Full Judgment Text
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PETITIONER:
GULLAPALLI NAGESWARA RAO AND OTHERS
Vs.
RESPONDENT:
ANDHRA PRADESH STATE ROAD TRANSPORTCORPORATION AND ANOTHER
DATE OF JUDGMENT:
05/11/1958
BENCH:
SUBBARAO, K.
BENCH:
SUBBARAO, K.
DAS, SUDHI RANJAN (CJ)
BHAGWATI, NATWARLAL H.
SINHA, BHUVNESHWAR P.
WANCHOO, K.N.
CITATION:
1959 AIR 308 1959 SCR Supl. (1) 319
CITATOR INFO :
R 1959 SC1376 (2,4)
R 1960 SC1073 (13)
RF 1961 SC 82 (8,12)
RF 1961 SC1361 (8)
F 1961 SC1575 (6)
F 1962 SC1110 (8)
R 1962 SC1183 (10)
R 1962 SC1621 (79,118)
F 1963 SC 416 (7)
RF 1964 SC 381 (75)
R 1964 SC 436 (8,10)
R 1965 SC1017 (16)
RF 1966 SC 81 (5)
R 1966 SC1571 (8)
RF 1967 SC1507 (6)
RF 1967 SC1815 (10)
D 1970 SC1095 (3,8)
F 1971 SC1594 (9)
R 1972 SC1863 (12)
F 1973 SC 974 (8)
RF 1973 SC2237 (3)
D 1974 SC 669 (12)
R 1976 SC2428 (9)
RF 1979 SC 777 (31)
C 1981 SC 660 (4,8)
E 1990 SC1402 (20)
OPN 1990 SC1744 (6)
RF 1991 SC 933 (10)
ACT:
Road Transport-Nationalisation-Scheme proposed by State
Trans-port Undertaking approved by Government-Procedure, if
violative of fundamental rights-Scheme, if ultra vires-State
Government, if must act judicially in approving the scheme
Colourable legislation’, Meaning of-Motor Vehicles Act (IV
Of 1939), as amended by Act 100 of 1956, Ch. IVA, ss. 68C,
68D-Constitution of India, Art. 31.
HEADNOTE:
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With a view to nationalise the road transport services under
Ch. IV A of the Motor Vehicles Act, 1939 (IV Of 1939),
inserted into it by the amending Act 100 of 1956, the
General Manager of Andhra State Transport Undertaking
published a scheme under s. 68C of the Act in the Official
Gazette and invited objections thereto. By an order of the
Chief Minister the objections were received and heard by the
Secretary to the Home Department, who was in charge of
Transport, but were decided by the Chief Minister. The
State Government approved of the scheme and published it in
the Official Gazette. The petitioners, who were plying
their buses on various routes in the Krishna District as
permit-holders under the Act, apprehending that their routes
would be taken over by the newly established State
Corporation in implementation of the scheme, applied to this
Court for the protection of their fundamental rights to
carry on their business. It was contended, inter alia, on
their behalf, (i) that Ch. IVA of the Act was a piece of
colourable legislation whose real object was to take over
their business, under cover of cancellation of permits, in
contravention of Art. 31 of the Constitution, (2) that the
scheme itself was ultra vires the Act, for the reason,
amongst others, that the State Government whose duty it was
to act judicially in approving the scheme, had transgressed
certain fundamental principles of natural justice.
Held (Per curiam), that the question of colourable
legislation was, in substance, really one of legislative
competence of the legislature that enacted it. The
legislature could only make laws within its legislative
competence. Its legislative field might be circumscribed by
specific legislative entries or limited by fundamental
rights created by the Constitution. The legislature could
not over-step the field of its competency, directly or
indirectly. It would be for the Court to scrutinize if the
legislature in purporting to make a law within its sphere,
in effect and substance,
320
reached beyond it, it had infact the power to the law, its
motive in making it would be irrelevant.
K. C. Gajapaji Narayan Deo v. The’ State of Orissa, [1954]
S.C.R. i, followed.
The State of Bihar v. Maharajadhiraja sir Kameshwar singh
of darbhangha [1952] S.C R 889 considered
So judged; it could not said that CH. IVA of the Act was a
colourable piece of legislation.
The power vested in the Regional’ Transport Authority by s.
68F of the Act involved no transfer of business of the-
,existing permit-holders to the State Transport Undertaking-
nor could the latter be said thereunder to take over any
assets of the former. Section 68G of the Act in providing
for compensation for un expired period of the permit did not
imply that CH. IVA of the Act involved any transfer of
property or possession so as to entitle the permit-holder to
any compensation under Art. 31(2) Of the Constitution.
Chapter 1VA of the Act did not, therefore infringe the
fundamental right of the petitioners under’ Art. 31 Of the
Constitution.
Per Das, C. J., Bhagwati, and Subba Rao, jj.-While the
purpose of s. 68C of the Act was no doubt to provide a
scheme of road transport service on the lines prescribed by
it, the scheme proposed might affect the rights of
individual permit holders by excluding them, partially or
completely, from the business in any particular route or
routes, and the procedure prescribed by s. 68D and Rules 8
and 10 framed under the Act, required that the Government
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should hear both the objectors and the State Transport
Undertaking before approving or modifying the scheme. There
was no doubt, therefore, that the State was deciding a lis
and it was to do so judicially.
Province of Bombay v. Kusaldas S. Advani, [1950] S.C.R. 621,
Nagendra Nath Bora v. Commissioner, Hills Division, [1958]
S.C.R. 124o and Express Newspapers Ltd. v. The Union of
India, [1959] S.C.R. 12, relied on.
Franklin v. Minister of Town and Country Planning, [19481
A. C. 87, held inapplicable.
It was a fundamental principle of natural justice that the
authority empowered to decide a matter must have no bias in
it and another, no less fundamental, was that where the Act
provided for a personal hearing the authority that heard the
matter must also decide it. The procedure followed in the
instant case whereby the Home Secretary, in charge of
Transport, himself a party to the dispute, heard the
objections and the Chief Minister decided them, violated
those principles, and the order of the State Government
approving the scheme, therefore,must be quashed.
Per Sinha and Wanchoo, jj.-The sole object of Ch. IVA, of
the Act was to nationalise the road, transport services and
the inquiry envisaged by it was of a limited character.
That inquiry
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was meant to find out whether the scheme propounded was in
public interest as required by s. 68C of the Act, and not to
adjudicate rival claim of permit-holder on the one hand and
the State Transport Undertaking on the other ; for, on
approval of the scheme, exclusion of private transport as
proposed by the scheme was bound to follow as a matter of
course. There could, therefore, be no lis, and the
Government in approving or modifying the scheme under Ch.
IVA and the Rules framed thereunder must be held to act in
its normal administrative capacity. No objections could be
taken, in the instant case, to the procedure adopted by the
Government in empowering the Secretary to hear objections
while the Chief Minister decided them, and the Secretary
could in no sense be a party to any dispute.
Province of Bombay v. Kusaldas S. Advani, [1950] S.C.R. 621,
Nagendra Nath Bora v. Commissioner, Hills Division, [1958]
S.C.R. 1240 and Express Newspapers Ltd. v. The Union of
India, [1959 S.C.R. 12, referred to.
Franklin v. Minister of Town and Country Planning, [19481
A.C. 87, applied.
Robinson v. Minister of Town and Country Planning, [1947] I
All E. R. 851, referred to.
JUDGMENT:
ORIGINAL JURISDICTION: Petition No. 100 of 1958.
Petition under Article 32 of the Constitution for
enforcement of fundamental rights.
M. K. Nambyar, K. Mangachari, G. Suryanarayana and P. V.
R. Patachari, for the petitioners and intervener.
M. C. Setalvad, Attorney General for India, R. Ganapathi
lyer, P. R. Ramachandra Rao and T. M. Sen, for the
respondents.
1958. November 5. The Judgment of Das, C. J., Bhagwati and
Subba Rao, JJ., was delivered by Subba Rao, J. Sinha and
Wanchoo, JJ., delivered separate judgments.
SUBBA RAO, J.-This is an application under Art. 32 of the
Constitution for the enforcement of the petitioners
fundamental right to carry on the business of motor
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transport in Krishna District in Andhra Pradesh, and for
prohibiting the respondents from taking over the routes on
which the petitioners have been plying their stage
carriages.
41
322
The petitioners have been carrying on motor transport
business in Krishna District for several years past by
obtaining permits under the Motor Vehicles Act, 1939 (IV of
1939), as amended by Act 100 of 1956, hereinafter called the
Act, in respect of various routes. They estimate the value
of their investment in the -business at a sum of Rs.
20,00,000.
The amending Act inserted a new Chapter IV-A in the Act
providing for the State Transport Undertaking running the
business to the exclusion, complete or partial, of all other
persons doing business in the State. Chapter IV-A provided
for a machinery called the State Transport Undertaking,
defined under s. 68-A(b) as an undertaking providing road
transport service, to run the transport business in the
State. In exercise of the powers conferred by s. 68-C of
the Act, one Shri Guru Pershad, styled as the General
Manager of the State Transport Undertaking of the Andhra
Pradesh Road Transport, published a scheme for the purpose
of providing an efficient, adequate, economical and properly
coordinated transport service in public interest to operate
the transport service mentioned therein with effect from the
date notified by the State Government. Objections were in-
vited within 30 days from the date of the publication of the
proposal in the Official Gazette, viz., November 14, 1957.
138 objections were received. Individual notices were
issued by the State Government by registered post to all the
objectors. On December 26, 1957, the Secretary to
Government, Home Department, in charge of transport, heard
the objections. 88 of the objectors represented their cases
through their advocates ; three of them represented their
cases personally and the rest were not present at the time
of hearing. After considering all the objections and after
giving an opportunity to the objectors, their
representatives and the representatives of the State
Transport Undertaking the State Government found that the
objections to the scheme were devoid of substance. On that
finding, the State Government approved of the scheme in G.O.
Ms. 58, Home (Transport IV), dated January 7, 1958, and the
approved scheme was published in the
323
Andhra Pradesh Gazette dated January 9, 1958. The scheme
was ordered to come into force with effect from January 10,
1958. The Government of Andhra Pradesh also established a
Road Transport Corporation under the Road Transport
Corporations Act, 1950 (LXIV of 1950), called the Andhra
Pradesh Road Transport Corporation, with effect from January
I I,’ 1958, and by its order dated January 11, 1958, the
said Corporation was empowered to take over the management
of the erstwhile Road Transport Department. The said
Transport Corporation is now implementing the scheme of
nationalisation of bus transport under a phased programme.
The petitioners, who are plying their buses on various
routes in Krishna District, apprehending that their routes
would be taken over by the Corporation pursuant to the
aforesaid scheme, seek the aid of this Court to protect
their fundamental right to carry on their business against
the action of the State Corporation on various grounds.
Mr. M.K. Nambiar, appearing for the petitioners, contends
that the scheme, in pursuance of which the bus routes
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operated by the petitioners are sought to be taken over by
the State Road Transport Corporation, is ultra vires and
illegal on two grounds, viz., (a) that the provisions of
Chapter IV-A of the Act violates the fundamental rights
secured to the citizens by the Constitution and (b) that the
scheme frained under the, Act is ultra vires the Act.
The first ground is sought to be supported by the contention
that Chapter IV-A of the Act, in substance and effect,
authorizes the State to acquire the undertakings of citizens
without providing for compensation for the entire
undertakings and therefore it is a fraud on the
Constitution, particularly on Art. 31 thereof. Shortly
stated, his argument is that under Art. 31 of the
Constitution no law shall be made for the transfer of
ownership or right to possession of any property to the
State or to a Corporation without fixing the amount of
compensation or specifying the principles on which
compensation is to be determined and given, and that Chapter
IV-A of the Act is a colourable legislation enabling such a
transfer of ownership without providing
324
for compensation for the property transferred, under the
guise of cancellation of a permit.
To appreciate this argument it would be convenient, at this
stage, to read the relevant provisions of the Articles of
the Constitution, omitting the words unnecessary for the
purpose of this case.
Art. 191 : All citizens shall have the right-
(g) to practise any profession, or to carry on any
occupation, trade or business.
(6) Nothing in sub-clause (g) of the said clause shall
affect the operation of any existing law in so far as it
imposes, or prevents the State from making any law imposing,
in the interests of the general public, reasonable
restrictions on the exercise of the right conferred by the
said sub-clause, and, in particular, nothing in the said
sub-clause, shall affect the operation of any existing law
in so far as it relates to, or prevent the State from making
any law relating to--
(i).........................................................
(ii) the carrying on by the State, or by a Corporation owned
or controlled by the State, of any trade, business, industry
or service, whether to the exclusion, complete or partial,
of citizens or otherwise.
Art. 311: No person shall be deprived of his property save
by authority of law.
(2) No property shall be compulsorily acquired or
requisitioned save for a public purpose and save by
authority of a law which provides for compensation for the
property so acquired or requisitioned and either fixes the
amount of the compensation or specifies the principles on
which, and the manner in which, the compensation is to be
determined and given; and no such law shall be called in
question in any ’Court on the ground that the compensation
provided by that law is not adequate.
(2A) Where a law does not provide for the transfer of the
ownership or right to possession of any property to the
State or to a Corporation owned or controlled by the State,
it shall not be deemed to
325
provide for the compulsory acquisition or requisitioning of
property, notwithstanding that it deprives any
person of his property."
The Constitution (First) Amendment Act of 1951, which came
into force on June 18, 1951, amended cl. (6) of Art. 19 by
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adding sub-cl. (ii) to that clause, along with other
amendments. Clause (2) of Art. 31 has been amended, and cl.
(2A) has been inserted by the Constitution (Fourth)
Amendment Act, 1955. Clause (2A) has been inserted with a
view to supersede the majority decisions of this Court in
the cases of State of West Bengal v. Subodh Gopal Bose (1),
Dwarkadas Shriniwas of Bombay v. Sholapur Spinning and
Weaving Co. Ltd. (2) and Saghir Ahmed v. State of U.P. (3).
In Subodh Gopal’s case, a majority of a Bench of this Court
held:
Clauses (1) and (2) of Art. 31 are thus not mutually
exclusive in scope and content, but should in my view, be
read together and understood as dealing with the same
subject, namely, the protection of the right to property by
means of the limitations on the State power referred to
above, the deprivation contemplated in clause (1) being no
other than the acquisition or taking possession of property
referred to in clause (2)." In Dwarkadas’s case (1),this
Court, while confirming the aforesaid principle, held that
the word ’acquisition’ has quite a wide concept, meaning the
procuring of property or the taking of it permanently or
temporarily and need not be confined to the acquisition of
legal title by the State in the property taken possession of
In Saghir Ahmed’s case (3) applying the said principles,
this Court held (at p. 728):
" If the effect of prohibition of the trade or business of
the appellants (citizens) by the impugned legislation
amounts to deprivation of their property or interest in a
commercial undertaking within the meaning of Art. 31 (2) of
the Constitution, does not the legislation offend against
the provision of that clause inasmuch as no provision for
compensation has been
made in the Act? "
(1) [1954] S.C.R. 587, 608.
(2) [1954] S.C.R. 674.
(3) [1955] 1 S.C.R. 707, 728.
326
It may be noted that though the said decision was given
after the Constitution (First) Amendment Act 195 1, amending
Art. 19 (6), it dealt with a matter that arose before the
said amendment came into force. In the aforesaid decisions,
this Court by a majority broadly laid down the two
principles: (a) that both cls. (1) and (2) of Art. 31 dealt
with the doctrine of ’eminent domain’; they dealt with the
topic of ’compulsory acquisition of property’; and (b) that
the word ‘acquisition’ does not necessarily imply
acquisition of legal title by the State in the property
taken possession of, but may comprehend cases where the
citizen has been ’substantially dispossessed’ of the right
to onion the property, with the result that the right to
enjoy property has been seriously’ impaired or the value of
the property has been ’materially’ reduced by the impugned
State legislation.
The Constitution (Fourth) Amendment Act, 1955, amended cl.
