DOSA SATYANARAYANAMURTY ETC. versus THE ANDHRA PRADESH STATE ROAD TRANSPORT CORPORATION

reasons mentioned in the or<lers but were only lo givo time lo enable the Governmen_t to approve the scheme, rna.y not be wholly unjnstifie<l.

The Sama11th Ttansporl Co. (PJ I.Id. v. The Uegio11al Ttattsporl Authority, Nagput 6- Others

In the circumstances, though we are disrniRsing the application, we a.re not awarding any costs to tho respondents.

Petition dismissed.

St1bba Rao ].

DOSA SATYANARAYANAMURTY ETC.

September 8.

THE ANDHRA PRADESH STATE ROAD TRANSPORT CORPOHATION

(B. P. SINHA, c. J., J. L. KAPUR,

P. B. G.AJENDBAGADKAB, K. SuBBA RAO a.nd K. N. WANCHOO,. J.J.)

Mota, V ehirles-N aJionalisation of ,oad transport services-PrcparaJion and enforcement of schcmes-ConstitHtional validity of rnactment-Varyifl~ frequmcy of services, if variation of the scheme-Validity of rule-Motor V chicles Act. 1939 (IV of 1939), as amended by Act 100 of 1956, Ch. IV. ss. 68C, 68E--A11dhra Pradesh Motor Vehicles R11/es, r. 5-Conslitution of Itidia, Arts. 19 (I)(g), I9(6)(ii), I4.

These petitions by certain stage carriage permit-holders for appropriate writs quashing seven schemes for nationalisation of road transport services in West Godavari District, approved and enforced from different dates by the Government of Andhra Pradesh, called in question the constitutional validity o! Ch. IVA o! the Motor Vehicles Act, 1939, as amended by Act 100 of 1956, and the validity o! r. 5 of the Andhra Pradesh Motor Vehicles Rules framed by the State Government under s. 68(1) of tbe Act and the note in terms of the said rule ap-pended to the schemes which was said to be inconsistent with the Act and was as follows:-

"The frequency of services of any of .the notified routes or within any notified area shall, ii necessary, be varied having regard to the traffic needs during any period."

Held, that in view of the decision of this Court in H. C.

Narayanappa v. The' State of Mysore, it was no longer open to the petitioners' to contend that the provisions of Ch. IVA of the Motor Vehicles.Act (IV of 1939), as amended by the Central Act mo of 1956, were ultra vires the powers of the Parliament.

Dosa Satya-11arayana111urty

etc. v.

H. C. Narayanappa v. The State of Mysore, [1960] 3 S.C.R. 742, followed.

The Andhra Pradesh State Road Transport Corporation

Nor was i.t correct to contend that Ch. IVA· of the Act was invalid on the ground that it infringed Art. l9(1)(g) of the Con-stitution and was not saved by Art. 19(6) ·as the powers confer-red on the State by s. 68C of the Act exceeded the limits of Art. 19(6)(ii) of the Constitution. Article l9(6)(ii) is couched in very wide terms, the word 'service' used by it is wide enough to include all species of motor service and it does not in any way limit the 'States' power. to confer on itself monopoly in respect any area in exclusion of any person or persons.

The only classification that Ch. IVA of the Act makes is between. the State Transport Undertaking and private transport undertakings, whether carried on by individuals or firms or companies, and that classification is reasonably connected wit\l the object it has in view. It was not, therefore, correct to s~y that it contravenes Art. 14 of the Constitution. That Chapter. does not confer any arbitrary ·and discriminatory power upon the State Transport Undertaking nor does. the quasi-judicia·f. procedure prescribed by it seek to cover such power. Any mala fide or collusive exercise of the power, therefore, in depri-vation of an individual's rights can only be ground for quash-ing particular scheme alone but not for declaring the chapter void.

Since that chapter provides complete and satisfactory machinety for reasonably regulating thecxclusion of all or some of the private operators from notified area or route it requires no liberal construction.

Gullapalli Nageswara Rao v. Andhra Pradesh Road Transport Corporation, [1959] Supp. I S.C.R. 319, referred to.

Saghir Ahmad v. The State of U. P., [1955] I S.C.R. 707, con-sidered.

Official bias inherent in the discharge of statutory duty, as has been_ poi·nted out by this Court, is distinct from personal bias for or against any of the parties. Since in the instant case, the State Road Transport Corporation was neither legally nor factually department of the State Government and the State Government in deciding the dispute between the said under-taking and the operators of private buses was only discharg-ing its statutory function, no question of official bias could arise.

Gullapalli N ageswara Rao v. The . State of And hr Pradesh, [1960] I S.C.R. 580 and H. C. Narayanappa v. The State of Mysore, [1960] 3 S.C.R. 742, COQsidered.

D"sa S(l/ya-""'a)·at11'11111tly etc. v. The Andhra Pradesh St(t/t Road Tran.~P<'"l Cor/>orati'JH

S•fbbd llao J.

'fhe ohser\'Ution~ madt by this Court in Srini;:asa If..:dd)' v. The Stale of Mj•.<orc, in rrgord to piecemeal implementatioo of sche111~ Y.erc direct(:<t ;.1g~1inst ar:y a.buse of po%·er Uy \vay of <liscriniination as hcl\\·e1.:11 operator~ and operators in respt>ct of single scheme. Since the ~r.\'en scherncs in c~urstion were in-tended to a\·oid tlic ,·ice inhercr;t in piecen1c1J irnpleroentation of single scheme and \\'_Crt: mrant to he implcrncntatcd in their entirety fron1 diJierent. elates, those observations did not apply to them.

Srimvasa.Rcddj• , .. The Stale of Mysore, 1190<< i S.C.R 130, explained.

