judgement:
ION: Special Leave Petition (Civil) No. 6605 of 1983.
From the Judgment and Order dated the 6.4.1983 of the Rajasthan High Court in D.B. Special Appeal No. 74 of 1983.
WITH Special Leave Petition Nos.
9678 9680 of 1982.
From the Judgment and Order dated the 4th October, 1982 of the Madras High Court in C.R.P. No. 2880 82/1978.
AND Write Petition Nos.
9600 9601 & 9759 9760 of 1983.
Under Article 32 of the Constitution of India.
468 K.K.Venugopal and Mukul Mudgal for the Petitioner in SLP.
6605/83.
Shanti Bhushan, S.K. Jain and B.M. Mathur for the Respondents in SLP.
6605/83.
C.S. Vaidyanathan for the Petitioner in SLP (Civil) Nos.
9678 9680 of 1982.
Dr. Y.S. Chitale and A.V. Rangam for the Respondents in SLP (Civil) Nos.
9678 9680 of 1982.
S.N. Kacker and A.K. Panda for the Petitioners in Writ Petitions.
Shanti Bhushan and B.N. Mathur, S.K.Jain & S.D. Sharma for the Respondents in Writ Petitions.
The Judgment of the Court was delivered by DESAI, J.
In this group of special leave petitions and writ petitions, constitutional validity of Sec.
47 (I H) of the (`Act ' for short) directly or indirectly figures.
With a view to focussing attention on the context in which the question is raised, it may be advantageous to refer to the factual matrix in S.L.P. 6605/83, in which the learned Single Judge and the Division Bench of the High Court repelled the challenge.
We would first deal with the principal challenge common to all petitions and then dispose of specific contention raised in other petitions clubbed together here.
For representative facts we would refer to S.L.P. 6605/83.
Re: S.L.P. No. 6605/83: Petitioner Sher Singh is the holder of a stage carriage permit on Behror Rewari via Barrod, Shahjahanpur inter State route.
A portion of the route from Bahror to National Highway No. 8 via Barrod and Shahjahanpur 28 k.ms.
in length passes through Rajasthan State and the rest of the portion of the route 22 K.ms.
in length lies in Haryana State.
It is thus an inter State route.
Petitioner holds 12 permits, for operating on the aforementioned route.
Of the 12 permits, the period prescribed under 8 permits expired and the petitioner applied for the renewal of the permits under Sec.
58 of the .
Regional Transport Authority granted renewal of the permits upto and inclusive of January 20, 469 1981.
The petitioner again applied for renewal of the permits on December 29, 1980.
The Rajasthan State Road Transport Corporation, fifth respondent (`Corporation ' for short) made an application to the Regional Transport Authority on April 20, 1981 for stage carriage permit on the aforementioned route.
This application was as usual advertised.
The application of the petitioner for the renewal of his permits accordingly was taken up for consideration on April 30, 1981.
Pending the consideration of the application for renewal of permits, petitioner was granted temporary permits under Sec.
62 for a period of four months commencing from the date of the expiry of the earlier permit.
The temporary permits were thus to expire on May 20, 1981.
And these temporary permits were further renewed for a period of 4 months Thereafter the application of the petitioner for renewal of his permits and the application for stage carriage permit made by the Corporation were taken up for consideration.
An objection was raised by the Corporation that as the route in question is an inter State route, it is entitled to permit in preference to the petitioner in view of the provision contained in Sec.
47 (I H) of the .
On the other hand, it was contended on behalf of the petitioner that in view of the provision contained in Sec.
58, the petitioner is entitled to renewal of his permits in preference to the Corporation, which has made an application for a fresh permit.
This contention found favour with the Regional Transport Authority and the renewal of permits was refused to the petitioner and the permits were granted to the Corporation.
This decision was questioned in a writ petition filed by the present petitioner in which the only contention raised was that the preference was accorded to the Corporation for grant of a permit under Sec.
47 (I H) of the which is constitutionally invalid, and once no such preference could be granted, the preference in favour of a renewal of permit under Sec.
58 should have a precedence and the renewal ought to have been granted.
It was contended before the learned Single Judge of the High Court that Sec. 47 (1 H) is violative both of article 14 and article 19 (1) (g) and is thus constitutionally invalid.
That was the only contention canvassed before the learned Single Judge which did not find favour with him as well as the Division Bench of the Rajasthan High Court.
Hence the petitioner filed this petition for special leave.
A notice was ordered to be issued to the respondent and it was directed that the petition be finally disposed of at this stage as the only question raised is one of law and no investigation of facts is necessary.
470 A brief reference to the relevant provisions of the may help us in demarcating the contours of controversy with precision.
Chapter IV of the contains provisions for control of transport vehicles.
For regulating the transport business, a scheme for granting different types of permits has been statutorily prescribed.
There are various kinds of permits contemplated by the such as stage carriage permit, contract carriage permit, all India tourist permit, special permit, permits for transport of goods etc.
Various authorities have been constituted under the for the purpose of implementing the .
Power has been conferred upon specific authorities for granting different kinds of permits.
47 prescribes procedure which the Regional Transport Authority has to follow while examining and deciding an application for stage carriage permit.
47 was specifically amended by 47 of 1978 which came into force on January 16,1979 By the Amending , sub secs (1 A) to (1 H) were added to Sec.
The focus of controversy is on subsec.
(1 H).
Sub sec.
(1 H) reads as under: "(1 H): 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 68 D where the undertaking operates the service.
Explanation: For the purposes of this sub section, 'inter State route ' means any route lying contiguously in two or more States. '.
A bare reading of the provision contained in sub sec.
(1 H) shows that where a Corporation set up under the is one of the applicants for a stage carriage permit on an inter State route, then as between other applicants and a State Transport Undertaking ( 'Undertaking ' for short), the latter 471 will have preference over others.
Routine statutory procedure prescribed in Sec.
47 for grant of a stage carriage permit requires the Regional Transport Authority which has the power to grant permit before selecting who amongst the numerous applicants should be granted the permit must take into consideration various things that are enumerated in Sec.
Fair approach would be that after examining the credentials of every applicant, the Regional Transport Authority shall grant permit to the person who in its opinion would best serve the travelling public.
The Regional Transport Authority upon a judicious consideration of merits and demerits of every applicant must in a fair and reasonable manner decide who amongst the applicants would perform the duty and carry out the obligations under the permit.
However, sub sec.
(1 H) carves out an exception to this generally well recognised principle that an administrative authority has to adopt while exercising the power conferred upon it by the statute, that where an application for a stage carriage permit on an inter State route is made by all intending applicants which includes a State Transport undertaking, its application must be accorded preference.
But while granting preference, the Regional Transport Authority must satisfy itself that the Corporation would be able to operate on 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 sec.
(3) of Sec.
68 D where the undertaking operates the service.
At this stage, a reference to Sec. 58 would be useful.
It provides for duration and renewal of stage carriage and contract carriage permits other than temporary permit granted under Sec.
An existing holder of permit may apply for renewal of permit.
Sub sec.
(2) of Sec.
58 requires that a permit may be renewed on an application made and disposed of as if it were an application for a permit.
There is a proviso to sub sec.
(2) which prescribes the time limit within which an application for renewal of different kinds of permits may be made.
There is a second proviso which is material and which may be extracted: "Provided further that other conditions being equal, an application for renewal shall be given preference over new applications for permits." Chapter IV A was introduced in the by Amending 100 of 1956 which came into force on February 2, 1957.
Chapter IV A makes special provisions relating to State Transport Undertaking.
472 The broad scheme of Chapter IV A is that a State Transport Under taking may prepare and publish a scheme on road transport service.
On the publication of the scheme, objections can be filed as provided in Sec.
68 D. Sec.
68 E confers powers for modification and cancellation of the Scheme.
Then comes Sec. 68 F which provides that where, in pursuance of an approved scheme, any State transport undertaking applies, in such a manner as may be prescribed by the State Government in this behalf, for a stage carriage permit or a contract carriage permit in respect of a notified area or notified route, the State Transport Authority in any case where the said area or route lies in more than one region and the Regional Transport Authority in any other case shall issue permit to the State Transport undertaking, notwithstanding anything to the contrary contained in Chapter IV.
In short in respect of a notified area or a notified route, an application for permit by State Transport undertaking shall be granted to the exclusion of any other operator.
