(2) S.C.R: SUPREME COURT REPORTS 213

THE AMALGAMATED ELE, CTRICITY CO., LTD. r959 . v. .: .. , . '· February IJ.

I .N .• S. BATHENA .. ' .,··· (JAFER IMAM, A. K. SARKAR and

 K. 'Su:BB.A RAo; JJ.) · ·

Arbitration_:_Arbit; ation claus~ in eletricity licence-Whether binding on consumer of electricity-Electricity (Supply) Act, r948 (54 of r948); s. 57, ct. XV I of Sixth Schedule.

The arbitration clause incorporated by s. 57(1) of the Electricity (Supply) Act, 1948, in a licence granted by the Government for the supply of electrical energy to the consumers is not available for adjudicating upon a dispute between the licensee. and the consumer, for the licence is an engagement between the licensee and the Government and the arbitration clause in it refers only to disputes between them. Section 57(1) does not make the arbitration clause a statutory provision by virtue of which disputes between any and every person may be referred to arbitration.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 361 of 1958.

Appeal by special leave from the judgment and order dated December 11, 1957, of the Mysore High Court in Civil Revision No. 702 of 1956, against the judgment and order dated August 10, 1956, of the Court of the Second-Extra Assistant Judge, Belgaum, in Misc. Appeal No. 36 of 1955, arising out of the order dated September 1, 1955, of the 1st Joint Civil Judge, Junior Division, Belgaum, in Regular Civil Suit No. 197 of 1955.

M. M. Gharekhan and J. N. Shroff, for the appellant.

D. D. Chawla and G. Gopalakrishna.n, for the respondent.

B. Sen and T. M. Sen, for the intervener (Attorney- General of India).

1959. February 13. The Judgment of the Court was delivered by

SARKAR, J.-This is an appeal from the judgment passed by the High Court at Bangalore on a petition in revision. The question is whether a certain suit should be stayed under s. 34 of the Arbitration Act, 1940.

Sarkar J.

, 959 The appellant carries on business as a supplier of -- electrical energy in Belgaum. It obtained a licence The Amalgamated from the Government under s. 3 of the Indian Elec- Electricity co., Ltd. tricity Act, 1910, authorising it to supply the energy

Baena in that area. The respondent, who is the plaintiff in the suit, obtained supply of electricity from the appel- Sarkar J. lant. The respondent felt that he was being overcharged by the appellant for the electricity so supplied. He thereupon filed a suit in the Court of the Civil Judge, Belgaum, on or about the 8th of June, 1955, claiming a refund of the amount paid in excess of what he thought was the legitimate charge. The appellant then applied under s. 34 of the Arbitration Act for a stay of the suit on the ground that the matter was referable to arbitration under the provisions of the Electricity (Supply) Act, 1948. The application was dismissed by the Civil Judge and his decision was confirmed by the Extra Assistant Sessions Judge on appeal and lastly, by the High Court in revision. The appellant has now come to this Court.

The appellant contends that this matter is referable to arbitration under the provision contained in

cl. XVI of the Sixth Schedule of the Act of 1948.

A few of the provisions of these Acts will now have to be referred to. Under the Act of 1910 the business of supplying electrical energy can be carried on only with the sanction of the Government. Section 3 of that Act makes provision for the grant of a licence for supplying electrical energy. The appellant obtained a licence in 1932.

A form of the licence is set out in the rules framed under the Act of 1910 and that form prescribes the maximum limit which a licensee is entitled to charge a consumer for the electrical energy supplied. The Act of 1948 made a somewhat different provision with regard to these charges. It provided by s. 57 as follows:-

" S. 57.

(1) The provisions of the Sixth Schedule and the Table appended to the Seventh Schedule shall be deemed to be incorporated in the licence of every licensee, not being a local authority, from the date of the commencement of the licensee's next succeeding

(2) S.C.R. SUPREME COURT REPORTS 215

year of account, and from such date the licensee shall x959 comply therewith accordingly and any provisions of Th A 1 1 d such licence or of the Indian Electricity Act, 1910, or El:ctrici7; f;.~~1~. any other law, agreement or instrument applicable to v. the licensee shall, in relation to the licensee, be void Bathena and of no effect in so far as they are inconsistent with the provisions of this section and the said schedule and Table.

(2) ........................................................... " This section had therefore. the effect of incorporating in the licence the terms of these two Schedules and provided that they would prevail over the terms of any previously granted licence or the provisions of the Act of 1910, or any other law, agreement or instrument inconsistent with these Schedules. The Sixth Schedule mn, de ne\v provisions about the clmrges t ]rn, i; a licensee was entitled to realiRe for the current supplied. Clause XVI of that Schedule contains a provision for arbitration and it is on that that the appellant relies. That clause is in these terms: " Any dispute or difference as to the interpretation or any matter arising out of the provisions of this Schedule shall be referred to the arbitration of the Authority." The appellant contends that the dispute covered by the respondent's suit is one of the kind mentioned in this clause and therefore must be referred to arbitration under its terms.

We will assume that the dispute is of the kind_mentioned in cl. XVI of the Sixth Schedule.

We are however unable to see that it is a dispute which is referable to arbitration under that clause. It is not the appellant's case that cl. XVI is a clause in any contract between it and the respondent. That being so, the only other way in which it is possible for the appellant to contend that the respondent is bound to refer the dispute to arbitration under this clause is by showing that it is astatutory provision for arbitration.

No doubt if it were so, then in view of the provisions of s. 46 of the Arbitration Act the appellant would be entitled to apply for a stay of the suit under s. 34 of that Act.

We are however wholly unable to agree that cl. XVI is such a statutory provision. The only

Sarkar ].

'959 statutory provision that we find on the subject is that

Th A I t d contained in s. 57 and its effect is that the terms of e ma ganta e l XVI d l .

Electricity co., Ltd. c . an the other c a uses m the 1xth Schedule v. are to be deemed incorporated in a licence granted by Batkena the Government under s. 3 of the Act of 1910 and the

Sarkar j. licensee is to comply with the terms of that Schedule.

Therefore all that we get is that the licence which is granted by the Government to a supplier of electricity, like the appellant, is to contain a clause that certain disputes would be referred to arbitration. The licence is an engagement between the Government and the licensee, binding the parties to it to its provisions. It is unnecessary to decide whej; her this engagement is contractual or statutory, "for, in either case it is between the two of them only. An arbitratioi+ clause in an instrument like this can only be in respect of disputes between the parties to it. Such an arbitration clause does not contemplate a dispute between a party, to the instrument and one who is not such a party .. We are unable to reads. 57 as making

cl. XVI in the Sixth Schedule a statutory provision by which certain disputes between any .and every person have to be referred to arbitration. . .

It was said on behalf of the appellant that th~ licence is a statutory document. That, in our vie.w, is a loose way of putting the thing. By that the utmost that can be meant is that it is issued under the terms of a statutory provision and . must , qpmply with the provisions thei; eof.

But that cannot convert it into a sti:ttutory provision for reference to arbitr.ation of disputes irrespective of the parties between whom the

dsputes may exist. . . In our view, therefore, c.1. XVI of the . SJxth Sche- 'dule of the Act of 1948 contains no provision for, arbi'.

trat.ion, statutory or otherwise, for reference o( t, he dispute of the nature we have b_efore us, between.a licensed. supplier of electricity .and. a. consumer. of .it from' him. . . . . . . , ,. . . ln the result, this appeal fails and is dismised with costs. ' Appeal dismissed.

213

THE AMALGAMATED ELE, CTRICITY CO.

N .• S. BATHENA

JAFER IMAM

A. K. SARKAR

K. 'Su:BB.A RAo

s. 57

Sixth Schedule

s. 57(1)

Section 57(1)

s. 34

Arbitration Act, 1940

s. 3

s. 34

XVI of the Sixth Schedule of the Act

Section 3

s. 57

S. 57

Sixth Schedule

Seventh Schedule

Indian Electricity Act, 1910

Sixth Schedule

Sixth Schedule

s. 46

s. 34

s. 57

s. 3

Sixth Schedule


(2) S.C.R. SUPREME COURT REPORTS 217

W AMAN SHRINIW AS KINI v.

RATILAL BHAGWANDAS & CO. (JAFER IMAM, S. K. DAS and J. L. KAPUR, JJ.)

Landlord and Tenant-Ejectment-Agreement of lease allowing sub-letting-Sub-letting prohibited by statute-Landlord's suit for ejectment-Right of ejectment under statute-Equal participant in illegality-Plea of Waiver-Agreement to waive an illegality- Bombay Hotel and Lodging Houses Rates Control Act, r947 (Bom. 57 of r947), ss. r3(r)(e), r5-Jndian Contract Act, r872 (9 of r872), s. 23.

The appellant was a tenant originally iri the old building but after it was purchased by the respondent he vacated it and became a tenant under the respondent in the new premises. In the old building the appellant had sub-tenants, who shifted to the new premises along with the appellant when the latter occupied those premises. One of the terms of the lease which were contained in a letter dated June 7, 1948, written by the respondent to the appellant provided: "In the shops in the old chaw] which are with you, you have kept sub-tenants. We are permitting you to keep sub-tenants in the same manner, in this place also." On April 20, 1949, the respondent brought a suit for ejectment against the appellant on the ground, inter alia, that s. 15 of the Bombay Hotel and Lodging Houses Rates Control Act, 1947, prohibited_sub-letting and under s. 13(1)(e) of the Act the landlord has the right to evict -the tenant on account of sub-letting. The appellant's -defence was (1) that s. 15 of the Act was confined to" any other law", that it did not apply to contracts between the landlord and tenant and therefore.it did not preclude an agreement between the parties as to sub-letting, (2) that the parties were in pari delicto and therefore the respondent could not succeed, and (3) that the right of the respondent to sue for ejectment on the ground of sub-letting being a personal right for his benefit, he must be taken to have waived it as he had allowed the appellant to sub-let and, consequently, he could not evict him under s. 13(1)(e) of the Act.

Held: (1) that the non-obstante clause "Notwithstanding anything contained in any Jaw" ins. 15 of the Bombay Hotel and Lodging Rates Control Act, 1947, applies to contracts also as they would fall under the provisions of the law relating to contracts;

(2) that the respondent was entftled to sue for ejectment, though the agreement recognised sub-letting, as the suit was brought not for the enforcement of the agreement but to enforce the right of eviction which flowed directly from an infraction of the provisions of s. 15 of the Act and for which the Act itself

February I6.

z959 provided a remedy. The section is based upon public policy, and where public policy demands, even an equal participant in Waman an illegality is allowed relief by way of restitution or rescission, Shriniwas Kini though not on the contract; and,

v..

