Kerala High Court
The Regional Transport Authority vs Haridas P. Ravindran on 26 February, 2020
Bench: S.Manikumar, Shaji P.Chaly
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR
&
THE HONOURABLE MR. JUSTICE SHAJI P.CHALY
WEDNESDAY, THE 26TH DAY OF FEBRUARY 2020 / 7TH PHALGUNA, 1941
WA.No.301 OF 2020
AGAINST THE JUDGMENT IN WP(C) 26375/2019(V) OF HIGH COURT OF
KERALA
APPELLANTS/RESPONDENTS 1 TO 3 IN W.P.(C)::
1 THE REGIONAL TRANSPORT AUTHORITY,
CIVIL STATION, AYYANTHOLE P.O., THRISSUR,
PIN-680 003, REPRESENTED BY ITS SECRETARY.
2 THE SECRETARY
REGIONAL TRANSPORT AUTHORITY, CIVIL STATION,
AYYANTHOLE P.O., THRISSUR-680003.
3 THE REGIONAL TRANSPORT OFFICER
CIVIL STATION, AYYANTHOLE P.O., THRISSUR-680 003.
BY P.SANTHOSH KUMAR, SPECIAL GOVERNMENT PLEADER
RESPONDENTS/PETITIONERS & RESPONDENTS 4 & 5 IN W.P.(C):
1 HARIDAS P. RAVINDRAN,
S/O. RAVINDRAN, PERINGANNUR HOUSE, PADUKKAD, VIYYUR
P.O., THRISSUR.
2 SAHADEVAN
MULANGATTUPARAMBIL HOUSE, PONNUKARA P.O., PUTHUR,
TRICHUR.
3 SUBHASH
CHERIYAKATH HOUSE, NETTISSERY P.O., TRICHUR.
4 DILEEP KUMAR
POOVATHINGAL HOUSE, ARIMBOOR P.O., TRICHUR.
5 RANJITH
PENATH HOUSE, AMBAKKAD, PUZHAKKAL, TRICHUR.
6 K.K.GOPI
KARATTUPARAMBIL HOUSE, VELLANIKKARA, CHIRAKKAKOD,
WA.No.301 OF 2020 2
TRICHUR.
7 CICILY
PZAHEDATHU HOUSE, ANCHERY P.O., TRICHUR.
8 BABU P.S.
POYYARA HOUSE, MADAKKATHARA P.O., TRICHUR.
9 APPU SANTHOSH
THARAYIL HOUSE, OLLUKKARA P.O., TRICHUR.
10 JISHNU M.B.
MUKKOTTIPARAMBIL HOUSE, CHANOTH, PATTIKKAD,
TRICHUR.
11 ARUN V.S.
VELLAMKUNNEL HOUSE, ERAVIMANGALAM P.O. TRICHUR.
12 SAJITHA
VALIYAPURAKKAL HOUSE, ERAVIMANGALAM P.O., TRICHUR.
13 PRASANTH M.A.
MUNDAYOORVALAPPIL HOUSE, AMALA NAGAR P.O.,
MUTHUVARA, TRICHUR.
14 JAYESH
VADAKKUMTHULLY HOUSE, PARAKKAD, TRICHUR.
15 PRAVEEN P.B.
PEDIKKATTUPARAMBIL HOUSE, KANATTUKARA P.O.,
TRICHUR.
16 ANSON
CHAIPPILAN HOUSE, CHITTILAPPILLY, TRICHUR.
17 MAJEED
PERUMBILAI HOUSE, VADOOKKARA P.O., TRICHUR.
18 SHAJI V.P.
VALIYAPARAMBIL HOUSE, CHIYYARAM P.O., TRICHUR.
19 SANDHYA
CHEMMANGATTUVALAPPIL HOUSE, PERAMANGALAM P.O.,
TRICHUR.
20 ARUN C.U.
CHOLAKKAL HOUSE, KALLIDUKKU, CHUVANNAMANNU P.O.,
TRICHUR.
WA.No.301 OF 2020 3
21 KUTTAN P.A.
PUTHENPURAKKAL HOUSE, OLLUKKARA P.O., PARAVATTANI,
TRICHUR.
22 NIKHIL ROY
THATTIL HOUSE, PULLAZHY P.O., TRICHUR.
23 THE THRISSUR CORPORATION
MUNICIPAL OFFICE ROAD, KURUPPAM P.O., THRISSUR,
REPRESENTED BY ITS SECRETARY, THRISSUR-680 001.
24 THE SECRETARY
THRISSUR CORPORATION, MUNICIPAL OFFICE ROAD,
KURUPPAM P.O., THRISSUR-680 001.
R23-24 BY SRI. SANTHOSH P.PODUVAL, SC, THRISSUR
CORPORATION
SRI.P.K.ANIL
THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON
26.02.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
WA.No.301 OF 2020 4
JUDGMENT
S.MANIKUMAR Challenge in this writ appeal is to the correctness of the judgment in W.P.(C) No.26375/2019 dated 3rd October, 2019, by which the writ court, taking note of Exts.45 to 48 judgments rendered on the request made for grant of variation of permits, directed the Regional Transport Authority, Ayyanthole,Thrissur, appellant No.1, to accept the application for variation of permit and to grant permit to the writ petitioners therein, within a period of one month from the date of receipt of copy of the applications.
2. Before the writ court respondents have contended that they are autorickshaw drivers operating within the limits of Thrissur city and there are no restriction of number of autorickshwas operating within the cities.
Hence they sought for a direction to the appellants to vary the permit conditions and allow them to operate within the cities.
3. Judgment made in W.P.(C) No.26375/2019 dated 3 rd October, 2019, is impugned on the following grounds:
A) The Petitioners having valid permits for plying their autorickshaws on fit roads in Trichur District, except the vehicle shall not pick up passengers from within the City. Most of the Petitioners are residing within the limits of City and they have to travel long distances in Order to reach their parking place. So the condition stipulating not to park or pick up WA.No.301 OF 2020 5 passengers from within the city is arbitrary and legally unsustainable. B) The Respondents are duty bound to give full effect to Ext.P45 Judgment of the State Transport Appellate Tribunal, Ernakulam, and Ext P46, P47 and P48 Judgments of this Hon'ble Court and should have granted permit to the Petitioners after accepting their application and the prescribed fee fixed for that purpose. The action of the Respondents is highly unjustifiable and arbitrary.
C) The Respondents while discharging their official duties is bound to obey the judicial pronouncements on the subject.
4. Though several grounds have been raised, placing reliance on the judgment of this Court in T. Muhammed V. Secretary, Regional Transport Authority, Malappuram and others reported in 1993 KHC 2016, Mr.P.Santhosh Kumar, learned Special Government Pleader, submitted that when discretion is conferred on Regional Transport Authority to consider the applications for grant of permit or for variation of permit conditions in terms of section 80(3) of the Motor Vehicles Act, 1988, positive directions issued by the writ court would curtail the powers of Regional Transport Authority to consider the applications, as per the statutory provisions.
