# It ' v. THE STATE OF M.P. & OTHERS

- **Citation:** [1967] 3 S.C.R. 329
- **Court:** Supreme Court of India
- **Decided:** 1967-03-30
- **Bench:** K. N. Wanchoo, R. S. Bachawat, V. Ramaswami
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/it-v-the-state-of-m-p-others-4052
- **Pages:** 14

## Headnote

Motor Vehicles Act (4 of 1939)-,Ss, 68A,
68-C and 68D-,State
Road Transport Corporation publishing schemes for take-over of certain
routes-Particulars to be given in the scheme for validly originating proceedings-Whether authority to hear ob;ections can be appointed under
the Ru/es of Business under Article 166(3) of the Constitution or only
under s. 68-D (2-A)-W.'iether express finding necessary
by authority
that scheme would fulfil four-fold purposes mentioned 111 s. 68-C-Authority not summoning documents or witnesses at the instance of objectors
regarding past records or financial position to consider ability of the State
Undertaking to run nationalised transport services and to consider com·
parative mer;ts of undertaking and private operators-Whether such evidence relevant-Therefore, whether hearing of obiections 'ailequate and
real.
On May 11, 1964, the Madhya Pradesh State Road Transport Corporation published two schemes for :he take-over by the corporation of certain routes under Chapter IV-A of the Motor Vehicles Act 4 of 1939 to
the exclusion of the existing private operators on those routes and objections were imited within 30 days. After the objectiollll li.led by various
private operators were heard by a Special Secretary to the State Government empowered under s. 68-D of the Act, he passed orders on June 8,
1965, modifying the schemes in certain particulars. The modified and
corrected schemes were finally published on June 18, 1966. Writ petitions
were thereafter filed by the appellants challenging the two schemes but
were dismissed by the High Court.
In the appeal to this Court it was contended on behalf of the appellants: (i) that the proposed schemes were bad as they were not in compliance with s. 68-C of the Act and the rules framed thereunder for they
did not give necessary particulars which would enable the appellants to
formulate their objections to the proposed schemes in respect of the fQllrfold purposes mentioned in s. 68-C I.e., that a scheme should be for the
purposes of providing an "efficient, adequate, economical and properly .
coordinated Road Transport Service" and that as the proposed schemes
were themselves bad, the entire proceedings initiated by them must fall
through; (ii) that the Special Secretary who heard the objections on behalf
of the State Government was not validly authorised to do so as he had
been appointed under the Rules of Business framed under Art. 166(3) of
the Constitution while the appointment should have been under s. 68-D
(2-A) of the Act; (iii) that the order approving the schemes passed on
June 8, 1965 was invalid as it did not say that the schemes fulfilled the
purposes mentioned in s. 68-C and an express finding to this effect was
necessary to validate the schemes; (iv) that the hearing given by the
authority to the objectors was not adequate and real as required under
s. 68-D of the Act : the authority wrongly rejec'ed the appellants application to summon documents from the Corporation to show that the Corporation did not have the equipment and finances to carry out the schemes.
and that the Corporation's past record of running its services was worse
330
SUPREME COURT REPORTS
[1967] 3 S. C.R.
than that of the private operators; and furthermore the authority had also
A
wrongly refused to summons witnesses sought to be called to show that
the schemes would not fulfil the four-fold purposes stated in s. 68-C.
HELD : Dismissing the appeal :
(i) S, 68-C requires two things, namely, (I) the nature of the services proposed to be rendered and (2) the area or route proposed to be
covered; it lu1 ther requires that such other particulars respecting the
B
schemes as the rules may prescribe should be giYen.
11he particulara
given in the present proposed schemes were clearly in compliance with
the provisioDll of s.. 68-C and that was enough fOr validly originating the
proceedings. [334B, G]
(ii) The first part of s. 68-D(2-a), which is the substantive part, lays
down that the per

## Text

_Characters 0–39,822 of 40,649. This is a partial read: ask again with offset=39822 for what follows._

l
A CAPITAL
MULTI-PURPOSE CO-OPERATIVE
SOCIETY
BHOPAL AND OTHERS
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It
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v.
THE STATE OF M.P. & OTHERS
March 30, 1967
(K. N. WANCHOO, R. S. BACHAWAT AND V. RAMASWAMI, JJ.]