There can be no doubt that r. 5 of the Andlua Pradesh ~lotor Vehicles Rules in conferring on the State Transport l'ndertaking the J){)\\'t:r to \'ary the frt•qucncy of st I \'ires, ga,·e it the power to effect substantial rn1.[1]dification in the scheme, permissible only under s. 68E of the Act, and as such the rule rn11st be declared \'Oid. Hut· since the note appt>nded to the ~chen1cs in pursuance of th~ rule is St\•crable fro1n the ·schemes', it should be deleted anrl the schemes must be <l<·clarc·d \'alid.

, '!'he \\'Ord ·route' in s, 68C ol the :\ct does not-- refer t1J p1c-existin~ rontc. It is pcrn1is~iblc under that section to frame :scheme in rc~pect of any area or route or any portions there-of, or ne\\' route, since there is no inherent inconsistency het\\'t'en an ·area ' and 'route·.

\Vrit Petitions ::'.\os. 76,

OmGil'AL JumsDICTION: 217 tu 228 of l!l60.

Pct.itionA under Article 32 of tl1e Constit11tion of

India for enforce mer.! of Fundamental l{ights.

A. V. Viswanatha Sallri and T. V. R. Talachaii, for the petitioners (In p<'lit iuns i'\<Js. 76, 87, na. J04 ;;nd 217-~28 c.f 19GO).

T. V. R. Tatachari, for tho petitioners (In petitions

NoR. 72 and 229-233 of 1960).

D. Xnnrnaraju, Admcate General for the State of ii ndl1ru Pradesh, I'. R. lfrlmcha1ulra Rao and T. M. Sm, for tho r";ponde11ta (ln all the petit.ionA).

J!)60. September 8. Th" .Judgment of the Court was deli vt•rcd by

i:;unBA RAO J .-These pct itiouH are filed under

Art. 32 of t.he ConHt it ution fol' the enforcement of tho petitioners' fllndamrntal. l'ight to_ carry _on _the_ bus_i· ness of )llotor trans11ort 111 \\ e•t Gudavan Drntnct m

1960 · the State of Andhra Pradesh by the issuance of writs of certiorari or . any other appropriate writs, orders or Dosa ·Satyu-directfons to quash the schemes of road transport narayanamurty services as finally approved by the Government of, etc. Andhra Pradesh on March 21, 1960, and for other v. incidental reliefs. The Atidhra

The Atidhra Pradesh State Road Tian:-.port Corporation

In exercise of the powers conferred by s. 68C of the Motor Vehicles Act (IV of 1939), as amended by the Central Act 100 of 1956, (hereinafter called the Act), Shri Guru Pershad, the Chief Executive Officer, Andhra Pradesh State Road Transport Corporation, (hereinafter called the Transport Corporation) publi-shed seven proposals dated December 7, 1959, in the Andhra Pradesh Gazette dated December 17, 1959, propounding seven schemes for the nationalization 'of the road transport in respect of different parts of West Godavari District in that State. Under that notification objections from the public and affected parties were invited to be filed within 30 clays of the publication thereof. Afore than 3000 objections· were received by the Government against the said schemes. After considering the objections, the Government issued notices to the objectors or their representatives and the representatives of the Transport Corporation inf01:ming them of the time, pla.c·e and the dates of h,earing: On the notified dates, namely, March 10, 11 and 12, 1960, 200 objectors were present and most of them. were represented by Advocates. The Transport Corporation was also represented by its Chief Execu-tive Officer and its legal advisers. The Minister in charge of the portfolio. of transport held an enquiry, consklered the conflicting arguments advanced, gave definite findings on the points urged, rejected all the objections· but one and approved the schemes with slight modification. The seven schemes wer~ directed to be put in force from different dates which were given in the order ma.de by the Minister. The aggrieved operators ·who were not satisfied with the order of the Minister filed the present petitions for the said reliefs.

SUbba R'ao ].

Shri A. V. Viswa.natha. Sa.stri, learned counsel for the petitioners, raised before us the following points;

Dosa .-.al ya-""'"Y""amurty tic. v. TJ,e A.ndlua Pradesh Stale Road TraHspo1l Corporation

Subba Rao ].

(I) The provisions of Ch. IVA of the Act are ultra vires the powers of Parliament because they are within the exclusive legislative field of the States. (2) The pro-visions of Ch. IV of;the Act infringe the fundamen-tal rights of the petitioners under Art. l9(l)(g) of the Constitution and are not saved by cl. (6) of the said Article. (3) The provisions of Ch. IVA a.re a.lso viola.-live of Art. 14 of the Constitution. (4) The order of the Government confirming the schemes is vitiated by the <loctrine of bias and, therefore, void. (5) Though in fact seven schemes a.re framed, in effect they a.re component pa.rts of one scheme and that device has been adopted to circumvent the judgment of this Court in Srinivasa Reddy v. The State of Mysore('). (6) The schemes are void inasmuch a.s they "tre pre-pared a.nd published by the Chief Executive Officer who was not one of the persons who could act on behalf of the Transport Corporation under s. 13 of the ltoa.d Tr~nsport Corporations Act. (7) The bchemes as propounded by the Transport Corporation did not give the number of vehicles proposed to be operated in each route a.a it should ha\·e given under r. 4 of the Andhra Pradesh Motor Vehicles Rules (heroina.ft~r called the rules) and tho modification made by the Minister directing the Transport Corporation to do so does not also comply with the requirements of the said rule. (8) In exercise of the power conferred under r. 5 of the Rules, the State Transport Under-ta.king conferred upon itself power to vary the fre-quency of the services and that rule and the note made pursuant thereto are inconsistent with the pro-visions of the Act and, therefore, void. (9) The proposed schemes include three new routes and that is illegal as the so.id Transport U nderta.king has no power to.include any new routes in a. scheme proposed by it. Though many other questions a.re raised in the petitions, they a.re not pressed before us. Lea.med Advocate Genera.I for the State of Andhra Pradesh sought to sustain the schemes a.a approved by the Minister in thbir entirety.

