Case: Ram Chandra Palai And Others Vs. The State Of Orissa And Others

2. The State of Orissa embarked upon a scheme of Nationalised State Transport and, as a first step towards, it, enacted and Act styled the Orissa Motor Vehicles (Regulation of Stage Carriage and Public Carriers Services) Act, 1947 (Orissa Act XXXVI of 1947), which modified the provisions of the Motor Vehicles Carriage and Public Carriers Services in the Province ofAct envisaged the formation of a Joint-Stock Company in which the Central and the Provincial Governments shall together have controlling interests for providing in stages or in one stage a more efficient administration of the entire stage carriage and public carriers services in the Province ofa Company was to be authorized to run carriage and public carriers services in the Province of Orissa to the exclusion of all other persons in the routes and areas over which it extended its activities, and with that end in view the provisions ofthe Motor Vehicles Act, 1939, were modified as therein specified. Section 4 of the Act provided that the Provincial Government may, if they think fit, by notification direct that the powers conferred bythe Motor Vehicles Act, 1939, on a Provincial Transport Authority or Regional Transport Authority shall be held in abeyance with respect to the issue, renewal, suspension or transfer of permits for stage carriage services and public carriersa notification was to be effective according to the directions either in the whole of the Province or in any specified area or in respect of any specified route or routes. On the issue of such a notification the above mentioned powers conferred on the Provincial Transport Authority or the Regional Transport Authority were to be held in abeyance and all permits issued, renewed or transferred by them were to become inoperative and the Provincial Government alone was to have the power to issue or renew permits or to grant temporary permits or to suspend or to transfer permits for stage carriage services and public carriers services.3. Whilst the State of Orissa was examining the question of the formation of such a Company, the merger of feudatory States of Orissa with the Province of Orissa took place on the 1st January 1948. Some of these Durbars had their own transport services and these were taken over by the State Government of Orissa. Orissa was then divided into 5 zones for the purpose of proper development of road transport, viz., Sambalpur, Keonjhar, Koraput, Ganjam and Cuttackwas decided by the Government to nationalise passenger service transport in the first three zones to be run departmentally based on the nucleus services taken over from the feudatory States which had merged. In order to give effect to this decision, the Orissa Motor Vehicles (Amendment) Act, 1948 (Orissa Act I of 1949) was enacted which further amendedthe Motor Vehicles Act, 1939, in the manner therein1(3) of that Act provided that the remaining provisions of the Act shall come into force in such specified areas of the district or districts as the Provincial Government may by notification from time to time appoint. The Provincial Government may also by notification withdraw the remaining provisions of the Act from any specifiedwas further provided that on and from the date when the remaining provisions of the Act came into force in any specified areas, the provisions of Orissa Act XXXVI of 1947 shall be repealed in respect of the said specified areas and when the remaining provisions of the Act were withdrawn from any specified areas, the provisions of Orissa Act XXXVI of 1947 shall be deemed to be revived in the said specified areas from the date of publication of the notification of withdrawal.4. The effect of these provisions was that in those areas or districts where a notification under S. 4(1) of the Orissa Act XXXVI of 1947 was not issued, the provisions ofthe Motor Vehicles Act, 1939, continued to apply, where such a notification was issued, the provisions of Orissa Act XXXVI of 1947 came to be applied except where, by virtue of the power reserved under S. 1 of Orissa Act I of 1949, the remaining provisions of that Act were brought into force by a notification issued in that behalf in which case the provisions of Orissa Act XXXVI o 1947 were repealed in respect of the said specified areas and the provisions of Orissa Act I of 1949 becamewere the three distinct sets of circumstances which would prevail at a given time after the enactment of Orissa Act I of 1949 according as the relevant notification under S. 4(1) of the Orissa Act 36 of 1947 or under S. 1(4) of Orissa Act I of 1949 were issued bringing particular area or areas within the operation of the said respective Acts.5. Whereas a Joint-Stock Company in which the Central and the Provincial Government were together to have controlling interests was envisaged in Orissa Act XXXVI of 1947, State Transport Service was envisaged in Orissa Act I of 1949 which defined State Transport Service to mean a service in which the Orissa State has entire or partial financial interest and which the Provincial Government may by notification declare to be a State Transport Service for the purposes of the Act. A Joint-Stock Company was accordingly formed in 1950 which was called the Orissa Road Transport Co.,Transport Services which were run through the Joint-Stock Company were termed the "Rationalized Services". The Services which were run through the State Transport Service were termed the "Nationalized Services."6. In pursuance of the above scheme of Nationalized State Transport, the State Government of Orissa issued notifications and press notes which gave intimation to the owners of Stage Carrier Services operating on the several routes within the districts of Orissa that with effect from 1-1-1955 either the Orissa Road Transport Co., Ltd., or the State Transport Service will be operating the said respectivewas the occasion for he above petitions being filed by the owners of the Stage Carriage Services plying their buses on the said respective routes impugning Orissa Act XXXVI of 1947 and Orissa Act I of 1949 as unconstitutional and void as aforesaid.7. The petitions before us are not confined no the areas and routes where only Rationalized Services of Nationalized Services are contemplated to be introduced by the State Government. Petitions Nos. 604 of 1954, 648 of 1954, 644 of 1954, 666 of 1954 and 671 of 1954 are concerned with the nationalization of the services and the routes operated upon by the petitioners in those petitions are intended to be served by the State TransportNos. 