REGIONAL TRANSPORT AUTHORITY & ANR. versus SHAJU ETC on 17 February 2022

[2022] 9 S.C.R. 785

REGIONAL TRANSPORT AUTHORITY & ANR.

v.

SHAJU ETC.

(Civil Appeal Nos. 1453 -1454 of 2022)

FEBRUARY 17, 2022

[K. M. JOSEPH ANDPAMIDIGHANTAM SRI NARASIMHA, JJ.]

Motor Vehicles Act, 1988 – s.83 – Kerala Motor Vehicle Rules,1989 – r.174(2)(c) – Whether r.174(2)(c) is ultravires the provisionsof the Act as the power with respect to prescription of age limit of amotor vehicle is in the exclusive domain of the Central Government– Held: No – r.174 (2) (c) made by the State Government to enablereplacement of the vehicle under a Transport permit, does notimpinge upon the powers of the Central Government with respect tofixation of the age of the vehicle, or fitness of the vehicle conferredupon it u/ss. 56 and 59 in Chapter IV – The scrutiny under r.174 isonly to enable the Authority to ensure that the subsisting permit isnot interrupted and at the same time public interest is notcompromised by deviating from the permit – The Rule will have nobearing on the power of the Central Government and as such itwould not be ultra vires the provisions of the Act – Thus, r.174 (2)(c) is intra vires the provisions of the Act and also s.83 of the MotorVehicles Act – It is valid and salutary.

Motor Vehicles Act, 1988 – Kerala Motor Vehicle Rules, 1989– Whether r.174(2)(c) of the 1989 Rules, travels beyond and contraryto s.83 of the Motor Vehicles Act, 1988 – Held: No – The rule isneither beyond nor contrary to s.83.

Kerala Motor Vehicle Rules, 1989 – r.174(2)(c) – Discretionexercised by Authority – Scope of – Discussed.

Motor Vehicles Act, 1988 – ss.64, 65 – Distinction betweenrule making power of Central government and State government –Discussed.

Motor Vehicles Act, 1988 – s.83 – Kerala Motor Vehicle Rules,1989 – r.174(2)(c) – Subordinate Legislation – Principles ofconstruction – Held: Reasoning adopted by the Division Bench in

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Athe impugned order that r.174 (2) (c) has overridden the Act is notcorrect because a subordinate legislation must be interpreted toeffectuate the statutory purpose and objective – The Rule shouldenable the transport Authorities considering applications forreplacement to insist upon the permit holder to abide by the samerigour and regulation that he was put to when the permit was grantedB– High Court did not appreciate the context in which r.174 (2) (c)r/w s.83 is to be construed – Judgment of High Court set aside –Interpretation of Statutes.

Motor Vehicles Act, 1988 – ss.70, 71, 83 – Kerala MotorVehicle Rules, 1989 – r.174(2)(c) – Held: r.174(2)(c) is intended toCensure that the conditions under which a transport permit is grantedis not diluted when the vehicle covered by the permit is sought to bereplaced by a new vehicle – Purpose and object of mandatingreplacement by a vehicle of the same nature in s.83 is only to ensurethat the scrutiny and the conditions that were undertaken and Dimposed at the time of the grant continue even during the subsistenceof the permit – Statutory scheme u/s.70 requiring an application fora transport permit to provide material particulars include therequirement of indicating the type of vehicle is also incorporated inthe Rules made by the State Government – The Rules, followed bythe Forms require details of the type of the vehicles to be furnished.E

Words and Phrases – “of the same nature”, “same”, “nature”– Motor Vehicles Act, 1988 – s.83 – Discussed – Interpretation ofStatutes.

Allowing the appeals, the CourtFHELD: 1.1 Section 83 is an enabling provision. It allows apermit holder to replace the vehicle covered under the transportpermit. The right to replace the vehicle under a permit is subjectto the permission of the Authority. The right, as well as the powerto grant permission, are subject to the condition that the vehicleGto be replaced is ‘of the same nature’. The expression, ‘of thesame nature’ can have multiple meanings. This phrase, in itsnatural expression would only mean having similar features. Butthen, would ‘same’ mean similar, identical, equivalent, comparable,interchangeable or related? Likewise, would the expression“nature” mean type, feature, texture, make, model, design, orH

generation? These are open textual expressions, used in thenormal course to convey a meaning which the legislature wouldnot have intended to be read in a pedantic manner. When thewords in the Section allow multiple interpretations, Courts of Lawhave developed the art and technique of finding the correctmeaning by looking at the words in their context. As the text byitself has not conferred certainty to the meaning of the expression– of the same nature, the phrase has to be examined in context ofthe words in the Section, the neighboring provisions, theChapters, Parts and its location in the Statute as a whole. For thepurpose of this case, it is sufficient to examine the phrase in thecontext of Chapter IV relating to Registration of Motor Vehiclesand Control of Transport Vehicles in Chapter V. [Paras 8.1-8.3, 9and 10][798-E-G; 799-A-B, G; 800-A, C]

Reserve Bank of India v. Peerless General FinanceInvestment Co. Ltd and Ors. (1987) 1 SCC 424 : [1987]2 SCR 1 – relied on.

1.2 Following the power vested in it, the CentralGovernment enacted the Central Motor Vehicles Rules, 1989.There is a distinction between the rule-making power given tothe Central Government on one hand and to the State Governmenton the other. Section 64 is the rule-making power of the CentralGovernment, enabling it to lay down the norms and proceduresto be followed for implementation of provisions in the Act. Sub-sections (m) and (n) of Section 64 are relevant for presentpurposes. In contrast, the rule-making power of the StateGovernment is as the executing agency for implementing of theprovisions of the Act. For this purpose, Section 65 enables theState Government to make such Rules as are necessary forexecution. [Paras 11.2, 11.4, 11.5][800-H; 801-E, G-H; 802-A]

1.3 Chapter V relates to the regulatory regime of the StateGovernments with respect to Transport vehicles. It prohibitstransportation without a valid permit under Section 66. Underthis Chapter State Government alone has power to make rules.While Section 95 relates to the rule making power of the StateGovernment with respect to stage and contract carriages, Section96 relates to the general power of the State Government to make A

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Arules for the purpose of Chapter V. There is no power for theCentral Government to make rules under Chapter V.Replacement of a vehicle under a permit with any other vehicle,the provision with which the Court is concerned in this case, isprovided in Section 83. [Paras 12.1, 12.3][802-B, E-F; 803-B]

B1.4 The statutory scheme under Chapter V generallyprovides for the powers of the State Government to deal withtransport vehicles except under Section 88 of the Act where thepowers are subject to the rules made by the Central Government.It provides not only the procedure for grants of permits, but alsothe mechanism by which vehicles used for transportation areCregulated. It is in this context that Section 83 relating toreplacement of a vehicle occurs. The placement of Section 83 inChapter V is a recognition of the need to provide a seamlessmechanism for replacement of a vehicle during subsistence of atransport permit. Seen in the context of Chapter V relating toDtransport vehicles, it becomes clear that the provision is intendedonly to enable the owner to work his permit without anyinterruption even if there is a need to replace the vehicle coveredby the permit. There is no other purpose. It is intended to be asimple transaction and this is reason why the scope of scrutiny islimited only to examining if the vehicle is of same nature as inEthe permit. This is all that is required. It is but natural that thereplacement would require the Authority to grant the necessarypermission as they are the regulators. When an application madeunder Section 83 is taken up, the Authority is cognizant of thefact that there is a valid and a subsisting permit and the permit Fholder seeks to continue operating the permit and it is only forthis reason that he is seeking replacement of the vehicle. Thecontext in which his scrutiny is called upon, is only to ensure thatthe conditions of the permit are not deviated from. Therefore,when the statute says same nature, it is only relatable to the permit. The scrutiny is not of the vehicle in itself but the vehicleGin relation to the permit. It is for this reason that a scrutiny of thevehicle, stand alone, irrespective of its relation with the permitbecomes an irrelevant consideration for the purpose of Section83. The phrase, of the same nature seen in the context ofprovisions proximate to Sections 83, relating to duration andH

renewals of permits (Section 81), transfer of permits (Section 82)lend clarity to the meaning of the expression. Same nature mustnecessarily relate to the same nature of the vehicle in the permit.The question to be asked is the nature of the vehicle under thepermit. What kind of a vehicle was that? How was that connectedto the permit granted? Does the new vehicle serve the samepurpose as the old vehicle was serving under the permit? [Paras13.2-13.4][803-C-H; 804-A-C]