(1) [196<>] • S.C.R. 130.

We shall now proceed to deal with the contentions

in the order they were raised.

Dosa Satya· narayana1nurfy etc. v.

Re. (1) : The first contention does not now; merit detailed consideration as jt has been considered and rejected by this Court in H. C. Narayanappa v. The State of Mysore ([1]). In that case, after considering the question, Shah, J., speaking for this Court, observed: " We a.re therefore of the view that Chapter IV could competently be enacted by the Parliament under entrj No. 21 read with entry No. 35 of the Concurrent List.''

The Andina Pradesh State Road Transport Corporation

Subba Rao ].

Nothing further need be said on this point. With

respect we accept and follow the said decision.

Re. (2): The next contention is based upon Art. 19

of the Constitution. The question is whether Ch. IV of the Act is saved by Art. 19(6) of the Constitution. If Ch. IV A, which provides for the nationalization of road transport services in the manner prescribed thereunder is not permissible legislation covered by Art. 19(6), it would certainly offend against the funda-mental right of the petitioners to do business in motor transport. The constitutional ·validity of Ch. IV of the Act was raised in GuUapalli . N ageswara Rao v. Andhra Pradesh Road Transport Corporation('). There it was argued that Ch. IV of the Act was •a piece of colourable legislation whose real object was to take over the business of the petitioners therein under the cover of cancellation of permits in contravention of Art. 31 of the Constitution and that plea was rejected by this Court. But no attack was made cin the va.li: dity of Ch. IV of the Act on the ground that it in-fringed the provisions of Art. 19(l)(g) of the Constitu-tion a.nd was not saved by cl. (6) of the Article. That point is now raised before us. Under Art. 19(l)(g), all citizens shall have the right to carry on trade or business. The material part of cl. (6) of Art. 19, as amended by the Constitution (First Amendment) Act, 1951, reads:

"Nothing in sub-clause (g) of the said clause ...... . shall affect )~e operation of any existing law in so far (1) [1¢0] 3 S.C.R. 742. (•) [1959] Supp. 1 S.C.R. 319. · 83

Dosa Sotya· rarayariami,rty tic. ...

TIJt Aftd•ra Prdtsh Stalt Rood Trarisporl Corpora hon Suhb:i Rao ] .

as it relateH t-0, or pnwe!1t the State from making any law relating to ............ the carrying on by t.he State, or by corpo:ation ow11e<l or controlled by the State, of auy trade, busine"s, in<l11Htry or Hervice, whether to the exclusion, complete or· partial, of citizenH or other1>.·ise."

The only quest ion is, how for and to what extent Art. 19(6) secures the validity nf Ch. IVA of the Act from attack t.h11t it offendR against Art. 19(l)(g)? Learned counsel for the petitioners contends that Art. 19(6)(ii) pro\' ides only for partial exclusion of citizens, th1~t is, the exclusion of certain class of per-sons as aw hole and not for partial cxclusiou of some among the same class. AH s. 68C, the argument pro-ceeds, enables the Dtate Transport. U ndcrtaking to frame scheme for excluding some among the salije c~ss, the said prr•vision is not Hav<'d by Art. 19(6} of the Cot\stitution. Hek"rant portions of s. 68C of the Act read:

·" WhPre 1111y ~tale trnnsport undertaking is of opinion that :... . . .. ... . .. .. it is tiecessary iu the public interest that road-transport serl'ices in general or any particular clas8 of such service in relation to any area or route or portion thereof should be run and operated by the Stat€ transport undertaking, whether to the exclusion, complete or partial, of other persons or otherwise ......... ".

Under this section scheme may he framed in respect nf road transport service in genera.I or in respect of a. particul&r class of such service empowering the State Transport Undertaking to run the said service; it may be in rPla.tion to any area or. route or portion t hert>of; it ma\· al•o be to the exclusion of all or some of the persons "running the said service in genera.I or particular class of it. The section enables the State to take OYer particular class of service, say, the bus service, and exelude all or some of the persons doing lmsine"" in that class of service. Learned counsel says that this section confers wide power beyond the 1icnnissible limits of Art.'19(6}(ii) of the Constitu-tion. Tn stato it differently, the. argument is that while Art. 19(6)(ii) does not enable .partial exclusion

of some a.mong the sa.me class of service, s. ti!SC per-mits the said exclusion.

Dosa Siitya-narayananiurt_y etc. v.

; The answer to this argument depends upon the true mea.ning of the provisions of the said Article. Under sub.cl. (ii) of Art, 19(6), the State can make law relating to the carrying on by the State or by cor-poration, owned or controlled by the State, of any particular business, industry or service, whether to the exclusion, complete or partial, of citizens or otherwise. Article 19(6) is only saving provision and the la.w made empowering the State to carry on business is secured from attack on the ground of infringement of the fundamental rights of citizen to the extent it does not E'Xceed the limits of the scope of the said pto-vision .. Sub.cfause (ii) is couched in very wide terms. Under it the State can make law for carrying on business or service to the·exclusion, complete or par-tial, of citizens or otherwise .. The law, therefore, ca.n provide for carrying on service to the exclusion of all the citizens; it may exclud_e some of the citizens only; .it may do business in the entire State or portion of the State, in specified route or part thereof. The ·word "service" is wide enough to take in not only the general motor service but all the species of motor service. There are, therefore, no limitations on the State's power to make laws conferring monopoly OD it in respect of an are\t, and person or persons to be excluded. In this view, it must be held that s. 680 does not exceed the limits prescribed by Art. J 9(6)(ii) of the Constitution. . ·

The Andhra P.radesh State Road Transport Corp~ration Subba Rao J.