Apart from this specific provision in Sec.
68 F, this outcome to some extent also emerges from the provision contained in Sec.
68 B which provides that the provisions of Chapter IV A and the rules and orders made thereunder shall have effect notwithstanding anything inconsistent there with contained in Chapter IV of the or any other law for the time being in force or in any instrument having effect by virtue of any such law.
The first contention raised on behalf of the petitioner was that the State Transport Undertaking must either take recourse to provision in Chapter IV A or otherwise if it wants to compete without recourse to Chapter IV A, it must stand in competition with other applicants for stage carriage permit and any preference that it may enjoy in respect of inter State route under sub sec.
(1 H) of Sec.
47 is violative of article 14 and is denial of fundamental freedom to carry on trade guaranteed to petitioners by article 19 (1) (g).
At the outset it is necessary to bear in mind the legal position of a State Transport Undertaking when dealt with under Chapter IV A and Chapter IV of the .
If an approved scheme in respect of a notified area or a notified route is in force, State Transport Undertaking alone is entitled to operate vehicles and therefore is entitled to obtain stage carriage permits both regular and temporary depending upon whether the scheme provides for total or partial exclusion of private operators.
However, when an application for a permit is made under Chapter IV, the Undertaking has to compete 473 with private operators who may as well make an application for permit.
When the Undertaking applies for permit under Chapter IV, it must satisfy the Regional Transport Authority that it is better suited than the private operator to render transport facility to the travelling public.
47 (1 H) however, provides that in the case of inter State route, the Undertaking will have preference in the matter of stage carriage permit.
Does preference of this nature deny equality guaranteed by article 14 ? The expression 'preference ' amongst others means prior right, advantage, precedence etc.
But how would it be possible to give precedence one over the other.
It signifies that other things being equal, one will have preference over the others.
When an application for a stage carriage permit is being processed as required by Sec. 47, the application of the Undertaking for an inter State route shall be examined as application of any other private operator.
Their merits and demerits must be ascertained keeping in view the requirements of (a) to (f) of Sec.
47 (1) and after comparing the merits and demerits of both, not with the yardstick of mathematical accuracy, but other things being equal, the application of the Undertaking will have preference over others.
Qualitative and quantitative comparison on broad features of passenger transport facility such as fleet, facilities to travelling public and other relevant consideration may be undertaken and after balancing these factors other things being equal, the application of the Undertaking shall be given preference over other applicants.
There is no question of eliminating private operators merely because the Undertaking applies for a stage carriage permit under Chapter IV.
That situation is catered to under Chapter IV A.
In an application under Chapter IV, Corporation has to enter the arena like any other applicant, face the competition and come up to the level of other private operators intending to obtain stage carriage permits and then in respect of the route in question claim preference.
Would this statutory provision violate equality guaranteed by article 14 ? The answer is obviously in the negative.
Competition is the essence of improved commercial service.
After ensuing competition in matter of rendering more efficient transport service a public sector undertaking is assured statutory preference, remember no monopoly, there is no denial of equality guaranteed by article 14 ? A similar argument when the vires of the provisions contained in Chapter IV A were questioned in Dosa Satyanarayanamurty etc.
vs The Andhra Pradesh State Road Transport Corporation (1) did not commend to the Constitution Bench when it repelled the challenge observing as under: 474 "Ordinarily a State Transport Undertaking should be in a better position than others to carry on the said services for the benefit of the public; administratively, financially and technically it can be expected to be in a far better position than others.
It can provide more well equipped buses, give better amenities to the travelling public, keep regular timings repair or replace the buses in emergencies.
It may also employ efficient supervisory staff to keep things going at an appreciably high standard.
" This would apply mutatis mutandis to the present situation.
But let it be made clear that while considering the application for stage carriage permit under Sec.
47, the private operator has an equal chance to get a permit even on inter State route if it shows that the Undertaking is either unable to provide efficient and economical service or that the private operator is better equipped to render the same.
Preference in this context would mean that other things generally appearing to be qualitatively and quantitatively equal though not with mathematical accuracy, statutory provision will tilt the balance in favour of the Undertaking.
Viewed from this perspective the provision contained in Sec.
47 (1 H) would not deny equality before law and hence would not effend article 14.
The next contention was that Sec.
47 (1 H) is violative of article 19 (1) (g) in that it denies to the petitioner the fundamental freedom to carry on trade.
There is no substance in this contention because the petitioner has not been denied his freedom to carry on trade.
The petitioner is entitled to make an application under Chapter IV for a stage carriage permit and must compete with other private operators as also the Undertaking.
It is too late in the day to contend that a preference in favour of the Undertaking would be violative of article 19 (1) (g) for the obvious reason that Undertaking like all other applicants for permit has to compete for a permit.
It may be recalled that when it came to the provisions of Chapter IV A, this Court has more often than once upheld the validity of the provisions contained in Chapter IV A and repelled the challenge of its being violative of article 19 (1) (g), even though the private operator may be wholly excluded from even applying for a permit in respect of a notified area or a notified route being part of an approved scheme.
From a slightly different angle, the challenge may be repelled in that other things 475 being equal, even apart from the statutory preference, the Undertaking whose net profits are required to be spent for the provision of amenities to the passengers using road transport services, welfare of labour employed by the Undertaking, for financing the expansion programmes of the Undertaking, and the balance to be made over to the State Government for the purpose of road development must receive in larger public interest preference for a permit compared to a private operator whose profits would go to augment his private income.
30 of the Road Transport Corporation Act, 1950 makes statutory provision for disposal of net profits of a State Transport Undertaking.
In a slightly different context, this Court in Lachman Das vs State of Punjab & Ors.
while repelling the challenge to the validity of Patiala Recovery of State Dues Act, IV of 2002 BD approved the ratio in Mannalal & Anr.
vs Collector Of Jhalawar and Ors.(2) in which it was held that the dues of the Government of a State are the dues of the entire people of the State.
This being the position, a law giving special facility for the recovery of such dues cannot, in any event, be said to offend article 14 of the Constitution. ' This very approach requires to be adopted while examining the challenge under article 19 (1) (g).
It was next contended that petitioner was an existing permit holder and therefore, under Sec.
58 it was entitled to renewal of its permits in preference to the applications for new permits made by the Undertaking.
The second proviso to Sec.
58 (2) does provide that 'other conditions being equal, an application for renewal shall be given preference over new applications for permits. ' What has surprised us the most is that while the petitioners have a serious grievance against the preference accorded to the Undertaking for a permit on the inter State route under Sec. 47 (1 H), the same petitioner is keen to protect preference in favour of the renewal of a permit against a new applicant statutorily provided in Sec. 58.
But Sec. 58 also manifests the legislative intention when it uses the expression preference with an adjectival clause 'that other conditions being equal ', an application for renewal will have a preference over the new applications.
The first submission in this behalf is that when an application is made for a renewal of a permit, it has to be considered only under and the preference therein provided excludes any consideration of an application for a permit under Sec.
Approaching the matter from this angle, it was contended that as the present petitioner has made an application for the renewal of the permit, he should have been accorded preference as mandated by the second proviso to Sec.
58(2) over the fresh application of the Undertaking and consideration of the application of the renewal of the permit under Sec.
58 excludes importing of the provisions of Sec.
This approach overlooks a specific provision enacted in sub sec.
(2) of Sec. 58 which provides as under: "58 (2) A permit may be renewed on an application made and disposed of as if it were an application for a permit . " When a statute prescribes that an application for renewal of a permit shall be made and disposed of as if it were an application for a permit, the legislature incorporated by pen and ink all those provisions which are applicable for grant of a permit upon a fresh application made in this behalf.
If an application for renewal of a permit was to be treated differently than the application for a permit made under Sec. 45 and processed under Sec.
47 and other connected provisions, it was absolutely unnecessary for the legislature to provide that an application for renewal of a permit shall be made and disposed of as if it were an application for a fresh permit.
The expression 'as if ' is used to make one applicable in respect of other.
Therefore, the expression 'as if ' used in Sec. 58 (2) would mean and imply that the application for renewal must be made in the same manner and to same extent an application for a fresh permit and must be processed as such.
