# April 28 Appeal dismissed. H. C. NARAYANAPPA AND OTHERS v. THE STA.TE OF MYSORE AND OTHERS

- **Citation:** [1960] 3 S.C.R. 742
- **Court:** Supreme Court of India
- **Decided:** 1960
- **Bench:** B. P. Sinha, Jafer Imam, A. K. Sarkar, K. Subba Rao, J.C. Shah
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/april-28-appeal-dismissed-h-c-narayanappa-and-others-v-the-sta-te-of-mysore-and-1893
- **Pages:** 13

## Headnote

. Transport Business-Stage carriages-Exclusion of private
operators-Competence of Parliament to create monopolies-Grant
of monopoly to State for transport business-Scheme framed by
State for State Transport Undertaking-Legality-Motor Vehicles
Act, 1939 (IV of 1939), Ch. IV A, ss. 68C, 68D (2)--Constitution
of India, Arts. 12, 13(3)(a), 19(l)(g), 19(6), 298, Seventh Schedule,
List II, entry 26, List III, entries 21, 35.
In exercise of the powers conferred by s. 68C of the Motor
Vehicles Act 1939, the General Manager of the Mysore Government Road Transport Departmem published a scheme for the exclusion of p~ivate operators on certain routes in a specified area
and reservation of those routes for the State Transport Undertaking.
The scheme was
approved by the
Government
under
s. 68D(2) of the Act ater the
Chief Minister of the State bad
given an opμortunity to the operators affected by the scheme to
make
r~i:resentations objecting to it.
The petitioners who were
tf-,
....
-
'
. .,
•
...
-
""·
3 S.C.R.
SUPREME COURT REPORTS
743
printe operators challenged the validity of the scheme and the
Jl}(j(J
action taken by the Government pursuant to it on the grounds,
Utter alil. ( 1) that the petitioners have a fundamental right to
N•l!Jlaru¥Pa
airry on the business of plying stage carriages and that the prov.
visions of Ch. IVA of the Motor Vehicles Act, 1939, which proState of MJsore
vide for the right of the State to exclusive right to carry on
·motor transport business are invalid, (2) that by Ch. IV A Parliament
had merely attempted to regulate the procedure for entry by the
State into the business of motor transport in the State, and that
in the absence of legislation expressly undertaken by the State in
that behalf,
that
State was
incompetent to
enter into the
arena of motor transport
business to the exclusion of private
operators, and (3) that the scheme violated the equal protection
clause of the Constitution because only fourteen out of a total of
thirty one routes on which stage carriages were plied for public
transport in the area specified were covered by the scheme :
Held, (l) that the expression
"commercial and industrial
monopolies" in entry 21 of List III of the Seventh Schedule of
the Constitution of India is wide enough to include grant or cretttion of commercial or industrial monopolies to the State and citizens as well as control of monopolies.
·
(2) th!!! it is' competent for the Parliament to enact Ch. IVA
o.f the Act under entry 21 read with entry 35 of List III.
(3) that the scheme framed under s. 68C of the Motor Vehicles Act may be
regarded as "law"
within the
meaning of
Art. 19(6) of the Constitution, made by the State excluding private
operators from notified routes or notified
areas, and immune
from the attack that it infringes the fundamental right guaranteed by Art. 19(l)(g).
( 4) that on a true reading, the scheme in question was approved in. relation to the fourteen notified routes and not in relation
to a notified area and that as a scheme under s. 68C of the Act
may be one in relation to an area or any route or portion thereof,
the scheme could not be challenged as discriminatory.
ORIGINAL ] URISDICTION: PETITION No. 2 OF 1960.
Petition under Article 32 of the Constitution of India
for the enforcement of Fundamental Rights.
A. V. Viswanatha Sastry and B. R. L. Iyengar, for the
petitioner.
G. S. Pathak, R. Gopalakrishnan and T. M. Sen, for
the respondents.
C. K. Daphtary, Solicitor-General of India and B.R.L.
1,1engar, for the Intervener (D. R. Karigowda).