(2) of Art. 31 and inserted cl. (2A) in that Article. The
amendments, in so far as they are relevant to the present
purpose, substitute in place of the words ’taken possession
of or acquired’ the words ’compulsorily acquired or
requisitioned’ and provide an explanation of the words
‘acquired and requisitioned’ in cl. (2A). The result is
that unless the law depriving any person of his property
provides for the transfer of the ownership or right to the
possession of any property to the State, the law does not
relate to ’acqtuisition or requisition’ of property and
therefore the limitations placed upon the legislature under
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cl. (2) will not apply to such law. While realising this
legal position brought about by the amendment to the Con-
stitution, the learned counsel contends that the right to do
business is property as held in Saghir Ahmad’s case(1) and
that Chapter IV-A of the Act in effect transfers ownership
of that business to the Corporation, owned or controlled by
the State, though not directly but by the dual process of
preventing the citizen from doing the business and enabling
the Corporation to do the same business in his place and
that that result is effected by a device with a view to
avoid payment of
(1) [1955] i S.C.R. 707, 728.
327
compensation for the entire business so transferred. The
colourable nature of the legislation, the argument proceeds,
lies in its device or contrivance to evade limitations
imposed under Art. 31 (2). To solve the problem presented,
it is necessary to have a correct appreciation of the phrase
‘colourable legislation’. This Court considered this
question in The State of Bihar v. Maharajadhiraja Sir
Kameshwar Singh of Darbhanga(l). In that case the
constitutional validity of the Bihar Land Reforms Act, 1950
(Bihar 30 of 1950), was questioned. In the context of the
Bihar Land Reforms Act, 1950 (Bihar 30 of 1950), it was
contended that the impugned Act was a fraud on the Constitu-
tion and therefore void. It -was stated that the Act, while
pretending to comply with the Constitutional provisions when
it provided for the payment of compensation, in effect
produced a scheme for non-payment of compensation by shift
or contrivance. Mahajan, J., as he then was, in rejecting
the argument observed at p. 947, thus:
" All these principles are well-settled. But the question
is whether they have any application to the present case.
It is by no means easy to impute a dishonest motive to the
legislature of a State and hold that it acted mala fide and
maliciously in passing the Bihar Land Reforms Act or that it
perpetrated a fraud on the Constitution by enacting this
law. It may be that some of the provisions of the Act may
operate harshly on certain persons or a few of the zamindars
and may be bad if they are in excess of the legislative
power of the Bihar Legislature but from that circumstance it
does not follow that the whole enactment is a fraud on the
Constitution. From the premises that the estates of half-a-
dozen zamindars may be expropriated without payment of
compensation, one cannot jump to the conclusion that the
whole of the enactment is a, fraud on the Constitution or
that all the provisions as to payment of compensation are
illusory."
The aforesaid observations lend support to the argument that
the doctrine of colourable legislation imputes dishonest
motive or mala fides to the State
(1) [1952] S.C.R. 889.
328
making the law. But, Mukherjea, J., as he then was,
clarified the legal position in K. C. Gajapati Narayan Deo
v. The State of Orissa (1). It was contended in that case
that the Orissa Estates Abolition Act, 1952, was a
colourable legislation and as such void. Adverting to that
argument, Mukherjea, J., as he then was, says at p. 10 thus:
" It may be made clear at the outset that the doctrine of
colourable legislation does not involve any question of bona
fides or mala fides on the part of the legislature. The
whole doctrine resolves itself into the question of
competency of a particular legislature to enact a particular
law. If the legislature is competent to pass a particular
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law, the motives which impelled it to act are really
irrelevant. On the other hand, if the legislature lacks
competency, the question of motive does not arise at all.
Whether a statute is constitutional or not is thus always a
question of power......... ...... If the Constitution of a
State distributes the legislative powers amongst different
bodies, which have to act within their respective spheres
marked out by specific legislative entries, or if there are
limitations on the legislative authority in the shape of
fundamedtal rights, questions do arise as to whether the
legislature in a particular case has or has not, in respect
to the subject matter of the statute or in the method of
enacting it, transgressed the limits of its constitutional
powers. Such transgression may be patent, manifest or
direct, but it may also be disguised, covert and indirect
and it is to this latter class of cases that the expression
’colourable legislation’ has been applied in certain
judicial pronouncements. The idea conveyed by the
expression is that although apparently a legislature in
passing a statute purported to act within the limits of its
powers, yet in substance and in reality it transgressed
these powers, the transgression being veiled by what appears
on proper examination, to be a mere presence or disguise.
As was said by Duff, J., in Attorney-General for Ontario v.
Reciprocal Insurers (1924 A. C. 328 at p. 337):
" Where the law making authority is of a limited or
qualified character it may be necessary to examine
(1) [1954] S.C.R. i.
329
with some strictness the substance of the legislation for
the purpose of determining what is that the legislature is
really doing.’
In other words, it is the substance of the Act that is
material and not merely the form or outward appearance, and
if the subject-matter in substance is, something which is
beyond the powers of that legislature to legislate upon, the
form in which the law is clothed would not save it from
condemnation. The legislature cannot violate the
constitutional prohibitions by employing an indirect
method."
We have quoted the observations in extensor as they neatly
summarise the law on the subject. The legal position may be
briefly stated thus: The legislature can only make laws
within it legislative competence. Its legislative field may
be circumscribed by specific legislative entries or limited
by fundamental rights created by the Constitution. The
legislature cannot over-step the field of its competency,
directly or indirectly. The Court will scrutinize the law
to ascertain whether the legislature by device put-ports to
make a law which, though in form appears to be within its
sphere, in effect and substance, reaches beyond it. If, in
fact, it has power to make the law, its motives in making
the law are irrelevant.
The learned counsel for the petitioners can only succeed if
he can establish’ that the provisions of Chapter IV-A
constitute colourable legislation within the meaning of the
aforesaid definition. To test the validity of the argument,
it may be summarised thus : Business is I property’ within
the meaning of Art. 191 (g) of the Constitution. Chapter
IV-A of the Act transfers the business to the Corporation
controlled. by the State Government. Such a law should have
provided for payment of compensation for the business
transferred to the State Corporation ; instead, it adopted
the device of cancelling the permit of the citizen and
giving it to the Corporation and providing compensation to
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the citizen only for tile unexpired period of the permit.
42
330
We shall now proceed to ascertain whether any of the
aforesaid ingredients of device or contrivance are
established in this case. Does Chapter IV-A, in effect and
substance, authorize, in law or fact, the transfer of the
business of the citizens to the State or a Corporation,
owned or controlled by the State ? Under Art. 191 of the
Constitution, every citizen has a fundamental right to carry
on any business subject to reasonable restrictions imposed
by the State under cl. (6) of Art. 19 in the interest of the
general public. The Constitution (First) Amendment Act,
1951, reserved to the State the right to make law for
carrying on by the State or by a Corporation, owned or
controlled by the State, any business to the exclusion,
complete or partial, of the citizens or otherwise. The
Constitution, therefore, enables the State to make a law
placing reasonable restrictions on the right of a citizen to
do business or to create a monopoly or to make a law
empowering the State to carry on business to the exclusion
of a citizen. The right to carry on business in transport
vehicles on public pathways is certainly one of the
fundamental rights recognized under Art. 19 of the
Constitution. The Motor Vehicles Act, 1939 (IV of 1939),
regulates the right of a citizen to carry on the said
business for protecting the rights of the public generally.
’Permit’ is defined under cl. (20) of s. 2 of the Act to
mean the document issued by the Commission or a State or
Regional Transport Authority authorising the use of a
transport vehicle as a contract carriage or stage carriage,
or authorising the owner as a private carrier or public
carrier to use such vehicle. Section 57 of the Act
prescribes the procedure for applying for and granting
permits to carry on the business in transport vehicles on
public highways. Section 47 lays down the matters to be
considered by the Regional Transport Authority in the
disposal of applications for such transport carriers.
Section 59 gives the conditions of every permit and also
prohibits the transfer of permit. from one person to another
except with the permission of the Transport Authority.
Under s. 60, the Transport Authority which granted permit
may cancel the permit or may suspend it for
331
such period as it thinks fit for any of the reasons
mentioned therein. Section 61 provides for cases where, a
permit-holder dies. That section enables the success-. sor
to use the permit for a period of three months and to get
the permit transferred to him subject to the conditions laid
down therein. Section 68-F authorises the Regional
Transport Authority, for the purpose of giving effect to an
approved scheme in respect of a notified area or notified
route, to refuse to entertain any application for the
renewal of any other permit, to cancel any existing permit,
to modify the terms of any existing permit so as to render
the permit ineffective beyond a specified date, and to
reduce the number of vehicles authorised to be used under
the permit. It is manifest from the aforesaid provisions
that the Regional Transport Authority can, in exercise of
its regulatory power conferred on it in the interest of the
public, issue a permit to a ’person in regard to a stage
carriage authorising him to use the same in a particular
route for a particular period subject to the conditions laid
down in the permit, suspend or cancel the same under
specified conditions, and renew or refuse to renew the same
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after the expiry of the period subject to the conditions
laid down in the Act. Under Ch. IV-A, if a scheme has been
promulgated empowering the State Transport Undertaking to
take on hand the transport service in relation to any area,
route or portion thereof to the exclusion of any person, who
has been carrying on the business in that route, the
Transport Authority is empowered to cancel the existing
permit and issue a permit to the State Transport
Undertaking. It cannot be said that if the Transport
Authority cancels the permit of a person carrying on his
transport business in a route and gives it to another, the
process in. volves a transfer of business or undertaking of
the quondam permit-holder to the new entrant. Indeed the
process does not involve even a transfer of the permit from
one to another. The true position is that one permit comes
to an end and another permit comes into being. The power of
cancellation of a permit in favour of one and issuing a new
permit to another are
332
necessary steps in the regulatory jurisdiction entrusted to
the Regional Transport Authority. The business of one has
nothing to do with the business of another; they are two
independent businesses carried on under two different
licences. If that be the true legal position in the case of
issue of permits -before -Chapter IV-A was inserted in the
Act, we cannot see that the power of cancellation of an
existing permit and issuing one to the State Transport
Undertaking should involve a transfer of the previous
permit-holder’s business to the State Transport Undertaking.
The argument that the process contemplated by s. 68-F of the
Act involves two integrated steps, viz., cancelling the
existing permit and preventing the previous permit-holder
from doing the business and then issuing a permit to a
nominee of the State to enable it to do the same business
and thereby, in effect and substance, transferring the
business of the existing permit-holder to the State or its
nominee, appears to be attractive, but, in our view, it is
fallacious. It may be that by the said process the existing
permit-holder is precluded from doing his business and it
may also be that the State Transport Undertaking carries on
a similar business; but by no stretch of language or
extension of legal fiction can it be said that the State
Transport Undertaking is doing the same business which the
previous permit- holder was doing. If there is no transfer
in the case of cancellation of a permit in favour of one and
issue of a new permit to another, equally there cannot be
any such transfer in the case of issue of a permit to the
State Transport Undertaking. Looking at the business not
simply from the standpoint of the right to do it or the
activity involved in it, but also from the standpoint of its
assets, it becomes clear that no assets pertaining to the
business of the quondam permit-holder are transferred to the
State Transport Undertaking. Though the cancellation of the
permit has the effect of crippling his business, none of the
assets of the business is taken over by the State Transport
Undertaking; he is left in the possession of the entire
assets of the business. It is no doubt true that in the
context of the scheme of nationalisation he may not be able
to make
333
use of his assets in other routes or dispose of them at a
great advantage to himself; but, it cannot be said that by
cancelling the permit, what is left with him is only the ’
husk’. In fact the entire assets of the business are left
with him and the State Transport Undertaking has not taken
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over the same.
Lastly it is said that ss. 68-G of the Act which provides
for payment of compensation to the holder of the permit,
indicates that the legislature proceeded on the basis that
the cancellation of a permit involved a transfer of
property’ from the previous permit-holder to the State. In
our view, no such irresistible conclusion flows from the
said provision; as the permit is cancelled before the expiry
of the term fixed therein, the legislature thought it fit
and proper to give some compensation to the permit-holder
who is prevented from doing his business for the unexpired
period of the permit. Whether it is enacted by way of
abundant caution, as the learned Attorney General says, or
the provision is made by the legislature to mitigate the
hardship that is caused to the permit-holder by the
premature cancellation of the permit, we find it difficult
to draw the inference from the said provision that the
legislature assumed that a transfer of the business is
involved in the process laid down in Chapter IV-A. We
therefore bold that Chapter IV-A of the Act does not provide
for the transfer of ownership or the right to possession of
any property to the State or to a Corporation, Owned or
controlled by the State. Under Art. 31 of the Constitution
unless there is such a transfer, the law shall be deemed not
to provide for compulsory acquisition or requisition of
property ; and therefore, in such a case, no compensation
need be provided for under Art. 31(2) of the Constitution.
We therefore hold that Chapter IV-A of the Act does not
infringe the fundamental right of the petitioners under Art.
31 of the Constitution of India.
The next argument of the learned counsel for the petitioners
is that even if Chapter 1V-A of the Act is constitutionally
valid, the petitioners could be deprived of their rights
only in accordance with the law enacted for the purpose and
in the manner provided
334
therein, and that in the present case, the scheme was
promulgated in derogation of the provision of the said
Chapter. The learned counsel contends that the provisions
of Bs. 68-C and 68-D have not been complied with in framing
the scheme. The learned counsel’s contentions in this
regard fall under different sub-heads, and we shall proceed
to consider them seriatim.
The first contention is that no State Transport Undertaking
is constituted under the Central Act and therefore the
scheme initiated by the said Transport Undertaking
constituted under the Motor Vehicles (Hyderabad Amendment)
Act, 1956, ",as bad. To appreciate this argument some of
the facts may be stated. Before the State of Andhra Pradesh
was formed in November 1956, eight districts, popularly
called the Telengana, which are now in the Andhra Pradesh
State, were formerly part of the Hyderabad State. On
September 29, 1956, the Motor Vehicles (Hyderabad Amendment)
Act, 1956, became law, whereunder Chapter IV-A was inserted
in the Central Act in its application to the State of
Hyderabad. Under s. 68_ A of Chapter IV-A of that Act, the
State Transport Undertaking was defined to mean the Road
Transport Department of the State providing road service.
Under that Act, therefore, the Road Transport Department of
the Hyderabad State was functioning as a statutory
authority. After the States Reorganisation Act came into
force, the said eight districts of the Hyderabad State
became part of the State of Andhra Pradesh; with the result
that the Road Transport Department of the Hyderabad State
became the Road Transport Department of the State of Andhra
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Pradesh, though it was exercising its powers only in respect
of that part of the Andhra Pradesh State, popularly known as
Telengana. After the Andhra Pradesh State was formed, Sri
Guru Pershad, styled as the General Manager of the Andhra
Pradesh Road Transport Undertaking, published the scheme
under s. 68-C of the Act. The argument is that the State
Transport Authority constituted under Chapter IV-A of the
Hyderabad (Amendment) Act was not legally
335
constituted as the State Transport Undertaking under the
Central Act and, therefore, the initiation of the scheme by
the Hyderabad State Transport Undertaking, which has no
legal status under the Central Act was bad. It is also
pointed out that the State Transport Authority under the
Hyderabad Act differs from that under the Central Act in the
following three, respects: (1) statutory parentage; (2)
character and constitution ; and (3) territorial
jurisdiction; and therefore the authority constituted under
the Hyderabad Act cannot function under the Central Act.
This argument has no relevancy to the facts of the present
case. We are not concerned in this case with a statutory
authority created under one Act and pressed into service for
the purpose of another Act, when the latter has adopted the
said statutory authority as one constituted under that Act.
Here there is the Andhra Pradesh Road Transport Department
providing road transport service in Telengana, which is a
part of that State, and that Department, when it was a part
of the Hyderabad State was functioning as part of the
Hyderabad State Secretariat. The mere fact that the Road
Transport Department of the Andhra Pradesh State was
originally part of a department of another State and came
under the definition of the State Transport Undertaking of
the Hyderabad Act could not make the said department any the
less the Road Transport Department of the Andhra Pradesh
State. Assuming. for a moment that the Hyderabad Act is
still in force in the Telengatia area, there is nothing in
law which prevents a department coming under the definition
of two statutes. Under the Act, the State Transport
Undertaking means an Undertaking providing road trasport
service where such undertaking is carried on by a State
Government. This section does not prescribe the parentage
of the undertaking or impose a condition that the
undertaking should be providing transport service throughout
the State. The State Government maintained the department
for providing road transport service and therefore the
department clearly falls within the definition of State
Transport Undertaking. The citation from Salmond on,
336
Jurisprudence to the. effect that the law in creating legal
persons always does so by personifying some real thing does
not touch the question that falls to be decided in this
case; for, the real thing, viz., the department, falls under
the definition of both the Acts and therefore it can
function as a statutory authority under both the -Acts. We
therefore hold that the Road Transport Department of the
Andhra Pradesh Government is a State Transport Undertaking
under the Central Act and therefore it was within its legal
competence to initiate the scheme.
