IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL Nos. 4849-4850 of 2000 Sita Ram Bhandar Society, New Delhi ....Appellant Vs. Lt. Governor, Govt. of N.C.T. Delhi & Ors. ......Respondents JUDGMENT

<NAME>J.

1. These appeals are directed against the judgment of the Division Bench of <ORG> dated 2nd September 1998 dismissing the writ petitions. The facts are as under:

2. On 13th November 1959, a Notification was issued by the Chief Commissioner of Delhi under 4 of the Land Acquisition Act (hereinafter called the "Act") notifying the Government's intention to acquire 34070 acres of land for the "Planned ...2/...

CA Nos.4849-4850/2000 Development of Delhi". This notification had, within its ambit, agricultural land belonging to the appellant society, bearing Khasra No. 157 in Village Lado Sarai, Tehsil Mehrauli, Delhi measuring 8 Bighas and 11 Biswas or 8620 sq. yards equivalent to 1.8 acres. The appellant filed objections under Section 5A of the Act on the 10th December 1959 submitting that the land be exempted from the proposed acquisition. It pointed out that the appellant body was a registered trust and a religious body managing three temples in Pilani, Rajasthan and several gardens, water tanks etc. having religious significance. The objections raised were apparently found without merit whereafter the Chief Commissioner issued a declaration under Section 6 of the Act which was published on 16th May 1966 pertaining to 2153 Bighas 2 Biswas corresponding to about 448 acres. The Collector, Land Acquisition also rendered his award on 19th June 1980 clarifying that it pertained only to 1996 Bighas 18 Biswas leaving out an area of 156 Bighas 4 Biswas for the time being CA Nos.4849-4850/2000 as it was built up and that the award for this area would be given later. The appellant's property Khasra No.157 was, however, included in the award of 19th June, 1980. It appears that pursuant to the award possession of 1933 Bighas and 2 Biswas was taken by the Collector, Land Acquisition on the 20th June 1980 and further handed over to the beneficiary department. It was, however, observed in the proceedings of 20th June 1980 that the possession of the balance area of about 61 Bighas would be taken after the removal of the structures with the help of the demolition squad. On the 29 th July 1980 a Notification under Section 22 (1) of the Delhi Development Act, 1957 was issued by the Central Government, placing the acquired land at the disposal of <ORG> for the planned development of Delhi. At this stage, the appellant filed CWP No.1068 of 1980 in <ORG> challenging the validity of the Notification under Section 4 and Declaration under Section 6 of the Act. This petition was dismissed in limine on the 18 th August 1980. The appellant thereupon preferred Special CA Nos.4849-4850/2000 Leave Petition in this Court and after leave was granted the appeal was registered as C.A. No. 1738 of 1981. While the appeal was still pending, the appellant filed Writ Petition No.2220/1981 under Article 32 of the Constitution of India in <ORG>. It appears that an interim order was made by <ORG> in these proceedings on 15th of July 1981 staying dispossession of the appellant from the property in dispute and the said order was confirmed on 16th September 1982. Both the Civil Appeal and the Writ Petition aforementioned were, however, dismissed by this Court on the 20th July 1993. It also appears from the record that while the aforementioned two matters were pending in this Court, the appellant filed Suit No. 1226 of 1992 on the Original Side of <ORG> praying for an injunction against the respondents, including <ORG>, that no structure be demolished and that no interference be made with the plaintiff's possession and management of the Suit land. An interim injunction was also sought and obtained in these proceedings. It is the appellant's case that though the CA Nos.4849-4850/2000 aforesaid Suit was transferred to <ORG> in Delhi on account of the revision of the pecuniary jurisdiction of <ORG>, the said interim injunction still continued to operate, but despite the interim orders <ORG> continued to impinge on the appellant's property on which a Contempt Petition was filed in the High Court, which in its order dated 19th May 1992, directed the respondent authorities to ensure compliance with <ORG> order dated 2nd April 1992 made in the civil suit. It is further the case of the appellant that some time later <ORG> again tried to interfere with the appellant's property on which yet another Contempt Petition No.36 of 1993 was filed and the same is said to be pending. The appellant, however, continued to be persist in its efforts to save the acquired land and at this stage filed C.W.P.No.700 of 1994 in <ORG> on 28th January 1994 challenging, inter-alia, the constitutional validity of Section 22 of the Delhi Development Act, whereunder the acquired land had been handed over to the <ORG>, and also praying for the CA Nos.4849-4850/2000 allotment of an alternative site in lieu of the acquired land. This writ petition was dismissed as withdrawn on September 8, 1995 the prayer of the counsel for the petitioner (the present appellant) in the following terms:

"Mr. <NAME> says, in view of the order dated 29.11.94, he would not press this petition at this stage and would apply for allotment of alternative land in the institutional area.

Dismissed as withdrawn. However, we will make it clear that allotment of the alternative land be made to the petitioner as per policy."

3. Still dissatisfied, the appellant filed W.P. No. 623 of 1995 in <ORG> challenging some facets of the alleged violation of the Master Plan of 2001 which had statedly made the entire proceedings for the planned development of Delhi incohate and which had rendered the acquisition without any authority of law . This matter came up before <ORG> after notice on 20th February 1995 on which <ORG> observed that the petitioner was seeking two distinct prayers in the Writ Petition, (1) that the land which had been CA Nos.4849-4850/2000 acquired under the Land Acquisition Act should be released from acquisition and (2) that the <ORG> should not be permitted to use the aforesaid land for a purpose other than that postulated in the Master Plan and the Zonal Development Plan and as the two prayers were mutually distinct and pertained to different causes of action, one writ petition was not maintainable. On this, the learned senior counsel for the appellant, Mr. <NAME> stated that he would file two separate writ petitions for which liberty was granted and the papers of CWP No. 623 of 1995 were accordingly returned to the counsel. The appellant thereupon moved two writ petitions i.e. W. P. Nos. 1628/1995 praying that the respondent <ORG> be restrained from taking over possession of the land and Writ Petition No. 1629/1995 seeking to challenge the land acquisition proceedings which had been initiated by the Notification under Section 4 and Declaration under Section 6 of the Act in the year 1959 and 1966 respectively and also pleading that as the possession had not been taken, the land be released under Section 48 of the Act. The Division CA Nos.4849-4850/2000 Bench while dealing with the question of possession held that the writ petitioner had only relied on two stray entries in two Khasra Girdawaris for the period 13th October 1980 to 11th March 1981 which had recorded the land to be "Gair Mumkin Kotha Pukhta and Char Diwari" and that this entry was meaningless in the light of the fact that the land had been described as "Rosli" (agricultural) and not a built up property in the award No.36/80-81 dated 19.6.1980 and that in any case the plea appeared to be an after thought as it had not been taken by the petitioner though it was available at the time when Writ Petition No. 1068/1980 (in <ORG>) and Writ Petition No.2220/1981 had been directly filed in this Court. The Court further held that it was clear from the proceedings recorded by <NAME>, Land Acquisition, on 20th June 1980 in the presence of a large number of Revenue Officials that possession had indeed been taken over on that day after demarcation had been made with respect to 1933 bighas 2 biswas, including the land belonging to the appellant, and that boundary pillars had been affixed CA Nos.4849-4850/2000 round the demarcated land and that the possession had further been handed over to <NAME>, Tehsildar on 20th, 21st, 23rd and 24th of June 1980. The Court also noted that the proceedings aforementioned were witnessed as to their authenticity by <NAME>, and the two <ORG> Officials, <NAME> and <NAME>. The Division Bench in this background observed that possession had, in fact, been taken over after appropriate proceedings. The two writ petitions were accordingly dismissed by the Division Bench of <ORG> vide the impugned judgment leading to the present appeals as a consequence.

4. At the very outset, Mr. <NAME>, the learned senior counsel for the appellant has candidly stated at the <ORG> that the appellant was no longer challenging the acquisition and the relief claimed in W.P. 1629/1995 was, therefore, not being pursued in this appeal. He has, however, prayed with the greatest emphasis, that in so far as the claim arising out of W.P. No.1628/1995 was concerned it was clear from the record that possession of the appellant's land i.e. 1 acre 8 CA Nos.4849-4850/2000 Biswas continued to remain with the appellant despite the findings to the contrary recorded by <ORG>, and as such it was open to the Government to withdraw from the acquisition if it so desired, under Section 48 of the Act.

5. In this background, Mr. <NAME>, has raised three arguments before us during the course of hearing. He has first pointed out that it was the positive case of the appellant that the land in dispute was encircled by a boundary wall and as such possession thereof could be taken only after entering the land and not by any symbolic or paper possession. As a corollary, it has been submitted, that there was no material on record to show that the actual physical possession had been taken as would preclude the withdrawal of the acquisition under Section 48 of the Act. In this connection, the learned counsel has placed reliance on <CITATION> .  and <NAME> Anr. Vs. State of U.P. & Ors.  which had been subsequently followed in <CITATION> . . It has finally been CA Nos.4849-4850/2000 submitted that there was ample evidence on record to show that the property in dispute was, in fact, surrounded by a wall and had some other structures as well, and in view of the positive stand taken by the Land Acquisition Collector in his award dated 19th June 1980 that the possession of the area covered by structures would be the subject matter of a supplementary award, the very basis of the judgment of <ORG> that the possession had been taken on the 20th June 1980 was erroneous.

6. Mr. <NAME> and Mr. <NAME>, the learned counsel appearing for the <ORG> and <ORG> respectively have controverted the submissions and have pointed out that the appellant had, for almost 30 years, been able to scuttle the development of the area by taking piecemeal stands in the writ petitions and civil suits from the year 1980 onwards and though the aforesaid matters had been rejected with positive findings that possession had been taken, and that there was no wall or structure on the land in question. It has also been submitted that the proper procedure had been adopted by the CA Nos.4849-4850/2000 Naib Tehsildar and that the possession had been taken over as per law on the 20th June 1980 and there was ample evidence to this effect which had been considered by <ORG>.

