Full Judgment Text
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PETITIONER:
C. S. ROWJEE AND OTHERS
Vs.
RESPONDENT:
ANDHRA PRADESH STATE ROAD TRANSPORT CORPORATION
DATE OF JUDGMENT:
27/01/1964
BENCH:
AYYANGAR, N. RAJAGOPALA
BENCH:
AYYANGAR, N. RAJAGOPALA
SINHA, BHUVNESHWAR P.(CJ)
SUBBARAO, K.
DAYAL, RAGHUBAR
MUDHOLKAR, J.R.
CITATION:
1964 AIR 962 1964 SCR (6) 330
CITATOR INFO :
HO 1965 SC1848 (10)
RF 1968 SC1095 (5)
RF 1986 SC 872 (115)
D 1987 SC 294 (37)
ACT:
Motor Vehicles--Nationalisation of road transport
service--Preparation and enforcement of
scheme--Validity--Issue of permits to State Transport
Undertakings--Motor Vehicles Act, 1939 (4 of 1939), as
amended by Act 1 of 1956, Ch. IV, ss. 68C, 68D(3), 68F(1)-
Andhra Pradesh Motor Vehicles Rules, 1957, rr 4, 141.
HEADNOTE:
The respondent corporation appointed an expert committee to
go into the question as to the working of nationalised
transport in the State. The Committee laid down the
criteria for determining the order in which
331
areas and routes had to be selected for nationalisation and
had drawn up a list of the remaining districts in which
nationalisation should be successively taken up.
Accordingly, Nellore would have been the next district to be
taken up and the turn of Kurnool district would have come up
after nationalisation of the routes in Nellore, Chittore and
Cuddapah districts were completed. This report was
submitted to the Corporation in February, 1961 and the
Corporation accepted it and embodied the approval in its
Administration Report dated March 24, 1962 which was
published in April, 1962. After the General Election in
1962 the Chief Minister assumed office as Chief Minister on
March 12, 1962. On April 19, 1962, he summoned a conference
of the Corporation at which, he suggested that the
nationalisation of bus routes in the Kurnool district should
be taken up first. By its resolution dated 4-5-1962, the
Corporation made an alteration in the order of the
districts, successively to be taken up for nationalisation
and selected the western half of the Kurnool as the area to
be nationalised in the first instance. The appellants,
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motor transport operators whose routes were all in western
half of the Kurnool districts filed objections to the
Schemes before the Transport Minister. The Transport
Minister approved the schemes. Thereafter, the Corporation
applied to the Regional Transport Authority for permits.
The appellants then challenged the validity of the schemes
in the High Court and in support of that allegations were
made in the affidavit that the Chief Minister was motivated
by bias and personal ill-will against the appellants, that
he felt chagrined at the defeat of his partymen and
supporters and desiring to wreak his vengeance against the
motor transport operators of the western parts of Kurnool,
his political opponents, instructed the Corporation to
change the order in which the districts should be taken up
for nationalisalion and that the corporation gave effect to
these instructions and directions. These allegations were
not denied by the Chief Minister, nor was an affidavit filed
by any person who could claim to know personally about the
truth about these allegations. The High Court repelled
these allegations and dismissed the petition. On appeal by
certificate the appellants mainly contended: (1) that the
schemes did not in reality reflect the opinion of the
Corporation as required by s. 68-C of the Act, but that the
schemes owed their origin to the direction of the Chief
Minister who acted malafide in directing the Transport
Undertaking to frame the impugned schemes; (2) that the
approval of the schemes by the Transport Minister under s.
68-D(3) must be held to be vitiated by the malafides of the
Chief Minister; (3) that the impugned schemes did not
conform to the statutory requirements of s. 68-C and rule 4
of the Rules regarding the particulars to be embodied in the
schemes; (4) that some of the routes included in the schemes
were inter-state routes and that under the proviso to s. 68-
D(3) it could not be deemed to be an approved scheme unless
the previous approval of the Central Government had been ob-
tained and (5) that even when a transport undertaking
applies for a stage carriage permit under s. 68-F(1) it must
comply with the provisions of r. 141 of the Rules.
Held: (1) On the evidence placed in the present case it
must be held that it was a result of the conference of the
19th April, 1962 and in
332
order to give effect to the wishes of the Chief Minister
expressed there, that the impugned schemes were formulated
by the Corporation and therefore, it would be vitiated by
malafides notwithstanding the interposition of the semi-
autonomous corporation.
Though the counter-affidavits contained a denial of the
allegation that the Corporation was acting at the behest of
the Chief Minister, there was no explanation for the choice
of the western portion of Kurnool district Therefore, the
impugned schemes were vitiated by the fact that they were
not in conformity with the requirements of s. 68-C of the
Act.
(ii) There was nothing on the record to indicate that the
Chief Minister influenced the Transport Minister. Besides,
the Transport Minister stated on oath that in considering
the objections under s. 68-D(3) and approving the schemes he
was uninfluenced by the Chief Minister. Therefore, it
cannot be held that his approval of the schemes did not
satisfy the requirements of the law.
(iii) In the present case some of the variations between
the maxima and minima in the number of the vehicles proposed
to be operated on each route were such as to really
contravene r. 4 of the Andhra Pradesh Motor Vehicles Rules.
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1957.
Dosa Satyanarayanamurthy v. The Andhra Pradesh State
Transport Corporation, [1961] 1 S.C.R. 642, referred to.
(iv) The route which was proposed to be nationalised under
the scheme admittedly lay wholly within the State. The
right of the private operators to ply their vehicles beyond
the State border was not affected by any of the schemes.
Therefore, the proviso to s. 68-D(3) was not attracted and
consequently the schemes did not suffer from the defects
alleged.
(v) The High Court was right in holking that the Regional
Transport Authority which is specifically mentioned in s.
68-F(1) is empowered to issue the permit to the transport
undertaking "notwithstanding anything to the contrary
contained in Chapter IV" and that the section rendered the
provisions of r. 141 of the Motor Vehicles Rules
inapplicable to cases covered by s. 68-F(1). No doubt, in a
State where there is no Regional Transport Authority at all,
but there is some other authority which functions as the
Regional Transport Authority for the purposes of the Act,
such an authority might be that which would be comprehended
by s. 68-F(1) but where as in Andhra Pradesh there is
admittedly a Regional Transport Authority, it cannot be held
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
Chapter IV.
333
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 770 of 1963.
WITH
Civil Appeals Nos. 771-778, 883 and 884 of 1963.
Appeals from the judgment and order dated April 19, 1963, of
the Andhra Pradesh High Court in Writ Petitions Nos. 267-275
and 289 and 295 of 1963.
A. V. Viswanatha Sastri, P. Babula Reddy and K. R.
Chaudhuri, for the appellants (in C.A. No. 77/1963).
P. Babula Reddy and K. R. Chaudhuri, for the appellants
(in C. A. Nos. 771--777/1963).
