Judgment

KOSHAL, J. :- The bone of contention in this appeal by special leave consists of two stage carriage permits granted under the Motor Vehicles Act (hereinafter called the Act) in relation to the route Chirala Railway Station to Vetapalem, the claimants to which now are Venkaiah (the appellant), Krishna Rao (respondent No. 1) and Nagendrudu (respondent No. 5). By the impugned judgment a Division Bench of the High Court of Andhra Pradesh has dismissed an appeal under clause 15 of the Letters Patent and has upheld the judgment of a single Judge of that Court by which the order of the State Government was reversed and the permits were granted to respondents Nos. 1 and 5.

2. Before we proceed to lay down the facts leading to the present contest we may refer with advantage to Rule 212 of the A. P. Motor Vehicles Rules, 1964 which have been framed under the Act and are hereinafter referred to as the Rules. The marginal note to that rule reads:

"Grant, Variation, Suspension or Cancellation of stage carriage permit- Guiding principles"

The rule is divided into six clauses out of which we are concerned only with Cls. (i), (ii), (iii) and (iv) and the same, in so far as they are relevant for the purposes of this appeal, are reproduced below:

(i) Routes shall be classified as:-

(a) Short routes including shuttle services - This class or route will cover a distance of up to 50 kilometres.

(b) Medium routes - This class of route will cover a distance varying from 50 kilometres to 120 kilometres.

(c) Long routes - This class of route will cover a distance of more than 120 kilometres.

"(ii) Other things being equal, preference shall be given to applicants as follows:

(a) for short routes including shuttle services to new entrants,

(b) for medium routes to applicants with 1 to 4 stage carriages (excluding spare buses).

"(iii) The Transport authorities shall in deciding whether to grant or refuse to grant a stage carriage, permit, have regard to the following matters in addition to those specified in sub-sec. (1) of Section 47.

The applicants shall first be screened and those who are found to be unsuitable on one or more of the following principles shall be disqualified, reasons being given for the decision of the transport authority whenever an applicant is disqualified.

(1) Financial instability ............

(2) If the history sheet is not clean...

(3) If there is evidence that the applicant has been trafficking in permits, either benami or otherwise.

(4) If the applicant has no workshop facilities or other arrangements to attend to repairs efficiently:

.... ..... ..... .... .... .... .... ....

.... ..... ..... .... .... .... .... ....

(5) If the applicant has no main office or branch office on the route or resides beyond 8 kilometres from the route applied for to control the service.

(6) If the application is on behalf of others in order to evade rules.

"(iv) After eliminating the applicants in the manner laid down in clause (iii) above, marks shall be assigned as follows for assessing the different qualifications of the applicants for the grant of permits-

(a)Sector or residential qualifications -

(1) Four marks may be awarded to the applicant who has his place of business or residence at either terminus of the route applied for, and two marks may be awarded to the applicant who resides on the route (but not at either terminus) or within 8 kilometres from the route.

(2) Marks may be awarded to the applicant who has sector qualification on the route applied for, as follows:

(i) where the sector qualification is between 1 per cent and 25 per cent of the total distance of the route applied for - One mark;

(ii) where the sector qualification is between 26 per cent and 50 per cent of the total distance of the route applied for - Two marks;

(iii) where the sector qualification is between 51 per cent and 75 per cent of the total distance of the route applied for - Three marks; and

(iv) where the sector qualification is above 75 per cent of the total distance of the ro