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Himachal Pradesh High Court

Reserved On 23.02.2026 vs State Of H.P. Through Chief Secretary ... on 11 March, 2026

Author: Vivek Singh Thakur

Bench: Vivek Singh Thakur

                                                                                             2026:HHC:6560




                IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA




                                                                                    .
                                                           CWP No. 13984 of 2025





                                                           Reserved on 23.02.2026
                                                           Date of decision: 11.03.2026
    _____________________________________________________________________________





    Anand Moudgil
                                                                                           ...Petitioner.




                                                         of
                                                   Versus

    State of H.P. through Chief Secretary and others
                              rt                                                        ...Respondents.
    _____________________________________________________________________________

    Coram

    Hon'ble Mr. Justice Vivek Singh Thakur, Judge.
    Hon'ble Mr. Justice Ranjan Sharma, Judge.


    Whether approved for reporting? 1 Yes.
    _____________________________________________________________________________




    For the Petitioner.                       Petitioner  in           person           (through      video
                                              conferencing)





    For the Respondents:  Mr. Anup Rattan, Advocate General with Mr.
                          Raj Negi, Deputy Advocate General.
    __________________________________________________________





    Vivek Singh Thakur, Judge

Petitioner has preferred present petition, invoking Article 226 of Constitution of India for issuance of writ of Quo Warranto, Certiorari, Mandamus and/or passing any other writ, order or direction for declaring that appointment of respondent No. 2, Principal Secretary/Additional 1 Whether the reporters of the local papers may be allowed to see the judgment?

::: Downloaded on - 11/03/2026 20:33:46 :::CIS

2 2026:HHC:6560 CWP No. 13984 of 2025 Chief Secretary (Transport) to the Government of Himachal Pradesh, as .

Chairman, State Transport Authority, Himachal Pradesh, (STA-HP) and appointment of respondent No. 3, Director, Transport, Himachal Pradesh, as Chairman of all Regional Transport Authorities in Himachal Pradesh (RTAs-H.P.), vide Notification dated 29.05.2023 (Annexure P-2), are void of ab initio, illegal and in direct contravention of Section 68(2), read with third proviso of Motor Vehicles Act, 1988 (M.V. Act), as well as in the light rt of Principle settled by the Apex Court in Mor Modern Transport Company vs. State of Haryana, 2002 INSC 291, reported in (2002) 6 SCC 511, on the ground that both, i.e., Principal Secretary/Additional Chief Secretary (Transport), Himachal Pradesh and Director, Transport, Himachal Pradesh, are having financial interest in Himachal Roadways Transport Corporation, an undertaking of Government of Himachal Pradesh, as both of them are also members of Board of Directors of the said undertaking, as ex officio Director of the said Corporation, established under provisions of Road Transport Corporation Act, 1950 (RTC Act), and thus, suffering from disqualification provided under Section 68(2) of M.V. Act, 1988 and, therefore, are usurpers of the post, despite the fact that any person, who has financial interest, whether as proprietor, employee or otherwise, in any Transport undertaking, is disqualified from appointed or continued to be as a member of STA or ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 3 2026:HHC:6560 CWP No. 13984 of 2025 RTAs; and for quashing and setting aside Notification dated 29.05.2023 .

(Annexure P-2); to issue appropriate direction for reconstituting STA-HP and RTAs-HP, strictly in conformity with Section 68(2) of M.V. Act by appointing fit and disinterested persons as Chairman(s) in place of Principal Secretary/Additional Chief Secretary (Transport) to the of Government of Himachal Pradesh (respondent No. 2) and Director, Transport, Himachal Pradesh (respondent No. 3); and to award costs of these proceedings.

rt

2. Respondent No. 1 is State of Himachal Pradesh, sued through Chief Secretary to the Government of Himachal Pradesh, whereas respondent No. 2 is Additional Chief Secretary (Transport) to the Government of Himachal Pradesh and respondent No. 3 is Director, Transport, Himachal Pradesh.

3. As per the averments made in the petition, it has been instituted in personal capacity and not as a Public Interest Litigation, seeking issuance of writ of Quo Warranto against respondents No. 2 and 3, with submission that Locus-Standi arises to the petitioner from his intention to undertake stage carriage operations in Himachal Pradesh, by filing appropriate applications, which were decided by the STA and concerned RTAs, by exercising the power under various provisions of ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 4 2026:HHC:6560 CWP No. 13984 of 2025 Motor Vehicles Act, but the said STA and RTAs, were headed by a .

Chairman, who was disqualified to be Chairman or member of STA/RTAs.

4. Referring to provisions of Sections 67 and 68 of M.V. Act, it has been contended by the petitioner that it is duty of the respondent-

State to evolve a mechanism by constituting STA and RTAs, with of members having no financial interest in any of the transport undertaking for promoting effective competition among the transport service providers.

rt However, by appointing such officers as a Chairman/member of STA and RTAs, who have direct financial interest in the State Transport undertaking, i.e., HRTC being Directors of the said Corporation, as ex officio members of Board of Directors of the Said Corporation, the State has committed an illegality, resulting into holding the post of Chairman STA and Chairman RTAs by these persons/officers, who are disqualified to be appointed as such under Section 68 of MV Act. To substantiate the plea, reliance has been placed by the petitioner upon the judgment of the Apex Court in Mor Modern Transport Co. vs. State of Haryana, reported in (2002) 6 SCC 511.

5. According to petitioner, for appointment of persons, having financial interest in the transport undertaking, which is a competitor of Private Transporter, including the petitioner, who intends to have stage carriage permit in Himachal Pradesh, the omission and commission of the ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 5 2026:HHC:6560 CWP No. 13984 of 2025 respondent-State has prejudisiouly infringed fundamental rights of the .

petitioner, provided under Articles 14, 19(1)(e), 19(1)(g) and 21 as well as Constitutional right under Articles 300-A and 301 of the Constitution.

6. In order to substantiate biasness and discriminatory conduct of the STA and RTAs, petitioner has referred certain terms granted to of HRTC depots, table showing the default by the HRTC in making payment of SRT with arrears of Rs. 2,70,34,65,506/-, as on 14.06.2024 and rt arrears of SRT dues about (5,01,67,27,563/-), as on 31.10.2024, with submissions that despite being in arrears in crores, no action has been taken by the STA and RTAs for cancellation of permits under Section 86 of the MV Act, against the HRTC, because Chairmen of STA and Chairman of RTAs are also members, as Directors, in Board of Directors of HRTC.

7. Constitution of Board of Directors of HRTC has been placed on record as Annexure P-3, wherein Principal Secretary (Transport) to the Government of Himachal Pradesh and Director Transport, Himachal Pradesh are members, as Directors therein. This fact has not been disputed.

8. For substantiating the right to file petition to issue writ of Quo Warranto, for removal of respondents No. 2 and 3 from the posts of Chairman in STA and RTAs, reliance has been placed upon judgment ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 6 2026:HHC:6560 CWP No. 13984 of 2025 passed by the Apex Court in University of Mysore and Another vs. .

C.D. Govinda Rao and another, reported in (1963) 4 SCR, page 575, wherein it has been observed as under:-

"The judgment of the High Court does not indicate that the attention of the High Court was drawn to the technical nature of the writ of quo warranto which was claimed by the respondent in the present proceedings, and the conditions which had to be satisfied before a writ could issue in such proceedings.
of As Halsbury has observed* "An information in the nature of a quo warranto took the place of the obsolete writ of quo warranto which lay against a person who claimed rtor usurped an office, 'franchise, or liberty, to, inquire by what authority he supported his claim, in order that the right to the office or franchise might be determined:"

Broadly stated, the quo warranto proceeding affords a judicial remedy by which any person, who holds an inde- pendent substantive public office or franchise or liberty, is called upon to show by what right he holds the said office, franchise or liberty, so that his title to it may be duly determined, and in case the finding is that the holder of the office has no title, he would be ousted from that office by judicial order. In other words, the procedure of quo warranto gives the judiciary a weapon to control the Executive from making appointments to public office against law and to protect a citizen from being deprived of public office to which he has a right. These proceedings also tend to protect the public from usurpers of public office, who might be allowed to continue either with the connivance of the Executive or by reason of its apathy. It will, thus, be seen that before a person can effectively claim a writ of quo warranto, he has to satisfy the Court that the office in question is a public office and is held by a usurper without legal authority, and that inevitably would lead to the enquiry as to whether the appointment of the alleged usurper has been made in accordance with law or not."

9. Relevant paras of judgment in Mor Modern Cooperative Transport Society Ltd. vs. Financial Commissioner & Secretary to Govt. of Haryana and another, reported in (2002) 6 Supreme Court Cases 269, referred by the petitioner, are as under:-

"13. It was argued before us by the respondents that Haryana Roadways is neither a company nor a statutory corporation. It is run as a ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 7 2026:HHC:6560 CWP No. 13984 of 2025 departmental entity and is a wing of the department of transport. It was faintly urged that since Haryana Roadways is neither a company nor a statutory corporation, as is the case in other States, it cannot be .
considered to be an undertaking within the meaning of that term in sub-
section (2) of Section 68. It being a departmental entity, it was not an undertaking. The submission is devoid of force and must be rejected. Sub-section (2) of Section 68 mandates that no person who has any financial interest, whether as proprietor, employee or otherwise in any transport undertaking shall be appointed or continue to be a member of a Regional Transport Authority. The person concerned may be a proprietor, or an employee, or he may otherwise have financial interest in the transport undertaking. Clearly a proprietory concern also comes of within the ambit of sub-section (2) of Section 68. It is, therefore, futile to contend that Haryana Roadways being a departmental agency is not an undertaking for the purpose of sub-section (2) of Section 68. The question as to whether it is an undertaking at all has to be answered having regard to the language of sub-section (2) of Section 68 and the rt legislative intent. In Webster's Third New International Dictionary "undertaking" has been assigned the meaning:
"The act of one who undertakes or engages in a project or business; the business of an undertaker: a business, work, or project which one engages in or attempts".

In Words and Phrases legally defined, Third Edition "Undertaking has been defined thus:

'Undertaking' includes any trade, business or profession and, in relation to a public or local authority, includes any of the powers or duties of that authority, and, in relation to any other body of persons, whether corporate or unincorporated, includes any of the activities of that body".
Even applying the dictionary meaning of the word "undertaking", an entity such as the Haryana Roadways, which is engaged in the business of providing transport service to the people must be held be an "undertaking". The use of the words "any undertaking" also makes it abundantly clear that the undertaking may be either a private undertaking or a Government or public sector undertaking including a statutory corporation. We have, therefore, no hesitation in holding that a State undertaking such as Haryana Roadways is within the contemplation of sub-section (2) of Section 68 of the Act.
14. The next question which falls for consideration is what is the nature of the "financial interest" contemplated by the said sub-section.

The expression financial interest is capable of a narrower as well as a wider meaning. In the narrower sense it implies direct personal benefit of an economic nature. In the wider sense it may include any interest direct or indirect which a person has in relation to the finances of the undertaking. Such an interest may be the interest of an official who ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 8 2026:HHC:6560 CWP No. 13984 of 2025 manages the finances of the undertaking or on whom rests the burden of financial accountability. It is trite to say that the intention of the Legislature must be found by reading the statutes as a whole. The Court .

must ascertain the intention of the Legislature by directing its attention not merely to the Clauses to be construed but to the entire statute; it must compare the Clause with the other parts of the law, and the setting in which the Clause to be interpreted occurs. The rule is of general application as even plainest terms may be controlled by the context.

Expression used in a statute should ordinarily be understood in a sense in which they best harmonize with the object of the statute, and which effectuate the object of the Legislature. Therefore, when two interpretations are feasible the Court will prefer that which advances the of remedy and suppress the mischief as the Legislature envisioned. Keeping these principles in mind we shall now consider what meaning has to be given to the expression "financial interest" in sub-section (2) of Section 68 of the Act.