This would mean that even where an existing permit holder applies for a renewal of his permit, it has to be advertised and fresh applicants can as well apply for a permit to ply vehicles on the same route for which the previous holder of permit has applied for renewal of his permit.
After considering all such applications, other conditions being equal, an existing operator who has applied for renewal will have preference.
Therefore, by necessary interpretation, Sec. 47 (1 H) would also come into play when an application is for renewal of a permit on an inter State route.
There is no conflict between Sec.
47 (1 H) and Sec.
58 (2).
It is therefore, not possible to accept the submission that while considering the application for renewal of a permit, Sec. 47 (1 H) is not attracted.
477 It appears that the State of Rajasthan had amended Sec.
58 (2) in its application to that State by engrafting a third proviso to sub sec.
(2) of Sec.
58 by Rajasthan Act 8 of 1973, which reads as under: "Provided also that other conditions being equal, an application for stage carriage permit by a State Transport Undertakings, as defined in Section 68 A, whether an application for renewal or a new application shall be given preference over all other applications for renewal.
" Addition of this proviso merely makes explicit what was implicit in sub sec.
(2) of Sec. 58.
Nothing was pointed out to us to hold that the Rajasthan State Legislature lacked competence to add the aforementioned proviso to sub sec.
(2) of Sec. 58.
Re: S.L.Ps.
9678 to 9680/82: In this group of petitions for special leave, it was contended before the High Court that as Pallavan Transport Corporation Ltd., the first respondent, did not make provision for night halt cleaners, the application for permits made by them were liable to be screened.
The High Court declined to examine this contention on the short ground that this contention was not raised before the State Transport Appellate Tribunal.
For the same reason, we could as well have declined to examine this contention.
However, it may as well be pointed out that even if the contention is to be examined on merits, there is no substance in it.
The State of Tamil Nadu has framed what are styled as Tamil Nadu Motor Vehicles Rules.
Rule 155 A provides for a marking system under different heads to rival claimants for permit to objectively assess who amongst them is the best to whom permit should be granted.
Before proceeding to assign marks under different heads, the Transport Authority has to screen applications so as to weed out those unsuitable on one or the other ground mentioned in the rule.
One such disqualification is the failure to provide for night halt cleaners.
It was urged that after the Transport Authority made the enquiry from the first respondent Corporation whether it has provision for night halt cleaners, without waiting for the clarification, the Transport Authority proceeded to dispose of the application.
It was next pointed out that Rule 155 A (3) (d) provides that 5 marks shall be awarded to the applicant falling within the proviso to cl.
(c) of Sec.
62 of the Act which means and implies a State Transport Undertaking.
The 478 grievance is that such adhoc assignment of marks and failure to weed out the application on the ground of disqualification for not providing night halt cleaners has vitiated the decision of the Transport Authority.
The validity of Rule 155 A and its various sub clauses came up for consideration of this Court in D.R. Venkachalam & Ors.
vs Dy.
Transport Commissioner & Ors.(1) This Court repelled the challenge especially to the provision for assigning 5 marks to a State Transport Undertaking observing as under: "A State enterprise, in a truly Welfare State, is charged with a social consciousness and responsibility for its citizens, an attention to serve them and a willingness to embark on public utility undertakings better to fulfil people 's demands.
The public sector enterprises are expected to be model employers and model servants planning their budgets, subjecting themselves to public audit and criticism and inquest by legislative committees and the Houses of the legislature.
Profits are their concern but, more importantly, public weal is their commitment.
Such is the philosophy of the State sector in our socialistic pattern of society.
" On the question of assignment of 5 marks to State Transport Undertaking this Court held that 'this is not an arbitrary stroke of favouritism because there are many promotional factors bearing on the interest of the travelling public which a State enterprise qua State enterprise will, but a private enterprise qua private enterprise will not, take care of.
After all, private enterprise has its primary motivation in profit '.
The Court further observed that 'the superiority in many respects of State Transport Undertakings, in the legislative judgment, has led to r. 155 A '.
The Court ultimately held that the assignment of marks under r. 155 A is geared to public interest, which is the desideratum of section 47 (1) of the Act.
Once the assignment of 5 marks to State Transport Authority Undertaking is held to be valid, the Transport Authority was perfectly justified in refusing renewal of permits to the petitioners in comparison to the State Transport Undertaking.
As for failure to explain absence of night halt cleaners, in the absence of concerte evidence, no inference can be drawn.
This was the only additional contention in this group of petitions and we find no substance in it.
479 These are all the contentions in this group of petitions and as we find no substance in any of them, all the petitions are dismissed with no order as to costs.
N. V. K. Petitions dismissed.

summary/full:
The petitioner in the Special Leave Petition was the holder of a Stage carriage permit on an inter State route He held several permits for operation of the said route and as the period prescribed for a few of them had expired, he applied for renewal under section 58 of the to the Regional Transport Authority which granted renewal.
In the meanwhile, the State Road Transport Corporation the 5th respondent made an application for grant of a stage carriage permit for operation on the said route.
This application was advertised and the matter was taken up for consideration.
During the pendency of this application the petitioner was granted temporary permits under section 62 which were renewed from time to time.
When the application of the petitioner for renewal of permits and the application of the State Road Transport Corporation for allotment of new permit were taken up for consideration, an objection was raised on behalf of the Corporation that as the route was an inter State route it was entitled to the permit in preference to the petitioner in view of section 47 (1 H).
On behalf of the petitioner it was contended that section 58 entitled the petitioner to renewal of permit in preference to the Corporation.
The Regional Transport Authority negatived the petitioner 's contention and allotted the permit to the Road Transport Corporation.
465 The petitioner in his writ petition to the High Court contended that section 47 (1 H) was constitutionally invalid and no preference could be granted in favour of the State Road Transport Corporation.
The Single Judge dismissed the writ petition and the Division Bench upheld the order.
In the Special Leave Petitions to this Court it was contended on behalf of the petitioners that the State Road Transport Corporation must either take recourse to the provisions contained in Chapter IV A of the Act, which makes special provisions relating to State Transport Undertaking or otherwise if it wants to compete without recourse to chapter IV A it must stand in competition with other applicants for allotment of stage carriage permits.
Any preference that the State Road Transport Corporation may enjoy in respect of an interstate route under sub section (1 H) is violative of Article 14 and the fundamental freedom to carry on trade under Article 19 (1) (g).
Section 58 entitled the petitioners to renewal of permit in preference to the application for grant of a new permit made by the State Transport Undertaking.
In the connected Special Leave Petitions, it was contended on behalf of the petitioner that Rule 155 A of the Tamilnadu Motor Vehicles Rules provides for a marking system under different heads to objectively assess who is the best suited for grant of the permit, and consequently an ad hoc assignment of marks and failure to weed out the application of the State Transport Corporation on the ground of disqualification for not providing night halt cleaners vitiated the decision of the Transport Authority.
Dismissing the Petitions.
^ HELD: 1.(i) Section 47 (1 H) would not deny equality before law and hence would not offend Article 14.
[474 E] (ii) The Regional Transport Authority under section 47 upon a judicious consideration of merits and demerits of every applicant must in a fair and reasonable manner decide who amongst the applicants would perform the duty and carry out the obligations under the permit.
However, sub section (1 H) carves out an exception, that where an application for stage carriage permit on an inter state route is made by a State Transport Undertaking it must be accorded preference.
But while granting preference, the Regional Transport Authority must satisfy itself that the Corporation would be able to operate on the inter state route without detriment to its responsibility for providing efficient and adequate road transport service.
[471 C D] Dosa Satyanarayanamurty etc.
vs The Andhra Pradesh State Road Transport Corporation [1961]1 S.C.R. 642 referred to.
(iii) While considering the application for stage carriage permit under section 47, the private operator has an equal chance to get a permit even on an inter State route if it shows that the Undertaking is either unable to provide efficient and economical service or that the private operator is better equipped to render the same.
Preference in this context would mean that other things 466 generally appearing to be qualitatively and quantitatively equal though not with mathematical accuracy, statutory provision will tilt the balance in favour of the Undertaking.
[474 D] (iv) Section 47 (1 H) provides that in the case of inter State route, the Undertaking will have preference in the matter of stage carriage permit.
The expression `preference ' amongst others, means prior right, advantage, precedence etc.
It signifies that other things being equal, one will have preference over the other.
