# L_ SARASWATI DEVI & ORS v. STATE OF U.P. & ORS

- **Citation:** [1981] 1 S.C.R. 1005
- **Court:** Supreme Court of India
- **Decided:** 1980-11-04
- **Case number:** Civil Appeal No. 1755 of 1980
- **Bench:** Y. V. Chandrachud, P. N. Bhagwati, V. R. Krishna Iyer, S. MURTAZA lf'AZAL ALI, A. D. Koshal
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/l-saraswati-devi-ors-v-state-of-u-p-ors-8229
- **Pages:** 19

## Headnote

Motor Vehicles Act, 1959, sections 68C and 68D, scope of-Objections
involving comparison of the pre-existing road transport services wi1h those
prepared in a scheme are relatable to the ingredients of section 68C and are,
therefore admissible under section 68D of the Act.
"t
Uttar Pradesh State Transport Services (Development) Rules, 1958, rules
5(v) and 7(2)(iv), scope of-Summoning of witnesses and production of wit11esses, explain~-d.
Dismissing the appeal by special leave, the Court
HELD:
(I) A bare reading of sections 68A to E contained in Chapter
IV-A, which was added to the Act by Central Act JOO of 1956, makes it clear
that they provide for nationalisation of road transport services.
However,
such nationalisation, in view of the provisions of section 68C, is not nationalisation for
nationalisation's
sake but
nationalisation with a
view to the
achievement of certain specified objects.
Unless a scheme conform~ to the
two conditions referred to in section 68C, namely, (a) the S.T.U. i'S competent
to prepare and publish a scheme under section 68C only after it has formed
the opinion that it is necessary in the public interest that road transport
services covered by the scheme should be run and operated by itself,
whether to the exclusion, complete or partial, of ·other persons or otherwise;
and (b) the necessity for the road transport services te- be run and operated
by the S.T.U. must flow, in its opinion, from the purpose of providing an
efficient, adequate, economical and properly coordinated road transport service,
it will fall outside the ambit of section 68C. [l012A, 1013H, 1014A-Cl
Section 68D gives the right to certain persons, associations and authorities
to file objections to a scheme published under section 68C within the specified
period of thirty days of its publication and also lays down the procedure
for the hearing and disposal of such objections by the State Government.
The procedure provided in section 68D is designed to -
(a) enabie parties
affected by
the scheme to
point out
flaws therein;
(b) enable the State
Government to find out which flaws, if any, the scheme suffers from, and
(c) enable the State Government either to remedy the flaws by a suitable
modification of the scheme or to rescind the scheme altogether. Under section
68(2), every objector or his representatives
and the
representatives of the
S.T.U. have to be given an opportunity of being heard in the matter and it
is only thereafter that the State Government has to exercise its power to
approve or modify the scheme, which power includes the power not to approve
the scheme at all and to drop it in its entirety. [1014D-F]
Malik Ram v. State of Rajast/zan, [1962] 1 S.C.R. 978 at 981, followed.
1005
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SUPREME COURT REPORTS
[1981] 1 S.C.R.
Section 68D does not specify the type of objections envisaged by it but
then their purpose being to point out flaws in the scheme they must be confined
to the matters covered by se,~tion 68C. If the opinion forming the basis of
the scheme does not suffer from errors such as may render it abnoxious to
the dictates of section 68C and on the other hand, conforms to the conditions
laid down in that section, the scheme would be unobjectionable.
Objections
may thus be made to show: (a) that it is not necessary in the public interest
for the concerned road transport services to be operated by the S.T.U.; (b) that
it is not necessary in the public interest that such services be taken over by
the S.T.U. to the complete exclusion (if such exclusion is envisaged by the
scheme) of other persons and that their partial exclusion would suffice; (c) that
it is not necessary in the pub.lie interest that such services shall he taken over
by the S.T.U. even to the partial exclusion of others; (d) that the scheme is
not calculated to provide an
1~fficient road transport service;
(e) that the
scheme would not provide an adequate road transport service; (f) that the
road transport service envisaged by

## Text

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,L_
SARASWATI DEVI & ORS.
v.
