U.P. STATE ROAD TRANSPORT CORPORATION v. STATE OF U.P. AND ANR.

Res judicata-Principle of-Applicability-Statutory prohibition Held: Having regard to the factual position, the contention that the principle B of res judicata can have no application if there is a statutory prohibition, unsustainable. The appellant-Corporation prepared a draft scheme to nationalize Saharanpur-Shahdara-Delhi route and the same was published on 29.9.1959 in accordance with Section 68-C of the Motor Vehicles Act, C 1939. This Court quashed the said scheme. It was, however, left open to the appellant Corporation to publish a fresh draft scheme if it was necessary to do so. Thereafter, the appellant-Corporation published a fresh scheme on 13-2-1986, which not only covered the Saharanpur-Shahdara-Delhi route but also 38 other routes. Objections were filed against the scheme and before they could be finally decided. the Motor Vehicles Act, 1988 came into force w.e.f. 1.7.1989 repealing the 1939 Act. The competent authority thereafter held that the proposed scheme had lapsed by virtue of Section 100(4) of the 1988 Act. The appellant-Corporation preferred a writ petition but the High Court also took the view that the scheme had lapsed and accordingly upheld the order of the competent authority and dismissed the writ petition. This Court on 31.3.1992 in Ram Krishna Verma 's case allowed the appeal against the decision of the High Court. The State Government published a notification on 29.5.1993 whereby the draft scheme published on 13.2.1986 was approved. . Feeling aggrieved by the approved scheme dated 29-5-1993 several operators filed writ petitions in the High Court but the same were dismissed on 19-1:1.-1999 on the ground that the scheme stood approved by the decisions of this Court in Ram Krishna Verma 's case and also in Nisar Ahmad's case. This Court in Gajraj Singh 's cas.e allowed the appeals preferred against the judgment of the High Court. It was held in that case that the decision in Ram Krishna Verma 's case was confined only to one route namely. Saharanpur-Shahdara-Delhi route and as a result of the said decision the draft scheme stood approved only with regard D E F G H 444 SUPREME COURT REPORTS [2004] SUPP. 6 S.C.R. A to the said route. The notification published on 13-2-1986 included not only the Saharanpur-Shahdara-Delhi route, but also 38 other routes and consequently the scheme had not been approved with regard to these 38 routes and objections filed thereto required to be considered on merits. It was further held in Gajraj Singh 's case that if all the B objections or any of them are allowed, the draft scheme shall meet the fate consistently with the decision on the objections and the approved scheme dated 29.5.1993 shall be accordingly modified or annulled. In the event of the objections being dismissed, the approved scheme, as notified on 29-5-1993, shall continue to remain in operation. C Thereafter, the competent authority after hearing the parties decided the objectfons by his order dated 3.11.2001. The appellant-Corporation and some private operators preferred writ petitions in the High Court. The High Court held that the draft scheme dated 13.2.1986 had lapsed under Section 100(4) of the Motor Vehicles Act, 1988 and, therefore, it 'D could not be approved. Hence the appeal. E On behalf of the respondents-private opera.tors, it was contended that the appellant-Corporation was not in a position to provide transport facilities to the people in the area and, therefore, the nationalization of the route was not in pubic interest; that nearly 500 operators who had been granted permits after 1.7.1989 had taken loans from banks and finance companies at a very high rate of interest to purchase buses and in case the scheme of nationalization was enforced now they would be completely thrown out of business land.ing them in serious financial trouble; and the staff employed by them would also be thrown out of F employment. Allowing the appeal, the Court HELD: 1. Having regard to the earlier litigation and the decisions of this Court rendered with regard to the scheme in question, i.e. which G was published under Section 68-C of the Motor Vehicles Act, 1939 on 13.2.1986, the view taken by the High Court that the same had lapsed is wholly erroneous in law. (452-C, D]

#2. In Gajraj Singh 's case, this Court noticed the earlier decisions rendered in Nisar Ahmad's case and Ram Krishna Verma 's case, and also H U.P. STATE ROAD TRPT. CORPN. v. STATE 445 lapsed under A the finding recorded therein that the scheme had not Section 100(4) of the Motor Vehicles Act, 1988. Keeping in view the said finding and also the provisions of Section 100(4) of the 1988 Act, this Court gave a right to the operators to be heard under Section 100(2) of the 1988 Act. The notification issued on 29.5.1993 by which the draft scheme dated 13.2.1986 had been approved was not quashed, but merely a direction was issued that if the objections are allowed, the draft scheme shall meet the fate consistent with the decision on the objections and the approved scheme dated 29.5.1993 shall be modified accordingly. These decisions clearly hold that the scheme had not lapsed under Section 100(4) of the 1988 Act. [454-A, B, CJ B c .., Ram Krishna Verma v. State of U.P., (1992) 2 SCC 620; Nisar Ahmad v. State of U.P., (1994) Supp. 3 SCC 460 and Gajraj Singh v. State of U.P., (20011 5 sec 762, relied on. Jeewan Nath Wahal v. STAT, (C.A. No. 1616of1968 decided on by D Supreme Court on 3.4.1968) and Shri Chand v. Govt. of U.P., [1985) 4 sec 169, referred to.

