Case: T. Govindaraja Mudaliar Etc. Etc Vs. The State Of Tamil Nadu &amp; Others

2. The facts have been set out in detail in the judgment of the High Court and need be stated only briefly. The policy of nationalisation of passenger bus transport in the State of Madras (Now Tamil Nadu) was laid down by the Government Order dated June 7, 1967. Under that order all routes of 75 miles and above, all routes radiating or terminating in Madras City and all routes in the Kanyakumari District were to be nationalised as and when the permits of the private operators expired. By the Government Order dated June 17, 1967 a committee was constituted for implementing the above decision. A draft scheme was prepared by the committee for nationalising the routes in question to the complete elimination of private operators. This scheme was published under S. 68-C of the Motor Vehicles Act 1939, hereinafter called the Act. A number of writ petitions were filed in the High Court in 1967 challenging the validity of the draft scheme. That scheme was struck down by the High Court. Thereafter the Governor of Madras inserted Rule 23-A in the Madras Government Business Rules in exercise of his powers under Art. 166 of the Constitution. It was provided thereby that the powers and functions which the State Transport Undertaking could exercise under S. 68-C shall be exercised by the Secretary to the Government of Madras in the Industries, Labour and Housing Department on behalf of the State Government. It was also provided by that Rule that the powers and functions of the State Government under S. 68-D of the Act and the Rules relating thereto were to be exercised by the Secretary to the Government of Madras in the Home Department on behalf of the State Government. In April 1968 an Ordinance was promulgated by the Governor which was later replaced by the Madras Act 18 of 1968 which became effective from April 1, 1968. By that enactment S. 47 (1) CC, S. 58 (2) (A) and S. 68 (CC) were added to the Act. Under the first two sections the Regional Transport Authority was to have due regard to the publication of the draft scheme in granting. The State Transport Undertaking, however, was entitled as of right to the issuance of a temporary permit on the publication of a draft scheme under S. 68 (CC) In exercise of the powers and functions under the new Business Rule 23-A schemes of nationalisation were promulgated and published. A number of operators again filed writ petitions challenging the draft scheme as also the validity of the Tamil Nadu Act 18 of 1968. The High Court upheld the validity of these provisions including the newly added sections. That decision was affirmed by this Court in A. Sanjeevi Naidu v. State of Madras (1970) 3 SCR 505   = (AIR 1970 SC 1102  ). It was pointed out in that judgment that in the State of Tamil Nadu the State Transport Undertaking is a Department of the State Government. Therefore the necessary opinion had to be formed by that Government. It was held that the function under the Act had been allocated by the Governor to the Transport Minister under the Rules and the Secretary of that Ministry had been validly authorised under Rule 23-A to take action under S. 68 (C) of the Act. The validity of the provisions of the Madras Act 18 of 1968 which amended the Act had been canvassed before this Court but it was observed that it was not necessary to decide that matter while deciding the question of the validity of the impugned scheme.3. As pointed out by the High Court a third attempt was made by way of filing writ petitions in the High Court out of which the present appeals have arisen to impugn the validity of Chapter IV-A of the Act as amended by Madras Act 18 of 1968. We shall first state the allegations which are relevant for deciding the constitutionality of the impugned provisions. In this connection we may refer to writ petition No. 780 of 1970 in which the petitioner V. Krishnamurthy was one of those who had challenged the validity of the draft scheme published by the Director, Madras State Transport Department as well as the draft scheme published by the Secretary to the Government of Madras, Industries, Labour and Housing Department. It was stated in para 7 of the petition that by reason of the dismissal of the appeals by this Court the Secretary to the Government, Home Department, would now be competent to take up the draft scheme for hearing under S. 68-D of the Act. On finalisation of the scheme the petitioners permit would automatically stand cancelled. In that event the petitioners business would have to be closed down and he would be seriously affected financially. The following part of paragraph 7 may be reproducedwould be seen that the result of the implementation of the Chapter IV-A is that only two buses operated by me as a commercial undertaking could have been nationalised, and the vehicles covered by the permits would be reduced in value to that of scrap and it would have no market at all as there would be no operators who would be coming forward to purchase vehicles by reason of the nationalisation policy of the).6. The High Court acceded to the argument of the Advocate General that a bus with a permit is a valuable property but without a permit or when the permit expires it ceases to have more value than what can be fetched in the market. The motor vehicle is not taken away by the Government and the permit holder is free to use it. Since the renewal of a permit is not a matter of right on the expiry of the permit its holder had no property in it and as such there was no question of infringement of his fundamental rights guaranteed by Articles 19 (1) or Art. 31 of the Constitution.

