# D. jl. VENKATACHALAM & ORS v. DY. T/{ANSPORT Cf>MMISSIONER & OTHERS - **Citation:** [1977] 2 S.C.R. 392 - **Court:** Supreme Court of India - **Decided:** 1976-12-10 - **Bench:** A. N. Ray, M. H. Beg, V. R. KRISHNA lnR - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/d-jl-venkatachalam-ors-v-dy-t-ansport-cf-mmissioner-others-7049 - **Pages:** 15 ## Headnote • Motor Vehicles Rules, r. 155-A, vires of, whether against public iQterests whether coRtradicts or impliedly repeals proviso to s. 47(0 of the Motor Yehicles Act, 1939-E~presjio unius est etclusi~ alterius. applicability of. The aPpellants-, private stage carriage operators, applied for the renewal of their ·expiring bus permits. The respondent State Transport Uhdertaking objected, urging preferential grounds in its own favour, claiming to ha\'e' secured higher marks ·with the ·aid of r.-tj:5-A of the lvlotor Vehicles Rules. 1-be State Transport Undertaking's claim v.·as upheld. Tue appellants moved the appellate Tribunal, and also filed a writ petition before the High Court ·tor directions to the appellate Tribunal to dispose of his appeal without-relying on r. 155-A. The writ·Ntition was 'dismissed by a Single Judge,.and an appeal before the Division· Bench ·a1s6'"failed.' · · · - · · Jn appeal by Special Leave, the appellants assailed the validity of r. 155-A on the grounds of its being partial to the Government against public intere~t an.I co!1~.~icti!1g the pro~iso ~o ~· 47(1) of the ~1ot;>r yehicles Act, 1939. Dismissing the appeals, the Co\1rt, ~ELD: (Per K~ishna Iyer I. for himself ~nd ~n be~alf of~· N. Ray CJ.) 1. The assignment of mark~ under r. 155-A is geared to pubFc interest, v1hich i$ the desideratum of s. 47(1) of the ·Act. This is not an arbitrary stroke of favouritism because there arc many promotional factors bearing on · the interest o! the travelling public v.•bich a State enterprise qua State enterprise will, but a private enterprise qua private enterprise will not take care of. There is· equity in r." 155-A," lnaking up, as it does,' for the present short falls iH the ~g system vi1 a vi's .a government transport !crvicc. [398~, 399B] 0 P. Kumaralwamy v. State fransport A.pp.eltate Tribuntil, Madrav &:. A.11r. (1976] 2 SCR. 214 referr¢ to. __ The_ Court obsened : Le:al Darwinism, adapting the rule of law to new societal developments, so as to surTive ~nd serve the soc~l order, i3 n~ce~ary. [398B] Cardozo: The nature of the Judicial Proce.,s: Yale University Press: pp. 151-152, relied upon. 2. There cannot be any conflict betweeri s. 47 ( 1) proviso and the impugned rule. Tue proviso does not carry any negative injunction that tran~port tribunal shall not J?iVe anv other preferential consideration than what is stated in it. There is no implied interdict that in other contingencies no preference· shall be accorded. The proviso merely takes. care of a specific situation. MOfeovet. the- markin2 formula does not deprive the administrative tribunah of their discretion to choose the best (399C-E] Per H. M. Beg. J. (Concurring) Where there is a sinJ?le specified mode laid dowii. for-' doing something: in exercise of the legal power to do it, the specified mode may, negatively op~rate. ' D. R. VENKATACHALAM V. DY. TRANSPORT COMM. 3 93 (Krishna Iyer, !.) as a prohibition against what is not prescribed ar all and is outside che statute. Bnt expressio unius est exclu~io alterius could not apply ot a case where two modes of doing the same thing are provided for by a statute itself. Here both chapters IV and IV-A enable plying of State tranMMISSIONER & OTHERS December 10, 1976 [A. N. RAY, C.J,, M. H. BEG AND V. R. KRISHNA lnR, JJ.] • Motor Vehicles Rules, r. 155-A, vires of, whether against public iQterests whether coRtradicts or impliedly repeals proviso to s. 47(0 of the Motor Yehicles Act, 1939-E~presjio unius est etclusi~ alterius. applicability of. The aPpellants-, private stage carriage operators, applied for the renewal of their ·expiring bus permits. The respondent State Transport Uhdertaking objected, urging preferential grounds in its own favour, claiming to ha\'e' secured higher marks ·with the ·aid of r.-tj:5-A of the lvlotor Vehicles Rules. 1-be State Transport Undertaking's claim v.·as upheld. Tue appellants moved the appellate Tribunal, and also filed a writ petition before the High Court ·tor directions to the appellate Tribunal to dispose of his appeal without-relying on r. 155-A. The writ·Ntition was 'dismissed by a Single Judge,.and an appeal before the Division· Bench ·a1s6'"failed.' · · · - · · Jn appeal by Special Leave, the appellants assailed the validity of r. 155-A on the grounds of its being partial to the Government against public intere~t an.I co!1~.