(3) .that the plea of waiver which the appellant relied on Ratilal cannot be sustained because as a result of giving effect to that Bhagwandas & Co. plea the court would be enforcing an illegal agreement and thus contravene the statutory provisions of s. IS of the Act.

An agreement to waive an illegality is void on grounds of public policy and would be unenforceable.

Kapu1 ].

Case law reviewed.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 674 of 1957.

Appeal by special leave from the judgment and decree dated August 10, 1955, of the Bombay High Court in C. R. Application No. 1213 of 1953, arising out of the judgment and decree dated April 25, 1953, of the Assistant Judge, Thana, in C. A. No. 97 of 1952, against the judgment and decree dated January 31, 1952, of the Court of the Civil Judge, J. D. Kalyan, in Suit No. 153of1949.

PurBhottam TricumdaB, RameBhwar Nath and S. N.

Andley, for the appellant.

H.J. Umrigar, Ratnaparkhi Anant Govind and W. P. Oka, for the respondent.

1959. February 16.

The Judgment of the Court was delivered by

KAPUR, J.-This is an appeal by special leave against the judgment of the High Court of Bombay confirming the order of ejectment passed by the Assistant Judge, Thana. The tenant who was the defendant in the suit is the appellant and the landlord who was the plaintiff is the respondent.

The facts giving rise to this litigation shortly stated are that the appellant was a tenant for about 20 years in the premises known as " Fida Ali Villa "in Kalyan.

This building was purchased by the respondent who gave notice to the appellant to vacate, as he wanted to construct a new building on the site of the old building. The appellant agreed to vacate and the respondent let to him a portion of his new building which

was not far from "Fida Ali Villa". The appellant had four sub.tenants, three of them also shifted to the new

I959

Waman premises which were let to the appellant by the res.

Shriniwas Kini. pondent. Although it was disputed, the courts below v. have found that they occupied the same. position qua Ratilal the appellant. The 4th, a Bohri, was fixed up by the Bhagwandas & Co. respondent in some other place. There was some dispute as to the date when these new premises were let to the appellant, the appellant alleging that they were let on July 1, 1948, and the respondent that they were let on June 1, 1948. The trial Court found that they were let on June 1, 1948. The terms of the lease are contained in a document dated June 7, 1948, which is a letter in Marathi written by the respondent to the appellant and contains the following terms as to sub-tenancy:

"In the shops in the old chawl which are with you you have kept sub-tenants. We are permitting you to keep sub-tenants in the same manner, in this place also ".

The parties were not agreed as to the correctness of the translation of this term. The submission of the appellant was that the word 'sub-tenant' should be in the plural and of the respondent that it should be in the singular but whether it is in the singular or plural it does not make any difference to the principal argument advanced in this Court. On January 3, 1949, the respondent gave notice to the defendant to vacate the premises on the ground of non-payment of rent and sub-letting which it was alleged had resulted in the termination of the tenancy.

On April 20, 1949, the respondent brought a suit for ejectment on the groud of non-payment of rent and sub-letting of the premises. The defence of the appellant was that under the terms of the lease he had the right to sub-let the premises.

As to the claim on the ground of non-payment of rent be deposited the arrears of rent in court. The trial Court held that subletting was lawful in spite of s. 15 of Bombay Hotel and Lodging Houses R, ates Control Act, 1947 (Born. 57 of 1947)~ He also held that the appellant did not occupy he premises on the same terms and conditions on whic he occupied the old premises in "Fida Ali

Kapur].

'959 Villa". He passed a decree for Rs. 445 on account of rent remaining due and dismissed the respondent's Waman Sh.iniwas J{ini suit for ejectment. On appeal the Assistant Judge at v.

Thana reversed the decree holding that s. 15 of the Ratilal Act com.pletely prohibited sub-letting and under Bhagwandas & Co. s. 13(l)(e) of the Act the landlord had the right to evict - the tenant on account of sub-letting. The appellant I<apur j. h t en went in revision to the High Court of Bombay, but it affirmed the order of ejectment. The appellant has come to this Court by special leave.

Counsel for the appellant urged that there was no new tenancy after the coming into force of the Act and therefore ss. 13(l)(e) and 15 of the Act did not apply; (2) that the tenant had not sub, let the premises to the sub-tenants and they were merely licensees of the landlord; (3) that no new sub-tenancy had been created; (4) that s. 15 was confined to 'any other law'; it did not apply to contracts between the landlord and tenant and therefore it did not preclude an agreement between the parties as to sub-letting; (5) that the parties were in pari delicto -and therefore the plaintiff-respondent could not succeed. He also raised a new ground which had not been raised in the courts below or in the grounds of appeal or in the statement of case in this Court, that the. respondent had waived his right in regard .to the prohibition against sub-tenancy and the provision in s. 13(l)(e) was for the protection of his rights which he was entitled to waive.

The courts below have held that the tenancy by the letter of June 7, 1948, was a new tenancy and not a continuation of the old and that the sub-tenants were tenants of the appellant and not licensees of the respondent and in this Court no serious argument was addressed on these points. The previous tenancy was of a different building called 'Fida Ali Villa' which came to an end when the appellant vacated those premises and entered into a new agreement of lease in regard to the premises in dispute. There was no privity between the respondent and the sub-tenants of the appellant and they could not be termed his licensees.

These contentions are without substance and have rightly been rejected.

It was then argued that under s. 15 of the Act there '959 is no prohibition against a contract of sub-letting, the Waman non-obstante clause being confined to other laws. The Shriniwas Kini section when quoted runs as follows :- v. "Notwithstanding anything contained in any law Ratilal it shall not be lawful after the coming into operation Bhagwandas & Co. of this Act for any tenant to sub-let the whole or any Kapur J. part of the premises let to him or to assign or transfer in any other manner his interest therein : Provided that the (State) Government may, by notification in the Official Gazette, permit in any area the transfer of interest in premises held under such leases or class of leases and to such extent as may be specified ill the notification".

This section prohibits sub-letting and makes it unlawful for a tenant to assign or to transfer his interest in the premises let to him. The non-obstante clause would mean that even if any other law allowed subletting, e. g., s. 108 of the Transfer of Property Act, the sub-letting would, because of s. 15, be unlawful.

This would appy to contracts also as all contracts would fall under the provisions of the law relating to contracts, i.e., Contract Act. An agreement contrary to the provisions of that section (s. 15) would be unenforceable as being in contravention of the express provision of the Act which prohibits it. It is not permissible to any person to rely upon a contract the making of which the law prohibits (s. 23 of the Contract Act).

Counsel for the appellant contended that the view of the Bombay High Court in P. D. Aswani v. Kavashah Dinshah Mulla (1) was erroneous and that the correct rule was laid down by that Court in Cooper

v. Shiavax Cam.batta {2}.· That was a case under s. 10 of Bombay Rents, Hotel Rates and Lodging Houses Rates (Control) Act (Born. VII of 1944) which in express terms allowed sub-letting as follows:-

" Notwithstanding anything to the contrary in any law for the time being in force, a tenant may sublet any portion of his premises to a sub-tenant, provided be forthwith intimates in writing to his landlord

(1)

(1953) 56 Born. L.R. 467. (2) A.LR. I949 Born. 131.

1959 the fact.of his having so sub-let the premises and also ;,;;;;'an the rent at wb'ich t4ey have.been sub-let".

Shdniwas_Kini It was contended tliat the non-obstante clauses in s.10'

v. of Act VII of 1944 and of s. 15 of the Act being simi- Ralilal lar in language must be similarly interpreted. The

Bhgwanaas & Co.non-obstante clause has to be read in conjunction --with

Kapur;. the rest of the section. Section 10 of the Act of 1944 ·

- ---permitted sub-letting on certain conditions. By s. 9 of

tnat Act provision was made for a contract between the landlord and the tenant prohibiting sub-letting and in Cooper v. ShiavaxOam_batia (') the 'two provisions were reconci!Efd by saying that a contract under s. 9 prevailed over the permission.given-by s. 10. Buts. 15 expressly prohibits sub-letting and therefore a contract to the contrary cannot neutralise its prohibitory effect. The non-obstante clause of the two sections, s. 10 of the Act of 1944 and of s. 15 of the Act there- fore cannot be said to have the same effect.

The respondent's suit for ejectment was brought unaer s. 13(l)(e) whiqh provides: "Notwithstanding anything contained in this Act (but subject to the provisions of section 15), a land- , lord shall be erttitled to recover possession of any premises if the Court is satisfied ................................................................. '

...................... ........................ .................. .

(e) that the tenant has, since the coming into operation of this Act, sub-let the whole or part of the premises or assigned or transferred in any other manner his interest therein ; ". It was contended that s. 13(l)(e) had to be read separately and not in conjunction with s. 15 of the Act.

The section itself makes it quite clear that it is subject to the provision of s. 15 and the two sections must therefore be read together. The appellant pleaded that -under the agreement between him and the respondent he was entitled to sub-let the premises. Such an agreement, in our opinion, is void because of the provisions of s. 15 of the Act ands. 23 of the Contract Act and enforcement of the agreement would produce the

(1) A.I.R. 1949 Bom. 131.

(2) S.C.lt.

SUPREME COURT REPORTS 223

I959 very result which the law seeks to guard against and to prevent and by sustaining the plea of the appellant Waman the Court would be enforcing an agreement which is Shriniwas Kini prohibited and. made illegal. v.

The appellant relied on the maxim in pari delicto Ratilal potior est conditio posidentis to support his plea that Bhagwandas & Co. the respondent could not enforce his right under s. 13 (l)(e).

But this maxim "must not be understood as meaning that where a transaction is vitiated by illegality the person left in possession of goods after its completion is always and of necessity entitled to keep them. Its true meaning is that, where the circumstances are such that the Court will refuse to assist either party, the consequence must, in fact, follow that the party in possession will not be disturbed". (Per Du Parcq, L. J., in Bowmakers Ltd. v. Barnet Instruments Ltd. (1).

The respondent in the present case did not call upon the Court to enforce any agreement at all.

When the instrument of lease was executed and possession given and sub-letting done it received its full effect ; no aid of the Court was required to enforce it. The respondents' suit for ejectment was not brought for the enforcement of the agreement which recognised sub-letting but he asked the Court to enforce the right of eviction which flows directly from an infraction of a provision of the Act (s. 15) and for which the Act itself provides a remedy.

