Civil Appeals Nos
198 to 200 of 1959
Appeals from the judgment and order dated the 5th March 1959 of the Andhra Pradesh High Court in Writ Petitions Nos 1511 and 1512 of 1958 and 23 of 1959
N C Chatterjee G Suryanarayana K Mangach and T V R Tatachari for the appellants
D Narasaraju Advocate General for the State of Andhra Pradesh D Venkatappiah Sastry and T M Sen for the respondents
August 21
The Judgment of the Court was delivered by SUBBA RAO J
These appeals on certificates are directed against the judgment of the High Court of Judicature Andhra Pradesh at Hyderabad dismissing the petitions filed by the appellants under Art 226 74 582 of the Constitution for issuing writs of certiorari to quash the orders of the Government of Andhra Pradesh confirming a scheme of nationalization of transport and the subsequent orders of the Regional Transport Authority cancelling the appellants  stage carriage permits
These appeals are the off shoot of the judgment of this Court in Gullapalli Nageswara Rao vs Andhra Pradesh State Road Transport Corporation 1 delivered on November 5 1958
The facts were fully stated therein
It would be only necessary to recapitulate briefly the facts relevant to the present enquiry The appellants were carrying on motor transport business for several years in Krishna District in the State of Andhra Pradesh
Shri Guru Pershad styled as the General Manager of the State Transport Undertaking of the Andhra Pradesh Road Transport published a scheme for nationalization of motor transport in the said State from the date to be notified by the State Government
Objections to the said proposed scheme were invited by the State Government and the appellants among others filed their objections
On December 26 1957 the Secretary in charge of the Transport Department gave a personal hearing to the objectors and heard the representations made on behalf of the State Transport Undertaking
The entire material gathered by him was placed before the Chief Minister of the State in charge of transport who made the order approving the scheme
The approved scheme was published in the Andhra Pradesh Gazette dated January 9 1958 and it was directed to come into force with effect from January 10 1958
Thereafter the Andhra Pradesh Road Transport Corporation which was formed under the provisions of the Road Transport Corporation Act 1950 took over the Undertaking and proceeded to implement the scheme under a phased programme
The appellants moved this Court under article 32 of the Constitution for quashing the said scheme on various grounds
This Court rejected most of the objections raised by the appellants except in regard to two pertaining to the hearing given by the Secretary in charge 1 583 of the Transport Department which resulted in the quashing of the order of the Government approving the scheme and directing it to forbear from taking over any of the routes on which the appellants were engaged in transport business
After the said order notices were issued by the Government to all the objectors informing them that a personal hearing would be given by the Chief Minister on December 9 1958 and they were further informed that they were at liberty to file further objections before November 30 1958
The Chief Minister heard the representatives of the objectors and the Corporation and passed orders dated December 19 1958 rejecting the objections filed and approving the scheme as originally published
The order approving the scheme was duly published by the Government in the official Gazette oil December 22 1958
On December 23 1958 the Corporation applied to the Road Transport Authority for the issue of permits for plying stage carriages and for eliminating the permits granted to the private bus operators
On December 24 1958 the said Authority passed orders rendering the permits of the appellants ineffective from December 24 1958 and also issuing permits to the Corporation in respect of the routes previously operated by the appel lants
The said orders were communicated to the appellants on December 24 1958 and they were also directed to stop plying their buses from December 25 1958 on their respective routes
The appellants who were aggrieved by the orders of the Government as well by the order of the Regional Transport Authority filed petitions in the High Court under article 226 of the Constitution for quashing the same
The petitions were heard by a Division Bench of the said High Court consisting of Chandra Reddy CJ and Srinivasachari J who negatived the contentions raised by the appellants and dismissed the petitions
Hence these appeals
The arguments of Mr Chatterjee learned Counsel for the appellants maybe summarized thus 1 This Court held in Gullapalli Nageswara Rao vs Andhra Pradesh State Road Transport Corporation that the 1 584 Secretary in charge of the Transport Department was disqualified from deciding the dispute between the Department and the private bus operators on the basis of the principle that a party cannot be a judge in his own cause and that as the Chief Minister was in charge of the portfolio of transport the same infirmity attached to him also and therefore for the same reason he should also be disqualified from hearing the objections to the scheme published by the Undertaking and 2 the Chief Minister by his acts such as initiating the scheme and speeches showed a clear bias in favour of the Undertaking and against the private bus operators and therefore on the basis of the principles of natural justice accepted by this Court he was precluded from deciding the dispute between the said parties