~icti!1g the pro~iso ~o ~· 47(1) of the ~1ot;>r yehicles Act, 1939. Dismissing the appeals, the Co\1rt, ~ELD: (Per K~ishna Iyer I. for himself ~nd ~n be~alf of~· N. Ray CJ.) 1. The assignment of mark~ under r. 155-A is geared to pubFc interest, v1hich i$ the desideratum of s. 47(1) of the ·Act. This is not an arbitrary stroke of favouritism because there arc many promotional factors bearing on · the interest o! the travelling public v.•bich a State enterprise qua State enterprise will, but a private enterprise qua private enterprise will not take care of. There is· equity in r." 155-A," lnaking up, as it does,' for the present short falls iH the ~g system vi1 a vi's .a government transport !crvicc. [398~, 399B] 0 P. Kumaralwamy v. State fransport A.pp.eltate Tribuntil, Madrav &:. A.11r. (1976] 2 SCR. 214 referr¢ to. __ The_ Court obsened : Le:al Darwinism, adapting the rule of law to new societal developments, so as to surTive ~nd serve the soc~l order, i3 n~ce~ary. [398B] Cardozo: The nature of the Judicial Proce.,s: Yale University Press: pp. 151-152, relied upon. 2. There cannot be any conflict betweeri s. 47 ( 1) proviso and the impugned rule. Tue proviso does not carry any negative injunction that tran~port tribunal shall not J?iVe anv other preferential consideration than what is stated in it. There is no implied interdict that in other contingencies no preference· shall be accorded. The proviso merely takes. care of a specific situation. MOfeovet. the- markin2 formula does not deprive the administrative tribunah of their discretion to choose the best (399C-E] Per H. M. Beg. J. (Concurring) Where there is a sinJ?le specified mode laid dowii. for-' doing something: in exercise of the legal power to do it, the specified mode may, negatively op~rate. ' D. R. VENKATACHALAM V. DY. TRANSPORT COMM. 3 93 (Krishna Iyer, !.) as a prohibition against what is not prescribed ar all and is outside che statute. Bnt expressio unius est exclu~io alterius could not apply ot a case where two modes of doing the same thing are provided for by a statute itself. Here both chapters IV and IV-A enable plying of State tranrovisions of the Act. The law, being realistic, reckons with the socialist sector covering State and co-operative enterprises. The special status of a government-owned transport undertaking in a Welfare State is obvious. It has large resources to cater to the traffic needs. It has, within its range of influence and coordination. many services useful to the travelling public, which may be beyond the reach of private ownership. Its functional motto is not more profits at any cost but service to citizens first and in a far larger measure than private companies and individuals, although profitability is also a. factor even in public utilities. Its sensitivity to community welfare and encouragement of labour participation, its accouatability to the Government, the legislature and the public put it in a category by it~clf. It is socially conscious, not profit obsessed. We are aware of the shortfalls of some public-sector undertakings in some respects c D E F G H A B c D E F G H 398 SUPREME COURT REPORTS [1977) 2 S.C.R. but it needg little argument to hold that to classify State transport systems on a separate footing is realisic and is ordinarily no sin before the principle of equality before the law'. The legislative body has done, in the given circumsitances, what it thought was sound policy and we find no vice in the policy. To classify what is conceptually and operationally different into a separate category is intelligence, not impertinence. The judicial art of interpretation and appraisal is imbued with creativity and reallsm, especially where fundamental changes have been wrought by the Constitution in our approach to public sector enterprises. Legal Darwinism, adapting the rule of law to new societal developments, so as to survive and serve the social order is necessary : "That court best serves the law which recognil:es that the rules of law which grew up in a remote generation may, in the fullness of experience, be found to serve another generation badly, and which discards the old rule when it finds that another rule of law represents what should be according to the established and settled judgment of society, and no considerable property rights have become vested in reliance upon the old rule. It is thus great writers upon the common law have discovered the source and method of its growth, and in its growth found its health and life. It is not and it should not be stationary. Change of this character should not be left to the legislature. If judges have