5. Learned Special Government Pleader, placed reliance on the judgment of this Court in Rajesh T. v. Secretary, Regional Transport Authority and Another reported in 2014(3)KLT 341, the relevant portion is extracted hereunder:
WA.No.301 OF 2020 6"19. On the reasoning above, as also the precedents noticed, it has to be unequivocally found and declared that the Regional Transport Authority or any other prescribed authority while considering the grant of permit, whether it be a stage carriage or a contract carriage permit, is not statutorily shackled by an unfettered right on the part of the applicant to be granted a permit. It is conferred with the power to summarily refuse in the event of the grant exceeding the limit of a notification issued by the State Government. Again it cannot be gainsaid that; that alone would be the solitary instance where the grant could be refused. The mere existence of a number of permits and the decision by the Regional Transport Authority or a higher authority to restrict the grant based on numbers alone would fall foul, since such limits could be prescribed only by the State Government under a notification. But necessarily, the authority could take into account the population in an area, the need for public transport, the mode of transport ordinarily used by the majority of the residents of an area, the number of roads and the condition of such roads, the traffic congestion caused by indiscriminate parking and so on and so forth in considering the applications. These are all significant and relevant factors which could be taken into account by the authority who considers the individual application for grant of a permit."WA.No.301 OF 2020 7
6. Per contra Mr.P.K.Anil, learned counsel for respondent/writ petitioner, submitted that no discretion is conferred on the Regional Transport Authority, to consider the application for grant of permit or for variation of permit conditions as the case may be. Supporting the said submission, he placed reliance on the decision of the learned Single Judge in W.P.(C) No.20209/2014 dated 7th August, 2015, and the other decisions considered by the writ court.
7. Heard learned counsel for parties and perused the material on record.
8. Sections 73 & 74 of the Motor Vehicles Act, 1998 deals with grant of contract carriage permit and the same read thus:
"73.Application for contract carriage permit-An application for a permit in respect of a contract carriage (in this Chapter referred to as a contract carriage permit) shall contain the following particulars, namely-
(a) the type and seating capacity of the vehicle;
(b) the area for which the permit is required;
(c) any other particulars which may be prescribed.
74.Grant of contract carriage permit-
(1)Subject to the provisions of sub-section (3) a Regional Transport Authority may, on an application made to it under section 73, grant a contract carriage permit in accordance with the application or with such modifications as it deems fit or refuse to grant such a permit:
Provided that no such permit shall be granted in respect of any area not specified in the application.WA.No.301 OF 2020 8
(2) The Regional Transport Authority, if it decides to grant a contract carriage permit, may, subject to any rules that may be made under this Act, attach to the permit any one or more of the following conditions, namely-
(i) that the vehicles shall be used only in a specified area or on a specified route or routes;
(ii) that except in accordance with specified conditions, no contract of hiring, other than an extension or modification of a subsisting contract, may be entered into outside the specified area;
(iii) the maximum number of passengers and the maximum weight of luggage that may be carried on the vehicles, either generally or on specified occasion or at specified times and seasons;
(iv) the conditions subject to which goods may be carried in any contract carriage in addition to, or to the exclusion of, passengers;
(v) that, in the case of motor cabs, specified fares or rates of fares shall be charged and a copy of the fare table shall be exhibited on the vehicle;
(vi) that, in the case of vehicle other than motor car, specified rates of hiring not exceeding specified maximum shall be charged.
(vii) that, in the case of motor cabs, a specified weight of passengers' luggage shall be carried free of charge, and that the charge, if any, for any luggage in excess thereof shall be at a specified rate;
(viii) that, in the case of motor cabs, a taximeter shall be fitted and maintained in proper working order, if prescribed;
(ix) that the Regional Transport Authority may, after giving notice of not less than one month,-
(a) vary the conditions of the permit:
(b) attach to the permit further conditions;
(x) that the conditions of permit shall not be departed from save with the approval of the Regional Transport Authority;WA.No.301 OF 2020 9
(xi) that specified standards of comfort and cleanliness shall be maintained in the vehicles;
(xii) that, except in the circumstance of exceptional nature, the plying of the vehicle or carrying of the passengers shall not be refused; (3) (a) The State Government shall, if so directed by the Central Government, having regard to the number of vehicles, road conditions and other relevant matters, by notification in the Official Gazette, direct a State Transport Authority and a Regional Transport Authority to limit the number of contract carriages generally or of any specified type, as may be fixed and specified in the notification, operating on city routes in towns with a population of not less than five lakhs.
b) Where the number of contract carriages are fixed under clause (a), the Regional Transport Authority shall, in considering an application for the grant of permit in respect of any such contract carriage, have regard to the following matters, namely-
(i) financial stability of the applicant;
(ii) satisfactory performance as a contract carriage operator including payment of tax if the applicant is or has been an operator of contract carriages; and
(iii) such other matter as may be prescribed by the State Government.
Provided that, other conditions being equal, preference shall be given to applications for permit from-
(i) The India Tourism Development Corporation;
(ii) State Tourism Development Corporations;
(iii) State Tourism Departments;
(iv) State Transport Undertakings;
(v) Co-operative societies registered or deemed to have been registered under any enactment for the time being in force;
(vi) ex-servicemen.WA.No.301 OF 2020 10
9. Section 80 sets out the procedure in applying for and granting permits, which is reproduced hereunder:
80.Procedure in applying for and granting permits-(1)An application for a permit of any kind may be made at any time.
(2)A [Regional Transport Authority or any other prescribed authority referred to in sub-section (1) of section 66] shall not ordinarily refuse to grant an application for permit of any kind made at any time under this Act.
Provided that the [Regional Transport Authority, State Transport Authority or any other prescribed authority referred to in sub-section (1) of section 66] may summarily refuse the application if the grant of any permit in accordance with the application would have the effect of increasing the number of stage carriages as fixed and specified a in a notification in the Official Gazette under clause (a) of sub-section (3) of section 71 or of contract carriages as fixed and specified in a notification in the Official Gazette under clause (a) of sub-section (3) of section 74.
Provided further that where a 1[Regional Transport Authority, State Transport Authority or any other prescribed authority referred to in sub-section (1) of section 66] refuses an application for the grant of a permit of any kind under this Act, it shall give to the applicant in writing its reasons for the refusal of the same and an opportunity of being heard in the matter.
(3) An application to vary the conditions of any permit, other than a temporary permit, by the inclusion of a new route or routes or a new area or by altering the route or area covered by it, or in the case of a stage carriage permit by increasing the number of trips above the specified maximum or by the variation, extension or WA.No.301 OF 2020 11 curtailment of the route or routes or the area specified in the permit shall be treated as an application for the grant of a new permit:
Provided that it shall not be necessary so to treat an application made by the holder of stage carriage permit who provides the only service on any route to increase the frequency of the service so provided without any increase in the number of vehicles. Provided further that,-
(i) in the case of variation, the termini shall not be altered and the distance covered by the variation shall not exceed twenty-four kilometers;
(ii) in the case of extension, the distance covered by extension shall not exceed twenty-four kilometers from the termini;
and any such variation or extension within such limits shall be made only after the transport authority is satisfied that such variation will serve the convenience of the public and that it is not expedient to grant a separate permit in respect of the original route as so varied or extended or any part thereof.