The learned Advocate General sought to make out a distinction between  official bias  of an authority which is inherent in a statutory duty imposed on it and  personal bias  of the said authority in favour of or against one of the parties and contended that the mere fact that the Chief Minister of the Government had supported the policy of nationalization or even the fact that the Government initiated the said scheme did Dot disqualify him from deciding the dispute unless it was established that he was guilty of personal bias and that there was no legal proof establishing the said fact
At this stage it would be convenient to notice briefly the decisions cited at the Bar disclosing the relevant principles governing the doctrine of bias 
The principles governing the doctrine of bias  vis a vis judicial tribunals are well settled and they are  i no man shall be a judge in his own cause ii justice should not only be done but manifestly and undoubtedly seem to be done
The two maxims yield the result that if a member of a judicial body is  subject to a bias whether financial or other in favour of or against any party to a dispute or is in such a position that a bias must be assumed to exist he ought not to take part in the decision or sit on the tribunal   and that  any direct pecuniary interest however small in the 585 subject matter of inquiry will disqualify a judge and any interest though not pecuniary will have the same effect if it be sufficiently substantial to create a reasonable suspicion of bias 
The said principles are equally applicable to authorities though they are not courts of justice or judicial tribunals who have to act judicially in deciding the rights of others ie authorities who are empowered to discharge quasi judicial functions
The said principles are accepted by the learned Counsel on both sides but the question raised in this case is whether when a statute confers a power on an authority and imposes a duty on it to be a judge of its own cause or to decide a dispute in which it has an official bias the doctrine of bias is qualified to the extent of the statutory authorization
In The King vs Bath Compensation Authority 1 the licensing justices of a county borough referred the application for the renewal of the licence of a hotel to the compensation authority of the borough and also resolved that a solicitor should be instructed to appear before the compensation authority and oppose the renewal of the licence on their behalf
The solicitor so instructed appeared before the authority and supported the opposition and in the result the compensation authority refused the renewal subject to payment of compensation
It may be mentioned that a majority of the justices who sat on the compensation tribunal and voted against the renewal of the licence had as members of the licensing committee been parties to the resolution referring the question of renewal to the compensation authority
The Court of Appeal by a majority Atkin L J dissenting held that in view of the provi sions of the Licensing Act 1910 the facts in that case did not disclose such bias or likelihood of bias as would disqualify them from sitting on the tribunal
This decision was reversed by the House of Lords on appeal reported in The House of Lords held that the decision of the tribunal whereon three justices who referred the matter to the said authority sat must be set aside on the ground that no one can both be a party and a judge in the same cause 1 586 Viscount Cave LC meets the argument based upon the statutory duty thus at p 592  No doubt the statute contemplates the possibility of the licensing justices appearing before the compensation authority and taking part in the argument for it is provided by section 19 sub section 2 that the compensation authority shall give any person appearing to them to be interested in the question of the renewal of a licence  including the licensing justices an opportunity of being heard
But the statute nowhere says that justices who elect to appear as opponents of the renewal and take active steps such as instructing a solicitor to take their opposition affective may nevertheless act as judges in the dispute and in the absence of a clear provision to that effect I think that the ordinary rule that no one can be both party and judge in the same cause holds good
 This decision therefore is an authority for the pro position that unless the legislature clearly and expressly ordained to the contrary the principles of natural justice cannot be violated
In The King vs Leicester Justices 1 a case also arising under the Licensing Consolidation Act 1910 the king s Bench Division held that the mere fact that the licensing justice has originated an objection to the renewal of a licence does not disqualify him by reason of interest from sitting and adjudicating as a member of that authority upon the matter of that licence
Salter J brought out the distinction between the Bath Justices  Case 2 and the case before him in the following terms at p 565  The distinction is that in that case Parliament had not sanctioned what was done in this case it has