1.5 Questions relating to the vehicle or about the vehicleare matters of concern in Chapter IV, under which the CentralGovernment is empowered to set the norms for the fitness orthe age limit of the vehicle. Chapter V, on the other hand containsthe legal regime with respect to operations of transport vehicles.It is under this Chapter that the Parliament intended that theremust be a provision for replacement of a vehicle covered under apermit so that the permit granted could continue and subsist tillthe end of its tenure. Chapters IV and V operate in their ownfield subserving the purpose and objects mentioned therein. Rule174 (2) (c) made by the State Government to enable replacementof the vehicle under a Transport permit, does not impinge uponthe powers of the Central Government with respect to fixation ofthe age of the vehicle, or fitness of the vehicle conferred upon itunder Sections 56 and 59 in Chapter IV. The scrutiny under Rule174 is only to enable the Authority to ensure that the subsistingpermit is not interrupted and at the same time public interest isnot compromised by deviating from the permit. The Rule willhave no bearing on the power of the Central Government and assuch it would not be ultra vires the provisions of the Act. Thereis yet another aspect which can lend a certain amount of clarity tothis position. The vehicle which the Authority may not approvefor replacement under section 83 on the ground that it is olderthan the vehicle covered under the permit, can be used as atransport vehicle within the State. There is no prohibition forsuch a usage as the said vehicle may continue to be fit and withinthe age limit prescribed by the Central Government. The rigourof Rule 174 (2) (c) is only in the context of a subsisting transportpermit and not as a condition for transport vehicles as such. Forthe reasons stated above, the submission that Rule 174(2)(c) isultra vires the provisions of the statute is not accepted. Rule ABC

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A174(2)(c) of the Kerala Motor Vehicle Rules,1989 is valid andsalutary and does not go beyond the scope of Section 83. [Paras13.5-13.8][804-C-H; 805-A-B]

2.1 By the order impugned, the Division Bench of the HighCourt held that Rule 174 (2) (c) being inconsistent with the ActBshould be held to be inoperative. Rule 174 (2) (c) is intended toensure that the conditions under which a transport permit isgranted is not diluted when the vehicle covered by the permit issought to be replaced by a new vehicle. The purpose and objectof mandating replacement by a vehicle of the same nature inSection 83 is only to ensure that the scrutiny and the conditionsCthat were undertaken and imposed at the time of the grantcontinue even during the subsistence of the permit. The legalregime involved in the grant of the permit as evidenced by thestatutory provisions, rules, forms and certification establish thisprinciple. Section 83 is to be understood only in the context of aDsubsisting permit. The present is a case of a stage carriage permit,the application for which is to be made under Section 70. As perthe P.St.S.A form provided for in Rule 144 for grant of a stagecarriage permit is formulated and appended, which comprises ofvarious particulars that an applicant must fill and submit. Thestatutory scheme under Section 70 requiring an application for aEtransport permit to provide material particulars include therequirement of indicating the type of vehicle is also incorporatedin the Rules made by the State Government. The Rules, followedby the Forms require details of the type of the vehicles to befurnished. The need to call for information about the vehicle Fbecomes relevant when the requirement of Section 71 is noticed,relating to the procedure and consideration of the applications.Under Section 71, if the Central Government, in exercise of itspowers restricts the number of vehicles depending on the roadconditions and other relevant factors, the State Government shall direct the Authorities to limit the number of stage carriages etc.GThe consequence of limiting the stage carriages, coupled withthe provision for reservation in favour of Schedule Castes andSchedule Tribes will necessarily compel the Authorities toprioritize competing applicants on the basis of certainprescriptions. These are statutorily prescribed under Section 71H(3)(d) read with proviso. Having considered the applications under Section 70, following the procedure laid down under Section 71,the stage carriage permission is granted by the authority underSection 72. Even at the stage of grant, the Authority is empoweredto prescribe certain conditions for the operation of the grant. Incompliance of Section 72, when a stage carriage permit is granted,Rule 159 of Kerala Motor Vehicle Rules, 1989 mandatorilyprescribes that a permit shall bear the registration mark of thevehicle. Grant of a transport permit is an important function thatthe statutory authority under the Act would perform. [Paras 14,15, 16.1, 16.3, 17.1-18.1][805-C, G-H; 806-A-B; 807-E; 808-A-B; 809-F-H; 810-A, F; 811-D]

S. Rajaseekaran v. Union of India and Ors. (2018) 13SCC 532 : [2017] 13 SCR 508; Subhash Chandra v.State of U.P and Ors. (1980) 2 SCC 324 : [1980] 2SCR 1024; Maharashtra State Road TransportCorporation v. Babu Goverdhan Regular Motor Serviceand Ors. (1969) 2 SCC 746 : [1970] 2 SCR 319 – reliedon.

Shaheed Khan v. State of MP (2011) SCC Online MP2228 – approved.

Sheelchand and Co. v. State Transport AppellateAuthority, Gwalior and Anr. (1963) SCC Online MP44 – referred to.

2.2 The reasoning adopted by the Division Bench in theimpugned order that Rule 174 (2) (c) has overridden the Act isnot correct because a subordinate legislation must be interpretedto effectuate the statutory purpose and objective. The Rule shouldenable the transport Authorities considering applications forreplacement to insist upon the permit holder to abide by the samerigour and regulation that he was put to when the permit wasgranted.The High Court has not appreciated the context in whichRule 174 (2) (c) read with Section 83 is to be construed. TheSection as well as the Rule are to be seen in the context ofChapter V relating to control of transport vehicles with respectto which the State Government has the jurisdiction and powergrant and regulate transport permits. Rule 174 (2) (c), gives effectto that regulatory regime of the State. Replacement of a vehicleduring the subsistence and continuation of a transport permit is A

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Aonly an incident in the working of a transport permit. Whileaddressing such an incident, the Authority cannot be oblivious ofthe history and background in which the permit is granted. [Paras21.1, 21.2][816-E-H]

2.3 Further, the assumption in the impugned judgment thatBthe expression “same nature” is confined only to, mean “a busby bus, a mini-bus by mini-bus and not bus by a minibus….” isnot a correct way to read the provision. There is no need torestrict the meaning of an expression same nature. In fact,expressions such as this are better kept open ended to enablecourts to subserve the needs of changing circumstances. HavingCexamined Rule 174 (2) (c), intended to implement the purpose ofsection 83 and also having examined Section 83 in the context ofChapter V, in contrast to Chapter IV, the Court is of the view thatthe rule is neither beyond nor contrary to Section 83. [Paras 21.3,21.4][817-A-C]D

3. Scope of the discretion exercised by the authority inexercise of its power under Rule 174(2)(c) of the Kerala MotorVehicles Rules, 1989- Discretion is to be exercised wherevernecessary in order to render the exercise of power reasonable,fair and non-arbitrary. Discretion could be express or implied.ERule 174(2) is a provision where the Government has expresslyenabled the Authority to apply discretion, wherever necessary,while exercising the power to grant replacement of a vehicleunder a permit. This discretion will have to be exercisedreasonably, fairly as the facts and circumstance would clearlydemonstrate. For instance, where the vehicle sought to beFsubstituted is marginally and inconsequentially older than thevehicle covered under the permit, the Authority may perhaps bejustified in permitting such an application. The Authority will alsobear in mind the circumstances in which the permit holder waschosen in cases of comparative merit under which the rivalGapplicants would have offered their own vehicles. If the exerciseof the discretion is not based on just reasonable and non-arbitraryprinciples, such a decision would be vulnerable and subject tocorrection in appeal and a further review. [Para 22.2][817-E-G;818-A-B]

