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

1. The validity of schemes approved by the Uttar Pradesh Government under Section 68-D of the Motor Vehicles Act, 1939 (Act 4 of 1939) (hereinafter referred to as the Act) for inter-State routes as a result of which private operators including those who had been granted permits by Regional Transport Authorities of Rajasthan were excluded from those routes has been called in question in civil appeals Nos. 1737-1745 of 1972 and civil appeals Nos. 1870 and 1871 of 1972 which have been filed on certificate against the common judgment of the Allahabad High Court. This judgment would dispose of all the appeals. It would be necessary to reproduce only the facts of the case giving rise to civil appeal No. 1738, for the counsel for the parties are agreed that the decision in that appeal would also govern the other appeals as the question of law involved in all these appeals is identical.2. On June 14, 1960 a letter was sent by the Deputy Secretary to the Government of Rajasthan to the Secretary to the Government of Uttar Pradesh in reply to an earlier letter received from the Transport Commission, Uttar Pradesh conveying approval of the Rajasthan Government for the nationalisation of the undermentioned routes for the operation of services by the State transport undertakings of both States in accordance with its reciprocal arrangement arrived at between the two States.1. Bharatpur-Agra2. Bharatpur-Mathura3. Allwar-Mathura4. Mathura-Kama Kosi via Goverdhan5.are in the present appeals concerned with four of the routes, i.e. the routes mentioned above other than Bharatpur-Mathura route. Appeal No. 1738 of 1972 relates to Dholpur-Agra route. It may be mentioned that Dholpur, Bharatpur, Alwar and Kama Kosi are situated in Rajasthan, while Agra and Mathura are situated in Uttar Pradesh. Notification dated December 4, 1961 was published in the U. P. Gazette dated December 9, 1961 by the Uttar Pradesh Government under Section 68-C of the Act in respect of a proposed scheme for providing State road transport passenger services on inter-State Agra-Dholpur route. According to the proposed scheme, no persons other than State transport undertaking would be permitted to provide any road transport services on the route or portions thereof. The scheme also visualised the cancellation of the permits which had been granted to the private operators, including the appellants. Objections were invited with regard to the proposed scheme from persons affected by the scheme. No objections were, however, filed against the aforesaid scheme and the same was approved under Section 68-D (2) of the Act by the Joint Judicial Secretary to the Government of Uttar Pradesh, who was the hearing authority, as per order dated July 30, 1962. The Central Government conveyed its approval to the scheme under the proviso to sub-section (3) of Section 68-D of the Act as per letter dated February 6, 1963. Notificatin dated February 20, 1963 was published by the Uttar Pradesh Government in the Official Gazette dated March 16, 1963 for the publication of the approved scheme under sub-section (3) of Section 68-D of the Act. Clauses 1, 2, 4 and 8 of the scheme read asThe State Road Transport Passenger Services shall commence to operate from April 1, 1963 or thereafter.2. State Road Transport Passenger Services shall be provided on the inter-State route Agra-Dholpur of Agra Region.4. No persons other than the State Transport Undertakings will be permitted to provide any Road Transport Services on this route or portions thereof specified in clause (2) above.8. The number of private Transport vehicles on the route or portion thereof specified in clause (2) above shall be reduced to nil." It was also provided in the scheme that the permits of the private operators would stand cancelled. Provision was made for compensation for the premature cancellation of the permits of the private operators. No compensation was however, to be paid when a permit for an alternative, route or area in lieu thereof was offered by the Regional Transport Authority and accepted by the holder of the permit. By notification dated April 9, 1963 the permits in favour of the private operators, including the appellants, issued by the Regional Transport Authority, Jaipur and countersigned by the Regional Transport Authority Agra was cancelled under sub-section (2) of Section 68-F of the Act.The appellants, who are bus operators of Rajasthan, and some others thereupon filed petitions under Article 226 and 227 of the Constitution to challenge the validity of the above notifications. The learned single Judge who heard the writ petitions came to the conclusion that a State could not by taking unilateral action provide transport services for a territory outside the limits of its own territory. The learned Judge was of the view that in framing the scheme the State transport undertaking performed executive function of the State. View was expressed that one State could not cancel permits held by the bus operators of another State. Finding was also given that effective notice had not been given to the bus operators of Rajasthan as the notifications were published in the Gazette of Uttar Pradesh only. The writ petitions were accordingly allowed and the impugned notifications were quashed by the learned single Judge.On appeal the Division Bench of the High Court held that when an undertaking proposes a scheme and the same is approved by the State Government the undertaking and the State Government really perform the functions of the Central Government under clause (2) of Article 258 of the Constitution. Regarding the cancellation of the permits, the Division BenchBus Operators of Uttar Pradesh held permits granted by the Transport authorities of Uttar Pradesh. They could, however, not legally ply their vehicles on hire in Rajasthan beyond the limits of Uttar Pradesh without first having their permits countersigned by the transport authorities of Rajasthan. What really happened was that when the Schemes were finalised, the permits of the operators of Uttar Pradesh were cancelled by the transport authorities of Uttar Pradesh and the counter-signatures made by the transport authorities of Rajasthan were cancelled by those transport authorities. Similarly, the permits held by those operators of Rajasthan were cancelled by these transport authorities of Rajasthan and the counter-signatures on those permits made by the transport authorities of Uttar Pradesh were cancelled by these transport authorities. We, therefore, find no substance in this argument advanced on behalf of theHigh Court repelled the contention advanced on behalf of the appellants that they had no knowledge of the proposed schemes. It was observed that the relevant provisions for publication of the schemes were compiled with and that notices were put up on the notice boards of the State transport authorities of Uttar Pradesh as well as of Rajasthan. The Division Bench accordingly allowed the appeals filed by the State and held that the impugned schemes and notifications were valid in law. The Division Bench while allowing the appealsconsequence, we allow these appeals, set aside the order of the learned Single Judge and hold that the impugned Schemes and notifications are valid in law. The learned Single Judge has said in his judgment that individual petitions had raised some additional and separate grounds for questioning their exclusion from certain routes. He, however, felt that it was not necessary to consider individual cases of petitioners as all the writ petitions could be decided on general grounds common to all the petitions emerging from admitted facts. The individual grounds must now be considered by the learned Single Judge. He, however, is no longer available in this Court and the papers of these cases will be laid before the Honble the Chief Justice for nominating a Bench.The correctness of the view taken by the Division Bench has been assailed in these appeals.

Court's reasoning:
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.