STATE OF U.P. & ORS.
November 4, 1980
{Y. V. CHANDRACHUD, C. J., P. N. BHAGWATI, V. R. KRISHNA IYER,
S. MURTAZA lf'AZAL ALI AND A. D. KOSHAL, JJ.]
Motor Vehicles Act, 1959, sections 68C and 68D, scope of-Objections
involving comparison of the pre-existing road transport services wi1h those
prepared in a scheme are relatable to the ingredients of section 68C and are,
therefore admissible under section 68D of the Act.
"t
Uttar Pradesh State Transport Services (Development) Rules, 1958, rules
5(v) and 7(2)(iv), scope of-Summoning of witnesses and production of wit11esses, explain~-d.
Dismissing the appeal by special leave, the Court
HELD:
(I) A bare reading of sections 68A to E contained in Chapter
IV-A, which was added to the Act by Central Act JOO of 1956, makes it clear
that they provide for nationalisation of road transport services.
However,
such nationalisation, in view of the provisions of section 68C, is not nationalisation for
nationalisation's
sake but
nationalisation with a
view to the
achievement of certain specified objects.
Unless a scheme conform~ to the
two conditions referred to in section 68C, namely, (a) the S.T.U. i'S competent
to prepare and publish a scheme under section 68C only after it has formed
the opinion that it is necessary in the public interest that road transport
services covered by the scheme should be run and operated by itself,
whether to the exclusion, complete or partial, of ·other persons or otherwise;
and (b) the necessity for the road transport services te- be run and operated
by the S.T.U. must flow, in its opinion, from the purpose of providing an
efficient, adequate, economical and properly coordinated road transport service,
it will fall outside the ambit of section 68C. [l012A, 1013H, 1014A-Cl
Section 68D gives the right to certain persons, associations and authorities
to file objections to a scheme published under section 68C within the specified
period of thirty days of its publication and also lays down the procedure
for the hearing and disposal of such objections by the State Government.
The procedure provided in section 68D is designed to -
(a) enabie parties
affected by
the scheme to
point out
flaws therein;
(b) enable the State
Government to find out which flaws, if any, the scheme suffers from, and
(c) enable the State Government either to remedy the flaws by a suitable
modification of the scheme or to rescind the scheme altogether. Under section
68(2), every objector or his representatives
and the
representatives of the
S.T.U. have to be given an opportunity of being heard in the matter and it
is only thereafter that the State Government has to exercise its power to
approve or modify the scheme, which power includes the power not to approve
the scheme at all and to drop it in its entirety. [1014D-F]
Malik Ram v. State of Rajast/zan, [1962] 1 S.C.R. 978 at 981, followed.
1005
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SUPREME COURT REPORTS
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Section 68D does not specify the type of objections envisaged by it but
then their purpose being to point out flaws in the scheme they must be confined
to the matters covered by se,~tion 68C. If the opinion forming the basis of
the scheme does not suffer from errors such as may render it abnoxious to
the dictates of section 68C and on the other hand, conforms to the conditions
laid down in that section, the scheme would be unobjectionable.
Objections
may thus be made to show: (a) that it is not necessary in the public interest
for the concerned road transport services to be operated by the S.T.U.; (b) that
it is not necessary in the public interest that such services be taken over by
the S.T.U. to the complete exclusion (if such exclusion is envisaged by the
scheme) of other persons and that their partial exclusion would suffice; (c) that
it is not necessary in the pub.lie interest that such services shall he taken over
by the S.T.U. even to the partial exclusion of others; (d) that the scheme is
not calculated to provide an
1~fficient road transport service;
(e) that the
scheme would not provide an adequate road transport service; (f) that the
road transport service envisaged by the scheme would not be economical; or
(g) that the road transport service provided for by the scheme would suffer
from lack of proper coordination. [1014H, 10!5A-E]
Objections falling outside these seven categories would not be admissible
inasmuch as they would not have anything to do with any of the condition,;
which a scheme must satisfy in order to be covered by section 68C.
