Case: Capital Multi-Purpose Co-Operative Societybhopal And Other Vs. The State Of M.P. &amp; Others

1. These are two appeals on certificates granted by the Madhya Pradesh High Court. The appeals are connected and will be dealt with together. The Madhya Pradesh State Road Transport Corporation (hereinafter referred to as the Corporation), constituted under the Road Transport Corporation Act (No. 64 of 1950), came into existence in May 1962 to operate as State Transport Undertaking under S.A of the Motor Vehicles Act, No. 4 of 1939 (hereinafter referred to as the Act). The Corporation passed two resolutions in April and May 1964 by which it decided to take over certain routes under Chap.A of the Act to the to the exclusion of the existing private operators on those routes. Two schemes, namely, Nos. 16 and 22, dated May 11, 1964, were published by the Corporation inviting objections within 30 days. The schemes appeared in the Government Gazette of May 22, 1964 and objections thereto were filed by private operators affected thereby within the period prescribed. Thereafter the authority empowered to hear objections under S.D of the Act gave notices fixing a date for hearing. The hearing was to begin on September 4, I964, but it was postponed a number of times. Finally, arguments were heard on May 20, 1965. The authority passed orders on June 8, 1965 modifying the schemes in certain particulars. On June 11, 1965, the modified schemes were published, but as there were mistake in them, corrected schemes as modified were finally published on June 18, 19652. Then followed writ petitions to the High Court in August 1965 by private operators who were dissatisfied with the order of the authority concerned. The High Court dismissed the writ petitions rejecting all the contentions raised by the petitioners before it. Thereafter the High Court gave certificates to appeal to this Court, and that is how the appeals have come before us.

Court's reasoning:
4. The first contention relates to the invalidity of the proposed schemes published on May 22, 1964, on the ground that their are not in compliance with S., and the argument is that if the proposed schemes which initiate the proceedings leading to final approval thereof are themselves bad, the entire proceedings must fall through.But the argument seems to be that even though the section and the rules have been complied with certain other things should have been mentioned in order to ensable the private operators to show that the schemes did not provide an efficient. acequate, economical and properlyd road transport. We are of opinion that this argument must be rejected. The schemes have given sufficient details to enable the appellants to file their objections. The four purposes mentioned in S.C are to all embracing in their nature that it would always be possible for a private operator to put forward some small particular and say that this particular should also have been given in the proposed scheme and it is not given it is not possible for him to make a proper objection with respect to the four purposes mentioned in the section. The result of accepting the argument on behalf of the appellants would be that no scheme would ever get through, for some small particular or other can always be put forward by some person or other as not included in the scheme and, therefor, the whole proceeding should be invalidated on account of defect in the proposed scheme originating the proceeding. We are of opinion that so long as a scheme gives the two things which the section itself prescribes and such other particular which the rules prescribes that is enough for the purpose of validly originating the proceeding resulting in eventual nationalisation of the routes and services concerned. Thereafter it is open to the objectors to take such objections to the proposed scheme in the light of the four purposes already indicated and the proceedings being quasi judicial, the State Government or the authority concerned can consider the objections and finally approve or modify the scheme, or if necessary reject it altogether. The particulars given in the present proposed schemes published on May 22, 1964, are undoubtedly in compliance with the provision of S.C as well as the rules framed thereunder, and that in our opinion was enough for validly originating the proceeding. We. therefore, reject this contention raised on behalf of the appellants6. The second contention is that the Special Secretary who heard the objections on behalf of the State Government was not validly authorised.Therefore, we are of opinion that where the State Government proceeds under the new provision. It has to make a notification in the official gazette appointing a person not below the rank of a Secretary to Government to hear objections. But it may act under the Rules of Business so long as under those rules it appoints a person not below the rank of a Secretary, to Government for the purpose of hearing objections. The limitation under the new provision is only this that the person appointed cannot be below the rank of a Secretary. But so far as the procedural part is concerned the appointment may be by notification as provided under the new provision or by an order under the Rules of Business. The objection, therefore, that the authority in this case was not appointed under the new provision but was appointed under the limes of Business and therefore