There is thus a manifest distinction between this case where the plaintiff asked the Court to afford him a remedy against one who by contravening s. 15 of the Act has made himself liable to eviction and those cases where the Court was called upon to assist the plaintiff in enforcing an agreement the object of which was to do an illegal act. The respondent is only seeking to enforce his rights under the statute and the appellant cannot be permitted to assert in a Court of justice any right founded upon or growing out of an illegal transaction. Gibbs &: Sterr et Manufacturing Co.

v. Brucker (2). In our opinion s. 15 of the Act is based on public policy and it has been held that if public policy demands it even an equal participant in the

(I) [1945] I K.B. 65, 72.

(2) (1884) III U.S. 5'!J7 i 28 L. Ed. 534•

Kapur ].

224 SUP:REM:ln COtJR'r REPORTS [1959] Supp.

z959 illegality is allowed relief by way of restitution of rescission, though not on the contract.

Waman It was next contended that s. 13(1)(e) is a provision Shriniwas J(ini

v. for the protection of private rights of the landlord and Ratilal unless there is in the Act itself any provision to the Bhagwandas & ca. contrary such rights as far as they were personal rights may be parted with or renounced by the land- Kapm f. lord. In other words the right of the respondent to sue for ejectment on the ground of sub-letting being a personal right for his benefit, the landlord must be. taken to have waived it as by an express contract he had allowed the tenant to sub-let and consequently he could not evict the appellant under s. 13(1)(e) of the Act.

The plea of waiver was taken for the first time in this Court in arguments. Waiver is not a pure question of law but it is a mixed question of law and fact.

This plea was neither raised nor considered by the courts below and therefore ought not to be allowed to be taken at this stage of the proceedings. But it was argued on behalf of the appellant that according to the law of India the duty of a pleader is to set up the facts upon which he relied and not any legal inference to be drawn from them and as he had set up all the circumstances from which the plea of waiver could be inferred he should be allowed to raise and argue it at this stage even though it had not been raised at any previous stage not even in the statement of case filed in this Court and he relied upon Gouri Dutt Ganesh Lal l!'irm v. Madho Prasad {1).

Assuming that to be so and proceeding on the facts found in this case the plea of waiver cannot be raised because as a result of giving effect to that plea the Court would be enforcing an illegal agreement and thus contravene the statutory provisions of s. 15 baseq on public policy and produce the very result which the statute prohibits and makes illegal. In Surafinull Nargoremull v. Triton Insurance Go. ('), Lord Sumner said:-

"No Court can enforce as valid that which competent enactments have declared shall not be valid, nor is obedience to such an enactment a thing from

(1) A.I.R. 1943 P. C. 147.

(2) (1924) L.R. 52 I. A. 126.

which a Court can be dispensed by the consent of the

I959 Parties, or by a failure to plead or to argue the point Waman at the outset: Nixon v. Albion Marine Insurance Go. (1).

Shriniwas Kini The enactment is prohibitory. It is not confined to v. affording a party a protection of which he may avail Ratilal himself or not as he pleases. It is not framed solely for Bhagwandas &- Co. the protection of the revenue and to be enforced solely at the instance of the revenue officials, nor is the prohibition limited to cases for which a penalty is exigible ".

In the instant case the question is not merely of waiver of statutory rights enacted for the benefit of an individual but whether the Court would aid the appellant in enforcing a term of the agreement which s. 15 of the Act declares to be illegal. By enforcing the contract the consequence will be the enforcement of an illegality and infraction ofa statutory provision which cannot be condoned by any conduct or agreement of parties. Dhanukudhari Singh v. Nathima Sahu (2). In Corpus Juris Secundum, Vol. 92, at p. 1068, the law as to waiver is stated as follows:-

" ............ a waiver in derogation of a statutory right is not favoured, and a waiver will be inoperative and void. if it infringes on the rights of others, or would be against public policy or mo'rals ............ ".

In Bowmakers Limited v. Barnet Instruments Ltd. (3) the same rule was laid down. Mulla in his Contract Act at page 198 has stated the law as to waiver of an illegality as follows:-

"Agreements which seek to waive an illegality are void on grounds of public policy. Whenever an illegality appears, whether from the evidence given by one side or the other, the disclosure is fatal to the case.

A stipulation of the strongest form to waive the objection would be tainted with the vice of the original contract and void for the same reasons. Wherever the contaJDination reaches, it destroys".

This, in our opinion, is a correct statement of the law and is supported by high authority. Field, J., in

\l) \1867) L.R. 2 Ex. 338.

(2) (1907) n C. W. N. 848, 852.

(3) [1945] 1 K.B. 65, 72. 29

Kapur].

I959

Oscanyan v. Winchester Arms Company(') quoted with approval the observation of Swayne, J., in Hall v.

Waman Shriniwas ]{ini Coppell(') :- v. " The principle is indispensable to the purity of Ratilat its administration. It will not enforce what it has Bhagwandas <~Co.forbidden and denounced. The maxim Ex dolo malo

]{apur j. non oritur actio, is limited by no such qualification. The proposition to the contrary strikes us as hardly worthy of serious refutation. Wherever the illegality appears, whether the evidence comes from one side or the other, the disclosure is fatal to the case.

No consent of the defendant can neutralise its effect.

A stipulation in the most solemn form, to waive the objection; would be taiuted with the vice of the original contract, and void for the same reasons. Wherever the contamination reaches, it destroys ".

Waiver is the abandonment of a right which normally every body is at liberty to waive. A waiver is nothing unless it amounts to a release. It signifies nothing more than an intention not to insist upon the right.

It may be deduced from acquiescence or may be implied. Chitty on Contract, 21st Ed., p. 381 : Stackhouse v. Barnston ('). But an agreement to waive an illegality is void on grounds of public policy and would be unenforceable.

In Mytton v. Gilbert (4) Ashurst, J., said:-

"Besides, there is still further reason why the trustees should not be estopped ; for this is a public Act of Parliament, and the Courts are bound to take notice that the trustees under this Act had no power to mortgage the toll-houses.

This deed therefore cannot operate in direct opposition to an Act of Parliament, which negatives the estoppel ".

Vaughan Williams, L. J., in Norwich Corporation v.

Norwich Electric Tramways Company(') said :-.

" The case is not like that of a provision in an agreement which is for the benefit of one of the parties and which he may waive. This is a provision in an Act of Parliament, wh_ich, though to some extent

(1) (1881) 103 U.S. 261; 26 L. Ed. 539.

(2) 7 Wallace 542.

(3) (1805) 10 Ves. 453; 32 E.R. 921.

(4) (1787) 2 T.R. 171; 100 E.R. 91.

(5) [1906] 2 K.B. II9, 124.

I959 it may be for the benefit of the parties to the difference, must be regarded as inserted in the interest of the public also".

Waman Shriniwas Kini In that case there was a provision made by the Legisv. lature that disputes mentioned in the section of the Ratilal Act were to be determined by an Expert nominated by Bhagwandas & Co. the Board of Trade and it was contended that though not in the strict technical sense estoppel, it was a waiver of the provisions introduced into the Statute for the benefit of private rights. No doubt that was a case which proceeded on a question of jurisdiction but the judgment proceeded on the principle of waiver of a statutory provision inserted in public interest.

Thus the plea of waiver is unsustainable.

In our opinion, therefore, the judgment of the High Court is sound and the appeal must therefore be dismissed with costs.

Appeal dismissed.

M/S. RAMAN & RAMAN LTD. v.

THE STATE OF MADRAS & OTHERS (JAFER IMAM, A. K. SARKAR and SuBBA RAo, JJ.)

Motor Vehicles-Legislation empowering State Government to issue orders and directions-Interpretation-Nature of jurisdiction conj erred-Such orders and directions, if law regulating rights of parties-Motor Vehicles (Madras Amendment) Act, z948 (XX of I948), s. 43A.

The appellant and the fourth respondent along with others were applicants for a stage carriage permit.

The Regional Transport Authority after hearing the applicants granted the permit to the appellant. On appeal by the fourth respondent, the Central Road Traffic Board set aside the order of the Regional Transport Authority and granted the permit to the fourth respondent. The appellant moved the State Government in revision but to no effect. He thereafter moved the High Court under Art. 226 of the Constitution for a writ of certiorari quashing the orders of the Central Road Traffic Board and the State Government. The single Judge who heard the matter quashed

Rapur J.

I959

February xB.

W AMAN SHRINIW AS KINI

RATILAL BHAGWANDAS & CO

S. K. DAS

L. KAPUR, JJ.

Jndian Contract Act

s. 23

s. 15

s. 13(1)(e)

s. 15

s. 13(1)(e)

s. 15

s. 15

Control Act, 1947

s. 15

s. 13(l)(e)

ss. 13(l)(e) and 15

s. 15

s. 13(l)(e)

s. 15

s. 108

Transfer of Property Act

s. 15

s. 15

s. 23

s. 10

s. 15

Section 10

s. 9

s. 9

s. 10

s. 10

s. 15

s. 13(l)(e)

section 15

s. 13(l)(e)

s. 15

s. 15

s. 15

s. 13

s. 15

s. 15

s. 15

S. 5

s. 13(1)(e)

s. 13(1)(e)

s. 15

(1924) L.R. 52 I. A. 126

s. 15

Mulla in his Contract Act

S. 261

s. 43A

Art. 226


(2) S.C.R. SUPREME COURT REPORTS 227

I959 it may be for the benefit of the parties to the difference, must be regarded as inserted in the interest of the public also".

Waman Shriniwas Kini In that case there was a provision made by the Legisv. lature that disputes mentioned in the section of the Ratilal Act were to be determined by an Expert nominated by Bhagwandas & Co. the Board of Trade and it was contended that though not in the strict technical sense estoppel, it was a waiver of the provisions introduced into the Statute for the benefit of private rights. No doubt that was a case which proceeded on a question of jurisdiction but the judgment proceeded on the principle of waiver of a statutory provision inserted in public interest.

Thus the plea of waiver is unsustainable.

In our opinion, therefore, the judgment of the High Court is sound and the appeal must therefore be dismissed with costs.

Appeal dismissed.

M/S. RAMAN & RAMAN LTD. v.

THE STATE OF MADRAS & OTHERS (JAFER IMAM, A. K. SARKAR and SuBBA RAo, JJ.)

Motor Vehicles-Legislation empowering State Government to issue orders and directions-Interpretation-Nature of jurisdiction conj erred-Such orders and directions, if law regulating rights of parties-Motor Vehicles (Madras Amendment) Act, z948 (XX of I948), s. 43A.