K. R. Chaudhuri, for the appellants (in C.A. No.
778/1963).
K. Srinivasa Murthy and K. R. Chaudhuri, for the
appellants (in C. A. Nos. 883 and 884 of 1963).
D. Narasaraju, Advocate-General, Andhra Pradesh, P. R.
Ramachandra Rao and B. R. G. K. Achar, for the respondents
(in all the appeals).
January 27, 1964. The Judgment of the Court was delivered
by
AYYANGAR J.-This batch of 11 Appeals which have been
consolidated for hearing are directed against the common
judgment of the High Court of Andhra Pradesh and are before
us on the grant of a certificate of fitness under Art.
133(1) of the Constitution by the said High Court.
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 of the Motor Vehicles Act, 1939, nationalising
motor transport in certain areas in the Kumool 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
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motor transport operators whose permits are liable to be
modified or cancelled under the provisions of
334
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 the 5th February,
1963 in virtue of the powers conferred on Government by sub-
s. 2 of the 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.
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.
Chapter IV-A containing special provisions relating to
"State Transport Uundertakings" was introduced into the
Motor Vehicles Act (Act IV of 1939) by an amendment effected
by Central Act 1 of 1956 which came into effect on 16-2-
1957. The Chapter consists of sections numbered 68-A to 68-
1. 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
sec. 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
respondent before us is a body established under this enact-
ment.)
68-B reads:--
"The provisions of this Chapter and the rules
and orders made thereunder shall have effect
notwithstanding anything inconsistent
therewith
335 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
coordinated road transport service, it is
necessary in the public interest that road
transport services in general or any
particular class of such service 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
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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
Government may direct."
The first two sub-sections of section 68-D enable persons
affected by a Scheme published under s. 68-C to file objec-
tions 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 oppor-
tunity 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
336
Gazette by the State Government 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 under it has been published in
the Official Gazette with the previous
approval of the Central Government."
Section 68-E provides :
"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."
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 a stage
carriage permit or a public carrier’s 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-G 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.
337
Section 68-1 empowers the State Government to make rules for
the purpose of carrying into, effect the provisions of
Chapter IV-A and among the specific purposes for which such
rules may be framed is one under s. 68-1(2) (a) which
provides for the form in which any scheme or approved scheme
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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 con-
sidered."
These draft schemes prepared by the Corporation were
published under s. 68-D in the official Gazette on the 29th
of November, 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 the 11th of January, 1963. The Minister
passed an order according approval to the schemes on the
12th of February, 1963, and the schemes as finalised 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 others 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 the 19th
of April, 1963, holding that the objections made to the
validity of the schemes would 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.
The points urged by the appellants before us in support of
their submission regarding the invalidity of the impugned
schemes, were substantially the same as were urged before
High Court and which the learned Judges repelled. Briefly
stated the principal ones were:-(1) that the schemes did not
in reality reflect the opinion of the Corporation that "it
was necessary in the public interest that the Road Transport
services in the area or over the route, specified in the
134-159 S.C.--22
338
schemes should be run and operated by the State Transport
Undertaking" as is required by s. 68-C but that the schemes
owed their origin to the direction of the Chief Minister of
Andhra Pradesh who acted mala fide in directing the
Transport Undertaking to frame the impugned schemes for the
areas for which they were purported to be framed; (2) that
the decision by the Transport Minister overruling the
objections raised by the several road transport operators to
the schemes was also mala fide, in that he too acted in
pursuance of the mala fide intentions of the Chief Minister
of Andhra Pradesh; (3) that the provisions of the schemes
(and this applied both to the draft schemes published by the
Corporation as well as the approved schemes published under
s. 68-D(3) did not conform to the statutory requirements of
s. 68-C and rule 4 of the Rules regarding the particulars to
be embodied in the schemes and that in consequence the core
of the scheme was in violation of Rule 68(E) of the Act; (4)
that the schemes comprised not merely intrastate routes but
also included inter-state transport routes and in the latter
case the procedure prescribed by the proviso to s. 68-D was
not followed and hence all the impugned schemes which are
integrated ones are bad and require to be set aside. There
were also a few minor ones which we shall notice and examine
later.
We shall deal with these four points in the same order.
Before taking up the first one viz., that the draft scheme
in s. 68-D really did not originate from the Corporation,
the State Transport Undertaking, but that it was done under
the direction of the Chief Minister who, it was alleged for
reasons which were set out in the affidavits and to which we
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shall refer presently was stated to have compelled, directed
or induced the Corporation to do so, it would be necessary
to give a short resume of the history of nationalised
transport in Andhra Pradesh as well as certain events in
Andhra Pradesh politics which have been the subject of
allegations in these proceedings. The present State of
Andhra Pradesh is made up of two distinct areas-(1) what is
known as the "Telengana area" consisting of nine districts
of the old Hyderabad State and (2) the "Andhra area" which
separated from Madras i.e. from the composite
339
Madras State, in October 1953 and which comprised 11
districts. These two areas were integrated under the States
Re-organization Act, 1956, to form the present State of
Andhra Pradesh. In the Telengana area the road transport
services had been run by the Government of the Nizam since
the year 1932 and by 1956 private motor road transport
operators had been completely eliminated from this entire
area. In the Andhra Area comprising the 11 districts how-
ever, nationalisation of motor transport had not been under-
taken. Soon after the formation of the State of Andhra
Pradesh, the Andhra Pradesh State Road Transport Corporation
was established with effect from 11th of January, 1958 with
a view to take steps for extending nationalised transport to
the Andhra areas of the State. Certain routes in three of
the 11 Districts Krishna, West Godavari and Guntur were
nationalised from 1959 onwards. The Vijayawada--Masulipatam
and Vijayawada-Guntur routes were nationalised in the first
instance and thereafter by about September, 1959, almost the
entire routes in Krishna District were nationalised. The
next district to be taken up was West Godavari which was
done in March, 1960. The process was nearly completed in
this district by the 1st of February, 1960, except for a few
routes. The Government had sanctioned certain schemes for
nationalisation in Guntur District which were expected to be
completed by October, 1961. The question which was
thereafter the subject of consideration was the manner in
which and the stages whereby nationalisation of the motor
transport throughout the State might be brought about. With
this object the Corporation adopted a resolution in 1960 by
which it decided to appoint an expert Committee to go into
question as to the working of nationalised transport with a
view to improve its efficiency as well as for drawing up
plans for the future expansion of the road transport
services in the State. The terms of reference to that
Committee were comprehensive and it started functioning very
soon after the members were appointed. Shri S. Anantharama-
krishnan, Chairman of Messrs. Simpson & Co. Ltd., Madras,
one of the principal motor transport operators of the Madras
State, was the Chairman of the Committee and it comprised
three other members who were officials of the
340
Andhra Pradesh State Government.The Committee made various
recommendations in the Report which it submitted to the
Corporation on the 9th February, 1961. Among the several
recommendations which this Committee made, what is of
relevance to the present appeals and on which reliance was
placed in support of the plea that the impugned schemes were
vitiated by mala fides are those contained in Chapter IX of
the Report and in particular the priorities of areas for
taking up nationalisation which the Committee recommended in
paragraph 125. They set out in paragraph 124 the factors
which should be taken into account in fixing the order in
which new areas should be taken up for nationalisation as
being (1) "the most profitable areas should be taken up
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first;" (2) "from the traffic point of view there should be
contiguous expansion;" (3) "from the administrative point of
view it is convenient to nationalise bus services district
by district;" and (4) "the proposal to form large sized
divisions should be borne in view." Adopting these criteria
the Committee stated in paragraph 125 "that the
nationalisation of bus transport may be extended to the
remaining districts in the Andhra area as indicated below:-
1961-621 guntur District
1962-63-Nellore and Chittor Districts
1963-64-Cuddapah and Kurnool Districts
1964-65-Anantapur and East Godavari Districts
1965-66-Visakhapatnam and Srikakulam Dis-
tricts".