_ Re, (3): The next contention is that the provisions

_ of Ch. IV of the Acii, and particularly tho_se of s. 68C thereof, offend against Art. 14 of the Constitu-tion. The argument is that Ch. IVA enables the State to make discrimination between the State . Road Transport Corporation on the one hand. and private operators and private trwnsport undertakings on the other, and also to make a. similar discrimina-tion between the private operators or the private transport undertakings, and that this·discrill)ination is left to the arbitrary. discretion of the Transport Cor-poration. It is true that the provisions of this Chapter

Dosa Satyo-na1ayonann,rty etc. v.

The A1idhra Pradesh State Road Transport Corporation Subba Rao ].

enable scheme to be framed conforring monopoly on tho State in respect of transport services to tho partial or complete exclusion of other persons. How-ever, the provisions of the scheme do not make any distinction between individuals operating transport service and private transport undertakings; they are all treated as one class and tho classification is only made between tho State Transport Undertaking and private transport undertakings, whe.ther the business is carried on by individuals or firms or companies. Tho only question, therefore, is whether such claBBi· fication offends against the equality clause of tho Con-stitution. Article 14 says:

"The State shall not deny to any person equality before the law or the equal protection of the laws within tho territory of India."

This doctrine of equality has been so frequently con-

sidered by this Court that it does not require any further consideration. It has been· held that this Article does not prohibit reasonable classification for the purpose of legislation, but such classification cannot be arbitrary but must be based upon differen-ces which have rational relation to the object sought to be achieved. Doubtless in the prPsent case, the Legislature placed the State Transport Undertaking in class different from other undertakings. The question is whether the classification made in Ch. IV of the Act is just and bas reasonable relation to the object of the legislation. The object of Ch. IVA, as disclosed by the provisions of s. 68C, is to provide in the interest of the public an efficient, adequate, econo-mical and properly coordinated 1oad transport service. To achieve that object s. 68C confers power on the State Transport Undertaking t-0 prepare scheme t-0 run the service, whether to the exclusion, complete or partial, of other persons or otherwise. The classification bas certainly reasonable nexus to the object sought to .be achieved. Ordinarily State Transport Undertaking, compared with per-sons or private undertakings, should be in better position than others to carry on the said services for the benefit of the public; administratively, financially

and technically it can be expect~d to be in far better position than others. · It can provide more well-equipped buses, give better amenities to the travel-ling-Pu_blic, keep regular timings, repair or replace the buses in emergencies. It may also employ efficient supervisory staff to keep things going at an appreci-ably high standard .. We are not suggesting that there are no individuals or private companies who can effici-ently run the service. But the State, compared with individuals, should certainly be in better position t.o achieve the object, namely, to improve the road transport service in all its diverse aspects. In such situation, when the legislature, which must be presu-med to understand and correctly appreciate the needs of its own people, makes classification between State Transport Undertaking and others carrying on the business of transport services, we cannot say that there is no reasonable basis for such classification.

,Dosa Satya· narayanamurty etc. v

The Andhra Pradesh'- -State Road Transport Corporation Subba Rao J.

But it is said that s. 68C of the Act and other provi-sions of Ch. IV thereof confer an arbitrary power upon the State Transport Undertaking to discriminate between individuals and the said Undertaking, between individuals and private undertakings, and between individuals and individuals. But· the scheme of Ch. IV A, w hi oh has been considered by this Court in Gullapalli Nageswara Rao v. Andhra Pradesh State Road Transport Corporation('), evolves machinery for keeping the State Transpor:. Undertaking within bounds and from acting in an arbitrary manner, for B. 68C lays down the legislative policy in clear and understandable terms and the State Transport Under-taking can initiate scheme only for providing an efficient, adequate, economical and properly coordina-ted road transport service. "Another condition which it.Jays down is that the scheme is necessary in the pullHo interest. The scheme so framed is po blished, with all necessary particulars, in the official Gazette and also in such manner as the State Government may direct; persons affected by the scheme may file objections within the prescribed time ; the State Government, after considering the objections and (1) [1959] Supp. I S.C.R, 319.ryoo giving an opportunity to the objectors or their representatives and the representa.ti\·cs of thti 8tate Do.~a Sal) a-T U narayana111u,.ty ransport ndertaking to be heard in the matter, '"· may approve or modify the fcheme; the scheme HO v. approved or fil(>dified is published. The rules framed The Andhrn under the Act provide for personal hearing. ]f the Pradt<h State State Transport Undertaking seeks to modify a. Road hampo•I schem<>, it will have to follow the Harn" 1iroeed11re lwfnrn · CorporaJ1011 doing so: see ss. 68C, 680 and 68E of t.h(> Act. It Subba Roo J. will be seen from tho provisions of Ch. IVA nf the Art that th1• State Trnnsport Undertaking, l.iefor(l pro· pounding a. scht·m~, arrives at the decision on objec. ' tive criteria.· Th() parties affected a.nd the l'ublic !He given every opportunity to place tlwir ohjectionR bPfore tho Government, and the Ciovernm•·nt., after following the prescribed quasi.judicial proc,,dure, con. firms or modities the scheme. Thn sclll'lll(', before it is finalised, is subjected to puhlic gaze and scrutiny and the validity and appropriateness oft he proviHions are tested by a. qua.si-judir:ial process. The Gov<·rn. ment cannot be equated to a. Court; but the procedure proscribed accords with tho principl<·s of na.tmal justice. It is said that th(l State Transport U n<l•.·r. taking is either the State Government or corpora-tion, owned br controlled by the Sta.tP, a.nrl as such the entiro quasi-judicial procedure prescribed is only a. cloak to screen the exercise of an abtiolute and arbi-trary power on the part of the.Government. We cannot say that. Ch. l VA is such device. The Lcgis. lature ma.de sincere attempt to protect a.s fa.r as possible individual rights from the arbitrary acts of the executive. Once it is conceded that Ch. IV of the Act is constitutionally good and that the Legis-lature can validly make la.w for nationalization of the road transport service, the procedure laid down for implementing the said policy cannot, in our view, be said to bo unreasonable. It in a.ny pa.rt.icula.r case the mala fides of the auth0tit.ies eonc~rned a.nd eollu. sion between tho Staw Transport Undertaking and the ~~ale Government to deprive particular persons of their right to do road transport businoss or to drive ~ut particular persons from the trade on extraneous

