Case: J.Y. Kondala Rao &amp; Ors Vs. Andhra Pradesh State Road Transport Corpn. &amp; Ors

2. In exercise of the powers conferred by S. 68C of the Motor Vehicles Act (IV of 1939), as amended by the Central Act, 100 of 1956, (hereinafter called the Act), Shri Guru Pershad, the Chief Executive Officer, Andhra Pradesh State Road Transport Corporation (hereinafter called the Transport Corporation) published seven proposals dated December 7, 1959, in the Andhra Pradesh Gazette dated December 17, 1959, propounding seven schemes for the nationalization of the road transport in respect of different parts of West Godavari District in that State. Under that notification objections from the public and affected parties were invited to be filed within 30 days of the publication thereof. More than 3000 objections were received by the Government against the said schemes. After considering the objections, the Government issued notices to the objectors or their representatives and the representatives of the Transport Corporation informing them of the time, place and the dates of hearing. On the notified dates, namely, March 10, 11 and 12, 1960, 200 objectors were present and most of them were represented by Advocates. The Transport Corporation was also represented by its Chief Executive Officer and its legal advisers. The Minister in charge of the portfolio of transport held an enquiry, considered the conflicting arguments advanced, gave definite findings on the points urged, rejected all the objections but one and approved the schemes with a slight modification. The seven schemes were directed to be put in force from different dates which were given in the order made by the Minister. The aggrieved operators who were not satisfied with the order of the Minister filed the present petitions for the said reliefs.

Court's reasoning:
6. Re. (1): The first contention does not now merit a detailed consideration as it has been considered and rejected by this Court in H. C. Narayanappa v. State of Mysore, Petn. No. 2 of 1960, D/- 28-4-1960: (AIR 1960 SC 1073 ). In that case, after considering the question, Shah, J., speaking for this Court, observed:"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."7. Nothing further need be said on this point. With respect we accept and follow the saidconstitutional validity of Ch. IVA of the Act was raised in Gullapalli Nageswara Rao v. Andhra Pradesh State Road Transport Corporation, 1959-Supp-1 SCR 319  : (AIR 1959 SC 308 ). There it was argued that Ch. IVA of the Act was a piece of colourable legislation whose real object was to take over the business of the petitioners therein under the cover of cancellation of permits in contravention of Art. 31 of the Constitution and that plea was rejected by this Court. But no attack was made on the validity of Ch. IVA of the Act on the ground that it infringed the provisions of Art. 19(1)(g) of the Constitution and was not saved by cl. (6) of the Article. That point is now raised before us. Under Art. 19(1)(g), all citizens shall have the right to carry on trade or business.The answer to this argument depends upon the true meaning of the provisions of the said Article. Under sub-cl.(ii) of Art. 19(6), the State can make a law relating to the carrying on by the State or by a corporation, owned or controlled by the State, of any particular business, industry or service, whether to the exclusion, complete or partial, of citizens or otherwise. Article 19(6) is only a saving provision and the law made empowering the State to carry on a business is secured from attack on the ground of infringement of the fundamental rights of a citizen to the extent it does not exceed the limits of the scope of the said provision. Sub-cl. (ii) is couched in very wide terms. Under it the State can make law for carrying on a business or service to the exclusion complete or partial of citizens or otherwise. The law, therefore, can provide for carrying on a service to the exclusion of all the citizens; it may exclude some of the citizens only; it may do business in the entire State or a portion of the State, in a specified route or a part thereof. The word " service is wide enough to take in not only the general motor service but also the species of motor service. There are, therefore, no limitations on the States power to make laws conferring manopoly on it in respect of an area, and person or persons to be excluded. In this view, it must be held that S. 68C does not exceed the limits prescribed by Art. 19(6) (ii) of thes true that the provisions of this Chapter enable a scheme to be framed conferring a monopoly on the State in respect of transport services to the partial or complete exclusion of other persons. However, the provisions of the scheme do not make any distinction between individuals operating a transport service and private transport undertakings; they are all treated as one class and the classification is only made between the State Transport Undertaking and private transport undertakings, whether the business is carried on by individuals or firms or companies.But it is said that S. 68C of the Act and other provisions of Ch. IV-A thereof confer an arbitrary power upon the State Transport Undertaking to discriminate between individuals and the said Undertaking, between individuals and private undertakings, and between individuals and individuals. But the scheme of Ch. IV-A, which has been considered by this Court in 1959Supp-1 SCR 319 : (AIR 1959 SC 308 ) evolves a machinery for keeping the State Transport Undertaking within bounds and from acting in an arbitrary manner, for S. 68C lays down the legislative policy in clear and understandable terms