woefully misinterpreted the mores of their day, or if the mores of their day are no longer those of ours, they ought not to tie, in helpless submission, the hands of their successors." (Cardozo : The Nature of the Judicial Process : Yale University Press: pp. 151-152). This refreshing perspective guides us to look at the submissions advanced. Both the contentions can be shot down by three considerations. Firstly, a State enterprise, in a truly Welfare State, is charged with a social consciousness and responsibility for its citizens, an attention to serve them and a willingness to embark on public uti- ~ lity undertakings better to fulfil people's demands. The public sector enterprises are expected to be model employers and model servants, planning their budgets, subjecting themselves to public audit and criticism and inquest by legislative committees and the Houses of the legislature. Profits are their concern but, more importantly, public weal is their commitment. Such is, the philosophy of the State sector in our socialistic pattern of society. Article 19 ( 6) (ii) and Art. 38 of the Constitution, s. 4 7 ( 1), especially the proviso, and Chapter IV A of the Act (now governed by the impregnable Ninth schedule to the Constitution) throw light on this policy of the paramount law. Here, therefore, the rule making authority, having regard to all relevant circumstances, has decided to award to a State Transport Undertaking 5 marks. This is not an arbitrary stroke of favouritism because there are many promotional factors bearing on the interest of the travelling public which a State enterprise qua State enterprise will, but a private enterprise qua private enterprise will not, take care of. j D. R. VENKATACHALAM V. DY. TRANSPORT COMM. 399 (Krishna Iyer, J.) After all, private enterprise has its primary motivation in profit, although, under State direction, it is becoming socially responsive. The superiority in many respects (not all respects) of State lransport Undertakings, in the legisla~ve judgment, has led to r. 155A. This classification has noetic nexus with and rational relation to the obiect of augmenting the good of the passenger community. The theory, rooted in the obsolescent laissez faire economics, that only cold competition among claimants to run businesses brings out the best operator has serious limitations in fields where the focus is on public service, not gains of business. Public law, adapting itself to this socio-economic view, shifts its emphasis. This is what we have earlier called legal Darwinism. We, therefore, hold that the assignment of marks under r. 155A is geared to public interest, which i.;; the desideratum ·of s. 47(1) of the Act. We now move on to an examination of the alleged fatal incompatibility between the proviso to s. 47(1) and 1:. 155A. This second submission of counsel is a trifle mystifying. There cannot be a contradiction without dictioo. Unless s. 4 7 (1) proviso carries a negative injunction that transport tribunals shall not give any other preferential consideration than what is stated in it, there cannot be anv conflict between it and the impugned rule. The proviso to the section does nothing of the kind. It merely takes care of a specific situation. Where a State Transport Undertaking and a private operator are ·equally balanced, the scales, may be tilted in favour of the former. There is no implied interdict that in other contingencies no preference shall be accorded. It is not a 'Thus far and no further'. .Indeed, the spirit of this proviso has been carried further by the rule, having regard to the realities of the total transport system plying in the State. A B c D E The third consideration which silences the appellant's charge of violation of s. 47 is that the marking formula does not deprive the administrative tribunals of their discretion to choose the best. The consternation of the private entrepreneurs that by manipulating the marking mechanism the State undertaking, regardless of its demonsF ·trable inferiority of public service, will knock off all the permits, paralysing the power of the Tribunal to pick and choose, by the overwheiming and \inevitable\ superiority of marks, is misplaced. The fear is falsified if we read the rule aright. It has, written on its face, its own limitation. Marks shall guide, not govern the award. Full discretion, to some extent, canalised by the marking procedure, still vests in the Transport Authority. For, the marks, these authorities G will remember, sway the exercise of judgment, not supersede it. It is conceivable that the pecularities of a route, the calamitous performance in an area of a State transport system, the