Motor Vehicles Act (4 of 1939)-,Ss, 68A,
68-C and 68D-,State
Road Transport Corporation publishing schemes for take-over of certain
routes-Particulars to be given in the scheme for validly originating proceedings-Whether authority to hear ob;ections can be appointed under
the Ru/es of Business under Article 166(3) of the Constitution or only
under s. 68-D (2-A)-W.'iether express finding necessary
by authority
that scheme would fulfil four-fold purposes mentioned 111 s. 68-C-Authority not summoning documents or witnesses at the instance of objectors
regarding past records or financial position to consider ability of the State
Undertaking to run nationalised transport services and to consider com·
parative mer;ts of undertaking and private operators-Whether such evidence relevant-Therefore, whether hearing of obiections 'ailequate and
real.
On May 11, 1964, the Madhya Pradesh State Road Transport Corporation published two schemes for :he take-over by the corporation of certain routes under Chapter IV-A of the Motor Vehicles Act 4 of 1939 to
the exclusion of the existing private operators on those routes and objections were imited within 30 days. After the objectiollll li.led by various
private operators were heard by a Special Secretary to the State Government empowered under s. 68-D of the Act, he passed orders on June 8,
1965, modifying the schemes in certain particulars. The modified and
corrected schemes were finally published on June 18, 1966. Writ petitions
were thereafter filed by the appellants challenging the two schemes but
were dismissed by the High Court.
In the appeal to this Court it was contended on behalf of the appellants: (i) that the proposed schemes were bad as they were not in compliance with s. 68-C of the Act and the rules framed thereunder for they
did not give necessary particulars which would enable the appellants to
formulate their objections to the proposed schemes in respect of the fQllrfold purposes mentioned in s. 68-C I.e., that a scheme should be for the
purposes of providing an "efficient, adequate, economical and properly .
coordinated Road Transport Service" and that as the proposed schemes
were themselves bad, the entire proceedings initiated by them must fall
through; (ii) that the Special Secretary who heard the objections on behalf
of the State Government was not validly authorised to do so as he had
been appointed under the Rules of Business framed under Art. 166(3) of
the Constitution while the appointment should have been under s. 68-D
(2-A) of the Act; (iii) that the order approving the schemes passed on
June 8, 1965 was invalid as it did not say that the schemes fulfilled the
purposes mentioned in s. 68-C and an express finding to this effect was
necessary to validate the schemes; (iv) that the hearing given by the
authority to the objectors was not adequate and real as required under
s. 68-D of the Act : the authority wrongly rejec'ed the appellants application to summon documents from the Corporation to show that the Corporation did not have the equipment and finances to carry out the schemes.
and that the Corporation's past record of running its services was worse
330
SUPREME COURT REPORTS
[1967] 3 S. C.R.
than that of the private operators; and furthermore the authority had also
A
wrongly refused to summons witnesses sought to be called to show that
the schemes would not fulfil the four-fold purposes stated in s. 68-C.
HELD : Dismissing the appeal :
(i) S, 68-C requires two things, namely, (I) the nature of the services proposed to be rendered and (2) the area or route proposed to be
covered; it lu1 ther requires that such other particulars respecting the
B
schemes as the rules may prescribe should be giYen.
11he particulara
given in the present proposed schemes were clearly in compliance with
the provisioDll of s.. 68-C and that was enough fOr validly originating the
proceedings. [334B, G]
(ii) The first part of s. 68-D(2-a), which is the substantive part, lays
down that the person who is to hear the objections cannot be an officer
~ow the rank of Secretary to the Government. The second pan is
c
procedural and states how tile officer should be appointed, namely, by notification in the official gazette. In the present case as the person appointed was a Special Secretary, the substantive part of the provision had been
complied with. As far as the second and procedural part was concerned,
the appointment of the authority could be by notification as provided in
the Section or by an order under the Rules of Business under Art, 166( 3)
of the Constitution. Accordingly, the appointment of the authority to
hear objections in the present case could not be considered invalid.
D
[335H; 336C-D]
(iii) There is no express provision in Section 68-C read with Section
68-D that the authority hearing objections must come to a finding that
the scheme under examination provides an efficient, adequate, economical
and properly coordinated road transport service.
Jn the absence of such
a provision, the very order of the State Government or the authority appointed must be held to mean either, where ~he scheme is approved or
E
modlfied, that it subserves the, purposes mentioned in s. 68-C or where it
is rejected, that it does not. [337B, D-E]
(iv) The authority had rightly held the documentary and oral evidence
proposed to be called was irrelevant and the hearing of the objections was
therefore both adequate and real.