(4) A 1[Regional Transport Authority, State Transport Authority or any other prescribed authority referred to in sub-section (1) of section 66] may, before such date as may be specified by it in this behalf, replace any permit granted by it before the said date by a fresh permit conforming to the provisions of section 72 or section 74 or section 76 or section 79, as the case may be, and the fresh permit shall be valid for the same route or routes or the same area for which the replaced permit was valid.
Provided that no condition other than a condition which was already attached to the replaced permit or which could have been attached thereto under the law in force when that permit was granted shall be attached to the fresh permit except with the consent in writing of the holder of the permit.
WA.No.301 OF 2020 12(5) Notwithstanding anything contained in section 81, a permit issued under the provisions of sub-section (4) shall be effective without renewal for the reminder of the period during which the replaced permit would have been so effective.
10. A Hon'ble Division Bench of this Court in T. Mohammed (supra), considered the question as to whether court can issue a mandamus directing grant of permit or whether court should direct the Regional Transport Authority to exercise its powers in accordance with the provisions of law. On the facts and circumstances of the case, the Hon'ble Division Bench has framed the following three points for consideration:
"(1) Whether merely because a rival operator is not entitled to file objections or seek for being beard in connection with the application for grant of a permit to another operator under Sections 71, 72 and 80 of the new Motor Vehicles Act, 1988, High Court could issue a writ of mandamus for grant of a regular permit or whether the court could direct the RTA to consider the application for grant of permit?
(2) whether the appellant, who is aggrieved by the timings issued to the writ petitioner pursuant to the order of the learned single Judge now under appeal, can be said to be an aggrieved person atleast insofar as the timings granted to the writ petitioner are concerned?
(3) whether on the facts of the case, the order of the learned single Judge is to be confirmed insofar as it directed permit to be granted to the writ petitioner, and whether there are any other circumstances brought to the notice of this Court, such as mis-representation, etc., on the part of the WA.No.301 OF 2020 13 writ petitioner, which require the order of the learned single Judge to be set aside?
11. After considering the statutory provisions and rival submissions, at paragraph Nos. 7 to 9, the Hon'ble Division Bench answered point No.1 holding that writ court ought not have directed issue of permit but ought to have directed the authority to consider the application of the writ petitioners therein in accordance with the provisions of the Act and Rules.
"7. Point No.1:- It is true that under the Motor Vehicles Act, 1988 a rival operator is not now entitled to file any objections in respect of an application filed by another applicant for grant of permit. It is also true that the rival operator is not entitled to any hearing. This is clear from the decision of the Supreme Court in Mithilesh Garg's case (supra), as well as the decision of this Court in Secretary, CTRBT Coop. Society v,. Mathew Job, 1992 (1) KLTY 297, End in Girija Devi's case, 1991 (1) KLT 353, and also the decision of the Andhra Pradesh High Court in Secretary, RTA, Guntur v.
E.Rama Rao, AIR 1991 Ap 11. But that, in our opinion, does not mean that the RTA is performing a purely ministerial function while granting permits Under the Act, the RTA is still exercising quasi judicial functions. This is clear from sub-s.(2) of S.80 of the new act which reads as follows "80(2) A Regional Transport Authority shall not ordinarily refuse to grant an application for permit of any kind made at any time under this Act:WA.No.301 OF 2020 14
Provided that the Regional Transport Authority may summarily refuse the application if the grant of any permit in accordance with the application would have the effect of increasing the number of stage carriages as fixed and fixed in a notification in the Official Gazette under clause (a) of sub- section (3) of Section 71 or of contract carriages as fixed and specified in a notification in the Official Gazatte under clause (a) of sub-section 3 of Section 74:
Provided further that where a Regional Transport Authority refuses an application for the grant of a permit of any kind under this Act, It shall give to the applicant in writing its reasons for the refusal of the same and an opportunity of being heard in the matter."
Further Section 71 of the Act which deals with procedure of RTA considering application for stage carriage permit reads as follows:
"71(1). A Regional Transport Authority shall, while considering an application for a stage carriage permit, having regard to the objects of this Act:
Provided that such permit for a route of fifty kilometers of less shall be granted only to an individual or a State transport undertaking.
(2) A Regional Transport Authority shall refuse to grant a stage carriage permit if it appears from any time-table furnished that the provisions of this Act relating to the speed at which vehicles may be driven are likely to be contravened:
Provided that before such refusal an opportunity shall be given to the applicant to amend the time-table so as so conform to the said provisions.
(3)(a) The State Government shall, if so directed by the Central Government having regard to the number of vehicles, road conditions and other relevant matters, by notification in the Official Gazette, direct a State Transport WA.No.301 OF 2020 15 Authority and a Regional Transport Authority to limit the number of stage carriages generally or of any specified type, as may be fixed and specified in the notification, operating on city routes in towns with a population of not less than five lakhs.
A Regional Transport Authority shall not grant more than five stage carriage permits to any individual or more than ten stage carriage permits to any company (not being a State transport undertaking).
(5) In computing the number of permits to be granted under sub-section (4), the permits held by an applicant in the name of any other person and the permits held by any company of which Section 72 which deals with grant of stage carriage permits is also relevant in this context. It reads as follows:
"72(1). Subject to the provisions, of section 71, a Regional Transport Authority may, on an application made to it under section 70, grant a stage carriage permit in accordance with the application or with such modifications as it deems fit or refuse to grant such a permit:
Provided that no such permit shall be granted in respect of any route or area not specified in the application.
From the aforesaid provisions it is clear that while the procedure has been liberalised for grant of permits and the rival operators are excluded from objection and from hearing, it is not as if the RTA is bound to grant permit, whenever it is prayed for even without taking into consideration the various factors mentioned in Sections 71, 72 and 80(2) of the Act. The above said sections still require that certain factors have to be considered by the RTA. Further, under Section 72 it will be for the RTA to grant permit in accordance with the application or with such modifications as it deems fit or refuse to grant such permit. In other words, the RTA still performs quasi-WA.No.301 OF 2020 16
judicial functions and has to pass orders after considering the various factors mentioned in Sections 71, 72 and 80(2), notwithstanding the fact that the rival operator does not come into the picture.
This does not, however, mean that the RTA can reject applications arbitrarily or that it can resort to the pre-1988 situation. What we want to say is that the procedure is liberalised but, even so, the RTA functions as a quasi-judicial body and has to consider the factors mentioned in Sections 71, 72 and 80(2) of the new Act.
