THE PARBHANI TRANSPORT CO-OPERATIVE SOCIETY LTD. vs THE REGIONAL TRANSPORT AUTHORITY, AURANGABAD AND OTHERS

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

Court: supreme-court

Case Number: Petition No. 110 of 1959

Decision Date: 7 March, 1960

Coram: A.K. Sarkar, Bhuvneshwar P. Sinha, Syed Jaffer Imam, K.N. Wanchoo, J.C. Shah

The case titled The Parbhani Transport Co‑Operative Society Ltd. versus The Regional Transport Authority, Aurangabad and Others was decided by the Supreme Court of India on 7 March 1960. The judgment was authored by Justice A. K. Sarkar, with Justices Bhuvneshwar P. Sinha, Syed Jaffer Imam, K. N. Wanchoo and J. C. Shah forming the bench. The petitioner in the proceedings was The Parbhani Transport Co‑Operative Society Ltd., a registered cooperative society engaged in operating motor buses as stage carriages. The respondents included the Regional Transport Authority of Aurangabad and additional parties. The citation for this decision is reported as 1960 AIR 801 and 1960 SCR (3) 177, with subsequent references appearing in various law reports.

The factual background revealed that the cooperative society held permits for four bus routes, all of which were approaching expiration. The State government applied for permits for the same routes under Chapter IV of the Motor Vehicles Act, 1939, as amended by Act 100 of 1956, while the petitioner sought renewal of its existing permits. The Regional Transport Authority rejected the petitioner’s renewal applications and instead granted the permits to the State. An appeal by the petitioner to the State Transport Authority was also dismissed. However, the High Court, exercising its jurisdiction under Article 226 of the Constitution, set aside the authority’s orders and directed a reconsideration of the matter.

Subsequently, the State published a scheme under Section 68C of Chapter IVA of the Act, although the scheme had not yet been finalized. Acting on the High Court’s directive, the Regional Transport Authority again rejected the petitioner’s renewal applications and awarded the permits to the State. The petitioner contended that, according to Chapter IVA, the State had no right to apply for permits except under that specific chapter, and that granting permits under Chapter IV was illegal and infringed the petitioner’s fundamental right to practice any lawful trade, protected by Article 19(1)(g) of the Constitution. The petitioner also alleged that the order violated the principle of equality under Article 14.

The Court held that both of the petitioner’s contentions lacked merit and must fail. It observed that the Motor Vehicles Act, as amended, contains two distinct and independent provisions governing the operation of buses by the Government: one found in Chapter IV and the other in Chapter IVA. Section 68F(1) of Chapter IVA grants a special advantage to the Government, providing it with a right to obtain the necessary permits when it proceeds under that chapter. In contrast, Chapter IV operates on a competitive basis, requiring the Government to compete with other applicants for permits. Because the powers conferred by the two chapters are separate, the principle articulated in Nazir Ahmad’s case does not apply. Consequently, the Government possessed a clear right to apply for permits under Chapter IV, and no infringement of the petitioner’s Article 19(1)(g) right could be established. The Court further rejected the applicability of the maxim “expressio unius est exclusio alterius” and distinguished earlier cases, concluding that the petitioner’s arguments were without substance.