[473 B] (v) When an application for the stage carriage permit is being processed as required by sec.
47, the application of the Undertaking for an inter State route shall be examined as an application of any other private operator.
Their merits and demerits must be ascertained keeping in view the requirements of clauses (a) to (f) of sec.
47 (1) and after comparing the merits and demerits of both the application of the Undertaking will have preference over others.
[473 C D] (vi) Qualitative and quantitative comparison on broad features of passenger transport facility such as fleet, facilities to travelling public and other relevant consideration may be undertaken and after balancing these factors other things being equal, the application of the Undertaking shall be given preference over other applicants.
There is no question of eliminating private operators merely because the Undertaking applies for a stage carriage permit under Chapter IV.
[473 E] (vii) In an application under Chapter IV, the Corporation has to enter the arena like any other applicant, face the competition and come up to the level of other Private operators intending to obtain stage carriage permits and then in respect of the route in question claim preference.
Competition is the essence of improved commercial Service.
[473 F] 2.
(i) There is no substance in the contention of the petitioner that sec.
47(1 H) is violative of article 19 (1) (g) in that it denies the fundamental freedom to carry on trade because the petitioner has not been denied his free dom to carry on trade.
The petitioner is entitled to make an application under Chapter IV for a stage carriage permit and must compete with other private operators as also the Undertaking.
[474 F] (ii) The Undertaking whose nett profits are required to be spent for the provision of amenities to the passengers using road transport services, welfare of labour employed by the Undertaking, for financing the expansion programmes of the Undertaking, and the balance to be made over to the State Government for the purpose of road development must receive in larger public interest preference for a permit compared to a private operator whose profits would go to argument his private income.
[475 A B] Lachhman Das vs State of Punjab & Ors.[1963] 2 S.C.R. 353; Mannalal & Anr.
vs Collector of Jhalawar and Ors. ; referred to.
467 3 (i) If an application for renewal of a permit was to be trated differently than the application for a permit made under section 45 and perocessed under section 47 and other connected provisions, it was absolutely unnecessary for the legislature to provide that an application for renewal of a permit shall be made and disposed of as if it were an application for a fresh permit.
[476 E] (ii) The expression "as if" occurring in Section 58 (2) in the phrase "as if it were an application for a permit . " would mean and imply that the application for renewal must be made in the same manner and to the same extent as an application for a fresh permit and must be processed as such.
This means that even where an existing permit holder applies for renewal, it has to be advertised and fresh applicants can apply for a permit.
[476F] (iii) Section 47 (1 H) would also came into play when an application is for renewal of a permit on an inter State route.
There is no conflict between Section 47 (1 H) and Section 58 (2).
[476 G] 4.
Once the assignment of 5 marks to the State Transport Undertaking, is held to be valid the Transport Authority was perfectly justified in refusing renewal of permits to the petitioners.
Regarding failure to explain absence of nighthalt cleaners, in the absence of concrete evidence, no inference can be drawn.
[478 G H] D.R. Venkatachalam & Ors.
vs Dy Transport Commissioner


judgement:
Civil Appeal No. 1351 of 1980.
Appeal by Special leave from the Judgment and Order dated the 27th March, 1980 of the Allahabad High Court (Lucknow Bench) in Writ Petition No. 907 of 1975.
S.N. Kacker, N.S. Pandey and Altaf Ahmad for the Appellant.
K.B. Asthana, Shakeel Ahmed, M. Qamaruddin and Mrs. Qamaruddin for the Respondents.
The Judgment of the Court was delivered by CHANDRACHUD, C. J.
This appeal, with its long and labyrinthian history, sums up how the process of law can frustrate rather than further the cause of justice.
The appeal portrays the resolute story of a medical graduate who has been trying over the past eight years to obtain a post graduate qualification.
Law has both helped and hindered him in that quest.
His name is Vishan Kumar Agarwal.
This appeal is filed by the principal, King George 's Medical College, Lucknow, against the judgment of the Allahabad High Court dated March 27, 1980.
Respondent No. 1 is Dr. Vishan Kumar Agarwal, while respondent No. 2 who supports him is the Head of the Department of Physiology of the Medical College.
In a writ petition filed by Dr. V.K. Agarwal under Article 226 of the Constitution, the High Court issued a mandamus asking the appellant to declare the result of the examination for the degree of M.D. (Physiology) for which the petitioner had appeared in July 1977.
We will refer to Dr. V.K. Agarwal as 'the respondent '.
506 The question which arises in this appeal is whether the respondent possessed the requisite qualification for being admitted to the course of study the degree of Doctor of Medicine of the Lucknow University.
Having passed the M.B.B.S. Examination of the Lucknow University in July 1971, the respondent completed one year 's rotating compulsory internship, whereupon he was registered as a medical graduate by the State Medical Council.
In August 1972, he was appointed as a Medical Officer in the Civil Hospital at Lucknow which is approved by the Medical Council for compulsory internship.
In October 1974, the respondent applied to the Principal, King George 's Medical College, Lucknow, for admission to the M.D. course in Physiology, which was due to commence on January 1, 1975.
The Head of the Physiology Department recommended the respondent 's candidature, but the principal rejected the respondent 's application on the ground that he did not fulfil the qualification prescribed in paragraph (i) of the second proviso to clause (c) of Ordinance 1 of Chapter III of the Lucknow University Ordinances.
The aforesaid Chapter III is entitled "Doctor of Medicine and Master of Surgery".
On April 4, 1975 the respondent filed a writ petition in the Allahabad High Court, out of which this appeal arises.
The High Court passed an interim order on the same date asking the University to admit the petitioner to the M.D. course in Physiology subject to the availability of a seat.
The University complied with that direction by admitting the respondent to the M.D. course.
But, on February 3, 1976, the Principal of the College filed an application for vacating the interim order dated April 4, 1975 by which the respondent was directed to be admitted to the M.D. course.
The application filed by the Principal was rejected on November 12, 1976, with the result that the respondent continued his studies for M.D. degree in Physiology, uninterrupted.
He submitted his thesis, which was approved by the University authorities.
The respondent was due to appear for the M.D. examination which was scheduled to be held in December 1976 but, he was refused an admission card without which he could not appear for the examination.
Undaunted, he filed a suit in which the trial court passed and interim order directing the University authorities not to obstruct the petitioner from appearing for the examination.
The respondent appeared for the written examination but, as if not to be 507 outdone, the University filed an appeal against the interim order, which came to be allowed.
As a consequence of the appellate order, the appearance of the respondent at the written examination of 1976 become abortive since, it was as if he appeared for the examination without an admission card.
Inevitably, he was driven to wait until the next examination which was due to be held in July 1977.
He appeared for that examination but, apprehending that the University will not declare his result, he amended his writ petition so as to ask for a mandamus directing the University to declare his result.
The High Court issued the mandamus which is the subject matter of this appeal.
The contention of the respondent that he was duly qualified to be admitted to the M.D. (Physiology) courses has to be examined on the basis of paragraph (i) of the second proviso to clause (c) of Ordinance 1.
That Ordinance, to the extent material, reads thus: "1.
No candidate shall be eligible to appear at the examination for the degree of Doctor of Medicine or Master of Surgery unless: (a) he has obtained the degree of M.B.B.S. of the University of Lucknow . . . . . . (b) he has, after passing the M.B.B.S. examination, completed one year 's compulsory rotating housemanship . . . (c) he has, after full registration, done one year 's housemanship or equivalent job: Provided that for basic science, one year 's demonstratorship or equivalent job in the subject will be considered equivalent to one year 's housemanship.
Provided also that works in the following capacities will be considered as equivalent to one year 's housemanship; (i) Three years ' work as a Medical Officer in a hospital approved by the Medical Council for compulsory internship.
508 (ii) . . . . (iii) . . . . (d) He has subsequent to 1(c) put in two years ' work in the subject in department concerned in the college." (e) . . . . .
There is no dispute that the respondent satisfied the requirements of clauses (a) and (b) of Ordinance 1.
He had obtained the degree of M.B.B.S. or the University of Lucknow as required by clause (a) and, after passing that examination, he had completed one year 's compulsory rotating housemanship as required by clause (b).
The narrow dispute between the parties is whether, after full registration, the respondent had done one year 's housemanship or equivalent job on the material date.