[l015E-FJ
2. In order to find out if the scheme fulfils the requirements of section
68C a comparison
of the attributes of
the two services,
such as quality,
capacity, financial implications and coordination would certainly fall within
the scope of the inquiry to b1: conducted· by the State Government, although
a comparison would not be permissible for the sole purpose of finding out
whether the private operators should be given a preference over the State
Transport
Undertaking. If such a
comparison as
held
to
be permissible is ruled out, the result would be to shut out from the enquiry held by
the State Government under section 68D most of the material relennt for
determination of the validity of the scheme -
a result contemplated neither
by section 68D nor
by the decision or this Court in (1967]
3 S.C.R. 329.
[1018A-C]
Objections calculated to show that a scheme does not prnvide a road
F
transport service which can be considered efficient, adequate. economical or
propei-ly coordinated would certainly lie; and the adjectives "efficient", "adequate", "economical" and "prope.rly' coordinated are not absolute but more
or less comparative terms. [10l7E-FI].
Capital Multi-Purpose Co-operative Society, Bhopal and Others v. T!ie
State of Madhya Pradesh and Others, [1967] 3 S.C.R. 329, explained.
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3. Objections of a "personal" nature may be of two types: (i) those
challenging the scheme on the ground that it harms an existing operator and,
(ii) those which indicate the details of the services afforded by an existing
operator for the purpose of showing that service envisaged by the scheme
would in comparison not be efficient, adequate, etc. Objections of the second
type would be admissible, while those of the first type, would be wholly
irrelevant to the determination of the validity of the scheme in view of the
H
postulates of section 68C and would, therefore, be inadmissible. [I018E-G]
Gul/apalli Nageswara Rao and Others v. Andhra Pradesh State Road
Transport Corporation and Another, [1959] Suppl. 1 S.C.R. 319, distinguished.
SARASWATI DEVI v. U.P. STATE (Koshal !.)
4. It is true that the State Government was acting in the discharge of
its quasi-judicial functions and it could devise its own proce~ure fin the
absence of express provisions to the contrary) so that its functions could be
effectively discharged. Further, when the statute gives the power to the State
Government to afford to the objectors a reasonable opportunity of being heard
and to take evidence, oral as well as documentary, in support of their objections, the power to send letters of request to witnesses to appear and give
evidence or to produce documents is inherent in the situation
and needs
no statutory sanction, although; the power to enforce their attendance or
compel them to produce documents is Jacking on account of. absence of conferment thereof by a statute. [10210-F]
Nehru Motor
Transport
Co-operative Society Limited v. The State of
Rajasthan, [1964] 1 S.C.R. 220, followed.
5. Sub-rule (5) of rule 5 of Uttar Pradesh State Transport Services (Development) Rules, 1958 serves a salutary purpose and, that is, that· the inquiring
authority may shut out all evidence which is sought to be brought on the
record but which is either irrelevant or otherwise inadmissible. [1022G-H, 1023A]
6. In the instant case, no right of the appellants can be said to be infringed
when their applications for summoning witnesses
and
production of docu1007
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ments were rejected by the State Government and the rejection i' not illegal.
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[1022E-F]
Capital Multi-Purpose
Co-operative Society,
Bhopal and Others v. Tiu
State of Madhya Pradesh and Others, [1967] 3 S.C.R. 329; applied.
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1755 of
1980.
Appeal by Special Leave from the Judgment and Order dated
8-8-1980 of the Allahabad High Court in Civil Misc. Writ Petition
No. 4376/69.
S. N. Kackar, R. B. Mehrotra and Pramod Swarup for the
Appellants.