7. We have heard the learned counsel for the parties very carefully. The Act provides a machinery for the acquisition of the land. An acquisition is set in motion by a Notification under Section 4 when it is proposed to acquire any land for public purpose and Section 5A envisages the filing of objections with regard to the proposed acquisition. After the objections under Section 5A have been considered and been found without merit, a declaration under Section 6 of the Act is published that the land is indeed required for a public purpose. Section 9 of the Act provides that after all the proceedings and certain other formalities have been completed the Collector shall give public notice that the <ORG> intends to take possession of the land and calling upon the persons interested to file their claims for compensation. The matter is then enquired into by the Collector who renders his award under Section 11 of the Act and possession is taken by CA Nos.4849-4850/2000 the Collector under Section 16 on which the land vests absolutely in the <ORG> free from all encumbrances. It is the case of the respondent that all the procedures had been followed and that possession had been taken under Section 16 on the 20th June 1980, and as such, the question of its release under Section 48 of the Act did not arise, as this provision gives "liberty to withdraw from the acquisition of any land of which possession has not been taken". The question raised by Mr. <NAME> is that as the area in question was very extensive i.e. about 1933 bigas and the land belonging to the appellant was surrounded by a boundary wall, symbolic possession was meaningless and some more positive action was called for. To support this view he has relied on the three judgments cited earlier. We find, however, that the aforesaid judgments, in fact, help the case of the respondent rather than the other way around. In <NAME> case, which was heard by three Hon'ble Judges of this Court one of the Hon'ble Judges (<NAME>,J.) held that the principles underlying Order 21, Rules 35, 36, 95 and 96 of the <ORG> prescribing the modes of CA Nos.4849-4850/2000 delivery of possession including symbolic and actual could be applied to proceedings under the Act but the other two Hon'ble Judges (<NAME> and <NAME>,<NAME>.) held that the said provisions could not be applied to proceedings under the Act and that actual possession thereof was required to be taken. In this background, the two Hon'ble Judges observed as under:-

"We think it is enough to state that when the <ORG> proceeds to take possession of the land acquired by it under the Land Acquisition Act , 1894, it must take actual possession of the land, since all interests in the land are sought to acquired by it. There can be no question of taking `symbolical' possession in the sense understood by judicial decision under the Code of Civil Procedure. Nor would possession merely on paper be enough. What the Act contemplates as a necessary condition of vesting of the land in the <ORG> is the taking of actual possession of the land. How such possession may be taken would depend on the nature of the land. Such possession would have to be taken as the nature of the land admits of. There can be no hard and fast rule laying down what act would be sufficient to constitute taking of possession of land. There cannot be an absolute and inviolable rule that merely going on the spot and making a declaration by beat of drum or otherwise would be sufficient to constitute taking of possession of land in every case. But here, in CA Nos.4849-4850/2000 our opinion, since the land was lying fallow and there was no crop on it at the material time, the act of the Tehsildar in going on the spot and inspecting the land for the purpose of determining what part was waste and arable and should, therefore, be taken possession of and determining its extent, was sufficient to constitute taking on possession. "

8. In <NAME> case (supra) the basic issue was as to whether the land which was the subject matter of acquisition could be acquired in view of the State policy that Abadi land was not to be acquired. It is in this connection, the Court observed that there appeared to be no conclusive evidence that possession had been taken from the land owner, and the matter was left open for the land owner to approach <ORG> under Section 48 of the Act to have land released. In <NAME>'s case (supra), a reference was made to the judgment in <NAME> case (supra) and it was once again reiterated that the procedure for taking possession would depend upon the nature of the land and the extent thereof. A cumulative reading of the aforesaid judgments would reveal that while taking symbolic and notional CA Nos.4849-4850/2000 possession is perhaps not envisaged under the Act but the manner in which possession is taken must of necessity depend upon the facts of each case. Keeping this broad principal in mind, this Court in <CITATION> ) by Lrs. AIR 1996 SC 3377 after considering the judgment in <NAME> case, observed that while taking possession of a large area of land (in this case 339 acres) a pragmatic and realistic approach had to be taken. This Court then examined the context under which the judgment in <NAME> case had been rendered and held as under:

"It is settled law by series of judgments of this Court that one of the accepted modes of taking possession of the acquired land is recording of a memorandum or Panchanama by the <ORG> in the presence of witnesses signed by him/them and that would constitute taking possession of the land as it would be impossible to take physical possession of the acquired land. It is common knowledge that in some cases the owner/interested person may not cooperative in taking possession of the land."

CA Nos.4849- <CITATION> . AIR 1996 SC 1239 yet again the question was as to the taking over of the possession of agricultural land and it was observed thus:

"It is seen that the entire gamut of the acquisition proceedings stood completed by April 17, 1976 by which date possession of the land had been taken. No doubt, <NAME> has contended that the appellant still retained their possession. It is now well-settled legal position that it is difficult to take physical possession of the land under compulsory acquisition. The normal mode of taking possession is drafting the Panchnama in the presence of <NAME> and taking possession and giving delivery to the beneficiaries is the accepted mode of taking possession of the land. Subsequent thereto, the retention of possession would tantamount only to illegal or un lawful possession."

9. It would, thus, be seen from a cumulative reading of the aforesaid judgments, that while taking possession of a large area of land with a large number of owners, it would be impossible for the Collector or the Revenue Official to enter each bigha or biswas and to take possession thereof and that a pragmatic approach has to be adopted by the <ORG>. It is CA Nos.4849-4850/2000 also clear that one of the methods of taking possession and handing it over to the beneficiary department is the recording of a <ORG> which can in itself constitute evidence of the fact that possession had been taken and the land had vested absolutely in the Government.

10. The question arises as to whether in the face of the above observations, the procedure adopted by <NAME>, Land Acquisition <NAME> was the correct one. The Award was rendered in the present matter on the 19th June 1980. As per the possession proceedings (Panchnama) recorded by <NAME> dated the 20th June 1980, possession of 1933 bighas 2 biswas of land had been taken over and handed over to <ORG> on the 21st June 1980, 23rd June 1980 and 24th June 1980. In the Panchnama it was also observed that the land had been demarcated and pillars had been affixed and that the physical possession had further been handed over to <NAME>, Tehsildar, the representative of the beneficiary department. Admittedly, Khasra No.157 was covered by this document. It is CA Nos.4849-4850/2000 recorded that the possession of the land under the built up area of 160 bighas 6 biswas could not be handed over and the details of this land have also been provided in the aforesaid document. Khasra No.157 does not come in this category. Mr.<NAME> has, however, emphasized that some material documents which show the possession had not been taken on 20th June, as alleged, had been ignored by <ORG> which he has referred us to <ORG> for the years 1980-81 and 1981-82 showing the existence of <ORG>. He has, accordingly, submitted that the observations in the award that the appellant's land was "Rosli" was incorrect in the light of this record. We find absolutely no merit in this plea. A Khasra Girdwari which is a mere crop inspection report entered twice a year (Kharif and Rabi crops) has no presumption of truth attached to it. Even otherwise the state of the land as on the date of the Notification under Section 4 of the Act (which is 13th November 1959) would be the relevant date as to the nature of the land and a crop inspection report 20 years later cannot be taken as proof of some facts said to CA Nos.4849-4850/2000 exist in the year 1959. Mr. <NAME> has also stressed that from the Award itself it was clear that the wall standing on Khasra No.157 had been assessed to a compensation of Rs.420/- and as such the observations in the award that land was agricultural was erroneous. Mr. <NAME> has, however, pointed out that the part of the Award to which reference has been made by Mr. <NAME> is captioned as "Wells and Structures' and that a reference to a wall in the body is typographical error. We reproduce the relevant portion of the award herein under:

Wells and Structures "The land under acquisition has number of wells, water channel and structures. The Assistant Engineer (Valuation) has made the rate assessment of each of these items to which I agree and award accordingly subject to the verification at the time of possession as per details given as under: -

Value Kh.No. Item Assessed Well, Drain, Water 555/2/2 tank Rs.6920/-

254 Well Structure Rs.2490/- 577/430 -do- Rs.2130/- 217 Well Structure Rs.2730/- 100 Structure Rs.260/- 670/27 -do- Rs.3320/- 15 Well Rs.4030/- CA Nos.4849-4850/2000 Structure/Room Well, Water tank, 29 Room & Structures Rs.3490/- Well, Structures, Water tank, rooms & 139 drains 4600/- Well Structures, 160 room & drain Rs.2750/- 394 Well Structures Rs.4690/- 399 -do- Rs.2380/- 242 Structure Rs.540/- 149 -do- Rs.260/- 580/148 Wall Rs.1264/- 157 -do- Rs.420 Well, Water Tank, 172 drain Structure Rs.7960/- 298 -do- Rs.4890/- 333 wells, Structure Rs.5350/- Structure & 20 Compound wall Rs.3300/- Well, Water drains, 195/2 Water tank & room Rs.7530/- 321 -do- Rs.7250/- Well, Water tank 478 drains & rooms Rs.6665/- Room, water tank, 321 drain Rs.1125/- 478 Drain Rs.360/- Well, water tank, 92 drain, Khurli, rooms Rs.7260/- Well, water tank, drain khurli, rooms, 155 verandah Rs.6720/- Well, Water tank, 597/202/264 Room Rs.2700/- Well, Water tank, Water Channel 455 room Rs.2790/- Well, Water tank, 86 drains, rooms Rs.3320/- Value No. Item assessed 514 Well Rs.1720/- 464 -do- Rs.2850/- 688/518/119/2 -do- Rs.2290/- 189 -do- Rs.1820/- 436 Well, structures Rs.1020/- 210 Well Rs.2060/- 453 -do- Rs.5650/- CA Nos.4849-4850/2000 Total: Rs.1,21,189-00 There are water channels running

through <ORG>. Nos. 228, 635/251, 254, 253, 255, 250, 263, 597/262, 261, 269, 434, 435, 440, 442, 443, 444, 445 & 446. The Naib-

<ORG> has made a detailed valuation to which I agree and award Rs.2870/- as compensation as these channels."