Chapter (IV-A) of the Act was enacted for nationalisation of road
transport services in accordance with the amended Article 19(6) of the
Constitution. The nationalised roacl transport under the Chapter can only
be run by a State Transport Undertaking defined by s. 68-A (b) of the
Act which would always be under the control of the Central or State
Government. Jn this context, it would be futile for any object to show
that the undertaking backed by the Central or State Governments could
not have the equipment or finances to carry out the schemes.
Furtherffiore, as only a State Transport Undertaking can run a nationalised service, there was no necessity for considering the comparative merits of the
undertaking "and individual private operators. [341C-E, G]
If a party concerned wlshes to produce any document or produce any
witness, the authority may take the documentary evidence into consideration or ta:ke the e\·idence of the witness, if it considers such evidence rele,.
vant and necessary. But there is in the absence of any provision in the
Act or the Rules, no po\ver in the authority or the State Government to
compel attendance of witnesses or to compel production of documents.
This is not to say that if the authority wants any party before it to produce
any document for satisfying itself "1bether the scheme is for the purpose
mentioned in s. 68-C it cannot so ask; and if the party asked lo produce
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pocumeots ~o!l' n~t do so._ the. au~hority would be entitled to draw such
mfereoces a:s 1t might consider Just!fied from the non-production of documents. Bu·.• apart from this, there 1s no power conferred on the authority
under the /I.Ct or the Madhya Pradesh Rules IQ compel production of documentary .,videoce or to summon any witness.
[339H-340C]
Gul/r)pa/li Nageswara Rao, v. Andhra Pradesh .'1.oad Transport. f19591
I S.C.R·· 319, Malik Ram v. State of Rajasthan, [1962] 1 S.C.R. 978 and
Nehru: Motor Transport Co-operative
Society, Limited v. The State of
Rajadtha11, [1964) 1 S.C.R. 220, referred to.
, '
CIVIL APPELLATE JUR1soicnoN : Civil Appeals Nos. 2201
and 2202 of 1966.
Appeals from the judgment and order dated September 15,
1966 of the Madhya Pradesh High Court in Misc. Petitions Nos.
351 and 311 of 1965 respectively.
•
M. N. Phadke, Naunit Lal, Y. S. Dharmadhikari and M. N.
Puranik, for the appellants (in both the appeals).
A. P. Sen, Advocate-Genera/ for the State of Madhya Pradesh
and/. N. Shroff, for the respondent No. 1 (in both the appeals).
S. V. Gupte, Solicitor-Genera/, K. A. Chitale, Rameshwar Nath
and Mahinder Narain, for respondents Nos. 5 and 6 (in C.A.
No. 2201 of 1966) and respondents Nos. 4 and 5 (in C.A. No.
2202 of 1966.)
The Judgment of the Court was delivered by
Wancboo, J. These are two appeals on certificates granted by
the Madhya Pradesh High Court. The appeals are connected and
will be dealt with together.
The Madhya Pradesh State Road
Transport Corporation -(hereinafter referred to !!S the Corporation),
constituted under the Road Transport Corporation Act, (No. 64
of 1950), came into existence in May 1962 to operate as a State
Transport Undertaking under s. 68-A of the Motor Vehicles Act,
No. 4 of 1939, (hereinafter referred to as the Act). The Corporation passed two resolutions in April and May 1964 by which it
decided to take over certain routes under Chapter IV-A of the Act
to the exclusion of the existing private operators on those routes.
Two schemes, namely, Nos. 16 and 22 dated May 11, 1964, were
published by the Corporation inviting objections within 30 days.
The schemes appeared in the Government Gazette of May 22,
196_4 and objections thereto were filed by private operators affected
thereby within the period prescribed. Thereafter the authority empowered to hear objections under s. 68-D of the Act gave notices
fixing a date for hearing. The hearing was to begin on September
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SUPRBMB COURT REPORTS
(l!'l67] 3 S,C,R.
-4, 1964, but it was postponed a number of times. Finelly, arguments were heard on May 20, 1965. The authority pass'.ed orders
on June 8, 1965 modifying the' schemes in certain particulars. On
June 11, 1965, the modified schemes were published, but 'as there
were. mistakes in them, corrected schemes as modified were. finally
published on June 18, 1965.
.
'.
Then followed writ petitions to the High Court in August 1 ~65
by private operators who were dissatisfied with the order of t.li.e
-authority concemed. The High Court dismissed the writ petition~
rejecting all the contentions raised by the petitioners before it. '
Thereafter the High Court gave certificates to appeal to this Court,
:and that is how the appeals have come before us.
It is unnecessary to set out all the points raised before the
High Court, for learned counsel for the appellants have raised only
some points before us out of those raised before the High Court.