The Court explained that under Chapter IV of the Motor Vehicles Act the Government does not enjoy any special advantage; it must compete with all other applicants for permits. Because the two chapters create two separate sets of powers, the principle articulated in Nazir Ahmad’s case was inapplicable. Consequently, the Government possessed a distinct statutory right to apply for permits under Chapter IV, and therefore no question arose of the Government seeking permits without a valid entitlement that would violate the petitioner’s fundamental right under Article 19(1)(g). The Court held that the decision in Nazir Ahmad v. King Emperor, (1936) L.R. 63 I.A. 372 was inapplicable, and it distinguished the earlier case of Taylor v. Taylor, (1876) 1 Ch. D. 426. The maxim expressio unius est exclusio alterius was said to be of no assistance to the petitioner; while the maxim serves to ascertain legislative intent, Section 42(3)(a) of the Motor Vehicles Act leaves no doubt about that intent. That provision clearly indicates that the Government cannot operate buses as a commercial enterprise without first obtaining permits under Section 42(1) of the Act. Accordingly, the maxim could not be used to imply a prohibition on applying for permits under Chapter IV. The Court therefore found no basis to hold that Chapter IVA was the sole provision permitting the Government to ply stage‑carriages. The Court also considered the authorities cited by the petitioner, namely Viscountess Rhondda’s claim, (1922) 2 A.C. 339 and Motilal v. Government of Uttar Pradesh, (1955) 1 I.L.R. All. 269, and rejected the view that the State was not intended to compete with private citizens for permits under Chapter IV. Section 47 of the Act provided no support for such a proposition, and Article 19(6) of the Constitution confirmed that the Government may engage in such competition without infringing any fundamental right. The Court observed that the Regional Transport Authority, when it grants permits, functions in a quasi‑judicial capacity; any error in its decision, even if it relates to the proviso of Section 47(1), does not constitute a violation of Article 14 of the Constitution. The petitioner, therefore, had other remedies available. Moreover, Chapter IV could not be said, in light of Article 19(6), to offend that article by permitting open competition between the State and a private citizen. The judgment then recorded the original jurisdiction details, noting Petition No. 110 of 1959 filed under Article 32 of the Constitution for enforcement of fundamental rights, and listed the counsel appearing for the petitioners and respondents. The judgment, delivered on 7 March 1960 by Justice Sarkar, described the petitioner as a duly registered co‑operative society engaged in the business of operating motor buses as stage‑carriages on public highways in the State of Bombay, and stated that the petitioner claimed deprivation of its right to carry on this business and further alleged other grievances.

The petitioner alleged that it had been subjected to discriminatory treatment in the issuance of permits required for operating its buses, and claimed that such treatment violated its fundamental rights under article 19 (1) (g) and article 14 of the Constitution. The questions that arose for adjudication concerned certain provisions of the Motor Vehicles Act, 1939, as amended by Act 100 of 1956; therefore the Court first examined those statutory provisions before addressing the constitutional issues. The Court limited its analysis to chapters IV and IVA of the Act. Chapter IV comprises sections 42 to 68, while chapter IVA, introduced in its entirety by the amending Act, consists of sections 68A to 681. Section 42(1) provided that no owner of a transport vehicle could use or permit the use of the vehicle in any public place except in accordance with the conditions of a permit granted under the Act. The term “transport vehicle” was defined in section 2(33) as a public‑service vehicle or a goods vehicle. Under the original clause (a) of sub‑section (3) of section 42, sub‑section (1) did not apply to any transport vehicle owned by, or on behalf of, the Central Government or a State Government, except a vehicle used in connection with the business of a railway. Consequently, the Government was then able to ply stage carriages on public highways without obtaining permits for them. The 1956 amendment replaced that clause with a new clause (a) in section 42(3), which stipulated that sub‑section (1) would not apply to any transport vehicle owned by the Central Government or a State Government and used for Government purposes unconnected with any commercial enterprise. Because the operation of stage carriages is a commercial activity, the amendment meant that the Government could no longer run stage carriages on public highways without a permit, just as a private owner could not. Section 44 authorized a State Government to constitute a State Transport Authority and Regional Transport Authorities for different areas of the State to perform the duties specified in the Act. Section 45 required that every application for a permit be made to the Regional Transport Authority of the region in which the vehicle was intended to be used. Section 47 enumerated the matters that a Regional Transport Authority must consider when evaluating an application for the grant of a permit. Turning to chapter IVA, section 68A(b) defined a “State transport undertaking” for the purposes of that chapter as an undertaking that provides road‑transport service, carried on, among others, by a State Government. Section 68B declared that the provisions of chapter IVA would have effect notwithstanding anything to the contrary contained in chapter IV. Section 68C read in the following terms: “Where any State transport undertaking is of 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 in general or any particular class of such service, in relation to any area or route or portion thereof should be run and operated by the State transport undertaking, whether to the exclusion, complete or partial, of other persons or otherwise, the State transport undertaking may prepare a scheme giving particulars of the nature of the services proposed to be rendered, the area or route proposed to be covered and such other particulars respecting thereto as may be prescribed, and shall cause every such scheme to be published in the Official Gazette and also in such other manner as the State Government may direct.” Section 68D provided for the preferring of objections to the scheme published under section 68C, the consideration of such objections, and the final approval of the scheme by the State Government. Section 68F(1) subsequently dealt with the implementation of an approved scheme by a State transport undertaking.