Under paragraph (i) of the second proviso to clause (c) of the Ordinance, three years ' work as a Medical Officer in a hospital approved by the Medical Council for compulsory internship, can be considered as equivalent to one year 's housemanship.
The respondent passed his M.B.B.S. examination in July 1971 and after completing one year 's compulsory rotating housemanship, he obtained full registration with the State Medical Council.
In August 1972, he started working as a Medical Officer in the Civil Hospital, Lucknow, which is approved by the Medical Council for compulsory internship.
He had not done one year 's housemanship after full registration but, by virtue of paragraph (i) of the second proviso to clause (c) of the Ordinance, three years ' work as a Medical Officer in the Civil Hospital at Lucknow would be equivalent to one year 's housemanship.
When the respondent appeared for the M.D. examination in July 1977, he had evidently completed three years ' work as a Medical Officer in the Civil Hospital, Lucknow, which, as stated earlier, is approved by the Medical Council for compulsory internship.
According to the Principal of the Lucknow Medical College, the impediment in the way of the respondent was that on the date on which he applied for admission to the M.D. course, that is to say, in October 1974, he had not completed three years ' work as a Medical Officer in the Civil Hospital, having started working in that capacity in August 1972 only.
Thus, the question which arises for consideration is whether the qualification prescribed by paragraph (i) of the second proviso to clause (c) of Ordinance 1 is required to be fulfilled 509 by the candidate on the date on which he applies for admission to the M.D. course of studies or whether, as contended by the respondent, it is enough if that qualification is fulfilled on the date of the examination.
Ordinance 1 begins with the words: "No candidate shall be eligible to appear at the examination for the degree of Doctor of Medicine or Master of Surgery, unless. . ." (emphasis supplied).
The respondent derives sustenance to his contention from the words which we have underlined.
It is argued on his behalf that Ordinance 1 prescribes conditions of eligibility for appearing at the examination and not for making an application for admission to the M.D. course of studies.
Therefore, the material date for determining whether the conditions of eligibility are fulfilled is the date of examination and not the date of application.
This contention is difficult to accept.
Clauses (a) to (e) of Ordinance 1 are parts of an integrated scheme and therefore it will be wrong to apply different criteria to the interpretation of those clauses.
Clause (a) of the Ordinance requires that the candidate "has obtained" the degree of M.B.B.S.
It is inarguable that a candidate who has not yet obtained the M.B.B.S. degree can apply for admission to the M.D. course of studies in anticipation of or on the supposition that he will pass that examination before the M.D. examination is held.
He must hold the M.B.B.S. degree on the date on which he applies for admission to the course of studies leading to the M.D. examination.
Clause (b) requires that the candidate "has . . . completed" one year 's compulsory rotating housemanship after passing the M.B.B.S. examination.
As in the case of clause (a), this qualification must also be possessed by the candidate on the date on which he applies for admission to the M.D. course of studies.
It is not enough that the candidate has completed one year 's compulsory rotating housemanship after making the application and before the date of the examination.
The language of clause (c) is, in material respects, identical with the language of clauses (a) and (b).
Leaving aside for a moment the equivalence prescribed by paragraph (i) of the second proviso to clause (c) of the Ordinance, the substantive provision of clause (c) requires that the candidate "has, after full registration, done one year 's housemanship or equivalent job".
There is no justification for applying to the interpretation of this clause a different test than the one which has to be applied to the interpretation of clauses (a) and (b).
Neither the language of clause (c) nor the requirement of justice and fairplay warrants such a course.
Therefore, the condition prescribed by clause (c) must also be shown to have been fulfilled by the candidate on the date on which he 510 applies for admission to the M.D. course of studies and not later.
Clause (d) of the Ordinance points in the same direction.
It requires that subsequent to obtaining the qualification prescribed by clause 1(c), the candidate "has . . put in two years ' work in the subject in the department concerned in the college".
The verbs used in clauses (a) to (d) are: "has obtained", "has completed", "has done" and "has put in" respectively.
Giving to those words their natural meaning, we are of the view that the requirement of everyone of these clauses has to be fulfilled by the candidate on the date on which he applies for admission to the M.D. or M.S. course of studies.
It is not sufficient that he fulfils the requirements of these clauses on the date of the examination.
As a result of the interpretation which we have placed upon clause (c) of Ordinance 1, the writ petition filed by the respondent in Allahabad High Court is liable to be dismissed.
But, in view of the circumstances which we will immediately mention, it would be unjust to deny the relief sought by the respondent.
We have already mentioned that after appearing for July 1977 examination, the respondent amended his writ petition and asked for a writ of mandamus directing the University to declare his result.
The respondent made a specific averment in the amended writ petition that two candidates, Dr. (Miss) Rashmi Saxena and Dr. Mrs. Ratna Prabha Gupta, were admitted by the University to the same course of post graduate studies, even though they did not possess the requisite qualification on the date on which they applied for admission.
Learned counsel who appeared for the Principal of the Medical College in the High Court, produced the necessary papers before it relating to the admission of the two candidates.
The High Court has observed in its judgment that the papers relating to Dr. (Miss) Saxena show that she had passed the four and half year Course M.B.B.S. examination in December 1972, that she completed the pre registration one year compulsory housemanship on January 11, 1974, that she did the post registration housemanship from January 18, 1974 to August 8, 1974 and that on May 9, 1974 she joined as a Demonstrator in Physiology.
She applied for admission to the M.D. (Physiology) course on October 18, 1974.
That application was accepted on December 30, 1974.
As held by the High Court, it is clear from these dates that on the date on which Dr. (Miss) Saxena applied for admission to the M.D. course, she had complected a period of 9 months only in her House job as a Demonstrator, whereas she ought to have completed one year as prescribed by clause (c).
In fact, the requisite period of one year was not completed even on December 30, 1974 when her application for admission was 511 accepted by the University.
She had sought admission to the course which was to commence on January 1, 1975 but she had started her post registration housemanship on January 18, 1974.
Thus, she had not completed the requisite period of one year 's housemanship even on the date on which the course commenced.
The papers relating to the admission of Dr. (Mrs.) Ratna Prabha Gupta to the course of studies in M.D. (Physiology) disclose the same state of affairs.
Though she was not qualified under the first proviso to clause (c); she was admitted to the course by the University.
It has to be borne in mind that the University granted this concession though, under clause (c), no power is conferred upon it to relax the requirement of the period of one year which is permissible under the third proviso to clause (d).
We agree with the High Court that the papers relating to the admission of Dr. (Miss) Saxena and Dr. (Mrs.) Gupta show that the requirement of clause (c), was not invariably insisted upon by the University or by the College.
They did not regard that requirement as mandatory.
We consider it unfair that the respondent should be picked up for a differential treatment, though situated similarly in the matter of the application of clause (c).
If the requirement of clause (c) could be relaxed in the case of the other two candidates in regard to their admission to the M.D. course of studies, it would not be permissible to the University to regard that requirement as mandatory in the case of the respondent when he applied for admission to the very same course of studies.
Clause (c) does not apply differently to men and women.
There is no substance in the contention of the University or of the Principal of the Medical College that the University authorities committed an error in the case of the two women candidates.
Neither the University nor the Principal of the Medical College filed any counter affidavit to the amended writ petition, with the result that the averments made by the respondent in regard to the relaxation made in favour of those two candidates remained uncontroverted.
It is therefore not open to the University authorities to contend that the relaxation in favour of the two candidates was inadvertent or that it was made under a misconception.
In all future cases the interpretation put by us on Ordinance 1 must hold good.
In so far as the case of the respondent is concerned, his writ petition succeeds on the ground that the University and the 512 College authorities must apply the same yard stick to all the students who apply for admission to the post graduate course of studies.
Whether the rules contained in the Ordinance governing admission to the post graduate course of studies are mandatory or directory is a matter which the University shall have to consider after taking all relevant factors into account like the nature of the requirement, its purpose and the consequences of its relaxation on educational excellence.
We have not gone into that question because, no contention in that behalf was made either before us or in the High Court.
One thing, however, must be made clear that if the University considers that any provision is not mandatory, its relaxation in particular cases has to be governed by objective considerations.
No public authority, least of all a University which is entrusted with the future of the student community, can pick and choose persons for receiving the benefit of relaxation of the rules.
