1978 (9) TMI 191 - SC - Indian Laws

Supreme Court restores contract carriage permit renewal, stresses fair consideration and fundamental rights

The Supreme Court intervened under Article 136 and quashed the rejection of a contract carriage permit renewal due to lack of evidence and untenable ... - Issues involved: The issues involved in this case are the rejection of renewal application for a contract carriage permit by the State Transport Authority (S.T.A.) and the subsequent affirmance of the rejection by the State Transport Appellate Tribunal (S.T.A.T.), leading to the denial of fair consideration of the appellant's claim and the significant financial loss incurred due to non-renewal.Judgment Details:Rejection of Renewal Application:The appellant, who owned a luxury coach and plied it under a permit granted in 1971, applied for renewal two months before the permit's expiry in March 1976. The rejection was based on the reasoning that existing public sector undertakings provided adequate facilities, and renewal would result in unhealthy competition. The rejection lacked specific objections from any party and was affirmed by S.T.A.T., which failed to consider the appellant's claim of meritorious service and dismissed it without factual basis.Legal Considerations:The Supreme Court emphasized that a permit holder has an ordinary right of renewal unless public interest dictates otherwise. The Motor Vehicles Act restricts permits reasonably, and the key criterion for a contract carriage permit is whether an additional vehicle is unnecessary or undesirable in the public interest. The Court highlighted the importance of acting on relevant considerations, not hearsay, and ensuring a fair process for permit renewal.Judicial Intervention and Decision:The Court intervened under Article 136 due to the social trauma caused by the denial of renewal and the need to uphold the rule of law. The rejection lacked tangible evidence to support the decision, and the reasoning provided was deemed untenable. The Court quashed the refusal, directing S.T.A. to reconsider the renewal within two weeks, considering the long delay and absence of disqualifications. The decision was based on breach of natural justice, importation of non-materials, and the fundamental right involved in the case.Conclusion:The Court allowed the appeal, setting aside the refusal of renewal and emphasizing the importance of fair consideration in permit decisions. While the Court is generally hesitant to reinvestigate motor vehicle permit issues, exceptions are made in cases where fundamental rights are at stake. The judgment aimed to rectify the denial of renewal, ensuring a just process for the appellant and highlighting the significance of upholding fundamental rights in administrative decisions.