Judgment Case ID: 905

Judgment:
2 of 1960. Petition under Article 32 of the Constitution of India for the enforcement of Fundamental Rights. A. V. Viswanatha Sastry and B. B. L. Iyengar	 for the petitioner. G. section Pathak	 R. Gopalakrishnan and T. M. Sen	 for the respondents. C. K. Daphtary	 Solicitor General of India and B.R.L. Iyengar	 for the Intervener (D. R. Karigowda). April 28. The Judgment of the Court was delivered by SHAH	 J. The petitioners pray for a writ quashing a scheme approved under section 68D(2) of the 	 by the Government of the State of 744 Mysore and for a writ restraining the respondents	 i.e.	 the State of Mysore	 the General Manager	 the Mysore Government Road Transport Department and the Regional Transport Authority	 Bangalore	 from taking action pursuant to the scheme. The petitioners are operators of Stage carriages on certain routes in the sector popularly known as " Anekal area " in the Bangalore District. On January 13	 1959	 the General Manager	 Mysore Government Road Transport Department	 who will hereinafter be referred to as the 2nd respondent	 pub lished a scheme in exercise of the powers conferred by section 68C of the 	 for the exclusion of private operators on certain routes and reservation of those routes for the State transport undertaking in the Anekal area. The Chief Minister of the Mysore State gave the operators affected by the scheme an opportunity of making oral representations and on perusing the written objections and considering the oral representations	 approved the scheme as framed by the 2nd respondent. On April 23	 1959	 the scheme was published in the Mysore State Government gazette ' On June 23	 1959	 renewal applications submitted by petitioners 1 to 3 for permits to ply Stage carriages on certain routes covered by the scheme were rejected by the Transport Authority and the 2nd respondent was given permanent permits operative as from June 24	 1959	 for plying buses on those routes. In Writ Petition No. 463 of 1959 challenging the validity of the permanent permits granted to the 2nd respondent	 the High Court of Mysore held that the issue of permits to the 2nd respondent before the expiry of six weeks from the date Of the application was illegal. To petitioners 1 to 3 and certain other operators renewal permits operative till March 31	 1961	 were thereafter issued by the third respondent. The 2nd respondent applied for fresh permits in pursuance of the scheme approved on April 15	 1959	 for plying Stage carriages on routes specified in the scheme and notices thereof returnable on January 5	 1960	 were served upon the operators likely to be affected thereby. On January 4	 1960	 the five petitioners 745 applied to this court under article 32 of the Constitution for quashing the scheme and for incidental reliefs. The petitioners claim that they have a fundamental right to carry on the business of plying stage carriages and the scheme framed by the 2nd respondent and approved by the State of Mysore unlawfully deprives them of their fundamental right to carry on the business of plying stage carriages in the Anekal area. The diverse grounds on which the writ is claimed by the petitioners need not be Bet out	 because	 at the hearing of the petition	 counsel for the petitioners has restricted his argument to the following four heads: (1) that the scheme violates the equal protection clause of the Constitution	 because only fourteen out of a total of thirty one routes on which stage carriages were plied for public transport in the Anekal area were covered by the scheme and that even from among the operators on the fourteen routes notified	 two operators were left out	 thereby making a flagrant discrimination between the operators even on those fourteen routes; (2) that by Chapter IVA of the 	 Parliament had merely attempted to regulate the procedure for entry by the States into the business of motor transport in the State	 and in the absence of legislation expressly undertaken by the State of Mysore in that behalf	 that State was incompetent to enter into the arena of motor transport business to the exclusion of private operators; (3)that the Chief Minister who heard the objections to the scheme was biased against the petitioners and that in any event	 the objections raised by the operators were not considered judicially; and (4) that the Chief Minister did not give " genuine consideration " to the objections raised by the operators to the scheme in the light of the conditions prescribed by the Legislature. Re. 1: In column 1 of the scheme " part of Bangalore District	 viz		 Bangalore North	 Bangalore South	 Anekal and Hosakote Taluks " is set out as the area in relation to which the scheme is approved; and in 746 column 3	 " the routes (with their starting points	 termini	 intermediate stations and route length) in which the State transport undertaking will introduce its services to the exclusion of private operators " are those set out in statement 1 appended to the scheme. Statement 1 sets out the description of fourteen routes with their intermediate points	 route length	 number of buses to be operated and the maximum number of trips to be performed on each route. By column 4 " the number of existing stage carriages on each route with the number of trips and the names of their opera tors " are described " as in statement 2 appended ". Statement 