11. A reading of the above extract reveals that wells, and structures connected with wells, and irrigation facilities have been referred to therein and an independent wall is not even remotely the subject matter. Mr. <NAME> has, however, seriously objected to this explanation by submitting that no plea doubting the accuracy of the document having been raised in the counter affidavit, the respondents were now precluded from making this submission. We, however, feel that in the light of the context in which the entire matter has been dealt with in the Award, there can be no doubt that the entry `wall' should be read as `well' vis-`-vis Khasra No.157. There is yet CA Nos.4849-4850/2000 another circumstance, perhaps even more relevant. We find that no question had ever been raised by the appellant with regard to the presence of a wall in the objections filed under Section 5A or even in the responses filed to the notices under Section 9 of the Act and the only prayer was that the land be exempted from acquisition (Item no.36). These omissions become more significant as several other landowners had claimed compensation for the superstructures that were existing on the acquired land. It is also equally significant, as pointed out by Mr. <NAME>, that no question had ever been raised by the appellant with regard to the existence of a wall or superstructure in any of the litigations prior to the present set of Writ Petitions. Mr. <NAME> has, however, referred us to the objections dated 15th November 1966 showing the existence of a wall. These objections are, to our mind, meaningless as they had not been filed in response to the notification CA Nos.4849-4850/2000 under Section 4 which had been published in the year 1959 and were filed after the declaration under Section 6 had been made and are, therefore, an obvious after thought. It also bears notice that despite the claim under this document, no plea with regard to the existence of a wall had been raised at any stage till the filing of the present petitions in the year 1995.

12. Mr. <NAME> has, with great emphasis, pointed out that from the affidavit dated 30th July 1996 sworn by Mr. <NAME>, Under Secretary, <ORG>, it was clear that the appellant continued to remain in possession on account of the stay of dispossession granted by <ORG> on 15th July 1981 in WP No. 2220/1981 and the confirmation of the said order on 16th September 1982 and as such the stand of the appellants that possession had been taken was not correct. We have, however, already observed that possession had been taken between 20th and 24th June 1980, and the acquired land thus stood vested in the State CA Nos.4849-4850/2000 free from all encumbrances under Section 16 of the Act. It is also relevant that the afore-referred writ petition was dismissed meaning thereby that the said order should automatically be vacated as well. Even assuming for a moment that the petitioner had re-possessed the acquired land at some stage would be of no consequence in view of the provisions of section 16 ibidem. In <NAME> case (supra) one of the arguments raised by the land owner was that as per the communication of the Commissioner the land was still with the land owner and possession thereof had not been taken. The Bench observed that the letter was based on a misconception as the land owner had re-entered the acquired land immediately after its possession had been taken by the government ignoring the scenario that he stood divested of the possession, under Section 16 of the Act. This Court observed as under:

"This was plainly erroneous view, for the legal position is clear that even if the appellant entered upon the land and resumed possession of it the very next moment after the land was actually taken possession of and CA Nos.4849-4850/2000 became vested in the Government, such act on the part of the appellant did not have the effect of obliterating the consequences of vesting."

To our mind, therefore, even assuming that the appellant had re-entered the land on account of the various interim orders granted by the courts, or even otherwise, it would have no effect for two reasons, (1) that the suits/petitions were ultimately dismissed and (2) that the land once having vested in the <ORG> by virtue of Section 16 of the Act, re-entry by the land owner would not obliterate the consequences of vesting.

12. We must also observe that the petitioner has been able to frustrate the acquisition and development of the land right from the 1980 onwards by taking recourse to one litigation after the other. The record reveals that all the suits/writ petitions etc. that had been filed had failed. Undoubtedly, every citizen has a right to utilize all legal means which are open to him in a bid to vindicate and protect his rights, but if the court comes to the CA Nos.4849-4850/2000 conclusion that the pleas raised are frivolous and meant to frustrate and delay an acquisition which is in public interest, deterrent action is called for. This is precisely the situation in the present matter. The appeals are, accordingly, dismissed with costs which are determined at Rupees two lacs. The respondents, shall, without further loss of time proceed against the appellant.

..................................J. (Dalveer Bhandari) .................................J.

(<NAME>) New Delhi, Dated: September 15, 2009


PETITIONER: STATE OF ORISSA & ORS. Vs. RESPONDENT: LALL BROTHERS DATE OF JUDGMENT25/08/1988 BENCH: <NAME>, <NAME> (J) BENCH: <NAME>, <NAME> (J) RANGNATHAN, S. CITATION: 1988 AIR 2018 1988 SCR Supl. (2) 579 1988 SCC (4) 153 JT 1988 (3) 552 1988 SCALE (2)542 CITATOR INFO : RF 1989 SC 606 (7) ACT: Arbitration Act 1940: Sections 14, 17, 30 and 33- Unreasoned award-No ground to set aside award-Lump sum award-Not bad perse. HEADNOTE: The respondent-firm was entrusted with the construction work of a `Minor Irrigation Project' by the State of Orissa- Petitioner. The work was due to be completed on 3rd August, 1977 but it was actually on 31st March? 1978. Disputes arose in regard to the payment for the work. The respondent- contractor raised certain claims and gave notice for the appointment of an arbitrator according to the contract. On 22nd April, 1980, the Chief Engineer appointed an arbitrator but, on an application by the respondent, the judge removed him and appointed another arbitrator. Before the arbitrator, the respondent filed its claim along with some documents and the petitioner filed its counter statement. No further evidence was adduced and on 23rd June, 1982. the arbitrator gave a lump sum award for Rs. 14.67 lakhs with interest at 9% from 30th April, 1978. On 11th July 1983, the Sub-Judge made the award rule of the <ORG> with the modification that the interest was directed to run from 23rd June, 1982, instead of 30the April, 1978. The High <ORG> allowed the appeal in part and deleted the direction regarding future interest awarded by the arbitrator and modified by the Subordinate Judge. In the appeal by special leave to this <ORG>. it waS contended on behalf of the State-petitioner that the award in the instant case was an unreasoned award and a lump such amount was awarded without specifying the amount awarded on particular grounds. Dismissing the special leave petition . PG NO 579 PG NO 580 HELD: 1. The fact that there is an unreasoned award, is no ground to set aside an award. Lump sum award is not bad per se, as such. [583A] In the instant case, the award contained the recitals to the effect that the arbitrator had gone through the claim statement, counterstatement and documents produced before him and heard the representations made by the parties. There is no error of law apparent on the face of the award. There was no misconduct on the part of the arbitrator or in the conduct of the proceedings. [582G] <CITATION> ,  1 SCR 105; <CITATION> .,  1 SCR 324 and Allen Berry JUDGMENT:

282, referred to.

2. An award is conclusjve as a judgment between the parties and the court is entitled to set aside an award only if the arbitrator has misconducted himself, or where an award has been inproperly procured, or is otherwise invalid under Sections 30 and 35 of the Arbitration Act 1940. [583B]

3. An award may be set aside by the <ORG> on the ground of error on the face of the award, but an award is not invalid merely because by a process of inference and argument it may be demonstrated that the arbitrator has committed some mistake in arriving at his conclusion [583C]

4. It is not open to the Court to speculate, where no reasons are given by the arbitrator, its to what impelled him to arrive at his conclusions. [593D] <CITATION> & weaving co. Ltd., L. R. 50 <CITATION> .  5 SCR 480 referred to.

5. If a question of law was not specifically referred to the arbirator his decision is not final. [583F] <CITATION> ,  3 SCC 82 distinguished.

& CIVIL APPELLATE JURISDICTION : Special Leave petition (civil) No. 7396 of 1987.

PG NO 581 From the Judgment and Order dated 8.4. 1997 of <ORG> in M. A. No. 378 of 1983.

<NAME>, Solicitor General, <NAME> and Miss <NAME> for the Petitioners.

<NAME>, <NAME> and <NAME> for the Respondent The Judgment of the Court was delivered by <NAME>, J. This is an application for leave to appeal under Article 136 of the Constitution from the decision and judgment of <ORG>, dated 8th April, 1987. By the judgment <ORG> had allowed the appeal in part and modified the award so far as it related to the payment of interest in the awarded amount. Another appeal challenging the validity of the award was, however, dismissed.

In or about 1975-76 the respondent was entrusted with the work of "Construction of balance work of earth dam of <ORG>" vide an agreement No. 207 F-

2. The said work was due to be completed on 3rd August, 1977 but it was actually completed on 31st March, 1978. The estimated of value of the work was Rs.25,06,299. It is stated that the contractor, respondent herein, had executed only 18 out of 33 items of work beside one extra item and he was paid a sum of Rs.23.63.122 for the work done. According to, the petitioner no further amount was due to, the contractor, the respondent.

Final bill was prepared on 12th February, 1980 and it was unconditionally accepted be the respondent- contractor. This contention, however, was sought to be disputed before us by the respondent contractor by producing certain bill stated to be the final bill which was `accepted under protest '. It is, however, not necessary for us to go into this question at this stage.

On or about 16th April, 1980, the respondent-contractor raised certain claims and gave notice far appointment of an arbitrator according to the contract. On 22nd April, 1980, the Chief Engineer appointed <NAME> as arbitrator. However. on the application of the respondent the subordinate Judge removed <NAME> and instead appointed <NAME> as the arbitrator. Before the arbitrator the respondent filed its claim along with some documents and the petitioner filed his counter statement. It is stated on behalf of the State that no further evidence PG NO 582 was adduced by the respondent but the petitioner produced the measurement books. The petitioner contended that no amount was due. The respondent disputed that. The arbitrator on behalf of the claim statement and some document filed by the respondent-contractor, gave a lump sum award for Rs. 14,67,000 plus interest at 9% from 30.4. 1978. The award was given on 23rd June, 1982. On 11th July, 1983, the learned Subordinate judge made the award rule of the Court with the modification that the interest was directed to run from 23.6.1982 instead of 30.4. 1978. <ORG> allowed the appeal in part and deleted the direction regarding future interest awarded by the arbitrator and modified by the learned Subordinate Judge. In appeal it was contended before <ORG> for the said judgment by the Subordinate Judge that the following objections were taken against the award, namely:

"(i) that there is an error of law apparent on the face of the award ;

(ii) that the arbitrator has misconducted himself by giving a lump sure award without examining, each item of the claims,

(iii) that the claimant having accepted the final bill unconditionally deposit, the contract between the parties stood closed and, therefore, the arbitration clause was not operative and the arbitrator appointed had no jurisdiction to adjudicated upon the disputes ;

(iv) that the award of interest is without jurisdiction". Except the documents on record, neither of the parties adduced any evidence. It was urged before us that <ORG> did not accept challenge to the award but modified the order of interest as indicated before. The award in question contained the recitals to the effect that the arbitrator had gone through the claim statement, counter statement and documents produced before him and heard the representations made by the parties. There is no error of law apparent on the face of the award. There was no misconduct an the part of the arbitrator or in the conduct of the proceedings. It was contended before us that this is an award which was an unreasoned and a lump of amount was awarded without specifying the amount awarded on particular grounds.

