Full Judgment Text
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CASE NO.:
Appeal (civil) 6974 of 2001
PETITIONER:
THE MOR MODERN COOPERATIVE TRANSPORT SOCIETY LTD.
Vs.
RESPONDENT:
FINANCIAL COMMISSIONER AND SECRETARY TO GOVT. HARYANA & ANR.
DATE OF JUDGMENT: 09/07/2002
BENCH:
MB.IBS.HESSHHAWHA,R PRASAD SINGH, H.K. SEMA.
JUDGMENT:
Bisheshwar Prasad Singh, J.
The core question which arises for consideration in
this appeal by special leave is whether the Transport
Commissioner of the State of Haryana has any financial
interest within the meaning of Section 68 (2) of the Motor
Vehicles Act, 1988 in the Government Undertaking known
as the Haryana Roadways so as to render him ineligible for
appointment as Chairman of the Regional Transport
Authority. The appellant had challenged by a writ petition
the Notification dated March 27, 1998 whereunder the
Transport Commissioner was appointed as Chairman of the
Regional Transport Authority. Since the aforesaid
Notification was superseded by a subsequent Notification of
December 31, 1998 appointing the Secretary, Regional
Transport Authority as Chairman and the Traffic Manager of
the Haryana Roadways as a member of the authority, apart
from a representative of the District Administration, the
appellant amended the writ petition and challenged the
Notification of December 31, 1998 also. The High Court of
Punjab and Haryana dismissed the writ petition by its
impugned judgment and order dated February 21, 2000.
Later by a Notification dated February 20, 2001 in
supersession of the earlier Notification, the Transport
Commissioner of Haryana was again appointed as Chairman
of the Regional Transport Authority and the District
Transport Officer to act as Secretary, Regional Transport
Authority of concerned region as member. Before us, the
counsel has challenged only the appointment of the Transport
Commissioner as Chairman of the Regional Transport
Authority and not the appointment of the District Transport
Officer who has been appointed to act as the Secretary of the
Regional Transport Authority.
The appellant herein is a cooperative society duly
registered under the Haryana Cooperative Societies Act. It
deals in the business of passenger transport and for that
purpose obtains stage carriage permits issued through the
Regional Transport Authority, Hissar. Presently, it holds
one permit to operate four return trips on Hansi - Bad
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Chhappar route which falls within the District of Hissar.
The case of the appellant pleaded in the writ petition
was that the Haryana Roadways is a department of the State
of Haryana. It also carries on business of providing
passenger transport facility. It competes with private stage
carriage operators and owns and operates a fleet of motor
vehicles. The Haryana Roadways is also subject to the
provisions of the Motor Vehicles Act (hereinafter referred to
as "the Act") and the rules framed thereunder. Stage carriage
permits are issued by the concerned Regional Transport
Authority constituted under Section 68 of the Act.
It was contended that for about two decades the entire
passenger transport service in the State of Haryana remained
nationalized and stage carriage service was operated only by
the State Transport Undertaking known as the Haryana
Roadways. However, in the year 1993 by Notification issued
under Section 100 of the Act, a provision was made for grant
of stage carriage permits to private operators but confined to
cooperative societies. Under the Notification, the routes
falling within the districts with not more than 10 kilometers
falling on the National or State Highways, were available for
operation by cooperative societies. Accordingly, stage
carriage permits are being granted to cooperative societies
under Chapter V of the Act by the concerned Regional
Transport Authorities of which the Transport Commissioner,
Haryana was, and again is, the Chairman. By Notification
dated March 27, 1998 the Government of Haryana in
exercise of the powers conferred by Section 68 of the Act, in
supersession of its earlier Notification dated December 30,
1996 constituted Regional Transport Authorities for each of
the regions of Ambala, Hisar, Faridabad, Rohtak, Karnal and
Rewari consisting of Transport Commissioner as Chairman
and Secretary, Regional Transport Authority of the
concerned region as member to exercise and discharge the
powers and functions conferred by or under Chapter V of the
Act on such authorities in the areas specified in the
Notification. The aforesaid Notification of March 27, 1998
was challenged by the appellant cooperative society on the
ground that the Notification was illegal in as much as Section
68(2) of the Act was a complete bar to the appointment of the
Transport Commissioner as Chairman of the Regional
Transport Authority, he being an employee of the State
Government having financial interest in the Government
undertaking namely, Haryana Roadways, within the meaning
of Section 68(2) of the Act. In the writ petition the High
Court issued a show cause notice to the respondents by order
dated 5.12.1998. However, on 31.12.1998 another
Notification was issued in supersession of the Notification
dated March 27, 1998 whereunder the Secretary, Regional
Transport Authority of concerned region was appointed as
Chairman of the Regional Transport Authority and the
Traffic Manager concerned of the office of General Manager,
Haryana Roadways at District Headquarters as member of
the authority. Another member was appointed who was a
representative of the District Administration to be nominated
by the Deputy Commissioner concerned.
