this Chapter overriding effect over Chapter IV; section 68C dealt with the preparation and publication of the scheme of road‑transport services of a State Transport Undertaking; section 68D prescribed the procedure for filing objections to a proposed scheme; section 68E dealt with the consequences of cancellation or modification of a scheme; section 68F laid down the procedure for the issue of permits to State Transport Undertakings; section 68G outlined the method for determining compensation in cases where the State Transport Undertaking took over a service; section 68H related to the payment of such compensation; and section 68I conferred power to make rules. It was conveyed by counsel that rules had indeed been framed under section 68I. The Court therefore needed to examine the relevant provisions to determine the proper approach to implementation of the approved scheme.

In this case the Court examined the relevant portion of section 68C, which provides that when a State transport undertaking is of the opinion that, for the purpose of providing an efficient, adequate, economical and properly coordinated road‑transport service, it is necessary in the public interest that road‑transport services generally or any particular class of such service in relation to any area, route or portion thereof should be run and operated by the State transport undertaking—whether to the exclusion of other persons, wholly or partially, or otherwise—the undertaking may prepare a scheme giving the particulars of the nature of the services proposed to be rendered and the area or route to be covered. The Court also read section 68F(1), which states that where, in pursuance of an approved scheme, any State transport undertaking applies, in the manner specified in Chapter IV, for a stage‑carriage permit, a public carrier’s permit or a contract‑carriage permit with respect to a notified area or notified route, the Regional Transport Authority shall issue such permit to the State transport undertaking notwithstanding anything to the contrary contained in Chapter IV. The petitioners contended that the State Transport Undertaking—hereinafter referred to as the Undertaking—could propose a scheme only when the conditions laid down in section 68C were fulfilled, namely that the scheme was intended to provide efficient, adequate, economical and properly coordinated road‑transport services. They argued that these conditions were a sine qua non of a proposed scheme and that, if for any reason the Undertaking was unable to implement the whole scheme at once, it should modify the scheme under section 68E and implement the modified version. The Court observed that although the words “adequate”, “economical” and “co‑ordinated” appear in the provision, they must be read in context; the provision merely requires that, when the Undertaking holds the opinion that, for the purposes mentioned, services on a particular route or area should be operated by it, the Undertaking may prepare a scheme. The essential requirement was that the Undertaking be of that opinion when it prepared the scheme, and that the scheme contain the particulars of the services proposed to be rendered and the areas or routes to be covered. The petitioners further submitted that the language of section 68F supported the contention that, once an approved scheme was to be implemented, it must be implemented all at once or not at all, emphasizing the expressions “in pursuance of” and “permit in respect of a notified area or notified route”. The Court rejected that inference, holding that before a scheme is proposed the Undertaking must hold the requisite opinion and, when the scheme is to be put into operation, the Undertaking must proceed in the manner prescribed in the section, but it could not be said that implementation had to be carried out in a rigid manner; some flexibility and practicability were permissible.

It was observed that the very purpose of putting a scheme into effect inevitably brings with it financial and other implications that cannot be ignored. The Court explained that where, at the time the State Transport Undertaking attempts to implement the scheme, a natural disaster or some unforeseen circumstance beyond the Undertaking’s control arises, it may become impossible to launch the whole scheme at once. If the petitioners’ contention were to be accepted, the result would be that the entire scheme would have to be abandoned and a fresh scheme would have to be drawn up, submitted for approval and then awaited for its own set of delays. Such a result, the Court noted, would effectively postpone the policy of nationalisation, which is the declared State policy in India, for an indefinite period. In the intervening time, various interests could emerge and circumstances could change, further delaying or even obstructing the State’s nationalisation programme. The Court then turned to the words “in pursuance of” found in section 68F and held that these words simply indicate that applications are made to give effect to the scheme or to execute the scheme. The phrase therefore carries a sense of obligation and is more restrictive than the permissive phrase “by reason of”. To illustrate this point, the Court quoted Lord Buckmaster’s construction of similar language in Bradford Corporation v. Myers (1916) 1 A.C. 242 at p. 247, wherein the Lord described the act as one performed in the direct execution of a statute, in discharge of a public duty, or in the exercise of a public authority. Consequently, the mere presence of the words “in pursuance of” cannot be read to mean that the whole scheme must be implemented in one fell swoop and no portion of it may be carried out separately.