1960. April 28.
The Judgement of the Court was
delivered by
SH.AH, J.-The petitioners pray for a writ quashing
ShtJ• .J.
a. schenie approved
under s. 68D(2) of the Motor
Vehicles Act. I 939, by the Government of the State nf
33-6 SCI/ND/82
1960
Narayonappa
v.
~taie o_f Mysore
S.\ah J.
744
SUPREME COURT REPORTS
ll 96l"
Mysore an<l for a writ restraining the respondents, i.~ ..
the State of Mysore, the General Manager, the Mysore
Government
Road Transpor

## Text

742
SUPREME COURT REPORTS
[1960]
1960
here any hypothetical difficulty which may arise in the
Commissioner of
lnco.ne-ta,,;
application of s. 6.
.
The appellant relies, on the third proviso to s. 5 of
the Act in support of the contention that it excludes
the Baroda business of the assessee and the losses of
that business cannot be set off against the profits of
the business in India, and the appellant can succeed only·
on establishing that the proviso clearly and without any
ambiguity excludes the Baroda business.
We agree
with the High Court that if there is any ambiguity of
language, the benefit of that ambiguity must be given
to the assessee. However, the· conclusion at which we
have arrived is that on the language of the proviso as it
stands, it does not exclude the Baroda business of the
assessee but exempts only the income, profits or gains
thereof unless they are received or deemed to be received in or brought into India. Accordingly, the High
Court correctly answered the question of law referred
to it. The appeal fails. and is dismissed with costs.
v.
Knramch,,nd
Pre,nchand Ltd.
S.K. Das J.
1960
April 28
Appeal dismissed.
H. C. NARAYANAPPA AND OTHERS
v.
THE STA.TE OF MYSORE AND OTHERS
(B. P. Sinha, C.J.,' Jafer Imam, A. K. Sarkar,
K. Subba Rao and J.C. Shah, JJ.)
. Transport Business-Stage carriages-Exclusion of private
operators-Competence of Parliament to create monopolies-Grant
of monopoly to State for transport business-Scheme framed by
State for State Transport Undertaking-Legality-Motor Vehicles
Act, 1939 (IV of 1939), Ch. IV A, ss. 68C, 68D (2)--Constitution
of India, Arts. 12, 13(3)(a), 19(l)(g), 19(6), 298, Seventh Schedule,
List II, entry 26, List III, entries 21, 35.
In exercise of the powers conferred by s. 68C of the Motor
Vehicles Act 1939, the General Manager of the Mysore Government Road Transport Departmem published a scheme for the exclusion of p~ivate operators on certain routes in a specified area
and reservation of those routes for the State Transport Undertaking.
The scheme was
approved by the
Government
under
s. 68D(2) of the Act ater the
Chief Minister of the State bad
given an opμortunity to the operators affected by the scheme to
make
r~i:resentations objecting to it.
The petitioners who were
tf-,
....
-
'
. .,
•
...
-
""·
3 S.C.R.
SUPREME COURT REPORTS
743
printe operators challenged the validity of the scheme and the
Jl}(j(J
action taken by the Government pursuant to it on the grounds,
Utter alil. ( 1) that the petitioners have a fundamental right to
N•l!Jlaru¥Pa
airry on the business of plying stage carriages and that the prov.
visions of Ch. IVA of the Motor Vehicles Act, 1939, which proState of MJsore
vide for the right of the State to exclusive right to carry on
·motor transport business are invalid, (2) that by Ch. IV A Parliament
had merely attempted to regulate the procedure for entry by the
State into the business of motor transport in the State, and that
in the absence of legislation expressly undertaken by the State in
that behalf,
that
State was
incompetent to
enter into the
arena of motor transport
business to the exclusion of private
operators, and (3) that the scheme violated the equal protection
clause of the Constitution because only fourteen out of a total of
thirty one routes on which stage carriages were plied for public
transport in the area specified were covered by the scheme :
Held, (l) that the expression
"commercial and industrial
monopolies" in entry 21 of List III of the Seventh Schedule of
the Constitution of India is wide enough to include grant or cretttion of commercial or industrial monopolies to the State and citizens as well as control of monopolies.