and the State Transport Undertaking can initiate a scheme only for providing an efficient, adequate, economical and properly co-ordinated road transport service. Another condition which it lays down it that the scheme is necessary in the public interest. The scheme so framed is published, with all necessary particulars, in the official Gazette and also in such manner as the State Government may direct; persons affected by the scheme may file objections within the prescribed time; the State Government, after considering the objections and giving an opportunity to the objectors or their representatives and the representatives of the State Transport Undertaking to be heard in the manner, may approve or modify the scheme; the scheme so approved or modified is published. The rules framed under the Act provide for personal hearing. If the State Transport Undertaking seeks to modify a scheme, it will have to follow the same procedure before doing so: see Ss. 68C, 68D and 68E of the Act. It will be seen from the provisions of Ch. IVA of the Act that the State Transport Undertaking, before propounding a scheme, arrives at the decision on objective criteria. The parties affected and the public are given every opportunity to place their objections before the Government, and the Government, after following the prescribed quasi-judicial procedure, confirms or modifies the scheme. The scheme, before it is finalised, is subjected to public gaze and scrutiny and the validity and appropriateness of the provisions are tested by a quasi-judicial process. The Government cannot be equated to a Court; but the procedure prescribed accords with the principles of natural justice. It is said that the State Transport Undertaking is either the State Government or a corporation, owned or controlled by the State, and as such the entire quasi-judicial procedure prescribe is only a cloak to screen the exercise of an absolute and arbitrary power on the part of the Government. We cannot say that Ch. IVA is such a device. The legislature made a sincere attempt to protect as far as possible individual rights from the arbitrary acts of the executive. Once it is conceded that Ch. IVA of the Act is constitutionally good and that the legislature can validly make law for nationalization of the road transport service, the procedure laid down for implementing the said policy cannot, in our view, be said to be unreasonable. If in any particular case the mala fides of the authorities concerned and collusion between the State Transport Undertaking and the State Government to deprive particular persons of their right to do road transport business or to drive out particular persons from the trade on extraneous considerations, are established, that may be a ground for striking down that particular scheme. But the provisions of Ch. IVA cannot be struck down on the ground that they confer an arbitrary power on the State Transport Undertaking and on the State Government to discriminate between individuals and the State Transport Undertakings, between individuals and private undertakings, and between individuals and individuals.Re.(4): By the next contention the learned counsel attacks the validity of the scheme on the ground that the Government is actuated by bias against the private operators of buses in West Godavari District and indeed had pre-determined the issue. In the petitions it was alleged that the Government had complete control over the Road Transport Corporation, that the entire administration and control over such road transport undertaking vested in the Government, that the Chief Secretary to the Government of Andhra Pradesh was its chairman and that, therefore, the entire scheme, from its inception to its final approval, was really the act of the Government. On this hypothesis it was contended that the Government itself was made a judge in its own cause and that, therefore, its decision was vitiated by legal bias. That apart, it was also pleaded that a sub-committee, consisting of Ministers, Secretaries and officers of connected departments and presided over by the Minister in charge of transport, decided in its meeting of January 28, 1960, that under the scheme of nationalization of bus service, the State Government would take over the bus services in West Godavari District and Guntur District before the end of that year and, therefore, the Minister in charge of the portfolio of transport, he having pre-determined the issue, disqualified himself to decide the dispute between the State Transport Undertaking and thethe above cases the transport department of the Government was the transport undertaking, but here the State Road Transport Corporation, which is a body corporate having a perpetual succession and common seal, is the transport authority. Though under the provisions of the Act, the State Government has some control, it cannot be said either legally or factually that the said Corporation is a department of the State Government. The State Government therefore, in deciding the dispute between the said undertaking and the operators of private buses is only discharging its statutory functions. This objection, therefore, has no merits. Nor can we say that it has been established that the Minister in charge of the portfolio of transport has been actuated by personal bias. The fact that he presided over the sub-committee constituted to implement the scheme of nationalization of bus services in the West Godavari District does not in itself establish any such bias. Indeed, in the counter-affidavit filed on behalf of the first respondent the contents and authenticity of the reports of the proceedings of the sub-committee published