Shah, J. - (1.) The Delhi Municipal Corporation took over the organisation of the Delhi Transport Authority established under Section 3 of the Delhi Transport Authority Act 13 of 1950, and administered it in the name of Delhi Transport Undertaking - hereinafter called D. T. U. Even though the jurisdiction of the Delhi Municipal Corporation extends only to the municipal area, by Section 288 of the Act 66 of 1957 it is authorised to set up transport services for passengers and goods in the entire Union Territory of Delhi and even outside by virtue of Sections 288 and 292 of the Act.
(2.) The respondent Company held in 1960 permits on three routes - (1) Delhi - Bawana - Narela, (2) Delhi-Bawana-Auchandi and (3) Delhi-Bawana-Kharkhoda. Since May 9, 1956, the Delhi Transport Authority and its successor D. T. U. were holding stage carriage permits valid for certain areas but not including the routes on which the respondent Company held permits to ply its stage carriages. On October 19, 1959 the D. T. U. addressed a letter to the Secretary State Transport Authority, Delhi, stating that it considered "it necessary to approach x x with the request to place the matter before State Transport Authority xx to validate" its road permits to cover the entire Union Territory of Delhi. The State Transport Authority treated this letter as an application for validation of the existing permits so as to cover the entire area of the Union Territory of Delhi. After considering the objections filed by existing operators on the routes outside the Municipal Corporation area, the State Transport Authority passed the following order on February 10, 1960: "The representatives of the D. T. U. point out that under the Municipal Act they were required to provide efficient and adequate services in the entire territory of Delhi and therefore the area of their permits should be altered accordingly. The authority considered the request the D. T. U. reasonable. It was decided to alter the permits and make them valid for entire territory of Delhi but they should be informed that they should not operate new services parallel to the existing services of the private operators without the approval of the State Transport Authority".
(3.) On June 17, 1961 the D. T. U. issued a circular that it was decided to operate its services on Delhi Bawana route with effect from June 19, 1961, and informed the State Transport Authority of its intention to do so.;