·
(2) th!!! it is' competent for the Parliament to enact Ch. IVA
o.f the Act under entry 21 read with entry 35 of List III.
(3) that the scheme framed under s. 68C of the Motor Vehicles Act may be
regarded as "law"
within the
meaning of
Art. 19(6) of the Constitution, made by the State excluding private
operators from notified routes or notified
areas, and immune
from the attack that it infringes the fundamental right guaranteed by Art. 19(l)(g).
( 4) that on a true reading, the scheme in question was approved in. relation to the fourteen notified routes and not in relation
to a notified area and that as a scheme under s. 68C of the Act
may be one in relation to an area or any route or portion thereof,
the scheme could not be challenged as discriminatory.
ORIGINAL ] URISDICTION: PETITION No. 2 OF 1960.
Petition under Article 32 of the Constitution of India
for the enforcement of Fundamental Rights.
A. V. Viswanatha Sastry and B. R. L. Iyengar, for the
petitioner.
G. S. Pathak, R. Gopalakrishnan and T. M. Sen, for
the respondents.
C. K. Daphtary, Solicitor-General of India and B.R.L.
1,1engar, for the Intervener (D. R. Karigowda).
1960. April 28.
The Judgement of the Court was
delivered by
SH.AH, J.-The petitioners pray for a writ quashing
ShtJ• .J.
a. schenie approved
under s. 68D(2) of the Motor
Vehicles Act. I 939, by the Government of the State nf
33-6 SCI/ND/82
1960
Narayonappa
v.
~taie o_f Mysore
S.\ah J.
744
SUPREME COURT REPORTS
ll 96l"
Mysore an<l for a writ restraining the respondents, i.~ ..
the State of Mysore, the General Manager, the Mysore
Government
Road Transport Deparment and the
R,·3ional Transport Authority, Bangalore, from takin~
act:on pursuant to the scheme.
The petitioners are operators of Stage cari-iages on
onain routes ;n the
sector
popularly
known
as
"Anekal '.lrea" in the Bangalore District.
On J anuan
13, 1959, the General Mana:>;er, Mysore
Government
Road Transport Depmtment, who \'i ill hereinafter be
referred to as the 2nd respondent, published a scheme
in exer6se of the powers conferred by s. 68C of the
Motor Vehicles Act, 1939, for the exclusion of pr:v~t<
opc:rators on certain routes and reservation of these
routes for the State trauspor~ undertakini~ in the Anekal
area.
The Chief Minister of the Mysore State gave the
op.-:rators affecte<l ,Jy the sc'lemc "n
opportunity of
making oral reprccntati.ons ~nd on pursuim-; t'.-ie writtt-n
objections and considering t21e oral representations, a,"
proved the ·1chLme as framed by the 2nd respondem.
On April 23, l 959, the scheme was published in the
Mysore State Government gazette.
On June 23, 1959,
renewal applications submitted by petitioners 1 to 3 fot
permits to ply Stage carriages on certain routes covered
by the scheme were rejected by the Transport Authorit1
and the 2nd respondent was given permanent permih
operative as from June 24, 1959, for plying buses on
those routes.
In 'Vrit Petition No. 463 of 1959 challenging the validity of the permanent permits granted
to the 2nd respondent, the High Court of Mysore held
that the issue of permits to the 2nd respondent befor~
the expiry of six weeks from the date of the application
was illegal. To petitioners 1 to 3 and certain other
operators renewal permits operative till
March 11 l,
1961, were thereafter issued by the third respondent.
The 2nd respondent applied for fresh permits in pursuance of the scheme approved on April 15, 1959, for
plying Stage carriages on routes specified in the scheme
and notices thereof returnable on January 5, 1960,
were served upon the operators likely to be affected
thereby.
On January 4, l 960, the five
petitioners
t ..