It is enough therefore to set out the points that have been raised
before us and to indicate the decision of the High Court thereon.
The first contention raised before us is that the proposed schemes
published on May 22, 1964 .were bad inasmuch as they were not
in compliance with s. 68-C of the Act and the rules framed thereunder, for they did not give necessary particulars which would
enable the appellants to formulate their objections to the proposed
schemes in respect of the four-fold purposes mentioned in s. 68-C.
The High Court rejected this contention holding that there was
sufficient compliance with the provisions contained in s. 68-C and
the rules framed thereunder and there was enough material in the
proposed schemes to enable the appellants to file objections thereto.
The second contention is that the Special Secretary who heard
the objections on behalf of the State Government was not validly
.authorised to do so inasmuch as he had been appointed under the
Rules of Business framed under Art. 166 (3) of the Constitution
while appointment should have been under s. 68-0(2-a) of the
Act, which was inserted therein by the Motor Vehicles (Madhya
· Pradesh Amendment) Act, No. 2 of 1963. The High Court rejected this contention holding that the provision in s. 68-D (2-a)
was supplementary to the power which the State Government had
under the Rules of Business and therefore it was open to the State
Government to act under either of the provisions. The third cOntention is that the order approving the schemes passed on June 8,
1965 was invalid inasmuch as it did not say that the schemes fulfilled the purposes mentioned in s. 68-C. The High Court rejected
this contention also holding that as soon as the authority approved
the schemes, it must be held to have impliedly decided that the
schemes fulfilled the purposes mentioned in s. 68-C.
The last
contention is that the hearing given by the authority was not ade-
•quate and real and therefore the approval given was invalid. The
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High Court rejected this contention also holding that in tho circumstances of the case the healing given was sufficient for the
purpose. In the result the High Court dismissed the writ petitions
after rejecting other points which were raised before the High Court
but are not raised before us. We shall now proceed to deal with
the four contentions raised before us in that order.
The first contention relates to the invalidity of the proposed
schemes published on May 22, 1964, on the ground that they are
not in compliance with s. 68,C, and the argument is that if the
proposed schemes which initiate the proceedings leading to final
approval thereof are themselves bad, the . entire proceedings . must
fall through. Now section 68-C lays down that where any State
Transport Undertaking is of opinion that it is necessary in the public interest that road transport services in general or any particular
class of such services 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 has to prepare
a scheme.
Further the State Transport Undertaking forms this
opinion for the purposes of providing "an efficient, adequate, economical and properly co-ordinated road transport service". Section 68-C further provides that where the State Transport Undertaking is of this opinion for the purposes mentioned above it has
to prepare a scheme and cause it to be published in the official
g117.ette and in such other manner as the State Government may
direct. The publication is for the purpose of inviting objections to
the proposed scheme by those affected thereby.
Section 68-C
further provides that the proposed scheme should give particulars
of the nature of the services proposed to be rendered, the area or
route proposed to be covered and such other particulars respecting
thereto as may be prescribed. It is not the case of the appellants
that the proposed schemes published on May 22, 1964 did not give
particulars of the nature of the services proposed to be rendered,
and the area or route proposed to be covered. Nor is it the case
of the appellants that it did not give such gther particulars respecting thereto as were prescribed by rules. The argument is that the
proposed schemes must disclose data in support of the four purposes
which are the basis of what may be called nationalisation of road
transport service, namely, the providing of an efficient, adequate,
economical and properly co-ordinated road transport St.:-vice. Now
t~e two sc~emes w\th which we are concerned in these appeals have
given detailed particulars of what the State Transport Undertaking
considered was in compliance with s. 68-C and the rules framed
thereunder. But the argument is that more particulars should have
been given to disclose how the schemes were for the purpose of
providing an efficient, adequate, economical and properly co-ordinated road transport service, and in particular it is urged that the
334
SUPREME COURT REPORTS
[1967] 3 S.C.R.
timings on which services would be run should have been indicated
in the schemes as that would have indicated whether the services
to be provided by the Corporation were co-ordinated services.
Now the section itself requires two things, namely, (i) the
nature of the services proposed to be rendered, and (ii) the area
or route proposed to be covered.
Further the section provides
that such other particulars respecting the scheme should be given
as the rules prescribe, and that has been done. But the argument
seems to be that even though the section and the rules have been
complied with, certain other things should have been mentioned
in order to enable the private operators to show that the schemes
did. not provide an efficient, adequate, economical and properly
co-ordinated road transport service. We are of opinion that this
argument must be rejected.