the appointment was invalid, must failIt is unnecessary for us to refer to the American cases in detail it is enough to say that the principles enunciated above may be unexceptionable where the existence of a finding is necessary for taking action, but that depends upon the words of the statute and. therefore. we must now turn to the words of S.C and S.D We have already indicated that the State Transport Undertaking, publishes a scheme when it has arrived at a certain opinion.There is no express provision in these two sections laying down that the authority hearing objections must come to some finding of fact as a condition precedent to its final order. As such no express finding as envisaged in the American cases is necessary under S.C read with S.D that the scheme provides an efficient adequate, economical and properlyd road transport. Besides we are of opinion that the whole object of hearing objections under S.D is to consider whether the scheme provides an efficient, adequate, economical and properlyd road transport. After hearing objections the State Government, or the officer authorised by it has either to approve or modify, or if necessary, to reject the scheme. Where the scheme is approved or modified it necessarily follows in our opinion that it has been found to provide an efficient, adequate, economical and properlyd transport; if it is not of that type, the State Government or the authority appointed to hear objections would reject it. In the absence of a provision requiring an express finding in these two sections it seems to us that the very order of the State Government or the authority appointed by it to hear objections must be held to mean either, where the scheme is approved or modified, that it subserves the purposes mentioned in S., or, where it is rejected, that it does not subserve the purposes. SectionD (2) does not require in our opinion any express finding, and even if there is none in the present case, it would not invalidate the orders passed by the authority hearing the objections. The argument on behalf of the appellants under this head is also rejectedIt appears that an application was made by the appellants requesting the authority to summon a very large number of documents from the Corporation in order to prove inter alia that the present equipment and finances of the Corporation showed that it was not in a position to run the services and that on a comparison of the record of the Corporation with that of the various private operators it would appear that it was not in the interest of the public that the routes in question should be nationalized. It appears that some of the documents were not produced by the Corporation, and in particular documents, which would have shown the record of the Corporation with respect to its running various routes in the past, were not produced and it was contended that those documents were irrelevant. Besides this, the appellants wanted to produce a large number of witnesses in support of their contention that the schemes were not efficient, adequate, economical and properly. So far as the documents were concerned, the authority said in its order, dated February 17, 1965 that the matter would be dealt with at the time of argument. As for the witnesses, the authority refused to summon them on the ground that their evidence would be irrelevant and in any case oral testimony was not necessary to prove what the appellants desired to prove. It appears, therefore that no oral evidence was taken as it was considered irrelevant by the authority and some of the documents which the appellants wanted the Corporation to produce were not ordered to be produced. It appears from the final order of the authority that they were also considered irrelevant as the authority held that no question arose of comparing the merits of the Corporation with the private operatorsIt seems to us that there is force in this contention and strictly speaking, the authority cannot summon witnesses or order discovery and inspection of documents, as the Act has not provided for any such thing. Nor has any rule been pointed out to us making such aprovision.  This observation in our opinion does not mean, in the absence of any provision in the Act or the rules, that the authority was bound to summon witnesses even though the persons summoned were not bound to obey the summonses as there was no provision in law for issue of such summonses. The use of the words "by issue of summonses" in the circumstances of that case was by oversight, for issue of summonses presumes that there is authority to issue them and the person to whom they are issued is bound to obey. But in the absence of such power all that the authority can do is to issue letters merely requesting persons to appear and it is open to those persons to appear or not. In this situation if an authority decides not to issue such letter, it cannot be said that there was no effective hearing. In short, what the cases of this Court to which we have referred show is only this :If the party concerned wishes to produce any document or produce any witness, the authority may take the documentary evidence into consideration or take the evidence of the witness, if it considers such evidence relevant and necessary. But there is in the absence of any provision in the Act or the Rules, no power in the authority or the State Government to compel attendance of witnesses or to compel