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-
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>·
3 S.C.R.
·suPREME COURT REPORTS
745
applied to this com t under Art. 32 of the Constitution
for quashing the scheme and for incidental reliefs.
The petitioners claim that they have a fundamental
right to carry on the business of plying stage carriages
and the scheme framed by the 2nd respondent and
approved by the State of Mysore unlawfully deprives
them of their fundamental right to carry on the business of plying stage carriages in the Anekal area.
The
divcr;e grounds on which the writ is claimed by the
petitioners need not be set out, because, at the hearing
of th c petition, counsel for the petitioner~ has restricted his argument to the following four heads :
( 1) tin' the scJ.eme ·:iotates the equal protection
clause of the Constitution, because onlv fourteen out
of a ro11l of thirty one routes on which, stage carriages
were plied for public transport in the Anekal uea were
covered by the scheme and that even from among the
opera'ors on the fourteen routes notified, two operato"s we--e left out, thereby making a flagrant discrimination between the Gperators ccven on those fourteen
routes:
(2) that by Ch1pter IVA of the Motor Vehicles Act,
J 9'19,
1';11 liamcnt had mcrel) attempted to regulate
the procedure for entry by the States into the busine~~
of motor transport in the State, and in the absence of
legislation expressly undertaken by the State of Mysore
in th;it behalf, that State was incompetent to enter
into the arena of motor transport busines' to the exclusion of private operators
(3) that the Chief Minister who heard the objections
to the scheme was biased against the petitioners and
that in any event, the objections raised by the operators were not considered judicially; and
(4) that the Chief Minister did not give "genuine
consideration" to the objections raised by the operators to the scheme in the light of the conditions prescribed by the Legislature.
Re. 1:
In column I of the scheme "part of Bangalore Dis-
'"\.
trict, viz., Bangalore North, Bangalore South, Anekal
and Hosakote Taluks" is set out as the area in relation
to
which
the
scheme
is
approved; and in
J9(j()
Narayaaa{J/m
v.
Stfft. of Myme
S4tJI J.
196(}
v.
SW. :1·
746
SUPREME COURT REPORTS
[1960}
column 3, "the routes (with their starting points, termini, intermediate stations and route length) in which
the State transport undertaking will introduce its services to the exclusion of private operators" are those
set out in statement 1 appended to the scheme.
Statement 1 sets out the description of fourteen routes with
their intermediate points, route length, number of buses
w be operated .and the maximum number of trips to be
performed on each route.
By column 4 "the number
of existing stage carriages on each route with the number
of trips and the names of their operators" are described
"as in statement 2 appended".
Statement 2 sets out the
names and places of business of fifty-six operators together with the routes operated and the numbers of
the stage carriages and trips made by those operators.
In the Anekal area, there are thrity·one routes, which
are served by stage carriages operated by private operators, and by the approval of the scheme, only fourteen
of those routes arc covered by the scheme.
Section 68C, in so far as it is material, provides that
a State transport undertaking, if it is of opinion that
it is necessary in the public interest that road transport
services in relation to any area or route or portion thereof
'
...
' -
should be run and operated by itself, whether to the ex1-
clusion, complete or partial, of other persons or otherwise, it may prepare a scheme giving particulars of the
nature of the services proposed to be rendered, the area
or route proposed to be covered and other particulars respecting thereto as may be prescribed.
Section 68D(I)
provides for inviting objections by persons affected by
the scheme.
Sub-section 2 of s. 68D
authorises the
State Government after considering the objections and
giving an opportunity to the objectors to approve or
modify the scheme; and by sub-s. 3, the scheme as ap·
proved or modified and published by the State Government in the official gazette shall "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."
Counsel for the petitioners contended that ex·
ercising powers under s. 68C, the State transport undertaking may prepare a scheme in respect of an area or a
'
3 S.C.R.
SUPREME COURT REPORTS
747
number of routes in that area, but not a scheme for an
area 'd1ich is to apply to some only and not to all
routes on which pnbl ic transport vehicles in the area
oper;ite.