outstanding special facilities of a particular private operator or other like feature may outweigh the mechanics of marks. After all, many qualifications, advantageous to the travelling public, may be thought of, untouched by the rigid marking moulds. They are not irrelevant and may still be H regarded by the tribunals. All this leads to the conclusion that marks shape but do not clinch the ultimate selection. The public is the ·consumer; its plenary service is the final test. Therefore, these is A 8 400 SUPREME COURT REPORTS (1977] 2 S.C.R. .qot.hin.g in r. 1~5A deprivatory of the discretion vested by s. 47 (1). This mterpretatlve footnote: must allay the apprehensions voiced by counsel. Nor are we convmced that there is no possibility of a private operator exceeding the minimum marks of a State Transoort Undertaking. Moreover, the marking formula lacks flexibility. Merely because the State Transport Undertaking has no 'residence'· or wor~shop on the route, although its attention and ability to react are considerable, why should it suffer a marks-created handicap ? There is eq~ity in r. 1~5A, making up, as it does, for the present shortfalls m the markmg system vis a vis a government transport service. The appeals, for these reasons, must suffer dismissal. There will be no order as to costs. C BEG, J. I agree with the conclusion reached by my learned brother Krishna Iyer. As arguments in this batch of cases seem to raise some questions which I, speaking entirely for myself, consider to be really outside the sphere of the law which we have to interpret and apply, I would like to make some observations on the implications of these questions argued after stating my reasons for agreeing with my learned brother. D E F G H Mr. Chitaley's first argument for some of the appellants raised only what may be described as "normal" legal questiO'IlS of construotion or interpretation (there is some difference between these two allied processes as will appear from Crawfords "Statutory Construction", 1940 Edn., Chapter 18, paragraph 157 to 158 pages 240-244), as to whether Rule 155A(3) (D) (i), reproduced in the judgment of my learned brother Krishna Iyer, gives effect to or conflicts with Section 47 of the Motor Vehicles Act, 1939 (hereinafter referred to as 'the Act'). It was urged by the learned Counsel that what can be done only by resorting to Chapter IV-A of the Act, by framing a scheme for partial or complete nationalisation of the routes involved, cannot be accomplished by framing a rule only ostensibly purporting to give effect to Section 4 7 ( 1) of the Act or the proviso to it. In ultimate analysis, the rule of construction relied upon by Mr. Chitaley to make the last mentioned submission is : "Expressio u11ius est exclusio alterius". This maxim, which has been described as "a valuable servant but a dangerous master (per Lopes J., in Court of Appeal in Colgwwun v. Brooks(') fiI~ds expressio~ also in a rule, formulated in Taylor v. Tay/or,( 2 ) applied by the Pnvy Council in Nazir Ahmad v. King, Emperor(') which has been repeatedly adopted by this Court.. That rule. sa~s th.at an exp~e~s~y laid, doym mode of doing somethmg necessanly implies a proh1b1tion of domg it in any other way. The maxim from which the rule in Taylor v. Taylor(supra) is derived and the rule itself were discussed and explained by this Court in the Parbhani Transport Co-oper_ative Society Ltd. v. the Regional Transport . Authority, Aurangabad & Ors., ( •) · with specific reference to the argument advanced there that,. (I) (1881) 21 Q.B.D. 52 at 65. (3) (1936) L.R. 63 IA 372. (2) (1876) 1 Ch. D. 426 at 430. (4) [1960] (3) S.C.R. 177. D. R. VENKATACHALAM V. DY. TRANSPORT COMM. (Beg, J.) 4 0 1 as Chapter IV-A is meant for running its own buses by the State by A nationalisation of Motor Vehicle Road Transport Services, it was not open to the State to apply for permits at all under Chapter IV of the Act which applies to private operators only. This argument, repelled by this Court there has been put forward before us in a somewhat different and attenuated form by Mr. Chitaley. Nevertheless, the basic rule 0£ interpretation submitted to us is the same as the one which was relied upon in this Court in the Parbhani TransB port Co-operative Society's case (supra) in an attempt to exclude the State Transport Undertaking altogether from entry into what was sought to be made out to be the exclusive preserve of private operators. Before us, it is contended that exclusion of private operators could only be brought about by resorting to a duly framed scheme, on appropriate grounds given in Section 68C of the Act, but not indiroctly by framing the