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4. Whether the fact that the impugned judgment which hasheld the field over last few years and has been followed insubsequent orders is in itself a sufficient ground to reject theappeals? The Special Leave Petition against the order impugnedwas filed immediately after the decision of the Division Bench ofthe High Court and the matter has been pending adjudicationbefore this Court. As the judgment of the High Court is contraryto law, it is compelling and inevitable that the judgment is setaside. The judgment of the High Court is set aside, by holdingthat Rule 174 (2) (c) is intra vires the provisions of the Act andalso Section 83 of the Motor Vehicles Act. [Para 24][818-D-E, F-G]

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Geeta B. Rao v. Secretary, Karnataka State TransportAuthority, 1994 2 Karn LJ 703; Yeshodhara Kadambav. KSRAT, ILR1988 KAR 2447;MunicipalCorporation of City of Hubli v. Subha RaoHanumatharao Prayag and Others (1976) 4 SCC 830: [1976] 3 SCR 883; Vijayawada MunicipalCorporation v. Andhra Pradesh State Electricity Boardand Another (1976) 4 SCC 548 : [1977] 1 SCR 846;Bheem Singh Bhati v. State of MP and Ors. (2013) SCCOnline MP 8381; Ushakumari v. Abdul Azeez & Amp;Ors. (2000) SCC Online Ker 269; Madan SinghShekhawat v. Union of India (1999) 6 SCC 459;Kailash Chand and Anr. v. Dharam Dass (2005) 5 SCC375 : [2005] 3 SCR 1182; Bangalore Turf Club Limitedv. Regional Director, Employees’ State InsuranceCorporation (2014) 9 SCC 657 : [2014] 8 SCR 1021 –referred to.

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[2022] 9 S.C.R.

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 1453-B1454 of 2022.

From the Judgment and Order dated 18.07.2017 of the High Courtof Kerala at Ernakulam in W.A. Nos. 1466 and 1470 of 2017.

Santosh Krishnan, Adv. (Amicus Curiae).

G. Prakash, Ms. Priyanka Prakash, Ms. Beena Prakash, MohitCKumar Gupta, Advs. for the Appellants.

The Judgment of the Court was delivered by PAMIDIGHANTAM SRI NARASIMHA, J.1. Leave granted.D

2. Section 83 of the Motor Vehicles Act, 1988 enables replacementof the vehicle covered under an existing transport permit by anothervehicle of the same nature. Can a State Government make Rules,enabling the road transport authority to reject an application forreplacement if the proposed vehicle is older than the one covered underEthe existing permit? This is the question we are tasked to answer. Forthe analysis and the reasoning that will follow, we have held that Rule174(2)(c) of the Kerala Motor Vehicle Rules,1989 is valid and salutaryand does not go beyond the scope of Section 83. We will first refer tothe basic facts and the statutory provisions before analyses andFdetermination.

Facts:

3.1 The Respondent was granted a stage carriage operator permit,P.St. 7/362/2012 dated 7.5.2017 in respect of vehicle number KL-41L-1017, a 38-Seater, 2016 model by the Regional Transport AuthorityG(hereinafter referred to as ‘Authority’) to conduct transport service onthe route Pattimattam-Kakkanad in Kerala. On 19.5.2017, the Respondentapplied to the Authority under Section 83 of the Motor Vehicles Act,1988 (hereinafter referred to as ‘Act’) read with Rule 174 of the KeralaMotor Vehicle Rules, 1989 (hereinafter referred to as ‘Rules’) for grantof permission to replace the vehicle covered under his permit with anotherH

vehicle KL-17E-997, a 33-Seater, 2006 model. Alleging inaction on thepart of the Authority, the Respondent filed a Writ Petition before theHigh Court of Kerala on 12.6.2017. The Learned Single Judge disposedof the writ petition on 13.06.2017 by merely directing the State and theAuthority to consider the application on the ground of road-worthinessalone and without reference to the model of the vehicle.

3.2 Aggrieved by the Single Judge’s decision, the Authoritypreferred Writ Appeals No.1466/2017 before the Division Bench of theHigh Court of Kerala. Another Writ Appeal No.1470/2017 dealing withsimilar facts and issues was also taken up along with this case. TheDivision Bench by the impugned judgment dated 18.07.2017 dismissedthe Writ Appeals holding that Rule 174(2)(c) of the Kerala Motor VehicleRules, 1989 goes beyond the provision of the Act. The Court concluded:- “When in exercise of delegated authority, the subordinateauthority i.e., the State, makes the rules, the rules have to beconsistent with the Act. The Rules cannot override the Act orrestrict the ambit of the Act. When the expression is vehicle ofsame nature, then if Rule l74(2)(c) restricts that an oldervehicle cannot be brought in, it would be restricting the rightconferred to a person by the provisions of the Act. Surelysuch an exercise by a delegate cannot be permitted. Ruleshave to be consistent with the Act and not restricting or inderogation thereto. Rules to that extent cannot thus be heldto be consistent with the Act and would have to be held to be”inoperative.

3.3 With these findings the Division Bench dismissed the Appeals.It is this order that is challenged before this Court. We heard Sh. GPrakash, Advocate for the appellant State and the Authorities andSh. Santosh Krishnan, Amicus Curiae.

Contentions:

4.1 Shri G. Prakash, learned counsel on behalf of the State andAuthority submitted that the purpose of Rule 174(2)(c) is to ensure thesafety of the travelling public and therefore the prohibition for replacementof a vehicle covered under a permit with an older model would be legaland justified as it will also ensure that the vehicle of the ‘same nature’ asprescribed under Section 83. Alternatively, it is also submitted that therequirement under Rule 174(2)(c) must be seen in the context of A

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Adiscretion to be exercised by the Authority while considering theapplication for replacement. It is his case that rejection is not automaticas it is within the power of the Authority to either accept or reject therequest the application for a good and a valid reason. He further submitsthat as there was no specific challenge to Rule 174(2)(c), the High Courtwas not justified in declaring the Rule as inoperative. In light of theseBsubmissions, he urged for the impugned judgment to be set-aside and theRule be upheld.

4.2 Since there was no appearance on behalf of the Respondents,we requested Shri Santosh Krishnan to assist us as Amicus Curiae andhe readily accepted the assignment and ably assisted us by filing writtenCsubmissions supporting the judgment of the High Court. The primarysubmission of the Amicus Curiae is that the State Government does nothave the legislative competence to make the impugned Rule. He arguedthat matters relating to prescription of conditions, methodology forverification and even certification of fitness of vehicle (Section 56 readDwith the Rule 62) as well as the power to fix the age limit of a motorvehicle (Section 59) fall within the province of the Central Governmentand therefore, the State Government does not have the competence tomake Rules 174(2)(c). He would urge that a collateral challenge to theimpugned order on the ground of competence is legally permissible. Hedrew our attention to Rules made in other States to demonstrate thatEnone of them have made a Rule akin to Rule 174(2)(c) that touchesupon the fitness of a vehicle. He concluded by submitting that theimpugned decision of the High Court has held the field for over fouryears and has also been followed in subsequent cases and therefore thisCourt may not interfere while exercising jurisdiction under Article 136.F5. The following issues arise for our consideration:

i.Whether Rule 174(2)(c) of Kerala Motor Vehicles Rules,1989 is ultra-vires the provisions of the Act as the powerwith respect to prescription of age limit of a motor vehicleis in the exclusive domain of the Central Government?