In the first place, the rigour of a rule can be relaxed provided such relaxation is permissible under the rules or if the rule is directory and not mandatory.
Secondly, even if it is permissible to relax a rule, such relaxation, as stated above, must be goverded by defined guidelines.
For these reasons, we confirm the judgment of the High Court and dismiss the appeal with costs in favour of respondent Dr. Vishan Kumar Agarwal.
S.R. Appeal dismissed.

dataset_name: IN-Abs

summary/full:
The Respondent Dr. Vishan Kumar Agarwal passed the M.B.B.S. Examination of the Lucknow University in July 1971, completed his one Year 's rotating compulsory internship and got his name registered as a medical graduate by the State Medical Council.
In August 1972 he was appointed as a Medical Officer in the Civil Hospital which is approved by the Medical Council for compulsory internship.
In October 1974 he applied to the Principal, King George 's Medical College, Lucknow for admission to the M.D. Course in Physiology which was due to commence in January 1975.
The Principal of the College, inspite of the recommendation of the head of the Department, rejected his application on the ground that he did not fulfil the qualifications prescribed in para (i) of the second proviso to clause (c) of the Ordinance I Chapter II of the Lucknow University.
On April 4, 1975, the respondent filed a writ petition, and obtained an interim order under which he was admitted to the course and continued his studies.
The respondent was due to appear for his examination in December 1976 but he was refused an admission card.
The suit filed by him against the refusal to grant admission card was admitted but the interim order obtained was got vacated by the college authorities.
So he appeared for the December, 77 examination and by way of abundant caution got the writ petition amended so as to include a prayer for issuance of a mandamus to declare his result.
In the writ petition he has also alleged discrimination shown by relaxing the rules in favour of two other women candidates.
The writ petition was allowed and hence the appeal by the Principal after obtaining special leave.
Dismissing the appeal, the Court ^ HELD: 1:1.
The requirement of every one of the clauses in Ordinance I has to be fulfilled by the candidate on the date on which he applies for 504 admission to the M.D. or M.S. Course of studies.
It is not sufficient that he fulfills the requirements of these clauses on the date of the examination.
[510 A C] 1:2.
Though ordinance I begins with the words "No candidate shall be eligible to appear at the examination for the degree of the Doctor of Medicine or Master or Surgery, unless. . .", it cannot he said that the material date for determining whether the conditions of eligibility are fulfilled is the date of examination and not the date of application.
[509 B C] 1:3.
Clauses (a) to (e) of Ordinance I are parts of an Integrated Scheme and, therefore, it will be wrong to apply different criteria to the interpretation of those clauses.
The verbs used in clauses (a) to (d) are: "has obtained", "has completed", "has done", and has put in" respectively.
Giving to those words their natural meaning, the requirement of everyone of these clauses has to be fulfilled by the candidate on the date on which he applied for admission to the M.D. or M.S. courses of studies.
It is not sufficient that he fulfills the requirements of these clauses on the date of the examination.
[509D, E G] 1:4.
There is no justification for applying to the interpretation of this clause a different test that the one which has to be applied to the interpretation of clauses (a) and (b).
Neither the language of clause (c) nor the requirement of justice and fairplay warrants such a course.
Therefore, the condition prescribed by clause (c) must also be shown to have been fulfilled by the candidate on the date on which he applies for admission to the M.D. Course of studies and not later.
[509 G H, 510 A] 2.
Whether the rules contained in the Ordinance governing admission to the post graduate course of studies are mandatory or directory is a matter which the University shall have to consider after taking all relevant factors into account like the nature of the requirement, its purpose and the consequences of its relaxation on educational excellence.
However, if the University considers that any provision is not mandatory, its relaxation in particular cases has to be governed by objective considerations.
No public authority, least of all a University which is entrusted with the future of the student community, can pick and choose persons for receiving the benefit of relaxation of the rules.
In the first place, the rigour of a rule can be relaxed provided such relaxation is permissible under the rules or if the rule is directory and not mandatory.
Secondly, even if it is permissible to relax a rule, such relaxation must be governed by defined guidelines.
The University and the College authorities must apply the same yard stick to all the students who apply for admission to the post graduate course of studies.
[512 B D] 3:1.
It is not open to the University, in the absence of any counter affidavit having been filed to the amended writ petition, to contend that the relaxation in form of the two candidates was inadvertent or that it was made under a mis conception.
[511 G] 3:2.
The University did grant the concession to both the women candidates, though under clause (c), no power is conferred upon it to relax the requirement of the period of one year which is permissible under the third 505 proviso to clause (d).
When the requirement of clause (c) was not invariably insisted upon by the University or by the College and they did not regard that requirement as mandatory, it is unfair that the respondent should be picked up for differential treatment, though situated similarly in the matter of the application of clause (c).
If the requirement of clause (c) could be relaxed in the case of the other two candidates in regard to their admission to the M.D. course of studies, it would not be permissible to the University to regard that requirement as mandatory in the case of the respondent when he applied for admission to the very same course of studies.
Clause (c) does not apply differently to men and women.
[511 B E]


judgement:
ivil Appeal No. 10296 of 1983 Appeal by Special leave from the Judgment and Order dated the 30th September, 1983 of the Patna High Court in C.W.J.C. No. 4139 of 1983 Pramod Swarup for the Appellant.
K.N. Rai for the Respondent.
The Judgment of the Court was delivered by 649 SEN, J.
The controversy in this appeal by special leave against an order of the Patna High Court dated September 13, 1983 relates to the legality and propriety of the action of the Chief Minister of a State in issuing certain directions, and incidentally the scope and extent of the power of a Minister to interfere with the working of a statutory functionary under his department.
The facts are that on the bifurcation on the district of Muzaffarpur and creation of the new districts of Muzaffarpur and Hajipur, a separate Central Co operative Bank called the Vaishalli District Central Co operative Bank for the district of Hajipur was registered with its registered bye laws.
Bye law No.29 of the said registered bye laws provides inter alia as follows: "29.
Management: The Management of the Bank shall vest in a Board of Directors which will consist of 17 persons: XX XX XX XX XX Provided also that the first Board of Directors of the Bank shall be nominated by the Registrar, Co operative Societies, Bihar for a period not exceeding one year at a time and not exceeding three Co operative years in aggregate and that the Registrar, Co operative Societies may modify the nomination if and when required.
" The Registrar, Co operative Societies, Bihar, in exercise of the powers conferred by bye law 29 by his order dated July 22, 1981 nominated a Committee of Management of 17 members, including the appellant, to be the first Board of Directors of the Co operative Bank for a period of six months i.e. upto December 31, 1981, or till further orders, whichever was earlier.
The Committee of Management was specifically directed to get the election of the Board of Directors of the Central Bank held in accordance with the law within six months of the date of their nomination and the Registrar by the order had reserved his discretion to make changes in the nomination of the Board by the use of expression 'until further orders '.
The Registrar by his letter dated October 1, 1981 directed the Committee of Management to complete the election of the Board of Directors of the Bank as per programme laid down therein by December 20, 1981 as the six months ' term of the nominated Board 650 was going to expire on December 31, 1981.
Copies of the letter were endorsed to the District Co operative Officer, Vaishalli for necessary action as also to the Executive Officer of the Bank stating that it would be his personal responsibility to get the desired steps taken in that connection as per the time schedule fixed.
In accordance therewith, the District Co operative Officer, Vaishalli by his letter dated October 23, 1981 directed the Executive Officer of the Co operative Bank to get the election of the Board of Directors completed by December 20, 1981.
The case illustrates an unfortunate trend which has now become too common these days in the governance of the country.
The appellant who was nominated to be the Secretary of the first Board of Directors and is apparently a political person had a direct approach to the seat of power viz., the then Chief Minister Dr. Jagannath Misra.
The result was that the first Board of Directors as constituted by the Registrar kept on flouting with impunity the repeated directions of the Registrar, Co operative Societies in that behalf, since they were not interested in holding the general meeting for the purpose of election of the Board of Directors.
Instead of complying with the directions of the Registrar, the appellant by using the letterhead of the District Congress Committee (1), Vaishalli and after bypassing the Registrar of Co operative Societies and all other officials, directly approached Dr. Jagannath Misra, the then Chief Minister of Bihar, and got the term of the first Board of Directors extended from time to time and the election of the new Board postponed without any lawful justification.