kind of rule which has the effec<_t of excluding C private operators from the sphere of open competition which, it is submitted postulates an initial equality of positions. This argument rests, as I will indicate below, on two erroneous assumptions : firstly, that Rule 155A(3) (D) (i) has the effect of eir;cluding private operators; and, secondly, that the proviso to section 47 (1) compels the permit issuing authorities to postulate or start by assuming an equality of conditions, as between private operators and a State D Transport Undertaking. Indeed, if they were to start with the assumption of equality they will have to give preference to the State Transport Undertaking straightaway because that is what the proviso requires. The mainstay of the arguments of learned Counsel for the appellants before ,us, however, is that Rule 155A(3) (DJ (i) really has the effect of excluding the private operators altogether by making it impossible for them to ever obtain preference over the State E Transport Undertaking when it applies for a permit in competition against theni. The reply on behalf of the State is that no exclusion of private operators is either intended or brought about by an application of Rule 155A(3) (D) (i) of the Act. On the other hand, it is submitted that, as an ordinary operator and a State Transport Undertaking are, in many ways, so unlike each other· that, unless five marks were assigned to each application of the State Transport Undertaking, it could not c©mpete at all, on a fair and equal footing, with private operators, who are able to obtain straightaway two marks for residential qualifications, four marks if they are operating not more than three buses, and two marks for workshop facilities. Apparently, the residential qualification has reference to residence within the area in which the motor vehicles are to ply, and marks for workshop facilities are granted to operators who are able to show such facilities on particular routes, whereas the State Transport Undertakings, it is pointed out, will neither h·ave a residence within such an area nor may be able to show, in a particular case, workshop facilities on particular routes even though they may have better workshop facilities on the whole. Again, two marks are to be given to private concerns or organisations, plying on particular routes, if their owners or Managing Directors have certain technical aualificationg. It is pointed out that, as State Transport Undertakings do F G H A B c D E F G H 402 SUPREME COURT REPORTS [1977] 2 S.C.R. not have individual owners or Managing Directors, for whom these marks could be allotted, even though they may have technically much better qualified personnel to attend to their motor vehicles, the impugned Rule 1SSA(3) (D) (i) could be justified as meant only to place State Transport Undertakings O'll a footing of possible equality with private operators in competing for permits to be granted under Section 4 7 ( 1) read with Section 42 ( 3) of the Act and to do no more. Furthermore, Rule 1SSA(3) (D) (i) occurs in a group for marks to be assigned on the basis of the number of vehicles run by the operators. In any case, it was submitted that it is a fair provision as a rough guide but is not decisive by any means. It seems to me that the contention advanced on behalf of the State that the impugned part of Rule ISSA enables provisions of the proviso to Section 47(1), read with Section 42(3), to be worked in a manner in which the statutory provisions were -intended to operate and does not really authorise :a circumvention or infringement of the provisions of Chapter IV of the Act, is well founded. The manner in which provisions of Chapter IV of the Act were meant to operate in cases of competition between private operators and State Undertakings was explained in the Parbhani Transport Co-operative Society's case (supra) as follows (at p. 184) : "The Government has of course the power to do any business it likes and therefore the business of running stage carriages. We have earlier drawn attention to the change made in cl. (a) of S. 42(3) by the amendment of 19S6. Previously, ~t was not ,necessary for the Government to obtain permits under s. 42(1) lfor buses that it intended to run as stage carriages. Since the amendment the Government can no longer run transport vehicles for commercial purposes w;thout obtaining permits under S. 42( I). Now the plying of buses as stage carriages is a commercial enterprise and for /such buses, therefore, under the sections as they stand, . the Government would require permits as any one else. That being so, the sections clearly· contemplate that the Government may apply for and obtain permits for its buses run as stage carriages. The rule applied in Nazir Ahrmid's case (1936) L.R. 63, I.A. 372, 381) does not permit the ordinary meaning of s. 42, sub. s.