0. P. Rana and Mrs. Shobha Dikshit for Respondent No. 1.
Yogeshwar Prasad, Mrs. Rani Chhabra, P. K. Pillai and R. N.
Trivedi for Respondent No. 2.
The Judgment of the Court was delivered by
KoSHAL, J.-This appeal by special leave is directed against a
judgment dated the 8th August 1980 of a Division Bench of the
Allahabad High Court dismissing a petition
instituted by the 18
appellants under article 226 of the Constitution of India in which
the reliefs prayed for were -
(a) that the order dated the 19th July,
1969
(hereinafter
referred to as the impugned order) passed by the Deputy
Secretary
(Judicial),
Government
of
Uttar
Pradesh,
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SUPREME COURT REPORTS
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rejecting all the objections filed by the appellants to a
scheme (hereinafter called the impugned scheme) published
on the 21st January 1961 in the Government Gazette of
Uttar Pradesh under section 68C of the Motor
Vehicles
Act 1939 (for brevity, the Act) be set aside as
illegal,
and
(b) that the notification published iq the said Gazette dated
. the 7th November, 1970 and
approving the
impugned
scheme (for short, the 1970 notification) be quashed.
2. The notification dated the 21st January 1961 declared that
the State Government was of the opinion that "for the purpose of
providing an efficient, adequate, economical and
properly co-ordinated road transport service, it is necessary in the p·ublic interest
that road transport services on the routes mentioned at item No. 2
of the annexed schemes should be run and operated by the
State
transport undertaking to the complete exclusion of other persons"
and the impugned scheme was being published on that account under
section 68C of the Aot read with rule 4 ( 1) of the Uttar Pradesh
State Transport Services (Development) Rules, 1958 (for short, the
rules).
The impugned scheme envisaged the plying of buses on
the route Gorakhpur-Khajni-Gola via Dhuriapur
and
Malhanpur
exclusively by the State transport undertaking (hereinafter described
as the S.T.U.) and invited all persons whose interest was affected
by it to file objections thereto within 30 days of its publication in
the Official Gazette.
The impugned scheme was later on modified by different notifications and three allied routes were qrought
withln its
purview.
Supplementary objections to the
scheme as
amended
were
put
forward by persons interested.
Shri S. K. Bhargava, Deputy Secretary (Judicial) to the U.P.
Government rejected all the objections and
approved the
scheme
through the impugned order, in pursuance of which the 1970 notification was published in the Government Gazette.
3. On behalf of the 18 appellants (out of
whom appellants
Nos. 1 to 17 are transport operators who were plying their buses
on the routes covered by the impugned scheme
while
appellant
No. 18 is the
Motor
Operators
Association,
Gorakhpur)
the
following grounds were put forward before the High Court in support
of the prayers made :
(i) The impugned scheme was vitiated by mala fides inasmuch
as it was the outcome of action taken by Shri Hanumant
Singh Negi, Deputy Transport Commissioner, U.P., who had
......
SARASWATI DEVI v. U.P. STATE (Koshal, J.)
1009
threatened Shri Bajrangi Lal,
Pairokar
for one
of the
petitioners, namely, Shri Kashi Prasad Gupta,
that
the
disputed route would be nationalised in case . the latter
pursued in the Supreme Court the matter which had earlier
been decided against him by the High Court.
(ii) The impugned order did not deal at all with objections of
a personal nature which had been filed by the appellants
and which, inter alia, indicated that the
scheme would
operate to the great disadvantage of the appellants all of
whom were plying buses on the disputed route and had
invested huge sums of money for that purpose.
(iii) The impugned order did not record specific findings on any
of the objections of a "personal nature" and was liable
to be quashed for that reason alone.
(iv) It was incumbent on the author of the impugned order to
compare the services rendered
by
the
appellants· with
those to be rendered by the S.T.U.
That not having been
done, the impugned order and the 1970 notification were
both vitiated.
