Full Judgment Text
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PETITIONER:
CAPITAL MULTI-PURPOSE CO-OPERATIVE SOCIETYBHOPAL AND OTHERS
Vs.
RESPONDENT:
THE STATE OF M.P. & OTHERS
DATE OF JUDGMENT:
30/03/1967
BENCH:
WANCHOO, K.N.
BENCH:
WANCHOO, K.N.
BACHAWAT, R.S.
RAMASWAMI, V.
CITATION:
1967 AIR 1815 1967 SCR (3) 329
CITATOR INFO :
1970 SC1102 (17)
1971 SC1986 (10)
1977 SC 24 (8)
1977 SC 441 (20)
1981 SC 660 (4,7,9)
ACT:
Motor Vehicles Act (4 of 1939)-Ss. 68A, 68-C and 68D-State
Road Transport Corporation publishing schemes for take-over
of certain routes-Particulars to be given in the scheme for
validly originating proceedings-Whether authority to hear
objections can be appointed under the Rules of Business
under Article 166(3) of the Constitution or only under s.
68-D (2-A)-Whether express finding necessary by authority
that scheme would fulfil four-fold purposes mentioned in s.
68-C-Authority not summoning documents or witnesses at the
instance of objectors regarding past records or financial
position to consider ability of the State Undertaking to run
nationalised transport services and to consider comparative
merits of undertaking and private operators-Whether such
evidence relevant-Therefore, whether hearing of objections
adequate and real.
HEADNOTE:
On May 11, 1964, the Madhya Pradesh State Road Transport
Corporation published two schemes for the take-over by the
corporation of certain routes under Chapter IV-A of the
Motor Vehicles Act 4 of 1939 to the exclusion of the
existing private operators on those routes and objections
were invited within 30 days. After the objections filed by
various private operators were heard by a Special Secretary
to the State Government empowered under s. 68-D of the Act,
he passed orders on June 8, 1965, modifying the schemes in
certain particulars. The modified and corrected schemes
were finally published on June 18, 1966. Writ petitions
were thereafter filed by the appellants challenging the two
schemes but were dismissed by the High Court.
In the appeal to this Court it was contended on behalf of
the appellants:(i) that the proposed schemes were bad as
they were not in compliance with s. 68-C of the Act and the
rules framed thereunder for they did not give necessary
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particulars which would enable the appellants to formulate
their objections to the proposed schemes in respect of the
fourfold purposes mentioned in s. 68-C i.e., that a scheme
should be for the purposes of providing an "efficient,
adequate, economical and properly coordinated Road Transport
Service" and that as the proposed schemes were themselves
bad, the entire proceedings initiated by them must fall
through; (ii) that the Special Secretary who heard the
objections on behalf of the State Government was not validly
authorised to do so as he had been appointed under the Rules
of Business framed under Art. 166(3) of the Constitution
while the appointment should have been under s. 68-D (2-A)
of the Act; (iii) that the order approving the schemes
passed on June 8, 1965 was invalid as it did not say that
the schemes fulfilled the purposes mentioned in a 68-C and
an express finding to this effect was necessary to validate
the schemes; (iv) that the hearing given by the authority to
the objectors was not adequate -and real as required under
s. 68-D of the Act : the authority wrongly rejected the
appellants application to summon documents from the
Corporation to show that the Corporation did not have the
equipment and finances to carry out the schemes. and that
the Corporation’s past record of running its services was
worse
330
than that of the private Operators; and furthermore the
authority had also wrongly refused to summons witnesses
sought to be called to show that the schemes would not
fulfil the four-fold purposes stated in s. 68-C.
HELD: Dismissing the appeal :
(i) S. 68-C requires two things, namely, (1) the nature of
the services proposed to be rendered and (2) the area or
route proposed to be covered; it further requires that such
other particulars respecting the schemes as the rules may
prescribe should be given. The particulars given in the
present proposed schemes were clearly in compliance with the
provisions of s, 68-C and that was enough for validly
originating the proceedings. [334B, G]
(ii) The first part of s. 68-D(2-a), which is the
substantive part, lays down that the person who is to hear
the objections cannot be an officer below the rank of
Secretary to the Government. The second part is procedural
and states how the officer should be appointed, namely, by
notification in the official gazette. In the present case
as the person appointed was a Special Secretary, the
substantive part of the provision had been complied with.
As far as the second and procedural part was concerned, the
appointment of the authority could be by notification as
provided in the Section or by an order under the Rules of
Business under Art. 166(3) of the Constitution.
