KARNATAKA STATE TOURISM DEVELOP MENT CORPN LIMITED D P SHARMA P TEJRAJ SHARMA KARNATAK A STATE TOURISM DEVPLOP MENT CORPN S NARAYANA BHATTA B A JAVA RAM A RAMANNA NAIK Vs. KARNATAKA STATE TRANSPORT APPELLATE TRIBUNAL:UNION OF INDIA:KARNATAKA STATE ROAD TRANSPORT CORPN:UNION OF INDIA

JUDGEMENT

(1.) Special leave granted in all the cases.

(2.) These appeals raise common questions of law and may therefore, be disposed of by a common judgment. In exercise of its powers under S. 63(7) of the Motor Vehicles Act, the Central Government specified 50 as the number of 'All India Tourist Vehicle Permits' which may be granted by the Karnataka State Transport Authority. By S. 24 of Amending Act 47 of 1978, a proviso to S. 63(7) was introduced. We are concerned in these appeals with the vires and interpretation of this proviso. By the time the proviso came into force. 36 permits had been granted by the Karnataka State Transport Authority and 14 remained to be granted. There were as many as 495 applications for the grant of these 14 permits. By an order dated February 1, 1984, the Supreme Court directed the Karnataka State Transport Authority to dispose of these applications. The State Transport Authority, by its proceedings dated April 30, 1984, granted 11 out of the 14 permits to the Karnataka State Tourism Development Corporation, one permit to the Indian Tourism Development Corporation and two permits to the Karnataka State Road Transport Corporation. A number of appeals were preferred to the Karnataka State Transport Appellate Tribunal. The Tribunal by its order dated February 28, 1985 set aside the grant of the two permits in favour of the Karnataka State Road Transport Corporation, set aside the grant of three out of eleven permits to the Karnataka State Tourism Development Corporation and instead granted three permits to private operators and increased the number of permits granted to the Indian Tourism Development Corporation from one to three. The Tribunal took the view that having regard to the rule of preference enunciated by the proviso to S. 63(7), the applications from the 'non-preferred' category had to be excluded as the number of applications from the applicants who were required to be given preference exceeded the number of permits to be granted. It was on that ground that the grant of two permits to the Karnataka State Road Transport Corporation was set aside, though the Appellate Tribunal had no doubt regarding the resources and ability of that corporation to operate the tourist services. It was on that ground again, it was so stated by the Tribunal, that some of the appellants before the Tribunal had to be denied the grant of permits though otherwise they would have been entitled to the grant of permits having regard to their expertise, experience and resources. The tribunal rejected their appeals regretfully. A large number of applicants filed writ petitions in the High Court. The writ petitions were rejected by the High Court on the ground that the preference contemplated by the proviso to S. 63(7) contemplated exclusion of the 'non-preferred' class if sufficient number of applicants from the preferred classes were available. The decision of this court in Sher Singh v. Union of India (1984) 1 SCR 464 was distinguished on the ground that in that case the court interpreted the word 'preference' occurring in S. 47 (1-H) in the background of the provisions of Chapters IV and IV-A of the Act, under the former of which the State Transport Undertaking would have preference whereas. under the latter the State Transport Undertaking would have a monopoly. The Karnataka State Road Transport Corporation, the Karnataka State Tourism Development Corporation and some other private operators have filed these appeals by special leave of this court under Art. 136 of the Constitution.

(3.) Shri Shanti Bhushan, learned counsel for the Karnataka State Road Transport Corporation, Dr. Chitley, learned counsel for some of the private operators, Shri Datar, learned counsel for the Karnataka State Tourism Development Corporation, Shri Sampat and Shri Javali, learned counsel for other private operators submitted that the State Transport Appellate Tribunal and the High Court were wrong in distinguishing the decision of this court in Sher Singh's case and that the true position was that on a correct interpretation of the proviso to Sec. 63(7), the preference became operative only if other things were equal. It was also urged that the fourth sub-clause of the proviso offended Art. 14 and had to be struck down. Shri C. S. Vaidyanathan, learned counsel for some of the preferred private operators urged that the view taken by the High Court and the State Transport Appellate Tribunal was correct and that the fourth sub-clause of the proviso to S. 63(7) did not offend Art. 14 of the Constitution.