The High Court by the impugned judgment and order
of February 21, 2000 dismissed the writ petition challenging
the validity of the Notification dated 31.12.1998 on the
ground that the appellant had failed to show that the
appointment of Traffic Manager as a member of the Regional
Transport Authority had adversely affected the business of
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the appellant. It was not averred that the Regional Transport
Authority consisting of Traffic Manager as a member had
passed any order adversely affecting the interest of the
appellant or had acted in any manner prejudicial to their
interest. In such circumstances the High Court was of the
opinion that the challenge to the Notification was purely
academic and did not warrant exercise of writ jurisdiction by
the High Court. On these findings the High Court did not
consider it necessary to examine the question as to whether
the appointment of Traffic Manager, working in the office of
General Manager, Haryana Roadways as a member of the
authority was illegal, being in breach of the provisions of
Section 68, particularly Section 68 (2) of the Act.
During the pendency of this appeal another
Notification has been issued by the Government of Haryana
on February 20, 2001 superseding the Notification dated
31.12.1998. Under the latest Notification the Transport
Commissioner, Haryana has again been appointed the
Chairman of the Regional Transport Authorities, and the
District Transport Officer concerned as the Secretary of the
Regional Transport Authority of the concerned region as
member to exercise and discharge the powers and functions
conferred by or under Chapter V of the Act.
It was submitted before us by counsel appearing on
behalf of the appellant that the Transport Commissioner of
the State of Haryana as well as the Traffic Manager working
in the office of the General Manager, Haryana Roadways,
though officials of the State of Haryana have a financial
interest within the meaning of Section 68(2) of the Act in the
Transport Undertaking owned by the State namely the
Haryana Roadways. By express words, Section 68(2) of the
Act prohibits the appointment of such a person as a member
of the State or Regional Transport Authority. The Haryana
Roadways is a department of the State of Haryana and is a
competitor in the passenger transport business. It competes
with private operators and therefore, under the Act its
employees are ineligible for appointment as members of the
Regional Transport Authority. The Regional Transport
Authority exercises powers and functions conferred on it
under Chapter V of the Act which includes inter-alia the
power to grant stage carriage permits, suspend or even cancel
such permits. Having regard to the nature and extent of
powers conferred on the Authority, the legislature in its
wisdom sought to exclude any person having any financial
interest in any transport undertaking from membership of the
Regional Transport Authority with a view to ensure its
independent and impartial functioning.
The respondents on the other hand contended before
us, as was contended before the High Court, that the
Transport Commissioner has been appointed as the Chairman
of the authority in accordance with law. It is not disputed
that he manages the State undertaking namely, the Haryana
Roadways, but it is contended that he has no personal interest
and it is only the interest of the State that he protects. No
doubt, the transport department of the State runs the
commercial wing known as Haryana Roadways which has
several depots. It is also clearly averred that the Transport
Commissioner is overall incharge of the Haryana Roadways
and is therefore intimately connected with its management
including accountability for its performance resulting in
profit or loss, but all the same his interest is not personal and
his appointment is in the interest of better administration of
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the undertaking which is run with a view to provide
economical and efficient transport service for the people at
large.
In their additional affidavit filed before this Court the
same stand has been reiterated. It is admitted that the
passenger transport service is provided to the people by the
transport department of the Government. There are 20
depots each headed by a General Manager who is usually a
Class - I Officer. The three senior most functionaries of the
transport department are the Minister for Transport,
Secretary Transport, and the Transport Commissioner.
Various schemes have been notified whereunder, but for the
routes specified therein, all the passenger transport routes
have been reserved for exclusive operation by the Haryana
Roadways. It is being run as a purely departmental entity
unlike other States where corporate entities have been
constituted to provide transport facility on commercial
considerations.
The counter affidavits filed by the respondents make
the factual position clear that the Transport Commissioner is
overall incharge of the State undertaking which is
departmentally managed. He is also accountable to the
government for its performance and the profits earned or
losses suffered by it. It logically follows that the Transport
Commissioner carries the burden of financial accountability.
The undisputed facts also establish that the private operators
provide transport service on the routes on which they are
permitted to operate, and though their competition with
Haryana Roadways may be limited, having regard to the fact
that they operate fewer routes, the existence of competition
between the two cannot be denied. In these facts and
circumstances, the question whether the Transport
Commissioner has a financial interest in the Haryana
Roadways within the meaning of that term in Section 68(2)
of the Act falls for our consideration.
