Supreme Court Upholds Validity of State Transport Authority Decision by Majority: State of Madhya Pradesh vs. Mahendra Gupta (2018)

Introduction

Date of the Judgment: 08 February 2018
Citation: (2018) INSC 117
Judges: A.K. Sikri, J., Ashok Bhushan, J.

Can a decision made by a State Transport Authority be considered valid if one of the members who participated in the hearing is transferred before the final order is issued? The Supreme Court of India recently addressed this question, focusing on whether a majority decision of a multi-member body is sufficient. This case examines the procedural validity of an order passed by the State Transport Authority of Madhya Pradesh.

The Supreme Court, in this case, was deciding on an appeal against the judgment of the High Court of Madhya Pradesh, which had ruled against the State Transport Authority’s decision. The core issue was whether the order issued by the State Transport Authority was valid, given that one of the members who heard the case was transferred before the order was signed. The Supreme Court bench comprised Justices A.K. Sikri and Ashok Bhushan, with Justice Ashok Bhushan authoring the judgment.

Case Background

The case originated from a dispute regarding the modification of a time schedule for a transport permit. The writ petitioners held permanent permits for two routes: Gwalior to Bhander, and Gwalior to Datia. Respondent No. 3 also had a permanent permit for the route Gwalior to Jhansi. Respondent No. 3 applied to the State Transport Authority for a modification of his time schedule. The State Transport Authority heard the application on 16.10.2014, with the Chairperson and two members present. The State Transport Authority allowed the modification. However, the final order, issued on 15.12.2014, was signed by the Chairperson and only one member, as the other member had been transferred in the interim. The writ petitioners, who were objectors to the modification, challenged this order, arguing that it was invalid because it was not signed by all members who heard the case.

Timeline

Course of Proceedings

The writ petitioners challenged the State Transport Authority’s order before a Single Judge of the High Court, arguing that the order was illegal because it was not signed by all three members who heard the matter. The Single Judge accepted this argument and set aside the order dated 15.12.2014. The State of Madhya Pradesh appealed this decision before a Division Bench of the High Court, contending that the order was valid since it was a decision by the majority of members who were present during the hearing. The Division Bench upheld the Single Judge’s decision, leading to the appeal before the Supreme Court.

Legal Framework

The case primarily revolves around the interpretation of the Motor Vehicles Act, 1988, and the Madhya Pradesh Motor Vehicles Rules, 1994. Specifically, Section 68 of the Motor Vehicles Act, 1988, provides for the constitution of a State Transport Authority. Sub-section (3) of Section 68 outlines the powers and functions of the State Transport Authority.

Section 68(1) of the Motor Vehicles Act, 1988 states:

“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…”

Section 68(3) of the Motor Vehicles Act, 1988 states:

“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; [(ca) Government to formulate routes for playing stage carriages;] and (d) to discharge such other functions as may be prescribed.”

The Madhya Pradesh Motor Vehicles Rules, 1994, further elaborate on the functioning of the State Transport Authority. Rule 63(6) of the Madhya Pradesh Motor Vehicles Rules, 1994, specifies the quorum for a meeting of the State Transport Authority:

“The quorum to constitute a meeting of the State Transport Authority shall be the Chairman or the nominated Chairman under the sub-rule (7) and two other members (whether official or non-official).”

Rule 65(2) of the Madhya Pradesh Motor Vehicles Rules, 1994, discusses decision-making by the Transport Authorities:

“The State or Regional Transport Authority, as the case may be, may decide any matter of urgent nature without holding a meeting by the majority of votes of members by recorded in writing and send to the Secretary (hereinafter referred to as the procedure by circulation).”

Arguments

Appellant’s Arguments (State of Madhya Pradesh):

• The State contended that the quorum for the meeting of the State Transport Authority was complete when the meeting was held on 16.10.2014, as the Chairperson and two members were present.
• The decision was valid as it was made by the majority of the members present, even though one member was transferred before the order was issued on 15.12.2014.
• The State argued that the Madhya Pradesh Motor Vehicles Rules, 1994, do not require all members who heard the matter to sign the order, and a decision by the majority is sufficient.
• The State relied on the principle that the act of a majority is regarded as the act of the whole, as supported by “Shackleton on the Law and Practice of Meetings”.

Respondents’ Arguments (Writ Petitioners):

• The respondents argued that since the matter was heard by three members, the decision should also have been issued by all three members.
• They contended that the absence of one member’s signature on the order dated 15.12.2014 made it invalid.
• The respondents supported the view taken by the High Court that the order was illegal due to the absence of one member who heard the matter.

Sub-Submissions

Issues Framed by the Supreme Court

The Supreme Court framed the following issue for consideration:

1. Whether the order passed by the State Transport Authority on 15.12.2014 was valid, given that it was signed by the Chairperson and only one member, while the hearing on 16.10.2014 was attended by the Chairperson and two members.

Treatment of the Issue by the Court

Authorities

Cases:

• Ramaswamy Nadar v. The State of Madras, AIR 1958 SC 56 – The Supreme Court of India. This case was cited to illustrate a situation where a judgment was delivered even after one of the judges who heard the case had passed away. The court distinguished the case on facts, as in the present case, there was no material to show that the third member had concurred with the decision.
• Gokal Chand- Jagan Nath Vs. Nand Ram Das- Atma Ram, AIR (1938) P.C. 292 – Privy Council. This case was cited to demonstrate that a judgment signed by only one judge was a mere irregularity and did not affect the merits of the case, when another judge who had concurred went on leave.
• A. Shanta Rao Vs. State Transport Appellate Tribunal, Hyderabad & Ors., AIR 1985 A.P. 256 – Andhra Pradesh High Court. This case was cited to show that if all members of a tribunal have applied their mind to the facts of a case and arrived at a conclusion, it does not matter if the communication is made under the signature of the Chairman alone.