PG NO 583 In our opinion, <ORG> was right in refusing to accept the challenge to the award. The fact that there is an unreasoned award, is no ground to set aside an award. Lump sum award is not bad per se. as such. An award is conclusive as a judgment between the parties and the court is entitled to set aside an award only if the arbitrator has misconducted himself in the proceedings or when the award has been made after the issue of an order by the <ORG> superseding the arbitration or after arbitration proceedings have become invalid under section 35 of the Arbitration Act or where an award has been improperly procured or is otherwise invalid under section 30 of the Act. An award may be set aside by the <ORG> on the ground of error on the face of the award, but an award is not invalid merely because by a process of inference and agrument it may be demonstrated that the arbitrator has committed some mistake in arriving at his conclusion.

It is not open to the Court to speculate, where no reasons are given by the arbitrator, as to what impellied him to arrive at his conclusions. See in this connection the observations of <ORG> in <CITATION> . 50 I.A. 324 and of this Court in <CITATION> .,  5 SCR 480. The fact that a lump sum award has been given, is no ground to declare the award bad. See further <CITATION> ,  1 SCR 105 and <CITATION> .,  1 SCR 324 as well as the decision of this Court in <ORG>,. ( <CITATION> ,  3 SCR 282.

Learned Solicitor General for the petitioner relied on <CITATION> ,  3 SCC 82.Reliance was misplaced. If a question of law was not specifically referred to the arbitrator his decision is not final. It was reiterated that the arbitrator is bound by law, and if an error of law in the award is on the face of it, it is amenable to be corrected.

In that view of the matter the points sought to be urged in this application for leave, are not entertainable. The application fails and is accordingly dismissed.

N.V.K. Petition dismissed.


PETITIONER: <NAME> <ORG>., <ORG>. Vs. RESPONDENT: STATE OF UTTAR PRADESH & OTHERS DATE OF JUDGMENT24/02/1983 BENCH: VENKATARAMIAH, E.S. (J) BENCH: VENKATARAMIAH, E.S. (J) SEN, A.P. (J) CITATION: 1983 AIR 383 1983 SCR (2) 418 1983 SCC (2) 195 1983 SCALE (1)152 CITATOR INFO : D 1992 SC 443 (13,14) ACT: Motor Vehicles Act , 1939 as in force in the State of Uttar Pradesh- S. 43-A as amended by U.P. Act 15 of 1976 read with s. 47 as amended by Central Act 47 of 1978 Interpretation of-State Government cannot issue directions under sub-s. (1) of s. 43-A for grant of stage carriage permits to an eligible applicants after amendment of s. 43-A by U. P. Act 15 of 1976-While issuing directions under sub- s. (1) of s. 43-A State Government cannot ignore provisions contained in sub-ss. (1) and (1A) to (1H) of s. 47 . Interpretation - Rule of construction of an amended provision. Words and Phrases -`Public interest'-What it means in the context of Motor Vehicles Act , 1939. HEADNOTE: A 'stage carriage' under the Motor Vehicles Act , 1939 means a motor vehicle which carries more than six persons for hire or reward at separate fares paid by or for individual passengers either for the whole journey or for stages of the journey and for plying such a vehicle it is necessary to obtain a permit from the appropriate <ORG>. While considering an application for such a permit, the <ORG> must, under cls. (a) to (f) of sub-s. (1) of s. 47 , have regard to the interest of the public generally, the advantages to the public of the service to be provided, the adequacy of other passenger transport services operating between the places to be served, the operation by the applicant of other transport services, etc., and also take into consideration the representations made by local or police authorities and by persons already providing passenger transport facilities by any means along or near the proposed route or area. <ORG> may, under sub-s. (1) of s. 43 , having regard to the advantages offered to the public by the development of motor transport, the desirability of preventing uneconomic competition among motor vehicles, etc., issue appropriate directions to the <ORG> The subject matter of regulation of motor vehicles being within the scope of entry 35 of the Concurrent List, the Act in its application to tho State of Uttar Pradesh was amended in 1972 by <ORG> by the introduction of s. 43-A which was a new provision. While sub-s. (1) thereof conferred power on <ORG> to issue directions of a general character in public interest in respect of any matter relating to road transport, sub-s. 419 (2) specifically conferred the power to issue directions regarding grant of stage carriage permits to all eligible applicants if <ORG> was of the opinion that it was in the public interest to do so. Further, under sub- s. (2) of s. 43-A , the provisions of s. 47 stood amended to the effect that while considering an application for permit, it was no longer necessary for the <ORG> to have regard to the adequacy of other passenger transport services operating between the places to be served or to the operation by the applicant of other transport services; nor was the <ORG> required to look into representations made by any one other than local or police authorities. <ORG>, acting under s. 43-A , issued directions in March, 1972 for grant of permits to all eligible applicants without any restriction as to the number of permits to be issued on any route. The validity of s. 43- A and the directions issued thereunder were upheld by the <ORG> in <CITATION>  1 S.C.R. 9l6. But, within a short time, <ORG> realised the necessity of reviewing the policy of issuing permits to all eligible applicants and amended s. 43-A with retrospective effect by the Uttar Pradesh Act 15 of 1976. While sub s. (1) was retained as such, sub-s. (2) was substituted by an entirely new sub-section. The Statement of objects and Reasons appended to the Amending Act stated that it had become necessary to reconsider the policy of granting bus permits liberally with a view to checking unproductive capital expenditure and unnecessary consumption of fuel, preventing elimination of small operators as a consequence of unreasonable competition, etc. and authorising <ORG> to issue necessary directions from time to time in regard to the number of permits that may be granted in respect of any route or area, the preference to be given to specifically deserving categories, etc. <ORG> thereafter issued directions to <ORG> to ensure that the operation of the total number of stage carriages on any route was economically viable. Section 47 was amended by the Central Act 47 of 1978. The proviso to sub-s. (1) of s. 47 was amended by providing that in addition to a registered cooperative society, an application for a stage carriage permit from a person who has a valid licence for driving transport vehicles shall he given preference over applications from individual owners. <ORG> also introduced new sub-ss. (1A) to (1H) in s. 47 providing for reservation of certain percentage of stage carriage permits for the Scheduled Castes and Tribes and weaker sections of the community and empowered <ORG> to frame rules for implementing sub-ss. (1A) to (1H) of s 47. These amendments came into force on January 16, 1979. On January 10, 1981 <ORG> issued a notification directing <ORG> to issue stage carriage permits to all eligible applicants and specifying that there should be no upper limit to the number of stage carriages for which permits might be granted. On January 23, 1981, by another notification, of <ORG> were directed to have regard only to matters referred to in cls. (a), (b), (d) and (f) of sub-s. (l) of s. 47 and to take into consideration representations made by local or police authorities only. Tho appellants challenged the notifications under Article 226. 420 The High <ORG> dismissed the petitions repelling the contention that in the absence of reservation of the required percentage of permits for persons belonging to the Scheduled Castes, the Scheduled Tribes and weaker sections as provided in s. 47 the grant of permits would be vitiated. According to the High <ORG> the question of reservation would arise only in those cases where the seats or articles are limited for distribution or allotment but where there is no limit or no fixed number, the question of reservation would not arise. The High <ORG> said that the Statement of objects and Reasons appended to the Amending Act 15 of 1976 cannot override the clear provisions of s. 43-A as amended by that Act and held that though the two impugned notifications did not follow the procedure prescribed by sub-s. (2) of s. 43-A , they could be sustained under sub-s. (1) of s.43-A. It relied on the decision in <NAME> case to hold that large number of buses operating on different routes would be for the convenience and benefit of the travelling public. Allowing the appeals, ^ HELD: Whenever a court is called upon to interpret an amended provision it has to bear in mind the history of the provision, the mischief which the legislature attempted to remedy, the remedy provided by the amendment and the reason for providing such remedy. Section 43-A of the Act as in force in the State of U.P. was amended by the U.P. Act 15 of 1976. By the substitution of the former sub-s. (2) by the new sub-s (2) in s. 43-A the legislature clearly expressed itself against the policy of granting permits to all eligible applicants without any consideration to the needs of any particular locality or route or to the qualifications of applicants. After the amendment, sub-s. (1) of S. 43-A did not comprehend within its scope the power to issue directions for issuing permits to all eligible applicants without any sort of restriction relevant to the scheme of the Act. The sub-section states that <ORG> may issue such directions of a general character as it may consider necessary in the public interest. 'Public interest' under the Act does not mean the interests of the operators or of the passengers only. It takes within its fold several factors such as, the maximum number of permits that may be Issued on a route or in any area having regard to the needs and convenience of the travelling public, the non- availability of sufficient number of stage carriages in other routes or areas which may be in need of running of additional services, the problems of law and order, availability of fuel, etc. To say that larger the number of stage carriages in any route or area more convenient it would be to the members of the public is an over- simplification of a problem with myriad facets affecting the general public. The Act itself contains provisions relating to licensing of drivers and conductors, specifications of motor vehicles, co-ordination of road and rail transport, prevention of deterioration of road system, prevention of Uneconomic competition among motor vehicles, etc. Any direction given by <ORG> under s. 43-A should, therefore, be in conformity with all matters regarding which the statute has made provision. In this situation to say that any number of permits can be issued to any eligible operator without any upper limit is to overstep the limits of delegation of statutory power. [444 A-H; 445 A-E] In the instant case, a reading of the two notifications shows that <ORG> ignored the legislative policy underlying the U.P. Act 15 of 421 1976 by which the new sub-s. (2) of s. 43-A was enacted in substitution of the former sub-s. (2) with retrospective effect. The new sub-s. (2) was introduced by the State legislature after it had realised the mistake committed by <ORG> in issuing the notification in the year 1972 directing the issue of bus permits liberally in favour of all eligible applicants which had resulted in investment of unproductive capital expenditure and under-utilisation of capital and fuel and in unreasonable competition which eventually eliminated small operators from business. [441 D-F] (ii) <ORG> also ignored the new policy governing the issue of permits introduced by <ORG> by amending s. 47 of the Act in 1978. The High <ORG> erred in not noticing that by issuing the notification containing a direction to <ORG> to issue limitless number of permits, <ORG> had attempted to circumvent sub-ss. (1) and (IA) to (IH) of a s. 47 . The observation of the High <ORG> that preferences have to be shown and reservations have to be made only when there is scarcity of permits and since there were no restrictions on the number of permits to be issued there was no necessity to make any such provision is shocking. Preference and reservations have value only when there is a limit on the number of permits to be issued and in the context of the Act there should necessarily be a limit on the issue of permits to operate motor vehicles in respect of any route or area. By the D method adopted by it <ORG> has virtually allowed the rich and well-to-do businessman - who can bear the loss for some time to introduce any number of vehicles on a route or in any area until all the small operators who also may take the permits to leave the field owing to the inevitable loss that ensues by the operation of an unlimited number of vehicles. The two notifications in question are clearly outside the scope of the Act. [445 F-H; 446 A-E] (iii) The observations in <NAME> case are inapplicable to the present cases. In that case the <ORG> was concerned with sub-s. (2) of s. 43-A as it stood then. At that time, the sub-section contained a clear legislative policy which considered that there could be no public prejudice if all eligible applicants were granted permits. Whatever the <ORG> may have observed while considering that provision would not apply now as There is a clear departure made by the legislature from that policy when it enacted the new sub-s. (2) of s. 43-A . In the face of this amendment by which the former sub-s. (2) of s.43-A which specifically authorised <ORG> when it was satisfied that it was necessary to do so in the public interest to issue directions to <ORG> to grant permits to all eligible applicants was deliberately taken away by the State legislature, the High <ORG> was wrong in holding that such power was still available under sub-s. (1) of s. 43-A which was widely worded. [443 <CITATION> .  2 S.C.R. 916, held inapplicable. JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 1269- 71 of 1982.

