2 of 1960
Petition under Article 32 of the Constitution of India for the enforcement of Fundamental Rights
A V Viswanatha Sastry and B B L Iyengar for the petitioner
G section Pathak R Gopalakrishnan and T M Sen for the respondents
C K Daphtary Solicitor General of India and BRL Iyengar for the Intervener D R Karigowda
April 28
The Judgment of the Court was delivered by SHAH J
The petitioners pray for a writ quashing a scheme approved under section 68D2 of the  by the Government of the State of 744 Mysore and for a writ restraining the respondents ie the State of Mysore the General Manager the Mysore Government Road Transport Department and the Regional Transport Authority Bangalore from taking action pursuant to the scheme
The petitioners are operators of Stage carriages on certain routes in the sector popularly known as  Anekal area  in the Bangalore District
On January 13 1959 the General Manager Mysore Government Road Transport Department who will hereinafter be referred to as the 2nd respondent pub lished a scheme in exercise of the powers conferred by section 68C of the  for the exclusion of private operators on certain routes and reservation of those routes for the State transport undertaking in the Anekal area
The Chief Minister of the Mysore State gave the operators affected by the scheme an opportunity of making oral representations and on perusing the written objections and considering the oral representations approved the scheme as framed by the 2nd respondent
On April 23 1959 the scheme was published in the Mysore State Government gazette  On June 23 1959 renewal applications submitted by petitioners 1 to 3 for permits to ply Stage carriages on certain routes covered by the scheme were rejected by the Transport Authority and the 2nd respondent was given permanent permits operative as from June 24 1959 for plying buses on those routes
In Writ Petition No 463 of 1959 challenging the validity of the permanent permits granted to the 2nd respondent the High Court of Mysore held that the issue of permits to the 2nd respondent before the expiry of six weeks from the date Of the application was illegal
To petitioners 1 to 3 and certain other operators renewal permits operative till March 31 1961 were thereafter issued by the third respondent
The 2nd respondent applied for fresh permits in pursuance of the scheme approved on April 15 1959 for plying Stage carriages on routes specified in the scheme and notices thereof returnable on January 5 1960 were served upon the operators likely to be affected thereby
On January 4 1960 the five petitioners 745 applied to this court under article 32 of the Constitution for quashing the scheme and for incidental reliefs
The petitioners claim that they have a fundamental right to carry on the business of plying stage carriages and the scheme framed by the 2nd respondent and approved by the State of Mysore unlawfully deprives them of their fundamental right to carry on the business of plying stage carriages in the Anekal area
The diverse grounds on which the writ is claimed by the petitioners need not be Bet out because at the hearing of the petition counsel for the petitioners has restricted his argument to the following four heads 1 that the scheme violates the equal protection clause of the Constitution because only fourteen out of a total of thirty one routes on which stage carriages were plied for public transport in the Anekal area were covered by the scheme and that even from among the operators on the fourteen routes notified two operators were left out thereby making a flagrant discrimination between the operators even on those fourteen routes 2 that by Chapter IVA of the  Parliament had merely attempted to regulate the procedure for entry by the States into the business of motor transport in the State and in the absence of legislation expressly undertaken by the State of Mysore in that behalf that State was incompetent to enter into the arena of motor transport business to the exclusion of private operators 3that the Chief Minister who heard the objections to the scheme was biased against the petitioners and that in any event the objections raised by the operators were not considered judicially and 4 that the Chief Minister did not give  genuine consideration  to the objections raised by the operators to the scheme in the light of the conditions prescribed by the Legislature
Re 1 In column 1 of the scheme  part of Bangalore District viz Bangalore North Bangalore South Anekal and Hosakote Taluks  is set out as the area in relation to which the scheme is approved and in 746 column 3  the routes with their starting points termini intermediate stations and route length in which the State transport undertaking will introduce its services to the exclusion of private operators  are those set out in statement 1 appended to the scheme
Statement 1 sets out the description of fourteen routes with their intermediate points route length number of buses to be operated and the maximum number of trips to be performed on each route
By column 4  the number of existing stage carriages on each route with the number of trips and the names of their opera tors  are described  as in statement 2 appended 