2 sets out the names and places of business of fifty six operators together with the routes operated and the numbers of the stage carriages and trips made by those operators. In the Anekal area	 there are thirty one routes	 which are served by stage carriages operated by private operators	 and by the approval of the scheme	 only fourteen of those routes are covered by the scheme ' Section 68C	 in so far as it is material	 provides that a State transport undertaking	 if it is of opinion that 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 itself	 whether to the exclusion	 complete or partial	 of other persons or otherwise	 it 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 other particulars respecting thereto as may be prescribed. Section 68D(1) provides for inviting objections by persons affected by the scheme. Sub section 2 of section 68D authorises the State Government after considering the objections and giving an opportunity to the objectors to approve or modify the scheme; and by sub section 3	 the scheme as approved or modified and published by the State Government in the official gazette shall " 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. " Counsel for the petitioners contended that exercising powers under section 68C	 the State transport undertaking may prepare a scheme in respect of an 747 area or a number of routes in that area	 but not a scheme for an area which is to apply to some only and not to	 all routes on which public transport vehicles in the area operate. In this case	 it is unnecessary to decide whether it is open to a State transport undertaking under a scheme framed for a notified area to limit its application to some only of the routes	 because on a true reading of the scheme	 it is amply clear that the scheme was approved in relation to fourteen notified routes and not in relation to a notified area. 		 The approved scheme is in the form prescribed by the rules	 and in the form prescribed	 by column 1	 the area in relation to which the scheme is approved is required to be set out. But a scheme under section 68C must be one in relation to an area or any route or portion thereof wherein the transport service is to be undertaken by the State transport under taking to the exclusion	 either complete or partial	 of other operators. Column 1 of the approved scheme undoubtedly describes the area in relation to which the scheme is approved	 but by the designation of the area	 in the scheme	 an intention to exclude either wholly or partially the operators of stage carriages from that area is not evinced either expressly or by implication. By column 3	 the scheme expressly directs that the State transport undertaking will introduce its service to the exclusion of private operators on the specified routes. The scheme must therefore be regarded as one for the fourteen notified routes and not in relation to the area described in column 1. Counsel for the petitioners submitted that an order passed on October 22	 1959	 by the 3rd respondent the Regional Transport Authority rejecting applications for permits for one of the fourteen routes to an applicant	 indicated that in the opinion of the third	 respondent	 the scheme related to a notified area and not to notified routes. The order states that. " an approved scheme for the exclusive operation in the notified area of Bangalore District " by the second respondent " has come into existence after the notification of the route Bangalore to Nallur	 and the major	 portion of the route applied for lie in the notified area and as such it was not desirable	 to grant any permit 748 to operators to pass through notified area in the intraState route. " The third respondent may have in considering the application assumed that the scheme related to a notified area	 but the true interpretation of the scheme cannot be adjudged in the light of that assumption. The other document relied upon is a statement of objections filed by the second respondent on October 24	 1959	 resisting the application for stage carriage permits to a private operator on the route Siddalaghatta Bangalore via Nallur. In para. 4 of the statement	 it was submitted that " the existing notification dated October 15	 1959	 came under the notified area of the department" of the second respondent " and that would overlap certain services of the department". But because in making his defence	 the second respondent has referred to the scheme as dealing with " the notified area"	 the scheme will not necessarily be hold to be one in relation to the notified area. The argument that among the operators on the fourteen routes	 two have been selected for special treatment and on that account	 the scheme is discriminatory	 has	 in our judgment	 no substance. It is averred in para. 13 of the petition that two persons	 Chikkaveerappa operating on route Chikkathirupathi to Bangalore via Surjapur	 Domsandra and Agara and Krishna Rao operating on route Bangalore to Chik kathirupathi via Agara and Surjapur are not amongst those who are excluded from operating their vehicles on the notified routes. In the affidavit filed by the State and the second respondent	 it is submitted that the plea of the petitioners that the two persons operating stage carriages on specified routes were not amongst those to be excluded is incorrect	 and that those two persons had been notified by the Secretary of the third respondent that they were " likely to be affected on giving effect to the approved scheme. " Undoubtedly	 route item No. 2 in statement 1 to the scheme is " Bangalore to Surjapur or any portion thereof " and the route operates via Agara and Domsandra	 but the record does not disclose that the two named persons are	 in plying their stage carriages	 entitled to operate on the route specified with right to stop at the named places for picking up passengers. 