 Dealing with the argument that there was some risk of bias if the statutory duty was discharged the learned Judge rejected it with the observation that  some risk of bias is inseparable from the machinery which Parliament has set up 
At first sight this judgment appears to be inconsistent with the decision 1 1927 1 KB 557
2 587 of the House of Lords in Bath Justices  Case1 but a scrutiny of the latter case shows that in that case the licensing justices had themselves actively opposed the renewal of the licence before the compensation authority and instructed a solicitor to do so on their behalf This is not a duty cast on them by the statute whereas the licensing justices in dealing with an application for renewal of a licence and when the question of renewal was referred for decision to the compensation authority in sitting as members of that authority are merely carrying out the duties in accordance with the procedure prescribed by the legislature
These decisions show that in England a statutory invasion of the common law objection on the ground of bias is tolerated by decisions but the invasion 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 a statutory law however repugnant to the principles of natural justice is valid whereas in India the law made by Parliament or a State Legislature should stand the test of fundamental rights declared in Part III of the Constitution
In the instant case the relevant provisions of the Act do not sanction any dereliction of the principles of natural justice
Under the Act a statutory authority called the Transport Undertaking is created and specified statutory functions are conferred on it
The said Undertaking prepares a scheme providing for road transport service in relation to an area to be run or operated by the said Undertaking
Any person affected by the Scheme is required to file objections before the State Government and the State Government after receiving the objections and representations gives a personal hearing to the objectors as well as to the Undertaking and approves or modifies the scheme as the case may be
The provisions of the Act therefore do not authorise the Government to initiate the scheme and thereafter constitute itself a judge in its own cause
The entire scheme of the Act visualises in case of conflict between the Undertaking and the operators of private buses that the State Government 1 588 should sit in judgment and resolve the conflict
The Act therefore does not authorise the State Government to act in derogation of the principles of natural justice
The next question is whether the State Government in the present case acted in violation of the said principles
The argument that as this Court held in the previous stage of this litigation that the hearing given by the secretary in charge of the Transport Department offended the principles of natural justice we should hold as a logical corollary to the same that the same infirmity would attach to the Chief Minister
This argument has to be rejected on two grounds firstly for the reason that on the last occasion the appellants did not question the right of the Chief Minister to decide on the objections to the scheme and indeed they assumed his undoubted right to do so but canvassed the validity of his order on the basis that the secretary who was part of the Transport Department gave the hearing and not the Chief Minister and therefore a party to the dispute was made a judge of his own cause
If as it is now contended on the same reasoning the Chief Minister also would be disqualified from deciding the dispute that point should have been raised at that stage instead a distinction was made between the Secretary of a Department and the Chief Minister and the validity of the order of the Chief Minister was questioned on the basis of this distinction
This Court accepted that argument
Having obtained the judgment of this Court on that basis it could not be open to the appellants at this stage to reopen the closed controversy and take a contrary position
That apart there are no merits in this contention
There is a clear distinction between the position of a Secretary of the Department and the Chief Minister of the State
Under the Constitution the Governor is directed to act on the advice of the Ministers headed by the Chief Minister
In exercise of the powers conferred by cls 2 and 3 of article 166 of the Constitution the Governor of Madras made rules styled as  The Madras Government Business Rules and Secretariat Instructions and r 9 thereof 589 prescribes that without prejudice to the provisions of r 7 the Minister in charge of a department shall be primarily responsible for the disposal of the business pertaining to that department
The Governor of Andhrain exercise of the powers under the Constitution directed that until other provisions are made in this regard the business of the Government of Andhra shall be transacted in accordance with the said Rules
It is therefore manifest that under the Constitution and the Rules framed thereunder a Minister in charge of a department is primarily responsible for the disposal of the business pertaining to that department but the ultimate responsibility for the advice is on the entire ministry
But the position of the Secretary of a department is different
Under the said Rules the Secretary of a department is its head ie he is part of the department
There is an essential distinction between the functions of a Secretary and a Minister the former is a part of the department and the latter is only primarily responsible for the disposal of the business pertaining to that department
