Case: Standard Motor Union Pvt. Ltd Vs. State Of Kerala &amp; Ors

S. 68-C provides for the preparation and publication of a draft scheme of nationalization of road transport services in general or any particular class of such service in relation to any area or route or portion thereof whether to the exclusion, complete or partial, of other persons or otherwise. Section 68-D provides for the filing of objections of persons affected by the scheme, for the consideration of the objections by the Government, for modification or approval of the scheme by the Government and for publication of the approved or modified scheme. Section 68-E provides that a scheme finally settled under S. 68D may at any time be cancelled or modified by the State transport undertaking. The procedure laid down in Sections 68-C and 68-D shall, so far as it can be made applicable, be followed in every case where the scheme is proposed to be modified as if the modification proposed were a separate scheme. For the purpose of giving effect to the approved scheme in respect of a notified area or a notified route Section 68-F (2) (iii) authorises the Regional Transport Authority to modify the terms of an existing permit so as to curtail the area or route covered by the permit in so far as such permit relates to the notified area or notified route. Section 68-I authorises the State Government to make rules for the purpose of carrying into effect the provisions of Chapter IVA and in particular to provide the form in which any scheme or approved scheme may be published under Sections 68-C and 68-D. In exercise of its powers under Section 68-I the State Government framed the Kerala Motor Vehicles (State Transport Undertaking) Rules, 1960. Rule 3 provides that every proposed scheme shall be in form I when it is in complete exclusion of existing road transport service, in form II when the scheme is in partial exclusion of existing road transport service, in form III when the scheme is in supplementation of existing road transport service and in form IV when the scheme is to modify an existing scheme2. On December 15, 1965 the Kerala State Transport Corporation published a draft scheme in form II for nationalization of 9 specified routes in the districts of Ernakulam and Kottayam in partial exclusion of the existing passenger transport services concerned, giving the particulars of the stage carriage permits to be excluded. On October 17,1966 after hearing the objections the State Government approved the scheme. On October 24 1966 the Government published the approved scheme. On December 7, 1966 the appellant filed a writ petition in the Kerala High Court to quash the scheme, V. P. Gopalan Nambiyar J. dismissed the petition. A Divisional Bench of the High Court affirmed his order. The present appeal has been filed after obtaining special leave.

Court's reasoning:
6. The impugned scheme is in partial exclusion of operators from Kottayam-Ernakulam and Kottayam-Erattupettah routes and 7 other routes. It is common case that there were earlier schemes relating to the Kottayam-Ernakulam and Kottayam-Errattupettah routes. In so far as the impugned scheme excludes private operators from those routes, it has the effect of modifying the earlier schemes. The appellants contention is that the impugned scheme is invalid as the modifications of the earlier schemes were made without complying with the provisions of Section 68E. In our opinion, this contention is baseless. The new scheme has been proposed and approved after following the procedure laid down in Sections 68C and68D.In so far as the new scheme modifies the earlier schemes, the modifications could be made under Section 68E. As the procedure laid down in Sections 68C and 68D were followed the conditions of Sec. 68E were satisfied. S. 68E does not require that the new scheme should expressly say that it cancels or modifies the earlier schemes. On the promulgation of the new scheme the earlier schemes stand modified by implication pro tanto7. A scheme to modify an existing scheme simpliciter is required by Rule 3 of the Kerala Motor vehicles (State Transport Undertaking) Rules, 1960, to be in Form IV.The impugned scheme was in Form II as it was in partial exclusion of the existing road transport service. Such a scheme could not be in form IV.The partial exclusion scheme was rightly proposed in form II and when approved it had the effect of modifying the earlier schemes8. Counsel suggested that the approval of the scheme by the State Government on October 17, 1968 was defective as the Government was merely of the opinion that the proposed scheme was necessary to provide efficient, adequate and co-ordinated road transport services and it did not form the opinion that the scheme was necessary to provide economical road transport service. The point was not taken in the courts below and we therefore indicated to the course of the arguments that the appellant will not be permitted to raise point at this late stage. Several other objections were taken in the courts below but they are not pressed in this Court.