The next objection raised is that the scheme was published
by Sri Guru Pershad, the General Manager of the State
Transport Undertaking and that it has not been established
that he had been legally authorized to represent the State
Transport Undertaking, the statutory authority constituted
under the Act. We have already held that the Transport
Department of the disintegrated Hyderabad State continued to
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function as the Transport Department of the Andhra Pradesh
State after the merger of Telengana areas with the Andhra
State. In the affidavit filed by the petitioners, it is
stated that Sri Guru Pershad was the General Manager of the
Road Transport Department of the erstwhile Hyderabad State,
that he was never appointed as the General Manager of the
State Transport Undertaking of the Andhra Pradesh State and
that, therefore, he had no legal authority whatever to
publish the scheme. In the counter affidavit filed on
behalf of the first respondent, it is averred that the
General Manager of the Andhra Pradesh Road Transport, which
was a State Transport Undertaking within the meaning of s.
68-B of the Act, prepared a scheme and that was published in
the Andhra Pradesh Gazette on November 14, 1957. It is
therefore a common case that Sri Guru Pershad was the
General Manager of the Road Transport Undertaking of the
erstwhile Hyderabad State. It is not denied that Sri Guru
Pershad continued to be the General Manager of that
Department functioning in Andhra Pradesh. We have already
held that the same department was the statutory authority
functioning under
337
the Central Act. Sri Guru Pershad was also the General
Manager of that undertaking. In the circumstances, there is
no substance in the contention that Sri Guru Pershad should
have been appointed as the -General Manager of the
Undertaking under the Central Act. This is the first
argument under a different garb. The preexisting Road
Transport Department of the erstwhile Hyderabad State, with
its General Manager, Sri Guru Pershad, continued to function
as a statutory authority under the Central Act and therefore
he had the legal authority to represent the State Transport
Undertaking, which was a statutory authority. lie published
the scheme and subscribed it as Guru Pershad, the General
Manager of the State Transport Undertaking (Andhra Pradesh
State Road Transport). The notification, therefore, must be
held to have been issued by the State Transport Undertaking
functioning under the Central Act.
The learned counsel then contends that the scheme published
does not disclose that the State Transport Undertaking was
of the opinion that the scheme was necessary in the
interests of the public and, therefore, -is the necessary
condition for the initiation of the scheme was not complied
with, the scheme could not be enforced. Section 68-C says
that where any State Transport Undertaking is of opinion
that for specified reasons it is necessary in the public
interest that road port service should be run or operated by
the Transport Undertaking, it may prepare a scheme giving
particulars of the scheme and publish it in the Official
Gazette. An express recital of the formation of the opinion
by the Undertaking in the scheme is not made a condition of
the validity of the scheme. The scheme published in terms
of the section shall give particulars of the nature of the
service proposed to be rendered, the area or route proposed
to be covered and such other particulars respecting thereto.
It is true that the preparation of the scheme is made to
depend upon the subjective opinion of the State Undertaking
as regards the necessity for such a scheme. The
43
338
only question, therefore, is whether the State Transport
Undertaking formed the opinion before preparing the scheme
and causing it to be published in the Official Gazette. The
scheme published, as already noticed, was signed by Guru
Pershad, General Manager, State Transport Undertaking,
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Andhra Pradesh Road Transport. The preamble to the scheme
reads :
" In exercise of the powers conferred by section 68-C of the
Motor Vehicles Act, 1939, it is hereby proposed, for the
purpose of providing an efficient, adequate, economical and
properly coordinated road transport service in public
interest, to operate the following transport services as per
the particulars given below with effect from a date to be
notified by the Government."
We have already held that Guru Pershad represented the State
Transport Undertaking. The scheme was proposed by the said
Undertaking in exercise of the powers under s. 68-C of the
Act for the purpose of providing an efficient, adequate,
economical and properly coordinated road transport service
in public interest. Except for the fact that the word
’opinion’ is omitted, the first part of the section 68-C is
incorporated in the preamble of the scheme ; and, in
addition, it also discloses that the scheme is proposed in
exercise of the powers conferred on the State Transport
Undertaking under s. 68-C of the Act. The State Transport
Authority can frame a scheme only if it is of opinion that
it is necessary in public interest that the road transport
service should be run or operated by the Road Transport Un-
dertaking. When it proposes, for the reasons mentioned in
the section, a scheme providing for such a transport
undertaking, it is a manifest expression of its opinion in
that regard. We gather from a reading of the scheme that
the State Transport Undertaking formed the necessary opinion
before preparing the scheme and publishing it. The argument
of the learned counsel carries technicality to a breaking
point and for the aforesaid reasons, we reject it.
The next attack of the learned counsel centres round the
provisions of s. 68-D (2) of the Act. It would be
convenient, before adverting to his argument, to read
339
s. 68-D and the relevant rules made under the Act. They
read :
Sec. 68-D : (1) Any person affected by the scheme published
under s. 68-C may, within thirty days from the date of the
publication of the scheme in the Official Gazette, file
objections thereto before the State Government.
(2) The State Government may, after considering the
objections and after giving an opportunity to the objector
or his representatives and the representatives of the State
Transport Undertaking to be heard in the matter, if they so
desire, approve or modify the scheme.
(3) The scheme as approved or modified under sub-section
(2) shall then be published in the Official 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 unless
it has been published in the Official Gazette with previous
approval of the Central Government.
Rule 8 : Filing of objections (procedure)
Any person, concern or authority aggrieved by the scheme
published under s. 68-C may, within the specified period,
file before the Secretary to Government in charge of
Transport Department, objections and representations in
writing setting forth concisely the reasons in support
thereof
Rule 9 : Conditions for submission of objections
No representation or objection in respect of any scheme
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published in the Official Gazette shall be considered by the
Government unless it is made in accordance with rule 8.
Rule 10 : Consideration of scheme (Procedure regarding) :-
After the receipt of the objections referred to above, the
Government may, after fixing the date, time and place for
holding an enquiry and after giving if they so desire, at
least seven clear days’ notice of
340
such time and place to the persons who filed objections
under rule 8, proceed to consider the objections and pass
such orders as they may deem fit after giving an Opportunity
to the person of,being heard in person or through authorised
representatives."
Under the section, the procedure prescribed for the approval
of a scheme may be summarized thus : The State Transport
Undertaking prepares a scheme providing for road transport
service in relation to an area, to be run or operated by the
State Transport Undertaking, whether to the exclusion,
complete or partial, of other persons, and publishes it in
the Official Gazette. Any person affected by the scheme may,
within thirty days from the date of its publication, file
before the Secretary to Government in charge of Transport
Department objections and representations in writing with
reasons in support thereof. After receiving the objections
and representations, the Government fixes a date for the
hearing and after giving an opportunity to the persons of
being heard in person or by authorized representatives,
considers the objections and then modifies or approves of
the scheme.
The following procedure was in fact followed by the
Government in this case: After the scheme was prepared and
published in the Official Gazette, the petitioners and
others filed objections before the Secretary to Government
Transport Department, within the time prescribed. 138
objections were received and individual notices were issued
by the Government by registered post to all. the objectors
fixing the date of the hearing for December 26, 1957. The
Secretary to Government, Home Department, in charge of
Transport, heard the representations made by the objectors,
some in person and others through their advocates, and also
the representation is made by the General Manager of the
Road Transport Undertaking. The Secretary, after hearing
the objections, prepared notes and placed the entire matter,
with his notes, before the Chief Minister, who considered
the matter and passed orders rejecting the objections and
approving the scheme; and the approved scheme was thereafter
issued in the name of the Governor.
341
On the aforesaid facts, the first contention raised is that
the State Government in approving the scheme was discharging
a quasi-judicial act and therefore the Government should
have given a personal hearing to the objectors instead of
entrusting that duty to its Secretary. Secondly, it is
stated that a judicial hearing implies that the same -person
hears and gives the decision. But in this case the hearing
is given by the Secretary and the decision by the Chief
Minister. Thirdly, it is contended on the same hypothesis,
that even if the hearing given by the Secretary be deemed to
be a hearing given by the State Government, the hearing is
vitiated by the fact that the Secretary who gave the hearing
is the Secretary in charge of the Transport Department. The
Transport Department, it is stated, in effect was made the
judge of its own cause, and this offends one of the
fundamental principles of judicial procedure. Lastly, it
was pointed out that though the enquiry was posted for
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hearing on December 26, 1957, even before the enquiry was
commenced, the Chief Secretary to the Government gave an
interview to the ’Deccan Chronicle’ and the I Golconda
Patrika’ to the effect that the Government bad already taken
a decision to nationalize the road transport in Krishna
District and some routes had been chosen, including the
Guntur-Vijayawada route, thereby indicating that the
Government has prejudged the case before holding the
enquiry. The learned Attorney General counters the said
argument by stating that the State Government strictly
followed the procedure prescribed under s. 68-C of the Act,
that the said Government, being an impersonal body, (gave
the hearing through the machinery prescribed by law, that
the said Government was discharging only an administrative
act and not a judicial act in the matter of approving the
scheme, that even if it did perform a judicial act, the Home
Secretary in charge of Transport Department had only
collected the material and the final orders were made only
by the Chief Minister and that the Secretary’s press
interview was nothing more than a mere indication of the
factum of the proposed scheme.
342
At the outset it would be convenient to consider the
question whether the State Government acts quasijudicially
in discharging its functions under s. 68-C of the Act. The
criteria to ascertain whether a particular act is a judicial
act or an administrative one, have been laid down with
clarity by Lord Justice Atkin ’in Rex v. Electricity
Commissioners, Ex Parte London Electricity Joint Committee
Co. (1) elaborated by Lord Justice Scrutton in Rex v. London
County Council, Ex Parte Entertainments Protection
Association Ltd. (2) and authoritatively re-stated by this
Court in Province of Bombay v. Khusaldas S. Advani (3) .
They laid down the following conditions: (a) the body of
persons must have legal authority; (b) the authority should
be given to determine questions affecting the rights of
subjects and (c) they should have a duty to act judicially.
In the last of the cases cited supra, Das, J., as he then
was, analysed the scope of the third condition thus at page
725:
" (i) that if a statute empowers an authority not being a
Court in the ordinary sense, to decide disputes arising out
of a claim made by one party under the statute which claim
is opposed by another party and to determine the respective
rights of the contesting parties who are opposed to each
other, there is a lis and prima facie and in the absence of
anything in the statute to the contrary it is the duty of
the authority to act judicially and the decision of the
authority is a quasi-judicial act; and
(ii)that if a statutory authority has power to do any act
which will prejudicially affect the subject, then, although
there are not two parties apart from the authority and the
contest is between the authority proposing to the act and
the subject opposing it, the final determination of the
authority will yet be a quasi. judicial act provided the
authority is required by the statute to act judicially."
In the case In re Banwarilal Roy (4) Das, J., as he then
was, said much to the same effect at page 800:
" A judicial or quasi-judicial act, on the other hand,
implies more than mere application of the mind
(1) [1924] 1 K.B. 171.
(3) [1950] S.C.R. 621.
(2) [1931] 2 K.B. 215.
(4) [1944] 48 C.W.N. 766.
343
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or the formation of the opinion. It has reference to the
mode or manner in which that opinion is formed. It implies
a proposal and an opposition’ and a decision on the issue.
It vaguely connotes ’hearing evidence and opposition’ as
Scrutton, L. J., expressed it. The degree of formality of
the procedure as to receiving or hearing evidence may be
more or less according to the requirements of the particular
statute, but there is an indefinable yet an appreciable
difference between the method of doing an administrative or
executive act and a judicial or quasi-judicial act."
This statement is practically in accord with the first
proposition extracted above. This Court again, in Nagendra
Nath Bora v. Commissioner of Hills Division (1) in the
context of the provisions of Eastern Bengal and Assam Excise
Act, 1910 (I of 1910), considered the scope of the concept
of ’judicial act’. Sinha, J., who delivered the. judgment
of the Court, made the following observations at page 408:
" Whether or not an administrative body or authority
functions as a purely administrative one or in a quasi-
judicial capacity, must be determined in each case, on an
examination of the relevant statute and the rules framed
thereunder."
In Express Newspapers Ltd. v. The Union of India (2) this
Court again reviewed the law on the subject to ascertain
whether the Wage Board functioning under the Working
Journalists (Conditions of Service) and Miscellaneous
Provisions Act, 1955 (45 of 1955) was only discharging
administrative functions or quasijudicial functions.
Bhagwati, J., made the following observation at page 613:
" If the functions performed by the Wage Board would thus
consist of the determination of the issues as between a
proposition and an opposition on data and materials gathered
by the Board in answers to the questionnaire issued to all
parties interested and the evidence led before it, there is
no doubt that there would be imported in the proceedings of
the Wage Board a duty to act judicially and the functions
(1) A.I.R. 1958 S. C. 398.
(2) A.I.R. 1958 S.C. 578.
344
performed by the Wage Board would be quasi-judicial in
character."
The aforesaid three decisions lay down that whether an
administrative tribunal has a duty to act judicially should
be gathered from the provisions of the particular statute
and the rules made thereunder, and they clearly express the
view that if an authority is called upon to decide
respective rights of contesting parties or, to put it in
other words, if there is a lis, ordinarily there will be a
duty on the part of the said authority to act judicially.
Applying the aforesaid test, let us scrutinize the
provisions of ss. 68-C and 68-D and the relevant rules made
under the Act to ascertain whether under the said provisions
the State Government performs a judicial act or an
administrative one. Section 68-C may be divided into three
parts: (1) The State Transport Undertaking should come to an
opinion that it is necessary in public interest that the
road transport service in general or any particular. class
of such service in relation to any area or route or portion
thereof should be run or operated by the State Transport
Undertaking, whether to the exclusion, complete or partial,
of other persons or otherwise ; (ii) it forms that opinion
for the purpose of providing an efficient, adequate,
economical and properly co-ordinated road transport service;
and (iii) after it comes to that opinion, it prepares a
scheme giving particulars of the nature of the services
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proposed to be rendered, area or route proposed to be
covered and such other particulars respecting thereto as may
be prescribed and causes it to be published in the Official
Gazette. The section, therefore, makes a clear distinction
between the purpose for which a scheme is framed and the
particulars of the scheme. To state it differently, though
the purpose is to provide an efficient, adequate, economical
and coordinated road transport service in public interest,
the scheme proposed may affect individual rights such as the
exclusion, complete or partial, of other persons or
otherwise, from the business in any particular route or
routes. Under s. 68-C, therefore, the State Transport
Undertaking may propose a scheme affecting the proprietary
rights
345
of individual permit-holders doing transport business in a
particular route or routes.. The said proposal threatens the
proprietary right of that individual or individuals. Under
s. 68-D read with Rules 8 and 10 made under the Act, any
person affected by the aforesaid proposed, scheme may file
objections within the -prescribed time before the Secretary
of the Transport’ Department. Under the said provisions,.
the State Government is enjoined to approve or modify the
scheme after holding an enquiry and after giving an
opportunity to the objectors or their representatives and
the representatives of the State Transport Undertaking to be
heard in the matter in person or through authorised
representatives. Therefore, the, proceeding prescribed is
closely approximated to that obtaining in courts of justice.
There are two parties to the dispute. The State Transport
Undertaking, which is a statutory authority under the Act,
threatens to infringe the rights of a, citizen. The citizen
may object to the scheme on public grounds or on personal
grounds. He may oppose the scheme, on the ground that it is
not in the interest of the public or on the ground that the
route which he is exploiting should be excluded from the
scheme for various reasons., There is, therefore, a proposal
and an opposition and the third party, the State Government
is to decide that lis and prima facie it must do so
judicially. The position is put beyond any doubt by the
provision in the Act and the Rules which expressly require
that the State Government must decide the dispute according
to the procedure prescribed by the Act and the Rules framed
thereunder, viz., after considering the objections and after
hearing. both the parties. It therefore appears to us that
this is an obvious case where the Act imposes a duty on the
State Government to decide the act judicially in approving
or modifying the scheme proposed by the Transport
Undertaking.