In order to secure an efficient, adequate, economical and properly coordinated road‑transport service, the legislation provides that it may be in the public interest for the State transport undertaking to operate road‑transport services generally, or a particular class of such services, on any specified area, route or portion thereof, either exclusively or in competition with other persons. Accordingly, the State transport undertaking is authorised to prepare a scheme that sets out the nature of the services it proposes to render, the area or route it intends to cover and any other particulars that may be prescribed. Every such scheme must be published in the Official Gazette and also in any other manner that the State Government may direct. Section 68D then furnishes the procedure for permitting objections to the published scheme, for considering those objections and for granting final approval of the scheme by the State Government. Section 68F(1) provides that when, pursuant to an approved scheme, a State transport undertaking applies for a stage‑carriage permit, a public carrier’s permit or a contract‑carriage permit for a notified area or route in the manner prescribed by Chapter IV, the Regional Transport Authority shall issue the permit to the State transport undertaking notwithstanding any contrary provision in Chapter IV. The petition before this Court was filed against four respondents: (1) the Regional Transport Authority, Aurangabad; (2) the State Transport Authority, Bombay; (3) the Divisional Controller of State Transport, Marathwada; and (4) the State of Bombay. Both Aurangabad and Marathwada lie within the State of Bombay. The first and second respondents are the authorities created under section 44 of the Act by the Government of Bombay. The first respondent is charged with considering applications for and granting permits for stage‑carriages operating in the Aurangabad region, while the second respondent hears appeals from the decisions of the first respondent. The third respondent heads a department of the Government of the State of Bombay and is responsible for public‑transport work in Marathwada. The records indicate that the petitioner held permits to operate buses on four routes in Aurangabad, and that those permits were set to expire on 1 October 1958. The State of Bombay also possessed permits for two of those routes. On 19 May 1958, the State of Bombay applied for permits for all four routes under Chapter IV of the Act. Subsequently, on 27 May 1958, the petitioner applied for renewal of its existing permits. The first respondent rejected the petitioner’s application and instead granted the permits to the State of Bombay. The petitioner appealed this rejection to the second respondent, but the appeal was dismissed. In the interim, on a date that does not appear in the record, the petitioner was granted temporary permits until 31 December 1958.

The petitioner had earlier received temporary permits that were valid until 31 December 1958. When those temporary permits expired on that date, the petitioner would have been unable to operate any of its buses. Consequently, the petitioner approached the High Court at Bombay invoking article 226 of the Constitution. The High Court set aside the orders issued by respondents 1 and 2 and directed that both the petitioner’s and the State of Bombay’s applications for permits be reconsidered. The reasons given by the High Court for that order are not examined here. Nevertheless, respondent 1, disregarding the High Court’s directive to reconsider the applications, proceeded to grant temporary permits to the State of Bombay. The petitioner returned to the High Court, which then annulled respondent 1’s order that had granted the State of Bombay temporary permits. Subsequently, on 20 March 1959, respondent 1 issued temporary permits to the petitioner; those permits were later extended to 20 July 1959. On 1 June 1959, the State of Bombay published a scheme under section 68C of Chapter IV‑A of the Act. Several objections were lodged against that scheme, and no further steps appear to have been taken to give the scheme final effect. On 18 July 1959, respondent 1, claiming to act in accordance with the High Court’s instructions, reconsidered both the petitioner’s renewal applications and the State of Bombay’s applications for permits. In that reconsideration, respondent 1 rejected the petitioner’s applications while allowing the State of Bombay’s applications. As a result, when the petitioner’s temporary permits expired on 20 July 1959, the petitioner was forced to cease operating its buses. On 27 August 1959, the petitioner instituted the present petition before this Court under article 32 of the Constitution, seeking appropriate writs. The petitioner asked that the order of respondent 1 dated 18 July 1959 be set aside, that the State of Bombay be restrained from applying for permits except under the provisions of Chapter IV‑A, that respondent 1 be prohibited from entertaining any application by the State of Bombay under Chapter IV, and that respondent 1 be directed to hear the petitioner’s applications for permits in accordance with the law. Various grounds supporting the petition have been advanced and will now be examined. The petitioner’s primary contention is that, in view of Chapter IV‑A, the State of Bombay possessed no authority to apply for permits under Chapter IV of the Act, as it had done. Accordingly, the petitioner argues that the order of respondent 1 granting permits to the State of Bombay under Chapter IV was illegal and infringed the petitioner’s fundamental right guaranteed by article 19(1)(g). The first issue to be resolved, therefore, is whether the State of Bombay was entitled to apply for permits under Chapter IV. The petitioner maintains that special provisions were made in Chapter IV‑A to enable the Government to operate its own buses, and that the Government’s right to run buses was confined to those provisions, precluding it from resorting to the other provisions of the Act. In support of this claim, the petitioner referred to the relevant statutory provisions.