The schemes have given s.ufficient
details to enable the appellants to file their objections. The four
purposes mentioned in s. 68-C are so all-embracing in their nature
that it would always be possible for a private operator to put forward some small particular and say that this particular should also
have been given in the proposed scheme and as it is not given it
is not possible for him to make a proper objection with respect
to the four purposes mentioned in the section. The result of accepting the argument on behalf of the appellants would be that no
scheme would ever get through, for some small particular or other
can always be put forward by some person or other as not included
in the scheme and therefore the whole proceeding should be invalidated on account of defect in the. proposed scheme originating
the proceeding. We are of opinion that so long as a scheme gives
the two things which the section itself prescribes and such other
particulars which the rules prescribe, that is enough for the purpose
of validly originating the proceeding, resulting in eventual nationalisation of the routes and services concerned. Thereafter it is open
to the objectors to take such objections to the proposed scheme
in the light of the four purposes already indicated and the proceedings being quasi judicial, the State Government or the authority
concerned can consider the objections and finally approve or modify
the scheme, or if necessary reject it altogether. The particulars
given in the pre~ent proposed schemes published on May 22, 1964,
are undoubtedly in compliance with the provision of s. 68-C as
well as the rules framed thereunder, and that in our opinion was
enough for validly originating the proceeding. We therefore reject
this contention raised on behalf of the appellants.
The second contention is that the Special Secretary who heard
the objections on behalf of the State Government was not validly
authorised. Now s. 68-D (2) provides that "the State Government
may, after considering the objections and after giving an opportunity to the objector or his representatives and the representatives
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of the State Transport Undertaking to be heard in the matter, if
they so desire, approve or modify the scheme". The State Government obviously is not a natural person and therefore some natural
person has to give the hearing on behalf of the State Government.
Article 166 (3) of the Constitution gives power to the Governor
IO make rules for the more convenient transaction of the business of
the Government of the State, and Rules of Business have been
framed under this power for the performance of duties which have
to be performed under the law by the State Government.
It is
not in dispute that the Special Secretary who gave the hearing in
the present case was authorised under the Rules of Business. But
what is urged is that in view of the introduction of s. 68-D (2-a)
in the Act by the Madhya Pradesh Amendment it is no longer
open to the State Government to act under the Rules of Business,
and that the appointment should have been made under the new
provision. That provision is in these terms :-
"(2-a). The State Government may, by notification,
authorise any officer not below the rank of a Secretary
to Government for the purpose of hearing objections
under sub-section (2)."
Further as under s. 2 (25) of the Madhya Pradesh General Clauses
Act, (No. 3 of 195 8), the word "notification" as used in Madhya
Pradesh Acts means a notification published in the o{licial gazette,
the officer who heard the objections should have been appointed
by means of a notification in the State Gazette under this new
provision.
Now this new provision may be divided into two parts. The
first part may be called substantive and lays down that the person
who is to hear objections on behalf of the State Government cannot
be an officer below the rank of a Secretary to Government. The
r
second part is procedural and states how the officer may be appointed, namely, by notification in the official gazette.
So far
as the substantive part of the new provision is concerned, it certainly limits the power of the State Government when it proceed
to appoint some one to hear objections and such person in view
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of the limitation contained in the new provision cannot be an
officer below the rank of a Secretary to Government. This means,
that for example, a Deputy Secretary or an Under Secretary to
Government cannot be appointed to hear objections. In the present C!l_se the person appointed is a Special Secretary to Government i.e., an officer not below the rank of a Secretary to Government. Therefore the substantive part of the new provision is
complied with by the appointment made in this behalf, and that
in our opinion is mandatory and limits the power of the State
Government as to the rank of the person to be appointed to hear
objections on its behalf.
But the second part is merely proce-
336
SUPREME COURT REPORTS
[1967] 3 s.c.R.
dural, namely, how the appointment is to be made.
The new
provision indicates that it may be made by a notification in the
official gaz.ette.· But that does not mean that if the Constitution
provides for any other method of making the appointment that
method is made nugatory. Such a procedural provision may be
mandatory if action is taken under the new provision; but there
are no words in the new provision which exclude the procedure
provided under the. Rules of Business under Art. 166(3) of the
Constitution.
Therefore we are of opinion that where the State
Government proceeds under the new provision it has to m.ake a
notification in the official gazette appointing a person not below
the rank of a Secretary to Government to hear objections. But
it may act under the Rules of Business so fong as under th()SC
rules it appoints a person not below the rank of a Secretary to
Government for the purpose of hearing objections.