Accordingly, the appointment of the authority to hear
objections in the present case could not be considered
invalid. [335H; 336C-D]
(iii) There is no express provision in Section 68-C read
with Section 68-D that the authority hearing objections must
come to a finding that the scheme under examination provides
an efficient, adequate, economical and’ properly coordinated
road transport service. In the absence of such a provision,
the very order of the State Government or the authority ap-
pointed must be held to mean either, where the scheme is
approved or modified, that it subserves the purposes
mentioned in s. 68-C or where it is rejected, that it does
not. [337B, D-E]
(iv) The authority had rightly held the documentary and oral
evidence proposed to be called was irrelevant and the
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hearing of the objections was therefore both adequate and
real.
Chapter (IV-A) of the Act was enacted for nationalisation of
road transport services in accordance with the amended
Article 19(6) of the Constitution. The nationalised road
transport under the Chapter can only be run by a State
Transport Undertaking defined by s. 68-A (b) of the Act
which would always be under the control of the Central or
State Government. In this context, it would be futile for
any object to show that the undertaking backed by the
Central or State Governments could not have the equipment or
finances to carry out the schemes. Furthermore, as only a
State Transport Undertaking can run a nationalised service,
there was no necessity for considering the comparative
merits of the undertaking and individual private operators.
[341C-E, G]
If a 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 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 purpose
mentioned in s. 68-C it cannot so ask; and if the party
asked to produce
331
documents does not do so, the authority would be entitled to
draw such inferences as it might consider justified from the
non-production 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 witness. [339H-340c]
Gullapalli Nageswara Rao, v. Andhra Pradesh Road Transport.
[1959] 1 S.C.R. 319, Malik Ram v. State of Rajasthan.
[1962] 1 S.C.R. 978 and Nehru Motor Transport Co-operative
Society, Limited v. The State of Rajasthan, [1964] 1 S.C.R.
220, referred to.
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 2201
and 2202 of 1966.
Appeals from the judgment and order dated September 15, 1966
of the Madhya Pradesh High Court in Misc. Petitions Nos.
351 and 311 of 1965 respectively.
M.N. Phadke, Naunit Lal, Y. S. Dharmadhikari and M. N.
Puranik, for the appellants (in both the appeals).
A.P. Sen, Advocate-General for the State of Madhya Pradesh
and I.N. Shroff, for the respondent No. 1 (in both the
appeals).
S.V. Gupte, Solicitor-General, K. A . Chitale, Rameshwar
Nath and Mahinder Narain, for respondents Nos. 5 and 6 (in
C.A. No. 2201 of 1966) and respondents Nos. 4 and 5 (in C.A.
No. 2202 of 1966.)
The Judgment of the Court was delivered by
Wanchoo, J. 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
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May 1962 to operate as a State Transport Undertaking under
s. 68-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 Chapter IV-A of
the Act 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. 68-D of the Act gave notices fixing
a date for hearing. The hearing was to begin on September
332
4, 1964, 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 mistakes in them, corrected
schemes as modified were finally published on June 18, 1965.
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.
It is unnecessary to set out all the points raised before
the High Court, for learned counsel for the appellants have
raised only some points before us out of those raised before
the High Court. It is enough therefore to set out the
points that have been raised before us and to indicate the
decision of the High Court thereon. The first contention
raised before us is that the proposed schemes published on
May 22, 1964 were bad inasmuch as they were not in
compliance with s. 68-C of the Act and the rules framed
thereunder, for they did not give necessary particulars
which would enable the appellants to formulate their
objections to the proposed schemes in respect of the four-
fold purposes mentioned in s. 68-C. The High Court rejected
this contention holding that there was sufficient compliance
with the provisions contained in s. 68-C and the. rules
framed thereunder and there was enough material in the
proposed schemes, to enable the appellants to file
objections thereto. The second contention is that the
Special Secretary who heard the objections on behalf of the
State Government was not validly authorised to do so
inasmuch as he had been appointed under the Rules of
Business framed under Art. 166 (3) of the Constitution while
appointment should have been under s. 68-D(2-a) of the Act,
which was inserted therein by the Motor Vehicles (Madhya
Pradesh Amendment) Act, No. 2 of 1963. The High Court re-
jected this contention holding that the provision in s. 68-D
(2-a) was supplementary to the power which the State
Government had under the Rules of Business and therefore it
was open to the State Government to act under either of the
provisions. The third contention is that the order
approving the schemes passed on June 8, 1965 was invalid
inasmuch as it did not say that the schemes fulfilled the
purposes mentioned in s. 68-C. The High Court rejected this
contention also holding that as soon as the authority
approved the schemes, it must be held to have impliedly
decided that the schemes fulfilled the purposes mentioned in
s. 68-C. The last contention is that the hearing given by
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the authority was not adequate and real and therefore the
approval given was invalid. The
333
High Court rejected this contention also holding that in the
circumstances of the case the hearing given was sufficient
for the purpose. In the result the High Court dismissed the
writ petitions after rejecting other points which were
raised before the High Court but are not raised before us.