The Court referred to the decision in Nazir Ahmad v. King Emperor (1) which had observed that when a statute authorises a particular act in a specific manner, that act must be performed in that manner or not at all. The Court noted, however, that this principle applies only where a single power is conferred and it cannot be used where the legislation provides more than one power. Accordingly, if a statute contains several provisions that each grant a distinct power, the rule cannot be invoked to strip away any of those individual powers. The Court then cited the observation in Taylor v. Taylor (2), which the Judicial Committee had mentioned in the Nazir Ahmad case, stating that when a statutory power is first conferred on a court and the mode of exercise is specified, no alternative mode may be adopted. The citation for the first case is (1936) L.R. 63 I.A. 372, 381 and for the second case is (1876) 1 Ch. D. 426, 431. The Court explained that the present situation differs because the Government possesses the general authority to engage in any lawful business, including the operation of stage‑carriage buses. The Court recalled the amendment made by the 1956 amendment to clause (a) of section 42(3). Before that amendment, the Government was not required to obtain permits under section 42(1) for buses it intended to run as stage carriages. After the amendment, the Government can no longer operate transport vehicles for commercial purposes without first obtaining a permit under section 42(1). The Court emphasized that the operation of buses as stage carriages now constitutes a commercial enterprise, and therefore, under the current statutory language, the Government must obtain permits in the same manner as any other applicant. Consequently, the provisions clearly envisage that the Government may apply for and be granted permits for its stage‑carriage buses. The Court held that the rule applied in Nazir Ahmad v. King Emperor (1) does not allow the ordinary meaning of section 42, sub‑section (1) and sub‑section (3), clause (a), to be narrowed because of the separate provisions contained in Chapter IVA. The Act, the Court observed, establishes two independent schemes for the Government’s operation of buses: one under Chapter IV and another under Chapter IVA. Chapter IVA was designed to give the Government a special advantage; when the Government elects to operate under that chapter, section 68F(1) confers a right to obtain the necessary permits automatically. In contrast, under Chapter IV the Government enjoys no such advantage and must compete with other applicants for permits in order to run its buses. Since the powers under the two chapters are distinct, the Court concluded that the principle articulated in Nazir Ahmad v. King Emperor (1) is inapplicable to this context. The petitioner’s counsel also invoked the maxim “expressio unius est exclusio alterius,” arguing that because Chapter IVA expressly allows the Government to run buses under a scheme, it implicitly forbids the Government from operating buses under any other provision.

In this case, the Court observed that the maxim “expressio unius est exclusio alterius” is used only to discover legislative intention when the statutory language is ambiguous. When the language of a provision is clear and its meaning is evident, the maxim cannot be invoked. The Court found that section 42(3)(a) is expressed in plain terms, indicating that the Government must obtain permits under section 42(1) in order to operate buses as a commercial enterprise. Consequently, the maxim could not be employed to infer a legislative prohibition against the Government applying for permits under Chapter IV.