15. rt Looking to the scheme of the Act it cannot be disputed that the Regional Transport Authorities exercise powers and perform functions which are conferred upon them by or under Chapter V of the Act. The power includes the power to grant stage carriage permits, attach conditions thereto, to determine the duration of permits and their renewal, to transfer permits, the cancellation and suspension of permits, grant of temporary permits etc. Having regard to the fact that the State undertaking competes with private operators in the business of providing transport service, the Legislature advisedly has barred the appointment of any person as a member of the Regional Transport Authority who has any financial interest, whether as proprietor, employee or otherwise in any transport undertaking, which must necessarily include a Government undertaking. This is considered necessary with a view to ensure the impartial functioning of the Regional Transport Authority which is envisaged by the Act.

16. Counsel for the appellant drew support from the observations made by this Court in Krishna Bus Service Pvt. Ltd. Vs. State of Haryana and Ors. (1985) 3 SCC 711 where the appointment of the General Manager of Haryana Roadways to exercise powers of Deputy Superintendent of Police under the Punjab Motor Vehicles Rules was challenged on the ground that it was violative of the fundamental rights of the private motor vehicles operators guaranteed by Articles 19(1)(g) of the Constitution. Upholding the challenge the Court observed :- (SCC p. 716, para 10) "The General Manager of Haryana Roadways who is a rival in business to the private operators of motor vehicles in the State and is intimately connected with the running of motor vehicles cannot be expected to discharge his duties in a fair and reasonable manner. An unobstructed operation of the motor vehicles by private owners operating along the same route or ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 9 2026:HHC:6560 CWP No. 13984 of 2025 routes would naturally affect the earnings of the Haryana Roadways. There is, therefore, every likelihood of his being overzealous in discharging his duties of stopping a vehicle and in .

searching, seizing and detaining motor vehicles belonging to others and at the same time excessively lenient in the case of vehicles belonging to his own department. If in discharging his duties in the case of vehicles belonging to others he fails to give due regard to the interests of the owners thereof he would be violating their fundamental right to carry on business in a reasonable way. If he is too lenient in inspecting the vehicles belonging to his own department, the interests of the traveling public at large would be in peril. In both the cases there is a of conflict between his duty on the one hand and his interest on the other. Moreover administration must be rooted in confidence and that confidence is destroyed when people begin to think that the officer concerned is biased".

17. rt Counsel also relied on the observations made by this Court in Ishwar Singh Bagga & Ors. Vs. State of Rajasthan (1987) 1 SCC 101. That was a case where employees of the State Road Transport Corporation were empowered to exercise powers that can be exercised under Section 129-A by police officers who were empowered in that behalf. Their appointment was challenged as being in violation of Article 19(1)(g). The challenge was upheld. Though, the question involved in that case was whether an employee of the State Road Transport Corporation was included in the expression 'other person' in Section 129-A of the Act, some observations made in the judgment are apposite. It was observed : (SCC p. 111, para 7) "It is thus clear that the Corporation is one of the many operators of the motor vehicles in the State though the fleet of the motor vehicles owned by it and the magnitude of the operations carried on by it may be very large. The police officers who are empowered to exercise certain powers under the Act should exercise those powers in respect of motor vehicles owned by the private operators and also in respect of the motor vehicles owned by the Corporation. Negligence on the part of the Transport Authorities, the Motor Vehicles Department and the police officers in exercising their powers of supervision, inspection and control in respect of the motor vehicles of the Corporation leads to grave public suffering and sometimes to disasters. They should not take it for granted that the motor vehicles of the Corporation do not need to be checked or inspected only because it is established by the State Government. Omission on their part in discharging these duties amounts to dereliction of public duty".

18. Relying on these observations, though made in a different context, it was submitted that the Legislature had in mind the ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 10 2026:HHC:6560 CWP No. 13984 of 2025 constitution of an impartial Regional Transport Authority having regard to the powers and functions conferred on it and with this objective in mind, an express provision was made debarring from membership of .

the Regional Transport Authority such persons who had any financial interest in any transport undertaking.

19. Having regard to the language of Section 68 we are of the considered view that the fact that the Transport Commissioner has no personal financial interest in the State undertaking, is of no consequence. Section 68(2) in express terms refers to a person having "any financial interest" as proprietor, employee or otherwise in any transport undertaking. The words employed are of the widest amplitude of and expressly include an "employee" of an undertaking. If a very narrow meaning is given to the expression "any financial interest" as contended by the respondents, the word "employee" will be rendered redundant, because in all cases it may be argued that an employee has no personal financial interest in the undertaking and his interest, whatever rt it may be, financial or otherwise, is his official interest and duty to protect the interest of his employer, including his financial interest. The wide sweep of the language employed in Section 68(2) particularly the use of the word "any" before "financial interest" leads us to hold that the financial interest of the person concerned need not be direct personal financial interest, but includes the financial interest which he may have even as an employee of the undertaking.

20. The third proviso of sub-section (2) of Section 68 affirms this conclusion. The express language of the said proviso clearly debars "an official connected directly with the management or operation of a transport undertaking" from being appointed as a member, or continuing as a member, of the Regional Transport Authority. Therefore, Section 68(2) read with third proviso makes it explicit that an official of the State Transport Undertaking who is directly connected with the management or operation of the transport undertaking is debarred from being appointed a member of Regional Transport Authority. So far as the Transport Commissioner is concerned he is undoubtedly such an official, and moreover in the discharge of his official duties he shoulders financial responsibility and is accountable to the State Government in that regard. The conclusion is, therefore, irresistible that he is a person who has financial interest in the transport undertaking within the meaning of that expression in Section 68(2) of the Act. The same can be said of the Traffic Manager who functions under the General Manager of the Haryana Roadways.

21. The appellants had originally challenged the Notification dated March 27, 1998, whereunder the Transport Commissioner was appointed as Chairman of the Regional Transport Authorities. However, during the pendency of the writ petition, since that Notification was superseded by another Notification dated 31.12.1998 appointing the Secretary, Regional Transport Authority of the concerned region as ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 11 2026:HHC:6560 CWP No. 13984 of 2025 Chairman of the Regional Transport Authority, and the Traffic Manager concerned of the office of the General Manager, Haryana Roadways concerned located at District Headquarters as member, the appellant .

amended the writ petitions and challenged the later Notification. During the pendency of this appeal the position as it existed when the writ petition was filed, has been restored so far as the appointment of Chairman of the Regional Transport Authority is concerned, in as much as the Transport Commissioner has again been appointed as Chairman of the Regional Transport Authority by the Notification dated February 20, 2001. Since we have found that the Transport Commissioner is an official of the Haryana Roadways and has a financial interest in that undertaking within the meaning of that expression in Section 68(2) of of the Act, the Notification in so far it relates to the appointment of Transport Commissioner as Chairman, Regional Transport Authority must be quashed. We may however record that counsel for the appellant did not challenge before us the appointment of the District Transport Officer to act as Member Secretary of the Regional Transport rt Authority.

10. No independent reply has been filed on behalf of respondent No. 1-State, however, a joint reply has been filed on behalf of all the respondents through respondent No. 2, Additional Chief Secretary (Transport) to the Government of Himachal Pradesh.

11. It has been contended on behalf of respondents that there is no infringement of fundamental and statutory right of the petitioner and replying respondents are statutorily entrusted duty under MV Act, 1988 and H.P. Motor Vehicles Rules, 1999, to ensure effective regulation of transport services, the proper consideration of permit applications and maintenance of transparency, fairness, and public interest in all transport related matters and, therefore, petition is not maintainable.

12. After a quote of Section 68(2) of M.V. Act, 1988, it has been stated that the Notification dated 29.05.2023, has been issued in strict ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 12 2026:HHC:6560 CWP No. 13984 of 2025 compliance with statutory provisions of Section 68(2) of MV Act, by .

lawfully exercising the power vested in the State of Himachal Pradesh under the said provision, as statutory framework separates prescribed qualification for Chairman, including judicial, appellate or adjudicatory experience from the disqualification on account of financial interest in any of transport undertaking, thereby ensuring administrative objectivity, efficiency and protection against conflicts of interests and, therefore, rt allegation of the petitioner regarding self appointment and any misuse of official position by respondent No. 2 as Chairman STA and respondent No. 3 as Chairman RTAs, is without merit and legally untenable, because the respondents No. 2 and 3 being Senior IAS Officers, by virtue of their services, have discharged numerous quasi judicial functions under Land Revenue Act, Excise Act, Labour Laws and Motor Vehicles Act and are also having experience of discharging regulatory, policy and quasi judicial functions. It has been further contended that Section 68(2) of MV Act is confined to situations, where person has a financial interest, whether as a proprietor, employee or otherwise in a transport undertaking and this safeguard is intended to prevent conflicts of interest and to maintain impartiality in decision making, whereas eligibility of Chairman, on the other hand, has been defined separately in the same provision, requiring judicial, appellate or adjudicatory experience, and, according to ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 13 2026:HHC:6560 CWP No. 13984 of 2025 respondents, therefore, the Statute draws a clear distinction between .

qualification requirement for Chairman and disqualification clause relating to financial interest, and the law clearly separates the rules for qualifications for the Chairman from those applicable to other members, and therefore, no disqualification applies in instant case to the Chairman of under Section 68(2) of the M.V. Act and, therefore, respondents No. 2 and 3 completely satisfies the statutory requirement for eligibility, and rt thus, appointments of Chairman(s) of STA and RTAs are legal and in accordance to the provisions of Section 68(2) of MV Act.

13. To repell the contention and prayer in the writ petition, respondents have also taken plea that petitioner has a long record of filing repetitive litigations since the year 2013, as he has preferred multiple writ petitions against the STA and RTA, assailing the orders with respect to stage carriage permits, review petitions, execution petitions and contempt petitions repeatedly, even in decided matters and a long list of more than dozen cases, has been narrated in the reply of the respondents, with submissions that despite repeated adjudications, the petitioner continues to re-agitate the same or similar issues, only to harass the Government officers and obstruct lawful discharge of quasi judicial functions by State Transport Authority and Regional Transport Authorities, which amounts to abuse of process of law by the petitioner, ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 14 2026:HHC:6560 CWP No. 13984 of 2025 who is a habitual and vexatious litigant and, therefore, it has been .

contended that petitioner is causing harassment to the public servants and obstruction of lawful discharge of quasi judicial function and thus, the petition is liable to be dismissed on this count only.

14. It has been submitted on behalf of respondents that of respondents No. 2 and 3 are Directors in Board of Directors of HRTC, but their simultaneous roles in STA and RTAs, as well as in Board of rt Directors of HRTC, are ex-officio attached to their statutory positions governed by law and, therefore, there is no infringement of statutory or constitutional right of the petitioner.

15. It has been further contended on behalf of respondents that term 'financial interest' in Section 68(2) of MV Act, referred to pecuniary or proprietary interest, is directly connected to management or operation of transport undertaking, whereas, neither respondent No. 2, nor respondent No. 3, holds any direct or personal financial interest in HRTC beyond their official capacity and their appointments have been made in due course of executive power and are in accordance with the procedure prescribed under the Act and relevant State Government Notifications.

Further, that competence of the State Government to appoint Chairman of STA and RTAs, is statutory and exercise of such power with due competence can be subjected to judicial review, only if it is established ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 15 2026:HHC:6560 CWP No. 13984 of 2025 that appointments were made in bad faith, malafide or in clear violation of .

statutory provisions and petitioner has failed to demonstrate any direct or personal financial interest of respondents No. 2 and 3, as defined under Section 68(2) of MV Act.

16. It has been further submitted that Legislature, under Section of 67 of MV Act, 1988, has conferred authority upon State Government to control/regulate road transport and this power is neither absolute, nor un- rt regulated, but exercise of this power must confirm strictly to the limits and objectives laid down by the Act itself and constitution of STA and RTAs, is specifically for the purpose of effectuating the intent and framework provided under the Act, particularly to ensure coordinated and controlled growth of Road Transport in a manner that serves public interest, ensures safety and promote efficiency, and the appointment of respondents No. 2 and 3 is within the power entrusted to the State, which is not beyond the powers, either expressly or impliedly, and the constitution of STA and RTAs is strictly in consonance with provisions of MV Act and applicable rules framed thereunder and, thus, their appointments are valid and are backed by lawful authority and there is no illegality or impropriety in issuance of Notification dated 29.05.2023. Therefore, it has been contended that the appointment of respondents No. 2 and 3 was not a personal decision of respondents No. 2 and 3, but was a decision as per ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 16 2026:HHC:6560 CWP No. 13984 of 2025 established norms and statutory framework. Further, that for holding the .

office of Director of Board of Director in HRTC, and State Transport undertaking, does not ipso facto render their appointments as Chairman STA as well as in RTAs, illegal, arbitrary or void ab initio, because statutory scheme does not prohibit such appointments, where these are of made in official capacity and in accordance with law.