in the Telugu daily "Andhra Patricia" were not admitted. Even if the sub-committee came to such a decision, it is not possible to hold that it was a final and irrevocable decision in derogation of the provisions of the Act. It was only a policy decision and in the circumstances could only mean that the sub-committee advised the State Government to implement the policy of nationalization of bus services in that particular district. The said decision could not either expressly or by necessary implication involve a predetermination of the issue; it can only mean that the policy would be implemented subject to the provisions of the Act. It is not suggested that the Minister in charge of the concerned portfolio has any personal bias against the operators of private buses or any of them. We, therefore, hold that it has not been established that the Minister in charge of the portfolio of transport had personal bias against the operators of private buses and, therefore, disqualified himself from hearing the objections under Ch. IVA of theelaborating on the scope of S. 68C of the Act, Wanchoo, J., observed at p. 136 (of SCR): (at pp. 352-353 of AIR), thus:"Therefore, the scheme to be framed must be such as is capable of being carried out all at once and that is why the Undertaking has been given the power to frame a scheme for an area or route or even a portion thereof. .....if the Undertaking at that stage has the power to carry it out piecemeal, it would be possible for it to abuse the power of implementation and to discriminate against some operators and in favour of others included in the scheme and also to break up the integrity of the scheme and in a sense modify it against the terms of S. 68E."Based on these observations it is contended that the State Government intended to frame only one scheme for the entire district though it was not in a position to implement the scheme in the entire district at one and the same time, but to circumvent the observations of this Court it had split up one scheme into seven schemes. The first respondent in its counter-affidavit met this allegation in the following way:"Having regard to the resources of the Undertaking in men, material and money, each scheme has been so framed that it is capable of being carried out all at once, and in full, without breaking its integrity. The State Transport Undertaking will carry out each of the published schemes on a date fixed by the State Government for the implementation of each scheme.The Minister in his order also adverted to this aspect and observed:"In this case, seven different schemes have been framed. Each scheme is a separate and independent scheme by itself. In terms of the notification, each scheme after approval will come into force only from a date to be fixed by the Government. Though different dates may be fixed for each scheme, each scheme will be implemented in its entirety. No piecemeal implementation of any one scheme will be done.Indeed the order of the Minister fixed specific dates from which each of the schemes shall come into force. This Court did not lay down that there cannot be any phased programme in the nationalization of transport services in a State or in a district; nor did it hold that there cannot be more than one scheme for a district or a part of a district. The observations of this Court in regard to the implementation of a scheme piecemeal were aimed at to prevent an abuse of power by discriminating against some operators and in favour of others in respect of a single scheme. In the present case, seven schemes were framed not to circumvent the observations of this Court, but only to avoid the vice inherent in piecemeal implementation. Not only seven separate schemes were framed in respect of separate areas of the district, but also the Government made it clear that each scheme should be implemented in its entirety commencing from different dates. We do not, therefore, see any legitimate objection to the framing of seven separatehave no reason not to accept the statement of the first respondent that there was a resolution passed by the Corporation in terms of S. 12 (c) of the Road Transport Corporations Act. If so, the only question is whether the act of publishing the proposed schemes framed by the Corporation in the Gazette pertains to the day to day administration of the Corporations business. The Chief Executive Officer has no power under the Act to frame a scheme. Section 68C empowers only the State Transport Undertaking to prepare a schedule and cause every such scheme to be published in the official Gazette and also in such other manner as the State Government may direct. The scheme, therefore, need not be directly published by the Corporation, but it may, cause it to be published in the official Gazette. The act of publishing in the official Gazette is a ministerial act. It does not involve any exercise of discretion. It is only a mechanical one to be carried out in the course of day to day administration. So understood, there cannot be any difficulty in holding that it was purely a ministerial act which the Chief Executive Officer by reason of the aforesaid resolution can discharge under S. 12(c) of the Road Transport Corporations Act. It must be presumed for the purpose of this case that the Corporation decided the terms of the proposed schemes and the said decision must have been duly authenticated by the Chairman or any other member authorized by the Corporation in this behalf and the Chief Executive Officer did nothing more than publish the said scheme in exercise of its administrative functions. We, therefore, hold that the Chief Executive Officer was well within his rights in