Appeals by Special leave from the Judgment and order dated 23rd the March, 1982 of <ORG> in Civil Miscellaneous Writ Petition Nos. 2328, 2424 and 1998 of 1981.

<NAME> and <NAME> for the Appellants. Mrs. <NAME> for the Respondents.

The Judgment of the Court was delivered by <NAME> J. In these appeals by special leave filed against the common judgment dated March 23, 1982 of <ORG>, the validity of two Notifications issued by <ORG> under section 43-A of the Motor Vehicles Act, 1939 (Act IV of 1939) (hereinafter referred to as 'the Act') as in force in the State of Uttar Pradesh arises for consideration. The two impugned Notifications are reproduced below:

I. "Notification No. 68 T/XXX-4-15-KM/79 Dated: Lucknow: January 10, 1981.

Whereas, <ORG> is of opinion that it is in the public interest to grant stage carriage permits (except in respect of routes or areas for which schemes have been published under section 68-C of the Motor Vehicles Act, 1939) to all eligible applicants:

Now. therefore, in exercise of the powers under section 43 . A of the Motor Vehicles Act , 1939, the Governor of Uttar Pradesh is pleased to direct that the stage carriage permits (except in respect of routes or areas for which schemes have been published under section 68-C of the Motor Vehicles Act, 1939) shall be granted according to the provisions of the Act to all eligible applicants and there shall be no upper limit to the number of stage carriages for which permits may be granted.

By order <NAME>, Sachiv II. Notification No. 241 T/XXX-4-15-P/79 Dated: January 23, 1981 The Governor being satisfied that it is expedient in the public interest so to do, is pleased to direct in exercise of the powers under section 43-A of the Motor Vehicles Act, 1939 (Act No. 4 of 1939) that while considering applications for stage carriage permits, <ORG> or <ORG>:

(i) shall have regard only to matters referred to in clauses (a), (b), (d) and (f) of sub-section (1) of section 47 of the said Act and shall also take into consideration representations made by the local authority or police authority within whose jurisdiction any part of the proposed route or area lies; and

(ii) shall be deemed to have made sufficient compliance of the provisions of section 57 of the said Act, if it intimates the particulars of the applications to such local authority and police authority for making representations, if any, within a period of fifteen days from the date of despatch of the intimation with the stipulation that if no representation is received with in the prescribed period of time, it shall be presumed that they have no representation to make, and has considered any representation made by such local authority and police authority.

By order <NAME>, Sachiv."

The appellants who are stage carriage operators challenged The validity of the above Notifications in the writ petitions filed by them under Article 226 of the Constitution before <ORG> inter alia on the ground that they were ultra vires the provisions of the Act under which they had been issued. <ORG> dismissed the writ petitions after negativing the contentions of the appellants. Aggrieved by the decision of <ORG> the appellants have preferred these appeals by special leave as stated above.

It is necessary at this stage to give a resume of the relevant statutory provisions to understand the rival contentions of the parties. On finding that the Indian Motor Vehicles Act , 1914 which Was brought into force at an early stage of development of motor transport was inadequate to meet the new situation created by the growth of motor transport by the year 1939, <ORG> passed the Act for the purpose of regulating motor traffic in the interests alike of the safety and convenience of the public and of the development of a coordinated system of transport. The Act underwent major alterations in 1956 and 1969. Broadly the Act provided inter alia for registration of motor vehicles, licensing of drivers and conductors, grant of permits to ply public service vehicles and public carriers, operation of road transport service by State transport undertakings in any area or on any route to the exclusion, complete or partial of other persons, construction, equipment and maintenance of motor vehicles, control of traffic, insurance of motor vehicles against third party risks and offences, penalties and procedure. The State Governments were entrusted with the duty of framing rules on various matters connected with the topics dealt with by the Act. The subject of regulation of motor vehicles being within the scope of Entry 35 - mechanically propelled vehicles including the principles on which taxes on such vehicles are to be levied-in List III of the Seventh Schedule to the Constitution, various amendments were made from time to time by several State Legislatures with the assent of the President of India either adding to or modifying the provisions of the Act. Chapter IV of the Act which includes section 42 to section 68 contains provisions pertaining to the control of motor vehicles. Section 42 of the Act provides that no owner of a transport vehicle shall r use or permit the use of the vehicle in any public place whether or not such vehicle is actually carrying any passenger or goods save in accordance with the conditions of a permit granted or countersigned by <ORG> or the <ORG> authorising the use of the vehicle in that place in the manner in which the vehicle is being used. A 'transport vehicle' is defined in section 2(33) of the Act as a public service vehicle or a goods vehicle. A 'public service vehicle' is defined in section 2(25) of the Act as any motor vehicle used or adapted to be used for the carriage of passengers for hire or reward, and includes a motor cab, contract carriage and stage carriage. Section 2(29) of the Act states that a 'stage carriage' means a motor vehicle carrying or adapted to carry more than six persons excluding the driver which carries passengers for hire or reward at separate fares paid by or for individual passengers, either for the whole journey or for stages of the journey. Section 45(1) of the Act prescribes that every application for a permit shall be made to <ORG> of the region in which it is proposed to use the vehicle or vehicles. When the vehicle is to be used in two or more regions, the applications for permits may be made as provided in the provisos to section 45(1) or section 45(2) of the Act, as the case may be. The constitution of <ORG> and <ORG> is dealt with by section 44 of the Act. <ORG> or <ORG> shall consist of a Chairman who has had judicial experience or experience as an appellate or revisional authority under any law relating to land revenue and in the case of <ORG>, such other officials and non-officials, not being less than two, and, in the case of <ORG> such other persons (whether officials or not) not being less than two, as <ORG> may think fit to appoint. An application for a stage carriage permit shall have to contain the particulars mentioned in section 46 of the Act. Prior to its amendment in 1978, section 47 as amended by Act 100 of 1956 read as follows:

"47. Procedure of <ORG> in considering application for stage carriage permits.-(1) A <ORG> shall, in considering an application for a stage carriage permit. have regard to the P following matters, namely:

(a) the interest of the public generally;

(b) the advantages to the public of the service to be provided, including the saving of time likely to be effected thereby and any convenience arising from journeys not being broken;

(c) the adequacy of other passenger transport services operating or likely to operate in the near future, whether by road or other means, between the places to be served.

(d) the benefit to any particular locality or localities likely to be afforded by the service;

(e) the operation by the applicant of other transport services, including those in respect of which applications from him for permits are pending;

(f) the condition of the roads included in the proposed route or area;

and shall also take into consideration any representations made by persons already providing passenger transport facilities by any means along or near the proposed route or area, or by any association representing persons interested in the provision of road trans port facilities recognised in this behalf by <ORG>, or by any local authority or police authority within whose jurisdiction any part of the proposed route or area lies:

Provided that other conditions being equal, an application for a stage carriage permit from a cooperative society registered or deemed to have been registered under any enactment in force for the time being shall, as far as may be, be given preference over applications from individual owners. (2) <ORG> shall refuse to grant a stage carriage permit if it appears from any timetable furnished that the provisions of this Act relating to the speed at which vehicles may be driven are likely to be contravened:

Provided that before such refusal an opportunity shall be given to the applicant to amend the time-table so as to conform to the said provisions. (3) <ORG> may, having regard to the matters mentioned in sub-section (1), limit the number of stage carriages generally or of any specified type for which stage carriage permits may be granted in the region or on any specified area or on any specified route within the region."