considerations, are established, that may be ground

for striking down that particular scheme. But the provisions of Ch. IV cannot be struck down ou the ground that they confer an arbitrary power on the State Transport Undertaking and on the State Govern-ment to discriminate between individuri,ls and the State Transport Undertaking, between individualirand private undertakings, and between individuals and individuals.

This question was raised in Saghir Ah'rflad v. The State of U. P. ([1]). That case dealt with the provisions of the U. P. Road Transport Act, 1951 (U. P. Act II of 1951). Under s. 42(3) of that Act the Government was exempt from taking permits.for its own vehicles . and it could run any number of buses as it liked with-out the necessity of taking out permits for them. Jn furtherance of the State policy to establish complete State monopoly in respect of road transport busin~~s, the transport authorities b!'gan not only to cancel the 'permits alreaJy issued to private operators but also refused to issue permits to others, who would other-wiee be entitled tu them. The constitutional validity of that section was questioned. It may also be men-tioned thri,t though that decision- was given after the Constitution (First Amendment) Act, Hl51, it was not based upon that amendment, as the Constitution before the amendment g-0verned the rights of the parties therein. ln that situation, adverting to the argument based upon Art. 14 of the Constitution, Mukherjea, J., a~ he then was, made the following observations at p. 731:

" There is no doubt that clas~ification is inherent

in the concept of & monopoly ; and if the object of legislation is. to create monopoly in favonr of the State with regard to particular business, obviously, the State cannot but be differentiated from ordinary citi-zens and placed in 'separate category so far as the running of the business' is concerned and this classifi-cation would have perfectly rational relation to the object of the statute."

Section 3 of that Act provided that " where the Sto.te (I) (1955] I S.C.R. 707.

Dosa Satya-narayanamurty etc. v.

The Anihra Prade.~k State Road Transport Corporation

Subba Rao ].

1960 Government is satisfied that it is necessary, in the Dos• Saty•-interest of genera.I public and for subserving the na•·~··••"'"''Y common good, so to direct, it may declare that the ,,,_ Road Transport Services in genera.I, or any particular v. class of such service on any route or port.ion thereof, The Andhm shall be run and operated by the State Government '"•de.<h Stale I . I S · · Road hmospo•t e~c ns1_vt y ?{ y t ta.te I ovhernment m COllJUnc-Co•P"'"""" tlon wit 1 ra1 way or pa.rt y 1iy t ta.te 80'overnment a.nd partly by othors in accordance with the provi-su&ha Rao J. sions of this Act". It was contended therein that, as the State could choose any and evory person it liked for the purpose of being associated with the transport service and as there were no rules to guide its iscre-tion, that provision would offend against Art. 14 of the Constitution. It was pointed out on behalf of the State that the discrl'tion under s. 3 of that Act was not uncontrolled as that could only be done by grant-ing of permits in accordance with the provisions of the Motor Vehicles Act. Accepting the const1 uction auggested, this Court hdd that the discretion to be exercised by the State would be a. regulated discretion guided by statutory rules. But in the instant case, no liberal const.ruction of the provisions need t.... re-sorted to, for Cb. IV of the Act in specific terms pcovides a. complete ·a.nd, in the circumsta.nceit; satis-factory machinery for reasonably regulating the exclusion of a.II or some of the private opera.tors from the notified area. or route. We, therefore, hold that the provisions of Ch. IV of the Act do not infringe the equality clause enshrined in Art 14 of the Consti-tution.

Re. (4): By the next contention the lea.med coun-sel attacks the validity of the scheme on tbe ground tha.t the Go\'ernment is actuated by bia.s against the private opera.tors of buses in We-st Goda.va.ri District, and indeed had predetermined the issue. In the peti-tions it was alleged that the Government had comp-lete control over the Road Transport Corporation, that the entire administration and control over such road transport undertaking vested in the Government, that the Chi~f Secretary to the Government of Andhra. Pra.de6h was its chairman and that, therefore, the

entire scheme, from its _inception to its final approval, was really the act of the Government. On this hypothesis it was contended that the Government itself was made judge in its own cause anQ. that, therefore, its decision was _vitiated by legal bias. That apart-, it was also pleaded that sub.committee, con-. sisting of Ministers, Secretaries and officers of connect; ed departments and presided over by the .Minister in charge of t.ransport, decided in its meeting of January 28, 1960, that under the scheme of nationalization of bus service, the State Government would take over the bus services in \Vest Godavari District and Gun-tur District before the end _of that year and, therefore, the Minister in charge of the portfolio of transport, he having predetermined the issue, disqualified him-self to decide the dispute between the State Transport Undertaking and the petitioners. The self same questions were raised in Gullapalli Nageswara Rao v. The State of Andhra Pradesh ([1]). There, as in this case, if, was contended that the Chief Minister, who was in charge of the portfolio of transport, could· not b<! judge in his own cause, as he was biased against the private operators. This Court pointed out the distinct.ion between official bias of an authority which is inherent in statutory duty imposed on it and per-sonal bias of the said authority in favour of, or against, one of the parties. In dealing with official bias this Court, after considering the relevant English decisions, observed at p. 587 thus : ·

"These deci.~ions show that in England stat.u-tory invasion of the common 111.w objection on the ground of bias is tolerated by decisions, but the inva-sion is confined strictly to the limits of the statutory exception. It is not out of place here to notice that in England the Parliament is supreme and therefore statutory law, however repugnant to the principles of natural justice, is valid ; whereas in India· the law made by Parliament or State Legislature should stand the test of fundamental rights declared in Part III of the Con&titution."