We shall now proceed to deal with the four contentions
raised before us in that order.
The first contention relates to the invalidity of the
proposed schemes published on May 22, 1964, on the ground
that they are not in compliance with S. 68-C, 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. Now section
68-C lays down that where any State Transport Undertaking is
of opinion that it is necessary in the public interest that
road transport services in general or any particular class
of such 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 has to prepare a scheme. Further the State
Transport Undertaking forms this opinion for the purposes of
providing "an efficient, adequate, economical and properly
coordinated road transport service". Section 68-C further
provides that where the State Transport Undertaking is of
this opinion for the purposes mentioned above it has to
prepare a scheme and cause it to be published in the
official gazette and in such other manner as the State
Government may direct. The publication is for the purpose
of inviting objections to the proposed scheme by those
affected thereby Section 68-C further provides that the
proposed scheme should give 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. It is not the case of the appellants
that the proposed schemes published on May 22, 1964 did not
give particulars of the nature of the services proposed to
be rendered, and the area or route proposed to be covered.
Nor is it the case of the appellants that it did not give
such other particulars respecting thereto as were prescribed
by rules. The argument is that the proposed schemes must
disclose data in support of the four purposes which are the
basis of what may be called nationalisation of road
transport service, namely, the providing of an efficient,
adequate, economical and properly coordinated road transport
service. Now the two schemes with which we are concerned in
these appeals have given detailed particulars of what the
State Transport Undertaking considered was in compliance
with S. 68-C and the rules framed thereunder. But the
argument is that more particulars should have been given to
disclose how the schemes were for the purpose of providing
an efficient, adequate, economical and properly co-ordinated
road transport service, and in particular it is urged that
the
334
timings on which services would be run should have been
indicated in the schemes as that would have indicated
whether the services to be provided by the Corporation were
coordinated services.
Now the section itself requires two things, namely, (i) the
nature of the services proposed to be rendered, and (ii) the
area or route proposed to be covered. Further the section
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provides that such other particulars respecting the scheme
should be given as the rules prescribe, and that has been
done. 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 enable the
private operators to show that the schemes did not provide
an efficient, adequate, economical and properly coordinated
road transport service. 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. 68-C are so
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 as 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 therefore
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
particulars which the rules prescribe, 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. 68-C a,-, 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 appellants.
The second contention is that the Special Secretary who
heard the objections on behalf of the State Government was
not validly authorised. Now s. 68-D. (2) provides that "the
State Government may, after considering the objections and
after giving an opportunity to the objector or his
representatives and the representatives
335
of the State Transport Undertaking to be heard in the
matter,if they so desire, approve or modify the scheme".
The State Government obviously is not a natural person and
therefore some natural person has to give the hearing on
behalf of the State Government. Article 166 (3) of the
Constitution gives power to the Governor to make rules for
the more convenient transaction of the business of the
Government of the State, and Rules of Business have been
framed under this power for the performance of duties which
have to be performed under the law by the State Government.
It is not in dispute that the Special Secretary who gave the
hearing in the present case was authorised under the Rules
of Business. But what is urged is that in view of the
introduction of S. 68-D (/’--a) in the Act by the Madhya
Pradesh Amendment it is no longer open to the State
Government to act under the Rules of Business, and that the
appointment should have been made under the new provision.
That provision is in these terms :-
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"(2-a). The State Government may, by
notification, authorise any officer not below
the rank of a Secretary to Government for the
purpose of hearing objections under sub-
section (2)."
Further as under S. 2 (25) of the Madhya Pradesh General
Clause$ Act, (No. 3 of 1958), the word "notification" as
used in Madhya Pradesh Acts means a notification published
in the official gazette, the officer who heard the
objections should have been appointed by means of a
notification in the State Gazette under this new provision.