Statement 2 sets out the names and places of business of fifty six operators together with the routes operated and the numbers of the stage carriages and trips made by those operators
In the Anekal area there are thirty one routes which are served by stage carriages operated by private operators and by the approval of the scheme only fourteen of those routes are covered by the scheme  Section 68C in so far as it is material provides that a State transport undertaking if it is of opinion that it is necessary in the public interest that road transport services in relation to any area or route or portion thereof should be run and operated by itself whether to the exclusion complete or partial of other persons or otherwise it may prepare a scheme giving particulars of the nature of the services proposed to be rendered the area or route proposed to be covered and other particulars respecting thereto as may be prescribed
Section 68D1 provides for inviting objections by persons affected by the scheme
Sub section 2 of section 68D authorises the State Government after considering the objections and giving an opportunity to the objectors to approve or modify the scheme and by sub section 3 the scheme as approved or modified and published by the State Government in the official gazette shall  become final and shall be called the approved scheme and the area or route to which it relates shall be called the notified area or notified route
 Counsel for the petitioners contended that exercising powers under section 68C the State transport undertaking may prepare a scheme in respect of an 747 area or a number of routes in that area but not a scheme for an area which is to apply to some only and not to all routes on which public transport vehicles in the area operate
In this case it is unnecessary to decide whether it is open to a State transport undertaking under a scheme framed for a notified area to limit its application to some only of the routes because on a true reading of the scheme it is amply clear that the scheme was approved in relation to fourteen notified routes and not in relation to a notified area
 The approved scheme is in the form prescribed by the rules and in the form prescribed by column 1 the area in relation to which the scheme is approved is required to be set out
But a scheme under section 68C must be one in relation to an area or any route or portion thereof wherein the transport service is to be undertaken by the State transport under taking to the exclusion either complete or partial of other operators
Column 1 of the approved scheme undoubtedly describes the area in relation to which the scheme is approved but by the designation of the area in the scheme an intention to exclude either wholly or partially the operators of stage carriages from that area is not evinced either expressly or by implication
By column 3 the scheme expressly directs that the State transport undertaking will introduce its service to the exclusion of private operators on the specified routes
The scheme must therefore be regarded as one for the fourteen notified routes and not in relation to the area described in column 1
Counsel for the petitioners submitted that an order passed on October 22 1959 by the 3rd respondent the Regional Transport Authority rejecting applications for permits for one of the fourteen routes to an applicant indicated that in the opinion of the third respondent the scheme related to a notified area and not to notified routes
The order states that  an approved scheme for the exclusive operation in the notified area of Bangalore District  by the second respondent  has come into existence after the notification of the route Bangalore to Nallur and the major portion of the route applied for lie in the notified area and as such it was not desirable to grant any permit 748 to operators to pass through notified area in the intraState route
 The third respondent may have in considering the application assumed that the scheme related to a notified area but the true interpretation of the scheme cannot be adjudged in the light of that assumption
The other document relied upon is a statement of objections filed by the second respondent on October 24 1959 resisting the application for stage carriage permits to a private operator on the route Siddalaghatta Bangalore via Nallur
In para
4 of the statement it was submitted that  the existing notification dated October 15 1959 came under the notified area of the department of the second respondent  and that would overlap certain services of the department
But because in making his defence the second respondent has referred to the scheme as dealing with  the notified area the scheme will not necessarily be hold to be one in relation to the notified area
The argument that among the operators on the fourteen routes two have been selected for special treatment and on that account the scheme is discriminatory has in our judgment no substance
It is averred in para
13 of the petition that two persons Chikkaveerappa operating on route Chikkathirupathi to Bangalore via Surjapur Domsandra and Agara and Krishna Rao operating on route Bangalore to Chik kathirupathi via Agara and Surjapur are not amongst those who are excluded from operating their vehicles on the notified routes