(1) and sub. s.(3), cl. (a) to be cut down because of the provisions of Chapter IV A. The Act lays down two independent sets of provisions in regard to the running of buses by the Government, one under Chapter IV and the other under Chapter IV A. Chapter IV A was 'intended to give the Government, ~ special· advantage. When the Government chooses to proceed under that chapter, it becomes entitled as .a matter of right under s. 68F( 1) to the necessary permits. Under Chapter JV the Government does uot have any such advantage; it has to compete with other applicants, to secure permits to be able to run its buses. The powers under the two chapters are therefore different. To such a case the principle of Nazir Ahmad's case cannot be applied". ' \ • D. R. VENKATACHALAM V. DY. TRANSPORT COMM. (Beg, J.) 4 0 3 . Both Chapters IV and IV A enable plying of State transport as , A well as privately owned vehicles on hire on same routes, but the grounds for these combined operations under the two chapters are different. The govermng pnnc1ple of Section 4 7 (1) is to preserve as free and open a competi,ion as possible in public interest, whereas the reason for allowing private operators upon a nationalised route may be broader one of publ!c policy which may favour a decision against sudden stoppage of privately provided motor transport, so as to avoid wastage of national wealth, even though it takes the form of investments by individual entrepreneurs, or, its object may even be prevention of undue hardship to private operators. Other reasons for permitting combined services can be, given. It is, however, possible only under Chapter IVA to exclude private operators oompletely. But, unless any rule relating to provision of motor transport under chapter IV has that effect it cannot be asserted that what can be done only by resorting to Chapter IV A is being attempted under the provisions of Chapter IV. B The rule 'in Nazir Ahmad's case (supra) applies only to cases where there, is a single specified mode laid down for doing something in exercise of the legal power to do it. In that event, the specified mode may, negatively, operate as a prohibition against what is not prescribed at all and is outside the statute. But, it could not apply to a case where two modes of doing the same thing are provided for by a statute itself. Nor, as I have indicated above, coUid it be said that what is to be done under Chapter IV and what can be done under a scheme under Chapter IV A are really the same simply because, in a given case, the results of both may appear to be similar or even identical. Mr. Ramamurthi, appearing on behalf of some of the appellants, embarked on quite an ambitious argument built upon an elaboration of the theme that Chapters IV and IV A belong to two different fields or spheres. of action which cannot, so to speak, be allowed to mix, o·verlap, or collide. It was contended that the waters of what are, in the eye of law, two different streams of activity must not be allowed to mingle. If I am not mistaken, even the word "pollute" was used, in the flow of arguments, to describe, possibly in a light vein, the alleged inequity of an invasion by a State Transport Undertaking of the supposedly exclusive preserve of private enterprise. It was suggested that such a result would involve "pollution" of the domain of open competition, which is forbidden territory for State Undertakings intro-- . duced as a consequence of another ideology or sphere of action found in Chapter IV A. It seems to me that to hear such an argument, advanced even in a lighter vein, is really rather surprising in view of the language of the statute and well known facts to which it is related. It is quite well known that ours is what is known as a "mixed economy". The highest norms of our law are embodied in our Constitution. Article 19 ( 6) (ii) of the Constitution clearly contemplates : "the carrying on by the State, or by a Corporation or controlled bv the State, of any trade, business, industry or service, whether to the exclusion, complete or partial, of citizens or otherwise". And, in order to fulfil the objectives of the Preamble to our Constitution, the Constituc D E F G H A B c D E F G H 404 SUPREME COURT REPORTS (1977] 2 S.C.R. tional mandate, contained in Article 39(c) of the Constitution, which ~he State ~as to. carry out, may make it imperative upon the State, Ill appropnate crrcumstances, either to take over or nationalise motor transport on roads in an:x.