The Committee also added in paragraph 126 "we recommend that
a policy decision may be taken by Government on the proposal
to extend nationalisation of bus services to the remaining
Andhra Districts during the Third Five Year Plan. The order
in which the new areas will be taken over may also be
decided by Government. The Corporation will then be able to
make its plans well in advance, and arrange to provide all
the facilities that are needed for expanding its activities
to other districts." This report of the
34I
Anantharamakrishnan Committee was the subject of con-
sideration by the Corporation and they accepted in March,
1962 the above recommendation regarding the phased
pro.programme of nationalisation of districts in the order
indicated s and embodied this recommendation in their
Administration Report for the period January 11, 1958, (the
day on which the Corporation was formed) to March 31, 1961
which was submitted to the Government as required by s.
35(2) of the Road Transport Corporation Act, 1960, on the
7th of April, 1962. In this last document they said
speaking of future trends, "the programme for
nationalisation of transport services in the remaining of
the Andhra Pradesh is as indicated below:-
1961-62--Guntur District
1962-63--Nellore and Chittor Districts
1963-64--Cuddapah and Kurnool Districts
1964-65--Ananthapur and East Godavari
Districts
1965-66--Vishakhapatnam and Srikakulam Dis-
tricts."
In the impugned schemes, however, the Corporation made an
alteration in the order of the Districts successively to be
taken up for nationalisation. It would be seen that after
Guntur District which was neatly completed by the end ,of
1961 the next districts to be taken up during the 1962-63
would have been Nellore and Chittor Districts in that order
and it was only thereafter that the District of Cuddapah and
after it Kurnool would be taken up. That was the
recommendation of the Anantharamakrishnan Committee and
which had been accepted by the Road Transport Corporation as
late as April, 1962 and it may be mentioned in this
connection that the Vice-Chairman of the Road Transport
Corporation was himself a member of the Anantharamakrishnan
Committee. By its resolution dated, 4th May, 1962, the Road
Transport Corporation decided that instead of the above
order Kurnool, Nellore and Cuddapah Districts in that order
would be chosen for nationalisation and in the three schemes
which were formulated in pursuance of this Resolution the
western half of Kurnool was selected as the area to be
nationalised in the first instance.
342
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As we have indicated earlier the appellants before us are
transport operators whose routes are all in the western half
of the, Kurnool District. It is this change in the orders
of the Districts in which the routes are to be nationalised
and the choice of the Western part of Kurnool for being
taken up in the first instance that are alleged to be due to
the mala fide intentions of the Chief Minister and this
forms the main ground upon which the validity of the schemes
is impugned.
The allegations in this respect may now be stated. In the
affidavit in support of the Writ Petition No. 267 of 1963
from which Civil Appeal No. 770 of 1963 arises, this is what
is stated:
"The General Elections for the various
Constituencies of Assembly and Parliament were
held in February, 1962. It is well-known that
there are two groups in the Congress and they
were actively ranged against each other. The
previous Chief Minister (Shri Sanjivayya) and
the present Chief Minister (Shri Sanjiva
Reddy) were both returned from Kurnool
District in general elections. T
he then
Chairman of the Zila Parishad Shri Vijaya
Bhaskara Reddy contested unsuccessfully from
Yemniganpur Constituency in Kurnool District.
(Yemniganpur is in the western part of the
Kurnool District). He is the active supporter
of the present Chief Minister. Shri C. Ram
Bhopal son-in-law of the present Chief
Minister also unsuccessfully contested from
the Nandikothur Constituency in Kurnool
District. (Nandikothur is also in the western
part of Kurnool). The person who successfully
opposed him Sri P. Venkatakrishna Reddy now
M.L.A. is a partner in ’Venkata Krishna Bus
Service Nandikothur. This firm owns 2 permits
and they stand in the name of Jayaramayya who
was the Election Agent of Sri Venkata Krishna
Reddy. Two persons Sri Ganikhan and Sri
Antony Reddy who are staunch supporters of
343
the present Chief Minister Sri Sanjiva Reddy
were selected as Congress candidates by the
Parliamentary Board at Delhi when Sanjiva
Reddy was the President of the Indian National
Congress, were also defeated in their
respective Constituencies. It was considered
by one and all that leading transport
operators among them, (the petitioners) were
responsible for the defeat of these
persons and this enraged the feelings of Shri
Sanjiva Reddy against the operators in Kurnool
District and particularly the operators whose
routes lay in the western areas of the
District and with a view to cause them loss
and to ruin their business this
nationalisation of transport in the western
part of Kurnool was directed to be undertaken
in spite of the Emergency and in spite of the
incapacity of the Road Transport Corporation
to fulfil their earlier commitments for want
of buses. The undivided brothers of Sri T.
Narayan, a transport operator, namely Sri
Venkataswamy contested the Assembly seat
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against Sri Sanjiva Reddy in the Dhone
Constituency from which he was returned and he
refused to withdraw even though lots of
pressure were brought on him. Sri Rajasekhara
Reddy and Sri Vijayakumara Reddy sons of Sri
P. Ranga Reddy, Minister in the previous
Cabinet are also transport operators in the
Kurnool District. It is known to every one
that Sri P. Ranga Reddy is in the group
opposed to Sri Sanjiva Reddy.
Sri Y. Mahananda Reddy another transport
operator is a staunch supporter of Sri P.
Ranga Reddy. When Sanjiva Reddy was
President, of the Indian National Congress his
selection, for the Congress ticket was set
aside by him and one Vengal Reddy was selected
by the Pradesh Congress Committee. It is
significant that the three schemes framed for
the part of the Kurnool District relat
e to the
areas in
344
which the routes on which the above stated
persons are running their buses. It is also
significant that the areas in Kurnool District
where the supporters of the present Chief Min-
ister are having permits are not sought to be
included in any of the three nationalisation
schemes. In the Nandyal area most of the
transport operators are the supporters of the
present Chief Minister and their routes are
excluded from the schemes. It is with a view
to achieve the object of hitting against those
operators who have fallen into disfavour and
to protect those who are in his good books
that the schemes have been evolved over routes
and parts of the District."