The then Chief Minister made an endorsement thereon dated October 29, 1981 addressed to the Minister (Co operation) with a direction that the Registrar should extend the period of the Committee of Management for the time being.
The Registrar was constrained by his order dated November 26, 1981 to extend the term of the Committee of Management for a period of six months i.e. till June 30, 1981 but he nonetheless gave a specific direction to the Committee of Management to call the general meeting and get the Board of Directors elected within the extended term, but this was of no avail.
On April 21, 1982 the appellant addressed a letter to the then Chief Minister for further extension of the term of the Committee of Management by one year and the then Chief Minister made an endorsement thereon addressed to the Minister (Co operation) to take necessary steps for extending the term.
Again, the Registrar by his order dated June 21, 1982 was forced to extend the term of the nominated Board of Directors for a 651 period of one year i.e. upto May 31, 1983, or until further orders, whichever was earlier.
Nevertheless, the Registrar while extending the term again made a direction requiring the Committee of Management to call the general meeting to get the new Board of Directors elected but despite the said direction, no such meeting was ever called.
On April 13, 1983, the appellant again addressed a communication to the then Chief Minister for extension of the term of the nominated Board of Directors for a period of one year from June 1, 1983 and the then Chief Minister by his order dated June 13, 1983 extended the term for six months and endorsed the same to the Minister (Co operation).
The Registrar accordingly by his order dated June 23, 1983 further extended the term of the nominated Board till November 30, 1983, or till further orders, whichever was earlier.
While extending the term, he again made a specific direction to the Committee of Management to call the general meeting for the aforesaid purpose.
With the resignation of the then Chief Minister on August 13, 1983, the respondent No. 3 Laliteshwar Prasad Shahi, Minister for Industries for the State of Bihar appears to have issued a direction on September 5, 1983 to the Commissioner of the Co operative Department.
The communication was marked as 'unofficial ' and was to the following effect: "If the Committee is reconstituted, the Board shall legally consist of 7 members only.
For this purpose, 7 names are being sent.
When the Committee is superseded under another provision, it may consist of even 15 members.
For this purpose, 8 names are being sent on a separate page.
" On a buff sheet, the Minister indicated the first set of seven names and the second of eight names.
In compliance thereof the Registrar by his impugned order dated September 6, 1983 in supersession of all his earlier orders reconstituted the first Board of Directors with immediate effect and directed that the tenure of office of the reconstituted Board shall be for the remainder of the term i.e, till November 30, 1983, or till further orders, whichever was earlier.
652 The short question that falls for determination is whether the then Chief Minister was entitled to usurp the functions of the Registrar of Co operative Societies under bye law 29.
Further, the question is whether the Minister was entitled to issue a direction to the Registrar of Co operative Societies to reconstitute the nominated Board of Directors under bye law 29; and if so, whether he could go further and assume the functions of the Registrar and forward to him a list of names to be nominated on the reconstituted Board.
Under bye law 29, it is the function of the Registrar to constitute the first Board of Directors which necessarily carries with it the incidental or ancillary power to reconstitute such Board when he is satisfied that the circumstances attendant so require.
It is urged on behalf of the appellant that the Registrar had no power to reconstitute the Board under bye law 29 and that in any event the Minister could not issue any direction to the Registrar as to the manner in which the Board was to be reconstituted.
The contention to the contrary advanced by the respondents is that the then Chief Minister had illegally usurped to himself the statutory functions of the Registrar under bye law 29 and passed the several orders in question to oblige the appellant and a handful of persons who retained their control over the Central Cooperative Bank contrary to the scheme of the Act, and that upon his demitting the office of the Chief Minister, the Minister for Industries was fully justified in issuing a direction to the Registrar for reconstitution of the Board.
It is said that the Minister was an important political worker in the district of Vaishalli and he was informally asked to suggest the names of suitable persons to the Registrar for his consideration.
The communication referred to was addressed by the Minister to the Commissioner of the Cooperative Department and marked as 'unofficial ' merely contained his informal suggestion.
The submission is that the Minister is entitled to issue a direction of this nature to a statutory functionary under his department and therefore the Registrar had necessarily to act under the directions of the Minister.
The Bihar & Orissa Cooperative Societies Act, 1935 ( 'Act ' for short) is intituled as: "An Act to consolidate and amend the law relating to Cooperative Societies in the States of Bihar and Orissa", and the Preamble recites that the object and purpose of the legislation was "to facilitate the formation working and consolidation of cooperative societies for the promotion of thrift, self help and mutal aid among agriculturists and other persons with common needs".
653 Sub s.(1) of s.7 provides that a society which has as its objects the promotion of the common interests in its members in accordance with cooperative principles, or a society established with the object of facilitating the operations of such a society, may be registered under the Act with or without limited liability.
Sub section
(1) of s.11 provides that if the Registrar is satisfied that a society has complied with provisions of the Act and the Rules and that its proposed bye laws are not contrary to the Act, or to the Rules, he may, if he thinks fit, register the society and its bye laws.
Sub section
(2) of section 14 of the Act provides that the management of a registered society shall be vested in a managing committee constituted in accordance with the Rules.
Sub s.(3) of section 14 of the Act provides that the term of office of the elected members and office bearers of the managing committee of the society shall be as provided in the bye laws of the society and the elected members and office bearers shall continue to hold office after the expiry of their term till their successors are elected or for three months, whichever is earlier.
A Central Cooperative Bank is a financing Bank within the meaning of s.2(c) which means a registered society the main object of which is to make advances in cash or kind to other registered societies or to both such societies and agriculturists.
From the very nature of things, a Central Cooperative Banks holds large sums of money.
Under the scheme of the Act, the Registrar of Cooperative Societies is charged with the duty of administering all cooperative societies within the State.
The Bihar Cooperative Societies Rules, 1959 provide that, subject to nomination by the Registrar of such number of members to the managing committee and in such manner as may be prescribed by him, a managing committee of a registered society including its office bearers shall be elected by vote from among the members of the society at the annual general meeting held in accordance with the bye laws.
Bye law 29 read with the proviso confers power on the Registrar to constitute the first Board of Directors of the Central Cooperative Bank.
Under the second part of the proviso to bye law 29, he has the necessary power to reconstitute such Board.
section 65A of the Act, on which reliance is placed, runs thus: "65 A.
Notwithstanding anything to the contrary contained in this Act, the State Government may, of its own motion or on an application made to it by any party aggrieved by the constitution, or reconstitution, 654 amalgamation, election, supersession, liquidation or any other matter concerning working of the society, call for any record of inspection or enquiry made under this Act or proceedings of any matter pending before the Registrar or his subordinate or any person acting under his authority and examine and pass such orders as it may deem fit.
" We fail to appreciate the propriety of the Chief Minister passing orders for extending the term of the first Board of Directors.
Under the Cabinet system of Government, the Chief Minister occupies a position of pre eminence and he virtually carries on the governance of the State.
The Chief Minister may call for any information which is available to the Minister in charge of any department and may issue necessary directions for carrying on the general administration of the State Government.
Presumably, the Chief Minister dealt with the question as if it were an executive function of the State Government and thereby clearly exceeded his powers in usurping the statutory functions of the Registrar under bye law 29 in extending the term of the first Board of Directors from time to time.
The executive power of the State vested in the Governor under article 154 (1) connotes the residual or governmental functions that remain after the legislative and judicial functions are taken away.
The executive power includes acts necessary for the carrying on or supervision of the general administration of the State including both a decision as to action and the carrying out of the decision.
Some of the functions exercised under "executive powers" may include powers such as the supervisory jurisdiction of the State Government under s.65A of the Act.
The Executive cannot, however, go against the provisions of the Constitution or of any law.
The action of the then Chief Minister cannot also be supported by the terms of s.65A of the Act which essentially confers revisional power on the State Government.
There was no proceeding pending before the Registrar in relation to any of the matters specified in s.65A of the Act nor had the Registrar passed any order in respect thereto.
In the absence of any such proceeding or such order, there was no occasion for the State Government to invoke its powers under s.65A of the Act.
In our opinion, the State Government cannot for itself exercise the statutory functions of the Registrar under the Act or the Rules.
