Case: Shri Vijay Baburao Thakar & Others Vs. State of Maharashtra & Others

V.M. Kanade J.Both these Petitions can be disposed of by a common order, since the Petitioners in both these Petitions are challenging the Government Resolution dated 20th April, 2007 and are also seeking appropriate writ, order and direction, directing the Respondents not to merge Pune Municipal Transport Undertaking and Pimpri Chinchwad Municipal Corporation under the provisions of the Companies Act, 1956. Brief facts in a nutshell are as under: 1. The Pune Municipal Corporation and Pimpri Chinchwad Municipal Corporation are constituted under the provisions of the Bombay Provisional Municipal Corporation (hereinafter referred to as BPMC Act). Pune and Pimpri Chinchwad are two cities, which are adjoining to each other and both the Pune Municipal Corporation and Pimpri Chinchwad Corporation have constituted transport undertakings under the BPMC Act for the purpose of regulating the road transport. In 1979, a Committee was constituted pursuant to the directions given by the Apex Court which is knows as Bhurelal Committee. Several other committees were also formed and they had unanimously recommended the merger of the two Transport Undertakings of the two Corporations. Accordingly, both the Municipal Corporations passed resolutions to consider the manner and the method of the merger of the two Transport Undertakings. The Committee accordingly submitted a report to the Government by their letter dated 6.6.2005.2. The Government accepted in principle the said recommendation and granted approval of merger of two Municipal Corporations. It constituted a Committee of high ranking officers under the Chairmanship of Additional Chief Secretary (Finance) to get recommendations in respect of the administrative structure and principles of financial working of the merge to the Committee accordingly submitted its recommendation and both Corporations also passed resolutions for the merger of the two undertakings and thereafter, the Government gave its approval to the merger of two undertakings by forming a company under the Indian Companies Act, 1956 vide Government Resolution dated 19th April, 2007. 3. Being aggrieved by the said decision and Government Resolution issued by the Government, both the Petitioners have filed the petitions under Article 226 of the Constitution of India. The Respondents have filed their Affidavit in Reply. We have heard the Learned Counsel appearing on behalf of both the Petitioners and respective Counsels of the Respondents at length.The grievance of the Petitioners in a nutshell is that: (i) two separate road undertakings could have been merged only under the Road Transport Corporation Act and not under the Indian Companies Act; (ii) In the earliar Government Resolution which was issued by the Government dated 2nd January, 2006, the Government had taken a decision to form of Company of the two transport undertakings under the provisions of the Road Transport Act and not under the Indian Companies Act;(iii) It was submitted that the provisions of the BPMC Act does not permit the formation of a company of its undertaking under the Indian Companies Act; (iv) The procedure which is laid down in the BPMC Act for the disposal and divesting of the properties belonging to the transport undertaking has not been followed by forming a new company under the Companies Act (v) Lastly it was submitted that the properties which belongs to the two transport undertakings should not be transferred merely by issuing a Government Resolution. 4. Counsel appearing on behalf of the Corporation had submitted that the Government had accepted the proposal and recommendation made by various companies and after necessary procedure was followed and had decided to merge the two transport undertakings by formation of a company under the Companies Act. 5. It was submitted that the Petitioners were expousing their private interest since the Petitioners were member of the Transport Committees of both the Respondents Pune Municipal Transport (PMT) and that as a result of merger of the PMT and Pimpri Chinchwad Municipal Transport (PCMT) resulted in the dissolution of the Transport Committee of both the PMT and PCMT and that was the grievance of the Petitioners and, therefore, this PIL had been filed by both the Petitioners. 6. In our view, the submissions made by the Learned Counsel appearing on behalf of the Petitioners cannot be accepted. It is an admitted position that both PMT and PCMT were separate transport undertakings. PMT which is a transport undertaking of Pune Municipal Corporation was started in March, 1950 and transport undertaking of Pimpri Chinchwad Municipal Corporation was started in 1974. The functions of both these undertakings was to provide public bus transport services within twin cities of Pune and Pimpri Chinchwad. It was noticed that both undertakings have bus routes on various roads within the Pimpri Pune and consequently many routes were common, as result of which the expenditure for these common routes which was incurred by PMT and PCMT were simultaneously incurred by both these undertakings. Both the transport undertakings were incurring financial deficit which in turn affected the transport service. The Corporators of both these undertakings and the public at large, therefore, had made a demand for a grant of coordinated separate undertaking. These demands were made by the public at large for more than 22 to 25 years and in view of this, various committees were constituted to look into the issue. Accordingly, several committees which consisted of experts in the field made a recommendations from time to time for the merger of the two transport undertakings. The recommendations made by all these Committees were unannious and all of them recommended of mergere of the two undertakings. Shri D.D. Sathe Commission submitted its report in 1979. The report of shri D.S. Kantikar, report of Shri K.J. Paranjpye commission (1995), report of Transport Manager 1997. The Bhurelal Committee appointed by the Honble Supreme Court. The Committee constituted by the Government under the Chairmanship of Additional Chief Secretary (Finance). All these Committees had recommended the merger of the two transport undertakings, for the purpose of overcoming financial difficulties and to avoid unnecessary competition between the two undertakings, to reduce the pollution (air and noise). The Additional Chief Secretary of Finance made a recommendation to the Government that the two transport undertakings should be merged by forming a new company under the Companies Act, 1956 and accordingly Draft Memorandum of Association was prepared. Both the Corporations