Now this new provision may be divided into two parts. ’Me
first part may be called substantive and lays down that the
person who is to hear objections on behalf of the State
Government cannot be an officer below the rank of a
Secretary to Government. The second part is procedural and
states how the officer may be appointed, namely, by
notification in the official gazette. So far as the
substantive part of the new provision is concerned, it cer-
tainly limits the power of the State Government when it
proceed to appoint some one to hear objections and such
person in view of the limitation contained in the new
provision cannot be an officer below the rank of a Secretary
to Government. This means, that for example, a Deputy
Secretary or an Under Secretary to Government cannot be
appointed to hear objections. In the present case the
person appointed is a Special Secretary to Government i.e.,
an officer not below the rank of a Secretary to Government.
Therefore the substantive part of the new provision is
complied with by the appointment made in this behalf, and
that in our opinion is mandatory and limits the power of the
State Government as to the rank of the person to be
appointed to hear objections on its behalf. But the second
part is merely proce-
336
dural, namely, how the appointment is to be made. The new
provision indicates that it may be made by a notification in
the official gazette. But that does not mean that if the
Constitution provides for any other method of making the
appointment that method is made nugatory. Such a procedural
provision may be mandatory if action is taken under the new
provision; but there are no words in the new provision which
exclude the procedure provided under the Rules of Business
under Art. 166(3) of the Constitution. 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 Rules of Business and therefore the appointment was
invalid, must fail.
The third contention raised on behalf of the appellants is
that the orders approving and modifying the schemes in this
case do not show that the authority had applied its mind to
the question whether the schemes were such as to subserve
the purposes of providing an efficient, adequate economical
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and properly coordinated transport service. Reliance in
this connection is placed on. certain American cases which
hold that the lack of an express finding necessary under a
statute to validate an order of an administrative agency
cannot be supplied by implication. When therefore such an
administrative agency is required as a condition precedent
to an order to make a finding of facts the validity of the
order must rest upon the needed finding. If it is lacking
the order is ineffective and the lack of express finding
cannot be supplied by implication. It 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. 68-C and s. 68-D. We have already indicated that the
State Transport Undertaking publishes a scheme when it has
arrived at a certain opinion After the scheme is published
under s. 68-C any person affected by it can object within 30
days under s . 68-D.(1). Thereafter the State Government
considers the objections and gives an opportunity to the
objector to be heard and
337
also to the State Transport Undertaking. Thereafter the
State Government or the authority authorised by it either
approves or modifies the scheme or even rejects it. 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. 68-C read with s. 68-D that the
scheme provides an efficient, adequate, economical and
properly coordinated road transport service. Besides we are
of opinion that the whole object of hearing objections under
S. 68-D is to consider whether the scheme provides an
efficient, adequate, economical and properly coordinated
road transport service. 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 properly coordinated
transport service; 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. 68-C, or, where it is
rejected, that it does not subserve the purposes. Section
68-D (2) does not require in our opinion any express find-
ing, 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 rejected.
The last contention is that an adequate and real hearing
was, not given to the appellants as required by S. 68-D of
the Act. Reliance in this behalf is placed on a number of
decisions of this Court Before however we consider the
legal position, let us see what exactly happened_in this
connection. It 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
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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 nationalised. 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
338
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 co-ordinated. 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 con-
sidered 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 operators.
Let us now turn to the legal position in this matter as
established by the decisions of this Court. The first case
to which reference may be made is Gullapalli Nageswara Rao
v. Andhra Pradesh State Road Transport Corporation(1) in
which this Court by majority held that the hearing under s.
68-D(2) was quasi judicial in nature and the State
Government acted as a quasi judicial authority under that
section.
The matter was further considered by this Court in Malik Ram
v. State of Rajasthan (2) and it was held that a hearing be-
fore a quasi judicial authority did not merely mean an
argument, and that in proper cases it might include taking
of evidence both oral and documentary. It was also held
that in the circumstances of the provision contained in s.
68-D (2) and the purpose of the hearing thereunder, taking
of evidence, whether oral or documentary, that might be
produced by either party, was necessary, before the State
Government could arrive at a just conclusion with respect to
the objections to the draft scheme. But it is clear that
Malik Ram’s case(2) only decided that if any party desired
to produce evidence, whether documentary or oral, the
authority should take that evidence, subject to its right to
consider whether the evidence was relevant or not and to
reject such evidence as it considered irrelevant. It was
also pointed out in that case that the authority would have
full power to control the proceedings and a party would not
be entitled to prolong them by producing irrelevant or
unnecessary evidence.