(1) [1960] I S.C.R 5F.o. 84

·DC'sa Satya. narayanamurty etc. v.

The And!ira Pradesl~ State Road Transport Corporation

Subba Rao J.

Then this Court proceeded to state that the provi· sions of the Act did not sanction any dereliction of the principles of natural justice, for the Act visualized in case of conflict between the undertaking and the operators of private buses that the State Government should sit in judgment and resolve the conflict. Much to the same effect has been stated by Sh ab, J., in H. C. Narayanappa v. The State of Mysore(') though in slightly different phraseology. The learned Judge stated:

Dosa Satya· narayanam"rly etc. v. The Andhra Pradesh State Rodd Transport Corporation Subba Rao j.

"It is also true that the Government on w bom the duty to decide I-he dispute rests, is substantially party to the dispute but if tho Government or the authority to whom the power is delegated acts judici-ally in approving or modifying the scheme, the appro-val or modification is not op~n to challrnge on pre-sumption of biaH. The :\linister or the officer of the Government who is invested with the power to hear objections to the scheme is acting in his official capa-city and unless thne is reliable evidence t-0 show that he is biased, his decision will not be liable to be called in question, merely because he is limb of the Government."In the above cases the transport department of the Government wa.s the transport undertaking, but here the State Road Transport Corporation, which is body corporate having perpetual succession a.nd common seal, is tho transport authority. Though under the pro-visions of the Act, the State Government has some control, it cannot be said either legally or factually tha.t1.he said Corporation is a. department of the State Government. The State Government, therefore, in deciding the dispute between the said undertaking a.nd the opera.tors of private buses is only discharging its statutory functions. This objection, therefore, ha.a no merits. Nor ca.u we sa.y that it ha.s been established that the Minister in charge of the portfolio of trans-. port ha.s been actuated by personal bias. The fact that he· presided over the sub-committee constituted to implement the scheme of nationalization of bus services i~ the West Godavari District does not in (1) [196<>] 3 S.C.R. 741.

itself establish any such bias. Indeed, in the counter-r96o affidavit filed on behalf of the first respondent the con-Dosa Satya· tents and authenticity of t reports o the procee · narayanamurty ings of the sub-committee published in the Telugu ,10. daily "Andhra Patrica" were not admitted. Even if v. the sub.committee ca.me to such decision, it is not Th• Andhra possible to hold that it was final and irrevocable Pradesh State uec1s1on .1 • • m • eroga.t1on · o th prov1s1ons · • o th . t It Road Transport Corporation was only a. policy decision and in the circumstances could only mean that the sub-committee advised the Subba Rao J. State. Government to implement the policy of nation-alization· of bus services in that particular district. The said decision could not either expressly or by neces-sary implication inv:olve predetermination of the issue: it can only mean that the policy would be implemented subject to the provisions of the Act. It is not suggested that the Minister in charge of the con. cerned portfolio has any personal bias against the operators of private buses or any of them. We, there-fore, hold that it has not been established that the Minister in charge of the portfolio of transport had persona.I bias against the operators of private buses and, therefore, disqualified himself from hearing the objections under Ch. IV of the Act.

Re. (5): The next contention is based upon the obser-vations of this Court in Shrinivasa Reddy v. The State .of Mysore ([1]). After elaborating on the scope of s. 68C of the Act, Wanchoo, J., observed at p. 136 thus:

"Therefore, the scheme tg be framed must be such as is capable of being carried out all at once and that is why the U,ndertaking has been given the power to frame scheme for an area. or route or even a. por-tion thereof ......•...... lf the Undertaking at that stage has the power to carry it out piecemeal, it woul~ possible for it to abuse the power of implementation and to discriminate against some opera.tors and iri'•, favour of others included in the scheme and also to break up the integrity of the scheme and in sense modify it against the terms of s. 68E."

Based on these observations it is contended that the State Government intended to frame only one scheme

(1) [1960) 2 S.C.R. 130.

uss

1960 for tho entire district though it wa.s not in position to implement the scheme in the entire district a.t one Dosti S11tya-a.n t ea.me time, , ut to circumvent the obscrv·a.-11aroyanantur1y '''· tions of this Court it had split up one scheme into v. seven scbcmt>s. Tht> first re~pondcnt in its counter-Th• A•dMa a.ffida.vit met this allegation in the foll(lwing wa.y: Pmdesh [51]• [1]• · "Having rl'ga.rd f.o the rcsourcl!s of the Undertaking Road Tratuport , ~ J J Co,poralion 111 men, m teria an n10ney, ca<" 1 sclwmo ha.s been so framed th~t it is cape.hie of bciug ea.rri<"d out a.II a.t Sitbba Rao ]. ·oucc, and in full, without breaking its integrity. Tho State Transport. Undertaking will carry out each of the published schemes on ·date fixed by the Statti Government for the implt·menlatiuu of each scheme". The M iuister in his order also ad vcrtcd to this aspoct and observed.: "In this case, A!'ve11 different schemes ha.ve been framed. Each scheme is st>pa.ra.te and independent scheme by itsr·lf. In terms of the notifica-tion, each scheme after approve.I will come into force only from a. da.te to be fixed by the i;overnmt•nt. Though different dates ma.y be fixed for each scheme, each scheme will be implemented in its .entirety. Xo piecemeal implementation of any one scheme will be done". Indeed the order of the Minister fixed specific dates from whieh ea.ch of the schemes shall come into force. This Court did not lay down that there eaunot Lo a.ny phased programme in the nationalization of transport services in Sta.le or in district; nor did it hold that there canuot be more t ban oue schcnw for district or part of district. The olJservatirms of this Court in regard to the implementat.ion of i;cheme piecemeal were aimed at to prcvl'ut an ab11He of power by discriminating age.inst _ o(Jllitl operal(Jl'S and iu fa. vour of others in res poet of a. bing le scheme. ln the present cast', se\·t•n o;chcuws were framed not to circumvent tho observatious of this Cuurt, but only to a.void the vice inherent in piecemeal implementation. Not only seven separate schemes \\ere framed in respect of separate areas of thr district, Lut also the Government made it clca.r that each scheme should be implemented in its entirety commencing from diffcrcut dates. We do not, therefore, sec any legitimate objec-tion to the framing of seven separate schemes.

