B. Rajagopala Naidu v. State Transport Appellate Tribunal (AIR 1964 SC 1575)

B. RAJAGOPALA NAIDU V. STATE TRANSPORT APPELLATE TRIBUNAL

Whether Government Order No. 1298 issued under Section 43A of the Motor Vehicles Act, 1939, prescribing principles for grant of stage carriage permits, was valid and within the scope of authority conferred on the State Government?

Administrative vs. Quasi-Judicial Nature of Tribunal Decisions: The case explored whether certain decisions made by the State Transport Authority and the Appellate Tribunal were administrative or quasi-judicial. The Court held that these decisions, particularly those involving permit allocation, were quasi-judicial. This meant they could be challenged under Article 226 of the Constitution (writ jurisdiction).
Judicial Review under Article 226: The Court applied the principle that quasi-judicial decisions by tribunals are subject to judicial review under Article 226. The tribunals must follow due process, and their decisions can be reviewed if they misinterpret the rules or make decisions contravening applicable laws
Doctrine of Ultra Vires: The appellant argued that the Government Order (G.O.) exceeded the scope of the authority conferred by Section 43A of the Motor Vehicles Act. The principle of ultra vires (beyond powers) was invoked to challenge the validity of the order. The Court had to consider whether the G.O. was within the powers granted to the State Government by law.
Separation of Powers (Legislative, Judicial, Administrative): The Court distinguished between legislative, judicial, and administrative powers conferred on the State Government under different sections of the Motor Vehicles Act. The marking system for evaluating bus operators was administrative, but the decision-making process regarding permits was quasi-judicial.

Rajagopala Naidu, a bus operator in Madras, applied for two stage carriage permits for a route from Madras to Krishnagiri, competing against other operators.
The State Transport Authority (STA) initially granted both permits to Naidu based on their assessment according to principles outlined in Government Order No. 1298 (G.O. 1298).
The respondents, being unsuccessful applicants, challenged the STA’s decision before the State Transport Appellate Tribunal (STAT).
The STAT re-assessed applications using G.O. 1298, leading to a new order (G.O. 2265) that changed the criteria for permit allocation and awarded the permits to the respondents.
Naidu challenged the STAT’s order in the High Court under Article 226 of the Constitution, arguing that G.O. 1298 was beyond the powers granted under Section 43A.
The High Court dismissed the petition.

The Supreme Court held that G.O. 1298 was invalid as it exceeds the authority granted under Section 43A of the Motor Vehicles Act.
The Court emphasized that such orders should be administrative and not interfere with quasi-judicial processes of transport authorities, in accordance with Section 43A of the Motor Vehicles Act.
O. 1298, by dictating how to award marks, interfered with the STA’s quasi-judicial function of considering applications on a case-by-case basis.
Consequently, the Supreme Court set aside the STAT’s order.