D. NATARAJA MUDALIAR versus STATE TRANSPORT AUTHORITY, MADRAS

Citation: [1979] 1 S.C.R. 552 · Decided: 06-09-1978 · Supreme Court of India · Bench: V.R. KRISHNA IYER · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

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D. NATARAJA MUDALIAR 
v. 
STATE TRANSPORT AUTHORITY, MADRAS 
September 6, 1978 
[V. R. KRISHNA IYER AND D. A. DESAI, JJ.] 
Constitution of India, Article 136, application, scope. 
Motor Vehicl~s Act, 1939, 
S. SO, 
unjustified refu~al to renew permit, "' 
breach of fundamental right. 
The appellant plied a luxury coach for public benefit under a permit of 
1971 for five years, in the Tamil Nadu State. He 1>pplicd for a renewal of 
the permit two months prior to its expiry, but was refused the same by the 
State Transport Authority, on the ground that the facilities provided by tho 
public sector undertakings were adequate, and the renewal of the applicant'• 
permit would be redundant in the circllmstances ood also result in nnbealtby 
competition. 
Applications for more permits were invited and some granted 
since the impugned refusal. On appeal u;s 64 of the Motor Vehicles· Act, 
the State Transport Appellate Tribunal affirmed the rejection, using the same 
reasoning. 
Thereafter the High Court rejected the appellant's revision applica~ 
tion, refusing to go into questions of fact. 
Allowing the appeal, the Court, 
HELD : 1. If a small man, whose heavy investment in a tourist coach 
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is to be sterilised altogether, it is a social trauma, and if fundamental rights 
are disposed of as if by executive fiats, this Court must intervene under Art 
136, to uphold the credibi,lity in the rule of law and prevent ils derailment. 
The touchstone is not the little man and his little /is but the large issue and 
the deep portent. [554 G-HJ 
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2. The Authority must remember that a. permit holder has an ordinary 
right- of renewal unless it is shown that outweighing reasons of public interest 
lead to a contrary result. The bare i'pse dixit that the S.T.A. considers the 
facilities provided by public sector undertakings are adequate is not intelligible, 
without some basis. Some objective assessment to exclude the petitioner, based 
on tangible data is tbe minimum for a judicial negation of a fuhdamental 
right. 
Another circumstance effectively negating the story of supernumerary 
vehicles is the admitted fact that applications for more permits ha.ve been 
invited and some grarited. The basic reason for quashing the order of refusal 
is the untenable reason o~.signed to &upport the order. [555 A, H, 556 A. D, FJ 
CIVIL Af'PELLATE JURISDICTION : Civil Appeal No. 1083 of 1978. 
Appeal by Special Leave from the Judgment dated 23-2-77 of the 
Madras High Court in C.R.P. No. 356 of 1977. 
Y. S. Chitale, Vineet Kumar and A. K. Srivastava for the Appel-
lant. 
A. V. Rangam for the Respondent 
552 
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D. NATARAJ"A v. STATE TRANSPORT (Krishna Iyer,!.) 
553 
The Judgment of the Court was delivered by 
KRISHNA IYER, J. 
Arbitrary orders and mystical directions have 
poor mileage in this Conrt when irrelevance and unreason are writ on 
their face even though the sanctity of concurrent error may give them 
some shelter. 
To ply a contract carriage is a fundamental right but it can be 
restricted reasonably as has been done by the Motor Vehicles Act, 1939. 
The perspective is that what is fundamental is the right, not the restric-
tion. 
Here, one Mudaliar, the appellant, owned a luxury coach, plied 
it for public benefit under a permit of 1971 for five years. 
The statu-
tory criteria for grant of such permits is set out in S. 50 and renewals 
of permits must be governed by the same considerations, the procedure 
being regulated by S. 58. There is no grievance made that procedural 
violations are involved here. 
All that we know is that the permit was 
to expire in March 1976 and so a renewal application was made two 
months earlier. 
The State Transport Authority (for short, S.T.A.) 
rejected the request for renewal on the score that the 'ITDC has ex-
panded its activities' and has in the field many tourist vehicles. Then 
the Authority added : 'It is said that the utilisation of these vehii:les is in 
the range of 90 to 100 per cent during the tourist season only (Novem-
ber to February) and that it is just 60 to 70% during other periods'. 
·The Tamil Nadu State's transport system also has vehicles on the road 
and some spare buses. 
All told, a few hundred motor vehicles, some 
of which are stage carriages and some contract carriages, serve the 
travelling public. 
On these statements, the conclusion was reached : 
'The State Transport Authority therefore considers that the fadlities · 
provided by 

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