In this case, it is unnecessary to decide whether
it is open to a State transport undertaking under a scheme
fran1ed for a notified area to limit its application to some
only of the routes,
because
on a true reading of
the scheme, it is amply clear that the scheme was ap·
pi·oved in relation to fourteen notified routes and not
in relation to a notified area.
The approved scheme is
in the form prescribed by the rules, and in the form
prescribed, by column 1, the area in relation to which
the scheme is approved is required to be set' out.
But
a scheme under s. 68C must be one in relation to an
area or any route or portion thereof wherein the transport service is to be undertaken by the State transport
undertaking to the exclusion, either complete or partial,
of other operators.
Column 1 of the approved scheme
undoubtedly describes the area in relation to which the
scheme is approved, but by the designation of the area,
in the scheme, an intention to exclude either whollv or
partially, the operators of stage carriages from that area
is not evinced either expi;essly or by implication.
By
column 3, the scheme expressly directs that the State
transport undertaking will introduce its service to the
exclusion of private operators on the specified routes.
The scheme must therefore be regarded as one for the
fourteen notified routes and not in relation to the area
described in column l.
Counsel for the
pet1t10ners
submitted
that
an
order passed on October 22, 1959, by the 3rd respondent
-the Regional Transport Authority-rejecting a pplications for permits for one of the fourteen routes to an
applicant, indicated that in the opinion of the third
respondent,
the
scheme
related
to
a
notified
area
and
not
to
notified
routes.
The
order
states that "an approved sch.eme' for the exclusive operation in the notifi.ed area of Bangalore District" by the
second respondent "has come into existence after the
n0t1fication of the route Bangalore to N 1llnr, and the
major portion of the route applied for lie in the notified
area and as such it was not desirable to grant any permit
34-6 SCI/ND/82
1960
Narayanappa.
v.
State of Nf.)'sore
Shah J.
1960
J{nrt1J'll11t1/i/ia
v.
Stnfe o.f
A~vsnrr
Shah],
748
SUPREME COURT REPORTS
[1960]
to operators to pass through notified area in the intr:i-
.~t:atc rnntc."
The
third rcsn<"ndenc ma' ha,·c in
u:miflffing the applicati011 01s;::i11c<l th:it the scheme
rc·hted to a notifier] a•·ea, b11r the true int:n1•rctatinn
d the 'rhcmc cannot he :1djudgcd in the light of tint
a>sL1mption.
The other documem
relie<l npon is "
1°t~.iernent of objections filed lw the second resp0ndcnt
"" Ou.oher 21, l!l.'>9, resi1tinti the applicatiJn for st.1gc
carriage permits to a private operator on the ronte
Siddalag·hatta-Bangalore via Nallm.
In para 4 of the
statcn1c11t, ir
\~.:as sub1niuci.1 th:1: "tl1l_' exi.;t!nr: noii(it~
tion dated October l 5, 1959 came under tl;e notified
area of the department" of the second respondent "and
that would overlap certain services of the department".
But because in making· his rlcfence, the seconrl respondent has referred to the scheme as dealing "·ith "the
notified area". the scheme "·ill not necessarilv he helrl
to be one in relation to the notified area. ·
The argument that among the operators on the
fourteen routes, two haYe been selected for special
trcatn1t:nt: ;inrl on that account. the sche1ne is <lis·
crimi natory, has, in our judgment, no substance.
It
is averrer] in para. 13 of the petition that two persons,
Chikkaveerappa operating on ronte Chikkathirnp:ithi
to Bangalore via Surjapur, Dornsanclra and Agara and
Krishn:i Rao operating· on route Banglore to ChikKathirupathi via Agara and Surjapur are not amongst
those who are excluded from operating their vehicles
on the notified routes.