The learned Attorney General argues that ss. 68-C and 68-D
do not contemplate the enquiry in regard to the rights of
any parties, that the scheme proposed is
44
346
only for the purpose of an efficient, adequate, economical
and properly coordinated bus transport service and should
relate only to that purpose and that, therefore, the enquiry
contemplated under s. 68-D, though assimilated to a judicial
procedure, does not make the approval of the scheme any the
less an administrative act. To put it shortly, his
contention is that the Government is discharging only an
administrative duty in approving the scheme in public
interest and no rights of the parties are involved in the
process. There is some plausibility and attraction in the
argument, but we cannot accept either the premises or the
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conclusions. The scheme proposed may exclude persons, who
have proprietary rights in a route or routes. As we have
pointed out, the purpose must be distinguished from the
particulars in the scheme. The scheme propounded may
exclude persons from a route or routes and the affected
party is given a remedy to apply to the Government and the
Government is enjoined to decide the dispute between the
contesting parties. The statute clearly, therefore, imposes
a duty upon the Government to act judicially. Even if the
grounds of attack against the scheme are confined only to
the purpose mentioned in s. 68-C-we cannot agree with this
contention-the position will not be different, for, even in
that case there is a dispute between the State Transport
Undertaking and the person excluded in respect of the
scheme, though the objections are limited to the purpose of
the scheme. In either view the said two provisions, ss. 68-
C and 68-D, comply with the three criteria of a judicial act
laid down by this Court.
Support is sought to be drawn for this contention from the
decision of the House of Lords in Franklin v. Minister of
Town and Country Planning (1). As strong reliance is placed
on this decision, it is necessary to consider the same in
some detail. The facts of that case are: On August 3, 1946,
the respondent, Lewis Silkin, as Minister of Town and
Country Planning, prepared the draft Stevenage New Town
(Designation) Order, 1946, under para. 1 of Schedule 1 to
the New
(1) [1948] A.C. 87.
347
Towns Act, 1946, and on or about August 6, 1946, he caused
the same to be published and notices to be given as
prescribed by paragraph 2 of Schedule I to the Act.
Thereafter objections were received from a number of
persons, including the appellants. Accordingly, the
respondent instructed Mr. Arnold Morris, an Inspector of the
Ministry of Town and Country Planning, to hold a public
local inquiry as prescribed by paragraph 3 of the said
Schedule. Mr. Morris held the inquiry at the Town Hall,
Stevenage, on October 7 and 8, 1946, and on October 25, made
a report to the respondent in which he set out a summary of
the sub. missions made and the evidence given by and on
behalf of the objectors and attached thereto a complete
transcript of the proceedings, which began with an opening
statement by Mr. Morris giving a brief recapitulation of the
reasons that had led to the designation of Stevenage as the
site of a New Town. On November 11, 1946, the respondent
made the order in terms of paragraph 4 of Schedule I to the
Act. The appellants applied to the High Court to have the
order quashed.. It was contended, inter alia, that the said
order was not within the powers of the New Towns Act, 1946,
or alternatively, that the requirements of the said Act have
not been complied with; that the Minister who made the order
had stated, before the Bill was made into law, that he would
make the said order, and therefore he was biassed in any
consideration of the said objections. The House of Lords
held that the respondent’s functions under the Act were only
administrative and that he had complied with the provisions
of the statute. In that view, the order of the Court of
Appeal dismissing the applications filed by the appellants
was confirmed. Lord Thankerton in his speech at page 102,
observed thus:
"In my opinion, no judicial, or quasi-judicial, pinion, no
duty was imposed on the respondent, and any reference to
judicial duty, or bias, is irrelevant in the present case.
The respondent’s duties under s. 1 of the Act and sch. 1
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thereto are, in my opinion, purely administrative, but the
Act prescribes certain methods of or steps in, discharge of
that duty.................... it
348
seems clear also, that the purpose of inviting objections,
and, where they are not Withdrawn I of having a public
inquiry, to be held by someone other than the respondent, to
whom that person reports, was for the further information of
the respondent in order to the final consideration of the
Soundness of the scheme’ of the
designation................... I am of opinion that no
judicial duty is laid on the respondent in discharge of
these statutory duties, and that the only question is
whether he has complied With the Statutory directions to
appoint a person to hold the public inquiry, and to consider
that person’s report.
At first sight the facts of this case may appear to have
some analogy to those in the present case, but on "a deeper
scrutiny of the facts and the provisions of the New Towns
Act, 1946, and Chapter IV-A of the Act, they disclose
essential differences in fundamentals. Under the New Towns
Act, 1946, the following steps for developing a new town
have been laid down: (1) It is left to the Minister’s
Subjective satisfaction, after consulting local authorities,
who appear to him to be concerned, to make an order
designating. a particular area as the site of the proposed
new town ; (2) when he proposes to make an order, he
prepares a draft of that order giving the necessary parti-
culars and publishes it in the London Gazette calling for
objections to the, proposed order within a prescribed time;
(3) if any objection is made to the proposed order, he shall
cause a public local enquiry to be held and shall consider
the report of the person by whom the enquiry was held; and
(4) any person desiring to challenge the validity of that
order may apply to the High Court and he can get that order
set aside only if he satisfies the Court that the order is
not within the powers of that Act or that his interests have
been substantially prejudiced by any requirements of that
Act not having been complied with. The steps to be taken
for nationalising the Road Transport under the Act are as
follows: (1) The State Transport Undertaking, which is a
statutory authority under the Act, proposes a scheme; (2)
the scheme may provide that the road transport services
349
should -be run or operated by the State Transport
Undertaking to the exclusion of a person or persons; (3) any
Person, affected may file objections before the
Government;(4) the Government following the rules of
judicial procedure decides the dispute between the
Undertaking and -the person or persons affected; (5)the
dispute is not necessarily confined only to the question-
whether the ’statutory requirements have been complied with,
but may also relate to the question whether a particular
person or persons should not. be excluded; and (6) a
personal hearing should be given to both the parties by the
Government..
A comparison of the procedural steps under both the Acts
brings out in bold relief the nature of the enquiries
contemplated under the two statutes. There, there is no
lis, no personal hearing and even the public enquiry
contemplated by a third party is presumably confined to the
question of statutory requirements, or at any rate was for
eliciting further information for the Minister. Here, there
is a clear dispute between the two parties. The dispute
comprehends not only objections raised on public grounds,
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but also in vindication of private rights and-it is required
to be decided by the State Government after giving a
personal’ hearing and following the rules of judicial
procedure. Though there may be some justification for
holding, on the facts of the case before the House of Lords
that that Act did not contemplate a judicial act-on that
question we do not propose to express our opinion-there is
absolutely none for holding in the present case that the
Government is not performing a judicial act. Robson in
’Justice and Administrative Law’, commenting upon the
aforesaid decision, makes the following observation at page
533:
" It should have been obvious from a cursory glance at the
New Towns Act that the rules of natural justice could not
apply to the Minister’s action in making an order, for the
simple reason that the initiative lies wholly with him. His
role is not to consider whether an order made by a local
authority should be confirmed, nor does he have to determine
a controversy between a, public authority and private
interests.
350
The responsibility of seeing that the intention of
Parliament is carried out is placed on him."
The aforesaid observations explain the principle underlying
that decision and that principle cannot have any application
to the facts of this case. In I Principles of
Administrative Law by Griffith and Street, the following
comment is found on the aforesaid decision : After
considering the provisions of s. 1 of the New Towns Act,
1946, the authors say-
" Like the town-planning legislation, this differs from the
Housing Acts in that the Minister is a party throughout.
Further, the Minister is not statutorily required to
consider the objections. It is obvious, as the statute
itself states, that the creation of new towns is of national
interest."
At page 176, the authors proceed to state:
Lord Thankerton did not analyse the meanings of I judicial’
and I administrative nor did he specify the particular
factors which motivated his classification. It is
permissible to conclude that he looked at the Act as a
whole, applying a theory of interpretation similar to the
rule in Heydon’s Case (1584, 3 Co. Rep. 7a, 7b)."
At page 178, they conclude thus:
" It is submitted, however, that the thoroughness with
which the Courts analysed the statutes in the Errington,
Robinson, Johnson and Franklin Cases and the emphasis which
they have placed on the fact that their decisions have been
based solely on the statute under consideration makes such
an approach inevitable."
It is therefore clear that Franklin’s Case is based upon the
interpretation of the provisions of that Act and
particularly on the ground that the object of the enquiry is
to further inform the mind of the Minister and not to
consider any issue between the Minister and the objectors.
The decision in that case is not of any help to decide the
present case, which turns upon the construction of the
provisions of the Act. For the aforesaid reasons, we hold
that the State Government’s order under s. 68-D is a
judicial act.
351
The next question is whether the State Government disposed
of the objections of the petitioners judicially in the
manner prescribed by the Act. It is said that under the Act
and rules framed thereunder, the State Government should
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hear the dispute, but in this case the Secretary in charge
of the Transport Department, who is not the State
Government, gave the hearing. The State Government is an
impersonal body and it can only function through the
machinery and in the manner prescribed by law. Clause (60)
of s. 2 of the General Clauses Act, 1897, defines I State
Government’ as respects anything done or to be done after
the commencement of the Constitution (VII Amendment) Act,
1956, to mean, in a State, the Governor, and in a Union
Territory, the Central Government. Under Art. 154(1) of the
Constitution, I the executive power of the State shall be
vested in the Governor and shall be exercised by him either
directly or through officers subordinate to him in
accordance with this Constitution’. Article 163 enacts that
’ there shall be a Council of Ministers with the Chief
Minister at the head to aid and advise the Governor in the
exercise of his functions, except in so far as he is by or
under this Constitution required to exercise his functions
-or any of them in his discretion’. Article 166(1) enjoins
that I all executive action of the Government of a State
shall be expressed to be taken in the name of the Governor’.
Sub-clause (2) of that Article says that ’orders and other
instruments made and executed in the name of the Governor
shall be authenticated in such manner as may be specified in
rules to be made by the Governor’. And under sub-cl. (3),
’the Governor shall make rules for tile more convenient
transaction of the business of the Government of the State,
and for the allocation among Ministers of the said business
in so far as it is not business with respect to which the
Governor is by or under this Constitution required to act in
his discretion ’. In exercise of the powers conferred by
cls. (2) and (3) of Art. 166 of the Constitution, the
Government of Madras made rules styled as ’The Madras
Government Business Rules and Secretariat Instructions’.
Rule 9 thereof prescribes
352
that without prejudice to the provisions of r. 7,
the Minister in charge of a. department shall be primarily
responsible for,the disposal of the business appertaining to
that department. Rule 21 enacts that except as otherwise
provided by any other Rule, cases shall ordinarily be
disposed of by or under the authority of the Minister in
charge who may, by means of standing orders, give such
directions as he thinks fit for the disposal of cases in the
department. Copies of such standing orders shall be sent to
the Governor and the Chief Minister. Rule 11 says that I
all orders or instruments made or executed by or on behalf
of the Government of the State shall be expressed to be made
or executed in the name of the Governor’. Under r. 12,
every order or instrument of the Government of the State
shall be signed either by a Secretary, an Additional
Secretary, a Joint Secretary, a draftsman, a Deputy
Secretary, an, Under Secretary or an Assistant Secretary to
the Government of the State or such other officers as may be
specially empowered in that behalf and such signature shall
be deemed to be the proper authentication of such order
or instrument’.
After the formation of the Andhra State on, October 3, 1953,
the rules made by the Governor of Madras, under the
provisions of the States Reorganization Act, Continue to be
the rules of the Andhra State till they are amended in
accordance with’, such law. The Governor of Andhra State,
in exercise of the powers conferred by cls. (2) and (3) of
Art. 166 of the Constitution directed that until other
provisions are made in this regard, ’the business of the
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Government of Andhra be transacted in accordance with the
Madras Government Business Rules. and Secretariat
Instructions in force on the first day of October, 1953’.
On October 26, 1956, after the formation of the Andhra
Pradesh State, as the Andhra Pradesh was not a new State but
a continuation of the Andhra State, though there is change,
in its name, the business rules of the Andhra state continue
to govern the Secretariat of the AndhraPradesh Government.
The effect of the aforesaid provisions may be stated thus: A
State Government
353
means the Governor; the executive power of the State vests
in the Governor; it is exercised by him directly or by
officers subordinate to him in accordance with the
provisions of the Constitution; the Ministers headed by the
Chief Minister advise him in the exercise of his functions;
the Governor made rules enabling the Minister in charge of
particular department to dispose of cases before him and
also authorizing him, by means of standing orders, to give
such directions as he thinks fit for the disposal of the
cases in the department. Pursuant to the rule, the record
discloses, the Chief Minister, who was in charge of
Transport, had made an order directing the Secretary to
Government, Home Department, to hear the objections filed
against the scheme proposed by the State Transport Autho-
rity.
The aforesaid machinery evolved by the rules for the
disposal of cases by the State Government has been followed
in this case. The petitioners and others filed objections
to the proposed scheme before the Secretary to the
Government Transport Department. He gave a personal hearing
to the parties-some of them appeared in person and others by
representatives; the entire material recorded by him was
placed before the Chief Minister in charge of Transport, who
made his order approving the scheme; and the order was
issued in the name of the Governor, authenticated by the
Secretary in charge of the Transport Department. It may
therefore be said that the State Government gave the hearing
to the petitioners in the manner prescribed by the rules
made by the Governor.
At this state, the argument hinted at but not seriously
pressed, may be noticed. The Rules the Governor is
authorised to make, the argument proceeds, are only to
regulate the acts of the Governor or his subordinates in
discharge of the executive power of the State Government,
and therefore will not govern the quasi-judicial functions
entrusted to it. There is a fallacy in this argument. The
concept of a quasijudicial act implies that the act is not
wholly judicial;
45
354
it describes only a duty cast on the executive body or
authority to conform to norms of judicial procedure in
performing some acts in exercise of its executive power.
The procedural rules made by the Governor for the convenient
transaction of business of the State Government apply also
to quasi-judicial acts, provided those ’Rules conform to the
principles of judicial procedure.
The mode of performing quasi-judicial acts by administrative
tribunals has been the subject of judicial decisions in
England as well as in India. The House of Lords in Local
Government Board v. Arlidge (1) in the context of the
Housing, Town Planning Etc., Act, 1909, made the following
observations at page 132:
" My Lords, when the duty of deciding an appeal is imposed,
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those whose duty it is to decide it must act judicially.
They must deal with the question referred to them without
bias, and they must give to each of the parties the
opportunity of adequately presenting the case made. The
decision must be come to in the spirit and with the sense of
responsibility of a tribunal whose duty it is to mete out
justice. But it does not follow that the procedure of every
such tribunal must be the same."
In New Prakash Transport Co., Ltd. v. New Swarna Transport
Co., Ltd. (2) this Court reviewed the case law on the
subject and came to the conclusion that the rules of
natural,-justice vary with varying constitutions of
statutory bodies, and the rules prescribed by the
legislature under which they have to act, and the question
whether in a particular case they have been contravened must
be judged not by any preconceived notion of what they may be
but in the light of the provisions of the relevant Act.
This Court re-affirmed the principle in Nagendra Nath Bora
v. Commissioner of Hills Division (supra) (3).
With this background we shall proceed to consider the
validity of the three alleged deviations of the State
Government from the fundamental judicial procedure. In the
present case, the officer who received
(1) [1915] A.C. 120. (2) A.I.R. 1958 S.C. 398.
(3) A.I.R. 1958 S.C. 398.
355
the objections of the parties and heard them personally or
through their representatives, was the Secretary of the
Transport Department. Under the ’Madras Government Business
Rules and Secretariat Instructions’ made by the Governor
under Art. 166 of the Constitution, the Secretary of a
department is its head. One of the parties to the dispute
before the State Government was the Transport Department
functioning as a statutory authority under the Act. The
head of that department received the objections, heard the
parties, recorded the entire proceedings and presumably
discussed the matter with the Chief Minister before the
latter approved the scheme. Though the formal orders were
made by the Chief Minister, in effect and substance, the
enquiry was conducted and personal hearing was given by one
of the parties to the dispute itself. It is one of the
fundamental principles of judicial procedure that the person
or persons who are entrusted with the duty of hearing a case
judicially should be those who have no personal bias in the
matter. In Ranger v. Great Western Ry. Co.(1) Lord
Cranworth, L.C., says:
’A judge ought to be, and is supposed to be, indifferent
between the parties. He has, or is supposed to have, no
bias inducing him to lean to the one side rather than to the
other In ordinary cases it is just ground of exception to a
judge that he is not indifferent, and the fact that he is
himself a party, or interested as a party, affords the
strongest proof that he cannot be indifferent."