publishing the said proposed schemes in the Andhra Pradeshcertain schemes the number of vehicles to be operated on each route was not specified, and one number was mentioned against two or more routes bracketing them. When an objection was taken before the Government in regard to this matter, the Minister accepted it and directed that the scheme might be modified so as to indicate the number of vehicles to be operated on each route separately. The schemes were accordingly modified by indicating the number of vehicles to be operated on each route separately and the approved schemes with the said modification were duly published in the Gazette dated March 21, 1960. The approved schemes, therefore, satisfy rule 4 (2) of the Rules, for the approved schemes, as duly modified, contain the number of vehicles proposed to be operated on each route. But the point sought to be made is that the Minister himself should have fixed the number of vehicles proposed to be operated on each route and should not have merely directed the appropriate modification to be made in the approved schemes. It does not appear from the record that there was any dispute before the Minister as regards the apportionment of the number of vehicles shown against two or more routes to each of the routes, but the only contention raised was that the bracketing of the number of vehicles between two or more routes contravened the provisions of R. 4.Though the order of the Minister only contains a direction, the apportionment of the vehicles between the routes was not made by the State Transport Authority, but only by the State Transport Authority, but only by the Government, for the approved schemes were published not by the Chief Executive Officer but by the State Government. It must be presumed that the allocation also must have been made with the approval of the Minister. There are no merits in this objectionrule is not so innocuous as the learned Advocate General of the Andhra Pradesh contends. Under that rule the State Transport Undertaking, having regard to the needs of traffic during any period, may increase or decrease the number of trips of the existing buses or vary the frequency by increasing or decreasing the number of buses. This can be done without any reference to the public or without hearing any representations from them. This increase or decrease, as the case may be, can only be for the purpose of providing an efficient, adequate, economical transport service in relation to a particular route with-in the meaning of S. 68C. At the time the original schemes are proposed, the persons affected by them may file objections to the effect that the number of buses should be increased or decreased on a particular route from that proposed in the schemes. The Government may accept such suggestions and modify the schemes; but under this rule the authority may, without reference to the public or the Government, modify the schemes. Learned counsel contends that the note only provides for an emergency. But the rule and the note are comprehensive enough to take in not only an emergency but also a modification of the scheme for any period which may extend to any length of time. We are, therefore, definitely of opinion that the rule confers powers on the State Transport Undertaking to modify substantially the scheme in one respect, though that power can only be exercised under S. 68E of the Act in the manner prescribed thereunder. This rule is void and, therefore, the said note was illegally inserted in the schemes. But on that ground, as the learned counsel contends, we cannot hold that the schemes are void. The note is easily severable from the schemes without in any way affecting their structure. Without the note the schemes are self-contained ones and it is impossible to hold that the schemes would not have been framed in the manner they were made if this note was not allowed to be included therein. We, therefore, hold that the note should be deleted from the schemes and the schemes are otherwisenew routes included in the schemes are Eluru to Kovvur, and Nidadavol to Jeelugumilli. It is argued that the provisions of S. 68C are concerned with the existing routes only. Support is sought to be drawn for this contention from the provisions of S. 68C of the Act. The relevant part of that section says:"Where any State Transport Undertaking is of opinion that.....it is necessary in the public interest that road transport services in general or any particular class of such service in relation to any area or route or portion thereof should be run and operated by the State transport undertaking....the State transport undertaking may propose a scheme ......."Now the contention is that the word " route in that section refers to a pre-existing route, for it is said that the words " route or portion thereof in the section clearly indicate that the route is an existing route, for a scheme cannot be framed in respect of a portion of a proposed route. We do not see any force in this contention. Under S. 68C of the Act the scheme may be framed in respect of any area or a route or a portion of any area or portion of a route. There is no inherent inconsistency between an " area and a " route. The proposed route is also an area limited to the route proposed. The scheme may as well propose to operate a transport service in respect of a new route from point A to point B and that route would certainly be an area with the meaning of S. 68C. We, therefore, hold that S. 68C certainly empowers the State Transport Undertaking to propose a scheme to include new routes.20. Though some other points were raised in the affidavits filed before us, they were not pressed.