Unfortunately, the High Court did not consider the
question which directly arose before it, namely, whether the
appointment of the Transport Commissioner/Traffic Manager
as Chairman/member of the Regional Transport Authority
was not in breach of statutory provisions. The High Court
did not exercise its writ jurisdiction in the absence of any
averment to the effect that the aforesaid officers had misused
their authority and acted in a manner prejudical to the interest
of the appellants. In our view the High Court should have
considered the challenge to the appointment of the officials
concerned as members of the Regional Transport Authority
on the ground of breach of statutory provisions. The mere
fact that they had not acted in a manner prejudicial to the
interest of the appellant could not lend validity to their
appointment, if otherwise, the appointment was in breach of
statutory provisions of a mandatory nature. It has, therefore,
become necessary for us to consider the validity of the
impugned Notification said to have been issued in breach of
statutory provision.
Section 68 of the Motor Vehicle Act empowers the
State Government to constitute a State Transport Authority
and the Regional Transport Authorities which may exercise
the powers and functions conferred by or under Chapter V on
such authority. Sub-section (2) is most relevant which reads
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as follows :
"(2) A State Transport Authority or a
Regional Transport Authority shall
consist of a Chairman who has had
judicial experience or experience as an
appellate or a revisional authority or as an
adjudicating authority competent to pass
any order or take any decision under any
law and in the case of a State Transport
Authority, such other persons (whether
officials or not), being more than four
and, in the case of a Regional Transport
Authority, such other persons (whether
officials or not), not being more than two,
as the State Government may think fit to
appoint; but no person who has any
financial interest whether as proprietor,
employee or otherwise in any transport
undertaking shall be appointed, or
continue to be, a member of a State or
Regional Transport Authority, and, if any
person being a member of a any such
Authority acquires a financial interest in
any transport undertaking, he shall within
four weeks of so doing, give notice in
writing to the State Government of the
acquisition of such interest and shall
vacate office:
Provided that nothing in this sub-
section shall prevent any of the members
of the State Transport Authority or a
Regional Transport Authority, as the case
may be, to preside over a meeting of such
Authority during the absence of the
Chairman, notwithstanding that such
member does not possess judicial
experience or experience as an appellate
or a revisional authority or as an
adjudicating authority competent to pass
any order or take any decision under any
law:
Provided further that the State
Government may, -
(i) where it considers necessary
or expedient so to do,
constitute the State Transport
Authority or a Regional
Transport Authority for any
region so as to consist of
only one member who shall
be an official with judicial
experience or experience as
an appellate or a revisional
authority or as an
adjudicating authority
competent to pass any order
or take any decision under
any law;
(ii) by rules made in this behalf,
provide for the transaction of
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business of such authorities
in the absence of the
Chairman or any other
member and specify the
circumstances under which,
and the manner in which,
such business could be so
transacted:
Provided also that nothing in this
sub section shall be construed as
debarring an official (other than an
official connected directly with the
management or operation of a transport
undertaking) from being appointed or
continuing as a member of any such
authority merely by reason of the fact that
the Government employing the official
has, or acquires, any financial interest in a
transport undertaking".
It was argued before us by the respondents that
Haryana Roadways is neither a company nor a statutory
corporation. It is run as a departmental entity and is a wing
of the department of transport. It was faintly urged that since
Haryana Roadways is neither a company nor a statutory
corporation, as is the case in other States, it cannot be
considered to be an undertaking within the meaning of that
term in sub-section (2) of Section 68. It being a departmental
entity, it was not an undertaking. The submission is devoid
of force and must be rejected. Sub-section (2) of Section 68
mandates that no person who has any financial interest,
whether as proprietor, employee or otherwise in any
transport undertaking shall be appointed or continue to be a
member of a Regional Transport Authority. The person
concerned may be a proprietor, or an employee, or he may
otherwise have financial interest in the transport undertaking.