In Rex v. Sussex Justices Ex Parte McCarthy (2) Lord Hewart,
C. J., observed:
" It is said, and, no doubt, truly, that when that gentleman
retired in the usual way with the justices, taking with him
the notes of the evidence in case the justices might desire
to consult him, the justices came to a conclusion without
consulting him, and that he scrupulously abstained from
referring to the case in any way. But while that is so, a
long line of cases shows that it is not merely of some
importance
(1) [1854] 5 H.L.C. 72, 89; 10 E.R. 824, 827.
(2) [1924] 1 K.B. 256, 258.
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356
but is of fundamental importance that justice should not
only be done, but should manifestly and undoubtedly be seen
to be done. The question therefore is not whether in this
case the deputy clerk made any observation or offered any
criticism which he might not properly have made or offered;
the question is whether he was so related to the case in its
civil aspects as to be unfit to act as clerk to the justices
in the criminal matter. The answer to that question depends
not upon what actually was done, but upon what might appear
to be done."
This was followed in Rex v. Essex Justices Ex Parte
Perkins(1).In Franklin’s Case (2), though on a construction
of the provisions of that Act under consideration in that
case it was held that the Minister was not acting judicially
in discharging his duties, his Lordship accepted the
aforesaid principle and expressd his view on the doctrine of
’bias’ thus, at
page 103:
" My Lords, I could wish that the use of the word ’bias’
should be confined to its proper sphere. Its proper
significance, in my opinion, is to denote a departure from
the standard of even-handed justice which the law requires
from those who occupy judicial office, or those who are
commonly regarded as holding a quasi-judicial office, such
as an arbitrator. The reason for this clearly is that,
having to adjudicate as between two or more parties, he must
come to his adjudication with an independent mind, without
any inclination or bias towards one side or other in the
dispute."
The aforesaid decisions accept the fundamental principle of
natural justice that in the case of quasi-judicial
proceedings, the authority empowered to decide the dispute
between opposing parties must be one without bias towards
one side or other in the dispute. It is also a matter of
fundamental importance that a person interested in one party
or the other should not, even formally, take part in the
proceedings though in fact he does not influence the mind of
the person, who finally decides the case. This is on the
principle that
(1) [1927] 2 K.B. 475.
(2) [1948] A.C. 87.
357
justice should riot only be done, but should manifestly and
undoubtedly be seen to be done. The hearing given by the
Secretary, Transport Department, certainly offends the said
principle of natural justice and the proceeding and the
hearing given, in violation of that principle, are bad.
The second objection is that while the Act and the’ Rules
framed thereunder impose a duty on the State Government to
give a personal hearing, the procedure prescribed by the
Rules impose a duty on the Secretary to hear and the Chief
Minister to decide. This divided responsibility is
destructive of the concept of judicial hearing. Such a
procedure defeats the object of personal hearing. Personal
hearing enables the authority concerned to watch the
demeanour of the witnesses and clear-up his doubts during
the course of the arguments, and the party- appearing to
persuade the authority by reasoned argument to accept his
point of view. If one person hears and another decides,
then personal hearing becomes an empty formality. We
therefore hold that the said procedure followed in this case
also offends another basic principle of judicial procedure.
The learned counsel further contends that the mind of the
State Government was foreclosed before the hearing was given
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and therefore no real enquiry was held by it as contemplated
by the Act. This argument is based upon the reports
published on 27-12-1957 in the ’Deccan Chronicle’ and
’Golconda Patrika’. Therein it was stated under date
December, 26, as follows :
" The Chief Secretary, Mr. M. P. Pai, told pressmen today
that the Government has already taken a decision to
nationalize the road transport in Krishna District and some
routes had been chosen. The Guntur-Vijayawada route also
comes under the nationalisation scheme. About 65 buses
would be plying oil these routes."
The Chief Secretary was giving this information on December
6, 1957, even before the enquiry was commenced. On the
basis of this publication, it is contended, that the
Government had already taken a decision to nationalize the
road transport before the scheme
358
was approved by the Government and that the entire procedure
was put through to implement the decision already taken to
meet the requirements of the technicalities of law. In the
counter-affidavit filed by the first respondent it is stated
that the scheme was published in the Andhra Pradesh Gazette
dated 24-12-1957 and that the alleged statement only
referred to the said proposal under s. 68-C of the Motor
Vehicles Act. Though the wording of the information
published speaks of the decision of the Government, the
Chief Secretary obviously must have been referring to the
contents of the notification published two days earlier, on
24-12-1957. We cannot from this publication in the
newspapers come to the conclusion that the Government having
finally decided to reject all possible objections, went
through a farce of an enquiry. We therefore hold, for the
first two reasons, that the quasi-judicial enquiry held by
the State Government was vitiated by the, violation of the
aforesaid fundamental principles of natural justice.
The last argument of the learned counsel for the petitioners
is that the Road Transport Corporation, i.e., the first
respondent, cannot implement the scheme proposed by the
defunct State Transport Undertaking. Some of the relevant
facts are as follows The State Transport Undertaking
published the scheme in the Andhra Pradesh Gazette dated
November 14, 1957. It also appeared through its
representative, the General Manager, who made his
representation to the Secretary of the Transport Department
on 26-12-1957. The State Government approved of the scheme
on 7-1-1958 and the approved scheme was published in the
Andhra Pradesh Gazette dated 9-1-1958 and it was directed to
come into force with effect from 10-1-1958. The Government
of Andhra Pradesh established a Road Transport Corporation
under the Road Transport Corporations Act, 1950 (Act LXIV of
1950), for the State of Andhra Pradesh, with effect from 11
- 1- 1958. The State Government transferred the business of
the Road Transport Department to the said Corporation for
management. Thereafter, the said Corporation was taking
subsequent steps to implement the scheme.
359
The argument is that the Road Transport Corporation has no
power under the Road Transport Corporations Act to take over
the business of the State Transport Undertaking and to
implement the scheme initiated by that Undertaking. The
said Corporation admittedly comes under the definition of
’State Transport, Authority’ under the Act. But the
question is whether-’ the said Corporation is also a
successor to the State Transport Authority that initiated
the scheme. It would certainly be the successor if the
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Corporation was legally entrusted with the duty of carrying
on the business the Road Transport Department was doing
before. On January 9, 1958, in exercise of the powers
conferred by s. 3 of the Road Transport Corporations Act,
1950, the Governor of Andhra Pradesh established with effect
from January 11, 1958, a Road Transport Corporation called
the Andhra Pradesh Road Transport Corporation for the State
of Andhra Pradesh. In exercise of the power conferred by s.
34 of the Road Transport Corporations Act, 1950, the
Governor of Andhra Pradesh made an order dated 11th January,
1958, for the following administrative arrangements to come
into force
"(I) The Andhra Pradesh Road Transport Corporation
(hereinafter referred to as the Corporation) shall take over
the management of the existing Road Transport Department of
the Government of Andhra Pradesh.
(2)All land and all stores, articles and other goods of the
Road Transport Department shall pass to the Corporation.
(3) (a) Subject to the provisions of sub-paragraphs (b)and
(c), all the assets and liabilities of the Road Transport
Department shall pass to the Corporation...
The other clauses need not be read as they are only
consequential to the aforesaid clauses. It is therefore
clear from the said order that the Government entrusted the
management of the Road Transport Department to the Road
Transport Corporation and directed the transfer of all
assets and liabilities to the said Corporation. The effect
of the said order is that the State
360
Corporation carries on the Road Transport business in the
place of the State Transport Department which was
functioning as the State Transport Undertaking under the Act
before the said order. If there was no legal impediment in
the Government transferring the business carried on by one
of its departments and its assets to the Corporation, the
Corporation would be a successor to the pre-existing State
Transport Undertaking. The petitioners contest the position
that the Government has any such power under s. 34 of the
Road Transport Corporations. Act, 1950. Section 34 reads:
"(1) The State Government may, after consultation with a
Corporation established by such Government, give to the
Corporation general instructions to be followed by the
Corporation, and such instructions may include directions
relating to the recruitment,, conditions of service and
training of its employees, wages to be paid to the
employees, reserves to be maintained by it and disposal of
its profits and stocks.
(2) In the exercise of its powers and performance of its
duties under this Act, the Corporation shall not depart from
any general instructions issued under subsection (1) except
with the previous permission of the State Government."
The Road Transport Corporation Was constituted for extending
and improving the facilities of the road transport in the
Andhra Pradesh area. The Government transferred the
Undertaking and its assets to that Corporation and gave it
directions under s. 34 of the Road Transport Corporations
Act, 1950, to take over the management of the said
undertaking.The fact that under the Road Transport Corpora-
tions Act the Corporation can acquire an undertaking after
paying compensation is not of much relevancy for, in this
case, the Corporation does not purport to acquire any
transport undertaking of the petitioners. It has not been
brought to our notice that the said direction is
inconsistent with any of the provisions of the Road
Transport Corporations Act, 1950. We, therefore, hold that
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the first respondent is the successor to the State Transport
Undertaking which
361
proposed the scheme and as admittedly it satisfied the
requirements of the definition of I Road Transport
Authority’ under the Act, it is within its rights in
implementing the scheme approved by the Government.
In the result, for the reason that the State Government did
not make the enquiry consistent with the principles of
natural justice in approving the scheme, the order approving
the scheme is hereby quashed and a direction issued to the
first respondent to forbear from taking over any of the
routes in which the petitioners are engaged in transport
business. This judgment will not preclude the State
Government from making the necessary enquiry in regard to
the objections filed by the petitioners in accordance with
law. The petitioners will have liberty to file additional
objections if any. As the petitioners have failed on
substantive points in the case, the parties are directed to
bear their own costs.
WANCHOO, J.-This petition under Article 32 of the
Constitution challenges the scheme of road transport
introduced in the Krishna district of Andhra Pradesh. The
petitioners raise two main contentions, namely, (1) that the
provisions of Chapter IV-A of the Motor Vehicles Act, 1939,
violate their fundamental rights guaranteed under the
Constitution, and (2) that the scheme introduced is ultra
vires Chapter IV-A.
I have had the advantage of reading the judgment prepared by
my brother Subba Rao, J. I agree with what he has said on
the first contention and therefore do not propose to repeat
the facts and the reasons given by him. I have, however,
been unable, with utmost respect, to persuade myself to
agree fully with what has been said on the second
contention. I, therefore, proceed to deal with that only.
The second contention of the petitioners is that the scheme
of road transport, which is sought to -be put into effect,
is ultra vires Chapter IV-A of the Motor Vehicles Act, (IV
of 1939), (hereinafter called the Act), inasmuch as the
provisions of that Chapter have not
46
362
been strictly followed. Before I deal with the contentions
of the petitioners in this matter, I may indicate briefly
the steps required to be taken before a scheme of road
transport is finalised under Chapter IV-A of the Act. The
first step is the preparation of the Scheme under s. 68C,
which lays down that 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 for the
purpose. After the scheme is prepared, it has to be
published in the Official Gazette and also in such other
manner as the State Government may direct. The next step is
that any person affected by the scheme published under s.
68C may, within thirty days from the date of publication,
file objections thereto before the State Government; [s.
68D(l)]. The third step is that the State Government has to
consider the objections and after giving an opportunity to
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the objectors or their representatives and the
representatives of the State Transport Undertaking to be
heard in the matter, to approve or modify the scheme; (s.
68D (2)). Finally, the scheme as approved or modified is
published in the Official Gazette as the approved scheme;
(s. 68D(3)). Then comes the provisions for putting. this
approved scheme into effect. Section 68F provides that the
Regional Transport Authority shall thereupon issue permits
to the State Transport Undertaking on its application in
pursuance of the approved scheme. The Regional Transport
Authority is also given power to cancel or modify any
existing permit or refuse to renew any existing permit for
this purpose. Section 68G provides for compensation where
any existing permit is cancelled or its terms are modified.
The main attack of the petitioners is that sections
363
68C and 68D were not complied with. The particulars of the
attack may be summarised as below:-
(1) There was no State Transport Undertaking in existence
which could have published the scheme (68C)
(2) Even if a State Transport Undertaking was there, it did
not form an opinion as required by s. 68C and in particular,
the General Manager, who acted for the State Transport
Undertaking, had no authority to do so;
(3)S. 68D(2) contemplates a hearing by the State Government
of the objections filed. There was no such hearing, as the
Home Secretary in-charge of Transport Department, who heard
the objectors must be deemed to be one of the parties who
have to be heard by the State Government, and in any case,
the hearing by the Secretary was no hearing by the State
Government.
(4)There was no real bearing at all and no genuine
consideration of the objections by the State Government as
the issue bad already been prejudged, (vide speech of the
Chief Secretary on the 26th of December, 1957); and
(5)The scheme could not be enforced by the Road Transport
Corporation, which replaced the Road Transport Department
soon after the scheme had been approved by the State
Government.
It is necessary in order to appreciate and decide the point
raised on behalf of the petitioners to mention briefly the
facts relating to the preparation of the scheme and
subsequent steps taken for its approval and enforcement.
The scheme was published on November 14, 1957, under the
authority of Shri Guru Pershad, General Manager of the State
Transport Undertaking Andhra Pradesh Road Transport. Chap-
ter IV-A of the Act had come into force from the 15th of
February, 1957. Before that Hyderabad State, as it then
was, had passed Act XLV of 1956, amending the Motor Vehicles
Act locally and incorporating in it provisions similar to
the present Chapter IV-A. Under the Hyderabad Act, the
State Transport Undertaking was defined as the Road
Transport
364
Department of the State providing road transport services.
When the Hyderabad State came to end and what was known as
the Telengana area of that State was merged in the State of
Andhra Pradesh, the Road Transport Department of Andhra
Pradesh took over the road transport services in the
Telengana area which were being run by the former Hyderabad
State. The present scheme was published, as already stated,
on the 14th of November, 1957, by Shri Guru Pershad on
behalf of the Road Transport Department of Andhra Pradesh.
The objections to the scheme were received by the Secretary
to Government in charge of the Road Transport Department,
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and the objectors were heard by the Home Secretary in charge
of the Transport Department on the 26th and 27th of
December, 1957. The scheme was finally approved by the
Governor of Andhra Pradesh on the 7th of January, 1958, and
was to come into force from the 10th of January, 1958. The
approved scheme was published in the Gazette on January 9,
1958. In the meantime, the Government of Andhra Pradesh
decided to establish a Road Transport Corporation under the
Road Transport Corporations Act, No. LXIV of 1950, for the
State of Andhra Pradesh. This decision was published on the
20th of December, 1957, and the Road Transport Corporation
was to come in existence from the 11th of January, 1958. It
was to take over the business of the Road Transport
Department of the State. The members of the Road Transport
Corporation were appointed on the 9th of January, 1958, and
the Corporation was established with effect from the 11th of
January, 1958. It was this Corporation, which took over the
duty of implementing the approved scheme, which was
published on the 9th of January, 1958, and was to come into
effect from the 10th of January, 1958. The steps necessary
under sections 68F, 68G and 68H of the Act to put the scheme
into force were taken by this Corporation.
Re. (1). The argument of the petitioners under this head is
put thus: There was a State Transport Undertaking under
Hyderabad Act, which was operating in the present Telengana
area of Andhra Pradesh. This
365
was the Road Transport Department of the Hyderabad State,
which became the statutory body under the Hyderabad Act.