production of documents. This is of course not to say that if the authority wants any party before it to produce any document for satisfying itself whether the scheme is for the purposes mentioned in S.C it cannot so ask, and if the party asked to produce documents does not do so, the authority would be entitled to draw such inferences as it might consider justified from then of documents. But apart from this, there is no power conferred on the authority under the Act or the Madhya Pradesh Rules to compel production of documentary evidence or to summon any witness14. But apart from this, even if we examine the reasons given by the authority for not compelling the production of documents or for not summoning witnesses we see no reason to disagree with the view taken by the authority in this case. So far as the witnesses are concerned, the authority was of opinion that their oral evidence would be irrelevant and it said so after hearing arguments on the question. Nothing has been shown to us which would induce us to hold otherwise. As to documentary evidence, it was asked for to show, firstly, that the Corporation did not have equipment and finances to carryout the schemes, and secondly, that the Corporations past record of running its services was worse than that of the private operators. We think that both these questions really do not arise in the context of a scheme of nationalization envisaged in ChapterA of the Act.It will thus be clear thatnationalizedd transportunder ChapterA would be run either by the Central Government, or a State Government or any of the other three authorities mentioned there which are all under the control of the State Government or the Central Government. In these circumstances with the resources of the Government behind those authorities it would in our opinion be futile for any objector to say that the Central Government the State Government or the authorities backed by it could not have equipment and finances to carry out the schemes. It seems to us that the very fact that a scheme its proposed suggests that the Central Government or a State Government or the authorities would carry it out. So there is no question of asking for production of documents relating to the equipment and financial position of a State Transport Undertaking as defined in S.15. We are further of opinion that there is no question of consideration of comparative merits of the State Transport Undertaking and the private operators in the context of Chapter. As we have said already ChapterA was enacted for nationalisation ofd transportservices inaccordance with the amendment made in Art. 19 to(6) of the Constitution. Thenationalisedd transportunder that Chapter can only be run by the State Transport Undertaking as defined in S.A (b) of the Act. In view of that fact, if nationalisation has to come as envisaged by the amendment of the Constitution the only body which can run thenationalisedservice is the State transport Undertaking, and in those circumstances we fail to see any necessity for comparison between a State Transport Undertaking on the one hand and individual, operators on the other16. Apart from this general consideration we are further of opinion that ordinarily no question of comparative merits based on past record between a State Transport Undertaking and individual operators can ariseC provides that the State Transport Undertaking has to run an efficient adequate economical and properlyd transportservice, andfor doing that it does not take up just one route and put one transport vehicle on it. It takes up a large number of routes and puts a large number of transport vehicles on them in order to run an integrated service whether for passengers or for goods or for both. In these circumstances it is difficult to see how one can compare such an undertaking with individual private operators who are running one transport vehicle or so can individual routes. Secondly it would be usual for the State Transport Undertaking to be running transport vehicles on individual routes before it produces a scheme for nationalisation of the type provided for in ChapterA though it may be conceded that this may not be quite impossible, for some State Transport Undertaking might have entered into competition with private operators and might have obtained permitsunder ChapterIV, [see for instance Parbhani Transporte Society Ltd. v. Regional Transport Authority3 SCR 177  : (AIR 1960 SC 801  )]. Even so, when the State Transport Undertaking takes actionunder ChapterA of the Act there can in our opinion be no question of comparison between a State Transport Undertaking running an integrated service and individual operators running one transport vehicle or more on individual routes. We are therefore of opinion that the authority cannot be said to have gone wrong in not asking for past records of the Corporation in the present case for purposes of such comparison. It is true that S. 68 C requires that the scheme should be in the public interest. But unless the scheme is shown not to be efficient adequate economical and properlyd it will in our opinion generally follow that it is in the public interest. We do not think therefore that the comparative merits of the Corporation as against individual operators requires to be judgedunder ChapterA in the public interest. In the circumstances we are of opinion that the hearing in this case was both adequate and real.