17. According to respondents, respondents No. 2 and 3 hold ex rt officio position, as Directors of Board of Directors in HRTC, a State Transport undertaking, and, therefore, it does not, in any manner, attracts the statutory disqualification under Section 68(2) of MV Act, read with third proviso thereof. It has been submitted that these provisions aim to prevent conflicts of interest, where a person is directly engaged in day to day operations or has a pecuniary interest in the transport undertaking.

However, ex officio Directorship, by virtue of holding a public office, does not amount to direct connection with the management in the sense contemplated under these provisions. It has been submitted that both respondents No. 2 and 3, have been appointed as Directors as members of Board of Director of HRTC in the official capacity as Government functionaries and not in any personal or executive capacity, but they are not involved in commercial or operational management of State Transport Undertaking, and their association with HRTC is a part of their broader ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 17 2026:HHC:6560 CWP No. 13984 of 2025 official responsibilities to oversee transport administration in the public .

interest and not as individual with a vested or conflicting interest.

18. While addressing arguments, learned Advocate General has also placed on record instructions dated 11.12.2025, received from Director Transport, Himachal Pradesh, wherein Sections 5, 14 and 15 of of Road Transport Corporations Act, 1950, have been reproduced with submission that there is a clear demarcation between financial and rt administrative responsibilities of the officers and servants of the Corporation; and executive, financial and operational authority of the Corporation is exclusively vested in Managing Director; and Additional Chief Secretary/Principal Secretary (Transport) to Government of Himachal Pradesh as well as Director Transport, Himachal Pradesh, participate in the Board of HRTC only as official Directors, representing the State Government for purposes of coordination and policy alignment.

Further that the Act does not confer upon them any exclusive power relating to financial management, expenditure sanction, procurement, commercial operations, fleet management, contract approvals or day to day administration of the Corporation. It has been further stated in the instructions that in view of the statutory framework, Additional Chief Secretary/Principal Secretary (Transport) and Director Transport, Himachal Pradesh, in their capacity as ex-officio members of Board of ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 18 2026:HHC:6560 CWP No. 13984 of 2025 Directors, do not hold, exercise, or influence any exclusive power of the .

Corporation, but their role is advisory, supervisory and policy oriented, strictly limited to ensuring conformity with the government policy and statutory obligations. They neither participate in, nor directly controlled day to day revenue decisions, expenditure, procurement, operational of administration or any financial transaction of HRTC.

19. It has been contended by respondents that there is nothing rt on record to establish that respondents No. 2 and 3 are unlawfully holding the public office without authority, and the petitioner in no way has been deprived from any liberty or right to undertake stage carriage operation, subject to compliance with applicable statutory provisions.

20. Huge arrears of tax payable by HRTC, as claimed in the petition, have been admitted by the respondents, but with submission that these arrears do not legally or factually correlate with disqualification of respondents No. 2 and 3 as Chairman(s) of STA or RTAs, with further submission that matter of HRTC's Tax Arrears and default therein, is subject to administrative proceedings under relevant law adjudicable before appropriate authority.

21. It has been contended by learned Advocate General that on facts, judgment of the Apex Court in Mor Moderan Transport Company, is distinguishable, because in the said judgment, observations of the ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 19 2026:HHC:6560 CWP No. 13984 of 2025 Court were based on the context, where Transport Commissioner of .

Haryana, was simultaneously appointed Chairman of RTA without proper separation of duties, whereas in present case, respondents No. 2 and 3 have acted in their official capacity, strictly as per State Government Notification, issued by following the due process.

of

22. It has been contended by learned Advocate General that in Mor Modern's case, the members appointed were employees of the rt department/undertaking, whereas in present case, respondents No. 2 and 3 are not employees of the undertaking, but are independent officers of the State and, therefore, judgment in Mor Modern's case is not applicable in present case.

23. Learned Additional Advocate General submits that judgment in Mor Modern's case, has been distinguished in the judgment of the Apex Court in State of Gujarat and others vs. Utility Users of Welfare Association, reported in (2018) 6 SCC 21, relevant paras of which are as under:-

"61. The judgment of this Court in Mor Modern Cooperative Transport Society Ltd. v. Financial Commissioner & Secretary to Govt. of Haryana and Anr. 24 was also referred to. The provision in question was Section 68(2) of the Motor Vehicles Act, 1988. Section 68 of the Motor Vehicles Act, 1988 empowered the State Government to constitute a State Transport Authority and Regional Transport Authorities to exercise powers and functions specified in Chapter V. Section 68(2) put a restriction that no person who has a financial interest whether as proprietor, employee or otherwise in any transport undertaking was to be appointed and in case such financial interest was acquired post appointment, the person was required to give notice in writing to the ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 20 2026:HHC:6560 CWP No. 13984 of 2025 State Government of acquisition of such interest and would vacate office. The Transport Commissioner and Traffic Manager working in the Office of the General Manager of the Haryana Roadways, a State .
Undertaking, were held to fall within the mischief of sub-section (2) of Section 68 of that Act. The nature of "financial interest" as contemplated by the said sub-section was examined in the narrower sense and it was held to imply direct personal benefit of an economic nature while in the wider sense it would include direct or indirect interest that a person has in relation to the finances of an undertaking. Such an interest was held to include the interest of an official who manages the finances of the undertaking or on whom rests the burden of financial accountability. The intention of the legislature was deciphered from reading the statute as a of whole.
62. We may, however, note at this stage itself that the factual matrix in the said case dealt with the situation where a person was holding both the offices."

rt

24. Referring to para 32 of judgment of the Apex Court in Premachandran Keezhoth and another vs. Chancellor Kannur University and others, reported in AIR 2024 SC 135, it has been contended by learned Advocate General that act and conduct of the petitioner does not entitle him to seek direction for issuance of Quo Warranto Writ for removal of respondents No. 2 and 3 from the posts of Chairman(s) STA and RTAs. Para 32 reads as under:-

"32. Any person may challenge the validity of an appointment of a public office, whether any fundamental or other legal right of his has been infringed or not. But the court must be satisfied that the person so applying is bona fide and there is a necessity in public interest to declare judicially that there is a usurpation of public office. If the application is not bona fide and the applicant is a mere pawn or a man of straw in the hands of others, he cannot claim the remedy. Though the applicant may not be an aspirant for the office nor has any interest in appointment, he can apply as a private relator, or an ordinary citizen."
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21 2026:HHC:6560 CWP No. 13984 of 2025

25. Learned Advocate General, to justify the appointment of .

Principal Secretary/Additional Chief Secretary (Transport) and Director, Transport Himachal Pradesh as Chairman of STA and RTAs, has also relied upon third proviso of Section 68(2) of MV Act, with submission that for the stand taken in the reply, reiterated in the instructions dated of 11.12.2025 and submissions made by him on behalf of respondents, it is apparent that the respondents No. 2 and 3 are not officers or officials rt connected directly with the management or operation of transport undertaking and, therefore, provisions of Section 68(2) of MV Act does not debar the appointment of respondents No. 2 and 3, as Chairman of STA and RTAs, despite their induction as Directors in the Board of Directors of HRTC, because they do not fall in the category of persons prohibited from being appointed as a member of STA or RTAs.

26. It has also been pleaded by the learned Advocate General that despite having been appointed and continuing as a Director of Board of Directors of HRTC, a transport undertaking, they, in view of the third proviso to Section 68(2) of MV Act, can be appointed, or continued as a member/chairman, because they only participate in the Board of HRTC, as official Directors representing the State Government only for purpose of coordination and policy alignment and does not have any exclusive power, relating to financial management, expenditure sanction, ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 22 2026:HHC:6560 CWP No. 13984 of 2025 procurement, commercial operation, fleet arrangement, contract .

approvals or day to day administration of the Corporation and thus, are not connected directly with the management or operation of transport undertaking, especially for performing role, which is advisory, supervisory and policy oriented, strictly limited to ensuring conformity with the of Government policies and statutory obligations.

27. In rebuttal, apart from filing rejoinder, reiterating the stand rt taken in the petition and referring provisions of Road Transport Corporations Act, 1950, indicating the role of Board of Directors of the HRTC, petitioner has also submitted point wise rebuttal to the instructions and oral submissions by and on behalf of respondents.

28. Petitioner has also placed reliance upon judgment of the Apex Court in Bhuwalka Steel Industries Ltd. Vs. Bombay Iron Steel Labour Board and Anr, reported in (2019) 16 SCC 618, wherein it has been held that it is irrelevant that how the State Government officials understood the provisions of the Act, but the provisions of the Act have to be considered in the light of the judgment of the Apex Court in Mor Modern Transport Company's case.

29. In Premachandran's case, it has been reiterated by the Apex Court that any person may challenge the validity of appointment of a public officer, irrespective of infringement of his fundamental or other ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 23 2026:HHC:6560 CWP No. 13984 of 2025 legal right, however, subject to satisfaction of the Court that the persons .

so applying is bonafide and there is necessity in public interest to declare judicially that there is usurpation of public office. The petitioner should not be a mere pawn, or man of straw in hand of others. Though, petitioner may not be an aspirant for the office, nor has any interest in the of appointment, he can apply as a private relater, or an ordinary citizen. It does not mean that validity of appointment of a public office can be rt challenged by un-interested person, or a person, who has some interest related to the public office in reference, is not entitled to file petition for issuing Quo Warranto Writ, or such person has not be considered a bonafide petitioner.

30. Nothing has been placed on record that petitioner is a mere pawn or a man of straw in hand of others. He had and has occasion to have dealing in the public office in reference, and mere fact that he had filed number of petitions against the Department, cannot be a ground to disentitle him to file a petition for Quo Warranto, with respect to appointment of the public office, where atleast, prima-facie, a case is made out that appointment of Chairman of STA and RTAs is in conflict with and in violation of statutory provisions. Therefore, plea in this regard raised on behalf of respondents, is liable to be rejected and petitioner is held entitled to file the petition for issuance of directions Quo Warranto.

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24 2026:HHC:6560 CWP No. 13984 of 2025 Otherwise also, under Article 226 of Constitution of India, during judicial .

review of some appointment, if any illegality or omission and commission, by or on behalf of concerned authority, is apparent at large on the face of the action/omission or commission, the Court is not inhibited from issuing any other writ other than the writ or direction of Quo Warrant, as deemed of appropriate and fit, as also prayed in present petition, in the facts and circumstances, placed before the High Court.

31. rt Judgment in Mor Modern Transport Company's case was passed by three judges' Bench of the Apex Court, whereas judgment in Utility Users Welfare Association's case, has been passed by two judges' Bench of the Apex Court.

32. Contrary to submission of learned Advocate General in Utility Users Welfare Association's case, the Apex Court has reiterated the principle of law laid down in Mor Modern Transport Company's case with observation that in Mor Modern Transport Company's case, nature of financial interest, as contemplated by Section 68(2) of MV Act, was examined in narrower sense, but holding that in wider sense, it would include direct or indirect interest that a person has in relation to finances of an undertaking. It was observed by the Court that such an interest was held to include the interest of an official, who manages the finance of the undertaking, or on whom rests the burden of financial accountability and ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 25 2026:HHC:6560 CWP No. 13984 of 2025 the intention of the legislature was deciphered from reading the statute as .

a whole and in that case, a situation was dealt with, where a person was holding both the offices. Therefore, reliance placed by the learned Advocate General, upon the Utility Users Welfare Association's case to distinguish the present case from Mor Modern Transport Company's of judgment, is misconceived. In present case also, respondents No. 2 and 3 are holding both the offices, i.e., Director of Board of Director of HRTC rt a transport undertaking as well as members/Chairmen of STA and RTAs, and as held in Mor Modern's case and clarified in Utility Users Welfare Association's case, the financial interest contemplated in Section 68(2) of MV Act, includes direct personal benefit of an economic nature as well as direct or indirect interest that a person has in relation to finances of an undertaking. Nature of financial interest in Mor Modern Transport Company was examined in narrower sense as well as in wider sense and in the wider sense, it was held to include direct or indirect interest of person in relation to finances of an undertaking.