Clearly a proprietory concern also comes within the ambit of
sub-section (2) of Section 68. It is, therefore, futile to
contend that Haryana Roadways being a departmental agency
is not an undertaking for the purpose of sub-section (2) of
Section 68. The question as to whether it is an undertaking
at all has to be answered having regard to the language of
sub-section (2) of Section 68 and the legislative intent. In
Webster’s Third New International Dictionary
"undertaking" has been assigned the meaning "The act of
one who undertakes or engages in a project or business; the
business of an undertaker: a business, work, or project which
one engages in or attempts". In Words and Phrases legally
defined, Third Edition "Undertaking has been defined thus:
’Undertaking’ includes any trade, business or profession and,
in relation to a public or local authority, includes any of the
powers or duties of that authority, and, in relation to any
other body of persons, whether corporate or unincorporated,
includes any of the activities of that body". Even applying
the dictionary meaning of the word "undertaking", an entity
such as the Haryana Roadways, which is engaged in the
business of providing transport service to the people must be
held be an "undertaking". The use of the words "any
undertaking" also makes it abundantly clear that the
undertaking may be either a private undertaking or a
Government or public sector undertaking including a
statutory corporation. We have, therefore, no hesitation in
holding that a State undertaking such as Haryana Roadways
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is within the contemplation of sub-section (2) of Section 68
of the Act.
The next question which falls for consideration is what
is the nature of the "financial interest" contemplated by the
said sub-section. The expression financial interest is capable
of a narrower as well as a wider meaning. In the narrower
sense it implies direct personal benefit of an economic
nature. In the wider sense it may include any interest direct
or indirect which a person has in relation to the finances of
the undertaking. Such an interest may be the interest of an
official who manages the finances of the undertaking or on
whom rests the burden of financial accountability. It is trite
to say that the intention of the Legislature must be found by
reading the statutes as a whole. The Court must ascertain the
intention of the Legislature by directing its attention not
merely to the Clauses to be construed but to the entire
statute; it must compare the Clause with the other parts of the
law, and the setting in which the Clause to be interpreted
occurs. The rule is of general application as even plainest
terms may be controlled by the context. Expression used in a
statute should ordinarily be understood in a sense in which
they best harmonize with the object of the statute, and which
effectuate the object of the Legislature. Therefore, when two
interpretations are feasible the Court will prefer that which
advances the remedy and suppress the mischief as the
Legislature envisioned. Keeping these principles in mind we
shall now consider what meaning has to be given to the
expression "financial interest" in sub-section (2) of Section
68 of the Act.
Looking to the scheme of the Act it cannot be disputed
that the Regional Transport Authorities exercise powers and
perform functions which are conferred upon them by or
under Chapter V of the Act. The power includes the power
to grant stage carriage permits, attach conditions thereto, to
determine the duration of permits and their renewal, to
transfer permits, the cancellation and suspension of permits,
grant of temporary permits etc. Having regard to the fact that
the State undertaking competes with private operators in the
business of providing transport service, the Legislature
advisedly has barred the appointment of any person as a
member of the Regional Transport Authority who has any
financial interest, whether as proprietor, employee or
otherwise in any transport undertaking, which must
necessarily include a Government undertaking. This is
considered necessary with a view to ensure the impartial
functioning of the Regional Transport Authority which is
envisaged by the Act.
Counsel for the appellant drew support from the
observations made by this Court in Krishna Bus Service
Pvt. Ltd. Vs. State of Haryana and Ors. (1985) 3 SCC 711
where the appointment of the General Manager of Haryana
Roadways to exercise powers of Deputy Superintendent of
Police under the Punjab Motor Vehicles Rules was
challenged on the ground that it was violative of the
fundamental rights of the private motor vehicles operators
guaranteed by Articles 19(1)(g) of the Constitution.
Upholding the challenge the Court observed :-
"The General Manager of Haryana
Roadways who is a rival in business to
the private operators of motor vehicles in
the State and is intimately connected with
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the running of motor vehicles cannot be
expected to discharge his duties in a fair
and reasonable manner. An unobstructed
operation of the motor vehicles by private
owners operating along the same route or
routes would naturally affect the earnings
of the Haryana Roadways. There is,
therefore, every likelihood of his being
overzealous in discharging his duties of
stopping a vehicle and in searching,
seizing and detaining motor vehicles
belonging to others and at the same time
excessively lenient in the case of vehicles
belonging to his own department. If in
discharging his duties in the case of
vehicles belonging to others he fails to
give due regard to the interests of the
owners thereof he would be violating
their fundamental right to carry on
business in a reasonable way. If he is too
lenient in inspecting the vehicles
belonging to his own department, the
interests of the traveling public at large
would be in peril. In both the cases there
is a conflict between his duty on the one
hand and his interest on the other.
Moreover administration must be rooted
in confidence and that confidence is
destroyed when people begin to think that
the officer concerned is biased".
Counsel also relied on the observations made by this
Court in Ishwar Singh Bagga & Ors. Vs. State of
Rajasthan (1987) 1 SCC 101. That was a case where
employees of the State Road Transport Corporation were
empowered to exercise powers that can be exercised under
Section 129-A by police officers who were empowered in
that behalf. Their appointment was challenged as being in
violation of Article 19(1)(g). The challenge was upheld.