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ii.Whether Rule 174(2)(c) of the Kerala Motor VehiclesRules, 1989 travels beyond and contrary to Section 83 ofthe Motor Vehicles Act, 1988?

iii. What is the scope of the discretion exercised by theAuthority in exercise of its power under Rule 174(2)(c) ofHthe Kerala Motor Vehicles Rules, 1989?

iv.Whether the Respondents can challenge the legality of Rule174(2)(c) without specifically praying for the same in theWrit Petition and whether the High Court is justified inpermitting such a submission?

v.Whether the fact that the impugned judgment has held thefield over last few years and has been followed in subsequentorders is in itself a sufficient ground to reject the appeals?

Act and the Rules:

6.1 Rule 174(2)(c) of the Kerala Motor Vehicles Rules, 1989provides as under: - “Rule 174. Permit Replacement of vehicles:

(1) If the holder of a permit desires at any time to replace avehicle covered by the permit with another vehicle, he shallforward the permit and apply in Form “P.V.A.” with the feeprescribed in Rule 180 to the Transport Authority whichgranted the permit stating the reasons for the proposedreplacement and shall, (a) if the new vehicle is not in his possession, state thematerial particulars in respect of which the new vehiclediffers from the old: and (b) if the new vehicle is in his possession, forward thecertificate of registration hereof

(2) Upon receipt of the application, the Transport Authoritymay in his discretion, reject the application –

(a) if it has previous to the date of receipt of the applicationgiven reasonable notice of its intention to reduce the numberof Transport Vehicles of that class generally or in respectof the route or area to which the permit applies; or (b) if the new vehicle proposed differs in the materialrespects from the old; or

(c) if the new vehicle proposed is older than the one soughtto be replaced; or (d) if the holder of the permit has contravened theprovisions thereof or has been deprived of possession of A

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the old vehicle under the provisions of any agreement ofhigher purchase, hypothecation or lease.

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(3) if the new vehicle proposed does not differ in materialrespects from the old, the application for replacement of thevehicle may be allowed. If there is material difference betweenBthe two vehicles, the application shall be treated as if it werefor a fresh permit.”

6.2 The power relatable to replacement of the vehicle is providedin Section 83 of the Act: - “83. Replacement of vehicles: The holder of a permit may,with the permission of the authority by which the permitwas granted, replace any vehicle covered by the permit byany other vehicle of the same nature.”

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7. Having noticed the Rule in question and the relatable statutoryprovision, we will now consider the issues in seriatim.

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Issue (i): Whether Rule 174(2)(c) of Kerala Motor VehiclesRules 1989 is ultra-vires the provisions of the Act as thepower with respect to prescription of age limit of a motorvehicle is in the exclusive domain of the CentralGovernment?

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8.1 Section 83 is an enabling provision. It allows a permit holderto replace the vehicle covered under the transport permit. The right toreplace the vehicle under a permit is subject to the permission of theAuthority. The right, as well as the power to grant permission, are subjectto the condition that the vehicle to be replaced is ‘of the same nature’.F

8.2 The expression, ‘of the same nature’ can have multiplemeanings.[1] This phrase, in its natural expression would only mean havingsimilar features. But then, would ‘same’ mean similar, identical, 1 In Geeta B.Rao v. Secretary, Karnataka State Transport Authority, 1994 2 Karn LJ703, the Karnataka High Court, while following an earlier judgment Yeshodhara KadambaGv. KSRAT, ILR1988 KAR 2447 held that the expression “nature” is distinct from theexpression “capacity” that existed prior to its amendment and observed, “firstly, on aplain understanding of the meaning of the Section can mean, vehicle of a similar type,i.e., a passenger vehicle. It only means that a tourist vehicle cannot be replaced by astage carriage or a goods-vehicle. In other words, the ‘character’ of the vehicle cannotbe changed. The meaning intended to be conveyed is that the characteristic of the vehicleHshould not be lost.”

equivalent, comparable, interchangeable or related? Likewise, would theexpression “nature” mean type, feature, texture, make, model, design,or generation?

8.3 These are open textual expressions, used in the normal courseto convey a meaning which the legislature would not have intended to beread in a pedantic manner. When the words in the Section allow multipleinterpretations, Courts of Law have developed the art and technique offinding the correct meaning by looking at the words in their context. Thisapproach is beautifully expressed by Justice O. Chinnappa Reddy in thecase of Reserve Bank of India v. Peerless General FinanceInvestment Co. Ltd And Ors.[2]:

“33. Interpretation must depend on the text and the context.They are the bases of interpretation. One may well say if thetext is the texture, context is what gives the colour. Neithercan be ignored. Both are important. That interpretation is bestwhich makes the textual interpretation match the contextual.A statute is best interpreted when we know why it was enacted.With this knowledge, the statute must be read, first as a wholeand then section by section, clause by clause, phrase by phraseand word by word. If a statute is looked at, in the context ofits enactment, with the glasses of the statute-maker, providedby such context, its scheme, the sections, clauses, phrasesand words may take colour and appear different than whenthe statute is looked at without the glasses provided by thecontext. With these glasses we must look at the Act as a wholeand discover what each section, each clause, each phraseand each word is meant and designed to say as to fit into thescheme of the entire Act. No part of a statute and no word ofa statute can be construed in isolation. Statutes have to beconstrued so that every word has a place and everything is inits place……”

9. As the text by itself has not conferred certainty to the meaningof the expression – of the same nature, we have to examine the phrase 2 Reserve Bank of India v. Peerless General Finance Investment Co. Ltd (1987) 1 SCC424. We would notice similar approach adopted by this Court in Municipal Corporationof City of Hubli v. Subha Rao Hanumatharao Prayag and others (1976) 4 SCC 830Vijayawada Municipal Corporation v. Andhra Pradesh State Electricity Board andAnother (1976) 4 SCC 548.

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Ain context of the words in the Section, the neighboring provisions, theChapters, Parts and its location in the Statute as a whole.

10. The Motor Vehicles Act, 1988 regulates matters such as,licensing of the drivers of motor vehicles in Chapter II, licensing ofconductors of stage carriages in Chapter III, registration of motor vehiclesBin Chapter IV, control of transport vehicles in Chapter V, state transportundertakings in Chapter VI, control of traffic in Chapter VIII, no faultliabilities in Chapter X, insurances in Chapter XI, establishments ofTribunals in Chapter XII, penalties in Chapter XIII, apart from themiscellaneous provisions in Chapter XIV. For the purpose of this case, itis sufficient to examine the phrase in the context of Chapter IV relatingCto Registration of Motor Vehicles and Control of Transport Vehicles inChapter V.

11.1 Chapter IV lays out the general regulatory regime forregistration of motor vehicles, transfer of ownership, certification offitness, age limit of vehicles and also provides for the rulemaking powersDof the Central as well as the State Governments. The purpose and objectof this Chapter is to regulate driving of a motor vehicle in any publicplace and with this endeavor. Section 39 prohibits any person from drivinga motor vehicle without its registration. The Central Government isempowered to lay down norms and prescribe procedures for registration,Efees, maintenance of registers, registration numbers (RC), time limitsfor renewal etc. Fixing the terms and conditions for grant of Certificateof fitness and fixation of age limits of the vehicle is the exclusive domainof the Central Government under Sections 56 and 59.

“Section 56. Certificate of fitness of transport vehicles:

“Section 56. Certificate of fitness of transport vehicles:

F(1)Subject to the provisions of sections 59 and 60, a transportvehicle shall not be deemed to be validly registered for thepurposes of section 39, unless it carries a certificate of fitnessin such form containing such particulars and information asmay be prescribed by the Central Government,issued by theGprescribed authority, or by an authorized testing stationmentioned in sub-section (2), to the effect that the vehiclecomplies for the time being with all the requirements of thisAct and the rules made thereunder;….”

11.2 Following the power vested in it, the Central Governmentenacted the Central Motor Vehicles Rules, 1989. Rule 62 laying downHthe procedure for grant of a certificate.