The limitation under the new provision is only this that the person appointed
cannot be below the rank of a Secretary. But so far as the procedural part is concerned, the appointment may be by notification
as provided under the new provision or by an order under the
Rules of Business. The. objection therefore that the authority in
this case was not appointed under the new provision but was appointed under the Rules of Business and therefore the appointment was invalid, must fail.
•
The third contention raised on behalf of the appellants is that
the orders approving and modifying the schemes in this case do
not show that the authority had applied its mind to the question
whether the schemes were such as to subserve the purposes of
providing an efficient, adequate economical and properly coordinated transport service. Reliance in this connection is placed
on certain American cases which hold that the lack of an express
finding necessary under a statute to validate an order of an administrative agency· cannot be supplied by implication. ·When therefore such an administrative agency is required as a condition precedent to an order to make a finding of facts the validity of the
order must rest upon the needed finding. If it is lacking the
order is ineffective and the lack of express finding cannot be supplied by implication. It is unnecessary for us to refer to the
American cases in detail; it is enough to say that the principles
enunciated . above may be unexceptionable where the existence of
a finding is necessary for taking action, but that depends upon
the words of the statute and therefore we must· now turn to the
words of s. 68-C and s. 68-D. We have already indicated that the
State Transport Undertaking publishes a scheme when it has
arrived at a certain opinion. After the scheme is published under
s. 68-C any person affected by it can object within 30 days under
s. 68-D.(I ). Thereafter the State Government considers the objections and gives an opportunity to the objector to be heard and
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also to the State Transport Undertaking.
Thereafter the State
Government or the authority authorised by it either approves or
modifies the scheme or even rejects it. There is no express provision in these two sections laying down that the authority hearing
objections must come to some finding of fact as a condition precedent to its final order. As such no express finding as envisaged.
in the American cases is necessary under s. 68-C read with s.
68-D that the scheme provides an efficient, adequate, economical.
and properly co-ordinated road transport service. Besides we are:
of opinion that the whole object of hearing objections under s ..
68-D is to consider whether the scheme provides an efficient, adequate,
economical and properly co-ordinated road transport
service.
After hearing objections the State Government, or the
officer authorised by it has either to approve or modify, or if neces•
sary, to reject the scheme.
Where the scheme is approved or
modified it necessarily follows in our opinion that it has been
found to provide an efficient, adequate, e.conomical and properly
co-ordinated transport service; if it is not of that type, the State
Government or the authority appointed to hear objections would
reject it. In the absence of a provision requiring an express finding in these two sections it seems to us that the very order of the
State Government or the authority appointed by it to hear objections must be held to mean either, where the scheme is approved
or modified, that it subserves the purposes mentioned in s. 68-C,
or, where it is rejected, that it does not subserve the purposes.
Section 68-D (2) does not require in our opinion any express finding, and even if there is none in the present case, it would not
i~validate the orders passed by the authority hearing the objec-_
hons. The argument on behalf of the appellants under this head·
is also rejected.
The last contention is that an adequate and real hearing was
not given to the appellants as required by s. 68-D of the Act.
Reliance in this behalf is placed on a number of decisions of this
Court.
Before however we consider the legal position, let u&
see what exactly happened _in this connection. It appears that an
application was made by the appellants. requesting the authority
to summon a very large number of documents from the Corporation in order to prove inter a/ia that the present equipment and·
finances of the Corporation showed that it was not in a position to
run the services and that on a comparison of the record of the
Corporation with that of the various private operators it would
appear that it was not in the interest of the public that the routes
in question should be nationalised. It appears that some of the·
documents were not produced by the Corporation, and in particular documents, which would have shown the record of the Corporation with respect to its running various routes in the past, were
not produced and it was contended that those documents were
338
SUPREME COURT REPORTS
(1967] 3 S.C.K.
irrelevant. Besides this, the appellants wanted to produce a large
number of witnesses in support of their contention that the schemes
were not efficient, adequate, economical and properly co-ordinated. So far as the documents were concerned, the authority said
in its order dated February 17, 1965 that the matter would be
dealt with at the time of argument.
As for the witnesses, the
authority refused to summon them on the ground that their evidence would be irrelevant and in any case oral testimony was
not necessary to prove what the appellants desired to prove. It
appears therefore that no oral evidence was taken as it was considered irrelevant by the authority and some of the documents
which the appellants wanted the Corporation to produce were
not ordered to be produced.
It appears from the final order of
the authority that they were also considered irrelevant as the
authority held that no question arose of comparing the merits of
the Corporation with the private operators.
Let us now turn to the legal position in this matter as established by the decisions of this Court.