The appellant and the fourth respondent along with others were applicants for a stage carriage permit.

The Regional Transport Authority after hearing the applicants granted the permit to the appellant. On appeal by the fourth respondent, the Central Road Traffic Board set aside the order of the Regional Transport Authority and granted the permit to the fourth respondent. The appellant moved the State Government in revision but to no effect. He thereafter moved the High Court under Art. 226 of the Constitution for a writ of certiorari quashing the orders of the Central Road Traffic Board and the State Government. The single Judge who heard the matter quashed

Rapur J.

I959

February xB.

I959

M/s. Raman &

Ranian Ltd. v.

The Stats of Madras & Others

the said orders and directed the State Transport Appellate Tribunal, which was constituted in place of the Central Road Traffic Board, to dispose of the appeal according to law. On a Letters Patent appeal by the fourth respondent, the Appellate Bench of the High Court set aside the order of the single Judge and restored the order of the Central Road Traffic Board. Hence this appeal by special leave. The point for determination in the appeal was whether the order granting the permit to the appellant made by the Regional Transport Authority on the basis of an order issued by the State Government under s. 43A of the Motor Vehicles Act, 1939, as amended by the Motor Vehicles (Madras Amendment) Act, 1948, could be set aside on the basis of another order imposing new restrictions issued thereunder while the appeal was pending before the Central Road Traffic Board and thus involved the question as to whether an order or direction issued by the State Government under s. 43A of the Act had the force of law, so as to create a vested right in the appellant.

Held (per Jafer Imam and Subba Rao, JJ.), that s. 43A of the Motor Vehicles Act, 1939. as amended by the Motor Vehicles (Madras Amendment) Act, 1948, properly construed, must be given a restricted meaning and the jurisdiction it conferred on the State Government must be confined to administrative functions. An order or direction made thereunder by the State Government, therefore, could not have the status of law regulating rights of parties and must partake of the character of an administrative order.

C. S.S. Motor Service, Tenkasi v. The State of Madras, I.L.R. 1953 Mad. 304 and Gopalakrishnan Motor Transport Co., Ltd. v.

Secretary, Regional Transport Authority, Krishna District, V ijayawada, A.LR. (1957) A.P. 882, approved.

Consequently, in the instant case, the appellant could not be said to have acquired a vested right that was defeated by a new law enforced pending the appeal and the order of the Central Road Traffic Board could not .be set aside merely on the ground that it had decided the appeal on the basis of an order issued subsequent to the grant of the permit if such order was otherwise in public interest.

Per Sarkar. J.-It could hardly be said that the rule that a court hearing an appeal from a decision should not ordinarily take into consideratiol) a law passed subsequent to that decision had application where a quasi-judicial tribunal heard an appeal from another such tribunal. Consequently, in the instant case, it could not be said that there was an error of law apparent on the face of the record so as to attract a writ of certiorari and the appeal must fail on that ground.

No applicant for a permit under the Motor Vehicles Act could have a substantive right to the permit vested in him and

the granting or refusal of a permit by the Regional Transport Authority could not operate as res judicata.

It was unnecessary for the purpose of the present case to decide what kind of orders could be issued by the State Government under s. 43A of the Act, for whatever its nature, administrative or otherwise, if an order under that section entitled a person to its observance, and there was hardly any doubt as to that, it would be a law a mistake of which would justify the issue of a writ of certiorari at his instance.

The Mayor of Rochester v. The Queen, (1858) EL. BL. & E.L. 1924; 120 E.R. 791, referred to.

Nagendra Nath Bora v. The Commissioner of Hills Division and Appeals, Assam, [1958] S.C.R. 1240, distinguished.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 37 of 1958.

Appeal by special leave from the judgment and order dated September 14, 1956, of the Madras High Court in Writ Appeal No. 64 of 1956, arising out of the judgment and order dated May 1, 1956, of the said High Court in Writ Petition No. 852 of 1955.

G. S. Pathak, R. Ganapathy Iyer and G .. Gopalakrishnan, for the appellant.

A. V. Viswanatha Sastri, J.B. Dadachanji and S. N.

Andley, for respondent No. 4.

1959. February 18. The judgment of Imam and Subba Rao, JJ., was delivered by Subba Rao, J.

Sarkar, J., delivered a separate judgment.

SuBBA RAO, J.-This appeal by Special Leave against the judgment of the High Court of Judicature at Madras raises the ques.J, ion of interpretation of s. 43A of the Motor Vehicles Act, 1939 (IV of 1939), as amended by the Motor Vehicles (Madras Amendment) Act, 1948 (Mad. XX of 1948), hereinafter referred to as the Act. On February 19, 1955, the Regional Transport Authority, Tanjore, Madras State, the second respondent herein, called for applications under s. 57(2) of the Act for grant of a stage carriage permit on the Saliamangalam Kodavasal route. The appellant and the fourth respondent, K. M. Shanmugam, Proprietor, K. M. S. Transport, Ammapet, Tanjore District, along with others, applied for the grant of the said permit. The Regional Transport Authority

z959

M/s. Raman &

Raman Ltd. v.

The State of Madras & Others

Subba Rao].

x959 at its meeting held on April 19, 1955, after hearing the

M/s. Raman & representations of the applicants, granted the permit Raman Ltd. to the appellant. The fourth respondent and two v. others preferred appeals against the said order to the The State of Central Road Traffic Board, Madras, the third respon- Madras & Others dent herein. The Central Road Traffic Board by its order dated June 25, 1955, set aside the order of the Subba Rao].

Regional Transport Authority and granted the permit to the fourth respondent. The appellant preferred a Revision Petition against that order to the first respondent, the State of Madras, but the first respondent rejected the petition by its order dated October l~,

1955. Thereafter, the appellant filed a Writ Petition (No. 852 of 1955) in the High Court of Madras under Art. 226 of the Constitution to quash the orders of the Central Road Traffic Board and the State of Madras.

Rajagopalan, J., of the said High Court by his order dated May 1, 1956, quashed the order of the Government and directed the State Transport Appellate Tribunal which had been constituted in place of the Central Road Traffic Board to dispose of the appeal in accordance with law. Against the judgment of the learned Judge, the fourth respondent preferred an appeal under the Letters Patent and the Appellate Bench of that High Court, consisting of Rajamannar, C. J., and Ramaswami, J., set aside the order of Rajagopalan, J., and restored the order of the Central Road Traffic Board. The appellant with special leave filed the present appeal against that judgment of the High Court. _ Mr. Pathak, appearing for the appellant, raised before us the following two points: (i) The appeal filed by the fourth respondent against the order of the Regional Transport Authority to the Central Road Traffic Board was barred by limitation and the Board acted illegally in disposing of the appeal without deciding the question of limitation; and (ii) the appellant had the fundamental right to carry on the business of transport subject to reasonable restrictions imposed by law as on the date he applied for a permit or at any rate when the Regional Transport Authority issued the permit to him, and that the Central Road

Traffic Board committed an error, evident on the face r959 of the record, in disposing of the appeal in accordance with the new restrictions imposed by law made pend- M/s. Raman &- ing the appeal before it. Stated as a legal proposition, Raman Ltd. the contention is that the appellant had acquired a The s:te of vested right to carry on the business of transport and Madras & Others that the same could not be defeated by a subsequent law made pending the appeal, which was only pro- Subba Rao J. spective in character.

The first argument need not detain us, for the learned Counsel, in view of the finding of the High Court

that as a matter of fact the appeal to the Central Road Traffic Board was not barred, fairly did not press it before us.

This leaves us with the second and the only argument in the case. To appreciate the contention it is necessary to set out some more relevant facts : On March 28, 1953, the Government made an order, G. 0. Ms. No. 1037 Home, purporting to be under s. 43A of the Act.

The material part of that order reads:

"(1) That additional buses should not be permitted to ply on existing routes unless there is a clear need for increase in the number of buses plying on a particular route and wasteful competition should be discouraged but healthy competition where there is room should be encouraged and,

(2) that the transport authorities while granting stage carriage permits should work up to the minimum of 5 permits with a spare bus for each operator and the issue of permits should be so regulated as not to encourage benamidars on one hand and inefficient operators on the other."

On November 15, 1954, in supersession of paragraph 2 of the above order, the Government issued an order, G. 0. Ms. No. 3353 Home, to the following effect:

" The Governor of Madras hereby directs that each viable stage carriage unit in this State shall consist of not less than 10 buses and that in the matter of grant of stage carriage permits, other things being equal, and with a view to build up such viable units, the following shall be the order of preference :

232 SUPREMECOURT REPORTS [1959] Supp.

(1) Operators with less than 10 buses but nearer the mark of 10.

M/s. Raman &

Raman Ltd.

(2) Operators with IO and more buses. v.

(3) Others including new entrants.

The State of The Governor also directs that in order to facili, Madras & Others tate the amalgamation of existing small units into - viable units transfer of permits shall be allowed Subba Rao j. liberally."

On June 15, 1955, the Government issued .another order, G. 0. Ms. No. 1689 Home, whereby the Central Road Traffic Board was informed that pending further orders of Government after re-examination of the question of formation of viable units of stage carriages, the orders in para. (2) of G. 0. Ms. No. 1037 Home dated 28th M; i, rch, 1953, would be in force.

The effect of this order was that the first order was restored pending final orders.

When the Regional Transport Authority issued the permit in favour of the appellant, G. 0. Ms. No. 3353 Home dated 15th November, 1954, was in force, and when the Central Road Traffic Board made the order giving the permit to the fourth respondent, G. 0. Ms.

No. 1689 Home dated 15th June, 1955, was in operation. Apart from other considerations, the Regional Transport Authority relied upon the former G. 0. in preferring the appellant to other applicants,· while the Central Road Traffic Board referred to G. 0. Ms.

No. 1037 Home dated 28th March, 1953, which was restored by the later G. 0. in preferring the fourth respondent to the appellant. We shall give further details of the orders of the Regional Transport Authority and the Appellate Tribunal in the context of another argument, but, for the present, the aforesaid facts would suffice.

It would be convenient at this stage, before entering into the controversial question, to state briefly some of the well-established principles relevant to the • question raised : (i) A citizen has a fundamental right to ply motor vehicles on public pathways under Art. 19(1 )(g) of the Constitution, and any infringement of that right by the State can be justified only if it falls within the scope of Art. 19(6) thereof-See 0. S.S.