Two further matters were also urged as supporting this plea
of mala fides. The first was that with a view to carry out
the original programme which was approved and confirmed by
the Corporation in their Administration Report published on
April 7, 1962, the routes in the Nellore District which
according to the Anantharamakrishnan Commitee Report had to
be taken up next were surveyed and though the elements of
contiguity and profitable nature were both present in regard
to the extension of the services to Nellore, contiguity by
reason of the fact that some buses belonging to the
Corporation and running from Guntur were already plying in
Nellore District and the profitable nature since these were
evaluated by the Anantharamakrishnan Committee whose
recommendations were examined and approved by the
Corporation, the nationalisation of the routes in Nellore
was, however, abandoned and that of the western part of
Kurnool was decided upon. The other fact was that the
National Defence Council passed a reso lution as late as the
first week of November, 1962, urging the deferring of
further nationalisation of transport services for the
present and it was in the teeth of. this resolution which
was passed at the meeting at which the Chief Minister
himself was present that the schemes of nationalisation of
transport services in Kurnool district was published by the
Corporation on the 29th November, 1962.
345
Before examining whether these allegations have been made
out it would be necessary to explain the legal position in
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relation to which they have to be considered. To begin with
the schemes now impugned have been formulated by the
Corporation which is an independent semi-autonomous body
brought into existence by the State Government by acting
under the Road Transport Corporation Act, 1950. Under s.
68-C of the Motor Vehicles Act it is the Corporation which
is the State Transport Undertaking which has to form the
opinion whether "for the purpose of providing an efficient,
adequate, economical and properly coordinated road transport
service it is necessary in the public interest whether the
service should be run and operated by the State Transport
Undertaking." Secondly, it is the Corporation that has to be
satisfied that such services should in public interests be
provided "for any area or route". In the present case, it
is undoubtedly the Corporation that has published the
schemes under s. 68-C in which these two matters are stated
to have been considered and decided upon by the Corporation
itself. It was not disputed by the appellants that whatever
be the inclinations, desires or motives of the Chief
Minister, if the Corporation had by an independent
consideration of the situation decided on the formulation of
the impugned schemes, their validity could not be
successfully impugned mearly because the schemes satisfied
the alleged grudge which the Chief Minister bore to the
affected operators.
The argument urged by the appellants on this part of the
case was however tow-fold: (1) That it was not in fact the
Corporation that formed the opinion indicated in s. 68-C but
really the Chief Minister; (2) That the Chief Minister was
motivated by extraneous considerations, namely, to strike at
his political opponents who worked either against himself or
his friends, supporters and relations in the elections in
February, 1962 and had devised the schemes in order to cause
them loss and compass their ruin. A subsidiary point was
also urged that the Transport Minister who heard the
objections under s. 68-D(2) was also influenced by the Chief
Minister. It was thus said that the Chief Minister
dominated at every stage through
346
which the schemes passed and that the schemes were really
the result of his improper motive to ruin his political
opponents. It was again not disputed by the respondent that
if these steps were made out the schemes would be invalid
and ought to be quashed.
The learned Judges of the High Court have on this part of
the case held: (1) That the allegations made against the
Chief Minister had not been proved; (2) Assuming, however,
that the Chief Minister was actuated by political motives to
hit at his opponents, still, the schemes which were
published by the Corporation, had been framed by the
Corporation not at the dictation of the Chief Minister, but
as a result of their own independent judgment; and (3)
Lastly the learned Judgesheld that there was no proof that
the Transport Minister who heard the objections raised by
the appellants to the schemes was influenced by the Chief
Minister or acted at his behest, and therefore that the
schemes framed and approved were fully in conformity with
the requirements of s. 68-C.
The correctness of these conclusions have been challenged
before us and the first matter that requires to be con-
sidered is as to whether the allegations against the Chief
Minister have been made out. The question raised has
manifestly to be considered from two aspects. The first is
whether the facts alleged which were stated to have been the
cause of the Chief Minister’s animus against the transport
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operators in the western part of Kurnool have been estab-
lished. In regard to this the first point to be noticed is
that the contents of the affidavit were not vague, but
details were given and these were: (1) The existence of two
groups in the Congress Party at the time of the General
Elections in 1962, the Chief Minister being the head of one
of them and of the other Mr. Sanjivayya; (2) That at the
last General Elections certain candidates who were named and
who are stated to have belonged to the group of the Chief
Minister were defeated; (3) The Constituencies where they
stood were in the western portion of the Kurnool District;
(4) That this defeat was occasioned by persons belonging to
the other group in the Congress Party whose names are
347
also given (5) That several of these members supporting the
dissident group were motor transport operators and who are
stated to have taken a prominent part in the elections and
in the defeat of the candidates belonging to the Chief
Minister’s group; (6) The matters in relation to Ranga Reddy
and his sons etc. These are what might be termed objective
facts.
If these allegations were held not proved, then the entire
plea of the appellants on this part of the case fails,
because there would be no foundation for the submission
regarding the mala fides of the Chief Minister. If, how-
ever, these facts were held to be made out, the second
aspect requires to be examined and that is whether the Court
has material to hold that these facts led the Chief Minister
to entertain feelings of personal hostility to these
transport operators because of the aid and support the
latter gave to the candidates belonging to the group opposed
to him which led to the defeat of his partymen. On this
aspect the allegations were that the Chief Minister felt
chagrined at the defeat of his partymen and supporters and
desiring to wreak his vengeance against the motor transport
operators of the western parts of Kurnool, his political
opponents, instructed the Corporation to change the order in
which the districts should be taken up for nationalisation
and had Kurnool taken up first, departing from what had been
decided upon, just a little while previously by the Cor-
poration, and that the Corporation gave effect to these in-
structions and directions by not only taking Kurnool first,
but even in that district eliminating the private operators
from the western portions of the district who were the poli-
tical opponents of the Chief Minister. This, it is obvious,
would be a matter of probabilities and of the inference to
be drawn by the Court from all the circumstances on which no
direct evidence can be adduced.