When, however, the Hyderabad State came to end and the
Telengana area was merged in Andhra Pradesh on the 1st of
November, 1956, the State Transport Undertaking of the
Hyderabad State continued to function as such for the
Telengana area of Andhra Pradesh. There was no extension of
the Hyderabad Act to the rest of Andhra Pradesh, and the
present scheme relates to Krishna District which is not in
the Telengana area; consequently, it was not open to the
State Transport Undertaking which was existing under the
Hyderabad Act to frame this scheme for an area which was not
in Telengana. It was also urged that no State Transport
Undertaking was formed as such after the coming into force
of Chapter IV-A of the Act in February, 1957. I am of the
opinion that there is no force in this argument. It is true
that tinder the Hyderabad Act, the State Transport
Undertaking was defined as " the Road Transport Department
of the State providing road transport service ". When
Hyderabad State came to end on the 1st of November, 1956,
the Road Transport Department of Andhra Pradesh became the
State Transport Undertaking within the meaning of the
Hyderabad Act, though, as that Act was in force only in the
Telengana area, road transport services could only be run in
that area. When, however, Chapter IV-A of the Act came into
force from the 15th of February, 1957, and applied to the
whole of the State of Andhra Pradesh, the Hyderabad Act must
be deemed to have been repealed by necessary implication, as
Chapter IV-A of the Act covered exactly the same field as
was covered by the Hyderabad Act. On the 15th of February,
1957, there was only Road Transport Department of Andhra
Pradesh, which was in existence and which was providing
transport services in certain areas of the State. Now,
under s. 68A, a State transport undertaking is defined as
any undertaking providing road transport service, where such
undertaking is carried on by the Central Government or the
State Government..." The Road Transport Department
366
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of Andhra Pradesh was obviously an undertaking providing
road transport service though only in a part of the State,
and was carried on by the State Government of Andhra
Pradesh. Therefore, the Road Transport Department of Andhra
Pradesh became the State Transport Undertaking under the
definition in Is. 68A. The fact that this undertaking which
came in existence by virtue of the definition on the 15th of
February, 1957, was at that time providing road transport
services only in a part of the State, would not make it any
the less a State Transport Undertaking within the meaning of
that term and there is nothing in Chapter.IV-A, which
precludes a State Transport Undertaking, which is for the
time being providing transport services in a part of the
State, from extending its activities and framing a scheme
for other parts of the State. I am, therefore, of opinion
that a State Transport Undertaking was in existence in
November, 1957, when the scheme was prepared and published,
and it was the Road Transport Department of Andhra Pradesh.
Re. (2). The contentions on this head are two-fold. In the
first place, it is urged that the General Manager, who acted
for the State Transport Undertaking had no authority to do
so on its behalf This is a question of fact and should have
been specifically raised in the petition. All that,
however, is said about the authority of Shri Guru Pershad is
to be found in paragraph 11 (e) of the petition in these
words:
"Mr. Guru Pershad was the General Manager of the Road
Transport Department of the erstwhile Hyderabad State. He
was never appointed as Manager of the State Transport
Undertaking of Andhra Pradesh, and therefore, he has no
legal authority whatever to publish a scheme ".
Now, it is obvious that this objection was only confined to
one point, namely, that Shri Guru Pershad had no authority
to act for the State Transport Undertaking of Andhra
Pradesh, as he was -never appointed as manager of that
undertaking. It was not the case of the petitioners that
even if he had been appointed as Manager of the Andhra
Pradesh State Transport
367
Undertaking, he would have no authority to frame and publish
a scheme on behalf of that undertaking. It appears that
Shri Guru Pershad, who was the Manager of the road transport
services when they were run by the former Hyderabad State,
continued to be such after the Telengana area of the
Hyderabad State was merged in Andhra Pradesh. It is
unthinkable that Shri Guru Pershad should have issued a
notification in the Gazette on the 14th of November, 1957,
styling himself as " General Manager, State Transport
Undertaking, Andhra Pradesh Road Transport ", if he was not
in fact the General Manager of the Andhra Pradesh Road
Transport. It must, therefore, be held that Shri Guru
Pershad was the General Manager of the Andhra Pradesh Road
Transport, and, therefore, of the State Transport
Undertaking. His authority to publish the scheme, if he was
the Manager of Andhra Pradesh State Transport Undertaking,
has not been attacked. The scheme was published on the 14th
of November, 1957, by Shri Guru Pershad as such Manager.
The petitioners cannot at this stage be allowed to challenge
his authority to do so, when they did not specifically raise
this point in their petitions. When, therefore, he prepared
and published the scheme, it must be held that he did so on
behalf of the State Transport Undertaking.
The second part of this contention is that the notification
of the 14th November, 1957, does not say that the State
Transport Undertaking was of opinion that it was necessary
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in the public interest that the road transport services
should be run and operated by the State Transport
Undertaking. The actual words used in the notification are
these:-
"In exercise of the powers conferred by s. 68C of the Motor
Vehicles Act, 1939, it is hereby proposed, for the purpose
of providing an efficient, adequate, economical and properly
coordinated road transport service in public interest, to
operate the following transport service as per the
particulars given below with effect from a date to be
notified by the Government."
No doubt, the words " that the State Transport Undertaking
is of opinion " are not expressly to be found in this
notification ; but at the same time it is impossible that a
proposal like this should be prepared and published on
behalf of the State Transport Undertaking without its
forming an opinion that it was necessary in the public
interest to do so. I am of opinion that the State Transport
Undertaking must have formed the opinion necessary under s.
68C before it published its proposal and invited objections
to the same. There 175 no exact form of words provided for
this purpose, and it would be quite in order to draw the
inference from the words used in the notification that it
was published after the State Transport Undertaking had
formed the opinion necessary under s. 68C. In this
connexion, reference may be made to paragraph 2 of the
counter-affidavit filed on behalf of the Andhra Pradesh
State Road Transport Corporation, where it is said that the
General Manager of the Andhra Pradesh Road Transport which
was the State Transport Undertaking, was of opinion that the
transport services in the Krishna District of Andhra Pradesh
should be operated in the public interest by the Andhra
Pradesh Road Transport. It was, however, urged on behalf of
the petitioners that this only disclosed the opinion of the
General Manager and not of the State Transport Undertaking;
but, as I have already said above, the authority of the
General Manager to speak on behalf of the State Transport
Undertaking was never specifically challenged in the
petition. There is, therefore, no force in this contention,
and it must be rejected.
Re. (3). This contention relates to the hearing by the
State Government under s. 68-D(2). In order to determine
this question, it is necessary to consider whether the State
Government, when it gives a hearing under s. 68-D(2), is
acting as a quasi-judicial tribunal or is merely performing
administrative functions. If the State Government acts as a
quasi-judicial tribunal certain considerations apply to the
nature of the hearing granted ; if, on the other hand, the
State Government acts administratively, certain other
369
considerations apply in determining the propriety of the
hearing in fact given in this case. The contention on
behalf of the petitioners is that the hearing contemplated
is as a quasi-judicial tribunal. The learned Attorney
General, on the other hand, contends that the State
Government merely acts administratively when it gives a
hearing under this provision. What constitutes a quasi-
judicial act has been considered by this Court in Province
of Bombay v. Kusaldas S. Advani (1). The principle has been
summarised by Das J. (as he then was) at p. 725, in these
words:
The principles, as I apprehend them are:
(i)that if a statute empowers an authority, not being a
Court in the ordinary sense, to decide disputes arising out
of a claim made by one party under the statute which claim
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is opposed by another party and to determine the respective
rights of the contesting parties who are opposed to each
other, there is a lis and prima facie and in the absence of
anything in the statute to the contrary it is the duty of
the authority to act judicially and the decision of the
authority is a quasi-judicial act; and
(ii)that if a statutory authority has power to do any act
which will prejudicially affect the subject, then, although
there are not two parties apart from the authority and the
contest is between the authority proposing to do the act and
the subject opposing it, the final determination of the
authority will yet be a quasi-judicial act provided the
authority is required by the statute to act judicially.
In other words, while the presence of two parties besides
the deciding authority will prima facie and in the absence
of any other factor impose upon the authority the duty to
act judicially, the absence of two such parties is not
decisive in taking the act of the authority out of the
category of quasi-judicial act if the authority is
nevertheless required by the statute to act judicially."
Now, it may be mentioned that the statute is not likely to
provide in so many words that the authority
(1) [1950] S.C.R. 621.
47
370
giving the hearing is required to act judicially; that can
only be inferred from the express provisions of the statute.
In the present case, it is urged by Mr. Nambiar appearing
for the petitioners that there were two parties before the
State Government, which was the deciding authority under s.
68D(2), namely, the objectors and the representatives of the
State Transport Undertaking. Therefore, according to him,
prima facie, there would be a duty to act judicially and
there is no other factor which would take away the inference
to be deduced from the presence of two parties before the
State Government, which has to decide the matter. Whether
there is any other factor will, however, depend upon the
circumstances of each case, and the nature of the matter
under hearing and the scope of the hearing. The learned
Attorney General contends that if one looks at the nature of
the matter to be heard and considers the scope of the
hearing before the State Government in this case the only
conclusion possible is that the State Government acts
administratively when it gives a hearing under section
68(2).
What then is the nature of the hearing before the State
Government ? Article 19(6)(ii) is of help in this
connection. It provides that nothing in sub-clause (g) of
article 19(1), which deals among other things with the right
to carry on trade or business shall prevent the State from
making any law relating to the carrying on by the State or
by a corporation owned or controlled by the State, of any
trade, or business, whether to the exclusion, complete or
partial, of citizens or otherwise. Chapter IV-A has been
inserted in the Act to carry out this purpose, so that the
State may operate transport services to the exclusion,
complete or partial, of citizens. The scheme which has been
published provides that there will be a complete exclusion
of citizens when the scheme is enforced in the area to which
it relates. Now, the question is whether the exclusion of
citizens as a whole is also an issue to be decided by the
State Government when it hears objections. Mr. Nambiar
submits that the most important thing for the State
Government to decide is whether there should be complete
exclusion of citizens
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371
on the enforcement of the scheme. The learned Attorney
General on the other hand contends that all that the State
Government has to do is to see whether the scheme published
is in the interest of the public and also whether it will
provide an efficient, adequate, economical and properly
coordinated road transport service. The argument continues
that if the State Government comes to that conclusion, the
complete exclusion which the scheme provides ipso facto
follows, and the State Government has not to decide the
matter of exclusion as a separate issue. In other words,
the argument is that the State Government is not to decide
between the competing claims of citizens providing transport
privately and the State Transport Undertaking providing
transport to the exclusion of citizens, and there is,
therefore, no real lis in this case. It is also pointed out
that objection can not only be filed by the bus operators of
that area who are to be excluded but also by anybody who is
affected by the scheme, including the members of the
travelling public. Giving, my best consideration to the
arguments on either side on this aspect of the matter, I
have come to the conclusion that the scope of the hearing
before the State Government is of a limited character,
though the decision may affect citizens providing transport,
the question whether private citizens should or should not
be allowed to provide transport is really not a matter in
issue before the State Government. What is in dispute
before the State Government is only whether the scheme that
is proposed by the State Transport Undertaking is an
efficient, adequate, economical and properly coordinated
scheme for road transport service and whether it is in the
interest of the public. If the State Government comes to
the conclusion that it is so, a complete exclusion proposed
automatically follows and the question of exclusion is not
to be determined as a separate issue as between the
objectors and the State Transport Undertaking. It is true
that the State Government has the right to modify the scheme
and in so doing it may drop a part of the scheme; but here
again it is not modifying the scheme because of any right of
a
372
private citizen to carry on road transport service in a
particular area but because it considers that the scheme so
far as that particular area is concerned is not efficient,
adequate, economical or properly coordinated or in the
public interest. Unless it comes to that conclusion with
respect to any part of the area. comprised in-the scheme and
modifies it, the consequence of complete exclusion ipso
facto follows. What I wish to emphasise is that the State
Government is not determining whether there should be
Statemonopoly or private enterprise when it is considering
objections under s. 68D(2); it is only deciding whether the
scheme put forward before it is such as can be approved with
or without modifications within the four corners of the law
laid down under s. 68C. If it comes to that conclusion, the
complete or partial exclusion follows. If on the other hand
it modifies any part of the scheme, exclusion fails to that
extent. Considering, therefore, the nature and the scope of
the hearing under s. 68D(2) it seems to me that there is
really no lis. Even though there may be two parties before
the State Government at the bearing, there is no
determination of the rights of the parties before it. The
determination is only of the efficiency etc. of the scheme.
proposed and whether it is in the public interest.
Therefore, it cannot be said that the nature of the hearing
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in this case makes the State Government a quasi-judicial
tribunal and the decision a quasijudicial act within the
meaning of the principles laid down in Advani’s Case(1).
I may in this connexion refer to Franklin v. Minister of
Town and Country Planning (2). The facts there were these:
Under the New Towns Act, 1946, the Minister prepared a draft
order for a new town and caused it to be published, and
notices were given to the persons affected. Thereafter
objections were received from a number of persons who were
the owners and occupiers of dwelling-houses and lands in the
affected area. The Act provided that on receipt of the
objections, an inspector was to hold a public local inquiry
into the objections and make a report to
(I) [1950] S.C.R. 621.
(2) [1948] A.C. 87.
373
the Minister. Thereupon, the Minister made the order under
the Act. These proceedings, as provided by the Act, were
taken with respect to a place called Stevenage in 1946 and
the Minister passed the necessary order eventually. Some of
the owners and occupiers of dwelling-houses and lands
situate at Stevenage applied to the Court to have the order
quashed, on the ground, among others, that the requirements
of the said Act had not been complied with and the interests
of the appellants had been substantially prejudiced.
According to them, the New Towns Act, 1946, impliedly
required that the objections of the appellants should be
fairly and properly considered by the Minister and that the
Minister should give fair and proper effect to the result of
such consideration in deciding whether the said order should
be made and that such implied requirements were not complied
with. It was held in that case that the Minister of Town
and Country Planning had no judicial or -quasi-judicial duty
imposed on him and the procedure followed was according to
the requirements of the Act.
Now, substitute in the place of the New Towns Act, 1946,
Chapter IV-A of the Act; substitute in the place of the
draft order of the Minister, the draft scheme of the State
Transport Undertaking ; and substitute in place of the final
order, the final approval of the State Government after
hearing the objections. It would seem, therefore, that the
parallel between the present case and Franklin’s case (1) is
complete. There a draft order was published, followed by
objections and an inquiry and hearing and a final order.
Here also a draft scheme is published, followed by objec-
tions and hearing, and final approval. There the interest
of persons occupying lands and houses in the area proposed
to be affected by the order were involved. Here also the
interests of the bus-operators at least, if not also of the
travelling public, are involved. In spite of that it was
held that the Minister had no judicial or quasi-judicial
duty imposed on him by the Act, and the reason was that he
was merely considering whether the scheme should go through.
Once he came to that conclusion after following the
procedure
(1) [1948] A.C. 87.
374
provided in the Act, the’ effect on those occupying lands
and dwelling houses would follow, according to the
provisions of the Act. Here also once the State Government
decides that the scheme should be approved, the effect would
be complete or partial exclusion of the bus operators of
that area, as envisaged in the scheme. To my mind,
therefore, the present case is parallel to Franklin’s case
(1) and on a parity of reasoning I would hold that the
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function of the State Government was administrative when it
considered the objections under s. 68D(2) and not quasi-
judicial. The only difference that I see between the two
cases is that the New Towns Act provided specifically for
hearing of the objections by an Inspector and not by the
Minister while this is not so in the present case. I shall
consider the effect of this later; but this has in my
opinion, little, if any, bearing on the question whether the
State Government was acting quasi-judicially when deciding
objections under s. 68D(2).
I may also in this connexion refer to Nagendra Nath Bora v.
Commissioner of Hills Division (2), where it was held by
this Court that the question whether or not an
administrative body or authority functions as purely
administrative or in a quasi-judicial capacity, must be
determined in each case on an examination of the relevant
statute and rules framed thereunder. Similar was the view
expressed by this Court in Express Newspapers Ltd. v. The
Union of India (3), when considering the functions performed
by a wage Board, and it was observed that whether the wage
Board exercised judicial or quasi-judicial functions is to
be determined by the relevant provisions of the statute
incorporating it and it would be impossible to lay down any
universal rule which would help in the determination of this
question. Applying, therefore, the principles laid down by
this Court in these cases and taking into account the
express provisions contained in Chapter IV-A and the Rules
framed thereunder, the conclusion at which I arrive is that
the hearing under s. 68D(2) was not before a quasi-judicial
tribunal and the decision was not a quasi-judicial act and
(I) [1948] A.C. 87. (2) A. I.R. 1958 S.C. 398.
(3) A.I.R. 1958 S.C. 878.
375
the State Government was acting purely administratively.