749 It is not clear on the averments made in the petition that the route on which the stage carriages of the two named persons ply are identical; even if the routes on which the stage carriages of these two operators ply overlap the notified route	 in the absence of any evidence to show that they had the right to pick up passengers en route	 the discrimination alleged cannot be deemed to have been made out. Re. 2: Article 298 of the Constitution as amended by the Constitution (Seventh Amendment) Act	 1956. recognises the executive power of the Union and of each State as extending to the carrying on of any trade or business. That power of the Union is subject in so	 far as the trade or business is not one in respect of which Parliament may make laws	 to legislation by the State and the power of each State	 in so far as the trade or business is not one with respect to which the State Legislature may make laws	 is subject to legislation by Parliament. Like ordinary citizens	 the Union and the State Governments may carry on any trade or business subject to restrictions which may be imposed by the Legislatures competent to legislate in respect of the particular trade or business. Under Article 19(6) of the Constitution as amended by the First Amendment Act	 1951	 nothing in sub cl. (g) of cl. (1) of article 19 is to affect the operation of any existing law in so far as it related to	 or prevent the State from making any law relating to the carrying on by the State or by a Corporation owned or controlled by the State of any industry or business	 whether to the exclusion	 complete or partial	 of citizens or otherwise. The State may therefore carry on any trade or business	 and legislation relating to the carrying on of trade or business by 	the State	 is not liable to be called in question on the ground that it infringes the fundamental freedom of citizens under article 19(1)(g). The Motor Vehicles Act.1939	 was enacted by the Central Legislative Assembly in exercise of its power under the Government of India Act	 1935	 to legislate in respect of mechanically 'propelled vehicles. Chapter IVA containing sections 68A to 681 was incorporated into that Act by the Parliament by Act 100 of 1956 whereby special provisions 97 750 relating to the conduct of transport undertakings by the States or Corporations owned or controlled by the State were made. Section 68A defines the expression " State transport undertaking " as meaning among others an undertaking for providing transport service carried on by the Central Government or a State Government or any Road Transport Corporation established under Act 44 of 1950. By section 68B	 the provisions of that chapter and the rules and orders made thereunder are to override Chapter IV and other laws in force. Section 68C authorises the State transport undertaking to prepare and publish a scheme of road transport services of a State transport undertaking. Section 68D deals with the lodging of objections to the scheme framed under the preceding section	 the of those objections and the publication of the final scheme approved or modified by the State Government. Section 68F deals with the issue of permits to State transport undertakings in respect of a notified area or notified route and provides that the Regional Transport Authority shall issue such permits to the State transport undertaking notwithstanding anything contained in Chapter IV. It also enables the Regional Transport Authority	 for giving effect to the approved scheme	 to refuse to entertain any application for the renewal of any other permit	 to cancel any existing permit	 to modify the terms of any existing permit so as to render the permit ineffective beyond a specified date	 to reduce the number of vehicles authorised to be used under the permit and to curtail the area or route covered by the permit. Section 68G sets out the principles and method of determining compensation to persons whose existing permits are cancelled. By Chapter IVA	 the State transport undertaking which is either a department of the State or a corporation owned or controlled by the State on the approval of a scheme	 is entitled	 consistently with the scheme	 to exclusive right to	 carry on motor transport business. The Regional Transport Authority is	 bound to grant permit for the routes covered by the		 scheme to the State transport undertaking if that authority applies for the same and the Regional Transport Authority is 751 also bound in giving effect to the approved scheme	 to modify the terms of existing permits and to refuse to entertain applications for renewal of permits of private operators. Chapter IVA is not merely regulatory of the procedure for carrying on business of road transport by the State; it enables the State transport undertaking	 subject to the provisions of the scheme	 to exclude private operators and to acquire a monopoly	 partial or complete	 