Regional Transport Authority & Anr. vs Shaju etc.

Motor Vehicles Act, 1988 – ss.70, 71, 83 – Kerala Motor Vehicle Rules, 1989 – r.174(2)(c) – Held: r.174(2)(c) is intended to ensure that the conditions under which a transport permit is granted is not diluted when the vehicle covered by the permit is sought to be replaced by a new vehicle – Purpose and object of mandating replacement by a vehicle of the same nature in s.83 is only to ensure that the scrutiny and the conditions that were undertaken and imposed at the time of the grant continue even during the subsistence of the permit – Statutory scheme u/s.70 requiring an application for a transport permit to provide material particulars include the requirement of indicating the type of vehicle is also incorporated in the Rules made by the State Government – The Rules, followed by the Forms require details of the type of the vehicles to be furnished. Words and Phrases – “of the same nature”, “same”, “nature” – Motor Vehicles Act, 1988 – s.83 – Discussed – Interpretation of Statutes.

Allowing the appeals, the Court

HELD: 1.1 Section 83 is an enabling provision. It allows a permit holder to replace the vehicle covered under the transport permit. The right to replace the vehicle under a permit is subject to the permission of the Authority. The right, as well as the power to grant permission, are subject to the condition that the vehicle to be replaced is ‘of the same nature’. The expression, ‘of the same nature’ can have multiple meanings. This phrase, in its natural expression would only mean having similar features. But then, would ‘same’ mean similar, identical, equivalent, comparable, interchangeable or related? Likewise, would the expression “nature” mean type, feature, texture, make, model, design, or generation? These are open textual expressions, used in the normal course to convey a meaning which the legislature would not have intended to be read in a pedantic manner. When the words in the Section allow multiple interpretations, Courts of Law have developed the art and technique of finding the correct meaning by looking at the words in their context. As the text by itself has not conferred certainty to the meaning of the expression – of the same nature, the phrase has to be examined in context of the words in the Section, the neighboring provisions, the Chapters, Parts and its location in the Statute as a whole. For the purpose of this case, it is sufficient to examine the phrase in the context of Chapter IV relating to Registration of Motor Vehicles and Control of Transport Vehicles in Chapter V. [Paras 8.1-8.3, 9 and 10][798-E-G; 799-A-B, G; 800-A, C]

Reserve Bank of India v. Peerless General Finance Investment Co. Ltd and Ors. (1987) 1 SCC 424 : [1987]

2 SCR 1 – relied on.

1.2 Following the power vested in it, the Central Government enacted the Central Motor Vehicles Rules, 1989. There is a distinction between the rule-making power given to the Central Government on one hand and to the State Government on the other. Section 64 is the rule-making power of the Central Government, enabling it to lay down the norms and procedures to be followed for implementation of provisions in the Act. Subsections (m) and (n) of Section 64 are relevant for present purposes. In contrast, the rule-making power of the State Government is as the executing agency for implementing of the provisions of the Act. For this purpose, Section 65 enables the State Government to make such Rules as are necessary for execution. [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 State Governments with respect to Transport vehicles. It prohibits transportation without a valid permit under Section 66. Under this Chapter State Government alone has power to make rules. While Section 95 relates to the rule making power of the State Government with respect to stage and contract carriages, Section

96 relates to the general power of the State Government to make rules for the purpose of Chapter V. There is no power for the Central 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, is provided in Section 83. [Paras 12.1, 12.3][802-B, E-F; 803-B]

1.4 The statutory scheme under Chapter V generally provides for the powers of the State Government to deal with transport vehicles except under Section 88 of the Act where the powers are subject to the rules made by the Central Government. It provides not only the procedure for grants of permits, but also the mechanism by which vehicles used for transportation are regulated. It is in this context that Section 83 relating to replacement of a vehicle occurs. The placement of Section 83 in Chapter V is a recognition of the need to provide a seamless mechanism for replacement of a vehicle during subsistence of a transport permit. Seen in the context of Chapter V relating to transport vehicles, it becomes clear that the provision is intended only to enable the owner to work his permit without any interruption even if there is a need to replace the vehicle covered by the permit. There is no other purpose. It is intended to be a simple transaction and this is reason why the scope of scrutiny is limited only to examining if the vehicle is of same nature as in the permit. This is all that is required. It is but natural that the replacement would require the Authority to grant the necessary permission as they are the regulators. When an application made under Section 83 is taken up, the Authority is cognizant of the fact that there is a valid and a subsisting permit and the permit holder seeks to continue operating the permit and it is only for this reason that he is seeking replacement of the vehicle. The context in which his scrutiny is called upon, is only to ensure that the 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 vehicle in relation to the permit. It is for this reason that a scrutiny of the vehicle, stand alone, irrespective of its relation with the permit becomes an irrelevant consideration for the purpose of Section