605 of 1954, 647 of 1954, 649 of 1954 663 of 1954 and 665 of 1954 are concerned with the rationalization of the services and the routes operated upon by the petitioners in those partitions are intended to be served by the Orissa Road Transport Co., Ltd. Petition No. 692 of 1954 is not clear whether the scheme to be put into operation by the State Government in the route operated upon by the petitioner therein is intended to be nationalized orthing, however, is common between all these petitioners that their permits under which they have been operating their buses upon those routes for the last several years are liable to be either terminated or cancelled or are not to be renewed under the scheme of Nationalized Road Transport Services and either the State Government or the Transport Authorities will grant the permits on those routes only to the Orissa Road Transport Co. Ltd., or the State Transport Service as the case may be.

Court's reasoning:
The provisions of both the Acts being materially different as set out above the application of one Act to particular districts of the State and of the other Act to the other districts of the State was violative of the guarantee of equal protection of laws enshrined in Art. 14 of the Constitution. The owners of stage carriage services to whom Orissa Act XXXVI of 1947 applied had the additional advantage of having compensation granted to them in accordance with the terms of section 6 thereof which advantage was not available to those owners of stage carriage services to whom Orissa Act I of 1949 wasnucleus of transport services which had been owned by the State Government had to be utilized so far as it was available and having regard to the situation as it obtained,the State Government naturally though of applying Orissa Act I of 1949 to certain districts of the State leaving the other districts to be served by the mode envisaged in Orissa Act XXXVI of 1947. Such a zonal or territorial or geographical division of the several districts of the State for implementation of the scheme of Nationalized State Transport by either the formation of a Joint-Stock Company or the running of the State Transport Service was based on the availability of the transport services acquired by the State Government from the various merging States and if such a division was made having regard to the situation as it thus obtained, no challenge could be made against it on the ground of discrimination or the denial of equal protection ofargument, however, ignores the fact that under Orissa Act XXXVI of 1947, the permits issued or renewed in favour of the owners of stage carriage services by the Provincial Transport Authority or the Regional Transport Authority cease to be operative or are canceled by the Provincial Government as the case may be and compensation is given to such permit holders for such premature termination or cancellation of theirowners of stage carriage services to whom Orissa Act I of 1949 is applied stand, however, on a different footing. Their permits continue for the normal period and the considerations which are laid down in clauses (f) and (g) which have been thereby added to Ss. 47 and 55 ofthe Motor Vehicles Act, 1939, would come into play when these permits which have expired by lapse of time come to be considered for renewal on applications made by permit holders in thatpermits may or may not be renewed in favour of these permit holders but the non-renewal of such permits would not be on a par with the premature termination or cancellation of the permits held by the owners of stage carriage services to whom the provisions of Orissa Act XXXVI of 1947 were applied. The two positions, therefore, are not similar and the permit holders under Orissa Act I of 1949 do not fall in the same class or group as the permit holders under Orissa Act XXXVI ofis no question, therefore, of any discrimination between these two classes or groups of permit holders and it cannot be validly urged that the provisions of the impugned Acts in so far as they applied to different classes or groups of permit holders are in any manner violative of the fundamental right embodied in Art. 14 of theOrissa Road Transport Co. Ltd., which is a Joint-Stock Company formed under the provisions of Orissa Act XXXVI of 1947 and the State Transport Services which are envisaged in Orissa Act I of 1949 would, therefore, be able to carry on their business even if it resulted in the complete elimination of the private-owned stage carriage services without any violation of the fundamental right guaranteed under Art. 19(1)(g) of thethe permits held by them underthe Motor Vehicles Act, 1939 were prematurely terminated or cancelled under the provisions of Orissa Act XXXV of 1947 compensation was provided by the Act itself. If there was no renewal of their permits on the expiration thereof after they had run for their normal period by virtue of the provisions of Orissa Act I of 1949, no claim could be made by them on the score of such non-renewal because renewal was not a matter of right.