The first case to which
reference may be made is Gullapa/li Nageswara Rao v. Andhra
Pradesh State Road TrampQrt Corporation(') in which this Court
by majority held that the hearing under s. 68-D(2) was quasi
judicial in nature and the State Government acted as a quasi judicial authority under that section.
The matter was further considered by this Court in Malik
Ram v. State of Rajasthan(2) and it was held that a hearing before a quasi judicial authority did not merely mean an argument,
and that in proper cases it might include taking of evidence both
oral and documentary. It was also held that in the circumstances
of the provision contained in s. 68-D (2) and the purpose ofthe
hearing thereunder, taking of evidence, whether oral or documentary, that might be produced by either party, was necessary, before
the State Government could arrive at a just conclusion with respect to the objections to the draft scheme.
But it is clear that
Malik Ram's case(2) only decided that if any party desired to produce evidence, whether documentary or oral, the authority should
take that evidence, subject to its right to consider whether the
evidence was relevant or not and to reject such evidence as it
considered irrelevant'. It was also pointed out in that case that the
authority would have full power to control the proceedings and a
party would not be entitled to prolong them by producing irrelevant or unnecessary evidence.
The matter was again considered by this Court in Nehru
Motor Tramport Co-operative Society Limited v. The State of
Rajasthan ('). In that case it was pointed out that the Rajasthan
Rules did not provide for compelling the attendance of witnesses
(I) [l959) Supp. l S.C.R. 319.
(2) [1962] l S.C.R. 978.
(3) (1964] l S.C.R. 22J.
A
B
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c
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D
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F
G
H
r
A
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CO-OP. SOCIETY v. M. P. STATE (Wanchoo, /.)
339
and that it was enough if the authority took evidence of witnesses
whom the objector produced before it.
It was also remarked
that the authority might help the objector to secure their attend·
ance by issue of summonses, though in the absence of any provi·
sion in the law, the witnesses might or might not appear in answer thereto. These observations were made in the context of an
argument that there couid be no effective hearing without a provision for coercive process compelling attendance of witnesses
and production of documents, and that argument was turned
down.
It is urged on behalf of the Corporation that there is no pro·
vision in the Act and the Rules framed thereunder in Madhya
Pradesh applying the provisions of the Code of Civil Procedure
with respect to summoning of witnesses and discovery or inspection of documents, to proceedings before the authority hearing ob·
jcctions under s. 68-D.
Therefore the authority was not in any
case bound to summon witnesses or order inspection or discovery of
documents. It seems to us that there is force in this contention and
strictly speaking, the authority cannot summon witnesses or order
discovery and inspection of documents, as the Act has not provided
for any such thing.
Nor has any rule been pointed out to us
making such a provision. But it is argued on behalf of the appellants that this was not the reason given by the authority for not
summoning witnes>es or not ordering production of documents
and we should judge whether the hearing was adequate on the
basis of the reasons given by the authority in the present case.
Further, reliance in this connection is placed on the observation
of this Court in Nehru Motor Transport Co-operative Society's
case( 1 ) that the authority might help the objectors by issuing summonses.
This observation in our opinion does not mean, in the
absence of any provision in the Act or the rules, that the authority
was bound to summon witnesses even though the persons summoned were not bound to obey the summonses as there was no
provision in law for issue of such summonses.
The use of the
words "by issue of summonses" in the circumstances of that case
was by oversight, for issue of summonses presumes that there is
authority to issue them and the person to whom they are issued
is bound to obey.
But in the absence of such power all that the
authority can do is to issue letters merely requesting persons to
appear and it is open to those persons to appear or not. In this
situation if an authority decides not to issue such letters it cannot be said that there was no effective hearing. In short, what
the cases of this Court to whkh we have referred show is only
this : If the party concerned wishes to produce any document or
produce any witness, the authority may take the documentary evidence into rn111idcration or take the evidence of the witness. if it
(I) (1964] 1 S.CR. 22·i.
L5SupCl/67 -9
340
SUPREME COURT RllPORtS
(1967] 3 s.c.R
considers such evidence relevant and necessary.
But there is in
A
the absence of any provision in the Act or the Rules, no power
in the authority or the State Government to compel attendance of
witnesses or to compel production of documents.