The matter was again considered by this Court in Nehru Motor
Transport Co-operative Society Limited v. The State of
Rajasthan(3). In that case it was pointed out that the
Rajasthan Rules did not provide for compelling the
attendance of witnesses.
(1) [1959] Supp. 1 S.C.R. 319. (2) [1962] 1 S.C.R. 978.
(3) [1964]1 S.C.R. 220.
339
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and that it was enough if the. authority took- evidence of
witnesses whom the objector’ produced before it. It was
also remarked that the authority might help the objector to
secure their attendance by issue of summonses, though in the
absence of any provision in the law, the witnesses might or
might not appear in answer thereto. These observations were
made in the context of an argument that there could be no
effective hearing without a provision for coercive process
compelling, attendance of witnesses and production of
documents, and that argument was turned down.
It is urged on behalf of the Corporation that there is no
provision in the Act and the Rules framed thereunder in
Madhya Pradesh applying the provisions of the Code of Civil
Procedure with respect to summoning of witnesses and
discovery or inspection of documents, to proceedings before
the, authority hearing objections under s. 68-D. Therefore
the authority was not in any case bound to summon witnesses
or order inspection or discovery of documents. It 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 a provision. But it is argued on
behalf of the appellants that this was not the reason given
by the authority for not summoning witnesses or not ordering
production of documents and we should judge whether the
hearing was adequate on the basis of the reasons given by
the authority in the present case. Further, reliance in
this connection is placed on the observation of this Court
in Nehru Motor Transport Co-operative Society’s case(1) that
the authority might help the objectors by issuing summonses.
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. It, this
situation if -,in authority decides not to issue such
letters 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 : It’ 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
(1) [1964] 1 S.C.R. 220.
Cl/167 --9
340
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. 68-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 the non-production of documents.
But apart from this, there is no power conferred on the
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authority under the Act or the Madhya Pradesh Rules to
compel production of documentary evidence or to summon any
witness.
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
carry out the schemes and, secondly, that the Corporation’s
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
nationalisation envisaged in Chapter IV-A of the Act. It
may be mentioned that his Chapter was introduced in the Act
in 1956 after Art. 19(6) of the Constitution had been
amended by the Constitution (First Amendment) Act, 1951. By
that amendment the State was given power relating to the
carrying on by it or by a Corporation owned or controlled by
it, of any trade, business, industry, or service, whether to
the exclusion, complete or partial, of citizens or other-
wise. Chapter IV-A envisages what we have called
nationalisation of transport service, and this has to be
undertaken by a State Transport Undertaking which under s.
68-A (b) may be
(i) the central Government or a State
Government; or
(ii) any Road Transport Corporation
established under section3of the Road
Transport Corporations Act, 1950; or
(iii) the Delhi Road Transport Authority
established under section 3 of the Delhi
Road Transport Authority Act, 1950; or
(iv) any municipality or any corporation or
company owned or controlled by the State
Government.
It will thus be clear that nationalised road transport under
Chapter IV-A would be run either by the Central Government,
or a State
341
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 is 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. 69-A (b).
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 IV-A. As we have said already Chapter IV-A was
enacted for nationalisation of road transport services in
accordance with the amendment made in Art. 19 (6) of the
Constitution. The nationalised road transport under that
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Chapter can only be run by the State Transport Undertaking
as defined in s. 68-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 the
nationalised service 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 other.
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 arise. Section 68-C provides
that the State Transport Undertaking has to run an
efficient, adequate, economical and properly coordinated
road transport service, and for 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 in 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 on
individual routes. secondly, it would be unusual for the
State Transport Undertaking co be running transport vehicles
on individual routes before it produces a scheme for
nationalisation of the type provided for in chapter IV-A,
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 permits under Chap. V: (see, for instance,
Parbani Transport Co-operative Society Ltd. v. The Regional
Trans-
342
port. Authority(1). Even so, when the State Transport
Undertaking takes action under Chap. IV-A 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 properly coordinated, 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 judged under Chapter IV-A in the
public interest. In the circumstances we are of opinion
that the hearing in this case was both adequate and real.
The appeals therefore fail and are hereby dismissed with
costs one hearing fee.
R.K.P.S. Appeals dismissed.
1) [1960]3 S.C.R. 177.
343