in carrying on transport business	 in a notified area or on notified routes. The authority of the Parliament to enact laws granting monopolies to the State Government to conduct the business of road transport is not open to serious challenge. Entry No. 21 of List III of the Seventh Schedule authorises the Union Parliament and the State Legislatures concurrently to enact laws in respect of commercial and industrial monopolies	 combines and trusts. The argument of the petitioners that the authority conferred by entry No. 21 in List III is restricted to legislation to control of monopolies and not to grant or creation of commercial or industrial monopolies has little substance. The expression " commercial and industrial monopolies " is wide enough to include grant or monopolies to the State and Citizens as well as control of monopolies	 The expression used in a constitutional enactment conferring legislative powers must be construed not in any narrow or restricted sense but in a sense beneficial to the widest possible amplitude of its powers: Navinchandra Mafatlal vs The Commissioner of Income tax	 Bombay City(1)	 The United Provinces vs Atiqua Begum(2). Entry No. 26 of List II of the Seventh Schedule which invests the States with exclusive authority to legislate in respect of trade and commerce within the State	 subject. to the provisions of entry No. 33 of List III	 does not derogate from the authority conferred by entry 21 of List III concurrently to the Parliament and the State Legislatures	 to grant or create by law commercial or industrial monopolies. The amplitude of the powers under the entry in the concurrent list expressly dealing with commercial and industrial monopolies cannot be presumed to be restricted by the (1) [1955] 1 S.C.R. 829	 836. (2) 752 generality of the expression " trade and commerce in the State List. If the argument of the petitioners and the intervener that legislation relating to monopoly in respect of trade and industry is within the exclusive competence of the State be accepted	 the Union Parliament cannot legislate to create monopolies in the Union Government in respect of any commercial or trading venture even though power to carry on any trade or business under a monopoly is reserved to the Union by the combined operation of article 298	 and the law which is protected from the attack that it infringes the fundamental freedom to carry on business by article 19(6). We are therefore of the view that Chapter IVA could competently be enacted by the Parliament under entry No. 21 read with entry No. 35 of the Concurrent List. The plea sought to be founded on the phraseology	 used in article 19(6) that the State intending to carry on trade or business must itself enact the law authorising it to carry on trade or business is equally devoid of force. The expression " the State " as defined in article 12 is inclusive of the Government and Parliament of India and the Government and the Legislature of each of the States. Under entry No. 21 of the Concurrent List	 the Parliament being competent to legislate for creating	 commercial or trading monopolies	 there is	 nothing in the Constitution which deprives it of the power to create a commercial or trading monopoly in the Constituent States. Article 19(6) is a mere saving provision: its function is not to create a power but to	 immunise from attack the exercise of legislative power falling within its ambit. The right of the State to carry on trade or business to the exclusion of others does not &rise by virtue of article 19(6). The right of the State to carry on trade or business is recognised by article 298; authority to exclude competitors in the field of such trade or business is conferred on the State by entrusting power to enact laws under entry 21 of List III of the Seventh Schedule		 and the exercise of that power in the context of fundamental rights is secured from attack by article 19(6)	 In any event	 the expression " law " as	 defined in article 13(3)(a) includes any ordinance	 order	 bye law	 753 rule	 regulation	 notification custom	 etc.	 and the scheme framed under section 68C may properly be regarded as " law " within the meaning of article 19(6) made by the State excluding private operators from notified routes or notified areas	 and immune from the attack that it infringes the fundamental right guaranteed by article 19(1)(g). Be.3: The plea that the Chief Minister who approved the scheme under section	 68D was biased has no substance. Section 68D of the undoubtedly imposes a duty on the State Government to act judicially in considering the objections and in approving or modifying the scheme proposed by the transports undertaking. Gullapalli Nageswara Rao vs Andhra Pradesh State Road Transport Corporation and another(1). It is also true that the Government on whom the duty to decide the dispute rests	 is substantially a party to the dispute but if the Government or the authority to whom the power is delegated acts judicially in approving or modifying the scheme	 the approval or modification is not open to challenge on a presumption of bias. The Minister or the officer of the Government who is invested with the power to hear objections to the scheme is acting in his official capacity and unless there is reliable evidence to show. that he is biased	 his decision will not be liable to be called in question	 