Case: Khazan Singh Etc. Etc Vs. State Of U.P. &amp; Ors

which we are concerned was inserted in the Act by the Union Parliament.The State Government in approving a scheme in respect of an inter-State route under sub-section (3) of Section 68-D of the Act exercises a statutory power which has been vested in it by a law made by the Parliament. The said law relates to the creation of a State monopoly in the matter of transport service. The executive power of the Union and each State under Article 298 of the Constitution extends, inter alia, to the carrying on of any trade or business. There is nothing in Article 298 to show that the trade or business carried on by a State must be restricted to the area within its territorial limits. On the contrary, the article envisages the carrying on of the trade and business by a State without any territorial limitations. The only restriction on the executive power of the State in this respect is contained in clause (b) of the proviso to that article.According to that clause, the executive power of the State shall, in so far as such trade or business is not one with respect to which the State Legislature may make laws, be subject to legislation by Parliament.13. Entry 35 in List III of Seventh Schedule to the Constitution relates to mechanically propelled vehicles including the principles on which taxes on such vehicles are to be levied. Under Entry 21 in List III of the Seventh Schedule, the Parliament can make laws for commercial and industrial monopolies. The expression "commercial and industrial monopolies", as held by this Court in the case of H. C. Narayanappa v. State of Mysore, (1960) 3 SCR 742 = (AIR 1960 Sc 1073 ),is wide enough to include grant or creation of commercial or industrial monopolies to the State and citizens as well as control of monopolies. Dealing with the question of State monopoly in the matter of transport service as envisaged by Chapter IV A of the Act, Shah J. speaking for the Court observed in the above mentioned case:"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 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 Art. 298, and the law which is protected from the attack that it infringes the fundamental freedom to carry on business by Art. 19 (6). 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".A scheme approved by the State Government under sub-section (3) of Section 68-D of the Act effectuates the object of State monopoly in the matter of transport service. Such a scheme, in our opinion, does not entail encroachment by one State Government upon the executive sphere of another State Government.The action taken by the Uttar Pradesh Government in furtherance of the objective of a State monopoly in accordance with the statute made by Parliament cannot, in our opinion, be struck down on the ground of encroachment upon the executive power of the Rajasthan Government. In any case, there is no question of encroachment upon the executive domain of the State of Rajasthan in the present case as the whole thing is being done by the Uttar Paradesh Government with the concurrence of the Government of Rajasthan and the two Governments are acting in concert.14. In view of the above, it is not necessary to go into the question as to whether the validity of the action of the Uttar Pradesh Government in according approval to the scheme can be sustained under clause (2) of Article 258 of the Constitution.15. The appellants have not challenged the constitutional validity of the proviso to sub-section (3) of Section 68-D of the Act. It has, however, been urged on their behalf that the proviso should be construed in such a manner so as not to contravene the articles of the Constitution. In our opinion, the construction which we have placed upon the aforesaid proviso entails no contravention of the articles of Constitution.16. We may now deal with some of the cases which have been cited on behalf of the appellants. The case of King-Emperor v. Sibnath Banerji, 72 Ind App 241= (AIR 1945 PC 156 ), related to the validity of Rule 26 of the Defence of India Rules framed under the Defence of India Act, 1939. The rule was held to be valid. It was also held that it was not necessary for the Governor to be personally satisfied before an order under the above Rule could be made. Dealing with the term "executive", the Judicial Committee held that it includes both a decision as to action and the carrying out of such a decision. Their Lord-ships further expressed disagreement with the view which sought narrow reading of Sections 49 (2) and 124 (2) of the Government of India Act, 1935. The case of In re The Delhi Laws Act, 1912, 1951 SCR 747 = (AIR 1951 SC 332 ) related to the delegation of legislative power and the difference between delegation of legislative power and conditional legislation. Gullapalli Nageswara Rao v. Andhra Pradesh State Road Transport Corporation, 1959 Supp (1) SCR 319 = (AIR 1959 SC 308 ) dealt with the procedure to be followed for nationalising transport service. None of the above cited cases, in our opinion, are of any real assistance to the appellants because the question involved in these appeals is materially different.17.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]This contention, in our opinion, cannot be accepted as it runs counter to the plain language of the proviso to sub-section (3) of Section 68-D of the Act. According to the proviso, no scheme which relates to an inter-State route shall be deemed to be an approved scheme unless it has been published in the Official Gazette with the previous approval of the Central Government. The proviso manifestly contemplates that the State Government, can in accordance with the procedure laid down in Chapter IVA of the Act approve a scheme relating to an inter-State route and publish the same.The only limitation on the power of the State Government in this respect is that it should before publishing the scheme obtain the prior approval of the Central Government. Such previous approval of the Central Government was admittedly obtained in respect of the inter-State route with which we are concerned, as per letter dated February 19, 1963. An inter-State route is one of which one of the termini falls in one State and the other in another State. Agra-Dholpur route is admittedly an inter-State route as the termini of the route are situated in two different States. In the face of the proviso to sub-section (3) of Section 68-D of the Act, we find it difficult to accede to the submission that the Uttar Pradesh Government was not competent to approve and publish the impugned scheme relating to Agra-DholpurState Government is competent to approve a scheme for a nationalisation of transport service on a route within its own territory if it complies with the other necessary formalities prescribed by law. There is in such an event no necessity to obtain any approval of the Central Government. The necessity of obtaining prior approval of the Central Government arises because the scheme envisages nationalisation of transport service not only for that part of the inter-State route which is within the territorial limits of the State Government approving the scheme but also for the remaining part of the route which is outside the said territorial limits. Inter-State route would normally cover the entire route and not merely the portion of the route which is within the territorial limits of the State Government which accordsState Government in approving a scheme does not legislate in the sense the Legislature of a State makes law under Article 245 of the Constitution for the whole or any part of the State. The limitation on the power of a State Legislature to make laws for the whole or any part of the State and not for areas outside the territorial limits of the State cannot be invoked for the purpose of placing a restriction on the power conferred upon the State Government by Parliamentary legislation to approve a scheme relating to an inter-Statescheme approved by the State Government under sub-section (3) of Section 68-D of the Act effectuates the object of State monopoly in the matter of transport service. Such a scheme, in our opinion, does not entail encroachment by one State Government upon the executive sphere of another State Government.The action taken by the Uttar Pradesh Government in furtherance of the objective of a State monopoly in accordance with the statute made by Parliament cannot, in our opinion, be struck down on the ground of encroachment upon the executive power of the Rajasthan Government. In any case, there is no question of encroachment upon the executive domain of the State of Rajasthan in the present case as the whole thing is being done by the Uttar Paradesh Government with the concurrence of the Government of Rajasthan and the two Governments are acting in concert.In view of the above, it is not necessary to go into the question as to whether the validity of the action of the Uttar Pradesh Government in according approval to the scheme can be sustained under clause (2) of Article 258 of the Constitution.The appellants have not challenged the constitutional validity of the proviso to sub-section (3) of Section 68-D of the Act. It has, however, been urged on their behalf that the proviso should be construed in such a manner so as not to contravene the articles of the Constitution. In our opinion, the construction which we have placed upon the aforesaid proviso entails no contravention of the articles ofof the above cited cases, in our opinion, are of any real assistance to the appellants because the question involved in these appeals is materially different.