It is, no doubt, true that allegations of mala fides and of
improper motives on the part of those in power are fre-
quently made and their frequency has increased in recent
times. It is also somewhat unfortunate that allegations of
this nature which have no foundation, in fact, are made in
348
several of the cases which have come up before this and
other Courts and it is found that they have been made merely
with a view to cause prejudice or in the hope that whether
they have basis in fact or not some of it at least might
stick. Consequently it has become the duty of the Court to
scrutinise these allegations with care so as to avoid being
in any manner influenced by them, in cases where they have
no foundation in fact. In this task which is thus cast on
the courts it would conduce to a more satisfactory disposal
and consideration of them, if those against whom allegations
are made came forward to place before the court either their
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denials or their version of the matter, so that the court
may be in a position to judge as to whether the onus that
lies upon those who make allegations of mala fides on the
part of authorities of the status of those with which this
appealis concerned, have discharged their burden of proving
it. In the absence of such affidavits or of materials,
placed before the Court by these authorities, the Court is
left to judge of the veracity of the allegations merely on
tests of probability with nothing more substantial by way of
answer. This is precisely the situation in which we find
ourselves in the present case.
The learned Judges of the High Court have repelled the
allegations contained in the affidavits which we have set
out earlier on grounds and for reasons which do not appeal
to us. As the learned Advocate-General did not seek to
support those grounds and that reasoning we do not consider
it necessary to set them out or deal with them. If the
reasons given by the learned Judges of the High Court be put
aside, the position resolves itself into this that
allegations with particularity and detail have been made in
the petition. We are here having in mind the allegations we
have enumerated and categorised earlier as objective facts.
As to these there is no denial at all of them, not even by
the Transport Minister who though he filed an affidavit,
confined himself to the allegations regarding his having
been dictated to by the Chief Minister when he approved the
schemes, though it is obvious they are capable of denial and
if need be with the same particularity with which they have
been made in the petition. The learn-
349
ed judges of the High Court have not rejected the allega-
tions regarding the objective facts on the ground of their
patent improbability or absurdity, nor did the learned Advo-
cate-General make any submission on these lines.
The next question is as regards the inference to be drawn
from these facts which in the absence of their denial have
to be taken as true. It is here that we have felt the
greatest uneasiness, because if the facts which serve as the
foundation for the plea of mala fides are made out, the only
question would be whether the inference of mala fides on the
part of the Chief Minister would be a reasonable one to
draw. It is at this point that we are faced with the neces-
sity of having to proceed without there being any effective
answer to the propriety of drawing the inference which the
appellants desire. There has been no denial by the Chief
Minister, nor an affidavit by any person who claims or can
claim to know personally about the truth about these alle-
gations. The Secretary to the Home Department-one Mr. S. A.
lyengar has filed a counter-affidavit in which the alle-
gations we have set out earlier have been formally denied.
He says, "I have been expressly instructed and authorised by
the Hon’ble the Chief Minister to state that the allegations
suggesting personal animus and giving mandate are false and
mischievous and have been deliberately made to create an
atmosphere of sympathy". The learned Advocate General did
not suggest that the Court could act upon this second-hand
denial by the Chief Minister, as the statement by Sri S. A.
lyengar is merely hearsay. We are, therefore, constrained
to hold that the allegations that the Chief Minister was
motivated by bias and personal ill-will against the
appellants, stands unrebutted.
The learned Advocate-General realising this position,
desired us to proceed on that basis and his submission was
that assuming that the allegations made against the Chief
Minister were made out and that he had bias and ill-will
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against the appellants, still there was no proof that the
Corporation which was an autonomous body was similarly moti-
vated and that unless the appellants were able to establish
it, bias or ill-will on the part of the Chief Minister would
be irrelevant
350
We agree as already indicated that he is right in this
submission. This takes us to the consideration of the ques-
tion as to whether the Corporation carried out the mandate
of the Chief Minister as was alleged by the appellants or
whether the impugned schemes were formulated by them as a
result of the opinion which they themselves formed that they
were necessary in public interest for the purposes set out
in s. 68-C of the Act. On this matter there is an affidavit
by the Corporation denying the allegation made by the
appellants that the Corporation acted merely as the tool of
the Chief Minister in order to carry out his behest, and it
is there asserted that the decision to frame the schemes was
taken as a result of the independent opinion formed by them
after an examination of the entire question. The
acceptability of these rival assertions were debated before
us most strenuously during the hearing of these appeals.
Certain facts already set out have a bearing on this ques-
tion, and these we shall recall. The Anantharamakrishnan
Committee had laid down the criteria for determining the
order in which areas and routes had to be selected for
nationalisation, and applying these principles had drawn up
a list of the remaining districts in which nationalisation
should be successively taken up. If that order was follow-
ed, Nellore would have been the next district to be taken up
and the turn of the Kurnool District would have come up
after nationalisation of the routes in the Nellore, Chittor
and Cuddapah districts were completed. This report had been
submitted to the, Corporation in February, 1961 and after
further detailed examination of these recommendations the
Corporation had accepted the recommendation regarding the
order of the Districts to be taken up for nationalisation
and had embodied this approval in its Administration Report
dated March 24, 1962 which was published in April, 1962. It
is only necessary to add that the Corporation had also had
the routes in Nellore surveyed a little while before. In
February, 1962, however, the general elections to the
Assembly and the Parliamentary Constituencies had taken
place and the allegations of the appellants related to the
feelings that arose during the course of elections. The
present Chief Minister assumed office as Chief
351
Minister on March 12, 1962. On April 19, 1962, it is ad-
mitted that he summoned a conference of the Corporation and
its officials at which, and this also is admitted, he sug-
gested that the nationalisation of bus routes in the Kurnool
District should be taken up first. Now the Chief Minister
himself made a statement as to what he did at this meeting.
It is the case of the appellants that it was the mandate
given to the Corporation by the Chief Minister at this
Conference that brought about this change in the order of
the districts to be taken up for nationalisation and not the
independent opinion of the Corporation as to what was needed
in the public interest as required by s. 68-C. As regards
his part at the conference, the Chief Minister himself
stated in the Assembly on July 26, 1962:
"To say that the Corporation will do
everything for the simple reason that it is an
autonomous body, and also to say that we will
not at all interfere, is not fair. It will
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not be fair. Now and then we shall have
conferences. For example, -the Corporation
wanted to nationalise Chittoor district. We
had discussions. Kurnool is surrounded by
three nationalised districts; one side
Mahaboobnagar, one side Guntur and the other
side the district of Nellore which is going to
be nationalised. I questioned as to why the
district of Kurnool which is surrounded by
three nationalised districts is left out, and
instead the district of Chittoor which is
abutting the borders of Madras and Bangalore
is sought to be taken up. They could not
explain. I said Kurnool district is a very
compact one and three districts around it are
nationalised. They thought that was more
practicable and reasonable. Therefore they
changed their minds. As a result of such dis-
cussions, once in a way we (Government) do
interfere but will not interfere in day to day
administration."