4. The High Court went at length into the question of mala fides
artd rejected the contention of the appellants in that behalf mainly
on the ground that it was not Shri Hanumant Singh Negi who had
initiated the nationalisation of the disputed route but that it was
the State Government under whose decision the impugned scheme
was formulated.
In support of ground (ii) reliance on behalf of the appellants
was placed before the High Court mainly on Gullapalli Nageiwara
Rao and Others v. Andhra Pradesh Stai'e Road Transport Corporation and Another, (1) which was decic:Ied by a Bench of five Judges
of this Court.
The crucial question before the Court in that case
was whether the authority. deciding the objections under section 680
of the Act was bound to act judicially. Subba Rao, J. (as he then
was), who answered the question in the affirmative on behalf of the
majority consisting of himself, Das, CJ., and Bhagwati, ., dealt at
length with the provisions of sections 68C and 68D of the act and,
while concluding that the mat!er partook the character of a dispute
between two parties, observed :
"The .citizen may object to the scheme on public grounds or
on personal grounds. He may oppose the scheme on the ground
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that it is not in the interest of the public or on the ground
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that the route which he is exploiting should be excluded from
(I) (1959] Suppl. 1 S.C.R. 319.
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SUPREME COURT REPORTS
[1981) 1 s.c.R.
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the scheme for various reasons.
There is, therefore, a proposal
and an opposition and the third party, the State Government
is to decide that Us and prima facie it must do so judicially.
The position is put beyond any doubt by the provisions in the
Act and the Rules which expressly require that the State Government must decide the dispute according to the
procedure
prescribed by the Act and the Rules framed
thereunder, viz.,
after considering the objections
and after
hearing both the
parties. It therefore appears to us that this is an obvious case
where the Act imposes a duty on the State Government to
decide the act judicially in approving or modifying the scheme
proposed by the transport undertaking. ~ . . . . . . . . The scheme
propounded may e:xclude persons from a route or routes
and
the affected party is given a remedy to apply to the Government
. and the Government is enjoined to decide the dispute between
the contesting parties.
The statute clearly, therefore, imposes
a duty upon the Government to act judicially.
Even if
the
grounds of attack against the scheme are confined only to the
purposes. mentioned in s. 68C-we cannot agree with this con-·
tention-the position will not be different, for, even in
that
case there is a dispute between the State transport undertaking
and the person excluded in respect of the scheme, though the
objections are limited to the purposes of the scheme.
In either
view the said two provisions, sections 68C and 68D, comply
with the three criteria of a judicial act laid down by this Court."
(emphasis supplied)
Emphasis before the High Court was laid on the
under-lined
portions of the above observations.
On the other hand, attention of
the Court was invited to Capital Multi-Purpose Co-eperative Society
Bhopal and Others v. The State of M.P. & Others. (1) on behalf of
the State for the proposition that the
objections to the impugned
scheme had to be related to the four purposes indicated in section
68C of the Act.
After giving consideration to the matter the High
Court held :
"There can be no quarrel with the proposition that an objection
of a personal nature can be filed
but it should be for the
purposes of showing that the four purposes indicated in section
68C cannot be achieved. · In other words objections
of the
nature that. the petitioners will suffer hardShip and there will be
financial loss to the petitioner or that the petitioners have
(1) [1967] 3 S.C.R. 3.2!1.
SARASWATI DEVI v. U.P. STATE (Koshal, !.)
1011
invested large amount cannot per se be sufficient to nullify a
scheme of the nature referred to above
unless they
have a
material bearing on the purposes indicated in section 68C of the
Act.
When a scheme is framed for nationalisation of a route,
whether wholly or partly, the necessary consequence
will be
that the persons who have invested their money in purchasing
vehicles will be displaced and that there will be loss in their
earnings. If this could have been the ground for rejecting or
modifying a scheme, no scheme could be taken up.