33. Provisions of Sections 67 and 68 of MV Act shall be relevant to adjudicate this matter, which reads as under:-

The Motor Vehicles Act, 1988
67. Power to State Government to control road transport.
(1) A State Government, having regard to--
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26 2026:HHC:6560 CWP No. 13984 of 2025

(a) the advantages offered to the public, trade and industry by the development of motor transport;

.

(b) the desirability of co-ordinating road and rail transport;

(c) the desirability of preventing the deterioration of the road system, and

(d) promoting effective competition among the transport service providers, may, from time to time, by notification in the Official Gazette issue directions both to the State Transport Authority and Regional Transport of Authority regarding the passengers convenience, economically competitive fares, prevention of overcrowding and road safety. (2) Any direction under sub-section (1) regarding the fixing of fares and freights for stage carriages, contract carriages and goods carriages may provide that such fares or freights shall be inclusive of the tax rt payable by the passengers or the consignors of the goods, as the case may be, to the operators of the stage carriages, contract carriages or goods carriages under any law for the time being in force relating to tax on passengers and goods:

[Provided that the State Government may subject to such conditions as it may deem fit, and with a view to achieving the objectives specified in clause (d) of sub-section (1), relax all or any of the provisions made under this Chapter.] [(3) Notwithstanding anything contained in this Act, the State Government may, by notification in the Official Gazette, modify any permit issued under this Act or make schemes for the transportation of goods and passengers and issue licences under such scheme for the promotion of development and efficiency in transportation--
               (a)    last mile connectivity;
               (b)    rural transport;





               (c)    reducing traffic congestion;
               (d)    improving urban transport;
               (e)    safety of road users;
               (f)    better utilisation of transportation assets;
               (g)    the enhancement of economic vitality of the area, through
competitiveness, productivity and efficiency;
(h) the increase in the accessibility and mobility of people;
(i) the protection and enhancement of the environment;
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27 2026:HHC:6560 CWP No. 13984 of 2025

(j) the promotion of energy conservation;

               (k)     improvement of the quality of life;




                                                               .

               (l)     enhance integration and connectivity of the transportation

system, across and between modes of transport; and

(m) such other matters as the Central Government may deem fit.

(4) The scheme framed under sub-section (3), shall specify the fees to be charged, form of application and grant of a licence including the renewal, suspension, cancellation or modification of such licence.] of

68. Transport Authorities.--(1) The State Government shall, by notification in the Official Gazette, constitute for the State a State Transport Authority to exercise and discharge the powers and functions specified in sub-section (3), and shall in like manner constitute Regional Transport Authorities to exercise and discharge throughout such areas rt (in this Chapter referred to as regions) as may be specified in the notification, in respect of each Regional Transport Authority; the powers and functions conferred by or under this Chapter on such Authorities:

Provided that in the Union territories, the Administrator may abstain from constituting any Regional Transport Authority. (2) A State Transport Authority or a Regional Transport Authority shall consist of a Chairman who has had judicial experience or experience as an appellate or a revisional authority or as an adjudicating authority competent to pass any order or take any decision under any law and in the case of a State Transport Authority, such other persons (whether officials or not), not being more than four and, in the case of a Regional Transport Authority, such other persons (whether officials or not), not being more than two, as the State Government may think fit to appoint;

but no person who has any financial interest whether as proprietor, employee or otherwise in any transport undertaking shall be appointed, or continue to be, a member of a State or Regional Transport Authority, and, if any person being a member of any such Authority acquires a financial interest in any transport undertaking, he shall within four weeks of so doing, give notice in writing to the State Government of the acquisition of such interest and shall vacate office:

Provided that nothing in this sub-section shall prevent any of the members of the State Transport Authority or a Regional Transport Authority, as the case may be, to preside over a meeting of such Authority during the absence of the Chairman, notwithstanding that such member does not possess judicial experience or experience as an appellate or a revisional authority or as an adjudicating authority competent to pass any order or take any decision under any law:
Provided further that the State Government may,--
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28 2026:HHC:6560 CWP No. 13984 of 2025
(i) where it considers necessary or expedient so to do, constitute the State Transport Authority or a Regional Transport Authority for any region so as to consist of only one member who shall be .

an official with judicial experience or experience as an appellate or a revisional authority or as an adjudicating authority competent to pass any order or take any decision under any law;

(ii) by rules made in this behalf, provide for the transaction of business of such authorities in the absence of the Chairman or any other member and specify the circumstances under which, and the manner in which, such business could be so transacted:

Provided also that nothing in this sub-section shall be construed as of debarring an official (other than an official connected directly with the management or operation of a transport undertaking) from being appointed or continuing as a member of any such authority merely by reason of the fact that the Government employing the official has, or acquires, any financial interest in a transport undertaking.
rt (3) The State Transport Authority and every Regional Transport Authority shall give effect to any directions issued under section 67 and the State Transport Authority shall, subject to such directions and save as otherwise provided by or under this Act, exercise and discharge throughout the State the following powers and functions, namely:--
(a) to co-ordinate and regulate the activities and policies of the Regional Transport Authorities, if any, of the State;
(b) to perform the duties of a Regional Transport Authority where there is no such Authority and, if it thinks fit or if so required by a Regional Transport Authority, to perform those duties in respect of any route common to two or more regions;
(c) to settle all disputes and decide all matters on which differences of opinion arise between Regional Transport Authorities; and [(ca) Government to formulate routes for plying stage carriages;]
(d) to discharge such other functions as may be prescribed. (4) For the purpose of exercising and discharging the powers and functions specified in sub-section (3), a State Transport Authority may, subject to such conditions as may be prescribed, issue directions to any Regional Transport Authority, and the Regional Transport Authority shall, in the discharge of its functions under this Act, give effect to and be guided by such directions. (5) The State Transport Authority and any Regional Transport Authority, if authorised in this behalf by rules made under section 96, may delegate such of its powers and functions to such authority or person subject to such restrictions, limitations and conditions as may be prescribed by the said rules."
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29 2026:HHC:6560 CWP No. 13984 of 2025

34. Following provisions of Road Transport Corporation Act, .

1950 are also relevant to be referred:-

2. Definitions.--In this Act, unless the context otherwise requires,--
(a) ......................

[(aa)"Board" means the Board of Directors of a Corporation;]

(b) "Corporation" means a Road Transport Corporation established under section 3;

of [(bb)"Director" means a member of the Board;]

(c) ...............................

rt

3. Establishment of Road Transport Corporations in the States.-- The State Government having regard to--

(a) the advantages offered to the public, trade and industry by the development of road transport;

(b) the desirability of co-ordinating any form of road transport with any other form of transport;

(c) the desirability of extending and improving the facilities for road transport in any area and of providing an efficient and economical system of road transport service therein, may, by notification in the Official Gazette, establish a Road Transport Corporation for 1 [the whole or any part of the Union territory of Delhi] under such name as may be specified in the notification.

4. Incorporation.--Every Corporation shall be a body corporate by the name notified under section 3 having perpetual succession and a common seal, and shall by the said name sue and be sued.

[5. Management of Corporation and Board of Directors.

--(1)The general superintendence, direction and management of the affairs and business of a Corporation shall vest in a Board of Directors which, with the assistance of its committees and Managing Director, may exercise all such powers and do all such acts and things as may be exercised or done by the Corporation.

(2) The Board shall consist of a Chairman and such other Directors, being not less than five and not more than ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 30 2026:HHC:6560 CWP No. 13984 of 2025 seventeen, as the State Government may think fit to appoint.

.

(3) The State Government may, if it so thinks fit appoint one of the other Directors as the Vice-Chairman of the Board.

(4) Rules made under this Act shall provide for the representation, both of the Central Government and of the State Government concerned, on the Board in such proportion as may be agreed to by both the Government and of appointment by each Government of its own representatives thereto and where the capital of a of Corporation is raised by the issue of shares to other parties under sub-section (3) of section 23, provision shall also be made for the representation of such shareholders on the Board and the manner in which the representatives shall be rt elected by such shareholders.

(5) The term of office of and the manner of filling casual vacancies among the Directors shall be such as may be prescribed.]

11. Meeting of [Board].-

(1) A [Board] shall meet at such times and places and shall, subject to the provisions of sub-sections (2) and (3), observe such rules of procedure in regard to transaction of business at its meeting as may be provided by regulations made under this Act:

Provided that [Board] shall meet at least once in every three months.
(2) The person to preside at a meeting of a [Board] shall be the Chairman thereof, or in his absence from any meeting, the Vice-Chairman, if any, or in the absence of both the Chairman and the Vice-Chairman, [such Director as may be chosen by the Directors present] from among themselves to preside.
(3) All questions at a meeting of a [Board] shall be decided by a majority of votes of the members present, and in the case of equality of votes, the Chairman or, in his absence, any other person presiding shall have a second or casting vote.

14. Officers and servants of the Corporation. -

[(1) Every Corporation shall have a Managing Director, a Chief Accounts Officer and a Financial Adviser, appointed by the State Government:

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31 2026:HHC:6560 CWP No. 13984 of 2025 Provided that the same person may be appointed as the Chief Accounts Officer and the Financial Adviser.] .

(2) A Corporation may appoint [a Secretary and such other officers and employees] as it considers necessary for the efficient performance of its functions.

[(3) The conditions of appointment and service and the scales of pay of the officers and employees of a Corporation shall -

(a) as respects the Managing Director, the Chief Accounts Officer and the Financial Adviser, or, as the case may of be, the Chief Accounts Officer-cum-Financial Adviser, be such, as may be prescribed, and

(b) as respects the other officers and employees, be such, as may, subject to the provisions of section 34, be rt determined by regulations made under this Act.] [15. Managing Director, Chief Accounts Officer and Financial Adviser.--

(1) The Managing Director shall be the executive head of the Corporation and all other officers and employees of the Corporation shall be subordinate to him.

(2) The Managing Director shall obtain the views of the Chief Accounts Officer and the Financial Adviser or, as the case may be, the Chief Accounts Officer-cum-Financial Adviser, on every proposal involving revenues, or expenditure from the fund, of the Corporation and shall cause such views to be placed before the Board prior to the consideration of such proposal by the Board.]

18. General duty of Corporation.--It shall be the general duty of a Corporation so to exercise its powers as progressively to provide or secure or promote the provision of, an efficient, adequate, economical and properly co-ordinated system of road transport services in the [Union territory of Delhi or part thereof] for which it is established and in any extended area:

Provided that nothing in this section shall be construed as imposing on a Corporation, either directly or indirectly, any form of duty or liability enforceable by proceedings before any Court or Tribunal to which it would not otherwise be subject.

19. Powers of Corporation.--

(1) Subject to the provisions of this Act, a Corporation shall have power

--

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32 2026:HHC:6560 CWP No. 13984 of 2025

(a) to operate road transport services in the 2 [Union territory of Delhi] and in any extended area;

.

(b) to provide for any ancillary service;

(c) to provide for its employees suitable conditions of service including fair wages, establishment of provident fund, living accommodation, places for rest and recreation and other amenities;

[(d) to authorise the issue of passes to its employees and other persons either free of cost or at concessional rates and on of such conditions as it may deem fit to impose;

(e) to authorise the grant of refund in respect of unused tickets and concessional passes.] (2) Subject to the provisions of this Act, the powers conferred by sub- rt section (1) shall include power--

(a) to manufacture, purchase, maintain and repair rolling stock, vehicles, appliances, plant, equipment or any other thing required for the purpose of any of the activities of the Corporation referred to in sub-section (1);

Explanation.--In this clause, the expression "manufacture" does not include the construction of the complete unit of a motor vehicle except for purposes of experiment or research;

(b) to acquire and hold such property, both movable and immovable, as the Corporation may deem necessary for the purpose of any of the said activities, and to lease, sell or otherwise transfer any property held by it;

(c) to prepare schemes for the acquisition of, and to acquire, either by agreement or compulsorily in accordance with the law of acquisition for the time being in force in the [Union territory of Delhi] and with such procedure as may be prescribed, whether absolutely or for any period, the whole or any part of any undertaking of any other person to the extent to which the activities thereof consist of the operation of road transport services in [that Union territory] or in any extended area;

(d) to purchase by agreement or to take on lease or under any form of tenancy any land and to erect thereon such buildings as may be necessary for the purpose of carrying on its undertaking;

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33 2026:HHC:6560 CWP No. 13984 of 2025

(e) to authorise the disposal of scrap vehicles, old tyres, used oils, [any other stores of scrap value, or such other stores as may be declared to be obsolete in the prescribed manner].

