Case: C.S. Rowjee, Represented by Power of Attorney holder C. Apparao Rowjee &amp; Others Vs. Andhra Pradesh State Road Transport Corporation

2. The proceedings concerned in the appeals arise out of Writ petitions filed before the High Court by the several appellants before us under Art. 226 of the Constitution challenging the validity of three Schemes framed under Chapter IV-A ofthe Motor Vehicles Act, 1939, nationalising Motor Transport in certain areas in the Kurnool District of the State of Andhra Pradesh which for convenience we shall refer to as the impugned Schemes. The appellants who impugn the validity of the Schemes are the previously existing Motor Transport Operators whose permits are liable to be modified or cancelled under the provisions of the Schemes on their coming into force. The impugned Schemes were published by Government as G. O. Ms: 292, 293 and 294 of the Home, Transport Department on February 5, 1963 in virtue of the powers conferred on Government by sub-s. (2) of S. 68-D of the Motor Vehicles Act. The Andhra Pradesh State Road Transport Corporation which, for shortness, we shall refer to as the Corporation, besides the State of Andhra Pradesh and the Regional Transport Authority Kurnool were impleaded as respondents to the petitions. They are also the respondents before us. By reason of the first Scheme, 34 routes were intended to be taken over, while under the 2nd and 3rd, 17 and 13 routes respectively were proposed to be nationalised. The routes covered by these three Schemes are all in the western half of the Kurnool District.3. Before adverting to the points requiring consideration in the appeals, it would be convenient to set out the relevant statutory provisions relating to the nationalisation of Road Transport for it is primarily on their construction that the decision of the appeals would turn.4. Chapter IV-A containing special provisions relating to State Transport Undertakings was introduced into the Motor Vehicles Act (Act IV of 1939) by an amendment effected by Central Act I of 1956 which came into effect on 16-2-1957. The Chapter consists of sections numbered 68-A to 68-I. S. 68-A contains definitions and of these it is sufficient to refer to the definition of "State Transport Undertaking which includes inter alia any undertaking providing road transport service, where such undertaking is carried on by .... " "any Road Transport Corporation established under S. 3 of the Road Transport Corporation Act 1950. (to refer to the portion which is material.)(It might be mentioned that the Corporation, the first respondents before us is a body established under this enactment.)5-6. Section 68-B reads:-"The provisions of this Chapter and the rules and orders made thereunder shall have effect notwithstanding anything inconsistent therewith contained in Chapter IV of this Act or in any other law for the time being in force or in any instrument having effect by virtue of any such law.The next Section 68-C which is the one most involved in the appeals runs :"Where any State Transport Undertaking is of opinion that for the purpose of providing an efficient, adequate, economical and properly co-ordinated road transport service, it is necessary in the public interest that road transport services in relation to any area or route or portion thereof should be run and operated by the State Transport Undertaking, whether to the exclusion, complete or partial, of other persons or otherwise, the State Transport Undertaking may prepare a scheme giving particulars of the nature of the services proposed to be rendered the area or route proposed to be covered and such other particulars respecting thereto as may be prescribed, and shall cause every such scheme to be published in the Official Gazette and also in such other manner as the State Govt. may direct.The first two sub-sections of Section 68-D enable persons affected by a Scheme published, under S. 68-C to file objections thereto before the State Government within thirty days after the publication of the Scheme. It further provides for the State Government considering the objections raised by persons affected by the Scheme after giving an opportunity to the objectors and the "undertaking to be heard in the matter before approving or modifying the Scheme. The Scheme so approved or modified is required to be published in the State Gazette and on such publication it becomes final and is to be called "the approved scheme. This is followed by sub-sec. (3) which reads :-"The scheme as approved or modified under sub-s. (2) shall then be published in the Official Gazette by the State Govt. and the same shall thereupon become final and shall be called the approved scheme and the area or route to which it relates shall be called the notified area or notified route :Provided that no such scheme which relates to any 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 Govt."any scheme published under sub-s. (3) of S. 68-D may at any time be cancelled or modified by the State Transport Undertaking and the procedure laid down in S. 68-C and S. 