Re. (6): This contention questions the validity of the schemes on the ground that the Chief Executive · R T Dosa Satya-Officer of the Andhra Pra es oa ransport or-narayanamur•y poration is not empowered to publish the schemes and, e1c. therefore, the schemes were not validly published. In-v. exercise of the powers conferre·d by s. 68C of the Act, The Andlira the Andhra Pradesh State Road Transport Corpora.-Pradesh Stale tion proposed the schemes n.nd published them in the Road Transporl Corporation Andhra Pradesh Gazette, Part II, p. 1310. The pro-posed schemes were signed by Guru Persha.d, Chief subba Ila~. Executive Officer, State. Transport Undertaking, Andhra Pradesh Road Transport Corporation. The relevant provisions of the Road Transport Corpora-tions Act, 1950 (Act LXIV of 1950) may be noticed at this stage. Under s. 4 of the said Act," Every Corpora-tion shall be body corporate by the name notified under section 3 having perpetual succession and common seal, and shall by the said name sue and be sued ". Relevant portions of s. 12 read : "A Corpora-tion may from time to time by resolution passed at meeting ......... authorize the Chief Executfre Officer or Genera.I Manager, or any other officer of the Corpora-tion subject to such conditions and limitations if any as may be specified in the resolution to exercise such powers and perform such duties as it may deem neces-sary for the efficient day to day administration of its business''. Section 13 says: " All orders and decisions of Corporation shall be authenticated by the signa-ture of the Chairman or any other member authorized by the Corporation in this· behalf and all other instru-ments issued by Corporation shall be authenticated by the signature· of the Chief Executive .Officer or General Manager or any other officer of the Corpora- . tion authorized.in like manner in this behalf". Hely-ing upon the said provisions, learned counsel for the petitioners contends tha.t the preparation and publi-cation of the ·schemes in question under s. 68C of the Act a.re .orders or decisions of the Corporation. and, therefore, should be au~henticated by the signature of the Chairman or any other member duly authorized under s. 13 of the Road Transport Corporations Act and not by the Chief Executive Officer. The first

Dosa Satya-narayatia,nurty etc. v. The Andhra Pradesh State Road TrtJttsport CorportJtion Subba Rao].

respondent in its counter-affidavit attempted to meet this contention by stat.ing that the Corporation by resolution authorized the Chief Executive Officer to exercise such powers and perform such duties as it may deem necessary for the efficient day to day administration of its business and the Chief Executive Officer in exercise of such authorization published the schemes in the Gazette. The first respondent relied upon s. 12 of the Road Transport Corporations Act and not on s. 13 thereof to sustain the power of the Chief Executive Officer to publish the schemes. We have no reason not to accept the statement of the first respondent that there was resolution passed by the Corporation in tel'ms of R. 12 (c) of the Road Transport Corporations Act. If so, the only question is whether the a.ct of publishing the proposed schemes framed by the Corporation in the Gazette pertains to the day to day administration of the Corporation's budineBB. The Chief Executive Officer has no power under the Act to frame schome. Section 68C empowers only the State Transport Undertaking to prepare scheme a.nd ca.nae every snch schrme to be published iu the official Ga.zettc a.nd also in such other manner as the State Goveromont may direct. The scheme, therefore, need not be directly published by the Corpora.tion, but it may cau8e it to be published in the official Gazette. The act of publishing in the official Ga.zette is ministerial aot. lt does not involve any exercise of discretion. It is only mecha.-nical one to be carried out in the course of day to day administration. So understood, there cannot be any difficulty in holding that it was purely ministerial act which the Chief Executive Officer by res.son of the e.forese.id resolution can uischa.rge under s. 12(c) of the Road Tra.nsport Corporations Act. It muot be presum-ed for the purpose of thi8 case that the Corporation decided the terms of the proposed schemes and the said cjecision must have been duly authenticated by the Chairman or any other member authorized by the Corporation in this behalf and the Chief Executive Officer did nothing more than publish the so.id scheme in exercise of itl! administrative functions. We,

therefore, hold that the Chief Executive Officer was well within his rights in publishing the said proposed schemes in the Andhra Pradesh Gazette.

Dosa Satya-narayanamurty ele. v.