.

(f) to enter into and perform all such contracts as may be necessary for the performance of its duties and the exercise of its powers under the Act;

(g) to purchase vehicles of such type as may be suitable for use in the road transport services operated by the Corporation;

(h) to purchase or otherwise secure by agreement vehicles, of garages, sheds, office buildings, depots, land, workshops, equipment, tools, accessories to and spare parts for vehicles, or any other article owned or possessed by the owner of any other undertaking for use thereof by the rt Corporation for the purposes of its undertaking;

(i) to do anything for the purpose of advancing the skill of persons employed by the Corporation or the efficiency of the equipment of the Corporation or of the manner in which that equipment is operated, including the provision by the Corporation, and the assistance by the Corporation to others for the provision of facilities or training, education and research;

(j) to enter into and carry out agreements with any person carrying on business as a carrier of passengers or goods providing for the carriage of passengers or goods on behalf of the Corporation by that other person at a thorough fare or freight

(k) to provide facilities for the consignment, storage and delivery of goods;

(l) to enter into contracts for exhibition of posters and advertising boards on and in the vehicles and premises of the Corporation and also for advertisement on tickets and other forms issued by the Corporation to the public;

(m) with the prior approval of the State Government to do all other things to facilitate the proper carrying on of the business of the Corporation.

[(n) to determine with the previous approval of the State Government, and in case of a road transport service operated in any extended area, also with the previous approval of the Government of the State within which such extended area is situated, fares and freights for the carriage ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 34 2026:HHC:6560 CWP No. 13984 of 2025 of passengers and goods in any road transport service provided by the Corporation.] .

(3) Nothing in this section shall be construed as authorising a Corporation, except with the previous approval of the State Government--

(i) to manufacture or maintain anything which is not required directly or indirectly for use for the purpose of the undertaking of the Corporation or to repair, store, or provide any service for, any vehicle which does not belong to the Corporation or is not used directly or indirectly for the of purpose of its undertaking;

(ii) to purchase any vehicle for the purpose of sale to another person;

(iii) rt to sell or supply to any person lubricants, spare parts, or equipment for or accessories to, vehicles;

(iv) to let vehicles on hire for the carriage of passengers or goods except as expressly provided by or under this Act.

(4) Except as otherwise provided by this Act nothing in the foregoing provisions shall be construed as authorising the Corporation to disregard any law for the time being in force (5) Where a Corporation acquires the whole or any part of an undertaking of any other person, the Corporation shall, in appointing its [officers and other employees] take into consideration the claims of employees employed in that undertaking.

(6) The provisions of this section shall not be construed as limiting any power of a Corporation conferred by or under any subsequent provision of this Act.

22. General principle of Corporation's finance.--It shall be the general principle of a Corporation that in carrying on its undertaking it shall act on business principles.

30. Disposal of net profits.- After making provision for payment of interest and dividend under section 28 and for depreciation, reserve and other funds under section 29, a Corporation many utilise such percentage of its net annual profits as may be specified in this behalf by the State Government for the provision of amenities to the passengers using the road transport services, welfare of labour employed by the Corporation and for such other purposes as may be prescribed with the previous approval of the Central Government [and out of the balance such amount as may, with the previous approval of the State Government ***, be specified in this behalf by the Corporation, may be ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 35 2026:HHC:6560 CWP No. 13984 of 2025 utilised for financing the expansion programmes of the Corporation and the remainder, if any, shall be made over to the State Government for the purpose of road development] .

31. Power of the Corporation to spend.- A Corporation shall have power to spend such sums as it thinks fit on objects authorised under this Act and such sums shall be treated as expenditure payable out of the fund of the Corporation.

43. [Directors], [Officers and other employees] of a Corporation to be public servants.--All [Directors] of a Corporation, and all [officers and other employees] of a Corporation, whether appointed by of the State Government or the Corporation, shall be deemed, when acting or purporting to act in pursuance of any of the provisions of this Act or of any other law, to be public servants within the meaning of section 21 of the Indian Penal Code (45 of 1860)002E." rt

45. Power to make regulations.-

(1) A Corporation may with the previous sanction of [the State Government and by notification in the Official Gazette], make regulations, not inconsistent with this Act and the rules made thereunder for the administration of the affairs of the Corporation.

(2) In particular and without prejudice to the generality of the foregoing power, such regulations may provide for all or any of the following matters, namely:-

(a) .......................
(b) .......................
(c) the conditions of appointment and service and the scales of pay of officers and [other employees of the Corporation other than the Managing Director, the Chief Accounts Officer and the Financial Adviser or , as the case may be, the Chief Accounts-cum-Financial Adviser.] d .......................

35. Constitution of Board of Directors of HRTC, which is not in dispute, depicts that Chairman of the HRTC is the Transport Minister, whereas out of 14 Board of Directors, six members/directors, i.e., Principal Secretary (Transport), Principal Secretary to Hon'ble Chief ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 36 2026:HHC:6560 CWP No. 13984 of 2025 Minister, Principal Secretary (Finance), Managing Director (HRTC) and .

Director Transport, are officials of the Government of H.P. Therefore, out of 14 members of Board of Directors, one is Transport Minister, 6 are Government officials, 1 is nominee of Ministry of Road Transport and Highways, Union of India and 7 members are nominees of the State of Government, including 1 Vice-Chairman and in case plea of learned Advocate General is accepted, then only 8 members, including Chairman, rt Vice-Chairman and 6 members nominees of the State, are the only Directors who are directly connected with management and operation of the transport undertaking, but all of them keep on changing, atleast on formation of new Government after every five years, and some times, even before five years tenure of the elected Government, because they are appointed as nominated, at the pleasure of State Government. In such a situation, system of Corporation/transport undertaking would definitely crumble. There is no provision anywhere including in the Road Transport Corporations Act, 1950, providing members of Board of Directors of the transport undertaking, as dormant or sleeping Directors.

All Directors of Board of Directors of HRTC, are equally competent and responsible for day to day affairs of the Corporation to be managed and controlled through the employees of the Corporation controlled by Managing Director, as an Executive Head of the Corporation. Therefore, ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 37 2026:HHC:6560 CWP No. 13984 of 2025 all Board of Directors, including Principal Secretary/Additional Chief .

Secretary (Transport) and Director, Transport, have equal status like other members/Directors of Board of Director of HRTC and thus have a direct connection with the management and operation of the transport undertaking, which is also evident from the provisions of Road Transport of Corporations Act, 1950, some of which have been referred supra.

36. Section 67 of the MV Act empowers the State Government to rt control the Road Transport, having regard to certain issues, including promotion of effective competition among the transport service providers and Section 68 of MV Act empowers the State to constitute State Transport Authority and Regional Transport Authorities to exercise and discharge powers and functions conferred by or under the provisions of Chapter-V, dealing with Control of Transport Vehicles, which also include coordination and regulation of activities and policies of RTAs of the State to settle all disputes and decide all matters, on which difference of opinion arise between Regional Transport Authorities and to grant, refusal, cancellation and suspension of permits for plying the vehicles by transport operators/undertakings. For ensuring constitution of independent and impartial State Transport Authority and Regional Transport Authorities, disqualification has been provided in Section 68(2) of MV Act, debarring any person from appointing or continuing to be a member of State or ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 38 2026:HHC:6560 CWP No. 13984 of 2025 Regional Transport Authorities, who has any financial interest, whether as .

proprietor, employee or otherwise in any transport undertaking.

37. Section 2(b) of RTC Act provides that 'Corporation' means a Road Transport Corporation, established under Section 3 and as per Section 2(aa), 'Board' means Board of Directors of Corporation and 2(bb) of provides 'Director' means member of the Board.

38. Section 3 empowers the State to establish Road Transport Corporations by issuing appropriate notification. As per Section 4, every rt Corporation shall be a body corporate, having perpetual succession and a common seal with name notified under Section 3 and shall, by the said name, sue and be sued. Section 5 provides Management of Corporation that general superintendence, direction and management of affairs and business of Corporation shall vest in the Board of Directors, which may exercise all such powers and do all such acts and things, as may be exercised or done by the Corporation, but with assistance of its Committee and Managing Director. The Board shall consist of Chairman and such other Directors, as provided under Section 5 of the Act.

39. From these provisions, it is apparently clear that HRTC, is a Body Corporate, having perpetual succession and common seal, being managed and governed by Board of Directors with assistance of Managing Director, and the acts and things to be exercised or done by ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 39 2026:HHC:6560 CWP No. 13984 of 2025 the Corporation, are to be done by the Board of Directors and all .

Directors are members of the Board, having equal say and responsibility in the Board.

40. Section 11 clearly depicts that Meeting of Board has to be presided by the Chairman and in his absence, by the Vice-Chairman and of in absence of both, any Director to be chosen by the Directors present from among themselves to preside and all questions in the meeting of the Board shall be decided by the majority of votes of members present. It rt indicates that in given circumstances, any member/Director of the Board can preside over Meeting of the Board and all the members have equal right to vote. There is no provision indicating that Principal Secretary/Additional Chief Secretary (Transport) or Director Transport, are not entitled to preside over the Meeting of the Board, in case such situation arose, or they have no right to vote in the Meeting of the Board, or they are having right to vote only matter related to policy of the Government and not in other matters. It is nowhere provided that these two Directors as a Director of the Board, shall have only supervisory, advisory and policy oriented role.

41. Section 14 provides that Managing Director along with others shall be officer and servant of the Corporation and pay of the Managing Director, Chief Accounts Officer and Financial Officer shall be, as may be ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 40 2026:HHC:6560 CWP No. 13984 of 2025 prescribed, whereas pay of the other officers/employees, may be subject .

to provisions of Section 34, be determined by regulations made under this Act. Therefore, determination of pay is controlled by the Board. As per Section 15, Managing Director shall act as an Executive Head of Corporation and all other officers/employees shall be subordinate to him of and he shall obtain the views of Chief Accounts Officer, Financial Adviser on every proposal, involving revenue and expenditure from the fund of the Corporation and shall cause such view to be placed before Board, prior to rt consideration of such proposal by the Board.

42. From the above provisions, it is apparent that though Managing Director, HRTC, is also one of the Directors of the Board, however, he is not above the Board. He has to assist the Board and he has only one vote as a Director of the Board, but he is not the person, who is controlling, managing or operating the Corporation. He is one amongst other Board of Directors and as a Managing Director, he is a subordinate to the Board of Directors. Therefore, plea of the learned Advocate General that it is the Managing Director, who runs the Corporation, is also misconceived.

43. Section 19 defines the Powers of the Corporation and all these powers are to be exercised by the Corporation through Board and constitution of Board includes Directors of the Board and, therefore, ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 41 2026:HHC:6560 CWP No. 13984 of 2025 powers of the Corporation are to be exercised by the Directors by taking a .

decision, as provided under the Act, by following the prescribed procedure, wherein respondents No. 2 and 3 have equal say. The power of Corporation includes manufacture, purchase, maintain and repair rolling stock, vehicles, appliances, plant, equipment or any other thing of required for the purpose of any of the activities of the Corporation, referred in the Act. Therefore, this power includes the power to decide the fleet of the vehicles, the routes, where these vehicles are to be plied by rt applying for such road permit to the STA and RTAs.

44. Section 30 provides disposal of net profit by the Corporation, after making provision for payment of interest and dividend under Section 28 and for depreciation, reserve and other funds under Section 29 and this decision of the Corporation again is to be taken by the Board, because Corporation has to act through the Board and this net profit can also be utilized by the Corporation for financing the expansion programmes of Corporation, which includes increase in the fleet of vehicles, routes, whereupon the vehicles of the Corporation are to be plied.