83. The phrase, of the same nature seen in the context of provisions proximate to Sections 83, relating to duration and renewals of permits (Section 81), transfer of permits (Section 82) lend clarity to the meaning of the expression. Same nature must necessarily relate to the same nature of the vehicle in the permit. The question to be asked is the nature of the vehicle under the permit. What kind of a vehicle was that? How was that connected to the permit granted? Does the new vehicle serve the same purpose as the old vehicle was serving under the permit? [Paras 13.2-13.4][803-C-H; 804-A-C]

1.5 Questions relating to the vehicle or about the vehicle are matters of concern in Chapter IV, under which the Central Government is empowered to set the norms for the fitness or the age limit of the vehicle. Chapter V, on the other hand contains the legal regime with respect to operations of transport vehicles. It is under this Chapter that the Parliament intended that there must be a provision for replacement of a vehicle covered under a permit so that the permit granted could continue and subsist till the end of its tenure. Chapters IV and V operate in their own field subserving the purpose and objects mentioned therein. Rule

174 (2) (c) made by the State Government to enable replacement of the vehicle under a Transport permit, does not impinge upon the powers of the 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 in Chapter IV. The scrutiny under Rule

174 is only to enable the Authority to ensure that the subsisting permit is not interrupted and at the same time public interest is not compromised by deviating from the permit. The Rule will have no bearing on the power of the Central Government and as such it would not be ultra vires the provisions of the Act. There is yet another aspect which can lend a certain amount of clarity to this position. The vehicle which the Authority may not approve for replacement under section 83 on the ground that it is older than the vehicle covered under the permit, can be used as a transport vehicle within the State. There is no prohibition for such a usage as the said vehicle may continue to be fit and within the age limit prescribed by the Central Government. The rigour of Rule 174 (2) (c) is only in the context of a subsisting transport permit and not as a condition for transport vehicles as such. For the reasons stated above, the submission that Rule 174(2)(c) is ultra vires the provisions of the statute is not accepted. Rule 174(2)(c) of the Kerala Motor Vehicle Rules,1989 is valid and salutary and does not go beyond the scope of Section 83. [Paras 13.5-13.8][804-C-H; 805-A-B]

2.1 By the order impugned, the Division Bench of the High Court held that Rule 174 (2) (c) being inconsistent with the Act should be held to be inoperative. Rule 174 (2) (c) is intended to ensure that the conditions under which a transport permit is granted is not diluted when the vehicle covered by the permit is sought to be replaced by a new vehicle. The purpose and object of mandating replacement by a vehicle of the same nature in Section 83 is only to ensure that the scrutiny and the conditions that were undertaken and imposed at the time of the grant continue even during the subsistence of the permit. The legal regime involved in the grant of the permit as evidenced by the statutory provisions, rules, forms and certification establish this principle. Section 83 is to be understood only in the context of a subsisting permit. The present is a case of a stage carriage permit, the application for which is to be made under Section 70. As per the P.St.S.A form provided for in Rule 144 for grant of a stage carriage permit is formulated and appended, which comprises of various particulars that an applicant must fill and submit. The statutory scheme under Section 70 requiring an application for a transport permit to provide material particulars include the requirement of indicating the type of vehicle is also incorporated in the Rules made by the State Government. The Rules, followed by the Forms require details of the type of the vehicles to be furnished. The need to call for information about the vehicle becomes 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 its powers restricts the number of vehicles depending on the road conditions and other relevant factors, the State Government shall direct the Authorities to limit the number of stage carriages etc. The consequence of limiting the stage carriages, coupled with the provision for reservation in favour of Schedule Castes and Schedule Tribes will necessarily compel the Authorities to prioritize competing applicants on the basis of certain prescriptions. These are statutorily prescribed under Section 71 (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 under Section 72. Even at the stage of grant, the Authority is empowered to prescribe certain conditions for the operation of the grant. In compliance of Section 72, when a stage carriage permit is granted, Rule 159 of Kerala Motor Vehicle Rules, 1989 mandatorily prescribes that a permit shall bear the registration mark of the vehicle. Grant of a transport permit is an important function that the 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-AB; 809-F-H; 810-A, F; 811-D]

S. Rajaseekaran v. Union of India and Ors. (2018) 13 SCC 532 : [2017] 13 SCR 508; Subhash Chandra v. State of U.P and Ors. (1980) 2 SCC 324 : [1980] 2 SCR 1024; Maharashtra State Road Transport

Corporation v. Babu Goverdhan Regular Motor Service and Ors. (1969) 2 SCC 746 : [1970] 2 SCR 319 – relied on.