The conference, as stated earlier, addressed by the Chief
Minister was on the 19th of April, 1962. This was follow-
352
ed by the resolution of the Corporation of May 4, 1962. This
ran:
.lm15
"The Corporation noted the discussion which took place in
the office of the Chief Minister on 19th April, 1962, in
regard to programme of nationalisation of Road Transport
Services during the Third Five Year Plan period and resolved
that during the Third Five Year Plan three more districts in
the order mentioned could be nationalised, viz., Kurnool,
Nellore and Cuddapah in view of difficult financial
position........ Chief Executive Officer explained that as
there is a depot at Kurnool and as Kurnool is contiguous to
the nationalised districts, it would be easier to
nationalise Kurnool rather Nellore district. The
nationalisation could be extended to the Nellore district
after Kurnool district is nationalised. The Corporation
therefore resolved that Kurnool district could be taken up
for nationalisation in preference to Nellore."
In the counter-affidavit which the Corporation filed to, the
writ petition the Chief Executive Officer after denying that
the Corporation was actuated by mala fides in framing the
three impugned schemes, stated that the acceptance by the
Corporation of the recommendation of the Anantharamakrishnan
Committee was tentative and that it could not fetter them
from discharging its powers and duties under the statute.
It gave the following reasons for the decision to
nationalise Road Transport Services in a part of the Kurnool
district in preference to other areas: (1) because there is
a Government depot at Kurnool, (2) Kurnool is contiguous to
the entire Telangana area which is rationalised and also
contiguous to the nationalised area of Guntur. It also
stated that the choice was made in the interest of the
maintenance of service contiguity and coordination and it
added that "the impending completion of the Rangapur Bridge
over the river Krishna, which when completed would
facilitate the operation of direct services from Hyderabad
through Kurnoof to the areas beyond." Besides it
353
asserted that the Corporation which was an autonomous
statutory authority was vested with powers under the Road
Transport Act and it was’, therefore, malicious to allege
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that the decision by the Corporation to prepare the impugned
schemes was either influenced by the, Chief Minister or was
under a mandate from him and it asserted that in formulating
the schemes the necessary opinion under s. 68-C was formed
by itself.
The learned Judges of the High Court have accepted this
statement, made on behalf of the Corporation and have
repelled the attack made on it based on the schemes not
having been formulated as a result of the opinion formed by
the Corporation itself. The learned Advocate-General
commended this approach and this conclusion for our
acceptance. He also pointed out that the Anantharama-
krishnan Committee had themselves indicated in paragraph 126
of their report that the order in which the new areas will
be taken over for nationalisation might be decided by the
Government, so that the order in which motor transport in
the several districts should be nationalised, was not
prescribed by the Committee as a rigid or hard and fast
rule, but the order of the districts was treated even by
them as a flexible one which was capable of and was intended
to be, modified by the Government by making policy decisions
on these matters taking into account not merely the finances
available for nationalisation but also other relevant
matters.
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 Anantha-
134-159 S.C.-23
354
ramakrishnan 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 to 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 under the 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
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answered this test better than Chittoor and he, applying the
tests he laid down, therefore suggested that instead of
Chittoor, 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 of the 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 judg-
355
ment of the Corporation, where that is the State Undertak-
ing, or again whether or not the policy decision has to be
by a formal Government order in writing, for what is rele-
vant is whether the materials placed before the Court estab-
lish 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 take 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-autonomous
Corporation.
It is also to be noticed that the Chief Minister in his
statement to the Assembly stated that when he made an
enquiry of the Corporation as to why they did not choose
Kurnool as the next district, the officials of the
Corporation had no answer to give. It is somewhat
remarkable that the Corporation and its officials should
have remained silent and tongue-tied notwithstanding that
its Vice-Chairman was a member of the Anantharamakrishnan
Committee and had as a member thereof considered the entire
question in all its aspects and laid down (1) the criteria
for determining the order of priority; and (2) by applying
these tests had laid down the priorities among the districts
and more than this, the entire body of the Corporation had
considered the several recommendations of the Committee in
their report and while rejecting some had accepted this
particular recommendation regarding the order in which the
districts should be taken up and this last one had happened
within a month or so before the conference addressed by the
Chief Minister. If in these circumstances the appellants
allege that whatever views the Corporation entertained they
were compelled to or gave effect to the wishes of the Chief
Minister, it could not be said that the same is an
unreasonable inference from facts. It is also somewhat
remarkable that within a little over two weeks from this
Conference by its
356
resolution of May 4, 1962, the Corporation dropped Nellore
altogether, a district which was contiguous to Guntur and
proceeded to take up the nationalisation of the routes of
the western part of the, Kurnool district and were able to
find reasons for taking the step. It is also worthy of note
that in the resolution of the 4th May, 1962, of the Cor-
poration only one reason was given for preferring Kurnool to
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Nellore, namely, the existence of a depot at Kurnool because
the other reason given, namely, that Kurnool was contiguous
to an area of nationalised transport equally applied to
Nellore and, in fact, this was one of the criteria on the
basis of which the Anantharamakrishnan Committee itself
decided the order of priority among the districts. As
regards the depot at Kurnool which was one of the two
reasons set out in the resolution for the choice of that
district in the first instance, learned Counsel for the
appellants submitted that this reason was one invented to
justify the Corporation’s action directed against them and
to obviate the comment that the reason for the change was
political and not for providing an adequate service for the
area. He submitted that the so-called depot was merely a
garage with a few repairing tools and not any full-fledged
repairing workshop. None of the affidavits filed on behalf
of the appellants, however, made any allegation regarding
the nature of the facility afforded at this ’depot-and so we
are not in a position to act merely on the arguments adduced
to us at the bar. It has however to be noticed that the
existence of this ’depot’ at Kurnool escaped the notice of
the Anantharamakrishnan Committee, who in their report have
devoted some attention to the need for depots and the
equipment these should possess and referred to certain
deficiencies which they noticed in the depots which they
inspected. The officials of the Corporation did not evi-
dently bring this depot at Kurnool to the notice of the Com-
mittee. Again, when in their Administration Report, the
Corporation accepted the recommendations as regards the
order in which the districts, should be nationalised, the
existence of this depot at Kurnool seems also to have escap-
ed the attention of the Corporation itself, as a factor to
be taken into account in making the choice of the district.
But we are basing no; conclusion on this feature.
357
When the Transport Corporation, however, filed the counter-
affidavit it was not content to rest merely with the reasons
given in the resolution as those which were taken into
account in arriving at the decision but added one more,
namely, the impending completion of the bridge at Rangapur
across the Krishna as a further reason which had been taken
into account for arriving at a decision. What the Court is
concerned with and what is relevant to the enquiry in the
appeal is not whether theoretically or on a consideration of
the arguments for and against, now advanced the choice of
Kurnool as the next district selected for nationalisation of
transport was wise or improper, but a totally different
question whether this choice of Kurnool was made by the
Corporation as required by s. 68-C or, whether this choice
was in fact and in substance, made by the Chief Minister,
and implemented by him by utilising the machinery of the
Corporation as alleged by the appellants. On the evidence
placed in the case we are satisfied that it was as a result
of the conference of the 19th April, 1962, and in order to
give effect to the wishes of the Chief Minister expressed
there, that the schemes now impugned were formulated by the
Corporation.