On this distinction the previous judgment of this Court was based for in that case after pointing out the position of the Secretary in that Department it was held that though the formal orders were made by the Chief Minister in effect and substance the enquiry was conducted and personal hearing was given by one of the parties to the dispute itself 
We cannot therefore accept the argument of the learned Counsel that the Chief Minister is part of the department constituted as a statutory Undertaking under the Act
The next question is whether the Chief Minister by his acts and speeches disqualified himself to act for the State Government in deciding the dispute
In the affidavit filed by Nageswara Rao one of the appellants herein in respect of the writ petitions filed in the High Court he states in ground 8 of paragraph 14 thus  He the Chief Minister is the Minister in charge of the Transport Department at whose instance the Scheme was first published under Section 68C of the Act
He is not only the initiator of the Scheme but also the person who is interested in its approval and 75 590 implementation
He has thus a direct and specific connection with the dispute being a party thereto and he would be acting as a Judge in his own cause when he gives a personal hearing and considers the objections Mr Chatterjee contends that this allegation embodied in ground 8 has not been contradicted by the respondents
It is not correct to say that these allegations went unchallenged for in paragraph 6 of the counter affidavit filed on behalf of the State we find the following statements  The contentions of the petitioner in para
14 of his affidavit are without substance
The scheme as approved by the Government is neither illegal nor without jurisdiction
 In sub paragraph 3 of paragraph 6 it is alleged  The allegations that the hearing and determination of the questions in issue are not in accordance with law or principles of judicial procedure but only a farce gone through to satisfy the direction of the Supreme Court is not correct Sub paragraph 7 of paragraph 6 reads  The Minister in charge ie the Chief Minister can hear and decide
The State Government itself cannot be regarded as interested in the cause and therefore disqualified to decide
 Sub paragraph 8 of the said paragraph says  The contention that the Chief Minister is not competent to give the hearing and consider the objections inasmuch as he is biassed and has also prejudged the issue is not well founded
On facts on 9 12 1958 there was no Road Transport Department at all but a Road Transport Corporation which is a completely autonomous body with which the Chief Minister has no concern
Hence on the date of the enquiry the Corporation being a completely autonomous body is an entirely independent body altogether and hence there can be no question of bias to the Chief Minister hearing the objectors
The bearing given by the Chief Minister is just like a hearing of the court of law after remand 591 by a Superior Court    
The allegation that the Chief Minister had closed his mind and was biased is absolutely baseless
He kept an open mind and considered all the objections fully The counter affidavit further gives in detail how the scheme was initiated by Guru Pershad and how the various steps were taken in compliance with the provisions of the Act
It is therefore clear that the Government did not accept the allegations made by the appellants in their affidavits
Whatever may be the policy of the Government in the matter of nationalisation of the bus transport it cannot be said that the Chief Minister initiated the scheme in question
The learned Counsel then relied upon certain extracts from the reports published in the newspapers purporting to be the speeches of the Chief Minister
Exhibit IV is said to be a summary of the speech of the Chief Minister
made on October 14 1957 and the relevant portion thereof reads   I do not have any prejudice against the Krishna District
The bus transport in Telangana was nationalised 25 years ago
The Bus Transport nationalisation was extended to Krishna District since it is contiguous to Telangana in regard to transport services
It will be extended to the other districts gradually
It requires 12 crores of rupees to introduce nationalisation in all the districts at the same time
The Government is aware that Nationalisation of Bus Transport is not profitable
But we should fall in line with other States and move with the times
There are 360 buses in Krishna District
I cannot give an assurance that all these would be taken over
It is regrettable that these should be subjected to severe criticism when they are being done in public interest
 This speech only reflects the policy of the Government
Exhibit V is said to be an extract from the report of the Indian Express dated October 18 1957
The material part of it runs thus  Nationalisation of road transport services in the Andhra area was a settled fact and there was absolutely no question of going back on it   592 This speech also only states the policy of the Government and has no reference to Krishna District or to the transport services in that district
Exhibit VI is an extract from the report in the Hindu dated October 25 1957 wherein it is alleged that the Chief Minister  made the following statement  Mr N Sanjiva Reddy Chief Minister said here today that the nationalised road transport in Krishna would be administered by a Corporation