If that be the position, it must necessarily follow that no operator could approach this Court straightaway for the issue of a writ of mandamus directing the RTA to issue permit, Nor can this Court, in exercise of its power under Article 226 of the Constitution of India, issue a writ of mandamus, directing grant of permit. This court can only direct the RTA to exercise its powers in accordance with the provisions of law, and cannot itself take over the powers and functions of issuing permits. When statutory authorities or quasi - judicial authorities constituted by the Legislature do not properly exercise their power or fail to exercise their power, the High Court has to make those authorities or quasi-judicial authorities to perform their statutory duties. If the operators approach this Court while the applications are still pending before the RTA, this Court cannot itself apply the relevant provisions and pass final orders directing issue of permits. The proper procedure in such circumstances would be to direct such authorities to perform their functions. This is well settled from the earlier decision of the Supreme Court in C.C. Revenue Authority v.M.S. Mills, AIR 1950 SC 218.WA.No.301 OF 2020 17
The question again came up before the Supreme Court in Chingleput Bottlers v.Majestic Bottling Co.,(1984) 3 SCC 258: AIR 1984 SC 1030. In that case, liquor licence had to be granted by the competent authority subject to approval of the State Government as per Rule 7 of the Tamil Nadu Arrack (Manufacture) Rules, 1981. The Commissioner rejected the rival applicant's application for grant of liquor licence under Rule 7. But the High Court of Madras, while coming to the conclusion that there was error apparent on the face of the record in rejecting one of the applications and quashing the order of the Commissioner, instead of sending it back to the Commissioner, directed that licence should be granted to a particular applicant. The Supreme Court pointed out that the proper thing for the High Court to do was to issue a writ of mandamus to the Commissioner to re-determine the question as to the grant of such privilege. In yet another case in State of U.P.v. Raja Ram Jaiswal,(1985) 3 SCC 131: AIR 1985 SC 1108, the Supreme Court, while dealing with licence to exhibit a cinematograph, observed that the jurisdiction of the High Court "came to an end" upon quashing an order and "the High Court could not then proceed to take over the functions of the licensing authority and direct the licensing authority by a mandamus to grant a licence". We, therefore, hold on Point No. 1 that this Court ought not to have directed issue of permit, but ought to have directed the authority to consider the application of the petitioner in accordance with the provisions of the Act and Rules. Point No. WA.No.301 OF 2020 18 1 is found accordingly."
12. Sub-section (3) of section 80 of the Motor Vehicles Act, 1988, is also relevant for the purpose, to consider as to whether there any discretion is conferred on the Regional Transport Authority to grant permit or refuse or on mere submission of an application for grant of permit or variation of permit, as the case may be, the Regional Transport Authority, is bound to grant permit or variation of permit without conducting any enquiry .
(3) An application to vary the conditions of any permit, other than a temporary Permit by the inclusion of a new route or routes or a new area or by altering the route or routes or area covered by it, or in the case of a stage carriage permit by increasing the number of trips above the specified maximum or by the variation, extension or curtailment of the route or routes or the area specified in the permit shall be treated as an application for the grant of a new permit:
Provided that it shall not be necessary so to treat an application made by the holder of stage carriage permit who provides the only service on any route to increase the frequency of the service so provided without any increase in the number of vehicles:
Provided further that,-
(i) in the case of variation, the termini shall not be altered and the distance covered by the variation shall not exceed twenty- four kilometres;
(ii) in the case of extension, the distance covered by extension shall not exceed twenty-four kilometres from the termini, and any such variation or extension within such limits shall be made only after the transport authority is satisfied that such variation will serve the WA.No.301 OF 2020 19 convenience of the public and that it is not expedient to grant a separate permit in respect of the original route as so varied or extended or any part thereof.
13. Reading of sub-section (3) makes it clear that the State Transport Authority is conferred with a discretion to consider an application to vary the conditions of any permit and that the said application, has to be treated as an application for grant of a new permit in which event, the Authority, is bound to consider all relevant factors for grant of permit or variation of permit. Judgment of this court in Rajesh (supra) is squarely applicable to the case on hand. At this juncture, we deem it fit to consider, a few decisions of the Hon'ble Supreme Court, on discretion, as to how it should be exercised, and judicial review thereof.
(i) In Suman Gupta and Others v. State of Jammu and Kashmir and Others [AIR 1983 SC 1235:(1983) 4 SCC 339], the Hon'ble Supreme Court while explaining as to how administrative discretion should be exercised, at paragraph No. 6, held as follows:
"The exercise of all administrative power vested in public authority must be structured within a system of controls informed by both relevance and reason -relevance in relation to the object which it seeks to serve, and reason in regard to the manner in which it attempts to do so. Wherever the exercise of such power affects individual rights, there can be no greater assurance protecting is valid exercise than its governance by these twin tests. A stream of case law radiating from the now well known decision in this Court in Maneka Gandhi v. Union of India [(1978) 1 SCC 248] has laid WA.No.301 OF 2020 20 down in clear terms that Article 14 of the Constitution is violated by powers and procedures which in themselves result in unfairness and arbitrariness. It must be remembered that our entire constitutional system is founded in the rule of law, and in any system so designed it is impossible to conceive of legitimate power which is arbitrary in character and travels beyond the bounds of reason.
In the above reported judgment, the Hon'ble Apex Court further held that, "We do not doubt that in the realm of administrative power the element of discretion may properly find place, where the statute or the nature of the power intends so. But there is a well recognised distinction between an administrative power to be exercised within defined limits in the reasonable discretion of designated authority and the vesting of an absolute and uncontrolled power in such authority. One is power controlled by law countenanced by the Constitution, the other falls outside the Constitution altogether."
(ii) Reiterating as to how the discretionary power has to be exercised, the Hon'ble Supreme Court in Sant Raj and Another v. O.P. Singla and Others [AIR 1984 SC 1595 : (1985) 2 SCC 349], held that,-
"Whenever, it is said that something has to be done, within the discretion of the authority, then that something has to be done, according to the rules of reason and justice and not according to private opinion, according to law and not humour. It is to be not arbitrary, vague and fanciful but legal and regular and it must be exercised within the limit to which an honest man to the discharge of his office ought to find himself. Discretion means sound discretion guided by law. It must be governed by rule, not by humour, it must not be arbitrary, vague and fanciful.WA.No.301 OF 2020 21
(iii) In Fasih Chaudhary v. Director General, Doordarshan and Others [AIR 1989 SC 157 and (1989) 1 SCC 89], the Hon'ble Supreme Court held that exercise of discretion should be legitimate, fair and without any aversion, malice or affection. Nothing should be done which may give the impression of favouritism or nepotism. While fair play in action in such matters is an essential requirement, "free play in the joints" is also a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere as the present one.
(iv) While considering, a litigation arising out of Bangalore Development Authority Act, 1976, the Hon'ble Supreme Court in Bangalore Medical Trust v. B.S. Muddappa and Others [AIR 1991 SCC 1902 : (1991) 4 SCC 54], held that,-
"Discretion is an effective tool in administration. It provides an option to the authority concerned to adopt one or the other alternative. But a better, proper and legal exercise of discretion is one where the authority examines the fact, is aware of law and then decides objectively and rationally what serves the interest better. When a statute either provides guidance or rules or regulations are framed for exercise of discretion then the action should be in accordance with it. Even where statutes are silent and only power is conferred to act in one or the other manner, the Authority cannot act whimsically or arbitrarily. It should be guided by reasonableness and fairness. The legislature never intends its authority to abuse the law or use it unfairly. Where the law requires an authority to act or decide, 'if it appears to it necessary' or if he is 'of opinion that a particular act should be done' then it is implicit that it should be done objectively, fairly and reasonably. In a democratic set up the people or community being sovereign the exercise of discretion must be guided by the inherent philosophy that the exerciser of discretion is accountable for his action. It is to be tested on anvil of WA.No.301 OF 2020 22 rule of law and fairness or justice particularly if competing interests of members of society is involved. Decisions affecting public interest or the necessity of doing it in the light of guidance provided by the Act and rules may not require intimation to person affected yet the exercise of discretion is vitiated if the action is bereft of rationality, lacks objective and purposive approach. Public interest or general good or social betterment have no doubt priority over private or individual interest but it must not be a pretext to justify the arbitrary or illegal exercise of power. It must withstand scrutiny of the legislative standard provided by the statute itself. The authority exercising discretion must not appear to be impervious to legislative directions. The action or decision must not only be reached reasonably and intelligibly but it must be related to the purpose for which power is exercised. No one howsoever high can arrogate to himself or assume without any authorisation express or implied in law a discretion to ignore the rules and deviate from rationality by adopting a strained or distorted interpretation as it renders the action ultra virus and bad in law.