The next submission of the learned Advocate-General was that
even assuming the Chief Minister directed the order in which
districts were to be taken up for nationalisation, still the
scheme framed by the Corporation could not be assailed as
not in conformity with the requirements of s. 68-C of the
Act so long as the choice of the "area" in which and the
routes in it to be run by the Corporation was made by them
alone. This argument proceeds from the circumstance that
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even taking it that the Chief Minister directed the
Corporation to take up the nationalisation of the routes in
the Kurnool district 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 within the district and the routes within that area,
358
cannot on any reasonable construction of s. 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.
Besides-. there is really little or no explanation forth-
coming from the Corporation for choosing the western part of
the Kurnool district for the exclusion of the private ope-
rators 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 affidavits 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 this 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, offers no assistance in this
matter and a,,; 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. 68-C.
The next question is as regards the approval of the schemes
by the Transport Minister under s. 68-D(3). It was the case
of the appellants that just like the Corporation, the
Transport Minister also merely, carried out the wishes of
the Chief Minister and that therefore the approval by the
Transport Minister must be held to be vitiated by the mala
fides of the Chief Minister. In 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
359
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 had stated on oath that in considering the objec-
tions under s. 68D(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
Minister’s approval of the schemes does not satisfy the re-
quirements of the law.
In view that we take 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
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with them.
The next point that was urged was that the schemes were not
in conformity with s. 68-C of the Act for another reason. A
scheme to be published by the Transport Undertaking is
required by s. 68-C to give "particulars of the nature of
the services proposed to be rendered and such other
particulars respecting thereto as may be prescribed",
prescribed, of course, meaning "prescribed by rules". These
particulars, it is obvious, are required to be set out in
the scheme, so that (a) transport operators running vehicles
on the routes might know that they are affected by the
scheme and might, if they see sufficient reason therefor,
prefer objections under s. 68-D(1); and (b) the operators
and others formulate their objections properly, particularly
in the matter of pointing out the deficiency or inadequacy
of the schemes or the services proposed to be run under the
schemes for the approving authority to consider. It was
urged on behalf of the appellants that the impugned scheme
did not furnish particulars required by this provision. The
draft scheme, as published under s. 68-C, and that as
approved finally, contains six columns which are respec-
tively headed (1) Serial Number; (2) Name of the Route,
indicating its course; (3) Length of the route in miles; (4)
360
Number of vehicles proposed to be operated on each route-,
(5) Total number of trips each way to be performed on each
route; and (6) The nature of the services. Now. columns 4
and 5 do not contain the precise number of vehicles proposed
to be operated or the precise total of the trips each way to
be performed daily. But on the other hand each of these
columns is sub-divided into two-4 and 4(a), 5 and 5 (a).
Under column 4 is given the minimum number of vehicles
proposed to be operated and under 4(a) the maximum number.
Similarly column 5 sets out the minimum number, of total
trips each way and 5 (a) the maximum number. Now in several
of these the variation between the maximum and the minimum
in columns 4 and 5 is 1 to 2 i.e. if one is the minimum two
is the maximum, and similarly if two is the minimum, four is
the maximum, but there are others in which the variation is
even more pronounced. for instance, in scheme number one, in
serial number 15 the minimum is one and the maximum three in
both columns 4 and 5 and in serial number 16 the proportion
between, the maximum and minimum is even more pronounced for
in column 4 it is 1 to 4. The position is similar in regard
to serial No. 20. The objection that is raised to this
method of specifying the maximum and the minimum of the
number of vehicles which will be put on the route and the
number of trips which these vehicles will operate is, that
one of the objects of the schemes is the provision, among
others, of an adequate road transport service. It is common
ground that the persons affected by the schemes may object
to the scheme on the ground that it does not offer an ade-
quate service and that this would be a relevant matter for
consideration by the authority approving the scheme. It is,
therefore, urged on behalf of the appellants that the
schemes as promulgated which disclose not the actual number
of vehicles that would run or the number of trips which the
vehicles would make, do not enable the affected objectors to
raise their objections to the adequacy of the service pro-
posed and similarly do not afford requisite information to
the approving authority under s. 68D(3) to decide whether to
approve the scheme or not. Besides this general objection,
it is pointed out that the specification of a minimum
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and a maximum in columns 4 and 5 is contrary to what has
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been prescribed by the Andhra Pradesh Motor Vehicles Rules,
1957, made in relation to "the particulars to be contained
in schemes under Ch. IV-A." Rule 4 of these Rules which
have statutory force under s. 68-C requires draft schemes
and approved schemes to contain inter alia "the number of
vehicles proposed to be operated on each route and the total
number of trips to be performed daily on each route." By a
rule framed on the 26th of December, 1958, the State
Government framed a rule numbered as Rule 5 of these Rules
which reads:
"5. The State Transport Undertaking may at its
discretion, vary the frequency of services on
any of the notified routes or within any
notified area having regard to the needs of
traffic during any period, either by
increasing or decreasing the number of trips
of the existing buses or by increasing or
decreasing the number of buses."
The validity of Rule 5 was one of the matters that was
raised for consideration by this Court in Dosa Satyanaraya-
namurty etc. v. The Andhra Pradesh State Road Transport
Corporation(1) and this Court held that Rule 5 was repugnant
to s. 68-E which reads:
"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
modifications proposed were a separate
scheme."
and struck it down. Thereafter rule 5 was deleted, but rule
4 remains as we have set out. The question for con-
sideration is whether the prescription of maxima and minima
in columns 4 & 5 is in conformity with the requirements of
Rule 4. It was submitted on behalf of the appellants (1)
that the reason why these maxima and minima were put
[1966] 1 S.C.R. 642.
362
down in the schemes, contravening Rule 4, was in reality to
avoid the operation of s. 68-E and to get over the decision
of this Court striking down Rule 5 and that for the same
reason which underlay the decision of this Court in Dosa
Satyanarayanamurty’s case(1) the prescription of maxima and
minima contravened s. 68-E as it operates in no way
dissimilar to Rule 5 and that as this vice pervades the
entirety of the scheme as published, all the three schemes
should be set aside. In further support of their submission
the appellants relied on the affidavit filed by the
Assistant Secretary to the Transport Department who stated
that the prescription of maxima and minima was adopted
because "it enabled the Corporation to provide adequate
services with reference to the public needs, without having
to go through the elaborate gamut of modifying the approved
scheme for the purpose."