The Chief Minister who was addressing a press conference said  There is no question of postponement of the decision to nationalise bus transport in that district    
The Chief Minister said firmly that there was no public support to the contention of the private bus operators that there should be no nationalisation This speech has a direct reference to the nationalisation of bus transport in Krishna District and indicates a firm determination on the part of the Chief Minister not to postpone it any further
Exhibit IX is an extract from the report in the Indian Express dated December 13 1957 and it reads  The Andhra Pradesh Chief Minister Sanjeeva Reddy told pressmen here to day that the State Government would go ahead with the implementation of its decision to extend nationalisation of bus transport to Krishna district from April I next
 This also indicates the Chief Minister s determination to implement the scheme of nationalisation of bus transport in Krishna District from a particular date
Exhibit X is a report in the Mail under date April 1 1958 purporting to be a speech made by the Chief Minister in inaugurating the first phase of the extension of the nationalised road transport services to Guntur and Krishna Districts by the State Road Transport Corporation
Relevant extracts of the speech read thus  He the Chief Minister considered the implementation of the scheme simple first but he regretted to find it difficult since bus operators filed writ petitions in the High Court raised a I huge noise  and fought 593 till the very end against the scheme and finally even approached the Congress President Mr U N Dhebar to save them        
Mr Sanjeeva Reddi affirmed that the Government was determined to implement the scheme of nationalisation of bus transport services against all opposition and persons like him trained by the late T Prakasam were never afraid of opposition
 If it had been established that the Chief Minister made the speeches extracted in Exhibits VI lX and X there would have been considerable force in the argument of the learned Counsel for the appellants but no attempt was made to prove that the Chief Minister did in fact make those speeches
It is true that the extracts from the newspapers were filed before the Chief Minister and they were received subject to proof  but no person who heard the Chief Minister making those speeches filed an affidavit before him
The Chief Minister did not admit that he made the statements attributed to him
The Chief Minister in his order approving the scheme says  As regards the paper cuttings I may mention that in the course of a long and varied political career I have made hundreds of statements on many an occasion and many of them may be purely personal opinions
Moreover it is not always that the press people consult the persons on the accuracy of the statements made before they are published
The press cuttings filed before me are not communiques issued by the Government with the approval of the Government
They are published records of several statements said to have been made by me on various occasions
It is common knowledge press cuttings here and there torn out of context will give a completely twisted picture and version of a man s real intentions
It is not possible for me to state any thing definite about the veracity of these statements said to have been made by me at different points of time
It is quite possible that I might have made many such on many an occasion and it is also quite possible that some points spoken here and there may have been published with Head lines in the papers
594 It is not possible nor desirable to treat paper cuttings of statements said to have been made on several occasions as legal evidence in a judicial enquiry
 Notwithstanding the fact that the Chief Minister did not accept the correctness of the statements attributed to him in the newspapers no attempt was made by the appellants to file any affidavit in the High Court sworn to by persons who had attended the meetings addressed by the Chief Minister and heard him making the said statements
In the circumstances it must be held that it has not been established by the appellants that the Chief Minister made the speeches indicating his closed mind on the subject of nationalisation of bus transport in Krishna District
If these newspaper cuttings are excluded from evidence the factual basis for the appellants  argument disappears
We therefore hold that the Chief Minister was not disqualified to hear the objections against the scheme of nationali sation
A subsidiary argument is raised on the basis of r 11 of the Andhra Pradesh Motor Vehicles Rules
It is contended that the Road Transport Authority made an order rendering that the permits of the appellants ineffective without giving them due notice as required by that rule and therefore the said order was invalid
Rule 11 of the said Rules reads  In giving effect to the approved scheme the Regional Transport Authority or Authorities concerned shall before eliminating the existing services or cancelling any existing permit or modifying the conditions of the existing permit so as to i render the permit ineffective beyond a specified date ii reduce the number of vehicles authorised to be used under a permit or iii curtail the area or route covered by the permit in so far as such permit relates to the notified route give due notice to the persons likely to be affected in the manner prescribed in these rules