45. Section 31 provides power to the Corporation to spend such sums, as it thinks fit on object authorized under this Act. Budget is also prepared by the Corporation, as provided under Section 32.

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42 2026:HHC:6560 CWP No. 13984 of 2025

46. Section 33 provides that Corporation shall maintain proper .

accounts and other records and prepare an annual statement of account, including the profits and loss account.

47. Section 35 casts duty upon Corporation to furnish the returns, statistics and accounts.

of

48. Section 45 empowers the Corporation to make regulations, including the condition of appointment and service and scale of pay of officers, other employees of the Corporation, other than the Managing rt Director and Chief Accounts Officer and Financial Adviser.

49. The aforesaid powers and duties are to be exercised and performed by the Corporation through Board, in which respondents No. 2 and 3 are members. Therefore, respondents No. 2 and 3 are directly connected with management and operation of transport undertaking, which includes the financial interest of the undertaking. Therefore, plea of learned Advocate General with respect to role and status of respondents No. 2 and 3 in Board of Director of HRTC, is misconceived and untenable.

50. In the ratio of law laid down in Mor Modern's case and Utility Users Welfare Association's case, it is apparent that it is not only the personal financial interest, but in wider sense, direct or indirect financial interest, which may not be personal financial interest, shall also be cause ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 43 2026:HHC:6560 CWP No. 13984 of 2025 of debar in appointment of any person as a member of State or Regional .

Transport Authorities, as provided under Section 68(2) of MV Act.

51. Plea of the respondents that Section 68(2) of MV Act is in two parts, wherein first part provides qualification and eligibility for appointment of Chairman and second part provides disqualification for a of member of STA or RTAs and, therefore, for fulfilling the eligibility conditions for appointment of Chairman of respondents No. 2 and 3 of STA and RTAs, disqualification shall not be applicable to the appointment rt of Chairman, is also misconceived. The plain reading of Sub-Section 68(1) and 68(2), unambiguously depicts that STA and RTAs shall consist of a Chairman and such other persons, whether official or not, not being more than four in case of State Transport Authority and not being more than two in case of Regional Transport Authority, whether official or not.

Therefore, Chairman is also member of the STA and/or RTAs and thus, disqualification prescribed for a member is equally applicable to the appointment of Chairman also. In case plea of learned Advocate General, raised on behalf of respondents, is accepted, then independent and impartial character of STA and RTAs, shall be demolished. It is also beyond imagination that a member of the STA and RTAs, other than the Chairman, shall not be a person, who has any financial interest, whether as a proprietor, employee or otherwise, in any under transport ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 44 2026:HHC:6560 CWP No. 13984 of 2025 undertaking, but the Chairman, who is heading the State Transport .

Authority or Regional Transport Authority, can be appointed, despite having financial interest in a transport undertaking. Therefore, this plea is liable to be rejected.

52. It is also apt to record that bar under Section 68(2) of the MV of Act, does not speak about direct financial interest or personal interest only, rather it includes every type of financial interest, whether as a proprietor or an employee or otherwise. The word 'otherwise' includes rt any direct or indirect financial interest. The persons having role in management or operation of transport undertaking with all powers to regulate such transport undertaking are definitely covered, as a person having financial interest otherwise, in any transport undertaking.

Therefore, respondents No. 2 and 3 being members of the Board of HRTC, as a Director, are debarred from appointing as a Chairman/member of STA and RTAs.

53. A careful reading of Section 68(2) of MV Act also depicts that STA/RTAs shall consist of a Chairman and such other persons, as the State Government may think fit to appoint. With first proviso, that in absence of Chairman, such other person is authorized to preside over the meeting of such authority during the absence of Chairman, notwithstanding that such member does not possess judicial experience ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 45 2026:HHC:6560 CWP No. 13984 of 2025 or experience as an Appellate or Revisional Authority or as an .

adjudicating authority, competent to pass any order or take any other decision under any law.

54. In this Sub-Section, constitution of STA and RTAs has not been provided like that it shall consists of Chairman and members, but it of provides that it shall consist Chairman and such other persons, as the Government may think fit to appoint. Meaning thereby, Chairman as well as such other persons, so appointed by the Government, are members of rt the STA or RTAs. This view is also further fortified from the second proviso to Sub Section 2, wherein it has been provided that State Government may constitute an STA or RTAs, for any reason, so as to consist of only one member who shall be an official with judicial experience and experience as an Appellate, or a revisional authority, or as an adjudicating authority, competent to pass any order to take any decision under any law. These qualifications are the same, as provided under Section 68(2) of MV Act for appointment of a Chairman. Therefore, intention of the legislature is explicit in complete reading of Section 68 of MV Act, including the provisos to Sub-Section 2, which clearly establishes that Chairman is also a member of STA or RTAs and there can be STA/RTAs, consisting of only one member, i.e,. Chairman. In our view any interpretation otherwise than this, shall create ambiguity, as for ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 46 2026:HHC:6560 CWP No. 13984 of 2025 constitution of one member STA/RTAs, the qualification shall be that of .

the Chairman, as provided under Section 68(2) of MV Act, whereas for member to be appointed in addition to Chairman, there shall be bar to be appointed, as provided in Section 68(2) of MV Act, for the member but not for the Chairman and it shall amount to introduce two different parameters of for two members, i.e., Chairman and other members to be appointed in terms of Section 68(2) of MV Act.

55. In case plea of the respondent-State is accepted, then rt instead of constituting a STA or RTAs, in terms of Section 68(2) of MV Act, the respondent-State may opt for appointment of a single member STA/RTAs of the State, as provided in second proviso to this Sub-

Section, wherein there is no provision for debarring the Chairman of the STA/RTAs, on account of having financial interest in any transport undertaking, because single member STA/RTAs cannot be instituted without Chairman, as the opening lines of the Section 68(2) of MV Act provides that STA/RTAs shall consist of Chairman and such other persons, to be appointed by the Government. Therefore, first pre-

condition for existence of STA/RTAs, is the existence/appointment of Chairman. Thus, in single member STA/RTAs, there shall be Chairman only and for that reason only, qualifications required for appointment of Chairman, have been reiterated in second proviso, empowering the State ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 47 2026:HHC:6560 CWP No. 13984 of 2025 to constitute the single member STA/RTAs. If plea of learned Advocate .

General is accepted then single member STA/RTA shall be having that member being Chairman who may be having financial interest in a transport undertaking, which shall be in conflict with intention of Legislature.

of

56. Third Proviso to this Sub-Section provides that an official, other than the official connected directly with the management or operation of a transport undertaking, can be appointed or continued as a rt member of STA or RTAs, irrespective of the fact that Government employing the official has or acquires any financial interest in a transport undertaking, which means that all officials of the Government, except those who are directly connected with the management and operation of transport undertaking, can be appointed as a member of STA or RTAs, despite the Government, who is employer of the official, has or acquires any financial interest in a transport undertaking, which means that only those officials of the Government are debarred from being appointed or continuing as a member of STA or RTAs who are directly connected with management and operation of transport undertaking, but because the Government has or acquires any financial interest in a transport undertaking, shall not debar the officials other than the officials connected directly with the management and operation of the transport undertaking, ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 48 2026:HHC:6560 CWP No. 13984 of 2025 to be appointed as a member/Chairman of the STA or RTAs. This proviso .

at any stretch of imagination, does not allow the appointment or continuation of an official as a Chairman or member of STA or RTAs, who is connected directly with management or operation of transport undertaking. However, any other Government official, irrespective of of having or acquiring any financial interest in a transport undertaking by the Government, can be appointed as a Chairman/member of STA or RTAs.

Therefore, plea of the learned Advocate General, that in view of third rt proviso of Sub Section 2 of Section 68 of MV Act, protects the appointment of respondents No. 2 and 3 claiming that they are not connected with management or operation of transport undertaking, is misconceived.

57. Plea of the learned Advocate General to distinguish judgment passed in Mor Modern Transport Company's case, is also misconceived, because Section 68(2) of MV Act does not speak about the Corporation, but it speaks about any transport undertaking and transport undertaking can be a Corporation or a department of the Government, involved in transport services. The transport undertaking may be private or Government and, therefore, whether transport activities are being undertaken by the Government through department or through a Corporation, are covered under the words any transport undertaking, as it ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 49 2026:HHC:6560 CWP No. 13984 of 2025 does not include only Corporation, but also Government Department, .

involved in the management and operation of a transport and also the private transport, because the words used in Section 68(2) of MV Act are 'in any transport undertaking'.

58. In our considered opinion, present case is also squarely of covered by Mor Modern Transport Company's case, reported in (2002) 6 SCC 511.

59. In view of above discussion, we are of the opinion that rt respondents No. 2 and 3 are debarred from appointment or continuing as a Chairman of STA/RTAs and, therefore, their appointments are liable to be quashed.

60. In case of quashing of the appointment of respondents No. 2 and 3 as Chairman of STA/RTAs, the question would arise what will be the fate of the actions, orders, already taken or passed by the STA/RTAs under their Chairmanship. In this regard, we are of the opinion that to avoid any chaos or anarchy, it would be appropriate to invoke de facto doctrine, dealing with such situations, as also laid down by the Apex Court in following judgments:-

In case tilted Gokaraju Rangaraju vs. State of Andhra Pradesh, reported in (1981) 3 Supreme Court Cases 132, it has been held as under by Apex Court:-
17. A judge, de facto, therefore, is one who is not a mere intruder or usurper but one who holds office, under colour of lawful authority, though his appointment is defective and may later be found to be ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 50 2026:HHC:6560 CWP No. 13984 of 2025 defective. Whatever be the defect of his title to the office, judgments pronounced by him and acts done by him when he was clothed with the powers and functions of the office, albeit .

unlawfully, have the same efficacy as judgments pronounced and acts done by a Judge de jure. Such is the de facto doctrine, born of necessity and public policy to prevent needless confusion and endless mischief. There is yet another rule also based on public policy. The defective appointment of a de facto judge may be questioned directly in a proceeding to which he be a party but it cannot be permitted to be questioned in a litigation between two private litigants, a litigation which is of no concern or consequence to the judge except as a judge. Two litigants litigating their private of titles cannot be permitted to bring in issue and litigate upon the title of a judge to his office. Otherwise so soon as a judge pronounces a judgment a litigation may be commenced for a declaration that the judgment is void because the judge is no judge. A judge's title to his office cannot be brought into jeopardy rt in that fashion. Hence the rule against collateral attack on validity of judicial appointments. To question a judge's appointment in an appeal against the judgment is, of course, such a collateral attack.