655 Neither the Chief Minister nor the Minister for Cooperation or Industries had the power to arrogate to himself the statutory functions of the Registrar under bye law 29.
The act of the then Chief Minister in extending the term of the Committee of Management from time to time was not within his power.
Such action was violative of the provisions of the Rules and the bye laws framed thereunder.
The Act as amended from time to time was enacted for the purpose of making the cooperative societies broad based and democratizing the institution rather than to allow them to be monopolized by a few persons.
The action of the Chief Minister meant the very negation of the beneficial measures contemplated by the Act.
For the same reasons, it must be held that the Minister for Industries also exceeded his own authority in directing the manner in which the new Board of Directors was to be constituted by the Registrar under bye law 29 by forwarding a list of 7 names to be nominated by him in the reconstituted Board and a further list of 8 names indicating that if the Committee of Management was superseded under another provision, it should consist of those 15 persons.
There is no warrant for the submission that the Registrar had no power to reconstitute the first Board of Directors under bye law 29 or to curtail the extended term.
While the proviso to bye law 29 lays down that the first Board of Directors shall be nominated by the Registrar for a period not exceeding one year at a time and not exceeding three cooperative years in the aggregate, it does not entail the consequence that when the term of the first Board of Directors is extended from time to time, it must necessarily extend to three cooperative years.
The expression "cooperative year" is defined in s.2 (bb) to mean the year beginning from the 1st of July to the 30th of June.
The second part of the proviso expressly confers power on the Registrar to modify the nomination of such Board, if and when required.
On a reading of bye law 29 read along with the proviso, it is manifest that the first Board of Directors is entitled to hold office for a period not exceeding three cooperative years in the aggregate, unless it is reconstituted by the Registrar within the aforesaid period.
That apart, the order passed by the Registrar dated July 22, 1981 nominating the first Board of Directors was for a period of six months i.e. upto December 31, 1981 or till further orders.
The words "till further orders" appear in all the subsequent orders extending the term of the Board and therefore the Registrar had reserved 656 to himself the right to curtail the extended term by reconstituting the Board, at any time.
In the instant case, however, the impugned order issued by the Registrar to reconstitute the first Board of Directors was not made by him at his own discretion in the exercise of his powers under bye law 29 but was made at the behest of the Minister for Industries and it must accordingly be held to be invalid.
In the circumstances of the case, we feel it proper to direct the Registrar, Cooperative Societies, Bihar to take over the Vaishalli District Central Cooperative Bank and exercise all the powers and perform all the duties which under the Bihar and Orissa Cooperative Societies Act, 1935 and the Bihar Cooperative Societies Rules 1959 and the bye laws of the Central Cooperative Bank are vested in the Committee of Management.
The Registrar shall either himself or through an Officer in the Cooperative Department designated by him call a general meeting of the society at such time and place at the headquarters of the Central Cooperative Bank and to require the society to elect a new Board of Directors.
We further direct that neither the members of the first Board of Directors constituted by the Registrar of July 22, 1981, nor the so called Board of Directors reconstituted by him on September 6, 1983, shall interfere with the affairs of the society.
In compliance with these direction, the Registrar of Cooperative Societies will issue immediate instructions for taking over the management of the Central Cooperative Bank and may designate an Officer in the Cooperative Department to discharge the duties and functions of the Committee of Management till a new Board of Directors is constituted in accordance with law.
The appeal is disposed of accordingly.
There shall be no order as to costs.
N.S.K. Appeal allowed.

summary/full:
Bye law 29 of the Bihar Co operative Society Rules, 1959 provided that the management of a Co operative Bank shall vest in the Board of Directors, and that the first Board of Directors shall be nominated by the Registrar for a period not exceeding one year at a time and not exceeding three Co operative years in the aggregate, and that the Registrar could modify the nomination if and when required.
The Registrar, Cooperative Societies in exercise of the power conferred by the aforesaid bye law nominated a Committee of Management of 17 members to the first Board of Directors of the District Co operative Bank.
The Committee was directed to get the election of the Board of Directors completed within six months of the date of their nomination.
The appellant who was a political person was nominated to be the Secretary of the first Board.
The appellant got the period of the first Board of Directors extended from time to time and the election of the Board postponed without any lawful justification.
Between October 1981 and November 1983 at the instance of the appellant, the Chief Minister gave directions to the Minister (Co operation), that the Registrar be asked to extend the term of the Board, and the Registrar 647 in turn extended the term with the direction that the Committee of Management should call a general meeting and get the Board of Directors elected.
When the Chief Minister demitted office, the third respondent, who was the Minister for Industries issued a direction to the Commissioner of the Co operative Department, marked as 'unofficial '.
It was stated therein that if the Committee was reconstituted the Board shall legally consist of seven members only.
For this purpose seven names were sent If the Committee was superseded it was to consist of fifteen members.
On a separate sheet the Minister indicated the first set of seven names and second set of eight names.
In compliance with the Minister 's directive the Registrar by his impugned order in supersession of all earlier orders reconstituted the first Board of Directors with immediate effect and directed that the tenure of the office of the reconstituted Board shall be for the remainder of the term i.e. till November 30, 1983.
Being aggrieved, the appellant assailed the order by a writ petition in the High Court, which was dismissed.
On appeal to this Court, it was contended on behalf of the appellant that the Registrar had no power to reconstitute the Board under bye law 29 and that in any event the Minister could not issue any direction to the Registrar as to the reconstitution of the Board.
The respondents, however, contended that the Chief Minister had illegally usurped the statutory functions of the Registrar and passed several orders and that the Minister was justified in issuing the requisite orders.
Allowing the appeal, ^ HELD: 1.
Neither the Chief Minister nor the Minister for Cooperation or Industries had the power to arrogate to himself the statutory functions of the Registrar under bye law 9.
Under the Cabinet system of Government, the Chief Minister occupies a position of pre eminence and he virtually carries on the governance of the State.
The Chief Minister may call for any information which is available to the Minister in charge of any department and may issue necessary directions for carrying on the general administration of the State Government.
Presumably, the Chief Minister dealt with the question as if it were an executive function of the State Government and thereby exceeded his powers in usurping the statutory functions of the Registrar under bye law 29 in extending the term of the first Board of Directors from time to time.
[655 A, 654 C D] 2.
The executive power of the State vested in the Governor under article 154(1) connotes the residual or governmental functions that remain after the legislative and judicial functions are taken away.
The executive power includes acts necessary for the carrying on or supervision of the general administration of the State including both a decision as to action and the carrying out of the decision.
Some of the functions exercised under "executive powers" may 648 include powers such as the supervisory jurisdiction of the State Government under section 65A of the Act.
The action of the Chief Minister cannot however be supported by the terms of section 65A of the Act inasmuch as there was no proceeding pending before the Registrar in relation to any of the matters specified in section 65A of the Act nor had the Registrar passed any order in respect thereto.
[654 E G] For the same reasons, it must be held that the Minister for Industries also exceeded his own authority in directing the manner in which the new Board of Directors was to be constituted by the Registrar under bye law 29 by forwarding a list of 7 names to be nominated by him in the reconstituted Board and a further list of 8 names indicating that if the Committee of Management was superseded under another provision, it should consist of those 15 persons.
[655 C D] 3.
Under bye law 29, the Registrar had the power to reconstitute the first Board of Directors or to curtail the extended term.
Proviso to bye law 29 lays down that the first Board of Directors shall be nominated by the Registrar for a period not exceeding one year at a time and not exceeding three cooperative years in the aggregate.
It however does not entail the consequence that when the term of the first Board of Directors is extended from time to time, it must necessarily extend to three cooperative years.
That apart, the extended term of the first Board of Directors was to enure "till further orders" and therefore the Registrar had reserved to himself the right to curtail the extended term by reconstituting the Board, at any time.
[655E 656A] Upon this view, the Court directed (i) the Registrar, Cooperative Societies, to take over the District Central Cooperative Bank and exercise all the powers and perform all the duties vested in the Committee of Management which under the Bihar & Orissa Cooperative Societies Act, 1935 and the Bihar Cooperative Societies Rules, 1959 and the bye laws thereunder are vested in the Committee of Management.
And (ii) the Registrar, either himself or through an Officer in the Cooperative Department designated by him, shall call a general meeting of the Society and require the society to elect a new Board of Directors.[656 C D]