Full Judgment Text
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 7
PETITIONER:
SHRI ROSHANLAL GAUTAM
Vs.
RESPONDENT:
STATE OF UTTAR PRADESH AND OTHERS
DATE OF JUDGMENT:
26/10/1964
BENCH:
HIDAYATULLAH, M.
BENCH:
HIDAYATULLAH, M.
GAJENDRAGADKAR, P.B. (CJ)
WANCHOO, K.N.
DAYAL, RAGHUBAR
MUDHOLKAR, J.R.
CITATION:
1965 AIR 991 1965 SCR (1) 841
CITATOR INFO :
R 1974 SC1940 (11)
ACT:
Nationalisation of Transport Services--Scheme prohibiting
private operators from specified routes-Whether affects
rights of operators holding permits related not to routes
but to specified area-Scheme whether satisfies provisions of
statute-Services provided under scheme whether adequate-
Section 68C Motor Vehicles Act, 1939 as amended by Motor
Vehicles (Amendment) Act, 1956.
HEADNOTE:
The appellant, the holder of a permit in respect of contract
carriages in the Agra region challenged a scheme framed by
the Uttar Pradesh Government nationalising road transport
services in the Agra region and prohibiting private
operation of the services on, certain specified routes. His
writ petition before the High Court having been dismissed
and Letters Patent Appeal also having failed he appealed to
the Supreme Court, by special leave.
Three contentions were advanced on behalf of the appellant :
(1) The scheme was only a reproduction of an earlier scheme
under A. 3 of the U.P. Road Transport (Development) Act,
1955 which had been struck down by the High Court. The
requirements of s. 68C of the Motor Vehicles Act were quite
different from those of s. 3 of the U.P. Act, and the scheme
did not answer them. (2) Under s. 68C of the Motor Vehicles
Act the State was under an obligation to provide ’adequate’
transport services to replace those already in operation,
but the scheme provided only for 16 contract carriage
services. As the number of these services could be changed
under the scheme, the latter would be again open to
challenge whenever the change was effected. (3) The scheme
was not properly framed because it provided for the
operation of contract carriages on certain routes to the
exclusion of the appellant who held a permit for an area
irrespective of any route or routes.
HELD : The appeal must be dismissed.
(i) It is no doubt true that while s. 68C makes a mention
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 7
of an "efficient, adequate, economical and properly
coordinated road transport service" "in the public
interest", the U.P. Act merely mentioned "the interest of
the general public" "subserving the common good or for
maintaining and developing efficient transport system".
However it would be wrong to think that even under the U.P.
Act Government would not think of an "adequate",
"economical" or "property coordinated" road transport
services for the common good and for maintaining and
developing an efficient road transport system. The change
in the language is no doubt there but the intention
underlying the words is the same, and even if the exact
words of s. 68C might not have been present before the
framers of the scheme, it is quite obvious that they took
into account those very factors. Indeed the use of the
words "adequate State road transport contract carriage
service" in cl. (3) of the scheme reproduced the language of
s. 68C and not that of s. 3. This suggests that the
requirements of s. 68C were probably borne in mind. [845 B-
F]
842
(ii) The scheme was read as providing sixteen contract
carriages and it was not considered whether it would become
inadequate in the future. [84 A]
(iii) Under the Motor Vehicles Act there is no doubt a
distinction between area and route in some of the sections
but in others that distinction does not seem to be
preserved. The provisions of s. 51(2) (i) clearly show that
the area at the commencement of the permit can be cut down
by notifying certain routes and there seems to be no bar to
doing it later in view of the scheme of nationalisation. By
taking away one of the routes the area is as effectively cut
down as when an area is included in the permit but routes
are indicated on which alone the contract carriages can ply.
The provisions of s. 68B also indicate that power is
reserved to modify the existing permits either by curtailing
the area or by curtailing the routes. Taking over of
certain routes exclusively for the State undertakings
renders that portion of the area ineffective for a private
operator such as the appellant who holds the permit for the
whole area including those routes. [848 B-G]
C.P.C. Motor Services, Mysore v. State of Mysore, [19621
Supp. 1 S.C.R. 717, Kondala Rao v. A. P. State Road
Transport Corporation, A.I.R. (1961) S.C. 82 and Dosa
Satyanarayanamurty etc. v. Andhra Pradesh State Road
Transport Corporation, [1961] 1 S.C.R. 642, relied on.