“Rule 62. Validity of certificate of fitness:

(1) A certificate of fitness in respect of a transport vehiclegranted under Section 56 shall be in Form 38 and suchcertificate when granted or renewed shall be valid for theperiod as indicated below……...”

11.3 Similarly, we notice the power of the Central Government toprescribe age limit of a vehicle is in Section 59. The provision to theextent it is relevant for the purpose of the case is as under: - “Section 59: Power to fix the age limit of motor vehicle—

(1) The Central Government may, having regard to the publicsafety, convenience and objects of this Act, by notification inthe Official Gazette, specify the life of a motor vehiclereckonedfrom the date of its manufacture, after the expiry of which themotor vehicle shall not be deemed to comply with therequirements of this Act and the rules made thereunder:

Provided that the Central Government may specify differentages for different classes or different types of motor vehicles.”

11.4 There is a distinction between the rule-making power givento the Central Government on one hand and to the State Government onthe other. Section 64 is the rule-making power of the Central Government,enabling it to lay down the norms and procedures to be followed forimplementation of provisions in the Act. Sub-sections (m) and (n) ofSection 64 are relevant for our purposes, wherein it is provided that: - “Section 64: Power of Central Government to make rules:

The Central Government may make rules to provide for all orany of the following matters namely: - (m) the form in which the certificate of fitness shall be issuedunder sub-section (1) of Section 56 and the particulars andinformation it shall contain; (n) the period for which the certificate of fitness granted orrenewed under Section 56 shall be effective.”

11.5 In contrast, the rule-making power of the State Governmentis as the executing agency for implementing of the provisions of the Act.For this purpose, Section 65 enables the State Government to make A

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Asuch Rules as are necessary for execution. Crucial words in the Rulemaking power of the State are noted below with added emphasis: - “Section 65: Power of State Government to make rules: (1) AState Government may make rules for the purpose of carryinginto effect the provisions of this Chapterother than the mattersBspecified in Section 64.”

12.1 Chapter V relates to the regulatory regime of the StateGovernments with respect to Transport vehicles. It prohibitstransportation without a valid permit under Section 66. Control of roadtransport vested in the State Government under Section 67, is to ensure,C(a) advantages to the public, trade and industry by the development ofmotor of transport, (b) coordination of road and rail transport, (c) preventdeterioration of the road system and also to (d) prevent uneconomiccompetition among holders of permits. For this purpose, the StateGovernment can issue directions to the State and Regional TransportDAuthorities established under Section 68. Right to Appeal against thedecisions of State or Regional Transport Authority is provided underSection 89 and Revisional powers are under Section 90, followed by abar on Civil Courts Jurisdiction under Section 94. Under this ChapterState Government alone has power to make rules. While Section 95relates to the rule making power of the State Government with respectEto stage and contract carriages, Section 96 relates to the general powerof the State Government to make rules for the purpose of Chapter V. Itis important to note that there is no power for the Central Government tomake rules under Chapter V.

12.2 There are different types of transport vehicles, for whichFthere are different requirements and separate permits to be granted. Forexample, (i) applications for stage carriagespermits are covered underSection 70, procedure for the same is provided under Section 71 and thepower to grant the transport permit for stage carriages is provided underSection 72. (ii) Applications for contract carriagesare covered underGSection 73 and the power to grant is in Section 74. (iii) Scheme forrenting motor cabsis under Section 75, (iv) private service vehiclepermitsare covered under Section 76, (vii) applications, consideration and grantof goods carriage permitsare provided in Sections 77, 78 and 79.

12.3 The general norms with respect to applications and theprocedure to be followed is provided under Sections 79 and 80. Durationand renewal of permits is governed by Section 81 and the transfer of apermit is prescribed in Section 82. Replacement of a vehicle under apermit with any other vehicle, the provision with which we are concernedin this case, is provided in Section 83. General conditions applicable to allpermits, the forms in which the permits may be granted, and the powerand procedure of cancellation are provided in Sections 84, 85 and 86.The legal regime relating to operation and use of permit outside theregion is provided in Sections 87 and 88.

13.1 It is in the above referred statutory scheme that the submissionof the Amicus needs to be considered.

13.2 The statutory scheme under Chapter V generally providesfor the powers of the State Government to deal with transport vehiclesexcept under Section 88 of the Act where the powers are subject to therules made by the Central Government. It provides not only the procedurefor grants of permits, but also the mechanism by which vehicles used fortransportation are regulated. It is in this context that Section 83 relatingto replacement of a vehicle occurs. The placement of Section 83 inChapter V is a recognition of the need to provide a seamless mechanismfor replacement of a vehicle during subsistence of a transport permit.Seen in the context of Chapter V relating to transport vehicles, it becomesclear that the provision is intended only to enable the owner to work hispermit without any interruption even if there is a need to replace thevehicle covered by the permit. There is no other purpose. It is intendedto be a simple transaction and this is reason why the scope of scrutiny islimited only to examining if the vehicle is of same nature as in the permit.This is all that is required.

13.3 It is but natural that the replacement would require theAuthority to grant the necessary permission as they are the regulators.When an application made under Section 83 is taken up, the Authority iscognizant of the fact that there is a valid and a subsisting permit and thepermit holder seeks to continue operating the permit and it is only for thisreason that he is seeking replacement of the vehicle. The context inwhich his scrutiny is called upon, is only to ensure that the conditions ofthe permit are not deviated from. Therefore, when the statute says samenature, it is only relatable to the permit. The scrutiny is not of the vehiclein itself but the vehicle in relation to the permit. It is for this reason that AB

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Aa scrutiny of the vehicle, stand alone, irrespective of its relation with thepermit becomes an irrelevant consideration for the purpose of Section83.

13.4 The phrase, of the same nature seen in the context ofprovisions proximate to Sections 83, relating to duration and renewalsBof permits (Section 81), transfer of permits (Section 82) lend clarity tothe meaning of the expression. Same nature must necessarily relate tothe same nature of the vehicle in the permit. The question to be asked isthe nature of the vehicle under the permit. What kind of a vehicle wasthat? How was that connected to the permit granted? Does the newvehicle serve the same purpose as the old vehicle was serving under theCpermit?

13.5 Questions relating to the vehicle or about the vehicle arematters of concern in Chapter IV, under which the Central Governmentis empowered to set the norms for the fitness or the age limit of thevehicle. Chapter V, on the other hand contains the legal regime withDrespect to operations of transport vehicles. It is under this Chapter thatthe Parliament intended that there must be a provision for replacementof a vehicle covered under a permit so that the permit granted couldcontinue and subsist till the end of its tenure. Chapters IV and V operatein their own field subserving the purpose and objects mentioned therein.

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13.6 For the reasons stated above, we are of the view that Rule174 (2) (c) made by the State Government to enable replacement of thevehicle under a Transport permit, does not impinge upon the powers ofthe Central Government with respect to fixation of the age of the vehicle,or fitness of the vehicle conferred upon it under Sections 56 and 59 inFChapter IV. The scrutiny under Rule 174 is only to enable the Authorityto ensure that the subsisting permit is not interrupted and at the sametime public interest is not compromised by deviating from the permit.The Rule will have no bearing on the power of the Central Governmentand as such it would not be ultra vires the provisions of the Act.

G13.7 There is yet another aspect which can lend a certain amountof clarity to this position. The vehicle which the Authority may not approvefor replacement under section 83 on the ground that it is older than thevehicle covered under the permit, can be used as a transport vehiclewithin the State. There is no prohibition for such a usage as the saidvehicle may continue to be fit and within the age limit prescribed by theH

Central Government. The rigour of Rule 174 (2) (c) is only in the contextof a subsisting transport permit and not as a condition for transport vehiclesas such.

13.8 For the reasons stated above, we are not inclined to acceptthe submission that Rule 174(2)(c) is ultra vires the provisions of thestatute.

Issue (ii): Whether Rule 174(2)(c) of the Kerala MotorVehicles Rules, 1989 travels beyond and contrary to Section83 of the Motor Vehicles Act, 1988?