The Court noted that counsel had relied on the decision in Viscount Rhondda’s claim, quoting page 365, which stated that statutes should be interpreted by looking at the natural and grammatical meaning of the words, while also considering the existing law, the mischiefs to be remedied, and the defects to be corrected within the overall scheme of the Act. Counsel argued that Chapter IVA, introduced by the 1956 amendment, was meant to address observations in Moti Lal v. Government of Uttar Pradesh and other cases that section 42(3)(a) was discriminatory because it exempted the Government from the permit requirement, thereby violating article 14 of the Constitution. However, the Court found this contention unconvincing. The observations cited related to clause (a) of section 42(3) as it existed before the 1956 amendment. Since the amendment, the provision is no longer discriminatory, and the previously identified evil no longer exists. The Court could not locate any authority, including Moti Lal’s case, that demonstrated a continuing evil the amendment intended to remedy. Accordingly, there was no basis for reading Chapter IVA as the sole provision permitting the Government to operate stage‑carriage services.

Finally, the Court addressed the argument that section 42 requires a transport‑vehicle owner to obtain a permit and that a “State transport undertaking” cannot apply for a permit under Chapter IV because it is not an owner. The Court clarified that the discussion did not concern a State transport undertaking that would arise under Chapter IVA, which the Government had not yet invoked. Instead, the Government itself applied for permits under Chapter IV and can, in fact, be the owner of transport vehicles. Under clause (a) of section 42(3) the Government must follow the same permit procedure as any other owner. Moreover, section 68A defines a “State transport undertaking” as an undertaking providing road‑transport services on behalf of a State Government, essentially a departmental function that must own vehicles to operate. Section 68F(1) further requires such an undertaking to seek permits under Chapter IV, thereby treating it as a vehicle owner within the meaning of section 42. Consequently, the Court concluded that the statutory scheme allows the Government to obtain permits under Chapter IV without implying any prohibition or exclusive reliance on Chapter IVA.

The Court observed that the Government was permitted to apply for permits under Chapter IV and that the Government could, indeed, be the owner of transport vehicles. Referring to clause (a) of section 42(3), the Court noted that the Government was required to seek permits in accordance with section 42(1) in the same manner as any other vehicle owner, which indicated that the Act expressly contemplated the Government as a vehicle owner. The Court further explained that section 68A defined a “State transport undertaking” as an undertaking that provided road‑transport services operated by a State Government. Such an undertaking, being essentially a department of the Government, needed the capacity to own transport vehicles in order to furnish those services. Accordingly, section 68F(1) mandated that a State transport undertaking apply for permits under Chapter IV, thereby treating the undertaking as an owner of a transport vehicle for the purposes of section 42 contained in that Chapter.

Counsel for the respondent then referred to the final part of section 47(1), which required the authority considering permit applications to take into account the representations made by the persons listed therein. Counsel argued that the list of persons did not include the Government, and therefore the legislative intent was that applications submitted by the Government were not meant to fall within the scope of section 47. Counsel further asserted that if the Government could not be covered by section 47, it could not be eligible to apply under Chapter IV at all. The Court considered this argument but held that even if the representations of the Government were not envisaged by section 47, that omission did not necessarily preclude the Government’s applications from being considered under the same provision.

The argument was also advanced that the matters which the permitting authority must consider under section 47 would inevitably favor the State if the State competed with private citizens for permits, implying that the legislature could not have intended the State to compete with private individuals for permits under Chapter IV. The Court declined to accept this contention. It observed that section 47 contained no language indicating that, whenever the Government applied for a permit alongside private applicants, the Government must be granted the permit. Moreover, the Court pointed out that if such a presumption existed, the specific provision in section 68F(1), which obliges the authority to grant a permit to a State transport undertaking when it applied pursuant to an approved scheme, would have been redundant. Instead, section 68F(1) was intended to safeguard the Government’s application against a discretionary decision by the authority under section 47 that might otherwise favor a private operator.

Finally, the Court remarked that there was nothing in the existing law that prohibited the Government from engaging in a business that competes with private citizens. It noted that Article 19(6) of the Constitution expressly provided that nothing in Article 19(1)(g) barred the State from carrying on any trade, business, industry, or service, whether as a monopoly or in competition with citizens, and that such conduct did not infringe any fundamental rights of the citizens.

