Case: H.C. Narayanappa &amp; Others Vs. State of Mysore &amp; Others

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 enactd by the Parliament under entry No. 21 read with entry NO. 35 of the Concurrent List.11. The plea sought to be founded on the phraseology used in Art. 19(6) 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 Art. 12 is inclusive of the Government and Parliament of India and the Govt. 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 19 (6) 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 arise by virtue of Art. 19(6). The right of the State to carry on trade or business is recognised by Art. 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 Art. 19 (6).12. In any event, the expression "law" as defined in Art. 13(3) (a) includes any ordinance, order, bye-law, rule, regulation, notification, custom etc. and the scheme framed under S. 68C may properly be regarded as "law" within the meaning of Art. 19(6) 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 Art. 19 (1) (g).13. Re. 3 : The plea that the Chief Minister who approved the scheme under S. 68D was of Motor Vehicles Act 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 transport undertaking. G. Nageswara Rao v. Andhra Pradesh Road Transport Corporation, AIR 1959 SC 308 . 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 representations 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 paragraph of the reasons given, it is stated that the Government have heard all arguments advanced on behalf of the operators and "after giving full consideration to them, the Government have come to 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.14. Re. 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 werer 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 S. 68D of the Motor Vehicles Act upon persons likely to be affected by the intended scheme is a guarantee of an oportunity 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 judical approch. 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.

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

Explanation:
0[ds]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 S. 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 undertaking 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 te operators of stage carriages from that area is not evinced either expressly or by implication. By column 3, the scheme expressly directs that 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 columnis 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 Chikkathirupathi 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.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.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 also bound in giving effect to the approved scheme, to modify the terms of existng permits and to refust 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 notifiedNo. 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 provision 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 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 fentrue 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 enactd by the Parliament under entry No. 21 read with entry NO. 35 of the Concurrentany event, the expression "law" as defined in Art. 13(3) (a) includes any ordinance, order, bye-law, rule, regulation, notification, custom etc. and the scheme framed under S. 68C may properly be regarded as "law" within the meaning of Art. 19(6) 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 Art. 19 (1)plea that the Chief Minister who approved the scheme under S. 68D was of Motor Vehicles Act 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 transport undertaking. G. Nageswara Rao v. Andhra Pradesh Road Transport Corporation, AIR 1959 SC 308  . 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 representations 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 paragraph of the reasons given, it is stated that the Government have heard all arguments advanced on behalf of the operators and "after giving full consideration to them, the Government have come to 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 mustargument 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 werer 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 S. 68D of the Motor Vehicles Act upon persons likely to be affected by the intended scheme is a guarantee of an oportunity 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 judical approch. 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.