In the affidavit filed by the State and the second respondent it is submitted that the plea of the petitioners that the two persons operating stage carriages on specified routes were not amongst those to be excluded is incorrect and that those two persons had been notified by the Secretary of the third respondent that they were  likely to be affected on giving effect to the approved scheme
 Undoubtedly route item No 2 in statement 1 to the scheme is  Bangalore to Surjapur or any portion thereof  and the route operates via Agara and Domsandra but the record does not disclose that the two named persons are in plying their stage carriages entitled to operate on the route specified with right to stop at the named places for picking up passengers
749 It is not clear on the averments made in the petition that the route on which the stage carriages of the two named persons ply are identical even if the routes on which the stage carriages of these two operators ply overlap the notified route in the absence of any evidence to show that they had the right to pick up passengers en route the discrimination alleged cannot be deemed to have been made out
Re 2 Article 298 of the Constitution as amended by the Constitution Seventh Amendment Act 1956
recognises the executive power of the Union and of each State as extending to the carrying on of any trade or business
That power of the Union is subject in so far as the trade or business is not one in respect of which Parliament may make laws to legislation by the State and the power of each State in so far as the trade or business is not one with respect to which the State Legislature may make laws is subject to legislation by Parliament
Like ordinary citizens the Union and the State Governments may carry on any trade or business subject to restrictions which may be imposed by the Legislatures competent to legislate in respect of the particular trade or business
Under Article 196 of the Constitution as amended by the First Amendment Act 1951 nothing in sub cl
g of cl
1 of article 19 is to affect the operation of any existing law in so far as it related to or prevent the State from making any law relating to the carrying on by the State or by a Corporation owned or controlled by the State of any industry or business whether to the exclusion complete or partial of citizens or otherwise
The State may therefore carry on any trade or business and legislation relating to the carrying on of trade or business by the State is not liable to be called in question on the ground that it infringes the fundamental freedom of citizens under article 191g
The Motor Vehicles Act1939 was enacted by the Central Legislative Assembly in exercise of its power under the Government of India Act 1935 to legislate in respect of mechanically propelled vehicles
Chapter IVA containing sections 68A to 681 was incorporated into that Act by the Parliament by Act 100 of 1956 whereby special provisions 97 750 relating to the conduct of transport undertakings by the States or Corporations owned or controlled by the State were made
Section 68A defines the expression  State transport undertaking  as meaning among others an undertaking for providing transport service carried on by the Central Government or a State Government or any Road Transport Corporation established under Act 44 of 1950
By section 68B the provisions of that chapter and the rules and orders made thereunder are to override Chapter IV and other laws in force
Section 68C authorises the State transport undertaking to prepare and publish a scheme of road transport services of a State transport undertaking
Section 68D deals with the lodging of objections to the scheme framed under the preceding section the of those objections and the publication of the final scheme approved or modified by the State Government
Section 68F deals with the issue of permits to State transport undertakings in respect of a notified area or notified route and provides that the Regional Transport Authority shall issue such permits to the State transport undertaking notwithstanding anything contained in Chapter IV
It also enables the Regional Transport Authority for giving effect to the approved scheme to refuse to entertain any application for the renewal of any other permit to cancel any existing permit to modify the terms of any existing permit so as to render the permit ineffective beyond a specified date to reduce the number of vehicles authorised to be used under the permit and to curtail the area or route covered by the permit
Section 68G sets out the principles and method of determining compensation to persons whose existing permits are cancelled
By Chapter IVA the State transport undertaking which is either a department of the State or a corporation owned or controlled by the State on the approval of a scheme is entitled consistently with the scheme to exclusive right to carry on motor transport business
The Regional Transport Authority is bound to grant permit for the routes covered by the scheme to the State transport undertaking if that authority applies for the same and the Regional Transport Authority is 751 also bound in giving effect to the approved scheme to modify the terms of existing permits and to refuse to entertain applications for renewal of permits of private operators