Court's reasoning:
Bhanji Munji (1955) 1 SCR 777   = (AIR 1955 SC 41  ) and other decisions which followed it were based mainly on an examination of the inter-relationship between Article 19 (1) (f) and Art. 31 (2). There is no question of any acquisition or requisition in Chapter IV-A of the Act. The relevant decision for the purpose of these cases was only the one given in Kochunis case, (1960) 3 SCR 887   = (AIR 1960 SC 1080  ) after which no doubt was left that the authority of law seeking to deprive a person of his property otherwise than by way of acquisition or requisition was open to challenge on the ground that it constituted on the ground that it constituted infringement of the fundamental rights guaranteed by Art. 19 (1) (f).It was, therefore, open to those affected by the provisions of Chapter IV-A to have agitated before this Court the question which is being raised now based on the guarantee embodied in Art. 19 (1) (f) which was never done. It is apparently too late in the day now to pursue this line ofis possible and likely that the value of the buses owned by the operators may be prejudicially affected or that they may not be able to carry on trade or business on the nationalised routes. According to the clear instance given in Akadshi Padhans case, (1963) Supp 2 SCR 691 = (AIR 1963 SC 1047  ) to which reference has already been made a law relating to such a monopoly would not normally infringe the citizens fundamental right under Article 19 (1)examining the above contentions it may be stated that there is no dispute on certain matters. The first is that according to the scheme of nationalisation which has been impugned all existing permits must come to an end before each scheme will become enforceable on a particular route. In other words by virtue of the scheme the existing permits of any operator will not be cancelled. None of the properties or assets of the appellants is going to be acquired. So far as the renewal of a permit is concerned this Court has already held that no operator can claim renewal as a matter of right. Section 68-G of the Act contains the principle and method of determination of compensation if any existing permit is cancelled or its terms are modified. In the present cases, however, no such question arises because no occasion for cancellation of existing permits can arise in view of the terms of the impugned scheme. The effect of nationalisation on the properties or business of the operators is not such as cannot be regarded to be a reasonable restriction in the interest of the general public within Article 19 (5) in the same way as a State monopoly must be presumed to be reasonable and in the interest of the general public so far as Article 19 (1) (g) and Article 19 (6) are concerned. This is in view of the fact that the tests prescribed by Clauses 5 and 6 of Article 19 are the same : (vide Akadshi Padhans case, (1963) Supp 2 SCR 691 = (AIR 1963 SC 1047  ). We are accordingly unable to sustain the challenge under Article 19 (1) (f) even if such a challenge is open to the appellants in the light of what has been observedit is suggested, is wholly contrary to the rules of natural justice the hearing by the Secretary, Home, being vitiated by bias. The learned single Judge of the Calcutta High Court in East India Electric Supply and Traction Co., Ltd. v. S. C. Dutta, (1955) 59 Cal WN 162   held that where a member of a Rating Committee had already pre-judged at least one of the issues that had been raised before it, his inclusion as a member made by Rating Committee and its functioning, contrary to law. In D. Satyanarayanamurthy v. A. P. State Road Transport Corporation, (1961) 1 SCR 642   = (AIR 1961 SC 82  ) the Minister in charge of the port-folio of Transport had presided over the sub-committee constituted to implement the scheme of nationalisation of bus services. It was contended there that the same Minister could not be a Judge in his own case as he was biased against the private operators. That contention was negatived by this Court.It was pointed out that any decision arrived at by the sub-committee was not final or irrevocable and it was only a policy decision. The sub-committee was only meant to advise the State Government how to implement the policy of nationalisation. That could not either expressly or by necessary implication involve a predetermination of the issue. The Minister, therefore, could not be said to have any such bias as disqualified him from hearing objections under Chapter IV-A of the Act in which Section 68-D occurs. This case is quite apposite for disposing of the submission based onare unable to see that if the schemes conformed to the requirements of Section 68-C why they should be struck down on the only ground that routes were to be nationalised as and when permits of private operators on those routes expired. Section 68-C permits the State Transport Undertaking to operate a service in relation to any area or route or even a portion thereof and to the exclusion, complete or partial, of other persons. The decision in Shrinivasa Reddy v. State of Mysore, (1960) 2 SCR 130   = (AIR 1960 SC 350  ) can be of no avail to the appellants because no question arose of coordination of services on the various routes which were to be nationalised and in respect of which the nationalisation was to become effective from different dates. In that case it was pointed out that peicemeal nationalisation of a particular route is not permissible. It is quite clear that each route can be nationalised and it is difficult to comprehend that when the law empowers that to be done any further conditions should be superimposed of coordinating the services on all the routes which are proposed to beare unable to see how any authority who exercises individual power under Section 68-D is bound by what has been stated as a policy decision of the Government. In fact his main function is to hear such objections as may be preferred to the schemes published under Section 68-C and approve or modify the schemes so published after giving an opportunity to the objector. His function being of a quasi-judicial nature he is to bring a judicial approach to the matter and even if he happens to be a servant of the Government he is not bound in any way to carry out or endorse the policy of the Government without discharging his duties as contemplated by Section 68-D.We are unable to hold nor has anything been shown to us except the suggestion that the schemes as published under Section 68-C were approved in toto that the authority acting under Section 68-D had not discharged his duties in a proper and judicial manner. The mere fact that the schemes were approved without any modification cannot establish that the Secretary. Home, who exercised the functions of the State Government under Section 68-D had failed to carry out his functions as laid down in Section 68-D or that he had approved the schemes without any modification merely because the Government orders contained language of mandatoryare unable to hold that there is much substance in this argument.Bhanji Munji (1955) 1 SCR 777   = (AIR 1955 SC 41  ) and other decisions which followed it were based mainly on an examination of thebetween Article 19 (1) (f) and Art. 31 (2). There is no question of any acquisition or requisition in Chapterof the Act.