In this case the Court observed that the provision stating that the Constitution shall affect the application of any existing law insofar as it relates to, or shall prevent the State from making any law relating to the carrying on by the State of any trade, business, industry or service, whether to the exclusion, complete or partial, of citizens or otherwise, indicates that the State may engage in any business either as a monopoly, wholly or partially, or in competition with any citizen, and that such engagement would not by itself infringe any fundamental rights of the citizen. The Court then turned its attention to the proviso to section 47(1), which provides that, other things being equal, a cooperative society is entitled to preference over individual owners in the grant of permits. It was submitted that the Government is not an individual owner and therefore the proviso does not contemplate the Government as an applicant for a permit under section 47. The Court stated that even if the Government is not an individual owner – a point on which the Court was not called to pronounce – it does not follow that the section excludes the Government from applying for a permit. If the Government is not an individual owner, the effect of the proviso to section 47(1) would simply be that a cooperative society would not be able to claim any preference over the Government. The proviso merely gives a cooperative society a preference over individual owners; it does not determine who may apply for permits. Accordingly, the Court found that the petitioner’s contention that the Government cannot apply for a permit under Chapter IV of the Act is not sustainable. The petitioner therefore cannot complain that the Government applied under that Chapter. The Court further noted that it was not required to consider the further question whether any fundamental right of the petitioner under article 19(1)(g) would have been affected by the Government’s application for and receipt of permits under Chapter IV without a right to do so. By declining to address that issue, the Court disposed of the petitioner’s claim of infringement of the fundamental right guaranteed by article 19(1)(g) of the Constitution. Thus, the Constitution permits the State to engage in commercial activity without automatically surrendering the protective scope of article 19(1)(g).

The judgment then proceeded to examine the allegation of violation of article 14 of the Constitution. The first argument raised by the petitioner relied on the same proviso to section 47(1). It was asserted that, in the circumstances of the present case, the petitioner as a cooperative society was entitled to preference over the Government, which was being treated as an individual owner, and that this preference had been denied. The petitioner further contended that respondent No. 1, relying on various promises made by the State of Bombay to repair roads and to provide other facilities to the traveling public, had held that the other conditions were not equal, whereas the proviso required reliance only on the existing conditions. The petitioner claimed that this disparity amounted to an infringement of the equality guarantee under article 14. The Court considered this contention and held it to be untenable. The Court observed that the decision of respondent No. 1, whether right or wrong, did not offend article 14 or any other fundamental right of the petitioner. Since respondent No. 1 was acting as a quasi‑judicial body, any error in its decision could be remedied by the ordinary remedies available to the petitioner, and it could not be the basis for a claim of violation of article 14. The Court emphasized that the proper avenue for challenging the quasi‑judicial determination lay in appellate or review proceedings, not in invoking the equality clause. Consequently, the Court concluded that the petitioner’s arguments on both article 19(1)(g) and article 14 failed, and the petition was dismissed with costs.

In its consideration, the Court observed that it would not pass a definitive judgment on whether the decision of the respondent was right or wrong, but it found no indication that the decision infringed Article 14 of the Constitution or any other fundamental right of the petitioner. The Court noted that respondent No 1 had performed its functions in the capacity of a quasi‑judicial body, and it emphasized that, should the decision contain any error, the petitioner possessed the ordinary and appropriate legal remedies to seek corrective relief. Consequently, the Court held that the petitioner could not sustain a claim of violation of Article 14 on the basis of any mistake that might have been made by the quasi‑judicial authority.

The Court then turned to the petitioner’s second argument, which contended that Chapter IV of the relevant statute permitted the State to compete with a private citizen and that such permission amounted to a breach of Article 14 because the State’s considerably larger resources would inevitably place a private individual at a disadvantage in competition. The Court rejected this contention as unfounded. It pointed out that Article 19(6) of the Constitution, as presently interpreted, expressly contemplates and accommodates competition between the State and private parties, a position the Court had earlier articulated. Accordingly, the petitioner could not base a grievance upon the mere fact of State competition authorized by Chapter IV.

For these reasons, the Court concluded that the petition lacked merit and therefore must be dismissed. The dismissal was ordered with costs awarded against the petitioner, and the petition was formally closed.