Chapter IVA is not merely regulatory of the procedure for carrying on business of road transport by the State it enables the State transport undertaking subject to the provisions of the scheme to exclude private operators and to acquire a monopoly partial or complete in carrying on transport business in a notified area or on notified routes
The authority of the Parliament to enact laws granting monopolies to the State Government to conduct the business of road transport is not open to serious challenge
Entry No 21 of List III of the Seventh Schedule authorises the Union Parliament and the State Legislatures concurrently to enact laws in respect of commercial and industrial monopolies combines and trusts
The argument of the petitioners that the authority conferred by entry No 21 in List III is restricted to legislation to control of monopolies and not to grant or creation of commercial or industrial monopolies has little substance
The expression  commercial and industrial monopolies  is wide enough to include grant or monopolies to the State and Citizens as well as control of monopolies The expression used in a constitutional enactment conferring legislative powers must be construed not in any narrow or restricted sense but in a sense beneficial to the widest possible amplitude of its powers Navinchandra Mafatlal vs The Commissioner of Income tax Bombay City1 The United Provinces vs Atiqua Begum2
Entry No 26 of List II of the Seventh Schedule which invests the States with exclusive authority to legislate in respect of trade and commerce within the State subject
to the provisions of entry No 33 of List III does not derogate from the authority conferred by entry 21 of List III concurrently to the Parliament and the State Legislatures to grant or create by law commercial or industrial monopolies
The amplitude of the powers under the entry in the concurrent list expressly dealing with commercial and industrial monopolies cannot be presumed to be restricted by the 1 1955 1 SCR 829 836
2 752 generality of the expression  trade and commerce in the State List
If the argument of the petitioners and the intervener that legislation relating to monopoly in respect of trade and industry is within the exclusive competence of the State be accepted the Union Parliament cannot legislate to create monopolies in the Union Government in respect of any commercial or trading venture even though power to carry on any trade or business under a monopoly is reserved to the Union by the combined operation of article 298 and the law which is protected from the attack that it infringes the fundamental freedom to carry on business by article 196
We are therefore of the view that Chapter IVA could competently be enacted by the Parliament under entry No 21 read with entry No 35 of the Concurrent List
The plea sought to be founded on the phraseology used in article 196 that the State intending to carry on trade or business must itself enact the law authorising it to carry on trade or business is equally devoid of force
The expression  the State  as defined in article 12 is inclusive of the Government and Parliament of India and the Government and the Legislature of each of the States
Under entry No 21 of the Concurrent List the Parliament being competent to legislate for creating commercial or trading monopolies there is nothing in the Constitution which deprives it of the power to create a commercial or trading monopoly in the Constituent States
Article 196 is a mere saving provision its function is not to create a power but to immunise from attack the exercise of legislative power falling within its ambit
The right of the State to carry on trade or business to the exclusion of others does not rise by virtue of article 196
The right of the State to carry on trade or business is recognised by article 298 authority to exclude competitors in the field of such trade or business is conferred on the State by entrusting power to enact laws under entry 21 of List III of the Seventh Schedule and the exercise of that power in the context of fundamental rights is secured from attack by article 196 In any event the expression  law  as defined in article 133a includes any ordinance order bye law 753 rule regulation notification custom etc and the scheme framed under section 68C may properly be regarded as  law  within the meaning of article 196 made by the State excluding private operators from notified routes or notified areas and immune from the attack that it infringes the fundamental right guaranteed by article 191g
Be3 The plea that the Chief Minister who approved the scheme under section 68D was biased has no substance
Section 68D of the undoubtedly imposes a duty on the State Government to act judicially in considering the objections and in approving or modifying the scheme proposed by the transports undertaking
Gullapalli Nageswara Rao vs Andhra Pradesh State Road Transport Corporation and another1
It is also true that the Government on whom the duty to decide the dispute rests is substantially a party to the dispute but if the Government or the authority to whom the power is delegated acts judicially in approving or modifying the scheme the approval or modification is not open to challenge on a presumption of bias