The procedure in applying for and granting permits is set out in section 57 of the Act. Section 48 of the Act provides that subject to section 47 , <ORG> may, on an application made to it under section 46 , grant a stage carriage permit in accordance with the application or with such modifications as it deems fit or refuse to grant such a permit. If <ORG> decides to grant a stage carriage permit, it may attach to it all or any of the conditions mentioned in section 48(3) of the Act. The proceedings before <ORG> are quasi judicial in character. While considering the application for the grant of a stage carriage permit <ORG> has to consider all representations referred to in section 57(3) . Sub-section (5) of section 57 of the Act provides that when any representation such as is referred to in sub-section (3) thereof is made, <ORG> shall dispose of the application at a public hearing at which the applicant and the persons making the representations shall have an opportunity of being heard either in person or by a duly authorised representative. Representations can be made among others by any person who is providing transport facilities on the route or in the area, any rival applicant, police authorities and local authorities. Any person who satisfies the qualifications mentioned in section 64 of the Act and who is aggrieved by the resolution of <ORG> may file an appeal before <ORG> which should consist of a wholetime judicial officer not below the rank of a District Judge. An order of <ORG> or of <ORG> against which no appeal can be filed is subject to revision by <ORG> under section 64-A of the Act. Subsection (1) of section 43 of the Act which confers power on <ORG> to control transport reads thus:

"43. Power to State Government to control transport-

(1) A State Government having regard to:

(a) the advantages offered to the public, trade and industry by the development of motor transport,

(b) the desirability of coordinating road and rail trans port.

(c) the desirability of preventing the deterioration of the road system, and

(d) the desirability of preventing uneconomic competition among motor vehicles, may, from time to time, by notification in the official <ORG>, issue directions to <ORG>:

(i) regarding the fixing of fares and freights (including the maximum and minimum in respect thereof) for stage carriages, contract carriages and public carriers;

(ii) regarding the prohibition or restriction, subject to such conditions as may be specified in the directions, of the conveying of long distance goods traffic generally, or of specified classes of goods, by private or public carriers,

(iii) regarding the grant of permits for alternative routes or areas, to persons In whose cases the existing permits are not renewed in pursuance of the provisions of sub-section (1-D) of section 68-F , or are cancelled or the terms thereof are modified in exercise of the powers conferred by clause

(b) or clause (c) of sub-section (2) of section 68-F ;

(iv) regarding any other matter which may appear to <ORG> necessary or expedient for giving effect to any agreement entered into with <ORG> or any other State Government or the Government of any other country relating to the regulation of motor transport generally, and in particular to its coordination with A other means of transport and the conveying of long distance goods traffic:

Provided that no such notification shall be issued unless a draft of the proposed directions is published in the official <ORG> specifying therein a date being not less than one month after such publication, on or after which the draft will be taken into consideration and any objection or suggestion which may be received has, in consultation with <ORG>, been considered after giving the representatives of the interests affected an opportunity of being heard."

In the year 1972, however, the Act was amended by <ORG> State of Uttar Pradesh introducing a new section being section 43-A by the Motor Vehicles (U.P. Amendment) Act, 1972 with the assent of the President. The material part of section 43-A which was newly introduced by the said amending U.P. Act read as under:

"43-A. (1) The State Government may issue such directions of a general character as it may consider necessary or expedient in the public interest in respect of any matter relating to road transport to <ORG> or to <ORG>, and such Transport Authority shall give effect to all such directions.

(2) Without prejudice to the generality of the fore going power, where the State Government is of opinion that it is in the public interest to grant stage carriage permits (except in respect of routes or areas for which schemes have been published under section 68(C) or contract carriage permits or public carrier permits to all eligible applicants, it may by notification in the <ORG> issue a direction accor- dingly, and thereupon all transport authorities as well as <ORG> constituted under section 64 shall proceed to consider and decide all applications, appeals and. revisions in that behalf (including any pending applications, appeals and revisions) as if-

(a) in section 47-

(i) for sub-section (1) the following sub-

sections were substituted:

(ii) <ORG> shall in considering an application for a stage carriage permit, have regard to the following matters, namely-

(a) the interest of the public generally;

(b) the advantage to the public of the service to be provided including the saving of time likely to be effected thereby and any convenience arising from journeys not being broken;

(c) the benefit to any particular locality or localities likely to be afforded by the service;

and shall also take into consideration any representation made by any local authority or police authority within whose jurisdiction any part of the proposed route or area lies; and sub-section (3) were omitted The above U.P. Act was preceded by the U.P. Ordinance which contained more or less the same provisions. The ordinance was substituted by the said U.P. Act . The object of enacting section 43-A of the Act was set out in the Statement of objects and Reasons attached to the relevant U.P. Bill which read as follows:

"Objects and Reasons-operators engage in the race for securing permits for stage carriage on non-nation alised routes. Due to limitation on the number of permits this business is controlled by a few persons. Complaints in this regard are made every other day. Therefore, with a view to making it easier to secure permits in respect of non nationalised routes and to introducing simplicity in procedure and to providing greater employment and securing equitable distribution thereof it was considered necessary to amend sections 47 , SO, SS and 64 of the Motor Vehicles Act , 1939, suitably. Accordingly, in the public interest and with the aforesaid object in view, the Motor Vehicles (Uttar Pradesh Amendment) ordinance, 1972, was promulgated. This Bill is introduced to replace the said ordinance.

Pursuant to the power conferred on it by section 43-A of the Act, <ORG> issued the following directions on March 30, 1972 by a Notification, the relevant part of which reads as under:

"Whereas <ORG> is of opinion that it is in the public interest to grant stage carriage permits (except in respect of routes or areas for which schemes have been published under section 68-C of the Motor Vehicles Act, 1939) contract carriage permits and public carrier permits to all eligible applicants. Now, therefore, in exercise of the power conferred by section 43-A of the Motor Vehicles Act, 1939 the Governor is pleased to direct that stage carriage permits (except in respect of routes or areas aforesaid) contract carriage permits and public carrier permits shall be granted according to the provisions of the said Act to all eligible applicants."

The validity of section 43-A of the Act introduced by <ORG> and of the Notification dated March P 30, 1972 issued by the Government of Uttar. Pradesh pursuant to that section was questioned in some writ petitions filed by some motor operators in <ORG> of Allahabad. Those petitions were dismissed. On appeal this Court upheld the validity of section 43-A of the Act as well as the Notification by its judgment in <CITATION> .(1) which was delivered on December 4, 1974. Within about three and half years from the date of the above said notification <ORG> realised that it was necessary to review the whole question of issuing permits to all eligible applicants. Accor-

dingly the State Government issued a Notification on September 24, 1975 which ran as follows:

"Whereas, in exercise of the power conferred by Section 43-A of the Motor Vehicles Act, 1939 <ORG> was by notification No. 1188-T/XXX-4, dated March 30, 1972, pleased to direct that stage carriage permits (except in respect of routes or areas aforesaid) contract carriage permits and public carrier permits shall be granted according to the provisions of the said Act to all eligible applicants: And whereas, on further consideration <ORG> is of opinion that the policy of granting such permits to all eligible applicants requires review with a view to:

(a) Preventing unproductive expenditure and under utilization of capital and fuel.

(b) Preventing elimination of small operators due to unfair competition resulting from the issue of more permits than required for a route.

(c) Facilitating long term planning of passenger road transport services.

And whereas, such review is likely to take some time and in the mean time it is necessary to stay the disposal of all pending applications for permits or entertainment of fresh applications. Now, therefore, in exercise of the powers conferred by the said Section 43-A of the Motor Vehicles Act, 1939, read with Section 21 of the U.P. General Clauses Act, 1904, the Governor is pleased to direct that:

1. The Notification No. 1198 T/XXX-4, dated 30th March, 1972 be and is hereby rescinded with immediate effect.

<NAME>

2. The consideration of applications for stage carriage permits pending with <ORG> shall stand postponed until further directions are issued in this behalf by the State Government.

3. No fresh applications for such permits shall be entertained until further directions are issued in this behalf by <ORG>."

The above Notification shows that as a consequence of the policy of granting permits to all eligible applicants, necessity had arisen to take measures (i) to prevent unproductive expenditure and under utilisation of capital and fuel, (ii) to prevent elimination of small operators due to unfair competition resulting from the issue of more permits than required for a route; and (iii) to embark upon long term planning of passenger road transport services.

It is stated that by U.P. Ordinance 35 of 1975, Section 43-A was amended. This ordinance was replaced by the Uttar Pradesh Act 15 of 1976. By this Act, sub-section (2) of section 43-A . which had been added in 1972 was substituted with retrospective effect from the date of its original enactment. Section 43-A after it was amended by the U.P. Act 15 of 1976 read as under:

"43-A. Power of State Government to issue directions to Transport Authorities-(1) The State Government may issue such directions of a general character as it may consider necessary or expedient in the public interest in respect of any matter relating to road transport to <ORG> or to <ORG>, and such Transport Authority shall give effect to all such directions. (2) Without prejudice to the generality of the provisions of sub-section (1) such directions may be given in respect of any of the following matters, namely:

(a) the number of stage carriage or contract carriage permits that may be granted in respect of any route or area.

(b) the preference or the order of preference to be given to or the quota to be fixed for, specially deserving categories, such as <ORG> personnel, educated unemployed persons, such persons holding driving licences as are members of cooperative societies formed for passenger transport business, persons belonging to the Scheduled castes and Scheduled Tribes.

(c) the procedure for grant of permits, and for selection from among the applicants, including selection by drawing of lots from among persons belonging to the same category. (3) Any direction under sub-section (1) may be issued with retrospective effect.