The learned Judges of the High Court have repelled this
contention on the ground of the analogy furnished by ss. 46
and 48 of the Act under which applications for State
carriage permits by private operators and the permits grant-
ed to them are required to state the minimum and maximum
number of daily services proposed to be provided in relation
to each route or area, was an indication that a scheme
specifying the maxima and minima of the number of buses and
services was in conformity with and did not contravene Rule
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4. The learned Advocate-General adopted the same line of
argument and submitted that the language of Rule 4 did not
in terms prohibit the specification of a minimum and maximum
and that Rule 5 which this Court struck down as being
repugnant to s. 68-E was attracted only when the maxima or
minima set out in the scheme was departed from. He,
however, conceded that the gap, between the minimum and the
maximum specified in a scheme might be so wide as to render
the same a contradiction of Rule 4 but he submitted that the
variations in the 3 schemes before us between columns 4 and
4 (a) and columns 5 and 5 (a) respectively were so slight as
not to amount to a failure to fix the number of vehicles to
be operated or the trips they would do on the routes.
(1) [1961] 1 S.C.R. 642.
363
In the case before us in view 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
Rule 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
Rule 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 invade
the rights of private operators to carry on business and is
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 Rule 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 proportion 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 all the routes.
364
The next objection was that some of the routes included in
the scheme were inter-State routes and that under the
proviso to s. 68D(3) it could not be deemed to be an ap-
proved scheme unless the previous approval of the Central
Government had been obtained. We consider this objection as
without force. The route which is proposed to be
nationalised under the scheme admittedly lies wholly within
the State. The right of the private operators to ply their
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vehicles beyond the State border is not affected by any of
the schemes. It would, therefore, follow that the proviso
to s. 68-D(3) is not attracted and consequently the scheme
does not suffer from the defect alleged.
The next point made was that the language employed to
indicate the nature of the service in column 6 of the
schemes was vague, with the result that operators who had,
in fact, been affected by the scheme understood the words
employed as not affecting them and consequently did not make
objections as they were entitled to under s. 68-D(2). We
have examined the language employed and we consider that the
submission does not deserve serious consideration nor we are
satisfied that any party was really misled by ambiguous
phrasing of column 6 of the scheme. In fact, learned
Counsel did not press this objection after the matter was
discussed during arguments.
The next series of objections to the schemes are those which
arise in Civil Appeals Nos. 771 to 778. The point most
strenuously contended related to an illegality which was
alleged to have occurred in the implementation of the
scheme. Under s. 68-(1) the State Transport Undertaking has
to make the application in the manner specified in Chapter
IV-A for "a Stage Carriage permit........... "to the
Regional Transport Authority" and that Authority is directed
to grant the permit to the Undertaking notwithstanding
anything to the contrary in Ch. IV. In accordance with the
provisions of this section the State Road Transport
Corporation made an application for the grant of permits to
the Regional Transport Authority. The objection raised is
that the application had to be made not to the Regional
Transport Authority but only to the State Transport Autho-
rity which authority alone, it is urged, is competent to en-
365
tertain applications for the grant of permits where the
length of the route is 100 miles or over and such route is
over a Trunk Road. Three of the routes in scheme 2 with
which Civil Appeal Nos. 773, 776 and 777 are concerned are
of a length beyond 100 miles and the roadway on which the
route lies are admittedly Trunk Roads. Under Rule 141 of
the Madras Motor Vehicles Act Rules permits on routes
covering a distance of over 100 miles on Trunk Roads could
be granted only by the State Transport Authority. It was
this Authority that had granted the permits to operate on
these three routes to the respective appellants in these
appeals. The argument is that even when a Transport
Undertaking applies for a stage carriage permit under s. 68-
F(1) it must comply with the provisions of Rule 141. On the
basis of this reasoning the appellants in these three Civil
Appeals have applied for a writ of prohibition against the
Regional Transport Authority before whom the applications
have been filed. Section 68-F(1) reads:
"68-F(1). Where, in pursuance of an approved
scheme any State transport undertaking applies
in the manner specified in Chapter IV for a
stage carriage permit or a public carrier’s
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."
The learned Judges of the High Court have held that the
Regional Transport Authority which is specifically mentioned
in s. 68-F(1) is empowered to issue the permit to the
transport undertaking "notwithstanding anything to the
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contrary contained in Chapter IV" and that the section
rendered the provisions of Rule 141 of the Motor Vehicles
Rules inapplicable to cases covered by s. 68-F(1). We find
ourselves in agreement with this view. Besides, s. 68-B of
the Act enacts:
"68-B. The provisions of this Chapter and the
rules and orders made thereunder shall have
effect
366
notwithstanding anything inconsistent there-
with contained in Chapter IV of this Act or in
any law for the time being in force or in any
instrument having effect by virtue of any such
law."
Therefore any provisions in Chapter IV which are in-
consistent 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 Autho-
rity was itself vested with the powers 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 s. 44(1)],
but there is some other authority which functions as the
Regional Transport Authority for the purposes of the Art,
such an Authority might be that which would be comprehended
by s. 68-F(1) but where as in Andhra Pradesh there is admit-
tedly 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. 68F(1) merely because the
Regional Transport Authority of that area cannot grant
permits under Ch. IV
There were certain other points urged in Civil Appeal No.
771 which arose only if the Regional Transport Authority to
whom applications under s. 68-F(1) were made, was not
competent to entertain application and issue a permit. In
view of our conclusion as regards the point urged in Civil
Appeal No. 771 of 1963 do not arise.
367
There remains for being dealt with one minor point which was
urged 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 that the appellants did not file
their objections before the Government. Taking the case of
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 Ura-
vakonda 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 speci-
fication carries with it and obviously implies that the ope-
ration of transport between the two terminii is intended to
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be nationalised. The complaint in Civil Appeal No. 884 is
the same, only the route is different. This completes all
the points that are urged before us.
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.
The appeals are accordingly allowed and the appellants are
granted a declaration that the schemes are invalid and
cannot be enforced. The appellants would be entitled to
their costs here and in the High Court-one hearing fee’.
Appeals allowed.
AYYANGAR J.-When the judgment in the above appeals was
pronounced on January 27, 1964 the learned Advocate for the
appellants brought to our notice the following order passed
by this Court on June 10, 1963 when the interim stay of the
operation of the schemes which are impugned in the above
appeals, was vacated on the opposition by the State
Government:
"Stay vacated on the learned Advocate-General
for
Andhra Pradesh giving an undertaking that
368
in case the appeals succeed, the State will
compensate the appellants for the loss
incurred by them during the period that the
appeals were pending in this Court by reason
of the fact that they were not allowed to ply
their buses on the routes under the respective
permits granted to them. The learned
AdvocateGeneral further undertakes that this
amount of compensation will be determined in
the present proceedings themselves. No order
as to costs."
The learned Counsel requested us that we should give some
directions in terms of this undertaking. In view of the
above we would add the following at the end of the judgment
which was pronounced on January 27, 1964:
"In view of the order passed by this Court on
June 10, 1963, when the interim order of stay
was vacated at the instance of the respondent,
recording the undertaking on the part of the
State that it would compensate the appellants
for the loss incurred by them during the
period when the appeals were pending in this,
Court, there will be a declaration to that
effect, and the High Court will determine the
amount so payable and pass suitable directions
for the payment thereof."