Re. (7): The next argument turns upon the . provi-sions of r. 4 of the Andhra Pradesh Motor Vehicles Rules. The relevant part of the rule reads: " The scheme or approved scheme to be published in the official Gazette as required under section68C or 68D as the case may be, shall contain the following particulars : (i) ......... (ii) the number of vehicles proposed to be operated on each route ". In certain schemes the number of vehicles to be operated on each route was not specified, and one number was mentioned against two or more routes bracketting them. When an objec-tion was taken before the Government in regard to this matter, the Minister accepted it and directed that the scheme might be modified so as to indicate the number of vehicles to be operated on each route separately. The schemes were accordingly modified by indicating the number of vehicles to be operated on each route separately and the approved schemes with the said modification were duly published in the Gazette dated March 21, 1960. The approved schemes, therefore, satisfy rule 4(2) of the Rules, for the approv-ed schemes, as duly modified, contain the number of vehicles proposed to be operated ou each route. But the point sought to be made is that the Minister himself should have fixed the number of vehicles pro-posed to be operated on each route and should not have merely directed the appropriate modification to be made in the approved schemes. It does not appear from the record that there was any dispute before the Minister as regards the apportionment of the number of vehicles shown against two or more routes to each of the routes, but the only contention raised was that the bracketting of the number of vehicles between two or more routes contravened the provisions of r. 4. Though the order of the Minister only contains direc-tion, the apportionment of the vehicles between the routes was not made by the State Transport Authority, but only by the Government, for the approved schemes were published not by the Chief Executive Officer but

The Andhra Pradesh .State Road Transport Corporation

Subba Rao ].

by the State Government. It must he presumed that the allocation also must have been me.de with the Dosa Satya· I narayanamurty approva o the Minifiter. Ther1· a.re no merits in t.liis etc. objection either. v. Re. (8): The next rontention is that r. 5 framed bv T'he Andhra the State Government in exercise of the power con-Pradesh State ferred on it under s. 68(1) is inconsistent with the Road Transport Corporation prov1s1ons . . o s. 68[E ]o t ct au , t ere [f ][h ]d 1[. ]Ort', 18 . VOH . J . The schemes prepared by the State Transport Autbo-Subba Rao J. rity contain the following note: "The frequency of services on any of the notified routes or within any notified area shall, if necessary, be varied having regard to the traffic needs during any period "-In-deed the said note was practically reproduction of note appended tor. 5. The only question is whether r. 5 and the note made pursuant thereto come into conflict with s. 68E of the Act. Section 68E reads:"Any ache.me published under sub.section (3) of section 68D me.y e.t any time be cancelled or modified by the St&te transport undertaking e.nd the procedure le.id down in section 68C and section u8D shall, so fe.r as it can be made applicable, be followed in every case where the scheme is propoMed to be modified e.s if the modification proposed were e. separate scheme". The short question that a.rises is whether the varia-tion of frequency of service by the State Transport Undertaking amounts to modification of scheme within the meaning of s. 68E of the Act.' The rule is not so innocuous as the learned Ad voce.te-Genere.l of the Andbra Pradesh contends. Under that rule the State Transport Undertaking, having regard to the needs of traffic during any period, may increase or decrease the number of trips of the existing buses or vary the frequency by increasing or decree.sing the number of buses. This can be done without any reference to the public or without hearing any repre-sentations from them. This increase or decrease, as the case me.y be, can only be for. the purpose of pro-viding an efficient, adequate, economical transport service in relation to pe.rticul~r route within the meaning of s. 68C. At the time the original schemes -are propolltld, the persons affected by them may file

objections to the effect that the number of buses should be increased or decreased on a. particular route from that proposed in the schemes. The Government may accept such suggestions and modify the schemes; but under this rule the authority may, without refe-rence to the public or the Government, modify the schemes. Learned counsel contends that the note only· provides for an emergency. But the rule and the .note are comprehensive enough to take in not only an emergency but also modification of the scheme for any period which may extend to any length of time. We are, therefore, definitely of opinion that the rule confers power' on the State Transport Updertaking to modify · substantially the scheme in one ·respect, though that power can only be exercised under s. 68E of the Act in the manner prescribed th~eunder. This rule is void and, ~herefore, the said note was illegally inserted· in the schemes. But on that ground, as the learned counsel contends, we cannot hold that the schemes are void. The note is easily severable from the schemes without in any way affecting their structure: Without the note the schemes a.re self-contained o.µes and it is impossible tO hold that the schemes would not have been framed in the manner they were ma.de if this note was not allowed to be included therein. We, therefore, hold tha.t the note should be deleted from the schemes and the schemes are otherwise good.

Re. (9): The last of the arguments attacks· the schemes in so far i;i.s they include new routes. The new routes included in the schemes are Eluru to Kovvur, and Nida.de.vol to J eelugumilli. It is argued that the provisions of s. 680 a.re concerned with the existing . routes only. Support i,s sought to be drawn for this contention from the provisions of s. 680 of the Act. The relevant part of that seotion says: "Where any State transport undertaking is of opinion that ... ::; .... it is necessary in the public interest that road transport services in genera.I · or any particular class of such service in relation to any area. or route or portion thereof should be run and operated by the State

I960 . Dosa Salya-narayanamurty etc. v. The Andhra Pradesh Stall Road Transporl Corporation .

Subba Raoj.

Dosa Satya-narajananiurty etc.

The Andhra Pradesh State Road Transport Corporation

Subba Rao ].

transport undertaking ............ the State transport undertaking may propose scheme ............ ". Now the contention is that the word "route" in that section refers to pre-existing route, for it is said that the words "route or portion thereof" in the section clearly indicate that the route is an existing route, for scheme cannot be framed in respect of portion of proposed route. We do not see any force in this con-tention. Under s. 680 of the Act the scheme may be framed in respect of any area or route or port.ion of any area or portion of route. There is no in-herent inconsistency between an "area" and "route". The proposed route is also an area limited to the route proposed. The scheme may as well pro-pose to operate t~ansport service in respect of new route from point to point and that route would certainly be an area within the meaning of s. 680. We, therefore, hold that s. 680 certainly empowers the State Transport Undertaking to propose scheme to include new routes.

Though some other points were raised in the affida-vits filed before us, they were not pressed.

In the result we hold that the note relating to the frequency of the services appended to the schemes must be deleted and that in other respects the peti-tions fail ; and accordingly they are dismissed with costs. One set of hearing fees.

Petitions dismissed.