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.7. Section 68-F is really consequential on the approval of the scheme and sub-s. (1) thereof enacts :-"Where in pursuance of an approved scheme, any State Transport Undertaking applies in the manner specified in Chapter IV for state carriage permit or a public carriage permit or a contract carriage permit in respect of a notified area or notified route, the Regional Transport Authority shall issue such permit to the State Transport Undertaking, notwithstanding anything to the contrary contained in Chapter IV.Its second sub-section enables the Regional Transport Authority to refuse renewal of any other permits to private operators and otherwise to deal with those permits so as to give effect to the Scheme. Sections 68-C and 68-H deal with the payment of compensation and the methods by which the same should be computed but as these are not material, we shall not quote them.8. Section 68-I empowers the State Government to make rules for the purpose of carrying into effect the provisions of Chapter IV-A and among the specific purpose for which such rules may be framed is one under S. 68-I (2) (a) which provides for the form in which any scheme or approved scheme may be published under Section 68-C or sub-section (3) of Section 68-D and as usual a residuary clause reading :"any other matter which has to be or may be considered.9. These draft Schemes prepared by the Corporation were published under S. 68-D in the official Gazette on November 29, 1962. The appellants among others filed objections to the Schemes and thereafter there was a hearing of these objections by the Transport Minister of the State under S. 68-D (2) on January 11, 1963. The Minister passed an order according approval to the Schemes on February 12, 1963, and the Schemes as finalized were published in the Gazette on the next day, February 13, 1963. In pursuance of the provisions of the Schemes the Corporation made application to the Regional Transport Authority for permits. Soon thereafter the appellants and a few other filed Writ petitions invoking the jurisdiction of the High Court under Art. 226 of the Constitution praying for the quashing of the Schemes. These petitions were dismissed by the High Court by a common judgment on April 19, 1963, holding that the objections made to the validity of the Schemes could not be sustained. The learned Judges, however, on the application of the Appellants granted a certificate of fitness under Art. 133 in pursuance of which these appeals have been preferred.

Court's reasoning:
28. We have given the matter our best consideration, but we are unable to agree with the learned Judges of the High Court in their conclusion. The first matter which stands out prominently in this connection is the element of time and the sequence of dates. We have already pointed out that the Corporation had as late as March, 1962 considered the entire subject and had accepted the recommendation of the Anantharamakrishnan Committee as to the order in which the transport in the several districts should be nationalised and had set these out in their Administration Report for the three year period 1958 to 1961. It must, therefore, be taken that every factor which the Anantharamakrishnan Committee had considered relevant and material for determining the order of the districts had been independently investigated, examined and concurred in, before those recommendations were approved. It means that upto March-April, 1962 a consideration of all the relevant factors had led the Corporation it a conclusion identical with that of the Anantharamakrishnan Committee. The next thing that happened was a conference of the Corporation and its officials with the Chief Minister on April 19, 1962. The proceedings of the Conference are not on the record nor is there any evidence as to whether any record was made of what happened at the conference. But we have the statement of the Chief Minister made on the floor of the State Assembly in which he gave an account of what transpired between him and the Corporation and its officials. We have already extracted the relevant portions of that speech from which the following points emerge: (1) that the Chief Minister claimed a right to lay down rules of policy for the guidance of the Corporation and, in fact, the learned Advocate-General submitted to us that underthe Road Transport Corporation Act, 1950, the Government had a right to give directions as to policy to the Corporation; (2) that the policy direction that he gave related to and included the order in which the districts should be taken up for nationalisation; and (3) that applying the criteria that the districts to be nationalised should be contiguous to those in which nationalised services already existed, Kurnool answered this test better than Chittor and he applying the tests he laid down, therefore suggested that instead