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 800 of 1964.
Appeal by special leave from the judgment and order dated
March 30, 1964, of the Allahabad High Court in Special
Appeal No. 27 of 1964.
G. S. Pathak, B. L. Singhal and B. P. Maheshwari, for the
appellant.
C. B. Agarwala, K. N. Singh and O. P. Rana, for the
Respondents.
G. S. Pathak, A. V. Viswanatha Sastri, B. L. Singhal and
B. P. Maheshwari, for the intervener.
The Judgment of the Court was delivered by
Hidayatullah J. The appellant who appeals by special leave
against the judgment of the High Court of Allahabad dated
March 30, 1964 is the holder of a contract carriage permit
granted to him by the Regional Transport Authority, Agra and
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 7
valid till February 1, 1955. He owns a single contract
carriage and his permit covers the whole of the Agra region
which comprises the six districts of Mathura, Agra, Aligarh,
Etah, Etawah and Mainipuri. No special route or routes are
indicated in his permit and the terminal of his operation
are the frontiers of this region on all sides. In 1955, the
Government of Uttar Pradesh, purporting to act under S. 3 of
the U. P. Road Transport Services (Development) Act, 1955,
framed a scheme for nationalisation of transport services in
Uttar Pradesh. The scheme which was then
843
framed was struck down by an order of the High Court of
Allahabad on the petition of some private operators. In
1955, the Motor Vehicles Act, 1939 was amended by the
introduction of Chapter IVA dealing with special provisions
relating to State Transport Undertakings. This amendment
was introduced by the Motor Vehicles (Amendment) Act, 1956
with effect from February 16, 1957. After the amending Act
the scheme was reconsidered by the State Government and
action was taken under Chapter IVA to notify it under s. 68C
of the Motor Vehicles Act. In this scheme 56 routes, which
were mentioned by name, were removed from the operation of
contract carriage permits issued to private operators in the
Agra region and Government announced’ that adequate State
Road Transport contract carriage services would be provided
on those routes or portions thereof. The functioning of
transport services other than those put by the State Road
Transport Services was prohibited on all those routes. The
private operators objected again but their objections were
over-ruled and the scheme was published in the Gazette on
October 17, 1959. A writ petition (Civil Miscellaneous Writ
Petition No. 26622 of 1959) was filed by the appellant and
others objecting to the scheme on various grounds. This was
allowed on February 1, 1962 by Mr. Justice Oak who set aside
the scheme and remanded it for reconsideration in the light
of his order. The scheme was not struck dawn in full but
only partially in respect of the petitioners in the High
Court. It was ordered, however, that the State Government
would be at liberty to enforce the scheme in other respects.
The main reason for striking down the scheme in respect of
those petitioners was that their objections were not
considered and they were not given a reasonable opportunity
to produce evidence in support of their objections.
After remand objections were considered and an order was
passed by the Legal Remembrance on October 18, 1963 by which
the scheme was reaffirmed over-ruling the objections. The
only change made was that instead of the provision of
"adequate" contract carriage service by the State Road
Transport Contract Carriage Services it was provided that "
1 6 contract carriage services or more or less in accordance
with the need from time to time" would be provided on the
routes or portion thereof which were notified. The
appellant filed a petition in the High Court challenging the
scheme. It was heard by Mr. Justice Broome and rejected by
him on March 17, 1964. The appellant then filed a special
appeal under the Letters Patent against the decision of Mr.
Justice Broome. The High Court by the impugned order
844
dismissed it "summarily" though it passed a fairly detailed
order. It is against the order that the present appeal has
been filed.
The first contention of Mr. G. S. Pathak is that although
the scheme purports to be under s. 68C of the Motor Vehicles
Act, the requirements of that section were not borne in mind
inasmuch as the scheme framed under s. 3 of the U.P. Act was
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 7
without any change approved and notified after the
successive remands by the High Court. It is therefore
necessary to see how far the two provisions differ in their
requirements. Section 3 of the U.P. Act laid down the power
of the State Government to run Road ’Transport Services as
follows :-
"3. Power of the State Government to run Road
Transport Services.-
(1) Where the State Government is of the
opinion that it is necessary in the interests
of the general public and for subserving the
common good, or for maintaining and developing
efficient road transport system so to direct,
it may, by notification in the official
Gazette declare that the road transport
services in general, or any particular class
of such services on any route or portion
thereof as may be specified, shall be run and
operated exclusively by the State Government,
or by the ’State Government in conjunction
with railways or be run and operated partly by
the State Government and partly by others
under and in accordance with the provisions of
this Act.