Though, the question involved in that case was whether an
employee of the State Road Transport Corporation was
included in the expression ’other person’ in Section 129-A of
the Act, some observations made in the judgment are
apposite. It was observed :
"It is thus clear that the Corporation
is one of the many operators of the motor
vehicles in the State though the fleet of
the motor vehicles owned by it and the
magnitude of the operations carried on by
it may be very large. The police officers
who are empowered to exercise certain
powers under the Act should exercise
those powers in respect of motor vehicles
owned by the private operators and also in
respect of the motor vehicles owned by
the Corporation. Negligence on the part
of the Transport Authorities, the Motor
Vehicles Department and the police
officers in exercising their powers of
supervision, inspection and control in
respect of the motor vehicles of the
Corporation leads to grave public
suffering and sometimes to disasters.
They should not take it for granted that
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the motor vehicles of the Corporation do
not need to be checked or inspected only
because it is established by the State
Government. Omission on their part in
discharging these duties amounts to
dereliction of public duty".
Relying on these observations, though made in a
different context, it was submitted that the Legislature had in
mind the constitution of an impartial Regional Transport
Authority having regard to the powers and functions
conferred on it and with this objective in mind, an express
provision was made debarring from membership of the
Regional Transport Authority such persons who had any
financial interest in any transport undertaking.
Having regard to the language of Section 68 we are of
the considered view that the fact that the Transport
Commissioner has no personal financial interest in the State
undertaking, is of no consequence. Section 68(2) in express
terms refers to a person having "any financial interest" as
proprietor, employee or otherwise in any transport
undertaking. The words employed are of the widest
amplitude and expressly include an "employee" of an
undertaking. If a very narrow meaning is given to the
expression "any financial interest" as contended by the
respondents, the word "employee" will be rendered
redundant, because in all cases it may be argued that an
employee has no personal financial interest in the
undertaking and his interest, whatever it may be, financial or
otherwise, is his official interest and duty to protect the
interest of his employer, including his financial interest. The
wide sweep of the language employed in Section 68(2)
particularly the use of the word "any" before "financial
interest" leads us to hold that the financial interest of the
person concerned need not be direct personal financial
interest, but includes the financial interest which he may
have even as an employee of the undertaking.
The third proviso of sub-section (2) of Section 68
affirms this conclusion. The express language of the said
proviso clearly debars "an official connected directly with
the management or operation of a transport undertaking"
from being appointed as a member, or continuing as a
member, of the Regional Transport Authority. Therefore,
Section 68(2) read with third proviso makes it explicit that an
official of the State Transport Undertaking who is directly
connected with the management or operation of the transport
undertaking is debarred from being appointed a member of
Regional Transport Authority. So far as the Transport
Commissioner is concerned he is undoubtedly such an
official, and moreover in the discharge of his official duties
he shoulders financial responsibility and is accountable to the
State Government in that regard. The conclusion is,
therefore, irresistible that he is a person who has financial
interest in the transport undertaking within the meaning of
that expression in Section 68(2) of the Act. The same can be
said of the Traffic Manager who functions under the General
Manager of the Haryana Roadways.
The appellants had originally challenged the
Notification dated March 27, 1998, whereunder the
Transport Commissioner was appointed as Chairman of the
Regional Transport Authorities. However, during the
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pendency of the writ petition, since that Notification was
superseded by another Notification dated 31.12.1998
appointing the Secretary, Regional Transport Authority of
the concerned region as Chairman of the Regional Transport
Authority, and the Traffic Manager concerned of the office
of the General Manager, Haryana Roadways concerned
located at District Headquarters as member, the appellant
amended the writ petitions and challenged the later
Notification. During the pendency of this appeal the position
as it existed when the writ petition was filed, has been
restored so far as the appointment of Chairman of the
Regional Transport Authority is concerned, in as much as
the Transport Commissioner has again been appointed as
Chairman of the Regional Transport Authority by the
Notification dated February 20, 2001. Since we have found
that the Transport Commissioner is an official of the Haryana
Roadways and has a financial interest in that undertaking
within the meaning of that expression in Section 68(2) of the
Act, the Notification in so far it relates to the appointment of
Transport Commissioner as Chairman, Regional Transport
Authority must be quashed. We may however record that
counsel for the appellant did not challenge before us the
appointment of the District Transport Officer to act as
Member Secretary of the Regional Transport Authority.
In the result, this appeal is allowed, the impugned
judgment and order of the High Court set aside and the
Notification dated February 20, 2001 quashed in so far as it
relates to the appointment of the Transport Commissioner as
Chairman of the Regional Transport Authorities. There will
be no order as to costs.