18. We do not agree with the submission of the learned counsel that the de facto doctrine is subject to the limitation that the defect in the title of the judge to the office should not be one traceable to the violation of a constitutional provision. The contravention of a constitutional provision may invalidate an appointment but we are not concerned with that. We are concerned with the effect of the invalidation upon the acts done by the judge whose appointment has been invalidated. The de facto doctrine saves such Acts. The de facto doctrine is not a stranger to the Constitution or to the Parliament and the Legislatures of the States. Art. 71(2) of the Constitution provides that acts done by the President or Vice President of India in the exercise and performance of the powers and duties of his office shall not be invalidated by reason of the election of a person as President or Vice President being declared void. So also Sec. 107(2) of the Representation of the People Act 1951 (Act 43 of 1951) provides that acts and proceedings in which a person has participated as a Member of Parliament or a Member of the Legislature of a State shall not be invalidated by reason of the election of such person being declared to be void. There are innumerable other Parliamentary and State Legislative enactments which are replete with such provisions. The Twentieth Amendment of the Constitution is an instance where the de facto doctrine was applied by the Constituent body to remove any suspicion or taint of illegality, or invalidity that may be argued to have attached itself to judgment, decrees sentences or orders passed or made by certain District Judges appointed before 1966, otherwise than in accordance with the provision of Art. 233 and Art 235 of the Constitution. The Twentieth Amendment was the ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 51 2026:HHC:6560 CWP No. 13984 of 2025 consequence of the decision of the Supreme Court in Chandra Mohan v. State of Uttar Pradesh and Ors., (1967) 1 SCR 77 : AIR 1966 SC 1987 : that appointments of District Judges made .

otherwise than in accordance with the provisions of Arts. 233 and 235 were invalid. As such appointments had been made in many States, in order to preempt mushroom litigation springing up all over the country, it was apparently thought desirable that the precise position should be stated by the Constituent body by amending the Constitution. Shri Phadke, learned counsel for the appellants, argued that the constituent body could not be imputed with the intention of making superfluous amendments to the Constitution. Shri Phadke invited us to say that it was a necessary of inference from the Twentieth Amendment of the Constitution that, but for the amendment, the judgments, decrees etc. of the District Judges appointed otherwise than in accordance with the provisions of Art. 233 would be void. We do not think that the inference suggested by Shri Phadke is a necessary inference. It is rt true that as a general rule the Parliament may be presumed not to make superfluous legislation. The presumption is not a strong presumption and statutes are full of provisions introduced because abundans cautela non nocet (there is no harm in being cautious). When judicial pronouncements have already declared the law on the subject, the statutory reiteration of the law with reference to the particular cases does not lead to the necessary inference that the law declared by the judicial pronouncements was not thought to apply to the particular cases but may also lead to the inference that the statute-making body was mindful of the real state of the law but was acting under the influence of excessive caution and so to silence the voices of doubting Thomases by declaring the law declared by judicial pronouncements to be applicable also to the particular cases. In Chandra Mohan' case (Supra) this Court held that appointments of District Judges made otherwise than in accordance with Art. 233 of the Constitution were invalid. Such appointments had been made in Uttar Pradesh and a few other States. Doubts had been cast upon the validity of the judgments, decrees etc. pronounced by those District Judges and large litigation had cropped up. It was to clear those doubts and not to alter the law that the Twentieth Amendment of the Constitution was made. This is clear from the statement of objects and reasons appended to the Bill which was passed as Constitution (20th Amendment) Act. 1966. The statement said:

"Appointments of District Judges in Uttar Pradesh and a few other States have been rendered invalid and illegal by a recent judgment of the Supreme Court on the ground that such appointments were not made in accordance with the provisions of Art. 233 of the Constitution.... As a result of these judgments, a serious situation has arisen because doubt has been thrown on the validity of the judgments, decrees, orders and sentences ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 52 2026:HHC:6560 CWP No. 13984 of 2025 passed or made by these District Judges and a number of Writ Petitions and other cases have already been filed challenging their validity. The functioning of the District Courts in Uttar .
Pradesh has practically come to a stand-still. It is, therefore, urgently necessary to validate the judgments, decrees, orders and sentences passed or made heretofore by all such District Judges in those States......"

19. In our view, the de facto doctrine furnishes an answer to the submissions of Shri Phadke based on Sec. 9 Criminal Procedure Code and Art. 21 of the Constitution. The judges who rejected the appeal in one case and convicted the accused in the other case were not mere usurpers or intruders but were persons who of discharged the functions and duties of judges under colour of lawful authority. We are concerned with the office that the judges purported to hold. We are not concerned with the particular incumbents of the office. So long as the office was validly created, it matters not that the incumbent was not validly appointed. A rt person appointed as a Sessions Judge, Additional Sessions Judge or Assistant Sessions Judge, would be exercising jurisdiction in the Court of Session, and his judgments and orders would be those of the Court of Session. They would continue to be valid as the judgments and orders, of the Court of Session, notwithstanding that his appointment to such Court might be declared invalid. On that account alone, it can never be said that the procedure prescribed by law has not been followed. It would be a different matter if the constitution of the Court itself is under challenge. We are not concerned with such situation in the instant cases. We, therefore, find no force in any of the submissions of the learned counsel.

(In case titled Pushpadevi vs. Jatia vs. M.L. Wadhawan, Additional Secretary, Government of India and others, reported in 1987) 3 Supreme Court Cases 367, it has been held by Apex Court as under:-

18. In any event, the learned counsel further contends that R.C. Singh was clothed with the insignia of office and he was purporting to exercise the functions and duties of a gazetted officer of Enforcement under s. 40(1) of the FERA and therefore the de facto doctrine was attracted. He relies upon the decision of this Court in Gokaraju Rangaraju v. State of Andhra Pradesh, [1981] 3 SCR 474 enunciating the de facto doctrine, born of necessity and public policy to prevent needless confusion and endless mischief.

In other words, he contends that where an officer acts under the law, it matters not how the appointment of the incumbent is made so far as the validity of his acts are concerned.

19. We are inclined to the view that in this jurisdiction there is a presumption of regularity in the acts of offi- cials and that the evidential burden is upon him who asserts to the contrary. The ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 53 2026:HHC:6560 CWP No. 13984 of 2025 contention that R.C. Singh was not a gazetted officer of Enforcement within the meaning of s. 40(1) of the FERA appears to be wholly misconceived besides being an afterthought. The .

validity of appointment of R.C. Singh to be an officer of Enforcement under this Act cannot be questioned. The Directorate of Enforcement have along with the counter-affidavit placed on record Establishment Order No. 87/82 dated November 24, 1982 which shows that R.C. Singh along with 25 others was appointed by the Direc- tor to be an officer of Enforcement on an ad-hoc basis against 30 per cent deputation quota. The subsequent Estab- lishment Order No. 84/86 dated January 13, 1986 relied upon by the petitioner shows that R.C. Singh along with 29 others of was appointed as an officer of Enforcement on an officiating basis. It is not suggested that these officers were not authorised by the Central Government to discharge the func- tions and duties of an officer of Enforcement. Under the scheme of the Foreign Exchange Regulation Act, the Director- ate of Enforcement is rt primarily charged with the duty of administering the Act. S. 3 defines different classes of officers of Enforcement. The expression 'officers of En- forcement' as defined in s. 3 embraces within itself not only (a) a Director (b) Additional Director (c) Deputy Director and (d) Assistant Director of Enforcement but also

(e) such other class of officers of Enforcement as may be appointed for the purpose of the Act. Obviously, R.C. Singh who was Assistant Enforcement Officer having been appointed as an officer of Enforcement on an ad-hoc basis in 1982 fell within the category 'such other class of officers' covered by s. 3(e). Sub-S. (1) of s. 4 provides that the Central Government may appoint such persons, as it thinks fit, to be officers of Enforcement. Sub-s. (2) thereof provides for delegation of such power of appointment by the Central Government to a Director of Enforcement or an Addi- tional Director of Enforcement etc. to appoint officers of Enforcement below the rank of an Assistant Director of Enforcement. Sub-s. (3) of s. 4 of the FERA provides that subject to such conditions and limitations as the Central Government may impose, an officer of Enforcement may exer- cise the powers and discharge the duties conferred or im- posed on him under the Act. Undoubtedly R.C. Singh was discharging his duties and functions as a gazetted officer of Enforcement under s. 40(1) of the FERA when he recorded the statements in question. In our opinion, the expression 'gazetted officer of Enforcement' appearing in s. 40(1) must take its colour from the context in which it appears-and it means any person appointed to be an officer of Enforcement under s. 4 holding a gazetted post. There is no denying the fact that R.C. Singh answered that description. The conten- tion that there was no material on the basis of which the detaining authority could have based his subjective satis- faction on the ground that R.C. Singh was not a gazetted officer of Enforcement within the meaning of s. 40(1) of the FERA cannot prevail.

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20. Even if the contention that R.C. Singh was not a gazet- ted officer of Enforcement within the meaning of s. 40(1) of the FERA were to prevail, it would be of little consequence. In this case during the .

investigation statements were re- corded by B .T. Gurnsawhney, Assistant Director of Enforce- ment and R.C. Singh. There is no dispute regarding the competence of B.T. Gurusawhney to record statements under s. 40(1) of the FERA and the only question is as to whether the statements recorded by R.C. Singh under s. 40(1) could be acted upon. If evidence is relevant the Court is not concerned with the method by which it was obtained. In Barindra Kumar Ghose & Ors. v. Emperor, ILR (1910) 37 Cal. 467 Sir Lawrence Jenkins repelling the contention that the Court must of exclude relevant evidence on the ground that it was obtained by illegal search or seizure, said at p. 500 of the Report:

"Mr. Das has attacked the searches and has urged that, even if there was jurisdiction to direct the issue of search warrants, as I hold there was, still the provisions of the Criminal Procedure rt Code have been completely disre- garded. On the assumption he has contended that the evidence discovered by the searches is not admissible, but to this view I cannot accede. For without in any way countenancing disregard of the provisions prescribed by the Code, I hold that what would otherwise be relevant does not become irrel- evant because it was discovered in the course of a search in which those provisions were disregarded".

The question arose before the Judicial Commit- tee of the Privy Council in the well-known case of Kuruma v. Reginam, [1955] 1 All ER 236. In dealing with the question Lord Goddard, CJ. delivering the judgment of the Privy Council said:

"The test to be applied. both in civil and in criminal cases, in considering whether evi- dence is admissible, is whether it is relevant to the matters in issue. If it is, it is admissible and the Court is not concerned with how it was obtained."

The learned Chief Justice further observed:

"In their Lordships' opinion, when it is a question of the admission of evidence strictly it is not whether the method by which it was obtained is tortuous but excusable, but whether what has been obtained is relevant to the issue being tried."

Again, the House of Lords in R.V. Sang, [1979] 2 All ER 1222 reiterated the same principle that if evidence was admissi- ble it matters not, how it was obtained. Lord Diplock after considering various decisions on the point observed that however much the judge may dislike the way in which a par- ticular piece of evidence was obtained before proceedings were commenced, if it is admissible evidence probative of the accused's guilt 'it is no part of his judicial function to exclude it for this reason' and added:

::: Downloaded on - 11/03/2026 20:33:46 :::CIS
55 2026:HHC:6560 CWP No. 13984 of 2025 "He has no discretion to refuse to admit relevant admissible evidence on the ground that it was obtained by improper or unfair means. The court is not concerned with how it was obtained.

.

There is a long line of authority to support the opinion that the Court is not concerned with how evidence is ob- tained. The rule is however subject to an exception. The Judge has a discretion to exclude evidence procured. after the commencement of the alleged offence, which although technically admissible appears to the Judge to be unfair. The classical example of such a case is where the prejudi- cial effect of such evidence would be out of proportion to its evidential value. Coming nearer home. this Court in Magraj Patodia v.R.K. Birla & Ors., [1971] 2 SCR 118 held that of the fact that a document which was procured by improper or even illegal means could not bar its admissibility provided its relevance and genuineness were proved. In R.M. Malkani v. State of Maharashtra, [1973] 2 SCR 417 the Court applying this principle allowed the tape-recorded conversa- tion to be used as evidence rt in proof of a criminal charge. In Pooran Mal etc. v. Director of Inspection (Investigation) of Income-Tax Mayur Bhavan, New Delhi & Ors., [1974] 2 SCR 704 the Court held that the income-tax authorities can use as evidence any information gathered from the search and seizure of documents and accounts and articles seized. This being the substantive law, it follows that the detaining authority was entitled to rely upon the statements recorded by R.C. Singh under s. 40(1) of the FERA. Even if R.C. Singh was not competent to record such statements under s. 40(1) of the FERA, the statements were clearly relatable to s. 39(b) of the Act. It cannot therefore be said that there was no material on which the detaining authority could have based his subjective satisfaction under sub-s. (1) of s. 3 of the Act.

21. We are unable to accept the submission of the learned counsel for another reason. Where an office exists under the law, it matters not how the appointment of the incumbent is made, so far as validity of its acts are concerned. It is enough that he is clothed with the insignia of the office, and exercises its powers and functions. The official acts of such persons are recognised as valid under the de facto doctrine, born of necessity and public policy to prevent needless confusion and endless mischief. In Gokaraju Ranga- raju's case, supra, Chinnappa Reddy, J. explained that this doctrine was engrafted as a matter of policy and necessity to protect the interest of the public. He quoted the follow- ing passage from the judgment of Sir Ashutosh Mukerjee J. in Pulin Behari v. King Emperor, [1912] 15 Cal. LJ 5 17 at p. 574:

"The substance of the matter is that the de facto doctrine was introduced into the law as a matter of policy and necessity, to protect the interest of the public and the individual where these interests were involved in the official acts of persons exercising the duties of an office without being lawful officers. The doctrine in ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 56 2026:HHC:6560 CWP No. 13984 of 2025 fact is necessary to maintain the supremacy of the law and to preserve peace and order in the community at large."