(4) Where any direction is issued under sub- section (1) to <ORG>, then any appeal or revision pending before <ORG> shall also be decided in such manner as to give effect to such directions. (5) Where any direction is issued under sub- section (1) with retrospective effect then

(a) <ORG> or <ORG> may review any order passed earlier by it with a view to making it conform to such direction and may for that purpose cancel any permit already issued.

(b) <ORG> may apply to <ORG> earlier with a view to enabling such authority to comply with such direction. (6) The provisions of this section shall have effect not withstanding anything contained in sections 47 , 50 and 57 ."

The policy behind the above amendment was stated in the Statement of objects and Reasons placed before <ORG> as follows:

"(5) In 1972 <ORG> had accepted a policy of granting bus permits liberally. Reconsideration of the said policy however, became necessary with a view to checking unproductive capital expenditure and unnecessary consumption of fuel and preventing the elimination of small operators as a consequence of unreasonable competition and to removing difficulties in the implementation of long term plans pertaining to passenger road transport services. It was accordingly considered necessary to amend the Motor Vehicles Act , 1939, to authorise <ORG> to issue directions from time to time in regard to the number of permits that may be granted in respect of any route or area, the preference to be given to specially deserving categories and the procedure for grant of permits."

Pursuant to the said amended section 43-A of the Act, <ORG> issued a Notification containing directions on March 12, 1976 in the following terms:

"Whereas, in exercise of the powers conferred by section 43-A of the M.V. Act, 1939, <ORG> had by a notification No. 4251-T/XXX-4-9P/72 dated September 24 1975, as amended by notification No. 4530-T/ XXX-4-75 dated October 6,1975 postponed the consideration of applications for permits by any transport authority in respect of non-notified routes until further directions in this behalf of <ORG>.

Now, therefore, in exercise of the powers conferred by the said section 43-A (2) of the M.V. Act , 1939 read with section 21 of the General Clauses Act, 1904, the Governor is pleased to direct: (1) That the S.T.A. and R.T. As. while fixing the number of Additional Stage Carriage permits to be issued at a given time on non-notified routes, shall in addition to the consideration of the matter mentioned in sub-section (1) of section 47 of the M.V. Act, ensure that the operation of the total number of stage carriages on any route, taking into consideration the existing as well as the additional permits proposed to be issued, would be economically viable on the existing fare-structure as per the norms as laid down by <ORG> from time to time ............................."

The above notification also contained directions regarding the principle to be followed in determining the number of permits that could be issued and reservation of permits for operators displaced by nationalisation, educated unemployed, members belonging to the Scheduled Castes, the Scheduled Tribes and other backward classes, unemployed army drivers and cooperative societies.

These directions were superseded by the issue of a fresh notification under section 43-A by <ORG> on October 12, 1977 which was superseded by a Notification dated October 15, 1978.

Within a fortnight from the date of the last Notification referred to above <ORG> amended the Act by enacting The Motor Vehicles (Amendment) Act , 1978 (Act 47 of 1978) which inter alia amended the proviso to subsection (1) of section 47 of the Act and inserted sub-sections (1A) to (1H) in that section. After this amendment, the proviso to sub-section (1) of section 47 of the Act reads thus:

"47. (1).............

Provided that other conditions being equal, an application for a stage carriage permit from a co- operative society registered or deemed to have been registered under any enactment in force for the time being and an application for a stage carriage permit from a person who has a valid licence for driving transport vehicles shall, as far as may be, be given preference over applications from individual owners."

The new sub-sections (1A) to (1H) of section 47 of the Act read:

"47. (1) ............

(1A) The Government of a State shall reserve in that State certain percentage of stage carriage permits for the Scheduled Castes and the Scheduled Tribes. Explanation-In this section and in sections 55 and 63 , 'Scheduled Castes,' and 'Scheduled Tribes' have the meanings respectively assigned to them in Article' 366 of the Constitution.

(1B) The reservation of permits under sub-section (1A) shall be in the same ratio as in the case of appointments made by direct recruitment to public services in the <ORG>.

(1C) The Government of a State may, having regard to the extent to which persons belonging to economically weaker sections of the community have been granted stage carriage permits in that State:-

(a) reserve in that State such percentage of stage carriage permits, as may be prescribed, for persons belonging to economically weaker sections of the community, or

(b) notwithstanding anything contained in the proviso to sub-section (1), give preference, in such manner as may be prescribed, to applications for stage carriage permits from such person Explanation I-In this section and in sections 55 , 63 and 68 , a person shall be deemed to belong to economically weaker section of the community, if and only if, on the prescribed date:-

(a) the annual income of such person together with the annual income, if any, of the members of his family; or G

(b) the extent of land (whether in one class or in different classes), held by such person together with that, if any, held by the members of his family, or

(c) the annual income and the extent of land aforesaid, does, or do not exceed such limit as may be prescribed.

Explanation II.- For the purposes of Explanation I, "family", in relation to an individual, means the wife or husband, as the case may be, of such individual and the minor children of such individual. (1D) The number of permits reserved under sub- section (1B) and clause (a) of sub-section (1C), shall not exceed fifty per cent of the total number of stage carriage permits granted during a calendar year. (1E) In giving effect to the provisions of sub- section (1B) and clause (a) of sub-section (1C) <ORG> or <ORG> may, if it considers necessary or expedient so to do, group the various routes within its jurisdiction.

(1F) Where any stage carriage permit is to be granted from the quota reserved under sub-section (1B) or clause(a) of sub-section (1C) to any cooperative society registered or deemed to have been registered under any enactment in force for the time being or any firm to which the provisions of the Indian Partnership Act , 1932 , apply, no permit shall be granted to such society or firm unless the members of the co-operative society or the partners of the firm belong to the Scheduled Castes, the Scheduled Tribes or economically weaker sections of the community: Provided that where the members of such co- operative society or the partners of such firm are partly from the Scheduled Castes, partly from the Scheduled Tribes and partly from the economically weaker sections of the community, or from any two of these categories, any permit under this sub-section shall be granted to such society or firm only from the quota reserved for the category to which the largest number of members of the co-operative society, or as the case may be, partners of the firm belong:

Provided further that where no reservation has been made in the State for economically weaker sections of the community under clause (a) of sub-section (1C), no permit under this sub-section shall be granted to a co-operative society or firm unless the members of such society or partners of such firm belong to the Scheduled Castes or the Scheduled Tribes or partly to the Scheduled Castes and partly to the Scheduled Tribes and the permit to such society or firm shall be granted only from the quota reserved for the Scheduled Castes or the Scheduled Tribes according as to whether the larger number of the members of the co-operative society, or partners of the firm, belong to the Scheduled Castes or the Scheduled Tribes. (1G) The circumstances under which, the manner in which, and the extent to which, reservation under sub- section (1A) and clause (a) of sub-section (1C) may be carried forward shall be such as may be prescribed. (1H) Notwithstanding anything contained in this section, an application for stage carriage permit from a State transport undertaking for operating in any inter-State route shall be given preference over all other applications: Provided that the authority shall not grant a permit under this sub-section unless it is satisfied that the State transport undertaking would be able to operate in the inter-State route without detriment to its responsibility for providing efficient and adequate road transport service in any notified area or notified route as is referred to in sub section (3) of section 68D where the undertaking operates the service.

Explanation.-For the purposes of this sub-section, 'inter-State route' means any route Lying continuously in two or more States."

By the amendment of section 47 of the Act as stated above, <ORG> directed that <ORG> while considering applications for stage carriage permits should, provided that other conditions being equal? give preference to an application from a person who has a valid licence for driving transport vehicles over applications from individual owners. <ORG> also provided for reservation of certain percentage of permits for state carriages in favour of persons belonging to the Scheduled Castes and the Scheduled Tribes in the same ratio as in the case of appointments made by direct recruitment by a State Government to public services in that State. Since it was considered necessary to promote the well being of economically weaker sections of the community, <ORG> was empowered under certain circumstances either to reserve certain percentage of permits for stage carriages for persons belonging to economically weaker sections of the community or to give preference to them in the prescribed manner. It was however, provided that the number of permits reserved under section 47(1B) and (1C)(a) of the Act should not exceed fifty per cent of the total number of stage carriage permits granted in a calendar year. It was also provided that if <ORG> applied for a stage carriage permit operating in any inter-State route, such application should be given preference over all other applications provided the authority we satisfied that the <ORG> would be able to operate in the inter-State route without detriment to its responsibility for providing efficient and adequate road transport service in any notified area or notified route as is referred to in sub section (3) of section 68-D of the Act where the <ORG> operated its service. By the very same amending Act of 1978 <ORG> also amended section 68 of the Act by inserting clauses (ci), (cii), (ciii) and (civ) enabling <ORG>s to frame rules for implementing subsections (1A) to (1H) of section 47 of the Act. The above said amendments made to sections 47 and 68 came into force on January 16, 1979. It is conceded by the learned Attorney General who appeared for <ORG> that these amendments which were made by <ORG> would have an over riding effect on section 43-A of the Act introduced earlier by <ORG> and that section 43-A should be read subject to those later amendments made by <ORG>. Curiously <ORG> issued on January IO, 1981 and January 23, 1981 the impugned notifications which are set out at the commencement of this judgment. By the first notification, <ORG> directed <ORG> of the State of Uttar Pradesh to issue stage carriage permits (except in respect of routes or areas for which schemes had been published under section 68-C of the Act) to all eligible applicants and that there should be no upper limit to the number of stage carriages for which permits might be provided. By the second impugned notification dated January 23, 1981, <ORG> directed <ORG> and <ORG> to have regard only to matters referred to in clauses (a), (b), (d) and (f) of sub-section (1) of section 47 of the Act and should also take into consideration representation made by the local authority or police authority within whose jurisdiction any part of the proposed route or area lay. It also directed that section 57 should be deemed to have been complied with if <ORG> concerned intimated the particulars of the applications to such local authority and police authority for making representations, if any, within a period of fifteen days from the date of despatch of the intimation with the stipulation that if no representation was received within the prescribed period of time, it would be presumed that they had no representation to make and considered any representation made by such local authority and police authority;