(v) In Shiv Sagar Tiwari v. Union of India and Others [AIR 1997 SC 1483 : (1997) 1 SCC 444], the Hon'ble Supreme Court held that the discretionary power has to be exercised to advance the performance, to sub-serve for which the power exists.
(vi) In Rakesh Kumar v. Sunil Kumar [AIR 1999 SC 935 : (1999) 2 SCC 489], the Hon'ble Supreme Court has held that administrative action/quasi-
judicial function is the duty of the authority to give reasons/record reasons/and it should be a speaking order.
(vii) In A.P. Aggarwal v. Govt. of NCT of Delhi [AIR 2000 SC 205:
(2000) 1 SCC 600], the Hon'ble Supreme Court held as under:
"The conferment of power together with a discretion which goes WA.No.301 OF 2020 23 with it to enable proper exercise of the power and therefore it is coupled with a duty to shun arbitrariness in its exercise and to promote the object for which the power is conferred which undoubtedly is public interest and not individual or private gain, whim or caprice of any individual."
(viii) In State of NCT of Delhi v. Sanjeev, [AIR 2005 SC 2080 : (2005) 5 SCC 181], the Hon'ble Supreme Court explaining the scope of judicial review of executive action has held as follows:
"15. One of the points that falls for determination is the scope for judicial interference in matters of administrative decisions. Administrative action is stated to be referable to broad area of governmental activities in which the repositories of power may exercise every class of statutory function of executive, quasi- legislative and quasi-judicial nature. It is trite law that exercise of power, whether legislative or administrative, will be set aside, if there is manifest error in the exercise of such power or the exercise of the power is manifestly arbitrary (see State of U.P. v. Renusagar Power Co.). At one time, the traditional view in England was that the executive was not answerable where its action was attributable to the exercise of prerogative power. Professor de Smith in his classical work Judicial Review of Administrative Action, 4th Edn. at pp. 285- 87 states the legal position in his own terse language that the relevant principles formulated by the courts may be broadly summarised as follows:
The authority in which discretion is vested can be compelled to exercise that discretion, but not to exercise it in any particular manner. In general, discretion must be exercised only by the authority to which it is committed. That authority must genuinely address itself to the matter before it; it must not act under the dictates of another body or disable itself from exercising discretion WA.No.301 OF 2020 24 in each individual case. In the purported exercise of its discretion, it must not do what it has been forbidden to do, nor must it do what it has not been authorised to do. It must act in good faith, must have regard to all relevant considerations and must not be influenced by irrelevant considerations, must not seek to promote purposes alien to the letter or to the spirit of the legislation that gives it power to act, and must not act arbitrarily or capriciously. These several principles can conveniently be grouped in two main categories: (i) failure to exercise a discretion, and (ii) excess or abuse of discretionary power. The two classes are not, however, mutually exclusive. Thus, discretion may be improperly fettered because irrelevant considerations have been taken into account, and where an authority hands over its discretion to another body it acts ultra vires.
(ix) In Indian Railway Construction Co. Ltd. v. Ajay Kumar [AIR 2003 SC 1843 : (2003) 4 SCC 579], at paragraphs No. 13 to 15, the Hon'ble Supreme Court explained the manner in which discretionary power has to be exercised, while discharging an administrative function. In the above judgment, the Supreme Court held that in matters relating to administrative functions, if a decision is tainted by any vulnerability as such illegality, irrationality and procedural impropriety, Courts should not hesitate to interfere, if the action falls within any of the categories stated supra.
"14. The present trend of judicial opinion is to restrict the doctrine of immunity from judicial review to those class of cases which relate to deployment of troops, entering into international treaties etc. The distinctive features of some of these recent cases signify the willingness of the courts to assert their power to scrutinize the factual basis upon which discretionary powers have been exercised. One can conveniently classify under three heads the grounds on WA.No.301 OF 2020 25 which administrative action is subject to control by judicial review.
The first ground is "illegality", the second "irrationality", and the third "procedural impropriety". These principles were highlighted by Lord Diplock in Council of Civil Service Unions v. Minister for the Civil Service (commonly known as CCSU case). If the power has been exercised on a non-consideration or non-application of mind to relevant factors, the exercise of power will be regarded as manifestly erroneous. If a power (whether legislative or administrative) is exercised on the basis of facts which do not exist and which are patently erroneous, such exercise of power will stand vitiated. (See CIT v. Mahindra and Mahindra Ltd.) The effect of several decisions on the question of jurisdiction has been summed up by Grahame Aldous and John Alder in their book Applications for Judicial Review, Law and Practice thus:
"There is a general presumption against ousting the jurisdiction of the courts so that statutory provisions which purport to exclude judicial review are construed restrictively. There are, however, certain areas of governmental activity, national security being the paradigm, which the courts regard themselves as incompetent to investigate, beyond an initial decision as to whether the Government's claim is bona fide. In this kind of non- justiciable area judicial review is not entirely excluded, but very limited. It has also been said that powers conferred by the Royal Prerogative are inherently unreviewable but since the speeches of the House of Lords in Council of Civil Service Unions v. Minister for the Civil Service this is doubtful. LORDS Diplock, Scarman and ROSKILL appeared to agree that there is no general distinction between powers, based upon whether their source is statutory or prerogative but that judicial review can be limited by the subject-matter of a particular power, in that case national security. Many prerogative WA.No.301 OF 2020 26 powers are in fact concerned with sensitive, non-justiciable areas, for example, foreign affairs, but some are reviewable in principle, including the prerogatives relating to the civil service where national security is not involved. Another non-justiciable power is the Attorney-General's prerogative to decide whether to institute legal proceedings on behalf of the public interest."
(Also see Padfield v. Minister of Agriculture, Fisheries and Food)
15. The court will be slow to interfere in such matters relating to administrative functions unless decision is tainted by any vulnerability enumerated above: like illegality, irrationality and procedural impropriety. Whether the action falls within any of the categories has to be established. Mere assertion in that regard would not be sufficient.
17. Before summarizing the substance of the principles laid down therein we shall refer to the passage from the judgment of LORD GREENE in Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn. (KB at p. 229 : All ER pp. 682 H-683 A). It reads as follows:
"It is true that discretion must be exercised reasonably. Now what does that mean? Lawyers familiar with the phraseology used in relation to exercise of statutory discretions often use the word 'unreasonable' in a rather comprehensive sense. It has frequently been used and is frequently used as a general description of the things that must not be done. For instance, a person entrusted with a discretion must, so to speak, direct himself properly in law. He must call his own attention to the matters which he is bound to consider. He must exclude from his consideration matters which are irrelevant to what he has to consider. If he does not obey those rules, he may truly be said, and often is said, to be acting 'unreasonably'. Similarly, there may be something so absurd that no WA.No.301 OF 2020 27 sensible person could even dream that it lay within the powers of the authority.... In another, it is taking into consideration extraneous matters. It is unreasonable that it might almost be described as being done in bad faith; and in fact, all these things run into one another."