14. By the order impugned, the Division Bench of the High Courtheld that Rule 174 (2) (c) being inconsistent with the Act should be heldto be inoperative. The reasoning adopted by the High Court is as under:

“9. We may now come to the Act. Section 83 clearly predicatesreplacement of the vehicle by vehicle of the “same nature”.The Legislature have used the expression purposely. Theycould have used various other expressions. To us, theexpression is clear. Same nature would mean; a bus by a bus,a mini bus by a mini bus, an air-conditioned bus by an air-conditioned bus, a truck by a truck and not a bus by a minibus and an air-conditioned bus by a non-air-conditioned busor mini bus by a regular bus; that is the only restriction. Whenin exercise of delegated authority the subordinate authorityi.e. the State, makes the rules, the rules have to be consistentwith the Act. The Rules cannot override the Act or restrict theambit of the Act. When the expression is vehicle of same nature,then if Rule, l74(2)(c) restricts that an older vehicle cannotbe brought in, it would be restricting the right conferred to aperson by the provisions of the Act. Surely such an exerciseby a delegate cannot be permitted. Rules have to be consistentwith the Act and not restricting or in derogation thereto. TheRules to that extent cannot thus be held to be consistent withthe Act and would have to be held to be inoperative.”

15. We are of the opinion that Rule 174 (2) (c) is intended toensure that the conditions under which a transport permit is granted isnot diluted when the vehicle covered by the permit is sought to be replacedby a new vehicle. The purpose and object of mandating replacement bya vehicle of the same nature in Section 83 is only to ensure that the A

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Ascrutiny and the conditions that were undertaken and imposed at thetime of the grant continue even during the subsistence of the permit.The legal regime involved in the grant of the permit as evidenced by thestatutory provisions, rules, forms and certification establish this principle.We will explain this position.B16.1 Section 83 is to be understood only in the context of a subsistingpermit. The present is a case of a stage carriage permit, the applicationfor which is to be made under Section 70. When an application underSection 70 for grant of a stage carriage permit is made, it shall containparticulars such as (i) the type and seating capacity of the vehicle [Section70(1)(b)]; (ii) the number of vehicles to be kept in reserve; and (iii) suchCother details as may be prescribed. Such application should also beaccompanied by the documents as may be prescribed [Section 70(2)].Section 70 of the Act may be noticed:

“Section 70. Application for stage carriage permit: (1) Anapplication for a permit in respect of a stage carriage (in thisDChapter referred to as a stage carriage permit) or as a reservestage carriage shall, as far as may be, contain the followingparticulars, namely:—

(a) …

(b) the type and seating capacity of each such vehicle; E

(c) the minimum and maximum number of daily tripsproposed to be provided and the time-table of the normaltrips.

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(f) such other matters as may be prescribed.

(2) An application referred to in sub-section (1) shall beaccompanied by such documents as may be prescribed.”

16.2 In furtherance of the statutory prescriptions under SectionG70, and in exercise of the power to make Rules, the State Governmentmade the Kerala Motor Vehicle Rules, 1989. In Chapter V of the Rulesrelating to control of transport vehicle, Rule 143 prescribe the applicationfor permits and Rule 144 provides the Forms of such permits.

Rule 143. Application for permits –– The application for aHpermit shall be in the following form

Rule 144. Form of permits –– Permits shall be issued in thefollowing forms:

16.3 As per the P.St.S.A form provided for in Rule 144 for grantof a stage carriage permit is formulated and appended, which comprisesof various particulars that an applicant must fill and submit. The Form isas under: - “FORM P.St.S.A

APPLICATION FOR PERMIT IN RESPECT OF STAGECARIAGE/RESERVE STAGE CARRIAGE

1. Full Name

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7. Type of vehicle

8. (i) Seating capacity (Excluding Driver and Conductor)

(ii) Maximum laden weight

9. Time table proposed

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”….

A17.1 It is evident from the above, the statutory scheme underSection 70 requiring an application for a transport permit to providematerial particulars include the requirement of indicating the type ofvehicle is also incorporated in the Rules made by the State Government.The Rules, followed by the Forms require details of the type of thevehicles to be furnished. The need to call for information about theBvehicle becomes relevant when we notice the requirement of Section71, relating to the procedure and consideration of the applications. Section71 is as under:

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“Section 71. Procedure of Regional Transport Authority inconsidering application for stage carriage permit.—C

(1) A Regional Transport Authority shall, while consideringan application for a stage carriage permit, have regard tothe objects of this Act:

(2) A Regional Transport Authority shall refuse to grant astage carriage permitif it appears from any time-tablefurnished that the provisions of this Act relating to the speedat which vehicles may be driven are likely to be contravened:

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Provided that before such refusal an opportunity shall be givento the applicant to amend the time- table so as to conform tothe said provisions.

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(3) (a) The State Government shall, if so directed by theCentral Government having regard to the number of vehicles,road conditions and other relevant matters, by notification inthe Official Gazette, direct a State Transport Authority and aFRegional Transport Authority to limit the number of stagecarriages generally or of any specified type, as may be fixedand specified in the notification, operating on city routes intowns with a population of not less than five lakhs.

(b) Where the number of stage carriages are fixed under clause(a), the Government of the State shall reserve in the Statecertain percentage of stage carriage permits for the scheduledcastes and the scheduled tribes in the same ratio as in thecase of appointments made by direct recruitment to publicservices in the State.

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(c) Where the number of stage carriages are fixed under clause(a), the Regional Transport Authority shall reserve suchnumber of permits for the scheduled castes and the scheduledtribes as may be fixed by the State Government under sub-clause (b).

(d) After reserving such number of permits as is referred to inclause (c), the Regional Transport Authority shall inconsidering an application have regard to the followingmatters, namely:—

(i) financial stability of the applicant;

(ii) satisfactory performance as a stage carriage operatorincluding payment of tax if the applicant is or has been anoperator of stage carriage service; and

(iii) such other matters as may be prescribed by the StateGovernment:

Provided that, other conditions being equal, preference shallbe given to applications for permits from—

(i) State transport undertakings;

(ii) co-operative societies registered or deemed to have beenregistered under any enactment for the time being in force;

(iii) ex-servicemen; 2[or]

[(iv) any other class or category of persons, as the Stategovernment may, for reasons to be recorded in writingconsider necessary;]”

17.2 Under Section 71, if the Central Government, in exercise ofits powers restricts the number of vehicles depending on the roadconditions and other relevant factors, the State Government shall directthe Authorities to limit the number of stage carriages etc. The consequenceof limiting the stage carriages, coupled with the provision for reservationin favour of Schedule Castes and Schedule Tribes will necessarily compelthe Authorities to prioritize competing applicants on the basis of certainprescriptions. These are statutorily prescribed under Section 71 (3)(d)read with proviso.

17.3 Having considered the applications under Section 70, followingthe procedure laid down under Section 71, the stage carriage permission A

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Ais granted by the authority under Section 72. Even at the stage of grant,the Authority is empowered to prescribe certain conditions for theoperation of the grant. Section 72, to the extent that it is relevant for ourpurpose is as under:

“Section 72. Grant of stage carriage permits.B

(1) Subject to the provisions of section 71, a RegionalTransport Authority may, on an application made to it undersection 70, grant a stage carriage permit in accordance withthe application or with such modifications as it deems fit orrefuse to grant such a permit:CProvided that no such permit shall be granted in respect ofany route or area not specified in the application.

(2) The Regional Transport Authority, if it decides to grant astage carriage permit, may grant the permit for a stagecarriage of a specified description and may, subject to anyDrules that may be made under this Act, attach to the permitany one or more of the following conditions, namely:

(i) …..

(x) that vehicles of a specified type fitted with body conformingto approved specifications shall be usedE

(xi) that specified standards of comfort and cleanliness shallbe maintained in the vehicles;

(xxiv) any other conditions which may be prescribed.”