A reading of these two notifications shows that <ORG> ignored, first, the legislative policy underlying the Uttar Pradesh Act 15 of 1976 by which the new sub-section (2) of section 43-A was enacted in substitution of the former sub section (2) with retrospective effect. As stated earlier, <ORG> introduced the new sub-section (2) of section 43-A after it realised the mistake committed by <ORG> in issuing the notification in the year 1972 directing the issue of bus permits liberally in favour of all eligible applicants which had resulted in investment of unproductive capital expenditure and under utilisation of capital and fuel and in unreasonable competition which eventually eliminated small operators from business. The State Government also ignored the new policy governing the issue of permits introduced by <ORG> by amending section 47 of the Act. It was argued on behalf of <ORG> before <ORG> that <ORG> d not contravened either section 43-A , or the provisions of section 47 as amended in the year 1978. <ORG> dismissed the writ petitions observing that the Statement of objects and Reasons attached to the Bill which was ultimately enacted as the U.P. Act 15 of 1976 could not over-ride the clear provisions of section 43-A as amended by that Act. <ORG> upheld the notification dated January 10, 1981 and further observed that since the schemes of grant of free permits had been upheld by it '<ORG> had the power to prescribe the procedure to be followed in granting the same which has been provided for by the Notification dated January 23, 1981'. Repelling the contention of the writ petitioners that in the absence of reservation of the required percentage of permits for persons belonging to the Scheduled Castes, the Scheduled Tribes and weaker sections as provided in section 47 as amended by <ORG> in 1978, the grant of permits would be vitiated, <ORG> observed as follows:

"The question of reservation, however, arises only in those cases where the seats or articles are limited for distribution or allotment but where there is no limit or no fixed number, the question of reserved on will not arise. In that event, every body would be served according to his need and aspiration. Hence, if under section 43-A a direction has been made for grant of stage carriage permit to all eligible applicants without putting any fixed number for the vehicles to ply, the interest of the Scheduled Castes and Scheduled Tribes would be sufficiently safeguarded. A member of the Scheduled Caste or Scheduled Tribe as well as economically weaker section of the community would as much be entitled to get a permit to run his vehicle as a member of any other community. It is where the seats are limited that the legislature thought of making a provision to reserve the grant of permits in their favour to the extent of 25 per cent. The principle behind reservation in the grant of stage carriage permits employed by the <ORG> appears to be the same as in reserving appointment in the Government service. If today government services are available in abundance, the question of reservation would not arise. It is only on account of the posts being limited that the question of reservation has arisen. So we are not able to agree with the submission of the petitioner's learned counsel that there is a conflict between section 43-A , as inserted by <ORG> and the amendments made in section 47 by <ORG> in the Motor Vehicles Act ."

<ORG> further proceeded to observe that though the tow impugned notifications did not follow the procedure prescribed by sub-section (2) of section 43-A as it is now in force in the State of Uttar Pradesh, they could be sustained under sub-sec. (1) of section 43-A which authorised <ORG> to issue such directions of a general character as it might consider necessary or expedient in the public interest in respect of any matter relating to road transport to <ORG> or to <ORG> and which required such authority to give effect to any such directions. <ORG> also relied upon the decision of this Court in <NAME> case (supra) to hold that larger number of buses operating on different routes would be for the convenience and benefit of the travelling public.

We may here state that any observations made in <NAME> case (supra) would be inapplicable so far as these cases presently before us are concerned. In that case the <ORG> was concerned with sub-section (2) of section 43-A of the Act as it stood then which was a provision enacted by the <ORG>. That sub- section provided that without prejudice to the generality of the power contained in section 43-A(1) of the Act where <ORG> was of opinion that it was in public interest to grant stage carriage permits (except) in respect of routes or areas for which schemes have been published under section 68 (C) or contract carriage permits or public carrier permits to all eligible applicants it may issue appropriate directions as stated therein. That sub-section contained a clear legislative policy which considered that there could be no public prejudice if all eligible applicants were granted permits. Without saying anything more on the point, it may be stated that whatever this <ORG> may have observed while considering that provision would not apply now as there is a clear departure made by the <ORG> from that policy when it enacted the new sub-section (2) of section 43-A . In the face of this amendment by which the former sub-section (2) of section 43-A which specifically authorised he State Government when it was satisfied that it was necessary to do so in the public interest to issue directions to the Transport Authorities to grant permits to all eligible applicants was deliberately taken away by the State <ORG>, the High <ORG> was wrong in holding that such power was still available under sub-section (1) of section 43-A of the Act which was widely worded. The High <ORG> shut its eyes to the realities of the situation when it observed that in this case the contents of the Statement of objects and Reasons were irrelevant as the provisions of section 43-A (1) were very clear. Even without the aid of the Statement of objects and Reasons it has to be held that by the substitution of the former sub-section (2) by the new sub- section (2) in section 43-A the <ORG> clearly expressed itself against the policy of granting permits to all eligible applicants without any consideration to the needs of any particular locality or route or to the qualification of applicants. It is a well settled rule of construction of statutes that whenever a court is called upon to interpret an amended provision it has to bear in mind the history of that provision, the mischief which the <ORG> attempted to remedy, the remedy provided by the amendment and the reason for providing such remedy. Therefore, after the amendment at any rate it has to be held that sub-section (1) of section 43-A of the Act did not comprehend within its scope the power to issue direction, for issuing permits to all eligible applicants without any sort of restriction relevant to the scheme of the Act. What does section 43-A(1) after all say ? It says that <ORG> may issue such directions of a general character as it may consider necessary in the public interest What is the meaning of the term 'public interest' ? In the context of the Act, it takes within its fold several factors such as, the maximum number of permits that may be issued on a route or in any area having regard to the needs and convenience of the travelling public, the non-availability of sufficient number of stage carriage services in other routes or areas which may be in need of running of additional services, the problems of law and order, availability of fuel, problems arising out of atmospheric pollution caused by a large number of motor vehicles operating in any route or area, the condition of roads P and bridges on the routes, uneconomic running of stage carriage services leading to elimination of small operators and employment of more capital than necessary in any sector leading to starvation of capital investment in other sectors etc. Public interest under the Act does not mean the interest of the operators or of the passengers only. We nave to bear in mind that like every other economic activity the running of stage carriage service is an activity which involves use of scarce or limited productive resources. Motor Transport involves a huge capital investment on motor vehicles, training of competent drivers and mechanics establishment of workshops, construction of safe roads and bridges, deployment of sufficient number of policemen to preserve law and order and several other matters. To say that larger the number of stage carriages in any route or area more convenient it would be to the members of the public is an over simplification of a problem with myriad facts affecting the general public. If we run through the various provisions of the Act it becomes clear how much attention is given by it to various matters affecting public interest. There are provisions relating to licensing of drivers on the basis of their competence, licensing of conductors, specifications to which the motor vehicles should conform, coordination of road and rail transport, prevention of deterioration of the road system, prevention of uneconomic competition among motor vehicles, fixation of reasonable fare, compliance by motor vehicles with the prescribed time table, construction of bus stands with necessary amenities, maintenance of standards of comfort and cleanliness in the vehicles, development of <ORG> tourist traffic and several other matters with the object of making available adequate and efficient transport facilities to all parts of the country. Any direction given by <ORG> under section 43-A of the Act should therefore, be in conformity with all matters regarding which the statute has made provision. In this situation to say that any number of permits can be issued to any eligible operator without any upper limit is to overstep the limits of delegation of statutory power and to make a mockery of an important economic activity like the motor transport.

It is surprising that <ORG> has reached the conclusion that the preferences and reservations to be observed while granting permits as stated in the proviso to sub-section (1) to section 47 and in sub sections (1A) to (1H) of section 47 have not been contravened as there is no restriction on the number of permits to be issued. The observation of <ORG> that preferences have to be shown and reservations have to be made only when there is scarcity of permits and since there are no restrictions on the number of permits to be issued there is no necessity to make any such provision really shocks us. <ORG> erred in not noticing that it was dealing with a vital economic activity which could be carried on at a huge cost both to the operator and to the <ORG> and that by issuing the notification containing a direction to <ORG> to issue limitless number of permits, the State <ORG> had attempted to circumvent sub-sections (1) and (1A) to (1H) of section 47 of the Act. Preferences and reservations have value only when there is a limit on the number of permits to be issued and in the context of the Act there should necessarily he a limit on the issue of permits to operate motor vehicles in respect of any route or area. By the method adopted by it the State <ORG> has virtually allowed the rich and well-to-do businessman who can bear the loss for some time to introduce any number of vehicles on a route or in any area until all the small operators who also may take the permits to leave the field owing to the inevitable loss that ensues by the operation of an unlimited number of vehicles. The learned Attorney General while conceding that the amendment made in 1978 to section 47 of the Act should prevail contended that they had not been violated by the impugned notifications. We do not agree with the above submission. We are clearly of the view that the State <ORG> has transgressed the provisions contained in sub-section (1) and sub-sections (1A) to (1H) of section 47 . It has failed to comply with the duty imposed on it by those provisions.

We are of the view that the two notifications are clearly outside the scope of the Act. The first notification which directs that all eligible applicants shall be granted permits and that there shall be no upper limit to the number of permits to be issued for stage carriages and the second notification which says that <ORG> shall have regard only to matters referred to in clauses (a), (b),

(d) and (f) of sub-section (1) of section 47 of the Act and thereby precludes <ORG> to take into consideration matters contained in the proviso to section 47(1) and in sub-section (1A) to (1H) of section 47 of the Act are ultra vires the Act and they are liable to he struck down.

We, therefore, allow these appeals, set aside the judgment of <ORG> in each of these cases and declare that the Notification No. 68 T/XXX-4-15 KM/79 dated January 10, 1981 and the Notification No. 241 T/XXX-4-15- P/79 dated January 23,1981 issued by the GoverDmeDt of the State of Uttar Pradesh under section 447  43-A of the Act are ultra vires and, therefore, void and, ineffective.

In the circumstances of the case. there will be no order as to costs.

H.L.C. Appeals allowed.