Having reached this decision, let me see what actually
happened in this case. The matter pertains to the Road
Transport Department which was in charge of the Chief
Minister. The Home Secretary works under the Chief Minister
and was in charge of the Road Transport Department. The
Chief Minister ordered, when the objections were put up
before him, that the representation should be heard by the
Home Secretary, and thereupon, the Home Secretary heard the
objectors and a note of the hearing was placed before the
Chief Minister for orders. The Chief Minister then passed
the order approving the scheme. The main attack on this
kind of hearing is two-fold. It is urged in the first place
that rule 10 framed under Chapter IV-A of the Act provides
that the objectors will be given an opportunity of being
heard in person or through authorised representatives. It
is said that in view of this rule it was not open to the
Chief Minister to direct the Home Secretary to bear the
objections when the decision was to be made by the Chief
Minister. It is pointed out that in Franklin’s case (1)
there was a specific provision that an Inspector will hold
an inquiry and hear the objections and make his report, and
thereafter the Minister will pass the final order on the
report of the Inspector. There is no such specific
provision in the Act or the Rules in this case, and,
therefore, the hearing by the Home Secretary in these
circumstances cannot be said to be a hearing by the State
Government or the Chief Minister who had to decide the
objections. The learned Attorney General relies in this
connexion on the Rules of Business framed under article
166(3) of the Constitution which provides for the making of
rules for the more convenient transaction of the business of
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the Government of the State, a copy of which was shown to
us. It is said in paragraph 13(1) of the counter-affidavit
that these Rules do not provide for personal hearing; but it
is open to the Minister to pass a standing order as he
thinks fit for the disposal of business in his Ministry.
Consequently, in exercise of this power, the
(1) [1948] A.C. 87.
376
Chief Minister passed an order that the Home Secretary
should hear these representations in order to comply with
the provision of Chapter IV-A and Rule 10, even though there
is no provision in the Rules of Business for oral hearing by
the Minister or the Secretary. It is urged by Mr. Nambiar
that the order passed by the Chief Minister in this case
that the hearing should be given by the Home Secretary was
not a standing order but an order in this particular case.
That seems to me to be correct ; but the question is
whether, when an administrative hearing of this nature is
being given under a rule which provides that the State
Government should give a hearing to objectors, it is
necessary that the Minister who decides must also hear. It
seems to me that where the hearing is administrative, it is
not essential that the Minister must hear, so long as a
hearing is given by an officer of the Government. I may in
this connexion refer to article 154 of the Constitution,
which provides that the executive power of the State shall
be vested in the Governor and shall be exercised by him
either directly or through officers subordinate to him in
accordance with the Constitution. This being an ad-
ministrative hearing comes within the executive power of the
State and there would be no infirmity if the Governor, who
in view of the provisions of the General Clauses Act, is the
State Government, authorised through the Chief Minister a
subordinate officer to give the hearing. Reference in this
connection may also be made to Local Government Board v.
Arlidge (1), which dealt with the manner of hearing of an
appeal by the Local Government Board under the Housing, Town
Planning &c., Act, 1909. The following observations of Lord
Haldane at p. 132 are apposite in this context :-
" In the case of a Court of Law tradition in this country
has prescribed certain principles to which in the main the
procedure must conform. But what that procedure is to be in
detail must depend on the nature of the tribunal. In modern
times it has become increasingly common for Parliament to
give an appeal
(1) [1915] A.C. 120, 132.
377
in matters which really pertain to administration, rather
than to the exercise of the judicial functions of an
ordinary Court, to authorities whose functions are
administrative and not in the ordinary sense judicial. Such
a body as the local Government Board has the duty of
enforcing obligations on the individual which are imposed in
the interest of the community. Its, character is that of an
organization with, executive functions. In this it
resembles other great departments of the State. When,
therefore, Parliament entrusts it with judicial duties,
Parliament must be taken, in the absence of any declaration
to the contrary, to have intended it to follow the procedure
which is its own, and is necessary if it is to be capable of
doing its work efficiently."
These observations show that when one is dealing with a body
like the State Government one has to take into account the
procedure usually followed by the State Government in
matters that come before it. In these circumstances if the
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Minister ordered, in the absence of specific rules on the
point, that the hearing should be by the Secretary, he was,
in my opinion, complying with the essential requirement,
namely, that there should be an oral hearing by the State
Government before the decision of the objections. The
bifurcation of the function of hearing from the function of
deciding cannot in the circumstances, when the hearing was
administrative, be said to be improper or against rule 10,
and was necessary in order that the Government may function
efficiently. Therefore, I am of opinion that the hearing by
the Secretary was sufficient compliance of rule 10, which
required a personal hearing before the decision of the
objections.
The second ground of attack under this head is that in any
case the Home Secretary who was also in charge of the Road
Transport Department was not the right person to hear the
objections on the ground that the scheme was put forward by
his department. Here again the fact that the hearing was of
an administrative nature has to be borne in mind. Bearing
that in
48
378
mind and also considering that it was the Chief Minister who
finally decided the matter and approved the scheme, it
cannot be said that the Home Secretary in charge of the
Transport Department was an improper person to give the
hearing. After all, the scheme was put forward as a
proposal. It was open to approval or modification after
hearing the objections. The body which put forward the
scheme was the State Transport Undertaking which was a limb
of the Government. The Government has in a case of this
kind to hear objections against a scheme prepared by one of
its own limbs. In these circumstances, if the Head of the
Department, namely, the Secretary hears the oral objections
on a scheme prepared by some one in that department who
would necessarily be under him, like the General Manager of
the Road Transport Department, it does not follow that the
Secretary is an improper person to give the hearing because
he hears his subordinate who put forward the scheme also,
along with the objectors. Further, the Secretary in this
case is not the deciding authority which is the Chief
Minister’ He made notes of the hearing and conveyed the
arguments to the Chief Minister, and as the matter was
purely administrative, the procedure cannot be said to be
improper. I am, therefore, of opinion that the contentions
under this head must be rejected.
Re. (4). It is said that there was no real hearing at all
and no genuine consideration of the objections as the issue
had already been pre-judged, and reliance in this connexion
is placed on the statement of the Chief Secretary dated the
26th of December, 1957. It appears that the Chief Secretary
said that the Government had already taken a decision to
nationalise transport in Krishna District and some routes
had been chosen. Learned Attorney General contends that
this only refers to the scheme which had already been
published on the 14th of November, 1957. Mr. Nambiar on the
other hand contends that it goes much further and shows that
the Government had already made up their mind to nationalise
road transport in Krishna District and therefore the hearing
which the State Government gave to the objectors to the
scheme was
370
a farce. Now, taking into account what I have said above
about the scope of the hearing under s. 68D(2), it would be
clear that there was no prejudging of the issue so far as
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the scheme was concerned. It is true that the Chief
Secretary said that there would be nationalisation in
Krishna District, which meant of course complete exclusion
of the private bus operators;’ but I have already said that
the scope of the hearing under s. 68D(2) is to consider
whether the scheme is efficient, etc., and is in public
interest. If the answer is yes, complete exclusion follows.
Therefore, when the Chief Secretary said that the Government
had decided to nationalise road transport in Krishna
District, he was certainly not saying that the Government
was wedded to the scheme which was published and to which
objections had been invited. The speech merely emphasises
the aspect of complete exclusion; but it nowhere says that
the scheme which was to bring about the exclusion into
effect had already been approved. I may again in this
connection refer to Franklin’s case (ibid), where also an
argument was raised that the Minister was biased so far as
any consideration of the draft order was concerned, as he
had said in an earlier speech that he would make the said
order. It was held that as the Minister had no judicial or
quasi-judicial duty imposed on him, consideration of bias in
the execution of this duty was irrelevant, the sole question
being whether or not he genuinely considered the report and
the objections. In the present case also, the sole question
was whether the objections to the scheme were genuinely
considered. If after genuine consideration they were
approved, complete exclusion would follow. Simply because
the Chief Secretary said that the Government had decided to
nationalise road transport in Krishna District, it did not
follow that the Government was not prepared to consider
fairly the objections to the scheme on the approval of which
nationalisation would follow through complete exclusion.
Considering, therefore, that the hearing before the State
Government under s. 68D(2) was purely administrative, there
is no force in this objection.
380
Re. (5). It is urged that the scheme was proposed by the
Andhra Pradesh Road Transport Department as the State
Transport Undertaking within the meaning of s. 68A and was
approved while that undertaking was still in existence. But
immediately after -the scheme was approved the Undertaking
came to an end and the Road Transport Corporation came into
existence and that Corporation could not carry out the
scheme which had been approved before it came into
existence. The argument seems to be that the body which
prepared the scheme and got it approved is the body which
can enforce it, and as the Road Transport Corporation
neither prepared it nor got it approved, it cannot enforce
it. I am of opinion that there is no force in this
contention. The Road Transport Corporation came into
existence oil the 11th of January, 1958. On the same date
the State Government passed an order under s. 34 of the Road
Transport Corporation Act No. LIV of 1950 by which it
directed that the Corporation shall take the management of
the Road Transport Department of the Government of Andhra,
Pradesh and all assets and liabilities of the Department
shall pass to the Corporation. The staff of the Road
Transport Department were given option to serve under the
Corporation and direction was given that those who opt to
serve the Corporation shall be employed by the Corporation
subject to the regulations made under the Act and the
assurance given by the Government to the employees.
It was urged in the first place that such an order could not
be passed under s. 34 of the Road Transport Corporation Act.
Section 34, however, gives very wide powers to the State
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Government to give directions to the Corporation, including
directions relating to the recruitment, condition of service
and training of its employees, wages to be paid to the
employee, reserve to be maintained by it and disposal of its
profits or stocks. In the circumstances, it was open to the
State Government, under the wide powers Conferred by s. 34
of the Road Transport Corporation Act, to ask the
Corporation which was being created to take over the assets,
liabilities and the employees of the Road Transport
381
Department which was being wound up. Now, the effect of
this order was to make the Road Transport Corporation a
successor of the Road Transport Department. It is true that
there is nothing in Chapter IV-A of the Act which provides
for succession of one kind of undertaking as defined in s.
68A(b) by another kind of undertaking as defined therein,
but when in fact it happens that the Road Transport
Corporation is ordered under s. 34 of the Road Transport
Corporation Act to take over everything from the Road Trans-
port Department, there is no reason why it should not be
considered to be the successor of the Road Transport
Department which was at that time the State Transport
Undertaking. If the Road Transport Corporation is thus a
successor of the State Transport Undertaking from the 11th
of January, 1958, I do not see why it cannot enforce the
scheme which had already been approved at the instance of
its predecessor. I can see no sense in requiring the Road
Transport Corporation to go through all these steps which
had been gone through by its predecessor, except that it
would delay the coming into force of the scheme ; probably,
the argument has been raised merely for the sake of delay.
But I am of opinion that the Road Transport Corporation in
this case being the successor of the State Transport
Undertaking which got the Scheme prepared and approved is
en-titled to enforce it under s. 68-F of Chapter IV-A in the
absence of any provision to the contrary in the Chapter.
This contention also fails.
In view of what I have said above on the second contention,
the petition fails and I would dismiss it with costs.
SINHA, J.-I have had the advantage of perusing the judgments
prepared by our brothers, Subba Rao and Wanchoo, JJ. After
giving my best consideration to the opinions expressed in
the two judgments, I have come to the conclusion that I am
not in a position to agree with all the conclusions arrived
at by our brother Subba Rao.
Two main controversies were raised on behalf of the
petitioners, namely, (1) that the provisions of Chapter
382
IVA of the Motor Vehicles Act, 1939 (which will be referred
to in the course of this judgment as the Act), violate the
fundamental rights guaranteed to citizens of India under the
Constitution, and (2) that the scheme framed under the Act,
was ultra vires the Act. I agree with my brother Subba Rao
that the said Chapter IVA of the Act does not infringe any
fundamental rights of the petitioners, and that those
provisions are constitutionally valid. I also agree with
him in holding that the Road Transport Department of the
Andhra Pradesh Government, is a State Transport Undertaking
under the Central Act; that the Notification publishing the
scheme had been validly done, and that the conditions
precedent to the initiation of the scheme, had been
fulfilled. But I do not agree with him in his conclusion
that the State Government, in approving the published
scheme, was discharging any judicial or quasi-judicial
function. On the other hand, I agree with my brother
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Wanchoo in his conclusion that in so doing, the State
Government was only performing its normal administrative
function.
As my learned brothers aforesaid have stated the relevant
facts in detail, it is not necessary for me to repeat them,
but as I differ from my learned brother Subba Rao, with whom
some of my colleagues on the Constitution Bench have agreed,
and for whose opinions, I have the greatest respect, I
should state my reasons for differing from them and for
agreeing with our brother Wanchoo. It may be taken as the
settled view of this Court that the question whether a
certain decision envisaged in a statute, is judicial or
quasijudicial or only administrative in character, must de-
pend upon the terms of the statute law itself, apart from
any pre-conceived notions about the functions of a court or
other tribunals vested with the duty and jurisdiction to
decide controversies as a judicial body, vide Province of
Bombay v. Kusaldas S. Advani (1), Nagendra Nath Bora v.
Commissioner of Hills Division(2) and Express Newspapers
Limited v. Union of India (3). Now, let us see what has
been envisaged by the im-
(1) [1950] S.C.R. 621. (2) A.I.R. 1958 S.C. 398.
(3) A.I.R. 1958 S.C. 578.
383
pugned provisions of Chapter IVA of the Act. The first step
in the process is the preparation of a scheme of road
transport service by a State Transport Undertaking "for the
purpose of providing an efficient, adequate, economical and
properly coordinated road transport service." Such a scheme
may be to the exclusion, complete or partial, of other
persons or otherwise. The second step would be to publish
such a scheme in the Official Gazette and also in such other
manner as the State Government may direct, giving
particulars of the nature of the service proposed to be
rendered, area or route proposed to be covered and other
prescribed particulars-(s. 68-C). The third step in that
process is the filing of objections to the scheme by any
person affected by the scheme so published. Those
objections have to be filed before the State Government
within thirty days from the date of the publication of the
scheme-(s. 68-D (1)). The fourth step is to be taken by the
State Government, of considering the objections after giving
an opportunity to the objectors or their representatives and
the representatives of the State Transport Undertaking, to
be heard-(s. 68-D(2) ). And the last step is that after
hearing all concerned, the State Government may approve or
modify the scheme. It is noteworthy that this section does
not contemplate an outright rejection of the scheme but only
a modification, if it is necessary. The scheme as approved
or modified, has then to be published in the Official
Gazette, and thereupon, the scheme becomes final. Such a
scheme is called the "approved scheme ", and the area or
route to which it relate,,;, is called the "notified area"
or "notified route"-Is. 68-D(3) ). The approved scheme may
at any time be cancelled, or modified by the State Transport
Undertaking, according to the procedure already indicated,
as contained in S. 68-C and s. 68-D, if it is proposed to
modify it-(s. 68-E). The provisions of Chapter IV, relating
to the grant of stage carriage permits, etc., have been
abrogated so as to make it obligatory on the Regional Trans-
port Authority to issue permits applied for by a State
Transport Undertaking, in pursuance of the approved scheme.
Not only that, with a view to giving effect
384
to the approved scheme in respect of a notified area or
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notified route, the Regional Transport Authority has been
authorized to refuse renewal of any permit, to cancel any
existing permit, or to modify the terms of any existing
permit-(s. 68-F). The provisions of s. 64, relating to
appeals by aggrieved persons against orders of refusal to
grant a permit, or of revocation or suspension of a permit,
or of refusal to renew a permit, etc., have been abrogated
in so far as those orders have been passed under s. 68-F.
A review of the provisions aforesaid, contained in ss. 68-C
to 68-F in Chapter IV-A, leads to the following
conclusions:-
(1)A State Transport Undertaking has been authorized to
determine whether or not it is in the public interest that
road transport services in general, or any particular class
of service, should be run and operated by the State
Undertaking, in relation to any area or route or a portion
thereof, keeping in view the purpose of providing an
efficient, adequate, economical and properly coordinated
road transport service. It is for the State Transport
Undertaking to prepare a scheme in furtherance of its
determination in favour of such a service, and to publish
the same in the Official Gazette and elsewhere, with a view
to informing the public, including those who may be affected
by such a scheme.
(2) Objections to such a scheme may be taken by parties
interested, but such objections are not claims.
(3) The State Government is authorized to decide the
question whether the proposed scheme should be approved or
modified, after hearing the parties or their representatives
in support of their objections to the scheme. As the
objections have to be directed to the merits of the scheme
proposed by the State Transport
Undertaking, there is no question of any lis between
conflicting claims.