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

Sheelchand and Co. v. State Transport Appellate Authority, Gwalior and Anr. (1963) SCC Online MP

44 – referred to.

2.2 The reasoning adopted by the Division Bench in the impugned order that Rule 174 (2) (c) has overridden the Act is not correct because a subordinate legislation must be interpreted to effectuate the statutory purpose and objective. The Rule should enable the transport Authorities considering applications for replacement to insist upon the permit holder to abide by the same rigour and regulation that he was put to when the permit was granted.The High Court has not appreciated the context in which Rule 174 (2) (c) read with Section 83 is to be construed. The Section as well as the Rule are to be seen in the context of Chapter V relating to control of transport vehicles with respect to which the State Government has the jurisdiction and power grant and regulate transport permits. Rule 174 (2) (c), gives effect to that regulatory regime of the State. Replacement of a vehicle during the subsistence and continuation of a transport permit is only an incident in the working of a transport permit. While addressing such an incident, the Authority cannot be oblivious of the history and background in which the permit is granted. [Paras 21.1, 21.2][816-E-H]

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

3. Scope of the discretion exercised by the authority in exercise of its power under Rule 174(2)(c) of the Kerala Motor Vehicles Rules, 1989- Discretion is to be exercised wherever necessary in order to render the exercise of power reasonable, fair and non-arbitrary. Discretion could be express or implied. Rule 174(2) is a provision where the Government has expressly enabled the Authority to apply discretion, wherever necessary, while exercising the power to grant replacement of a vehicle under a permit. This discretion will have to be exercised reasonably, fairly as the facts and circumstance would clearly demonstrate. For instance, where the vehicle sought to be substituted is marginally and inconsequentially older than the vehicle covered under the permit, the Authority may perhaps be justified in permitting such an application. The Authority will also bear in mind the circumstances in which the permit holder was chosen in cases of comparative merit under which the rival applicants would have offered their own vehicles. If the exercise of the discretion is not based on just reasonable and non-arbitrary principles, such a decision would be vulnerable and subject to correction in appeal and a further review. [Para 22.2][817-E-G; 818-A-B]

4. Whether the fact that the impugned judgment which has held the field over last few years and has been followed in subsequent orders is in itself a sufficient ground to reject the appeals? The Special Leave Petition against the order impugned was filed immediately after the decision of the Division Bench of the High Court and the matter has been pending adjudication before this Court. As the judgment of the High Court is contrary to law, it is compelling and inevitable that the judgment is set aside. The judgment of the High Court is set aside, by holding that Rule 174 (2) (c) is intra vires the provisions of the Act and also Section 83 of the Motor Vehicles Act. [Para 24][818-D-E, FG]

Geeta B. Rao v. Secretary, Karnataka State Transport Authority, 1994 2 Karn LJ 703; Yeshodhara Kadamba v. KSRAT, ILR1988 KAR 2447; Municipal

Corporation of City of Hubli v. Subha Rao

Hanumatharao Prayag and Others (1976) 4 SCC 830 : [1976] 3 SCR 883; Vijayawada Municipal

Corporation v. Andhra Pradesh State Electricity Board and Another (1976) 4 SCC 548 : [1977] 1 SCR 846; Bheem Singh Bhati v. State of MP and Ors. (2013) SCC Online MP 8381; Ushakumari v. Abdul Azeez & Amp; Ors. (2000) SCC Online Ker 269; Madan Singh

Shekhawat v. Union of India (1999) 6 SCC 459; Kailash Chand and Anr. v. Dharam Dass (2005) 5 SCC

375 : [2005] 3 SCR 1182; Bangalore Turf Club Limited v. Regional Director, Employees’ State Insurance Corporation (2014) 9 SCC 657 : [2014] 8 SCR 1021 – referred to.