In the affidavit filed by the
State and the second respondent, it is submitted that
the
plc:i
of
the
petitioners that the two persons
operatmg stage carriages on specified routes "·ere not
amongst those to be excluded is incorrcn arnl th:\t
those two persons had been notified by the Secret:iry
of the third respondent th:it they "-ere "likely to be
affected on o·ivinoeffect to the a}J}Jl'O\'erl scheme."
t"I
ei
Uncloubtedlv, route-item No. 2 in statement. I lo the
scheme is "Bangalore
to S11rjap11r
or any
portion
thereof" and
the' route operates \'ia
Agara
and
Domsandra, but. the record does not disclose that the
two named persons are, in plying their stage carriage,
entitled to operate on the route specified with right to
stop at the named pbces for picking up
passengers.
•
•
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•
3 S.C.R.
SUPREME COURT' REPORTS
749
lt is not clear ou the averments made in the petition
that the route on which the stage carriag~s of the two
named persons ply are identical; even if the routes on
which the stage carriages of these· two operators ply
overlap the notified route, in the absence of any
evidence to show that they had the right to pick up
pessengers en route, the discrimination alleged cannot
be deemed to have been made out.
Re. 2:
Article 298 of the Constittition as amended by the
Constitution (Seventh Aniendment) Act, 1956, recognises the executive power of the Union and of each State
as extending to the carrying on of any trade or business.
That power of the U uion is subject in so far as the
trade or business is not one in respect of which Parliament may make laws, to legislation by the State; and
the power of each State, in so far as the trade or
business is not one with respect to which the State
Legislature may make laws, is subject to legislation
by Parliament.
Like ordinary citizens, the
Union
and the State Governments
may carry on any trade
or business subject to restrictions which may be imposed by the Legislatures competent to legislate in respect
of the particular trade or business. Under Article 19(6)
of the Constitution as amended by the First Amendment Act, 1951, nothing in sub-cl. (g) of cl. (1) of Art.
19 is to affect the operation of any existing law in so
far as it related to, or 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
industry or business, whether to the exclusion, complete
or partial, of citizens or otherwise.
The State:
may
therefore carry on any trade or business, and legislation relating to the carrying on of trade or business by
the State, is not liable to be called in question on the
ground that it infringes the fundamental freedom of
citizens under Art. 19(1 )(g).
The Motor Vehicles Act,
1939, was enacted by the Central Legislative Assembly
in exercise of
its power under the Government of
India Act, 1935, to legislate in respect of mechanically
propelled vehicles.
Chapter IV A containing ss. 68A
to 68J was incorporated into that Act by the Parliament by Act 100 of 1956 whereby special provisions
1960
J\rarayatwppa
v.
Stale of klysure
Shah J.
1960
v.
State of A1_ysore
Shah J.
750
SUPREME COURT REPORTS
[1960]
relating to the conduct of transport undertakings by
the States or Corporations owned or controlled by the
State were made.
Section 68A defines the expression
"State
transport
undertaking"' as meaning
among
others an undertaking for providing transport service
carried on by the
Central
Government or a
State
Government or any Road Transport Corporation established under Act 44 of 1 %0.
By s. 68B, the provisions of that chapter and the rules and orders made
thereunder are to override Chapter IV and other laws
in force.
Section 68C authorises the
State transport
undertaking to prepare and publish a scheme of road
transport services of a State
transport undertaking.
Section 68D deals with the lodging of objections to
the scheme fram.cd under the preceding section, the
consideration of those objections and the publication
of the final scheme approved or modified by the State
Government.
Section 68F deals with the issue of
permits to State transport undertakings in respect of
a notified area or notified route and provides that the
Regional Transport Authority shall issue such permits
to the
State transport undertaking notwithstanding·
anything contained in Chapter IV.
It also
enables
the Regional Transport Authority, for giving effect to
the approved scheme, 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 elate, to reduce the number of
vehicles authori.sed to be used under the permit and to
curtail the area or route
covered
by
the
permit.
Section 68G sets out the principles and method
of
determining compensation -to persons whose existing
permits are cancelled.
By Chapter IVA, the State transport undertaking
which is either a department of the State or a corporation owned or controlled by the St.ate on the approval
of a scheme, is entitled, consistently with the scheme,
to exclusive right to carry on motor transport business.
The Regional Transport Authority is bound to grant
permit for the routes covered by the scheme to the
State transport undertaking if that
authority applies
for the same and the Regional Transport Authority is
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3 S.C.R.