of Chittor, Kurnool should be taken up next. One matter that emerges from this is that it was as a result of policy decision taken by the Chief Minister and the direction given to the Corporation that Kurnool was taken up for nationalisation next after Guntur. It is also to be noticed, that if the direction by the Chief Minister, was a policy decision, the Corporation was under the law bound to give effect to it. (vide S. 34 ofthe Road Transport Corporation Act, 1950). We are not here concerned with the question whether a policy decision contemplated by S. 34 of the Road transport Act could relate to a matter which under S. 68-C of the Act is left to the unfettered discretion and judgment of the Corporation, where that is the State undertaking, or again whether or not the policy decision has to be by a formal Government order in writing for what is relevant is whether the materials placed before the Court establish that the Corporation gave effect to it as a direction which they were expected to and did obey. If the Chief Minister was impelled by motives of personal ill-will against the Road Transport Operators in the western part of Kurnool and he gave the direction to the Corporation to change the order of the districts as originally planned by them and instead taken up Kurnool first in order to prejudicially affect his political opponents and the Corporation carried out his directions it does not need much argument to show that the resultant Scheme framed by the Corporation would also be vitiated by mala fides notwithstanding the interposition of the semi-autonomousargument proceeds from the circumstances that even taking it that the Chief Minister directed the Corporation to take up the nationalisation of the routes in the first instance, there was no allegation, that he gave any direction regarding the area in the district and the routes. We fail to see any force in this argument. If the choice of the district was that of the Chief Minister, the fact that within the area of the district pointed out to them, the Corporation selected some area with in the district and the routes within that area, cannot on any reasonable construction of Section 68-C be a sufficient compliance with the statute. We are disposed to read the word area in the section as meaning such area in the entire State as the Corporation should consider proper and not as the learned Advocate General would read as area within a circumscribed part of the State determined by an outside authority.32. Besides, there is really little or no explanation forthcoming from the Corporation for choosing the western part of the Kurnool district for the exclusion of the private operators in the first instance. The principal allegation regarding mala fides on the part of the Chief Minister made by the appellants was directed to demonstrate that the object of the present schemes was to eliminate operators whose routes lay on the western side of the district. It is also stated in the affidavit that the friends or supporters of the Chief Minister were operating motor transport in the eastern part of Kurnool. Therefore it might be expected that the counter affidavits filed offered a rational explanation as to why his portion of the Kurnool district was chosen in the first instance in preference to the other portion of the district. Needless to say the resolution of the Corporation of May 4, 1962, officers no assistance in this matter as we have said earlier though the counter-affidavits contained a denial of the allegation that the Corporation was acting at the behest of the Chief Minister, there is no explanation for the choice of the western portion.Our conclusion therefore is that the impugned schemes are vitiated by the fact that they were not in conformity with the requirements of S.regard to this, however, two matters have to be remembered. The first is that there is nothing on the record to show that the Chief Minister influenced his colleague and beyond the fact that both the Chief Minister as well as the Transport Minister are members of the same Council of Ministers, there is nothing to indicate that the Chief Minister influenced the Transport Minister. The other matter is that the Transport Minister has stated on oath that in considering the objections under Section 66-D (3) and approving the Schemes he was uninfluenced by the Chief Minister. We, therefore, consider that there is no basis for holding that the Transport Ministers approval of the schemes does not satisfy the requirements of the law.34. In the view that we taken the Schemes have to be set aside as not in conformity with S. 68-C of the Act, the other objections raised do not require consideration but in view, however, of the arguments addressed to us on them we shall briefly deal with them.In the case before us in view of the conclusion we have reached that some of the conclusion we have reached that some of the variations between the maxima and the minima in the number of vehicles proposed