 595 This rule will have to be read along with section 68 F sub section 2 which reads  For the purpose of giving effect to the approved scheme in respect of a notified area or notified route the Regional Transport Authority may by order a refuse to entertain any application for the renewal of any other permit b cancel any existing permit c modify the terms of any existing permit so as to i render the permit ineffective beyond a specified date ii reduce the number of vehicles authorised to be used under the permit iii curtail the area or route covered by the permit in so far as such permit relates to the notified area or notified route
 A combined reading of section 68F 2 and r 11 makes it clear that the order contemplated under the said subsection can be made by the Regional Transport Authority only after giving due notice to the persons likely to be affected by the said order
On December 24 1958 the Regional Transport Authority made the following order  The permits of the following buses are rendered ineffective beyond 24 12 1958 under section 68F 2c1 of as amended by Act 100 of 1956 for the purpose of giving effect to the approved scheme of Nationalisation in respect of the following notified routes
 The routes on which the appellants were operating their buses were also included in the routes mentioned in the order
On December 24 1958 the Regional Transport Authority issued an order to the operators directing them to stop plying their buses on their respective routes from December 25 1958 and that order was served on the appellants on the same day ie December 24 1958
Though the learned Advocate General suggested that the provisions of r 11 have been satisfied in the present case we find it impossible to accede to his contention
There are two defects in the procedure
followed by the Regional 596 Transport Authority  i while the rule enjoins on the Authority to issue notice to the persons affected before making the relevant order the Authority made the order and communicated the  same to the persons affected and ii while the rule requires due notice ie reasonable notice
 to be given to the persons affected to enable them to make representations against the order proposed to be passed the Regional Transport Authority gave them only a day for complying with that order which in the circumstances could not be considered to be due notice within the meaning of the rule
We have therefore no hesitation to hold that the Regional Transport Authority did not strictly comply with the provisions of the rule
But in view of the supervening circumstances the High Court while noticing this defect in the procedure followed by the Regional Transport Authority refused to exercise its jurisdiction under article 226 of the Constitution
Pursuant to the order of the Regional Transport
Authority the appellants withdrew their vehicles from the concerned routes and the vehicles of the Road Transport Corporation have been plying on those routes
The judgment of this Court conclusively decided all the questions raised in favour of the respondents and if the order of the Regional Transport Authority was set aside and the appellants were given another opportunity to make their representations to that Authority it would be as the High Court says only an empty formality
As their vehicles have already been withdrawn from the routes and replaced by the vehicles of the Corporation the effect of any such order would not only be of any help to the appellant but would introduce unnecessary complication and avoidable confusion
In the circumstances it appears to us that as the appellants have failed all along the line to interfere on a technical point of no practical utility is to strain at a gnat after swallowing a camel 
We cannot therefore say that the High Court did not rightly exercise its discretion in this matter
The appeals fail and in the circumstances are dismissed without costs
Appeals dismissed


Summary:
Under a contract for the sale of goods the buyer paid an advance amount towards the price of the goods to be supplied and various quantities of goods were thereafter delivered by the sellers
The buyer from time to time made various other payments towards the price of the goods after they had been delivered
The last delivery of goods was made on June 23 1947 and the suit was brought on October 10 1950 by the sellers for the balance of the price due for goods delivered
The sellers pleaded that the suit was within time and relied on article 115 Of the Jammu and Kashmir Limitation Act under which the period of limitation was six years for a suit  for the balance due on a mutual open and current account where there have been reciprocal demands between the parties
564 Held that article 115 was not applicable to the case as there was no mutual account based on reciprocal demands
The payment made by the buyer after deliveries had been given to it were in discharge of the obligations to pay the price due on account of these deliveries the amount paid in advance was paid under the contract in discharge of obligations to arise  none of such payments created an independent obligation in the sellers towards the buyer
Tea Financing Syndicate Ltd vs Chandrakamal Bazbaruah Cal
649 approved