passed a resolution showed their willingness for merger of their transport undertakings.7. On the above aforesaid background, which is not disputed by the Petitioners in both the Petitions the Government after taking into consideration all the factors and the proposals of the Commissioners granted approval to the two resolutions passed by the Pune Municipal Corporations for merging the two undertakings under the Indian Companies Act. In the said Government Resolution, the composition of the permanent Board of Director was also laid down. The composition of the Board of Diretor is as under:8. It was further decided by the Government that the share of the Corporation of the Company would be proportionate to the property and its undertaking and that the company shall hold the property acquired by both the undertakings. A further decision was taken that the procedure regarding the establishment and other administrative and financial aspect would be completed within six months from the date of the order. 9. Perusal of the aforesaid Government Resolution discloses that a policy decision has been taken by the Government after taking into consideration the resolutions, which were passed by the two Corporations and recommendations made by various Expert Committees from time to time. The decision has been taken in view of the demand made by the public from time to time and in public interest. The constitution of the Board of Directors of the company clearly discloses that all responsible and high ranking officers of the Government and the PMC and PCMC as also the Director of Central Institute of Road Transport and General Manager of both PMT and PCMC are included in the list of Board of Directors. Simultaneously three Corporators from the Pune Municipal Corporation and two Corporators from the Pimpri Chinchwad Municipal Corporations have also been included in the Board of Directors. The composition of the said Board of Directors, therefore, clearly allays the apprehension and fear expressed by the Petitioners about mismanagement and misappropriation on the formation of the alleged company under the Companies Act. Therefore, there is no substance in the submission made by the Learned Counsel appearing on behalf of the Petitioners that the Government erred in issuing the G.R. Dated 19th April, 2007. In any case, the said impugned Government Resolution is a policy decision, which has been taken by the Government on the recommendations of Expert Committees and persons who are experts in the field of transport and as such it is not possible for this Court to interfere with the policy decision taken by the Government. 10. The grievance of the Petitioners essentially is in respect of the formation of the new company under the Indian Companies Act. The Petitioners, therefore, are not opposing the merger of the two transport undertakings, but it is their contention that the merger ought to have been taken place under the Transport Corporation Act and not under Indian Companies Act. It is urged by the Counsels appearing on behalf of the Petitioners that the initial resolutions which were passed in the year 20052006, a recommendation was made that the two transport undertakings should be merged under the Road Transport Corporation Act and, therefore, the Government had erred in issuing the impugned Government Resolution dated 19th April, 2007 recommending merger under the Indian Companies Act. There is no substance in the said submission made by the Learned Counsel appearing on behalf of the Petitioners. Once a decision is taken to merge the two undertakings, the Government after taken into consideration the recommendation made by the two undertakings thought it fit and proper to form a new company under the Companies Act. The said decision, therefore, cannot be faulted and this Court cannot interfere in the policy decision taken by the Government while exercising its writ jurisdiction under Article 226 of the Constitution of India. 11. So far as grievance regarding disposal of the properties of the two undertakings is concerned, in the reply filed by the Respondents, it has been stated that that procedure which is laid down under BPMC Act for the disposal of assets shall be taken as prescribed under the said Act. The Company already has been established and has started functioning and in view of the statement made by the Respondents in their affidavit the submission of the learned Counsel for the Petitioners in this respect cannot be accepted.

Decision:
0[ds]6. In our view, the submissions made by the Learned Counsel appearing on behalf of the Petitioners cannot be accepted. It is an admitted position that both PMT and PCMT were separate transport undertakings. PMT which is a transport undertaking of Pune Municipal Corporation was started in March, 1950 and transport undertaking of Pimpri Chinchwad Municipal Corporation was started in 1974. The functions of both these undertakings was to provide public bus transport services within twin cities of Pune and Pimpri Chinchwad. It was noticed that both undertakings have bus routes on various roads within the Pimpri Pune and consequently many routes were common, as result of which the expenditure for these common routes which was incurred by PMT and PCMT were simultaneously incurred by both these undertakings.Perusal of the aforesaid Government Resolution discloses that a policy decision has been taken by the Government after taking into consideration the resolutions, which were passed by the two Corporations and recommendations made by various Expert Committees from time to time. The decision has been taken in view of the demand made by the public from time to time and in public interest. The constitution of the Board of Directors of the company clearly discloses that all responsible and high ranking officers of the Government and the PMC and PCMC as also the Director of Central Institute of Road Transport and General Manager of both PMT and PCMC are included in the list of Board of Directors. Simultaneously three Corporators from the Pune Municipal Corporation and two Corporators from the Pimpri Chinchwad Municipal Corporations have also been included in the Board of Directors.So far as grievance regarding disposal of the properties of the two undertakings is concerned, in the reply filed by the Respondents, it has been stated that that procedure which is laid down under BPMC Act for the disposal of assets shall be taken as prescribed under the said Act. The Company already has been established and has started functioning and in view of the statement made by the Respondents in their affidavit the submission of the learned Counsel for the Petitioners in this respect cannot be accepted.