Legal Provisions:

• Section 68(1) of the Motor Vehicles Act, 1988 – This section provides for the constitution of a State Transport Authority.
• Section 68(3) of the Motor Vehicles Act, 1988 – This section outlines the powers and functions of the State Transport Authority.
• Rule 63(6) of the Madhya Pradesh Motor Vehicles Rules, 1994 – This rule specifies the quorum for a meeting of the State Transport Authority.
• Rule 65(2) of the Madhya Pradesh Motor Vehicles Rules, 1994 – This rule discusses decision-making by the Transport Authorities.
• Article 145(5) of the Constitution of India – This article provides that a judge of the Supreme Court can deliver a judgment with the concurrence of a majority of the judges present at the hearing of the case.

Judgment

The Supreme Court allowed the appeal, setting aside the judgments of the High Court. The Court held that the decision of the State Transport Authority dated 15.12.2014, signed by the Chairperson and one member, was a valid decision. The Court reasoned that the quorum was complete during the hearing on 16.10.2014, and the decision was made by the majority of the members present. The Court also noted that the rules do not require all members who heard the matter to sign the order.

How each authority was viewed by the Court:

• The Court distinguished Ramaswamy Nadar v. The State of Madras, AIR 1958 SC 56* on facts, noting that there was no evidence of the third member’s concurrence in the present case.
• The Court relied on Gokal Chand- Jagan Nath Vs. Nand Ram Das- Atma Ram, AIR (1938) P.C. 292* to support the view that a judgment signed by one judge is a mere irregularity.
• The Court cited A. Shanta Rao Vs. State Transport Appellate Tribunal, Hyderabad & Ors., AIR 1985 A.P. 256* to emphasize that the substance of the matter is more important than the form.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the principle that a decision by a majority of members in a multi-member body is valid, especially when the rules do not specify otherwise. The Court emphasized that the quorum was complete at the time of the hearing and that the decision was made by the majority of members present. The court also took into consideration the fact that the rules do not specifically mandate that all members who participated in the hearing must sign the final order. The court also considered the practical implications of the matter, and held that any irregularity in the procedure would not affect the merits of the case.

The court’s reasoning was based on the following logical steps:

The court considered the argument that all members who heard the matter should sign the order, but rejected it, stating that the rules do not mandate such a requirement. The court emphasized that the decision was made by the majority of the members present at the hearing, which is sufficient for a valid decision.

The Court quoted from the judgment:

“The principle has long been established that the will of a corporation or body can only be expressed by the whole or a majority of its members, and the act of a majority is regarded as the act of the whole.”

“Although Rules, 1994 do not expressly provide that decision of the State Transport Authority shall be taken in accordance with the opinions of the majority but there being no special majority provided for decision to be taken in the meeting of the State Transport Authority, normal, rule that decision by majority of the members present has to be followed.”

“The Court has to see the substance of the matter and not the mere form, and if it is clear that all the members of the Tribunal have applied their mind to the facts of the case and arrived at a conclusion, it does not matter if the communication is made under the signature of the Chairman.”

Key Takeaways

• A decision made by a majority of members in a multi-member body like the State Transport Authority is valid, provided the quorum was complete during the hearing.
• The absence of one member’s signature on an order does not invalidate the decision if the decision was made by the majority of members present at the hearing.
• The focus should be on the substance of the matter rather than the mere form, ensuring that the decision-making process is valid.
• This judgment clarifies the procedural requirements for decision-making in multi-member bodies, emphasizing the importance of majority decisions.

Directions

No specific directions were given by the Supreme Court.

Specific Amendments Analysis

There is no discussion of any specific amendment in the judgment.

Development of Law

The ratio decidendi of this case is that a decision by a multi-member body is valid if it is made by a majority of the members present during the hearing, even if one member is transferred before the final order is issued. This judgment reinforces the principle that the act of a majority is considered the act of the whole, and it clarifies the procedural aspects of decision-making in such bodies.

Conclusion

The Supreme Court’s judgment in State of Madhya Pradesh vs. Mahendra Gupta & Ors. clarifies that a decision by a majority of members in a multi-member body is valid, even if one member is transferred before the final order is issued. The Court emphasized that the quorum was complete during the hearing and that the rules do not require all members who heard the matter to sign the order. The judgment underscores the importance of majority decisions in multi-member bodies and provides clarity on procedural aspects of decision-making in such bodies. The Supreme Court allowed the appeal and set aside the judgment of the High Court.

Category

Parent Category: Motor Vehicles Act, 1988

Child Categories:

• Section 68, Motor Vehicles Act, 1988
• Madhya Pradesh Motor Vehicles Rules, 1994
• State Transport Authority
• Transportation Law
• Majority Decision

FAQ

Q: What was the main issue in the State of Madhya Pradesh vs. Mahendra Gupta case?

A: The main issue was whether a decision by the State Transport Authority was valid when one of the members who participated in the hearing was transferred before the final order was issued.

Q: What did the Supreme Court decide in this case?

A: The Supreme Court held that the decision of the State Transport Authority was valid because it was made by the majority of the members present during the hearing, and the rules do not require all members to sign the order.

Q: What is the significance of a majority decision in a multi-member body?

A: A majority decision is considered valid as it represents the will of the body, especially when the rules do not specify a special majority.

Q: What legal provisions were considered in this case?

A: The court considered Section 68 of the Motor Vehicles Act, 1988, and Rules 63(6) and 65(2) of the Madhya Pradesh Motor Vehicles Rules, 1994.

Q: What is the practical implication of this judgment?

A: The judgment clarifies that decisions made by a majority of members in a multi-member body are valid, even if one member is transferred before the final order is issued, ensuring that the decision-making process is efficient and valid.