A
bare
perusal of section 68C indicates that the purpose of the scheme
is to provide an efficient, adequate, economical and
properly
co-ordinated road transport service which is necessary in public
interest, and such a scheme will be liable to be approved under
the provisions of the Act. The objections of personal nature in
the instant case in our opinion fail to r;stablish that the four
purposes which are sought to be achieved by the scheme will
not be achieved and for that reason the scheme should either
be rejected or modified."
Ground (iii) was repelled by the
High· Court with a remark
that even if objections of a personal nature were covered by section
68C the impugned order was not liable to be quashed merely on
the ground that its author did not record specific findings thereon.
Support for this view was sought from a Full Beach decision of the
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same Court reported as Khuda Dad Khan v.
Stdte of U.P.
and
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others(1)
The .Jast ground of attack against the impugned order and the
1970 notific~ion also did not fittd favour with the High Court as,
according to it, in Capital Multi-Purpose Co-operative Society Bhopal
and Others v. The State of M.P. & Others (supra), the Supreme Court
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had taken the view that it was not necessary for the concerned authority to compare the services rendered by the private operators with
those to be expected firom the S.T.U.
It was in these premises that the High Court passed the judgment under appeal.
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5. Out of the grounds . put forward before the High Court on
behalf of the appellants, two, namely, those listed at serial Nos. (i)
and (ii) above were not pressed before us by their learned counsel,
Shri S. N. Kacker, who, however, argued the
point
covered by
ground (iv) with great force and also challenged the finding recorded
by the High Court in relation to ground (iii) . In order to determine
(I) [1979] A.L.J. 1249.
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SUPREME COURT REPORTS
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the questions raised before us and canvassed by learned counsel for
the parties it is necessary to undertake an analytical study of sections
68A to 68E contained in Chapter IV A which was added to the
Act by Central Act 100 of 1956. Section 68A contains two definitions. According to it --
" (a) 'road transport service'
means a service of motor
vehicles carrying passengers or goods or both by road for hire
or reward.;
"(b) 'State transport undertaking' i;neans any undertaking
providing road transport service,
where
such undertaking is
carried on by,-
(i) the Central Government or a State Government;
(ii) any Road Transport Corporation established
under
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section 3 of the Road Transport
Corporations Act,
1950;
(iii) any municipality or any corporation or company
owned or controlled by the Central Goverru:Ilent or
one or more State Governments, or by
the Central
Government and one or more State Governments."
Section 68B gives over-riding effect to the provisions of Chapter
E
IV A. Contents of sections 68C and 68D are reproduced below :
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"68C. Where any State transport undertaking is of opinion
that for the purpo~e of providing an efficient, adequate, economical and properly co-ordinated road transport service, it is
necessary in the public interest that road transport services in
general or any particular class of such service in relation to any
area or portion thereof should be run and operated by the State
transport undertaking, whether to the
exclusion,
complete or
partial, of other persons or otherwise, the State transport undertaking may prepare a scheme giving particulars of the nature
of the servioes proposed to be rendered, the area or route proposed to be covered and such other particulars respecting thereto
as may be prescribed, and shall cause every such scheme· to be
published in the Official Gazette and also in such other manner
as the State Government may direct."
"68D. (1) On the publication of any scheme in the Official
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Gazette and in not less than one newspaper in regional language
circulating" in the area or. route which is proposed to be covered
by such scheme-·
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SARASWATI DEVI v. U.P. STATE (Koshal, J.)
1013
(i) any person
already providing transport facilities by
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any means along or near the area or route proposed
to be covered by the scheme;
(ii) any association representing persons interested in the
provision of road transport facilities recognised in tllis
behalf by the State Government; and
(iii) any local authority or police authority within whose
jurisdiction any part of the area or route proposed to
be covered by the scheme lies,
may, within thirty days from the date of its publication in the
Official Gazette, file objections [o it before the State Government.
"(2) The State Government may,
after
considering the
objections and after giving an opportunity to the objector or his
representatives and the representatives
of the State transport
undertaking to be heard in the matter, if they so desire, approve
or modify the scheme.