Motor Service, Tenkasi v. The State of Madras (1) and Saghir Ahmad v. The State of U. P. (2); (ii) proceedings before tribunals issuing permits are of quasijudicial in character-See 0. S.S. Motor Service, Tenkasi v. The State of Madras (1) and New Prakash Transport Go. Ltd. v. New Suwarna Transport Go.

Ltd. (3); (iii) a new law which takes away or impairs vested rights acquired under existing laws must be deemed to be intended not to have retrospective operation, unless such law makes it retrospective expressly or by implication-See Maxwell on the Interpretation of Statutes, p. 215; Garikapatti Veeraya v.

N. Subbiah Chowdhury {4) and Seth Gulab Chand v.

Kudilal (5); and (iv) the same principle applies to a law made pending an appeal before an appellate Court-See P. M. Seshadri v. Province of Madras (6).

So much is not, and cannot, de disputed. We shall assume that the said principles apply to a law made pending an appeal against an order of a quasi-judicial tribunal. The main controversy centres round the fact whether the orders made and the directions issued by the State Government under s. 43A of the Act are "laws" as to attract the operation of the aforesaid principles.

While Mr. Pathak says that the said directions are as much laws as those of the provisions of a statute or rules made thereunder, Mr. A. Viswanatha Sastri contends that, having regard to the scheme of the Motor Vehicles Act and the different sections of the Act vesting powers in the State Government with regard to different matters dealt with by the Act, the power conferred on the State Government under s. 43A is a power to make orders or issue directions in respect of administrative matters regulating the relationship between the State Government and the Transport Authorities and that such orders do not affect the legality or the validity of judicial acts of the said authorities. To appreciate the rival contentions, it is necessary to consider the relevant provisions of the Act.

(r) I.L.R. 1953 Mad. 304, 330, 334

(3) [1957] S.C.R. 98, rr8.

(5) [1959] S.C.R. 313, 322. 30

(2) [1955] 1 S.C.R. 707, 719.

(4) [1957] S.C.R. 488, 515.

(6) A.I.R 1954 Mad. 543.

z959

M / s. Raman &

Raman Ltd. v.

The State of Madras & Others

Subba Rao J.

z959 The Act, which is a Central Act, was passed in the year 1939 and subsequently it was amended from time

M~::n~~":; d~ to time both by Parliament and also by the local v. legislatures. The main object of the Act is to regulate The State of the motor traffic in every State in the interest of the Madras & Others public. Chapter II contains provisions relating to licensing of drivers of motor vehicles. Chapter III Subba Rao J. prescribes for the registration of motor vehicles.

Chapter IV provides for the control of transport vehicles. Chapter V lays down the general provisions regarding construction, equipment and maintenance of motor vehicles. Chapter VI regulates the control of traffic. Chapter VIII deals with the insurance of motor vehicles against third party risks. Chapter IX defines the offences, lays down the penalties and prescribes the procedure for detecting offences and enforcing penalties. Chapter X deals with miscellaneous matters. Every Chapter contains a specific provision conferring a pqwer on the State Government to make rules for the purpose of carrying into effect the provisions of that Chapter. To carry out the objects of the Act, the State Government is authorized to create a hierarchy of officers such as the State Transport Authority, the Regional Transport Authority, the Registering Authority, etc. Such Authorities are entrusted with administrative as well as quasi-judicial functions.

Chapter IV with which we are now concerned follows the same pattern. Its general heading is "Control of Transport Vehicles". Section 42 prohibits the owners of transport vehicles from using them in any public place without permits. Section 43 empowers the State Government to control road transport. Section 44 enables the State Government to constitute Transport Authorities to exercise and discharge the specified powers and functions. Under s. 44(4) the State Transport Authority is authorized to issue directions to any Regional Transport Authority and the latter shall be guided by such directions. Sections 46, 4 7, 48, 57, 60 and 64 prescribe the procedure for issue of permits and also create a hierarchy of Tribunals for hearing of applications and disposal of appeals. The said procedure is clearly quasi-judicial in character and has

been held to be so by this Court. Sections 67 and 68 confer a power on the State Government to make rules to regulate the operation of transport carriages and also to make rules for the purpose of carrying into effect the provisions of this Chapter.

Under the aforesaid provisions and the rules made thereunder, the State Transport Authority is made the administrative head of all the other Transport Authorities functioning in the State, and the Central Road Traffic Board the appellate authority in the hierarchy of Tribunals constituted under the Aet. As the admh1istrative head the State Transport Authority is authorized under s. 44(4) of the Act to issue directions to any Regional Transport Authority, who shall be guided by such directions.

As an appellate tribunal the Central Road Traffic Board is empowered to dispose of the appeals preferred against the orders made by the subordinate authorities under the Act in respect of specified matters. But the Central Act did not make any provision enabling the State Governments to control either the quasi-judicial or the administrative wings of the machinery provided under the Act. While the State Transport Authority could issue directions to other Transport Authorities constituted under the Act, a State Government could not likewise issue any directions either to the State Transport Authority or to its subordinate authorities. So too, while the Central .Road Traffic Board could in its appellate jurisdiction set aside or modify the orders of the subordinate tribunals, the State Government was not in a position to set aside the improper orders of the tribunals under the Act. Presumably, therefore, to bring the said authorities under its control, both on the judicial and the administrative wings, Motor Vehicles (Madras Amendment) Act, 1948 (Mad. XX of 1948), was passed and it became law on December 21, 1948.

Among other amendments, ss. 43A and 64A were inserted in the Act. Section 43A reads:

" The State Government may issue such orders and directions of a general character as it may consider necessary, in respect of any matter relating to road transport, to the State Transport Authority or

I959

Mjs. Raman &

Raman Ltd. v.

The State of Madras & Others

Subba Rao].

r959 a Regional Transport Authority; and such Trans-

M /s. Raman"" port Authority shall give effect to all such orders and

Ranian Ltd. directions."

Section 64A is to the following effect : The State af " The State Government may, on its own motion Madras & Others l' d 11 ,. d f _ or on app 10a.t10n ma e to it, ca .or the recor s o subba Rao J. any order passed or proceeding taken under this Chapter by any authority or officer subordinate to it, for the purpose of satisfying itself as to the legality, regularity or propriety of such order or proceeding and after examining such records, may pass such orders in reference thereto as it thinks fit." So far as s. 64A is concerned, in express terms it confers a judicial power on the State Government to keep a subordinate judicial tribunal within bounds. Section 64A, along with ss. 45 to 57, 60 and 64, forms a complete code in respect of the quasi-judicial disposals of the issue of permits. The permits should be issued in accordance with the provisions of the Act and the rules framed thereundAr following the judicial procedure. The words used in s. 43A are very wide. It says that the State Government may issue orders and directions of a general character in respect of any matters relating to road transport. Divorced from the context and the setting in which the new sectiou appears, it may comprehend any orders or directions of a general character in respect of road transport ; and, if so construed; it would not only subvert the other provisions of the Act but also would be vulnerable to attack on the ground of constitutional invalidity. It would entrust the Government with a naked arbitrary power capable of being used to compel quasi-judicial tribunals to dispose of cases in a particular way ; it would enable them to couch the order in a general way to induce a tribunal to come to a particular deoi

sion in a given case; and it would be destructive of the entire judicial procedure envisaged by the Act and the rules framed thereunder in the matter of disposal of specified questions. It would be attributing to the

legislatre an incongruity, for the State Government could issue . directions in respect of which it could make rules ignoring the safeguards provided in the

making of the rules. Section 133 lays down that every power to make rules given by the Act is subject to the condition of the rules being made after previous publication. It.also enjoins on the Central and the State Governments to place the said rules for not less than fourteen days before the appropriate legislature and the rules so made shall be subject to such modification as the legislature may make in such session in which they are so laid. All these salutary precautions can be ignored if the directions given under s. 43A are given the status of law; on the other hand, if a restrictive meaning is given as it should be in the context, there would be a happy correlation of the functions of the various bodies under the Act, includ - ing the Government. The Government's legislative power is recognised under ss. 67 and 68 of the Act; its judicial power is maintained under s. 64A and its administrative power is affirmed under s. 43A. Chapter IV and the rules made thereunder confer administrative powers on the Regional Transport Authorities and the State Transport Authority. Section 43A enables the State Government to make orders and issue directions of a general character in respect of those functions to implement the provisions of the Act and the rules made thereunder ; and the said authorities shall give effect to all such orders and directions.

The context in which and the setting wherein the section is inserted also lend support to the said conclusion. Section 42 describes the necessity for permits and s. 43 confers specific powers on the Government to control road transport. Section 43A coming ther~ after and before the sections conferring quasi-judicial powers on tribunals is indicative of the fact that the jurisdiction conferred under s. 43A is confined to administrative functions of the Government and the tribunals rather than to their judicial functions; for, if the section was intended to confer .lgislative power, it should have found its place aftr- ~-, 64A or somewhere near the end of the Chapter. Though it is not a conclusive test, t}le pla.cing of the proyisions of ss. 43A and Q4A,. which were ipserted by he same Amending Act is also a pointr to the intentjdn of the

I959

M/s, Raman &

Raman Ltd,

The State of M adra• & Others

Subba Rao].

I959

M/s. Ranian &-

Raman Ltd. v.

The State of Madras & Others

Subba Rao ].

legislature, namely, that s. 43A was intended to govern administrative functions of the tribunals.

The terms of the section and the manner of issuing orders and directions thereunder also support the same conclusion. The legislature used two words in the section : (i) order and (ii) directions. Whenever it intended to affect the rights of parties, it used the word " rules ", but in this section it designedly used the words appropriate to the control of admiuisLrative machinery. The words " directions and order" are defined in one of the Law Lexicons thus: "Direction contains most of instruction in it; order most of authority. Directions should be followed; orders obeyed. It is necessary to direct those who are unable to act for themselves; it is necessary to order those whose business it is to execute the orders. " The said meaning of the words is more appropriate to administrative control rather than to rules of law affecting rights of parties. Further, the declaration in the section that the orders and the directions under the section shall be binding on the authorities concerned is indicative of the fact that they are not laws, for if they are laws, no such declaration is necessary. What is more, they need not even be published and may, if the Government so desires, take the form of secret communication to the authorities concerned. Nor is there any basis for the argument that as the directions are issued under a statutory power, they are "laws". The source of the power does not affect the character of the things done in exercise of that power.

