The court determined that stay orders and interim injunctions must preserve the status quo and adhere to established legal principles, quashing the erroneous orders of the Appellate Authority.

1. The circumstances in which this application under Arts.226 and 287 of the Constitution of India has been filed are that the petitioner - company held stage carriage permits for three routes, namely, (1) Administration Office of Bhilai Steel Constructions to Sambalpur, via Durg. Balod; (2) Balod - Dhamtari via Gurur and Karhibadar; and (8) Durg - Raipur. When these permits were about to expire in 1962, the petitioner filed applications for their renewal before the Regional Transport Authority, Raipur. The respondent No. 3, Janata Motor Transport Co - operative Society Ltd., Durg (hereinafter referred to as the Society) also applied for the grant of fresh permits to it in respect of the routes (1) and (2) mentioned above in lieu of the permits held by the petitioner - company.
The applicant - company preferred objections to the grant of permits to the respondent - society, Both the renewal applications of the petitioner and the applications of the respondent No. 3 were taken up for consideration by the Regional Transport Authority on 31st December 1962, and on 3rd January 1963 the said Authority made an order refusing to renew the permits of the petitioner on all the aforesaid routes and granting permits to the respondent - society for Administration Office of Bhilai Steel Constructions to Sambalpur route and Balod - Dhamtari route on the condition that the society should "produce two new vehicles not later than 28th February 1963 and commence the service from 4-3-1963". The Regional Transport Authority also made an order on that date inviting applications for Durg - Raipur route in respect of which the petitioner's application for renewal was rejected.

2. The petitioner than filed three separate appeals before the State Transport Appellate Authority against the rejection by the Regional Transport Authority of the renewal applications, grant of permits to the respondent - society for two routes, and the invitation of fresh applications for the third route. The appeals are still pending before that Authority. After the filing of the appeals, the petitioner applied to the Appellate Authority for interim order staying the operation of the decision of the Regional Transport Authority with regard to the grant of permits to the respondent - society and Inviting fresh applications for Durg - Raipur route On 14th January 1963, the Appellate Authority stayed the operation of the Regional Transport Authority's order inviting fresh applications. It, however, refused to stay the operation of the decision of the Regional Transport Authority granting permits to the respondent - society taking the view that as the petitioner had not filed any copy of the order of the Regional Transport Authority there was nothing which could be legally stayed. The petitioner again moved for the issue of an interim stay order after filing copies of the order of the Regional Transport Authority. These applications were also rejected by the State Transport Appellate Authority on 8th February 1963 on the ground that the petitioner prayer for stay had already been considered before, that is, on 14th January 1963 and that there was no ground for varying that decision of rejection.
The respondent - society also preferred an appeal before the Appellate Authority against the order of the Regional Transport Authority assailing the legality of the condition imposed by that Authority that the society should produce two new vehicles before 28th February 1963. That appeal is also pending before the Appellate Authority. After the filing of that appeal, the society applied for an interim order so as to enable it to operate the services on the routes in respect of wh