to be operated on each route are such as adopting the test suggested by the learned Advocate-General himself, to really contravene R. 4 we have not thought it necessary to finally decide the larger question, whether the mere prescription of the maxima and minima, particularly for the reasons set out in the affidavit of the Assistant Secretary to the Transport Department, constitutes a violation of S. 68-E as also of R. 4 of the Motor Vehicles Rules, 1957 as to require the same to be struck down. We might, however, mention in passing that we are not much impressed by the argument based on Ss. 46 and 48. It must be remembered that we are concerned with a requirement of Ch. IV-A and under S. 68-B of the Act, not only the provisions of that Chapter but the rules made thereunder are to have effect notwithstanding anything in Ch. IV in which S. 46 and S. 48 occur. This apart, the rule-making authority had the analogy of the provisions of Ss. 46 and 48 before it, but yet chose not to adopt the same phraseology as was employed in these sections. Besides, as the provisions of Ch. IV-A made the rights of private operators to carry on business and are justified as a reasonable restriction on their rights in public interest, it might very well have been considered that a more precise indication should be afforded by the scheme to enable its adequacy to be tested by the quasi-judicial procedure which has to be followed before the scheme becomes effective. However, as stated already, there is no need to decide this matter finally in view of our conclusion that the scheme contravenes R. 4 even on the test submitted by the Advocate General. In saying this we have in mind routes 15, 16, 18 and 20 of Scheme No. 1 in which the variation in the number of vehicles is 1 to 3, 1 to 4 and 3 to 8 and similarly in Scheme No. 2 Route No. 1 where the variation is 6 to 12 and in Scheme No. 3 route No. 1 the variation is 5 to 9. We might mention that we have taken into account not merely the proposition but the variation in the number. We have set these out as merely illustrative and we have not thought it necessary to make an exhaustive list of allany provisions in Chapter IV which are inconsistent with those contained in Chapter IV-A would to that extent be superseded. No doubt, S. 68-F(1) speaks of an application in the manner specified in Ch. IV which if the words stood alone are capable of being understood as meaning the authority to whom the application has to be made, but as the authority to issue the permit in pursuance of the application is specified as the Regional Transport Authority and as that authority is directed to issue the permit notwithstanding anything in Ch. IV so much of Ch. IV or the Rules made thereunder, which specify the authority to grant the permit as being someone other than the Regional Transport Authority, is to that extent superseded. It was pointed out that under Rule 141 the State Transport Authority was itself vested with the power of the Regional Transport Authority where the route was of the description mentioned earlier, but this in our opinion, makes no difference. No doubt, in a State where there is no Regional Transport Authority at all (vide e.g. proviso to Section 44 (1)), but there is some other authority which functions as the Regional Transport Authority for the purpose of the Act, such an Authority might be that which would be comprehended by Section 68-F(1) but where as in Andhra Pradesh there is admittedly a Regional Transport Authority, we cannot accede to the submission that such authority is deprived of the power to issue a permit by reason of S. 68-F (1) merely because the Regional Transport Authority of that area cannot grant permits under Ch. IV.There remains for being dealt with one minor point which was urge in Civil Appeals Nos. 883 and 884 which we consider entirely without substance. The point was that the description of the route in the Scheme was too vague and misleading, so much so the appellants did not file their objections before the Government. Taking the case of the Civil Appeal No. 883, it is by an operator who runs a service from Uravakonda to Adoni, Serial No. 16 of scheme No. 1 describes the route as Adoni to Uravakonda. It was urged that as the scheme notified the route Adoni to Uravakonda but not Uravakonda to Adoni, the appellant thought that his route was not affected. The objection is on its very face frivolous because throughout the Scheme, it is only the terminal points that are specified and that specification carried with it and obviously implies that the operation of transport between the two termini is intended to be nationalised. The compliant in Civil Appeal No. 884 is the same, only the route is different. This completes all the points that are urged before us.43. In view of our conclusion that the schemes are vitiated by non-compliance with the requirements of S. 68-C and the Rules made thereunder, we hold that they have to be quashed as not warranted by law.