Lord Greene also observed: (KB p. 230 : All ER p. 683 F-G) "... it must be proved to be unreasonable in the sense that the court considers it to be a decision that no reasonable body can come to. It is not what the court considers unreasonable.... The effect of the legislation is not to set up the court as an arbiter of the correctness of one view over another."
(Emphasis supplied)
18. Therefore, to arrive at a decision on "reasonableness" the court has to find out if the administrator has left out relevant factors or taken into account irrelevant factors. The decision of the administrator must have been within the four corners of the law, and not one which no sensible person could have reasonably arrived at, having regard to the above principles, and must have been a bona fide one. The decision could be one of many choices open to the authority but it was for that authority to decide upon the choice and not for the court to substitute its view."
(x) In Union of India v. Kuldeep Singh [AIR 2004 SC 827:(2004) 2 SCC 590], the Hon'ble Supreme Court while testing the correctness of the judgment rendered under the Narcotic Drugs and Psychotropic Substances Act, 1985, and the discretion to be exercised by the High Court, explained the principles governing the mode of exercise of the discretionary power for public functionaries as follows:
"20. When anything is left to any person, judge or Magistrate to be done according to his discretion, the law intends it must be done with sound discretion, and according to law. In its ordinary WA.No.301 OF 2020 28 meaning, the word "discretion" signifies unrestrained exercise of choice or will; freedom to act according to one's own judgment; unrestrained exercise of will; the liberty or power of acting without control other than one's own judgment. But, when applied to public functionaries, it means a power or right conferred upon them by law, of acting officially in certain circumstances according to the dictates of their own judgment and conscience, uncontrolled by the judgment or conscience of others. Discretion is to discern between right and wrong; and therefore, whoever hath power to act at discretion, is bound by the rule of reason and law.
21. Discretion, in general, is the discernment of what is right and proper. It denotes knowledge and prudence, that discernment which enables a person to judge critically of what is correct and proper united with caution; nice discernment, and judgment directed by circumspection; deliberate judgment; soundness of judgment; a science or understanding to discern between falsity and truth, between wrong and right, between shadow and substance, between equity and colourable glosses and pretences, and not to do according to the will and private affections of persons.
22. The word "discretion" standing single and unsupported by circumstances signifies exercise of judgment, skill or wisdom as distinguished from folly, unthinking or haste; evidently therefore a discretion cannot be arbitrary but must be a result of judicial thinking. The word in itself implies vigilant circumspection and care; therefore, where the legislature concedes discretion it also imposes a heavy responsibility. "The discretion of a judge is the law of tyrants; it is always unknown. It is different in different men. It is casual, and depends upon constitution, temper and passion. In the best it is often times caprice; in the worst it is WA.No.301 OF 2020 29 every vice, folly, and passion to which human nature is liable," said Lord Camden, L.C.J., in Hindson and Kersey (1680) 8 HOW St Tr.
57.
23. If a certain latitude or liberty is accorded by a statute or rules to a judge as distinguished from a ministerial or administrative official, in adjudicating on matters brought before him, it is judicial discretion. It limits and regulates the exercise of discretion, and prevents it from being wholly absolute, capricious, or exempt from review."
(xi) While testing the validity of Central Electricity Regulatory Commission (Procedure, terms and conditions for grant of trading licence and other related matters) (Amendment) Regulations, 2006, the Hon'ble Supreme Court in Global Energy Limited and Another v. Central Electricity Regulatory Commission, [AIR 2009 SC 3194 : (2009) 15 SCC 570], started the judgment with an epilogue and it reads as follows:
"Epilogue
71. The law sometimes can be written in such subjective manner that it affects efficiency and transparent function of the Government. If the statute provides for pointless discretion to agency, it is in essence demolishing the accountability strand within the administrative process as the agency is not under obligation from an objective norm, which can enforce accountability in decision-making process. All law-making, be it in the context of delegated legislation or primary legislation, have to conform to the fundamental tenets of transparency and openness on one hand and responsiveness and accountability on the other. These are fundamental tenets flowing from due process requirement under Article 21, equal protection clause embodied in Article 14 and fundamental freedoms clause ingrained under Article 19. A modern deliberative democracy cannot function without these attributes.WA.No.301 OF 2020 30
40. The power conferred on the authority without any guidelines may likely to be abused or arbitrarily exercised and in such circumstances, the guidance and control of exercise of such power has to be gathered from the object of conferment of power. Non- consideration or non-application of mind to relevant factors renders the exercise of discretion manifestly erroneous, and it is cause for judicial interference."
14. Contention of learned counsel for writ petitioner is that judgment in W.P.(C) No.20209/2015 dated 7th August, 2015, has to be construed as a precedent, cannot be countenanced for the reason that no specific issue has been raised, in the said judgment, as to whether mere receipt of application for grant of permit or variation of permit by the Regional Transport Authority casts a duty on the authority to grant permit without there being any consideration to the factors mentioned in sections 71, 72, 73, 74 & 80 of the Motor Vehicles Act, 1988.
15. On the submission of the learned counsel for writ petitioner, let us consider what precedent means;
"(i) In M. Subbarayudu v. State reported in AIR 1955 Andhra 87, a Hon'ble Full Bench of the Andhra Pradesh High Court held that the binding nature of the precedents of one Court on another depends upon the fact whether such Courts are Courts of co-ordinate jurisdiction or not and co-ordinate Jurisdiction does not connote the same idea as concurrent jurisdiction or simultaneous jurisdiction. The connotation of the word 'co-ordination' is not the same as that of the words 'concurrence or simultaneity'. Simultaneity or coexistence is not WA.No.301 OF 2020 31 a necessary ingredient of coordination. Co-ordination is more comprehensive and takes in successive acts of the same status or level.
(ii) In Anand Municipality v. Union of India reported in AIR 1960 Guj. 40, a Hon'ble Full Bench of the Gujarat High Court applied the principles of binding effect, declared in M. Subbarayudu's case (cited supra).
(iii) A Hon'ble Full Bench of the Gujarat High Court in State of Gujarat v. Gordhandas Keshavji Gandhi reported in AIR 1962 Guj. 128, has considered the question as to binding nature of judicial precedents. K. T. Desai, CJ. in his judgment, observed:
"Judicial precedents are divisible into two classes, those which are authoritative and those which are persuasive. An authoritative precedents is one which judges must follow whether they approve of it or not. It is binding upon them. A persuasive precedent is one which the Judges are under no obligation to follow, but which they will take into consideration and to which they will attach such weight as they consider proper. A persuasive precedent depends for its influence upon its own merits.... A decision of a High Court Judge of a State is regarded as binding on all the subordinate courts in that State. A decision of a Division Bench of a High Court is regarded as binding on Judges of the same High Court sitting singly in the High Court. A decision of a Full Bench, i. e. a Bench of at least 3 Judges of a High Court is considered binding on all Division Benches of the same High Court.... A decision of a High Court Judge sitting singly is not legally binding on another Judge of the same High Court sitting singly. So also a decision of a Division Bench of a High Court is not legally binding on another Division Bench of the same High Court. A decision of a Full Bench is not legally binding on another Full Bench of the same Court. One Judge of a High Court has however, no right WA.No.301 OF 2020 32 to overrule the decision of another Judge of the same High Court nor has one Division Bench of a High Court the legal right to overrule another decision of a Division Bench of the same High Court.... The rule that a court should follow the decision of another Court of co- ordinate jurisdiction is subject however to several exceptions which have been dealt with in Salmond's jurisprudence, 11 th Edn. at page 199 to 217.