(2) The notification under sub-section (1)
shall be conclusive evidence of the facts
stated therein."
Section 68C of the Motor Vehicles Act provided
as follows:-
"68C. Preparation and publication of scheme
of road transport service of a Slate Transport
undertaking.
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
845
the nature of the services proposed to be
rendered, the area or route proposed be
covered and such other particulars respecting
thereto as may be prescribed, and shall cause
every such scheme to be published in the
Official Gazette and also in such other manner
as the State Government may direct."
It is contended that the requirements of the former section
which were the conditions precedent for action are not the
same as the requirements of s. 68C. It is no doubt true
that while s. 68C makes a mention of an "efficient,
adequate, economical and properly coordinated road transport
service" "in the public interest" the U.P. Act merely
mentioned "the interest of the general public" " subserving
the common good or for maintaining and developing efficient
road transport system." The change of verbiage, however,
does not make a change in the requirements. It would be
wrong to think that even under the U.P. Act Government would
not think of an ’adequate’, ’economical’ or ’properly
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 7
coordinated’ road transport service when it chose to provide
road transport services for the common good and for
maintaining and developing efficient road transport system.
The change in language is no doubt there but the intention
underlying the words is the same and even if the exact words
of s. 68C might not have been present before the framers of
the scheme, it is quite obvious that they took into account
those very factors. Indeed, the use of the words "adequate
State road transport contract carriage service" in cl. (3)
of the scheme framed and notified in 1959 reproduces the
language of s. 68C and not that of s. 3. This suggests that
the requirements of s. 68C were probably borne in mind.
Even if they were not and only the requirements of the U.P.
Act were borne in mind, we find no difficulty in holding
that as the requirements are basically the same, the
exercise of power must be referred to s. 68c under which it
has validity, and not to s. 3 of the U.P. Act. This ground
of objection was rightly over-ruled by the High Court.
It was next contended that the provision of "16 contract
carriages or more or less’ under cl. (3) of the present
scheme does not carry out s. 68C either in spirit or in
terms. Section 68C requires ’adequate’ services to be
maintained and the fixing of 16 carriages in advance, it is
said, does not carry out the purpose of that provision. It
is also contended that as this number is likely to be
changed the scheme itself would be open to challenge when-
ever the number is less than the adequate number required.
It may be pointed out that on the former occasion the
provision
846
about ’adequate’ carriages was challenged as too vague. It
is because of that challenge that the number of carriages is
now shown and it is provided that this number may be more or
less as the occasion demands. We read the scheme as
providing sixteen contract carriages. We need not consider
whether it would become inadequate in the future. At the
moment it is stated that 16 carriages will be provided and
it is not affirmed that this number is in any way
inadequate.
The last contention is the most serious of all. It is
submitted that the scheme is not properly framed because it
provides for the operation of contract carriages on certain
routes to the exclusion of the appellant who holds a permit
for an area irrespective of any route or routes. It is
contended that the framers of the scheme have confused
between a stage carriage permit and a contract carriage
permit, since the former is granted for a route or route and
the latter only for an area. The argument is that if State
road transport contract carriages were to be provided the
scheme should have indicated an area in which they were to
operate and that area should have been excluded instead of
dismembering the area of the appellant by mentioning the
routes. Such a procedure, it is submitted, is contrary to
the scheme of the grant of permits under Chapter IV of the
Motor Vehicles Act. On behalf of the respondent it is
submitted that the notification of the 56 routes curtails
the area such as it was and that there is no breach of the
provisions of the Motor Vehicles Act.
Under the Motor Vehicles Act there is no doubt a distinction
between area and route in some of the sections but in others
that distinction does not seem to be preserved. ’These
terms-route and area-were explained in C. P. C. Motor
Services, Mysore v. The State of Mysore and A nr. (1) and it
was pointed out that under the scheme of the Motor Vehicles
Act, 1939 these two words sometimes stand for the road on
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 7
which the omnibuses run or portions thereof. A similar view
was earlier expressed in Kondata Rao v. A. P. State Road
Transport Corpn. (2) In Dosa Satyanarayanamurty etc. v. The
Andhra Pradesh State Road Transport Corporation("), Subba
Rao I., observed :
"Under s. 68C of the Act the scheme may be
framed in respect of any area or a route or a
portion of any area or a portion of a route.