The second argument advanced by the petitioners relied on the expression “applies in the manner specified in Chapter IV for a stage‑carriage permit in respect of a notified area or notified route”. The Court explained that Chapter IV governs the control of transport vehicles, and that section 46 prescribes the particulars that must be set out in any application for a stage‑carriage permit. Those particulars include the specific route or area for which the permit is sought, the number of vehicles proposed for each route or area, the minimum and maximum number of daily services to be provided, the number of reserve vehicles, and the arrangements for housing, repairing, and ensuring the comfort and convenience of passengers, together with any other matters that may be prescribed. Section 46 also governs applications made under section 68F. The Court therefore concluded that where a State Undertaking wishes to take over a large area or a great number of routes, it will inevitably have to make numerous applications in order to supply all of the required details. If the petitioners’ view were to be accepted, all of those applications under section 46 would have to be filed simultaneously, leaving no room for innocent errors or accidental omissions. The Court further noted that there is no reason to excuse accidental omissions while still refusing to allow omissions caused by unforeseen events such as a vehicle becoming unusable, a repair workshop not being ready on time, or a natural calamity preventing the start of operations on a particular route. Moreover, if the State were unable to take over those routes for which applications could be promptly made, the takeover would become not only difficult but also prohibitively expensive, because other interests might arise that would preclude the State from acquiring the routes. Accordingly, the Court held that when the State Undertaking intends to run a scheme within a reasonable period, there is no justification for requiring it to apply for all routes at once, provided that it proceeds honestly, fairly and without ulterior motives.

The petitioners contended that if their view is correct, every application required under section 46 of the Act must be filed simultaneously, and that no accommodation should be permitted for any mistake or accidental omission. They argued that if accidental omissions are to be forgiven, the same principle should apply to omissions caused by unforeseen events such as a vehicle being deemed unfit, a repair shop not being completed on schedule, or a natural disaster that makes it impossible to commence service on a particular route. The petitioners further maintained that if the State is unable to assume control of those routes for which applications could be filed immediately, the takeover would become not merely difficult but also extremely costly, because, as previously observed, other interests may arise that would preclude the State from acquiring the routes. Consequently, they maintained that when the State Undertaking intends to operate a scheme within a reasonable period, there is no justification for preventing the State from submitting applications for different routes within a reasonable time, provided that the State acts honestly, fairly and without any hidden motives. The respondents advanced a third argument, asserting that where the State Undertaking has already implemented the scheme on certain routes and has begun operations after obtaining the necessary permits, that portion of the scheme should not be set aside. They warned that quashing those permits would result in the removal of the State’s stage‑carriage services, would force the issuance of new permits to other parties, and could leave the public without road transport, an outcome that the Act does not intend. Moreover, if the State’s policy is one of nationalisation, such an order would not only cause delay but would also obstruct and defeat that policy.

The Court expressed the view that the legislature, in sections 68C and 68F, did not intend that the entire scheme be either fully implemented at one time or entirely abandoned. The next issue was the appropriate relief in the present case. The High Court had observed that the applications filed on behalf of the State Undertaking did not comply with section 57 of the Act. The learned Additional Solicitor‑General informed the Court that the State Undertaking had accepted that legal position and proceeded to make fresh applications in accordance with section 57 and the other relevant provisions of Chapter IV. Considering this development, the Court held that it was unnecessary to issue a formal order invalidating the permits that had been granted to the State Undertaking. The matter was likened to the earlier decision in K. N. Guruswamy v. The State of Mysore & Ors. (1). In line with the opinion expressed in Petitions Nos. 54, 75 and 76, the Court concluded that the petition should be dismissed and that each party should bear its own costs. Accordingly, the Court ordered the petition dismissed, directing the parties to bear their respective costs, in accordance with the majority’s opinion.

The Court allowed the petition that was before it and consequently set aside the order which had previously issued the permits that were the subject of the dispute, thereby removing the legal effect of those permits. In reaching that conclusion the Court cited the earlier authority reported in the first volume of the 1955 Supreme Court Reports at page 305, which was indicated as reference (1) and which dealt with a similar question of permit validity. The Court further ordered that each of the parties to the present petition should bear its own costs, meaning that no party would be required to pay the legal expenses of the other, and each would be responsible for its own litigation expenditures. The Court observed that the petitioners had earlier filed Petition Number 117 of 1959, which dealt with the question of whether the scheme under consideration was valid, but that the petitioners chose to withdraw that proceeding at a very late stage in the litigation, thereby preventing a final determination on that issue. Accordingly, the Court directed that the costs associated with that withdrawn petition would also be borne individually by the parties, without imposing any cost liability on the opposite side, and each would bear its own expenses.