Judgment

RANGANATHAN, J.:- Special Leave granted. Appeals are disposed of by this order.

2. The three appellants had been granted permits on a route from Bhadra to Hissar via Adampur. This route lay both in the State of Rajasthan and in the State of Haryana and was thus an inter-State route. When the permits were about to expire the petitioners filed applications for their renewal in accordance with the provisions of S. 58 of the Motor Vehicles Act (hereinafter called the Act). At the same time, the Rajasthan State Road Transport Corporation (hereinafter referred to as the Corporation) also moved applications before the Regional Transport Authority, Bikaner, for the grant of fresh permits to it on the same route. The applications for renewal of permits made by the petitioners as well as the applications for the grant of permits by the Corporation were heard together by the Regional Transport Authority, Bikaner (R.T.A.) on several dates, the last of which was the 6th of November, 1981. On that date, orders were reserved by the R.T.A. The R.T.A., however, passed its order only on 27th November, 1982, about a year after the date of the hearing. It rejected the renewal applications of the petitioners and granted permits to the Corporation in respect of the above route.

3. Aggrieved by the orders of the R.T.A., the petitioners filed appeals before the State Transport Appellate Tribunal (S.T.A.T.). The S.T.A.T. dismissed the appeals preferred by the petitioners and confirmed the order of the R.T.A. The petitioners filed writ petitions in the High Court of Rajasthan, which were dismissed by a single Judge on 21st July, 1986. Further appeals preferred by the petitioners and certain other operators were dismissed by a Division Bench of the High Court of Rajasthan by its judgment and order dated 8th December, 1986. These Special Leave Petitions have been preferred against the order of the Division Bench dated 8th December, 1986.

4. We have come to the conclusion that the order of the R.T.A. (and consequently the orders of the STAT and the High Court) should be set aside and the matter should be remitted back to the R.T.A. for fresh consideration on the short ground that the petitioners have not had a fair opportunity of putting forward and being heard on their contentions relevant to the issue before the R.T.A.

5. The principal issue that had to be considered by the R.T.A. was whether the claims of the Corporation for the grant of a permit had precedence over the claims of the petitioners for renewal. This issue had to be decided in the context of two statutory provisions. The first is S. 47(1H) of the Act which reads as follows :

"Notwithstanding anything contained in this section, an application for a stage carriage permit from a State transport undertaking for operating in any inter-State route shall be given preference over all other applications :

Provided that the authority shall not grant a permit under this sub-section unless it is satisfied that the State transport undertaking would be able to operate in the inter-State route without detriment to its responsibility for providing efficient and adequate road transport service in any notified area or notified route as is referred to in sub-sec. (3) of S. 68D where the undertaking operates the service.

Explanation- For the purposes of this sub-section, "inter-State route" means any route lying contiguously in two or more States.

The second relevant provision is the third proviso inserted in S. 58(2) of the Act by an amendment applicable to the State of Rajasthan. This sub-section, in so far it is material for our present purposes, reads :

"(2) A permit may be renewed on an application made and disposed of as if it were an application for a permit:

Provided further that, other conditions being equal, an application for stage carriage permit by a State transport undertaking as defined in S. 68-A, shall be given preference over applications from individual owners and co-operative societies."

6.