(1) A decision ceases to be binding if a statute or statutory rule inconsistent with it is subsequently enacted, or if it is reversed or overruled by a higher court.
(2) A precedent is not binding if it was rendered in ignorance of a statute or a rule having the force of statute.
(3) A precedent loses its binding force if court that decided it overlooked an inconsistent decision of higher court. (4) xx xx xx xx xx (5) Precedents sub silentio are not regarded as authoritative. A decision passed sub silentio when the particular point of law involved in the decision is not perceived by the Court or present to its mind."
(iv) In State of Orissa v. Sudhansu Sekar Misra, reported in AIR 1968 SC 647, the Hon'ble Supreme Court explained as to when a decision can be taken as a precedent, which as follows:-
"A decision is only an authority for what it actually decides. What is of the essence of a decision is its ratio and not every observation found therein nor what logically follows from the various observations made in it. On this topic, this is what Earl of Halsbury LC said in Quinn v. Leathem, reported in 901 AC 495.
'Now before discussing the case of Allen vs. Flood, reported in 1898 AC 1 and what was decided therein, there are two observations of a general character which I wish to make, and one is to repeat what I have very often said before, that every judgment must be WA.No.301 OF 2020 33 read as applicable to the particular facts proved, or assumed to be proved, since the generality of the expressions which may be found there are not intended to be expositions of the whole law, but governed and qualified by the particular facts of the case in which such expressions are to be found. The other is that a case is only an authority for what it actually decides. I entirely deny that it can be quoted for a proposition that may seem to follow logically from it. Such a mode of reasoning assumes that the law is necessarily a logical code, whereas every lawyer must acknowledge that the law is not always logical at all."
It is not profitable task to extract a sentence here and there from a judgment and to build upon it."
(v) In Eknath Shankarrao Mukhawar v. State of Maharashtra reported in AIR 1977 SC 1177, it was held that judicial discipline as well as decorum suggested only one course when a Bench wanted to differ from the decision of a co-ordinate court and that was to refer to a larger Bench.
(vi) In Ayyaswami Gounder v. Munuswamy Gounder reported in (1984) 4 SCC 376, it was held that a single Judge of a High Court not agreeing with earlier decision of single Judge of the same Court, should refer the matter to a larger Bench and propriety and decorum do not warrant his taking a contrary view.
(vii) In Sonal Sihimappa v. State of Karnataka and Ors., reported in AIR 1987 SC 2359, it was observed, in a precedent-bound judicial system, binding authorities have got to be respected and the procedure for developing the law has to be one of evolution.
(viii) The Hon'ble Chief Justice Pathak, speaking for the Constitution Bench, in Union of India v. Raghubir Singh reported in AIR 1989 WA.No.301 OF 2020 34 SC 1933, said:
"The doctrine of binding precedent has the merit of promoting a certainty and consistency in judicial decisions, and enables an organic development of the law, besides providing assurance to the individual as to the consequence of transactions forming part of his daily affairs. And, therefore, the need for a clear and consistent enunciation of legal principle in the decisions of a court."
(ix) In Sundaradas Kanyalal Bhathija v. The Collector, Thane reported in AIR 1991 SC 1893, the law is stated thus:
"17. It would be difficult for us to appreciate the judgment of the High Court. One must remember the pursuit of the law, however glamorous it is, has its own limitation on the Bench. In a multi-Judge Court, the Judges are bound by precedents and procedure. They could use their discretion only when there is no declared principle to be found, no rule and no authority. The judicial decorum and legal propriety demand that where a learned single Judge or a Division Bench does not agree with the decision of a Bench of co-ordinate jurisdiction, the matter shall be referred to a larger Bench. It is subversion of judicial process not to follow this procedure."
(x) In Philip Jeyasingh v. The Jt. Regr. of Co-op. Societies reported in 1992 (2) MLJ 309, a Hon'ble Full Bench of this Court, held as follows:
"49. The ratio decidendi of a decision may be narrowed or widened by the judges before whom it is cited as a precedent. In the process the ratio decidendi which the judges who decided the case would themselves have chosen may be even different from the one which has been approved by subsequent judges. This is because Judges, while deciding a case will give their own reasons but may not distinguish their remarks in a right way between what they thought to be the ratio decidendi and what were their obiter WA.No.301 OF 2020 35 dicta, things said in passing having no binding force, though of some persuasive power. It is said that "a judicial decision is the abstraction of the principle from the facts and arguments of the case". A subsequent judge may extend it to a broader principle of wider application or narrow it down for a narrower application."
(xi) A Hon'ble Division Bench of Bombay High Court in CIT v. Thana Electricity Supply Ltd., reported in (1994) 206 ITR 727 (Bombay), held as follows:
"(a) The law declared by the Supreme Court being binding on all courts in India, the decisions of the Supreme Court are binding on all courts, except, however, the Supreme Court itself which is free to review the same and depart from its earlier opinion if the situation so warrants. What is binding is, of course, the ratio of the decision and not every expression found therein.
(b) The decisions of the High Court are binding on the subordinate courts and authorities or Tribunals under its superintendence throughout the territories in relation to which it exercises jurisdiction. It does not extend beyond its territorial jurisdiction.
(c) The position in regard to the binding nature of the decisions of a High Court on different Benches of the same court may be summed up as follows:
(i) A learned single Judge of a High Court is bound by the decision of another single judge or a Division Bench of the same High Court. It would be judicial impropriety to ignore that decision.
Judicial comity demands that a binding decision to which his attention had been drawn should neither be ignored nor overlooked. If he does not find himself in agreement with the same, the proper procedure is to refer the binding decision and direct the papers to be placed before the Chief Justice to enable him to constitute a larger Bench to examine the question (see WA.No.301 OF 2020 36 Food Corporation of India v. Yadav Engineer and Contractor AIR 1982 SC 1302).
(ii) A Hon'ble Division Bench of a High Court should follow the decision of another Division Bench of equal strength or a Full Bench of the same High Court. If one Division Bench differs from another Division Bench of the same High Court, it should refer the case to a larger Bench.
(iii) Where there are conflicting decisions of courts of co-ordinate jurisdiction, the later decision is to be preferred if reached after full consideration of the earlier decisions.
(d) The decision of one High Court is neither binding precedent for another High Court nor for courts or Tribunals outside its own territorial jurisdiction. It is well settled that the decision of a High Court will have the force of binding precedent only in the State or territories on which the court has jurisdiction. In other States or outside the territorial jurisdiction of that High Court it may, at best, have only persuasive effect."