merely because he is	 a limb of the Government. The Chief Minister of the State has filed an affidavit in this case stating that the contention of the petitioners that he was " biased in favour of the scheme was baseless he has also stated that he heard such objections and representation& as were made before him and he had given the fullest opportunity to the objectors to submit their objections individually. The Chief Minister has given. detailed reasons for approving the scheme and has dealt with such of the objections as he says were urged before him. In the last para. of the reasones given	 it is stated that the Government have heard all the arguments advanced on behalf of the operators and " after: giving full consideration to them	 the Government have come to (1959) Supp. 1 S.C.R.319 754 the conclusion that the scheme is necessary in the interest of the public and is accordingly approved subject to the modifications that it shall come into force on May 1	 1959 ". In the absence of any evidence controverting these averments	 the plea of bias must fail. 4: The argument that the Chief Minister did not give genuine consideration " to the objections raised by operators to the scheme in the light of the conditions prescribed has no force. The order of the Chief Minister discusses the questions of law as well as questions of fact. There is no specific reference in the order to certain objections which were raised in the reply filed by the objectors	 but we are	 on that account	 unable to hold that the Chief Minister did not consider those objections. The guarantee conferred by section 68D of the upon persons likely to be affected by the intended scheme is & guarantee of an opportunity to put forth their objections. and to make representations to the State Government against the acceptance of the scheme. This opportunity of making representations and of being heard in support thereof may be regarded as real only if in the consideration of the objections	 there is a judicial approach. But the Legislature does not contemplate an appeal to this Court against the order passed by the State Government approving or modifying the scheme. Provided the authority invested with the power to consider the objections gives an opportunity to the objectors to be heard in the matter and deals with the objections in the light of the object intended to be secured by the scheme	 the ultimate order passed by that authority is not open to challenge either on the ground that another view may possibly have been taken on the objections or that detailed reasons have not been given for upholding or rejecting the contentions raised by the objectors. In the view taken by us	 the contentions raised by the petitioners fail and the petition is therefore dismissed with costs. Petition dismissed.

Summary:
In exercise of the powers conferred by section 68C of the 	 the General Manager of the Mysore Government Road Transport Department published a scheme for the exclusion of private operators on certain routes in a specified area and reservation of those routes for the State Transport Undertaking. The scheme was approved by the Government under s	 68D(2) of the Act after the Chief Minister of the State had given an opportunity to the operators affected by the scheme to make representations objecting to it	 The petitioners who were 743 private operators challenged the validity of the scheme and the action taken by the Government pursuant to it on the grounds	 inter alia	 (1) that the petitioners have a fundamental right to carry on the business of plying stage carriages and that the provisions of Ch. IVA of the 	 which provide for the right of the State to exclusive right to carry on motor transport business are invalid	(2)that by Ch. IVA Parliament had merely attempted to regulate the procedure for entry by the State into the business of motor transport in the State	 and that in the absence of legislation expressly undertaken by the State in that behalf	 that State was incompetent to enter into the arena of motor transport business to the exclusion of private operators	 and (3) that the scheme violated the equal protection clause of the Constitution because only fourteen out of a total of thirty one routes on which stage carriages were plied for public transport in the area specified were covered by the scheme : Held	 (1) that the expression " commercial and industrial monopolies " in entry 21 of List III of the Seventh Schedule of the Constitution of India is wide enough to include grant or creation of commercial or industrial monopolies to the State and citizens as well as control of monopolies. (2) that it is competent for the Parliament to enact Ch. IVA of the Act under entry 21 read with entry 35 of List III. (3)that the scheme framed under section 68C of the may be regarded as "law" within the meaning of article 19(6) of the Constitution	 made by the State excluding private operators from notified routes or notified areas	 and immune from the attack that it infringes the fundamental right guaranteed by article 19(1)(g). (4)that on a true reading	 the scheme in question was approved in relation to the fourteen notified routes and not in relation to a notified area and that as a scheme under section 68C of the Act may be one in relation to an area or any route or portion thereof	 the scheme could not be challenged as discriminatory.