.

The learned Judge also relied upon the following passage from the judgment of P. Govindan Nair, J. in P.S. Menon v. State of Kerala & Ors., AIR (1970) Kerala 165 at p. 170;

"This doctrine was engrafted as a matter of policy and necessity to protect the interest of the public and individual involved in the official acts of persons exercising the duty of an officer without actually being one in strict point of law. But although these officers are not officers de jure they are by virtue of the particular circumstances, officers, infact, whose acts, public policy requires of should be considered valid."

In case titled Central Bank of India vs. C. Bernard, reported in (1991) 1 Supreme Court Cases 319, it has been observed by Apex Court as under:-

5.

rt Taking the last submission first we think that in the facts and circumstances of this case the de facto doctrine can have no application. Under paragraph 19.14 of the by- parties agreement the Chief Executive Officer was entitled to decide which officer should be empowered to hold an enquiry and take disciplinary action in the case of each office or establishment. Under this paragraph only an offi- cer of the bank could be empowered to hold an enquiry and take disciplinary action against a delinquent.

The names of officers so empowered were required to be published on the bank's notice board. Accordingly, Shri U.B. Menon was ap- pointed an Enquiry Officer/Disciplinary Authority under paragraph 19.14 of the bi-partite agreement while he was still in service. It is indeed surprising that an officer who was due to retire within a few days only was chosen to act as an Enquiry Officer and Disciplinary Authority by the order dated January 9, 1979. Shri U.B. Menon was intimated about his appointment by the letter of January 23, r979, i.e., hardly a week before his superannuation on January 31, 1979. After his retirement from service he proceeded with the enquiry and concluded it by the end of 1979. The respondent was then served with a second show cause notice on the question of punishment and thereafter the impugned order of discharge was passed on January 14, 1980. There is nothing on the record to show that any formal decision was taken by the appellant to continue the services of Shri U.B. Menon as an official of the bank. Shri Shetty is right when he contends that an Enquiry Officer need not be an officer of the bank; even a third party can be appointed as Enquiry Officer to enquire into the conduct of an employee. See: Saran Motors (P) Ltd. v. Vishwanath & Anr., [1964] 2 LLJ 139. But there can be no doubt that a non-official cannot act as a Disci- plinary Authority and pass an order of punishment against the delinquent- employee. It is for this reason that the learned Single Judge of the ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 57 2026:HHC:6560 CWP No. 13984 of 2025 High Court observed that on retirement Shri U.B. Menon was nobody in the hierarchy of authorities to impose punishment on the delinquent. He therefore, held that the order of punishment .

was clearly incompetent and without jurisdiction. The learned counsel for the appellant submitted that since the initial appoint- ment of Shri U.B. Menon was valid, his actions and decisions could not be invalidated by his subsequent retirement. According to him he continued to function as an Enquiry Officer de facto and hence his actions and decisions were saved. The de facto doctrine has two requisites, namely, (i) the possession of the office and the performance of the duties attached thereto, and (ii) colour of title, that is, apparent right to the office and of acquiescence in the posses- sion thereof by the public. According to this doctrine the acts of officers de facto performed within the sphere of their assumed official authority, in the interest of the public or third parties and not for their own interest, are generally held valid and binding as if they were performed by de jure rt officers. This doctrine dates back to the case of Abbe de Fontaine decided way back in 1431 to which reference was made by Sir Asutosh Mookerjee, 3. in Pulin Behari Das v. King Emperor, [1911-12] 16 Calcutta Weekly Notes 1105 at 1120. Mookerjee, J. held that as the complaint was made after complying with section 196, Criminal Procedure Code, by the order of or under authority from Local Government which was de facto, the proceedings were valid. On the same principle it was further held that the Court of Sessions, assuming it was not the holder of a de jure office, was actually in possession of it under the colour of title which indicated the acquiescence of the public in its actions and hence its authority could not be collaterally impeached in the proceedings arising from the conviction of Pulin and his co-accused. Again, in Immedisetti Ramkrishnaiah Sons v. State of Andhra Pradesh, AIR 1976 A.P. 193, the Govern- ment nominated nine persons on a Market Committee which nomination was later set aside by the High Court. However, before the High Court pronounced its judgment, the Market Committee had functioned as if it had been properly consti- tuted. Between the date of its constitution and the date of the High Court decision it had taken several decisions, issued notifications, etc., which were the subject-matter of challenge on the ground that its constitution was ab initio bad in law. Chinnappa Reddy, J. relying on the observations of Mookerjee, J., in Pulin's case concluded that the acts of the Market Committee de facto performed within the scope of its assumed official authority, in the interest of the public or third persons and not for his own benefit are generally as valid and binding as if they were performed by a de jure Committee. The Allahabad High Court in Jai Kumar v. State, [1968] All. L.J. 877 upheld the judgments of the District Judges whose appointments were later struck down by this Court on the principle that the acts of officers defac- to are not to be questioned because of the want ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 58 2026:HHC:6560 CWP No. 13984 of 2025 of legal authority except by some direct proceeding instituted for the purpose by the State or by someone claiming the office de jure, or except when the person himself attempts to build up some .

right, or claim some privilege or benefit by reason of being the officer which he claims to be. In all other cases, the acts of an officer de facto are valid and effec- tual, while he is suffered to retain the office, as though he were an officer by right and the same legal consequences will flow from them for the protection of the public and of the third parties. This Court in Gokaraju Rangaraju v. State of A.P., [1981] 3 SCR 474=AIR 1981 SC 1473 was required to consider the question of the effect of the declaration of this Court holding the appointment of an Additional of Sessions Judge invalid on judgments pronounced by him prior to such declaration. This Court observed that the defacto doctrine is rounded on good sense, sound policy and practical experi- ence. It is aimed at the prevention of public and private mischief and the protection of public and private interest. It avoids endless rt confusion and needless chaos. It, there- fore, seems clear to us that the de facto doctrine can be invoked in cases where there is an appointment to office which is defective; but notwithstanding the defect to the title of the office, the decisions made by such a de facto officer clothed with the powers and functions of the office would be as efficacious as those made by a de jure officer. The same would, however, not be true of a total intruder or usurper of office.

6. In our view, the submission of Shri Shetty based on the defacto doctrine is clearly misconceived. Shri U.B. Menon can hardly be described as a person occupying or being in possession of an office to which certain duties affecting the members of the general public can be said to be attached. The de facto doctrine, as explained earlier, envisages that acts performed de facto by officers within the scope of their assumed official authori- ty are to be regarded as binding as if they were performed by officers de jure. While the de facto doctrine saves official acts done by an officer whose appointment is found to be defective the private parties to a litigation are precluded from challenging the appointment in any collateral proceedings. But the doctrine does not come to the rescue of an intruder or usurper or a total stranger to the office. Obviously the doctrine can have no application to the case of a person who is not the holder of an office but is merely a bank employee, for that matter an ex-employee. We, there- fore, see no merit in this contention'.

In case tilted as Veerendra Kumar Gautam and others vs. Karuna Nidhan Upadhyay and others, reported in (2016) 14 Supreme Court Cases 18, it has been observed by Apex Court as under:-

33. The next submission of the appellants was that once the High Court decided to apply the de facto doctrine, on finding that the ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 59 2026:HHC:6560 CWP No. 13984 of 2025 members of the Commission viz. Respondents 4 to 9 in the writ petition ceased to hold office, it ought not to have interfered with the selection and in support of the said submission, reliance was .

placed upon Gokaraju Rangaraju (1981) 3 SCC 132. Para 4 of the said judgment is relevant where the principle has been set out which reads as under: (SCC pp. 136-37) "4. We are unable to agree with the submissions of the learned counsel for the appellants. The doctrine is now well established that 'the acts of the officers de facto performed by them within the scope of their assumed official authority, in the interest of the of public or third persons and not for their own benefit, are generally as valid and binding, as if they were the acts of officers de jure' (Pulin Behari Das v. King Emperor 1911 SCC OnLine Cal 159, (1911-12) 16 CWN 1105, SCC OnLine Cal).

As one of us had occasion to point out earlier rt 'the doctrine is founded on good sense, sound policy and practical expedience. It is aimed at the prevention of public and private mischief and the protection of public and private interest. It avoids endless confusion and needless chaos. An illegal appointment may be set aside and a proper appointment may be made, but the acts of those who hold office de facto are not so easily undone and may have lasting repercussions and confusing sequels if attempted to be undone. Hence, the de facto doctrine' (vide Immedisetti Ramkrishnaiah Sons v. State of A.P. 1975 SCC OnLine AP 198, AIR 1976 AP 193, SCC OnLine AP para 6.)"

34. It is no doubt well settled that the acts of the officers de facto performed by them within the scope of their assumed authority in the interest of the public or the third persons and not for their own benefits are generally held valid and binding as if they were the acts of the officers de jure. A reading of the said paragraph does not give an omnibus authority even while applying de facto doctrine to hold that every illegal act or acts performed which smacks of very many illegalities and incongruities should be merely ignored and validated. It has to be kept in mind that even while applying the de facto doctrine whether such acts performed were aimed at the prevention of public and private mischief and for the protection of public and private interest. The doctrine is intended to prevent invalidation of acts, such as appointments, on the sole ground that they were performed without de jure authority. Therefore, keeping the well-thought out principles set down in the said judgment in mind when we examine the approach of the Division Bench we find that the Division Bench having noted that Respondents 4 to 9 in the writ petition ceased to hold office had to necessarily not deal with the challenge made to their appointment for issuance of quo warranto. It also rightly ::: Downloaded on - 11/03/2026 20:33:46 :::CIS 60 2026:HHC:6560 CWP No. 13984 of 2025 applied the de facto doctrine but the approach of the Division Bench in stating that even while applying the de facto doctrine, the selection made required deeper scrutiny cannot be held to be .
improper.
61. In present case, it is not a case that respondents No. 2 and 3 were not fulfilling eligibility condition for appointment as a Chairman STA/RTAs, but for having financial interest in HRTC, as discussed supra, of their appointment has been found contrary to and in conflict with the statutory provisions provided bar of such appointment under Section 68(2) of the MV Act, disentitling them to be appointed as a Chairman of rt STA/RTAs. Therefore, we are of the considered opinion that the act performed by respondents No. 2 and 3, is required to be protected and accordingly, any act performed by these officers, acting as a Chairman of STA/ RTAs, shall not be invalid or illegal, only on the ground that the said act has been performed while acting as a Chairman of STA/RTAs, but shall be treated to have been passed by exercising the power of Chairman STA/RTAs and as such, the same shall be valid for all intents and purposes, but subject to further challenge laid thereto, as permissible under law and the aforesaid observation shall not give an immunity to all acts of respondents No. 2 and 3, performed as a Chairman STA/RTAs, from challenging/assailing the same in accordance with law, on valid grounds. Needless to say, all such orders shall be subject to any further order to be passed by the competent Court, as per law, as applicable.
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62. In view of above discussion, we are of the considered view .
that respondents No. 2 and 3 are debarred from being appointed or continued to be as Chairman of STA and RTAs and accordingly, notification dated 29.05.2023 is quashed and set-aside and respondents are directed to take effective steps for reconstitution of the STA and RTAs of in consonance with the provisions of law, as explained hereinabove, by appointing eligible persons as a Chairman/member of STA/RTAs, on or rt before 31.03.2026. Till then, other members of STA/RTAs shall perform day to day routine business of the STA/RTAs, which is, urgently and necessarily, required to be performed before reconstitution of STA/RTAs but it shall not take decision related to Policy including grant or refusal of route permits. Respondents No. 2 and 3 shall cease to act as a Chairman of STA/RTAs forthwith.
63. Accordingly, petition is allowed and disposed of in the aforesaid terms. Pending applications, if any, also stands disposed of.
(Vivek Singh Thakur), Judge.
(Ranjan Sharma), Judge.
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