Whether it is a law or an administrative direction depends upon the character or nature of the orders or directions authorized to be issued in exercise of the power conferred. That should be determined on other considerations adverted to by us already. Our view is in accord with that expressed by a Division Bench of the Madras High Court in C. S.S. Motor Service, Tenkasi v. The State of Madras (1). There the constitutional validity of ss. 42, 43A, 4 7, 48 and 64A of the Act was questioned. In dealing withs. 43A, Venkatarama Ayyar, J., who delivered the judgment of the Court, observed at p. 335 thus :

(1) l.L.R. 1953 Mad. 304. 330, 334.

... -•

r959 "Coming next to section 43A, it is argued that it confers on the Provincial Government wide and unlimited powers to issue all such orders and directionsof M~~ .... ::m:;/'' a general character as they may consider necessary, v. that the transport authorities are bound under that The State of section to give effect to such orders and directions, Madras & Others

that there is nothing to prevent the Government from even issuing directions with reference to the judicial functions which those authorities have to discharge under the Act, that it could not be expected that such directions would be disregarded by those authorities and that in practice the provisions of section 4 7 could be evaded. Reference is also made to the fact that this section was introduced for nullifying the effect of the decision in Sri Rama Vilas Service Ltd: v. The Road Traffic Board, Madras (1) where it was held that the transport authorities had failed in the discharge of their judicial function in meekly giving effect to an order of the Government which was opposed to the provisions of the Act.

Section 43-A appears to be intended to clothe the Government with authority to issue directions of an administrative character and in that view it would be valid.

No specific order or direction of the Government is attacked in these proceedings as invalid and the discussion is largely academic. The section must itself be held to be valid though particular orders passed thereunder might be open to challenge as unconstitutional." From the aforesaid observations, it is manifest that the learned Judge construed s. 43A as conferring a power on the State Government to issue directions of an administrative character. If the construction was otherwise, the learned Judge would have held that the section was constitutionally. bad as he had held in regard to other sections.

The High Court of Andhra Pradesh in Gopalakrishna Motor Transport Co.

Ltd. v. Secretary, Regional 'l.'ransport Authority, Krishna District, Vijayawada (2) had also considered the scope of the provisions of s. 43A.

There, the State Government issued an order under s. 43A of the Act prescribing the manner of checking a bus for over-

(1) (1948) l M.L.J. 85.

(2) A.I.R. 1957 A.P. 882.

Subba Rao].

r959 loading. The procedure prescribed was not followed

M/s. Raman & by the Regional Transport :Authority, which was em- Raman Ltd. powered to suspend the permit on the ground of overv. loading under s.· 60 of the Act. One of the contentions The State of raised was that as the mandatory direction given by Madras & Others the State Government under s. 43A was not followed, the Regional Trarisport Authority in exercising its Subba Rao ]. powers under s. 60 should have held that there was no over-loading. In rejecting this plea, the High Court observed at p. 885 thus:

" Government has power to frame rules and also to issue administrative directions of a general character under Section 43-A of the Act. . ........... In so far as the order was couched in mandatory terms, it is incumbent upon the officers concerned to comply with it.

Any instruction given under Section 43-A cannot override the discretionary power conferred upon the Transport Authority under section 60. . ..... We, therefore, hold that the order of the Government contained only administrative instructions issued under Section 43-A. It is true that some of the ad ministrative instructions impose a mandatory duty on the officers concerned and if they do not discharge their duty, Government may take disciplinary action against them. But, in our view, non-compliance with those directions cannot affect the finding the Au thority arrived at on other material on the question of over-loading." In the present case, the learned Chief Justice, who was a party to the decision in 0. S. S. Motor Service

v. The State of Madras (1), presumably on the basis of that judgment observed thus:

"In our opinion, these Government orders, which are in the nature of general administrative directions to the transport authorities, do not vest any rights, indefeasible rights-in any applicant for a stage carriage permit ".

The result of the discussion may be summarised thus: The appellant had a fundamental right to carry

(1) l.L.R. 1953 Mad. 304. 330, 334

(2) S.C.R.

SUPR:gME COURT REPORTS 241

on his motor transport business subject to reasonable r959 restrictions imposed upon that right by law. Some of the provisions of Chapter IV of the Act contain M /s. Raman""

Rarnan Ltd. reasonable restrictions on the said right. He was given v a permit on the basis of the law imposing the said The stte of restrictions on his right. The orders made and the Madras & Others directions issued under s. 43A could cover only the administrative field of the officers concerned and Subba Rao J. therefore any direction issued thereunder was not law regulating the rights of the parties. The order made and the directions issued under s. 43A of the Act cannot obviously add to the considerations prescribed under s. 47 on the basis of which the tribunal is empowered to issue or refuse permit, as the case may be.

There was, therefore, no change in the law pending the appeal so as to affect the appellant's vested right.

In this view, the appellant cannot question the validity of the order of the Central Road Traffic Board on the ground that it decided the appeal on a law that was made subsequent to the issue of the permit to him.

The same result could be arrived at by different process of reasoning.

The appellant had a fundamental right to carry on the business of motor transport subject to reasonable restrictions imposed by law under Art. 19(6) of the Constitution. The Act imposed reasonable restrictions on the said right. One such restriction was that the State Government may issue such orders and directions of a general character as it may consider necessary in respect of any matter relating to road transport to the State Transport Authority.

When the appellant applied for a permit, he must be deemed to have had the knowledge of the fact that his application would be disposed of by the State Transport Authority in accordance with orders and directions of a general character issued by the State Government. The directions were not new law that came into existence pending the appeal, but only issued under a law that was in existence even at the time he applied for a permit. The law was that embodied in s. 43A of the Act, namely, that the Government could issue directions binding on the authorities

concerned and that law was a pre-existing one and the application had to be disposed of subject to that M/s. Raman & law till it was finally terminated by an order: of the Raman Ltd.

I959

v. highest tribunal in the hierarchy. In this view also The State of there are no merits in the appellant's contention.

Madrns & Othm Now coming to the merits of the case, the conten-

Subb:i Rao ]. tions of the parties may be stated thus : The learned Counsel for the respondents contends that there is no material difference between G. 0. Ms. No. 1037 and G. 0. Ms. No. 3353, except in regard to one circumstance, which is not material for the present purpose: while in the former G. 0., the argument proceeds, the transport authority is directed to work up to a minimum of five units with a spare bns, under the latter G. 0., the viable unit fixed is not less than ten buses and the authority concerned is directed to work up to that limit. It is pointed out that the only difference is in the measure of a viable unit and that the fourth respondent's case falls squarely within the first category in the order of preference prescribed in G. 0. Ms.

No. 3353of1954. The learned Counsel for the appellant contends that the order of preference is based upon the achievement of the object, namely, building up of viable units of ten permits and that the appellant admittedly had only four permits and, therefore, far below the viable unit and he could not be given preference in a competition between him and the appellant, who had more than thirty permits. The problem presented can only be solved by a reasonable interpretation of the plain words used in G. 0. Ms. No. 3353 of 1954 read along with the expressed object sought to be achieved thereby. It will be convenient at this stage to read the said order omitting the unnecessary words: G. 0. Ms. No. 3353 Home dated 15th November, 1954.

"The Planning Commission has made the following recommendation in respect of Road Transport service: 'It is desirable for the existing private operators' units to amalgamate, wherever possible, into big viable units to enable them to achieve better returns and maintain better standards of operation '.

1 , '

I959 The Government considered that it will be in the M /s. Rama"&· interests of the public if road transport services are Haman Ltd. conducted by operators having at least ten stage v. carriaaes and they have therefore decided that each The State of b • viable unit should consist of at least ten stage car- Madras & Others riages. - Subb;; ao ].

In exercise of the powers conferred by Section 43-A of the Motor Vehicles Act, 1939 (Central Act IV of 1939), and in supersession of the orders issued in paragraph (ii) of G. 0. Ms. 1037, Home dated 28th March, 1953, the Governor of Madras hereby directs that each viable stage carriage unit in this State shall consist of not less than IO buses and that in the matter of grant of stage carriage permits, other things being equal, and that with a view to build up such viable units, the following shall be the order of preference : I. Operators with less than 10 buses, I.mt nearer the mark of ten.

2~ Operators with 10 and more buses. 3.

Others including new entrants.

The Governor also directs that in order to facilitate the amalgamation of existing small units into viable units transfer of permits shall be allowed liberally." The G. 0., was issued to achieve the object of inducing the operators to amalgamate wherever possible, into big viable units to enable them to achieve better returns and maintain better standards of operation.

The Government decided that a unit of at least ten buses would be necessary to achieve that object. To implement that policy, it directed that each viable stage carriage unit should consist of not less than ten buses and with a view to build up such viable units, it directed that, other things being equal, the order of preference contained therein should be followed.

The order of preference contained three categories, one excluding the other. They did not provide for any rules of preference inter se of operators coming within each one of the categories. Presumably, that was left to be decided by the transport authorities, having regard to the considerations mentioned in s. 47.

The argument

M/s. li'a1nan 6'

Haman Ltd. v.

The State of Madras & Others

Subba Rao J.

of the learned Counsel for the fourth respondent is based upon the first category, which reads:

"Operators with less than 10 buses but nearer the mark of IO".

He contends that, having regard to the object of the G. 0., namely, to build up a viable stage .carriage unit of ten, in the absence of an operator with stage carriages nearer to the mark of ten than the fourth respondent, he is entitled to a permit in preference to the appellant provided other things are equal between them. In respect of this argument, emphasis is laid upon the word "nearer" and it is said that the said word indicates a rule of preference between operators coming within that category, namely, that an operator like the fourth respondent is to be preferred, if there is no other operator nearer than him to the mark of ten. This argument is attractive, but, in our view, it is inconsistent with the scheme of the order. It is true that the phraseology of category (I) has not been happily worded and perhaps grammatically not correct. But the intention is fairly obvious. For one thing the rule of preference is based upon the achievement of the object, i.e., the building up of a viable unit of ten permits, for the other, the rule of preference is only to govern the throe categories mentioned therein and not inter se between those falling in each category.

The word "others" in category (3) becomes meaningless, if operatoi:s far below the mark of ten permits fall within the first category. The more reasonable interpretation and that is in accord with the intention of the State Government is that other things being equal, in a competition between the three categories of operators mentioned in the order, operators nearer the mark of ten shall be preferred. In the absence of any such operator, operators with ten or more buses should be given the second preference. In the absence of such operators, others, i. e., operators who are not nearer the mark of ten and new entrants, will have to be preferred.