SUPREME COURT REPORTS
751
also. bound in giving eHect to the approved scheme, "to
modify the terms of existing permits and to refuse to
entertain applications for renewal of permits of private
operators.
Chapter IV A is not merely regulatory of
the procedure for carrying on business of road transport by the State; it
enables the
State
transport
undertaking, subject to the provisions of the scheme,
to exclude private operators and to acquire a monopoly, partial
or complete, in carrying on transport
business, in a notified area or on notified routes.
The authority of the
Parliament to enact laws
granting monopolies to the State
Government
to
conduct the business of. road transport is not open to
serious challenge.
Entry No. 21 of List III of the
Seventh Schedule authorises the
Union
Parliament
and the State Legislatures concurrently to enact laws
in respect of commercial and industrial monopolies,
combines and trusts. The argument of the petitioners
· that the authority conferred by entry No. 21 in List
III is restricted to legislation to control of monopolies
and not to grant or creation of commercial or industrial monopolies has little substance.
The express10n
"Commercial and industrial
monopolies"
is
wide
enough to include grant or monopolies to the
State
and Citizens as well as control of monopolies.
The
expression used in a constitutional enactment conferring legislative powers must be construed not in any
nan:ow or restricted sense but in a sense beneficial to
the widest possible amplitude of its powers:
Navinchandra Ml•fatlal v. The Commissioner of income-tax,
Bombay City('). The United Provinces v. Atiqua Begum.(2). Entry No. 26 of List II of the Seventh Schedule
which invests the States with exclusive authority to
legislate in. :respect of trade and commerce within the
State, subject to the provisions of entry No. 33 of List
III, does not derogate from the authority conferred
by entry 21 of List III concurrently to the Parliament
and the State Legislatures to grant or create by law
commercial or industrial n1Dnopolies.
The amplitude
of the poweri; imder the entry in the co.ncurrent list
expressly dealing with
commerical
:ind
industrial
monopolies cannot be presumed to be restricted by the
(I) [1955] l.S.C.R. 829, 836.
(2)
[19'W] F.C.R. 110.
1960
y.
Stale of Mysore
.51wh J.
1960
,1Varr.ya11ajJ/1a
v.
State of 1l1;•sore
Shah J.
752
SUPRE:tl1E COURT REPORTS
[ 1960]
generality of the expression "trade
and commerce"
in the State List. If the argument of the petitioners
and the intervener that legislation relating to monopoly in respect of trade and industry is within the
exclusive competence of the State be accepted,
the
Union Parliament cannot legislate to create monopolies
in the Union Government in respect of any commercial or trading venture even though power to carry on
any trade or business under a monopoly is reserved to
the Union by the combined operation of Art. 298, and
the law which is protected from the attack that it
infring·es the fundamental freedom to carry on business
by Art. l '1(6).
'We are therefore of the view that
Chapter IVA could competently be enacted
by
the
Parliament under entry No. 21 read with entry No. 35
of the Concurrent List.
The plea sought to be founded on the phraseology
used in Art. 19(6) that the State intending to carry on
trade or business must itself enact the law authorising
it to carry on tnde or business is equally devoid of
force.
The expression "the State" as defmcd in Art.
12 is inclusive of the Government and Parliament of
India and the Government and the Legislature of each
of the Stat.cs.
Under entry No. 21 of the Concurrent
List, the Parliament being competent to legislate for
creating commercial or trading
monopolies, there is
nothing· in the Constitution which deprives it of the
power to create a commercial or trading monopoly in
the constituent States.
Article 19(6) is a mere saving
provision: its function is not to create a power but to
immunise from altack the exercise of legislative power
falling with in its ambit.
The right of the State
to
carry on trade or business to the exclusion of others
does not arise by virtue of Art.
19(6).
The right of
the State to carry on trade or business is recognised
by Art. 298; authority to exclude competitors in tbe
field of such trade
or business is conferred on the
State by entrusting power to enact laws under entry
21 of List III of the Seventh Schedule, and the exercise of that pml"er in
the context of fundamental
rights is secured from attack by Art. 19(6).