(4) No particular person or body of persons in the
Governmental hierarchy of officers, has been designated as
the Authority to hear the objections and to pronounce upon
them, unlike the provisions in Chapter IV. Neither the
provisions in Chapter IV-A nor the rules made in pursuance
of s. 68-1, contemplate
385
adducing evidence or calling witnesses in support of or in
opposition to the proposed scheme.
(5)The right of appeal as contemplated by s. 64 in Chapter
IV, has been expressly abrogated by s. 68-F(3). Nor is
there any provision in Chapter IV-A, requiring reasons to be
given in writing for an order. passed by a Regional
Transport Authority under s. 68-F(1) and (2), as contrasted
with s. 57(7) in Chapter IV, which requires the Authority to
give its reasons in writing for refusing an application for
a permit of any kind, because such an order is open to
appeal, revision or review.
The question now arises whether, in view of the provisions
of Chapter IV-A, summarized above, and the conclusions as
indicated above, the determination by the State Government
is judicial or quasi-judicial in character, as contended for
the petitioners, or only of an administrative character, as
contended on behalf of the respondents. In order that a
determination may be characterized as judicial or quasi-
judicial, it is essential that it should be objective, based
on evidence pro and con (not necessarily given in accordance
with the strict rules of evidence) by a determinate
authority who should not have the right to delegate such a
function of a judicial character. Section 68-D(2) authori-
zes the State Government to decide whether or not the
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proposed scheme should be approved or modified.’ The "State
Government" may mean the Governor himself or any of his
Ministers or Deputy Ministers or any officers in the
Secretariat, according to the rules of business promulgated
under Art. 166 of the Constitution. Section 68-D(2) could
not have meant that the Governor himself or any of his
Ministers should personally hear the objections-that would
be throwing too great a burden on them. The objections may
be heard by any one who has been delegated that power. If
that is correct, the function to be performed under s. 68-
D(2), does not satisfy the test of a judicial hearing.
Under that section, the objections may be heard by ’A’ and
the decision arrived at by ’B’. If that is
49
386
a regular procedure under that section, that is not an index
of a judicial process.
Another very important consideration pointing to the
conclusion that the determination under s. 68-D(2) is not of
a judicial character (using it in the comprehensive sense,
including ’quasi-judicial’, which expression has not been
approved by high judicial authorities), is that no objective
tests have been laid down in Chapter IV-A with reference to
which, the determination has to be arrived at. The
expressions "efficient", "adequate", "economical", "properly
coordinated" and "public interest", are matters of opinion
and policy as s. 68-C itself indicates, and do not lay down
any objective tests. If I am right in that conclusion,
there cannot be any question of evidence forthcoming in
proof of something which is subjective to the authority
determining that matter.
A very fundamental consideration in this connection, is
whether ss. 68-C and 68-D contemplate any lis. In other
words, what is the proper scope and ambit of the inquiry
envisaged by those sections ? The scheme prepared and
published in accordance with s. 68-C, by a State Transport
Undertaking, is placed before the public only after the
Undertaking has reached the conclusion that it is necessary
in the public interest. After the scheme has been prepared
and published as aforesaid, the objections to be filed under
s. 68-D have reference to the basic question whether or not
the scheme as published, was in public interest. Such
objections are open to any person or organization, e.g., an
Automobile Association, and are not limited only to persons
who are providing road transport services. In my opinion,
it is a mistake to suppose that the objections contemplated
by s. 68-D(l), could be on grounds personal to the objectors
who are engaged in the business of providing road transport
services. It is not open to any particular individual
carrying on the business of providing road transport
services, to claim that his route should be excluded from
the operation of the published scheme. I am led to that
conclusion by the effective words of s. 68-D(l), namely,
"file objections thereto", that is, to the scheme published
under s. 68-C.
387
The objections have to be limited to the merits of the
scheme as propounded by the State Transport Undertaking. It
will, therefore, be opening the gates too wide to hold that
the objections have reference to particular routes or
portions of routes covered by private transport services.
The underlying purpose of inviting objections, is not to
invite "claims" by individual businessmen engaged in
providing road transport services, but to bring out useful
information bearing on the feasibility and soundness of the
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scheme, as propounded by the Undertaking. Once, the
Government has decided upon a policy of nationalization of
road transport facilities, the question of safeguarding the
interest of individual businessmen in that line, is no more
relevant. What is relevant. for the purpose of the inquiry
by the Government, on receipt of objections, is whether the
published scheme is in the interest of the public. In my
opinion, therefore, it is erroneous to suppose that the
object of s. 68-D(l) is to afford any remedy to a private
individual in his personal interest. Particulars of the
scheme required to be published under s. 68C, are meant for
the information of the public, so that persons feeling
interested in a public venture like that, may offer
intelligent and constructive criticism with reference to the
merits of the scheme. It is equally erroneous to suppose
that there are two parties-one, represented by the
Undertaking, and the other, represented by persons who are
engaged in the business of providing road transport
services-and that the Government is the third party, which
is the arbitrator between the two contesting parties. That,
in my opinion, is not a correct reading of the provisions of
Chapter IV-A of the Act. The whole aim and object of that
Chapter is to replace individual businessmen engaged in that
trade, by nationalised road transport services which are
meant to be run in the interest of the community as a whole,
and thus to serve the best public interest. The Government
is as much interested in the scheme as the Road Transport
Undertaking which is a creature and a limb of the
Government, brought into existence with a view to
implementing the policy of the Government to provide
nationalised
388
road transport services. That being the whole scheme of the
policy of nationalisation, it is not correct to represent
the State Transport Undertaking as entering into competition
with other individuals or incorporated bodies whose business
it is to provide the same kind of transport facilities.
That is made clear by the provisions of s. 68-F, which, as
indicated above, make it obligatory on the Regional
Transport Authority to issue permits as applied for by the
State Transport Undertaking. It follows from the foregoing
observations that there is no question of the Government
functioning as an adjudicating authority as between the
rival claims of the Undertaking and private persons engaged
in the same kind of activity, or that the Secretary to
Government in the Department of Road Transport, when he
personally heard the objections, was functioning as a judge,
or that he was disqualified, by any bias, from hearing those
objections. If we carry this line of reasoning to its
logical conclusion, then even the Minister in-charge of the
Department, may be said to be equally interested, and
therefore, equally biased, and thus, disqualified from
hearing those objections and coming to his own
determination, as contemplated in s. 68-D(2). In my
opinion, the concept that a person should not be a judge in
his own cause, is wholly foreign to the scheme and
provisions of Chapter IV-A of the Act.
The scheme as prepared and published, may have proposed, as
it did in the instant case, completely to exclude other
persons from providing road transport service in the
notified area by the notified routes. But the State
Government is not concerned with determining whether any or
some or all of the objectors could be permitted to provide
or continue to provide their own road transport service.
The State Government under s. 68-D(2) has only to decide
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whether or not the proposed scheme should be approved or
modified in any way. The decision to be arrived at by the
State Government, is confined to the scheme, and is not
concerned with rival claims by persons providing road
transport service in the same area or by the same routes.
That, in my opinion, is the reason why under that section,
the State Government has not been authorized altogether to.
389
cancel the scheme, but only to approve or modify it. The
State Government has to examine the soundness of the
declaration made by the Road Transport Undertaking that the
proposed scheme is in public interest. The stage of
cancellation comes, if at all, later under s. 68-E, when
experience gained in working the approved scheme, may
lead the State Transport Undertaking to the conclusion that
it should be cancelled or modified.But at the initial stage,
that is to say, under s. 68-D, the proposed scheme is
already there only to be approved or modified in the light
of the objections raised, if any. It has been held and it
may be taken as well-settled that when there is a
competition between a number of applicants for a particular
route for supplying road transport service, the Regional
Transport Authority or any other Authority deciding between
those conflicting claims, has to determine the matter in a
quasijudicial way, because they are determining questions
affecting the rights of individuals. But in the proceeding
before the State Government, no such rival -claims have to
be decided upon. What has to be determined is whether the
proposed scheme will serve public interest. Thus, in
proceedings under Chapter IV of the Act, individual claims
have to be decided upon, whereas under Chapter IVA, it is
the collective interest of the community as a whole, which
is the subjectmatter of determination by the State
Government. In other words, the proposed scheme is the
outcome of the decision by a limb of the State Government
(State Transport Undertaking), which has come to the con-
clusion that it is in the public interest that road trans-
port service should be run and operated by the State. The
calling of objections by persons affected by the scheme, is
not with a view to deciding between the rival claims of the
State Undertaking and individuals providing road transport
services in the areas or routes proposed to be covered. The
State Transport Undertaking has not made any claim at this
stage. Such a claim arises after the determination by the
State Government Under s. 68D(2). That stage is reached
when the State Transport Undertaking applies for permits
under s. 68F. Such a claim for a permit, once
390
made by the Undertaking, is no more a rival claim to be
treated along with the claims of other individuals providing
such road transport services, but an absolute claim which
under that section shall be granted by the Regional
Transport Authority which is authorized even to cancel an
existing permit or modify the terms of an existing permit,
or to refuse renewal of permits, with a view to implementing
the approved scheme. In my opinion, therefore, it is not
correct to view the proceedings under Chapter IVA before the
State Government as a lis between any rival claims, unlike
proceedings under Chapter IV of the Act. In view of these
considerations, I would hold that there is no lis between
rival claims, no determinate tribunal to determine any lis,
and no procedure prescribed in Chapter IVA approximating or
even simulating judicial procedure. That being so, there is
no question of any bias, because there can be none in a
determination which is come to by officers of the Government
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in the discharge of their administrative duties.
As already indicated, the question now under consideration,
does not admit of a general answer. The answer must depend
upon the relevant statutory provisions, and one case decided
on its own basic statutory provisions, cannot be a
controlling authority for another; but, by way of
illustration, reported cases dealing with similar questions,
have been referred to. My learned brother Wanchoo, J., has
referred in detail to Franklin’s case, hence, I need not add
any observations with reference to that case. But another
case, namely, Robinson v. Minister of Town and Country
Planning (1), perhaps, not referred to at the bar, seems to
me to be instructive in so far as it has discussed this very
question with reference to the provisions of s. 1(1) of the
Town and Country Planning Act, 1944, which is in these
terms:- :-
" Where the Minister of Town and Country Planning (in this
Act referred to as ’the Minister’) is satisfied that it is
requisite, for the purpose of dealing satisfactorily with
extensive war damage in the area of a local planning
authority, that a part or parts of their
(I) [1947] 1 All E.R. 851, 853, 854.
391
area, consisting of land shown to his satisfaction to have
sustained war damage or of such land together with other
land contiguous or adjacent thereto, should be laid out
afresh and redeveloped as a whole, an order declaring all or
any of the land in such a part of their area to be land
subject to compulsory purchase for dealing with war damage
may be made by the Minister if an application in that behalf
is made to him by the authority before the expiration of
five years from such date as the Minister may by order
appoint as being the date when the making of such
applications has become practicable. A part of the area of
a local planning authority as to which the Minister is
satisfied as aforesaid is in this Act referred to as an
’area of extensive war damage’."
Lord Greene, M. R., who delivered the leading judgment of
the Court of Appeal, reversing that of Henn Collins, J. thus
summarized the procedure laid down in the Act :-
" The procedural provisions in connection with the obtaining
of an order under the sub-section may, so far as relevant,
be summarised as follows: (a) Under sub-s. (4) at least two
months before the application is made the authority must
publish a notice in a local newspaper; (b) under sub-s. (5)
the application must ’designate’ the land to which the
application relates by reference to a map with or without
descriptive matter ; (c) under sub-s. (6) the a application
must be accompanied by a statement illustrated by a map, for
indicating the manner in which it is intended that the land
in the area of extensive war damage should be laid out as
respects its internal arrangement and in relation to the
existing or intended lay-out of the surrounding locality,
and the manner in which it is intended that such land should
be used whether for purposes requiring the carrying out of
development or otherwise’; (d) under sub-s. (7) if the
Minister is satisfied that these particulars are adequate
for enabling the expediency of the making of an order’ to be
properly considered, he notifies the authority who must then
advertise for objections; (e) under sched. I unless the
Minister, apart from an objection (which must be accompanied
by a
392
written statement of its grounds) decides to refuse the
application or to make an agreed modification to meet the
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objection, he must ’consider the grounds of the objection as
set out in the statement’ and may call for a further
statement. Under para. 4 of the schedule the Minister, ’if
satisfied that he is sufficiently informed, ’for the purpose
of his deciding as aforesaid (sc. whether or not to make the
order applied for), as to the matters to which the objection
relates’ he may decide to make the order without further
investigation. Subject, to this, the Minister (para. 5)
must give the objector an opportunity of appearing before a
person nominated by the Minister and, if the objector avails
himself of this, a similar opportunity to the authority.
Under para. 6, if it appears to the Minister that the
matters to which the objection relates call for
investigation by a public inquiry, he must cause such an
inquiry to be held, in which case, the requirements of para.
5 as to a private hearing need not be complied with; (f)
under s. 1(8), subject to the provisions of sched. 1, the
Minister may make the order with or without modification,
except that he cannot extend the area unless all persons
interested consent."
In the case of Phoenix Assurance Co., Ltd. v. Minister of
Town and Country Planning (1), Henn Collins, J. considered
the nature of the order to be passed under s. I (I) of the
Town and Country Planning Act, 1944, and came to the
conclusion that the Minister’s function was of a quasi-
judicial character. He followed that decision in the case
which came up before the Court of Appeal in Robinson v.
Minister of Town and, Country Planning (2). The Court of
Appeal reversed the decision of the learned Judge, and did
not approve of his decision in Phoenix Assurance Co., Ltd.
v. Minister of Town and Country Planning (1). In the course
of his judgment, Lord Greene, M. R., observed as follows at
page 859:-
" It is the case of an original order to be made by the
Minister as an executive authority who is at liberty to base
his opinion on whatever material he thinks fit,
(I) [1947] 1 All E.R. 454.
(2) [1947] 1 All E. R. 851, 853, 854.
393
whether obtained in the ordinary course of his executive
functions or derived from what is brought out at a public
inquiry if there is one. To say that, in coming to his
decision, he is in any sense acting in a quasi-judicial
capacity is to misunderstand the nature of the process
altogether. I am not concerned to dispute that the inquiry
itself must be conducted on what may be described as quasi-
judicial principles, but this is quite a different thing
from saying that any such principles are applicable to the
doing of the executive act itself, i.e. , the making of the
order. The inquiry is only a step in the process which
leads to that result, and there is, in my opinion, no
justification for saying that the executive decision to make
the order can be controlled by the courts by reference to
the evidence or lack of evidence at the inquiry which is
here relied on. Such a theory treats the executive act as
though it were a judicial decision (or, if the phrase is
preferred, a quasi-judicial decision) which it most emphati-
cally is not."
I have devoted considerable space to the decision of the
Court of Appeal, (supra), to show the close resemblance
between the procedure envisaged in the Act of the British
Parliament, and the law as laid down in Chapter IV-A of the
Act. In the reported case also, there had to be an inquiry
if objections were raised to the notified scheme of town
planning, and the Minister concerned had to consider all the
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evidence led on behalf of the objectors. In that case,
unlike the instant case, there was a provision for receiving
evidence pro and con, but even then, the Court of Appeal did
not hold that the function of the Minister was of a judicial
or quasi-judicial character, chiefly on the ground that no
objective tests were possible in coming to his conclusions
before passing the order under the relevant section of the
Act of Parliament.
For the reasons given above, I have come to the conclusion,
in agreement with my brother Wanchoo, J., that the
Government or the Minister concerned, when passing an order
under s. 68-D(2), had not to discharge a quasi-judicial
function, but was acting only in its or
50
394
his administrative capacity. It follows from this con-
clusion that all considerations flowing from the basic idea
of the proceedings before the State Government being of a
quasi-judicial character, are wholly out of the way. It
must, therefore, be held that the order of the State
Government, impugned in this case, is not open to any
interference by the courts. I would, therefore, dismiss the
petition with costs.
ORDER
In view of the opinion of the majority the order approving
the scheme is hereby quashed and a direction issued to the
first respondent to forbear from taking over any of the
routes in which the petitioners are engaged in transport
business. This will not preclude the State Government from
making the necessary enquiry in regard to the objections
filed by the petitioners in accordance with law. The
petitioners will have liberty to file additional objections,
if any. The parties to bear their own costs.