This rule of preference was not expected to cause any injustice as the restriction on the transfer of permits was removed and the small operators were permitted to amalgamate the existing units into viable units,

This policy did not achieve the expected results, but encouraged monopolies; with the result that the Government had to cancel the order of June 15, 1955, within about six months from the making of it; but

'959

M/s. Raman &

Rama1' Ltd.

v. that circumstance does not affect the construction of The State of the clause.

We, therefore, hold that on a strict inter- Madras & Others pretation of the G. 0. Ms. No. 3353of1954, the fourth respondent would not have been entitled to the permit.

But as we have held tha.t the said order was not law but was only an administrative direction, it could not affect the validity of the order of the Central Road Traffic Board, if it made the order, having regard to the consideration laid down ins. 47 of the Act.

The main consideration under s. 4 7 of the Act is that the Regional Transport Authority shall, in deciding whether to grant or refuse such carriage permit, have regard to the interest of the public generally. The Central l{oad Traffic Board, after having found that the appellant had other advantages such as he operated a three-route permit touching the route under appeal, that his record was satisfactory and that he was not inefficient, came to the conclusion that by giving the permit to the fourth respondent, it would be encouraging not only healthy competition but also would be enabling him to work out to the minimum of five permits. It is true that if the 1954 order should govern the selection, the main reason given by the Board would be wrong.

Whether a small unit or a large unit would be viable or would be in the interest of the public is always a debatable point and it is possible to take conflicting views on the question. One view is that an operator who is described as fleet-owner will have considerable experience in the business and will be in a position to keep a workshop and additional buses to meet any emergency and therefore he would be in a better position to operate the service without break and keep up the timings in the interest of the public than a stray bus operator.

The alternative view is that encouragement of large viable units will tend to monopoly and the freedom from competition will bring about deterioration in service. On the other hand, new entrants and operators

Subba Rao j.

r959 owning a few buses will liave incentive to bestow greater attention to the public needs, particularly in view M /s. Raman &

Raman Ltd. of the competition from others in the same field. That v. both views are possible is evident from the fact that The State of the State Government has been changing its views so Mad, as & Others often on the subject; and indeed the cancellation of G. 0. Ms. No. 3353 of 1954, within six months from Subba Rao ]. h d b b

Sarkar ].

t e ate of its issue, presuma ly on the asis of the experience gained during that period, is a clear indication that in the opinion of the Government, encouragement of large units was not in the interest of public. If that be so, one ca1mot say that the Central Road Traffic Board acted without jurisdiction when it accepted the view that the smaller units would be more in the interest of the public rather than larger units; nor the fact that it accepted the prevailing view of the Government on the subject would make it any the less an order within its jurisdiction, provided the said view was germane to one or other matters stated in s. 4 7 of the Act.

As pointed out by us, both the views are possible and the Board was well within its rights in holding that the public interest would be served if the permit was given to the fourth respondent, in the circumstances of the case.

In this view, no other question arises for consideration. The order of the Madras High Court is correct and the appeal is dismissed with costs.

SARKAR, J.-The appellant before us is a company operating public motor bus services in the State of Madras. Its grievance is that it has been wrongly refused a permit to run a bus.

Motor bus services transporting passengers on the public highways for consideration, called stage carriage services, are controlled by ss. 42 to 68 contained in Chapter IV of the Motor Vehicles Act, 1939. The Act provides that no vehicle can be used as a stage carriage save in accordance with a permit granted by a regional Transport Authority set up by the State Government. Section 4 7 of the Act lays down certain matters to which a Regional Transport Authority shall have regard in deciding whether to grant or refuse a

stage carriage permit, one of which is the interest of the public generally. Section 68 of the Act authorises the State Government to make rules for the purpose of carrying into effect the provisions of Chapter IV. The rules framed under this section do not contain anything to guide the Regional Transport Authority in the matter of granting the permits save that r. 150 provides that it "shall in all matters be subject to the orders of the Government and s)lall give effect to all orders passed by the Government whether on appeal or otherwise." Section 43-A of the Act however gives the State Government power to issue orders and directions to the Regional Transport Authority. That section is in these terms :

"The State Government may issue such, orders and directions of a general character as it may consider necessary, in respect of any matter relating to road transport,, to the State Transport Authority or a Regional Transport Authority ; and such Transport Authority shall give effect to all such orders and directions."

We are not concerned with the State Transport Authority in this case. The Act is a Central Act and s. 43-A was introduced into it by an amendment made by the legislature of the Province of Madras. The Government of Madras from time to time issued orders under this section providing certain considerations for the guidance of the Regional Transport Authorities in deciding applications for the grant of permits for stage carriages.

The appellant's contention is that the permit was refused to it by applying one of these orders which was not applicable to its case. Section 64 of the Act permits an appeal to an appellate authority from an order of a Regional Transport Authority refusing to grant a permit. This appellate authority in the State of Madras is called the Central Iioad Traffic Board. Section 64-A which again was introduced into the Act by an amendment of the legislature of the Province of Madras, empowers the Government to look into the records of any case concerning the grant of a permit and pass such order as it thought fit.

Now as to the facts of this case, on March 28, 1953,

r959

Mis. Raman &

Raman Ltd. v.

The State of Madras & Others

Sarkar ].

I959

M/s. Raman &

Raman Ltd. v.

The State of Madras & Others

Sarkar ].

248 Stft>:RE!M~ COURT RE!PORTS [1959j Supp.

the Government issued an order under s. 43-A marked G. 0. Ms. No. 1037 laying down certain considerations to be observed in granting permits. On November 15, 1954, the Government issued a11other order marked G. 0. Ms. No. 3353 superseding the second parngraph of G. 0. Ms. No. 1037 and sullstituting fresh provisions in its place.

As I do not consider it necessary to discuss the terms of these orders, it will tend to clarity to proceed on the basis t:\S if G. 0. Ms. No. 3353 superseded G. 0. Ms. No. 1037 wholly.

The appellant, the respondent No. 4 and eight, other persons had applied for the permit for a route for which applications had been invited. It does not appear from the record when these applications had been mjtde, but it appears that on April 9, 1955, the Regional Transport Authority after hearing all the competing applicants granted the permit to the appellant applying G. 0. Ms. No. 3353, this being the order then in force.

Soon thereafter, namely, on May 20, 1955, the Government passed under the same section a fresh order being G. 0. Ms. No. 1403 cancelling G. 0.

Ms. No. 3353 and on June 15, 1955, it passed another order being G. 0. Ms. No. 1689 which, for the purpose of this case it may be said, had the effect of restoring G. 0. Ms. No. 1037.

On or about June 23, 1955, the respondent No. 4, who will be referred to as the respondent as he is the only contesting respondent, preferred an appeal to the Central Road Traffic Board against the decision of the Regional Transport Authority. It may be that some of the other disappointed applicants for the permit also preferred similar appeals but with them we are not concerned. The Board considered the representations of all the parties before it and made an order on June 25, 1955, setting aside the decision of the Regional Transport Authority and granting the permit to the respondent. According to the appellant, in making this order the Board followed G. 0. Ms. No. 1037. The

complaint of the appellant is that the Board went wrong in doing so as G. 0. Ms. No. 1037 was not in force when the appellant's application was considered by the legional Transport Authority but had been

brought into force subsequently, and as the Board was r959 only hearing an appeal from the Regional Transport h . . b d d 'd h d' Mfs.Raman& Aut onty it was oun to em e t e case accor mg Raman Ltd. to the order in force when the Regional Transport v.

Authority made its decision and was not entitled to The State of decide it according to an order which came into exist- Madras & Others

ence subsequently. The appellant took the matter up to the Government under s. 64-A of the Act but Sarkar J. the Government refused to interfere.

The appellant then moved the High Court at Madras for a writ of certiorari quashing the orders of the Board granting the permit to the respondent and of the Government refusing to interfere. Rajagopalan, J., who heard the application, thought that the Government had failed to exercise its jurisdiction by not deciding a point raised before it, namely, whether the appeal to the Board had been made within the prescribed time. He, therefore, set aside the order of the Government and sent the case back for reconsideration.

The respondent went up in appeal from the order of Rajagopalan, J. The appeal was heard by a bench of the same High Court consisting of Rajamannar, C. J., and Ramaswami, J., and was allowed. The learned Chief Justice who delivered the judgment of the court, held that Rajagopalan, J., was not right in thinking that the Government had failed to decide whether the appeal to the Board had been filed by the respondent within the prescribed time.

He rejected the contention of the appellant that the order of the Board was liable to be set aside inasmuch as it had been made pursuant to G. 0. Ms. No. 1037 which was not the order in force when the Regional Transport Authority heard the matter. He observed, "these Government orders, which are in the nature of general administrative directions to the transport authorities, do not vest any rights, indefeasible rights-in any applicant for a stage carriage permit". He also held, "It cannot be said that because on the date of the disposal of the application by the Regional Transport Authority a particular G. 0. was in force, any one had a vested 32

r959 right conferred on him by that G. 0. 'Ve think that it was permissible to the Central Road Traffic Board A~n~:m~;/" to decide between the claimants on the basis of the v.

G. 0. which was in force at the time the appeal was The State of being heard." The appellant has now come to this Madras & Others Court by special leave in appeal against this judg- - mont.

Sarkar ].

Only one point has been argued by Mr. Pathak appearing in support of the appeal.

He said that the Board was a quasi-judicial tribunal and an order made by it is therefore liable to be quashed by a writ of certiorari if that order discloses an error apparent on the face of it. He then said that the order of the Board of June 25, 1955, was erroneous in law as it decided the case by the terms of G. 0. Ms. No. 1037, which was brought into force after the date of the decision of the Regional Transport Authority and bad not been given a retrospective operation, and the Board which was hearing an appeal from the Regional Transport Authority, could only decide whether that Authority had gone wrong in the application of the provisions in force at the time of the hearing before it, namely, the provisions contained in G. 0. Ms.

No. 3353. He also said that such error was apparent on the face of the record as the Board in its decision stated that it was deciding the case by G. 0. Ms.

No. 1037.

It has not been contended before us that the Board is not a quasi-judicial Tribunal. It clearly is so.

In view of the many decisions of this Court in similar matters it would be impossible to take a contrary view. Then again it is a principle firmly established and accepted by this Court that a writ of certiorari can issue where the decision of a tribunal discloses an error of law apparent on its face.

I am also clear in my mind that if it was an error for the Board to have followed G. 0. Ms. No. 1037, such error appeared on the face of its decisions for it expressly purported to be guided by G. 0. Ms. No. 1037. The only questions that remain are whether this was an error and an apparent error. These I now proceed to discuss.