17.4 In compliance of Section 72, when a stage carriage permit isFgranted, Rule 159 of Kerala Motor Vehicle Rules, 1989 mandatorilyprescribes that a permit shall bear the registration mark of the vehicle.

“Rule 159. Permits entry of registration marks compulsory:Time for entry G(1) No permit shall be issued before entering the registrationmark of the vehicle to which it relates has been entered therein.

(2) When the applicant is unable to produce the certificate ofregistration on the date of his application for permit, owingto the fact that he is not on that date in possession of the H

vehicle duly registered, or for some other reason, theapplicant shall within one month of the sanctioning of theapplication by the Transport Authority or such longer periodor periods not exceeding four months in the aggregate as theAuthority may specify, produce the certificate of registrationof the vehicle before that Authority so that the particulars ofthe registration mark may be entered in the permit. In theevent of any applicant failing to produce the certificate ofregistration within the period specified by the TransportAuthority, the Authority may revoke its sanction of theapplication.

(3) The power vested in a Transport Authority under sub rule(2) shall also be exercised by its delegate in respect of orderspassed under the delegated powers.”

18.1 Grant of a transport permit is an important function that thestatutory authority under the Act would perform. This Court had anoccasion to consider the serious consequences of motor accidents leadingto large number of deaths and injuries to human body. This unfortunatefact was noted by this Court in S. Rajaseekaran v. Union of Indiaand Ors.[3]

“90. During this hearing, we sought to impress upon allconcerned that road safety issues should be taken seriouslyboth by the Central Government as well as by the StateGovernments. We also noted that huge amounts running intohundreds of crores of rupees had been earmarked for roadsafety and it was also highlighted that a very large number ofdeaths had been taking place due to road accidents. We notedthat the insurance companies had spent an amount of Rs.11,480 crores by way of compensation for deaths, injuries,third -party property damage and other damage due to roadaccidents during the financial year 2015-2016.

91. On 7.11.2016 we again noted that there was one deathalmost every three minutes as a result of road accidents.Unfortunately, the legal heirs of half the victims were notcompensated (perhaps being unaware of their entitlement)…..”

3 S. Rajaseekaran v. Union of India (2018) 13 SCC 532 (Judgment dated 30.11.2017).

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A18.2 If this reality has to be addressed, the primary obligation ison the transport regulates the Authorities. The scrutiny that they mustexercise in granting licences and permits in today’s world is much morethan ever. At the same time, Courts have the obligation to interpret theprovisions of the statute and the rules made thereunder in a manner thatwill sub-serve an effective scrutiny by the regulator. This Court, as wellBas the High Courts have approached the problem in this perspective andin fact, the judgments that we will advert to, not only underline andemphasise the importance of the information of the vehicle in theapplication for permit, but also approved the condition of a maximumage of the vehicle prescribed by the Authorities.C

19.1 In the case of Sheelchand and Co. v. State TransportAppellate Authority, Gwalior,[4] the Division Bench of the High Courtof Madhya Pradesh upheld the condition of the Authority which prescribedthat the Bus must be of 1962 model. The Court held:

“Under section 48(3), the RTA may grant the permit for aDservice of stage carriages of a specified description… Clause(xxiii) gives the RTA the authority to attach “any othercondition which may be prescribed”. The power to prescribesuch a condition flows not from any of the clauses of section48(3) but from the substantive provision of sub-section (3)Eitself. That sub-section says that the RTA may grant a permitfor the service of sage carriages of a specified description.If the stage carriage for which a permit can be granted canbe of a “specified description” then it follows that the RTAhas the power to say that the stage carriage for which thepermit has been granted shall be of a particular year ofFmanufacture. Specific description of a stage carriage is notconfined to its class, name, maker, number of cylinders orhorsepower, but also includes the year of manufacture..... Thewhole idea and requiring that the service of a stage carriageshall be run with a stage carriage of a particular year ofGmanufacture is to ensure reliability and efficiency of serviceand the safety of the travelling public.Section 47 and 48 ofthe Act, read together, clearly show that the statutory powersto issue permits with certain conditions of stage carriages or 4 Sheelchand and Co. v. State Transport Appellate Authority, Gwalior and Anr. (1963)HSCC Online MP 44.

not meant for the benefit and protection of permit holders but”[5]are meant for the benefit of the general public.

19.2 The Division Bench judgment of the High Court of MadhyaPradesh was approved by this Court in the case of Subhash Chandrav. State of U.P,[6] wherein Justice Krishna Iyer in his inimitable expressionobserved as under:

“3…. The State must remember that it has responsibilities notmerely to minibus owners, but also to avoid the daily tragedieson the Indian highways under the little wheels of thesewhirling carriages. Section 51(2) Motor vehicles act, 1939,is geared to public safety, not private profits and cast a solemnduty not to be deterred by any pressure except the pressure ofsocial justice to Indian lives moving in buses, walking onroads or even standing on margins. If the top killer – roadaccident – is to be awarded death sentence, Section 51 andlike provisions must receive severe enforcement. In this spirit– although backtracking from 4-year-old vehicles to 7-year-old models – the State imposed condition 18. This waschallenged artfully but unsuccessfully before the High Courtand is attacked before us as ultra-vires Section 51(2) of theAct. We will examine briefly the submissions to reach theconclusion that mere lexical legalism cannot sterilize thesensible humanism writ large on Section 51(2)(c). It is notultra vires Indian law every condition to save life and limb isintra wires such salvation re-provision. This perspective ofsocial justice simplifies the problem and upholds the HighCourt.

4…. The short question is whether the prescription that thebus shall be at least a 7-year-old model one is relevant to thecondition of the vehicle and its passenger’s comparative safetyand comfort on our chaotic highways. Obviously, it is. Theolder the model, the less the chances of the latest safetymeasures being built into the vehicle.Every new modelincorporates new devices to reduce danger and promotecomfort. Every new model assures its age to be young, fresh 5 M/s. Goa Highways Operators v. State Transport Authority, Goa, Daman, and Diu

(1976) SCC Online GDD 19.

6 Subhash Chandra and Ors. v. State of U.P. and Ors. (1980) 2 SCC 324.

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Aand strong, less likely to suffer sudden failures and breakages,less susceptible to wear and tear and mental fatigue leadingto unexpected collapse… We have no hesitation to hold, fromthe point of view of human rights of road users, that thecondition regarding model of the permitted bus is within thejurisdiction and not to prescribe such safety clauses isBabdication of statutory duty.

5. ….We are clear that a later model is a better safeguardand, more relevantly to the point, the year of the make andthe particulars of the model or part of the description.7"

C20.1 The principles and observations made by the Full Bench ofthe High Court of Kerala on the powers and duties of the Authoritieswhile considering competing applications for grant of a permit arenoteworthy. Of course, the Court was dealing with a slightly differentissue, i.e., whether an applicant for stage carriage permit who has giventhe particulars of the vehicle he proposes to put on road should beDpreferred over an applicant who does not provide such information before-hand. The Full Bench of the Kerala High Court held as under:

“10. As repeatedly pointed out in the various decisions of theSupreme Court and the High Courts, the paramountconsideration that should weigh with the Regional/StateETransport Authority in taking a decision regarding the grantof a stage carriage permit is the advancement of publicinterest. Such decision will have to be reached by the authorityon a comparative evaluation of the qualifications possessedby the various applicants as on the date of consideration ofFthe subject by it. If, on the date of consideration of theapplications, an applicant is found to be possessed of a vehicleof the required specifications regarding its model, seatingcapacity etc. and if in respect of other matters he is found tobe possessed of better qualifications than a rival applicantwho might have furnished the particulars of his vehicle in hisGapplication itself it will not be in the public interest and, hence,also legally not right to overlook the superior claims of theformer and prefer the latter for the grant of the permit merelyon the ground of his having furnished in his application 7 This judgment is followed by this Court in a subsequent decision in the case S.K.HBhatia and Ors.v. State of U.P and Ors. (1983) 4 SCC 194.