(xii) In Union of India v. Dhanwanti Devi, reported in (1996) 6 SCC 44 = 1996 (7) Supreme 51, the Hon'ble Supreme Court has explained, what constitutes a precedent, as follows:-
"Before adverting to and considering whether solatium and interest would be payable under the Act, at the outset, we will dispose of the objection raised by Shri Vaidyanathan that Union of India v. Hari Krishan Khosla reported in 1993 Supplement (2) SCC 149, is not a binding precedent nor does it operate as ratio decidendi to be followed as a precedent and is per se per incuriam. It is not everything said by a Judge while giving judgment that constitutes a precedent. The only thing in a Judge's decision binding a party is the principle upon which the case is decided and for this reason it is important to analyse a decision and isolate from it the ratio decidendi According to the well-settled theory of WA.No.301 OF 2020 37 precedents, every decision contains three basic postulates- (i) findings of material facts, direct and inferential. A inferential finding of facts is the inference which the Judge draws from the direct, or perceptible facts; (ii) statements of the principles of law applicable to the legal problems disclosed by the facts; and (iii) judgment based on the combined effect of the above. A decision is only an authority for what it actually decides. What is of the essence in a decision is its ratio and not every observation found therein nor what logically follows from the various observations made in the judgment. Every judgment must be read as applicable to the particular facts proved, or assumed to be proved, since the generality of the expressions which may be found there is not intended to be exposition of the whole law, but governed and qualified by the particular facts of the case in which such expressions are to be found. It would, therefore, be not profitable to extract a sentence here and there from the judgment and to build upon it because the essence of the decision is its ratio and not every observation found therein. The enunciation of the reason or principle on which a question before a court has been decided is alone binding as a precedent. The concrete decision alone is binding between the parties to it, but it is the abstract ratio decidendi. ascertained on a consideration of the judgment in relation to the subject- matter of the decision, which alone has the force of law and which, when it is clear what it was, is binding. It is only the principle laid down in the judgment that is binding law under Article 141 of the Constitution. A deliberate judicial decision arrived at after hearing an argument on a question which arises in the case or is put in issue may constitute a precedent, no matter for what reason, and the precedent by long recognition may mature into rule of stare decisis. It is the rule deductible from the application of law to the facts and circumstances of the case which constitutes its ratio decidendi. Therefore, in order to understand and appreciate the binding force of a decision it is always necessary to see what were the facts in the case in which the decision WA.No.301 OF 2020 38 was given and what was the point which had to be decided. No judgment can be read as if it is a statute. A word or a clause or a sentence in the judgment cannot be regarded as a full exposition of law. Law cannot afford to be static and therefore, Judges arc to employ an intelligent technique in the use of precedents. "
(xiii) In State of Punjab v. Devans Modern Breweries Ltd., reported in (2004) 11 SCC 26, the Hon'ble Supreme Court explained the doctrine of precedents and when a judgment becomes per incuriam. Paragraphs 334 to 336, 339 and 343, of the judgment are relevant and they are as follows:-
Precedent
334. The doctrine of precedent is a well-accepted principle. A ruling is generally considered to be binding on lower courts and courts having a smaller bench structure:
"A precedent influences future decisions. Every decision is pronounced on a specific set of past facts and from the decision on those facts a rule has to be extracted and projected into the future. No one can foresee the precise situation that will arise, so the rule has to be capable of applying to a range of broadly similar situations against a background of changing conditions. It has therefore to be in general terms and "malleable" ...No word has one proper meaning, nor can anyone seek to fix the meaning of words for others, so the interpretation of the rule remains flexible and open-ended. (See Dias Jurisprudence, 5th Edn., p. 136.)"
335. However, although a decision has neither been reversed nor overruled, it may cease to be "law" owing to changed conditions and changed law. This is reflected by the principle "cessante ratione cessat ipsa lex".
"... It is not easy to detect when such situations occur, for as long as the traditional theory prevails that judges never make law, but only declare WA.No.301 OF 2020 39 it, two situations need to be carefully distinguished. One is where a case is rejected as being no longer law on the ground that it is now thought never to have represented the law; the other is where a case, which is acknowledged to have been the law at the time, has ceased to have that character owing to altered circumstances. (See Dias Jurisprudence, 5th Edn., pp. 146- 47.)"
336. It is the latter situation which is often of relevance. With changes that are bound to occur in an evolving society, the judiciary must also keep abreast of these changes in order that the law is considered to be good law. This is extremely pertinent especially in the current era of globalisation when the entire philosophy of society, on the economic front, is undergoing vast changes.
339. Judicial discipline envisages that a coordinate Bench follow the decision of an earlier coordinate Bench. If a coordinate Bench does not agree with the principles of law enunciated by another Bench, the matter may be referred only to a larger Bench. (See Pradip Chandra Parija v. Pramod Chandra Patnaik, reported in 2003 (7) SCC 01, SCC at paras 6 and 7; followed in Union of India v. Hansoli Devi , reported in (2002) 7 SCC 01, SCC at para 2.) But no decision can be arrived at contrary to or inconsistent with the law laid down by the coordinate Bench. Kalyani Stores, reported in AIR 1966 SC 1686 and K.K. Narula, reported in AIR 1967 SC 1368, both have been rendered by the Constitution Benches. The said decisions, therefore, cannot be thrown out for any purpose whatsoever; more so when both of them if applied collectively lead to a contrary decision proposed by the majority.
343. It is also trite that the binding precedents which are authoritative in nature and are meant to be applied should not be ignored on application of the do ctrine of sub silentio or per incuriam without assigning specific reasons therefor. I, for one, do not see as to how Kalyani Stores and K.K. Narula read together can be said to have been passed sub silentio or rendered per incuriam."
WA.No.301 OF 2020 40(xiv) In Government of W.B v. Tarun Roy and others, reported in (2004) 1 SCC 347, as regards binding precedent of a judgment, the Hon'ble Supreme Court, at paragraph 26, observed as follows:-
"26.......... If rule of law is to be followed, judicial discipline demands that the court follows its earlier binding precedent. The Calcutta High Court itself has rejected such a plea. The matter is pending in appeal. An order passed to the contrary by another learned Single Judge in ignorance of the earlier binding precedent by itself would not constitute a binding precedent and may be held to have been rendered per incuriam.
(xv) In Raman Gopi v. Kunju Raman Uthaman reported in 2011 (4) KLT 458, a Hon'ble Full Bench of the Kerala High Court held that when a Bench of higher number of judges of the concerned court decided a question on the subject, then that is binding on the Bench of co-equal judges or lesser number of judges of that court. Further, it is settled law that, if a decision has been rendered by the same High Court, then any decision rendered by any other High Court is not binding on the other High Court but it has got only persuasive value."
16. In the light of the decisions cited supra the judgment in W.P.(C) No.20209/2015 dated 7th August, 2015, cannot be said to be a precedent to be applied in all other similar cases.
17. In the light of the discussions and decisions, we are of the view that, positive directions issued by the writ court has to be set aside and accordingly it is set aside. The Regional Transport Authority is directed to consider the application in accordance with the statutory provisions and pass appropriate orders within one month from the date of receipt of a copy WA.No.301 OF 2020 41 of this judgment.
Instant writ appeal is disposed of accordingly.
Sd/-
S.MANIKUMAR CHIEF JUSTICE Sd/-
SHAJI P.CHALY
smv JUDGE