It is true that G. O. Ms. No. 1037 which had been

superseded by G. 0. Ms. No. 3353 on November 15, r959 1954, was revived by G. 0. Ms. No. 1689 issued on June 15, 1955, i.e., after the date of the decision of the M/s. Raman & Raman Ltd. legional Transport Authority given on April 9, 1955, v. when G. 0. Ms. No. 3353 prevailed. I will assume The state of now that G. 0. Ms. No. 1689 did not bring back G. 0. Madras & Others Ms. No. 1037 with retrospective force.

Was the Board then wrong in applying G. 0. Ms. No. 1037 Sarkar J. when it decided the appeal from the Regional Transport Authority's decision? I do not think so.

It may be that when one regular and ordinary court hears an appeal from the decision of another such court, it cannot, generally speaking, take into consideration a law which has been passed since that decision.

But it is far from clear that the same rule applies when an appeal from the order of a quasi-judicial tribunal is heard by another such tribunal, as is the case here. No authority to warrant such a proposition was cited and as at present advised, I am not prepared to assent to it. In any case, it can safely be said, and it is enough for the purpose of this case to do so, that it is far from clear that a quasi-judicial tribunal like the one before us is not entitled in hearing appeal from another such tribunal to apply a rule which has come into existence since the decision under appeal. If it is not so clear there of course is no error apparent on the face of the record.

It cannot be overlooked that such a tribunal is not enforcing a vested right which one party has against another or others. The tribunal is to choose from amongst a number of persons the fittest to be granted a permit. The overriding interest in the selection is of one who is not a party to the proceedings, namely, the travelling public. The lower tribunal is entitled to be heard on an appeal under s. 64, a procedure which is wholly inapplicable in appeals from the decisions of what are called courts of law.

As a general rule, a court gives effect at the t.ria, l to the substantive rights of the parties existing at the date of the writ and it is for this reason that a change in the law cannot ordinarily be taken into account in appeals.

Now such a consideration does not prevail in the

'959 present case. It is not said that a person when he

M/s. Raman & makes an application for a permit acquires a right to Raman Ltd. have his application decided by the order under tho v. section then in force.

All that is said is that the The State of Transport Authority must consider the applications Madras & Others according to the order in force at the time it hears

- them. If this is so, as I think it is, then the basis for Sa'fhaY ]. saying that the appellate authority cannot consider a Government order issued since the order under appeal was made, completely disappears. Another reason given for the view that a court of appeal cannot take into consideration a new law is that, "a matter of substantive right which has become res judicata cannot be upset by a subsequent general change of the law": see Re a Debtor, Ex parte Debtor('). Now it does not seem to me possible to say that an applicant for a permit has a substantive right to the permit vested in him.

Nor is it possible to conceive of the decision of a Regional Transport Authority in granting or refusing to grant a permit as having any operation by way of res judicata. It therefore seems to me that there is no warrant for applying the general rule applicable to a court of law hearing an appeal from a similar subordinate court which prevents it from taking notice of a new law, to tribunals such as those with which this case is concerned. • I wish to add one thing more on this subject. Even in the case of a ppoals strictly so called, the court hearing the appeal may take cognisance of new laws which are made applicable to pending cases: see Quilter v. Mapleson (2).

I have so long been proceeding on the assumption that G. 0. Ms. No. 1689 bad no retrospective effect at all. Now it seems to me that there is at least grave doubt if G. 0. Ms. No. 1689 which revived G. 0. Ms. No. 1037, was not intended to be applied to pending appeals. It was directed only to the Central Road Traffic Board which heard appeals, and this would indicate that it was intended that the Board would follow it in deciding the appeals that were then pending before it. It is not therefore clear that G. 0. Ms. No. 1689 was not intended to

(r) [1936J Ch. 237, 2n

(2) (1882) 9 Q.B.D. 672.

have at least this retrospective effect. If it did, which r959 on the form of the order it, may well be said to have l\Ifs. Rama" & done, then that would be another reason for saying Raman Ltd. that it is not clear that the Board was in error in v. applying it.

The State of In my view therefore it has not been shown that Madras & Others the Board committed an error apparent on the face of its decision in applying G. 0. Ms. No. 1037 to the appellant's case. This appeal must therefore fail.

Before leaving the case I wish to express my opinion on a matter which was pressed on behalf of the respondent. It was said that only administrative orders could be made under s. 43-A which orders were not laws, and therefore an error with regard to them would not be an error of law which would warrant the issue of a certiorari. I am unable to assent to this contention. To my mind the question is not solved by describing the orders as administrative orders, a term as to the meaning of which, I confess, I am not clear. So it does not seem to me to be necessary to enquire what kind of orders could be issued under s. 43-A. In my view if an order under the section is one to the observance of which a person is entitled, that would be a law, a mistake of which would justify the issue of the writ at his instance. The whole justification for a writ of certiorari is to prevent, where no other remedy is available, a patent injustice being allowed to stand. It would be strange if a person was entitled to the observance of a rule and was held not to have a remedy for its breach. It can make no difference by what name that rule is called. I wish to read here as a salutary advice to follow, what Pollock 0. B. and Martin B. sttid in The Mayor of Rochester v. The Queen (1) regarding the writ, " Instead of being astute to discover reasons for not applying this great constitutional remedy for error and mis-government, we think it our duty to be vigilant to apply it in every case to which, by any reasonable construction, it can be made applicable."

The real question thus is whether the applicants for permits were entitled to the observance of the orders

(r) (1858) EL. BL. & EL. 1024, 1033; 120 E.R. 791.

Sarhar ].

r959

111 /s, Ranzan Qi..

Rantan Ltd. v.

The State of 1\1 adras Qi.. Others

Sarkar ].

254 SUPl{E:M:E COURT REPORTS [1959] Supp.

with which we are dealing. I think they clearly were.

The orders were made under a statutory provision.

That itself would make them binding. Further, the statute expressly says that the "Transport Authority shall give effect to all such orders and directions ".

The statute applies to all; every one is entitled to the benefit of it. Any person interested has therefore a right to claim that an order passed under the section shall be observed by the Transport Authorities. The respondent himself made such a claim and has got tho benefit of one of these orders.

It was however said that it is true that the Transport Authorit.ies owed a duty to observe the orders but that was a duty they owed to the Government alone and that a breach of this duty only exposed them to disciplinary action by the Government but did not vitiate their decisions.

I find no words in the section so to limit the scope of the duty imposed by it on the Transport Authorities. The nature of the orders makes it impossible to think that it was intended to visit a breach by disciplinary action only. These orders lay down principles to be applied in deciding whether a person should or should not be given a permit. They affect persons materially; they affect persons' living. I find it very difficult to think that the only sanction for such rules can be disciplinary action.

It seems to me abhorrent that judicial bodies should in the discharge of their functions be subjected to disciplinary action. Then I think it would certainly be a very unusual statute which sets up quasi-judicial tribunals with power to affect people materially and binds the tribunals on pain of disciplinary action only to proceed according to rules made under its authority but gives the persons deeply affected by the tribunal's decision no right to claim that the rules should be observed. I am unable to hold that the Motor Vehicles Act is a statute of this kind.

I ought to refer to the case of N agendra Nath Bora

v. The Commissioner of Hills Division and Appeals, Assam('). That was a case concerning a licensing authority for liquor shops. It was there said that a

{I) [1958] S.C.R. 1240,

breach of certain executive instructions issued to the licensing authority did not amount to error of law. I think that case is clearly distinguishable. It dealt with executive instructions and therefore not such as were issued under a statutory power. There is nothing to show that it was the bounden duty of the tribunal, the licensing authority, to obey these instructions.

Had it not been that a hierachy of appeals had been provided for, it would perhaps have been held in that case that the authority was not a quasi-judicial authority at all. Furthermore, it was held there that no one had an inherent right to a settlement of a liquor shop. Therefore it seems to me that that case does not help in deciding the effect of the orders issued under s. 43-A. It is interesting to note that it was said in that case referring to the writ of certiorari at p. 412 that, "its purpose is only to determine, on an examination of the record, whet.her the inferior tribunal has exceeded its jurisdiction or has not proceeded in accordance with the essential requirements of law which it was meant to administer." The words" law which it was meant to administer" are very significant. The Transport Authorities in the present case were certainly meant to administer the orders issued under s. 43-A.

There is one thing more that I wish to observe in this connection. It may be that an order which it is the bounden duty of the Transport Authority to obey may give it a certain amount of discretion, but that in my view would not make the order any the less a law. If the discretion has been duly exercised, there would be no error of law for the law itself gives the discretion. It would be the bounden duty of the tribunal to observe that law and so if necessary to exercise the discretion given by it.

For the reasons earlier mentioned, however, I agree that the appeal should be dismissed.

Appeal dismissed.

I959

M /s. Raman &·

Raman Ltd. v.

The State of Madras & Others

Sarkar ].

M/S. RAMAN & RAMAN LTD

THE STATE OF MADRAS & OTHERS

A. K. SARKAR

SuBBA RAo, JJ.

s. 43A

Art. 226

s. 43A

Motor Vehicles Act, 1939

s. 43A

s. 43A

Motor Vehicles Act, 1939

s. 43A

s. 43A

Motor Vehicles Act, 1939

s. 57(2)

Art. 226

s. 43A

Art. 19(1 )(g)

Art. 19(6)

s. 43A

Motor Vehicles Act

s. 43A

[1955] 1 S.C.R. 707

Section 42

Section 43

Section 44

s. 44(4)

Sections 46, 4

Sections 67 and 68

s. 44(4)

ss. 43A and 64A

Section 43A

Section 64A

s. 64A

Section 64A

ss. 45 to 57, 60 and 64

s. 43A

Section 133

s. 43A

ss. 67 and 68

s. 64A

s. 43A

Section 43A

Section 42

s. 43

Section 43A

s. 43A

ss. 43A

s. 43A

ss. 42, 43A, 4

section 43A

section 4

Section 43

s. 43A

s. 43A

s. 43A

s. 43A

s. 60

Section 43

Section 43

section 60

Section 43

s. 43A

s. 43A

s. 47

Art. 19(6)

s. 43A

Section 43

Motor Vehicles Act, 1939

Central Act IV of 1939

s. 47

s. 4

s. 4

ss. 42 to 68

Section 4

Section 68

Section 43

s. 43

Section 64

Section 64

s. 43

s. 64

s. 64

s. 43

s. 43

Motor Vehicles Act

s. 43

s. 43