There is no inherent inconsis-
(1)[1962] Supp. 1 S.C.R. 717 (2) A.I.R.
1961 S.C. 82.
(3) [1961] 1 S.C.R. 642 at 664.
847
tency between an "area" and a "route". The
proposed route is also an area limited to the
route proposed. The scheme may as well
propose to operate a transport service in
respect of a new route from point A to point B
and that route would certainly be an area
within the meaning of s. 68C."
The argument thus loses a great deal of its force but there
are other reasons too which show that the contention is
misconceived.
By s. 2(3) a contract carriage is defined as a motor vehicle
which carries a passenger or passengers on hire or reward
under a contract from one point to another without stopping
to pick up or set down along the line of that route
passengers not included in the contract. A stage carriage
is defined as a motor vehicle carrying or adopted to carry
passengers for hire or reward at separate fares paid for the
whole journey or for stages of the journey. The distinction
between the two is this: the contract carriage is engaged
for the whole of the journey between two points for carriage
of a person or persons hiring it but it has not the right to
pick up other passengers en route. The stage carriage on
the other hand, runs between two points irrespective of any
prior contract and it is boarded by passengers en route who
pay the fare for the distance they propose to travel. Mr.
Pathak contends that if one examines the scheme of ss. 46
and 49 one finds that the application for a stage carriage
permit is for a route or routes or area or areas but the
application for a contract carriage is only for an area for
which the permit is required. He contends, therefore, that
as contract carriages do not ply on routes a scheme
curtailing a contract carriage permit must be for a part of
the area covered by the permit and that it cannot be for a
route or routes. He also refers to s. 68G in which two
separate principles and methods for the determination of
compensation for the curtailment of areas and routes is
provided and submits that this also points out that a
contract carriage permit is by an area and not by a route
and consequently the indication of the route on which the
carriages of State undertakings would ran is ineffective to
curtail the area of a private operator and the scheme must
therefore fail. On the other hand, it may be pointed out
that S. 51(2) of the Motor Vehicles Act itself provides as
follows
"51(2) : The Regional Transport Authority, if
it decides to grant a contract carriage
permit, may, subject to any rules that may be
made under this Act, attach to
848
the permit any one or more of the following
conditions, namely:-
(i) that the vehicle or vehicles shall be
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 7
used only in a specified area or on a
specified route or routes;
This provision clearly shows that the area at the
commencement of the permit can be cut down by notifying
certain routes and there seems to be no bar to doing it
later in view of a scheme of nationalisation.
In our judgment, the argument of the respondents must be
accepted. If under S. 51 (2) (1) a permit for a contract
carriage could be limited to specified route or routes
notwithstanding that the petition for such a permit must be
for an area there is no difficulty in accepting a scheme
which cuts down the area by subtracting a few routes. By
the taking over of the routes the area is as effectively cut
down as when an area is included in the permit but routes
are indicated on which alone the contract carriages can ply.
There are two other arguments which support the contention
of the respondents. Under S. 68B the provisions of Chapter
IVA apply notwithstanding anything inconsistent therewith
contained in Chapter IV of the Act. Sections 46 to 49 are
in Chapter IV and no inconsistency between a scheme framed
under S. 68C and any provision of Chapter IV can be made a
ground of attack. Secondly, under s. 68F when the permits
are issued to a State transport undertaking for stage
carriages or contract carriages it is provided that the
Regional Transport Authority may modify the terms of any
existing permit so as to "curtail the area or route covered
by the permit in so far as such permit relates to the
notified area or notified route". This would indicate that
power is reserved to modify the existing permits either by
curtailing the area or by curtailing the routes. The taking
over of certain routes exclusively for the State
undertakings renders that portion of the area ineffective
for a private operator such as the appellant who holds a
permit for the whole area including those routes. The High
Court was, therefore, right in holding that by the notified
scheme the routes which were mentioned must be taken to have
been subtracted from the area to which the permit applied.
In other words, there is no merit in the appeal. The appeal
fails and is dismissed with costs.
Appeal dismissed.
845