#3. This Court having specifically considered the question in two earlier decisions as to whether the draft scheme dated 13.2.1986 had lapsed under Section 100(4) of the Act and having recorded a clear E finding that the scheme had not lapsed, it was not at all open to the High Court to examine the said question all over again and to hold that the draft scheme had lapsed. The High Court committed manifest error of law in re-examining the question and recording a finding, which is totally at variance with the earlier decisions of this Court. [455-C, D] F

#4. In the writ petitions, which were filed in the High Court, what was assailed was the decision of the competent authority. Therefore. the scope of the writ petition was very narrow and the High Court could only examine whether the competent authority had considered the objections in accordance with the directions issued by this Court. In G such a writ petition, the High Court could not have gone into the question as to whether the scheme had lapsed under Section 100(4) of the Act. [455-E, F] ' /

5.1. In Krishan Kumar's case, it was held that it would be legitimate H 446 SUPREME COURT REPORTS [2004] SUPP. 6 S.C.R. A B to hold that in the case of a scheme under Section 68-C of the 1939 Act pending on the date of enforcement of the new Act, namely, 1.7.1989, the period of one year as prescribed under Section 100(4), should be computed from the date of commencement of the 1988 Act. Therefore, according to this decision, a draft scheme made under Section 68-C of the 1939 Act would lapse after 30.6.1990. (456-C, DJ

5.2. Having regard to the factual position that the scheme was declared to have lapsed much before the expiry of the period of one year and the decision in Krishan Kumar's case was ultimately reversed by this Court in Ram Krishna Verma's case, wherein a direction was issued to C publish the approved scheme, it cannot at all be held that the scheme had lapsed. [456-EJ Krishan Kumar v. State of Rajasthan, (1991) 4 SCC 258, held inapplicable. D Ram Krishna Verma v. State of UP., [1992J 2 SCC 620, referred to. E

#6. The contention that the travelling public will suffer great hardship ifthe scheme is allowed to stand on account of the fact that the appellant Corporation does not have sufficient number of buses to run on the routes in question, does not appear to have any substance, in view of the clear stand of the appellant-Corporation that it is now making profit and will induct more buses on the routes in question. Further, no such plea as is sought to be raised now, was raised when this Court decided the cases of Ram Krishna Verma, Nisar Ahmad and Gajraj Singh. By virtue F of Section 03(1-A) of the Motor Vehicles Act, (as amended in the State of U.P.), the appellant-Corporation can enter into agreements with the bus owners to ply their buses on the nationalized routes. Such an arrangement may be beneficial to the existing operators. [458-B, C, DJ Ram Krishna Verma v. State of U.P., [1992J 2 SCC 620; Nisar Ahmad G v. State of U.P., [1994J Supp. 3 SCC 460 and Gajraj Singh v. State of UP., [2001J 5 sec 762, referred to.

#7. If a writ petition filed by a party under Article 226 is considered on the merits as a contested matter and is dismissed, the decision thus H pronounced would continue to bind the parties unless it is otherwise U.P. STATE ROAD TRPT. CORPN. v. STATE 447 modified or reversed by appeal or other appropriate proceedings A permissible under the Constitution and cannot be permitted to be circumvented by a petition under Article 32. Daryao v. State of UP., AIR (1960) SC 1457; Devi/al Modi v. STO, AIR (1965) SC 1150 and Direct Recruit Class JI Engineering Officers' B Association v. State of Maharashtra, (1990) 2 SCC 715, followed.

#8. The principle of res judicata is based on the need of giving a finality to judicial decisions. The principle, which prevents the same case being twice litigated, is of general application and is not limited by the specific words of Section 11 of the Code of Civil Procedure, 1908 in this respect. Res judicata applies also between two stages in the same litigation to this extent that a court, whether the trial court or a higher court having at an earlier stage decided a matter in one way will not allow the parties to re-agitate the matter again at a subsequent stage of the same proceedings. (454-H; 455-A, B] Satyadhan v. Smt. Deorajin Debi, AIR (1960) SC 941, relied on.

#9. The contention that the principle of res judicata can have no application ifthere is a statutory prohibition cannot be accepted having regard to the factual position that the scheme was declared to have lapsed much before the expiry of the period of one year. (456-G)