The Minister or the officer of the Government who is invested with the power to hear objections to the scheme is acting in his official capacity and unless there is reliable evidence to show
that he is biased his decision will not be liable to be called in question merely because he is a limb of the Government
The Chief Minister of the State has filed an affidavit in this case stating that the contention of the petitioners that he was  biased in favour of the scheme was baseless he has also stated that he heard such objections and representation as were made before him and he had given the fullest opportunity to the objectors to submit their objections individually
The Chief Minister has given
detailed reasons for approving the scheme and has dealt with such of the objections as he says were urged before him
In the last para
of the reasones given it is stated that the Government have heard all the arguments advanced on behalf of the operators and  after giving full consideration to them the Government have come to 1959 Supp
1 SCR319 754 the conclusion that the scheme is necessary in the interest of the public and is accordingly approved subject to the modifications that it shall come into force on May 1 1959 
In the absence of any evidence controverting these averments the plea of bias must fail
4 The argument that the Chief Minister did not give genuine consideration  to the objections raised by operators to the scheme in the light of the conditions prescribed has no force
The order of the Chief Minister discusses the questions of law as well as questions of fact
There is no specific reference in the order to certain objections which were raised in the reply filed by the objectors but we are on that account unable to hold that the Chief Minister did not consider those objections
The guarantee conferred by section 68D of the upon persons likely to be affected by the intended scheme is  guarantee of an opportunity to put forth their objections
and to make representations to the State Government against the acceptance of the scheme
This opportunity of making representations and of being heard in support thereof may be regarded as real only if in the consideration of the objections there is a judicial approach
But the Legislature does not contemplate an appeal to this Court against the order passed by the State Government approving or modifying the scheme
Provided the authority invested with the power to consider the objections gives an opportunity to the objectors to be heard in the matter and deals with the objections in the light of the object intended to be secured by the scheme the ultimate order passed by that authority is not open to challenge either on the ground that another view may possibly have been taken on the objections or that detailed reasons have not been given for upholding or rejecting the contentions raised by the objectors
In the view taken by us the contentions raised by the petitioners fail and the petition is therefore dismissed with costs
Petition dismissed


Summary:
The appellant was a shareholder of a company known as Mafatlal Gagalbhai and Co Ltd The Company with its registered office at Bombay was at all material times resident in British India
It was also doing business in the former Baroda State and used to keep its profits derived in that State with Mafatlal Gagalbhai Investment Corporation Navsari
In the year 1949 Mafatlal Gagalbhai and Co Ltd declared dividends out of profits which had accrued partly in British India and partly in the Indian State
The appellant was assessed to income tax on the dividends earned by her
She did not bring those dividends into British India and claimed the benefit of para
4 of the Merged States Taxation Concessions Order
The Tribunal held that the income did not accrue to the appellant in the Baroda State but it did not decide the question whether she was entitled to the benefits of the Taxation Concessions Order
The High Court on a reference to it held that para
4 of the Taxation Concessions Order
did not apply to the assessee but it did not decide the other question as to where the income had accrued to the assessee
On appeal by special leave the appellant contended inter alia that since the Tribunal had not gone into the question of the applicability to the assessee of the Concessions Order and had not expressed any opinion thereon the High Court could not raise the question on its own and decide it Held that the High Court exceeded its jurisdiction in going outside the point of law decided by the Tribunal and deciding a different point of law
Section 66 of the Income tax Act which confers jurisdiction upon the High Court only permits a reference of a question of law arising out of the order of the Tribunal
It does not confer jurisdiction on the High Court to decide a different question of law not arising out of such order
New Jehangir Vakil Mills Ltd vs Commissioner of Income tax  Scindia Steam Navigation Co Ltd vs Commissioner of Income tax  Commissioner of Incometax vs Breach Candy Swimming Bath Trust and Ismailia Grain Merchants Association vs Commissioner of Incometax 1957 31 ITR 433 distinguished
Mash Trading Co vs Commissioner of Income tax  considered