This is of
course not to say that if the authority wants any party before it
to produce any document for satisfying itself whether the scheme
is for the purposes mentioned in s. 68-C it cannot so ask; and if
B
the party asked to produce documents does not do so, the authority would be entitled to draw such inferences as it might consider
justified from the non-production of . documents. But apart from
this, there is no power conferred on the authority under the Act
or the Madhya Pradesh Rules to compel production of documentary evidence or to summon any witness.
c
But apart from this, even if we examine the reasons given by
the authority for not compelling the production of documents or
for not summoning witnesses we see no reason to disagree with
the view taken by the authority in this case. So far as the witnesses are concerned, the authority was of opinion that their oral evidence would be irrelevant and it said so. after hearing arguments
on the question.
Nothing has been shown to us which would
induce us to hold otherwise. As to documentary evidence, it was
asked for to show, firstly, that the Corporation did not have equipment and finances to carry out the schemes and, secondly, that the
Corporation's past record of running its services was worse than
that of the private operators. We think that both these questions
really do not arise in the context of a scheme of nationalisation
envisaged in Chapter IV-A of the Act. It may be mentioned that
this Chapter was introduced in the Act in 1956 after Art. 19(6)
of the Constitution had been amended by the Constitution (First
Amendment) Act, 195 I. By that amendment the State was given
power relating to the carrying on by it or by a Corporation owned
or controlled by it, of any trade, busiuess, industry, or service,
whether to the exclusion, complete or partial, of citizens or otherwise.
Chapter IV-A envisages what we have called nationalisation of transpoi:t service, and this has to be undertaken by a State
Transport Undertaking which under s. 68-A (b) may be
(i) the Central Government or a State Government; or
(ii) any Road Transport Corporation established under section
3 of the Road Transport Corporations Act, 1950; or
(iii) the Delhi Road Transport Authority established under
section 3 of the Delhi Road Transport Authority Act, 1950; or
D
E .
F
G
(iv) any municipality or any corporation or company owned
or controlled by the State Government.
H
It will thus be clear that nationalised road transport under Chapter
IV-A would be run either by the Central Government, or a State
'
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CO-OP. SOCIETY v. M. P. STATE (Wanchoo, J.)
;)41
Government or any of the other three authorities mentioned there
which are all under the control of the State Government or tl;le
Central Government.
In these circumstances, with the resources
of the Government behind those authorities it would in our opinion
be futile for any objector to say that the Central Government, the
State Government or the authorities backed by it could not have
equipment and finances to carry out the schemes. It seems to
us that the very fact that a scheme is proposed suggests that the
Central Government or a State Government or the authorities
would carry it out. So there is no question of asking for production of documents relating to the equipment and financial posi·
tion of a State Transport Undertaking as defined in s. 68-A (b).
We are further of opinion that there is no question of consideration of comparative merits of the State Transport Undertaking and
the private operators in the context of Chapter IV-A. As we have
said already Chapter IV-A was enacted for nationalisation of road
transport services in accordance with the amendment made in Art.
19 (6) of the Constitution. The nationalised road transport under
that Chapter can only be run by th.e State Transport Undertaking
as defined in s. 68-A (b) of the Act. In view of that fact, if nationalisation has to come as envisaged by the amendment of the Constitution, the only body which can run the nationalised service is
the State Transport Undertaking, and in those circumstances we
fail to see any necessity for comparison between a State Transport
Undertaking on the one hand and individual operators on the
other.
Apart from
this general consideration, we are further of
opinion that ordinarily no question of comparative merits based
on past record between a State Transport Undertaking and individual operators ca~ arise, Section 68-C provides that the State
Transport Undertaking has to run an efficient, adequate, economical and properly co-ordinated road transport service, and for
doing that it does not take up just one route and put one transport vehicle on it.
It takes up a large number of routes and
puts a large number of transport vehicles on them in order to run
an integrated service whether for passengers or for goods, or for
both.
In these circumstances it is difficult to see how one can
compare sue~ an undertaking with individual private operators
who are running one transport vehicle or so on individual routes.
Secondly, i~ would be unusual for the State Transport Undertaking
to be running transport vehicles on individual routes before it produces a scheme for nationalisation of the type provided for in
Ch.apt~r IV-~. though it. may be conceded that this may not be
quite 1mposs1ble, for some State Transport Undertaking might
have entered into competition with private operators and mi2ht
hav~ obtained permits under Chap. V: (see, for instance, Parbham Tra11Sport Co-operative Society Ltd. v. The Reglorral Trans-
3'42
SUPREME· COURT R.EPOk £S
[1967] 3 S.C.R.
.pert Authority('). Even so, wht>n the State Transport Undertaking takes action under Chap. IV-A of the Act there can in eur
opinion be no question of compatison between a State Transport
Undertaking running an integrated service and individual operators
running one transport vehicle or more on individiral routes.