In any event, t.he expression "law" as defined in
Art. l3(3)(a) includes any ordinance, order,
bye-bw,
" -
-
'
•
\
I
•
j
,__.\
\
3 S.C.R.
SUPREME COURT REPORTS
753
rule, regulation,
notification,
custom, etc., and the
scheme framed under s. 68C may properly be regarded
as "law" within the meaning of Art. l 9(6)
made by
the State excluding private operators
from notified
routes or notified areas, and immune from the attack
that it infringes the fundamental right guaranteed. by
Art. 19(1 )(g).
Re. 3:
The plea that the Chief Minister who approved the
scheme under s. 68D was
biased has no substance.
Section 68D of the
fotor Vehicles Act undoubtedly
imposes a duty on L.te State Government to act judicially· in considering the objections and in approving
or. modifying the scheme proposed by
the
transport
Jmdertaking.
GullafJalli Nageswara Rao v. Andhra
Pradesh State Road
TransjJort Corporation and another('). It is also true that the Government on whom
the duty to decide the dispute rests, is substantially a
party to the dispute but if the Government or the
authority to whom the pmver is delegated acts judici;
any in approving
or modifying
the scheme,
the
approval or modification is not open to challenge· on
a presumption of bias. The Minister or the officer of
the Government who is invested with the. power to
hear objections to the scheme is acting in his official
capacity and unless there is reliable evidence to show
that he is biased, his decision will not be liable to be
called in question, merely because he is a limb of the
Government. The Chief Minister of the State has filed
an affidavit in this case stating that the contention of
the petitioners .that he was "biased in favour of the
scheme was baseless"; he
has
also
stated that he
heard such objections and
representations ·as were
made before him and he had given the fullest opportunity to the objectors to submit their objections individually. The Chief Minister has given detailed reasons
for approving the scheme and has dealt with such of
the objections as he says were urged before him. In
the last para.· of the reasons given, it is stated that the
Government have , heard all the arguments advanced
on behalf of the operators and
"after giving
full
consideration to them, the Government have come to
I
(I) (1959] Supp. I S.C.R, 319.
1960
NaraJ•a11appa
v.
State of kfi•.<ore
Shah ,7.
Nara yanappa
v.
State of Mys0¥6
Shah ].
754
SUPREME COURT REPORTS
[1960 J
the conclusion that the scheme is necessary in the
interest of the public and is accordingly approved
subject to the modifications that it shall come into
force on May 1, 1959 ". In the absence of any evidence
controverting these averments, the plea of bias must
fail.
Re. 4:
The argument that the Chief Minister did not give
" genuine consideration " to the objections raised by
opera.tors to the scheme in the light of the conditions
prescribed has no force. The order of the Chief
Minister discusses the questions of law as well as questions of fact. There is no specific reference in the
order to certain objections which were raised in the
reply filed by the objectors, but we are, on that
account, unable to hold that the Chief Minister did not
consider those objections. The guarantee conferred
by s. 68D of the Motor Vehicles Act upon persons
likely to be affected by the intended scheme is a
guarantee of an opportunity to put forth their objections and to make representations to the State Government against the acceptance of the scheme. This
opportunity of making representations and of being
heard in support thereof may be regarded as real only
if in the consideration of the objections, there is a
judicial approach. But the Legislature does not
contemplate an appeal to this Court against the order
passed by the State Government approving or modify.
ing the scheme. Provided the authority invested
with the power to consider the objections gives an
opportunity to the objectors to be heard in the matter
and deals with the objections in the light of the object
intended to be secured by the scheme, the ultimate
order passed by that authority is'not open to challenge
either on the ground that another view may possibly
have been taken on the objections or that detailed
reasons have not been given for upholding or rejecting
the contentions raised by the objectors.
In the view taken by us, the contentions raised by
the petitioners fail and thr petition is therefore dismissed with costs.
Petition dismissed.