particulars of his vehicle. As already observed by us, anapplication for the grant of a stage carriage permit cannotbe treated as invalid merely on the ground that it does notcontain particulars of the vehicle proposed to be used for theservice nor can the applicant be disqualified or excluded fromconsideration on the said ground. If all other qualificationsare equal as between the two applicants, one of whom hadfurnished in his application the particulars of his vehicle andthe other had furnished such particulars only at a later stagebefore the matter was taken up for consideration by theRegional/State Transport Authority and the vehicle offeredby the latter is found to be of a later model and better quality(providing better comforts for the passengers) than the vehicleoffered by the former, the Regional/State Transport Authoritywill be perfectly justified in taking the view that it will be inthe public interest to grant the permit to the applicant whohas offered the better vehicle (see Ikram Khan v. The StateTransport Appellate Tribunal, (1976) 4 SCC 1 : AIR. 1976SC. 2333).However, if in such a case the vehicles offered byboth the applicants are found to be substantially of the sametype, quality, model etc. and if in respect of other mattersboth the applicants are equally qualified it will be open to theRegional/State Transport Authority in its discretion to preferfor the grant the applicant who had furnished the particularsof his vehicle in the application itself treating the saidcircumstance as aground for tilting the balance as betweenthe two persons whose qualifications are equal in all otherrespects.”

20.2 The judgment of the Full Bench of the Kerala High Courthas been followed in a number of cases.[8] In another case of BabuGoverdhan,[9] this Court emphasised on the importance of the requirementof Form P.St.S.A along with the stage carriage permit application. Itwas held that the Form is an integral part of the legal regime which theState Government is authorised to take note of. The importance of 8 Bheem Singh Bhati v. State of MP and Ors. (2013) SCC Online MP 8381; Ushakumariv. Abdul Azeez & Ors (2000) SCC Online Ker 269.

9 Maharashtra State Road Transport Corporation v. Babu Goverdhan Regular MotorService and Ors. (1969) 2 SCC 746.

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Afurnishing all the details of a vehicle has also been affirmed in the caseof Shaheed Khan.[10]

“79. In the instant case we have already held that theconditions imposed by the impugned amendments in the Rulesof 1994 are with a view to ensure safe, secure and convenientBtransport services to the passengers to provide cheaper andsafer facilities to rural public, to protect and preserve theroad conditions, for better traffic management and to reducetraffic on long routes thereby reducing chances of untowardincidents and accidents and as such are in the interest ofpublic at large. It is, therefore, clear that although we haveCalready held that the petitioners do not have a fundamentalright to operate stage carriages even otherwise, the impugnedamendments in the rules are in consonance with and infurtherance of the object and purpose of the Act and arereasonable restrictions which can legitimately be imposed asDprovided by and permissible under Article 19(6) of theConstitution of India on the fundamental right to trade andcommerce granted under Article 19(1)(g) of the Constitutionof India.”

21.1 The reasoning adopted by the Division Bench in the impugnedEorder that Rule 174 (2) (c) has overridden the Act is not correct becausea subordinate legislation must be interpreted to effectuate the statutorypurpose and objective. The Rule should enable the transport Authoritiesconsidering applications for replacement to insist upon the permit holderto abide by the same rigour and regulation that he was put to when thepermit was granted. In our view, the High Court has not appreciated theFcontext in which Rule 174 (2) (c) read with Section 83 is to be construed.

21.2 The Section as well as the Rule are to be seen in the contextof Chapter V relating to control of transport vehicles with respect towhich the State Government has the jurisdiction and power grant andregulate transport permits. Rule 174 (2) (c), gives effect to that regulatoryGregime of the State. Replacement of a vehicle during the subsistenceand continuation of a transport permit is only an incident in the workingof a transport permit. While addressing such an incident, the Authoritycannot be oblivious of the history and background in which the permit isgranted.

H10 Shaheed Khan v. State of MP (2011) SCC Online MP 2228.

21.3 Further, the assumption in the impugned judgment that theexpression “same nature” is confined only to, mean “a bus by bus, amini-bus by mini-bus and not bus by a minibus….” is not a correctway to read the provision. There is no need to restrict the meaning of anexpression same nature. In fact, expressions such as this are betterkept open ended to enable courts to subserve the needs of changingcircumstances.[11]

21.4 Having examined Rule 174 (2) (c), intended to implementthe purpose of section 83 and also having examined Section 83 in thecontext of Chapter V, in contrast to Chapter IV, we are of the view thatthe rule is neither beyond nor contrary to Section 83.

Issue (iii): What is the scope of the discretion exercised bythe authority in exercise of its power under Rule 174(2)(c)of the Kerala Motor Vehicles Rules, 1989?

22.1 Rule 174 (2) provides that, upon receipt of an application,the Transport Authority may in his discretion reject an application,(c) if the new vehicle proposed is older than the one sought to bereplaced. Learned counsel on behalf of the State submitted that, it is notas if applications seeking replacement of a vehicles, older than the one’scovered by the Transport permit would stand rejected by the operationof the rule. It is his case that the Authority is given the power to exerciseits discretion before rejecting an application on the said ground.

22.2 Discretion is to be exercised wherever necessary in order torender the exercise of power reasonable, fair and non-arbitrary. Discretioncould be express or implied. Rule 174(2) is a provision where theGovernment has expressly enabled the Authority to apply discretion,wherever necessary, while exercising the power to grant replacementof a vehicle under a permit. This discretion will have to be exercisedreasonably, fairly as the facts and circumstance would clearlydemonstrate. For instance, where the vehicle sought to be substituted ismarginally and inconsequentially older than the vehicle covered underthe permit, the Authority may perhaps be justified in permitting such anapplication. The Authority will also bear in mind the circumstances in 11 Madan Singh Shekhawat v. Union of India (1999) 6 SCC 459, Para 15; KailashChand and Anr v. Dharam Dass (2005) 5 SCC 375, Para 12 and 13; Bangalore TurfClub Limited v. Regional Director, Employees’ State Insurance Corporation (2014) 9SCC 657, Para 61.

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H

Awhich the permit holder was chosen in cases of comparative merit underwhich the rival applicants would have offered their own vehicles.Needless to say, that if the exercise of the discretion is not based on justreasonable and non-arbitrary principles, such a decision would bevulnerable and subject to correction in appeal and a further review. Thereis no need to delve on this issue any further.B

Issue (iv):Whether the Respondents can challenge thelegality of Rule 174(2)(c) without specifically praying forthe same in the Writ Petition and whether the High Courtis justified in permitting such a submission?

C23. As we have held that Rule 174 (2) (c) is neither ultra viresthe Act, nor has overridden Section 83, as held by the High Court, thereis no need to deal with this issue.

Issue (v):Whether the fact that the impugned judgmentwhich has held the field over last few years and has beenDfollowed in subsequent orders is in itself a sufficient groundto reject the appeals?

24. The Special Leave Petition against the order impugned wasfiled immediately after the decision of the Division Bench of the HighCourt and the matter has been pending adjudication before this Court.EApart from the fact that the matter has been sub-judice, the decisionthat we have arrived at is based on the interpretation of statutoryprovisions and the principles concerning construction of subordinatelegislation. As the judgment of the High Court is contrary to law, it iscompelling and inevitable that we set aside the judgment and rule uponthe correct position of law.F

For the reasons stated above, we set aside the judgment of theHigh Court in Writ Appeal Nos. 1466 and 1470 of 2017, by holding thatRule 174 (2) (c) is intra vires the provisions of the Act and also Section83 of the Motor Vehicles Act. The appeals are allowed.

25. Before parting with this case, we would like to record ourGdeep appreciation for extremely valuable assistance provided by thelearned Amicus Curiae, Shri Santosh Krishnan.

Divya Pandey(Assisted by : Roopanshi Virang, LCRA)H

Appeals allowed.