"(3) The scheme as approved or modified under sub-section
(2) shall then be published in the Official Gazette by the State
Government and the same shall thereupon become final and shall
be called the approved scheme and the area or route to which it
relates shall be called the notified area or notified route :
"Provided that no such scheme which relates to any inter-State
route shall be deemed to be an approved scheme unless it has
been published in the Official Gazette with· the previous approval
of the Central Government."
Sub-section (1) of section 68E gives to the S.T.U. power to
cancel or modify at any time any scheme published under sub-section
( 3) of section 68D and provides that "the procedure laid down in
section 68C and section 68D shall, so far as it can be made applicable, be followed in every case where the scheme is proposed to be
cancelled or modified as if the proposal were a separate scheme."
Sub-sec~ion (2) of section 68E confers on the State Government
the power to modify a scheme published under sub-section (3) of
section 68D after giving the S.T.U. and any other person likely to
be affected by the proposed modification an opportunity of b@ing
heard in respect thereof.
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6. A bare reading of the sections noted above
makes it clear
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that they provide for nationalisation of road transport services. However, such nationalisation, in view of the provisions of section 68C,
4--{) S. C. India/ND /81
1014
SUPREME COURT REPORTS
f1981] 1 S.C.R.
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is not nationalisation or nationalisation's sake but nationalisation
with a view to the achievement of certain specified objects. A breakup of the section brings out the following es:>ential features.
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(a) The S.T.U. is competent to prepare and publish a scheme
under section 68C only after it has formed the opinion that
it is necessary in the public interest that road transport
services covered by the scheme should be run and operated
by itself, whether to the exclusion, complete or partial, of
other persons or- otherwise.
(b) The necessity for the road transport services to be run and
operated by the S.T.U. must flow, in its opinion, from the
purpose of providing an efficient, adequate, economical and
properly coordinated road tranlsport service.
Unless a scheme conforms to these two conditions .it will fall
outside the ambit of section 68C.
Section 68D gives the right to certain persons, associations and
authorities to file objections to a scheme published under section 68C
within the specified period of 30 days of its publication and also
fays down the procedure for the hearing and disposal of such
objections by the State Government.
An important feature of subsection ( 2) 0£ the section is that (every objector or hls representatives and the representatives of the S.T.U. have to be given an
opportunity of being heard in the matter and it is only thereafter
that the State Government has to exercise its power to approve or
modify the scheme, which power includes the power not to approve
the scheme at all and to drop it in its entirety), as held in Malik Ram
v. State of Rajasthan [1952] 1 S.C.R. 978 (981).
The procedure provided in section 68D is thus designed to-
(a) enable parties affected by the scheme, to point out flaws
therein,
(b) enable the State Government to find out which flaws; if any,
the scheme suffers from, and
( c) enable the State Government either to remedy the flaws by
Y
a suitable modification of the scheme or to rescind the
scheme altogether.
H
7. This brings us to the main point of controversy in the case,
that is, the nature of objections which parties affected by a scheme
may prefer to it. Section 68D does not .specify the type of objections
SARASWATI DEVI v. U.P. STATE (Koshal, J.)
envisaged by it but then their purpose being to point out flaws in the
scheme they must be confined to the matters covered by section 68C.
If the opinion forming the basis of the scheme does not suffer from
errors such as may render it obnoxious to the dictates of
section 68C and on the other hanjd, conforms to the conditions laid
down in that section, the scheme would be unobjectionable. Objections may thus be made to show:-
(a) that it is not necessary in the public interest for the concerned road transport services to be operated by the S.T.U.;
( b) that it is not necessary
in the public interest that such
services be taken over by the S.T.U. to the complete
exclusion (if such exclusion/ is envisaged by the scheme)
of other persons and that 'their partial exclusion would
suffice;
( c) that it is not necessary in the public interest that such services shall be taken over by the S.T.U. even to the partial
exclusion of others ;
( d) that the scheme is not calculated to provide an efficient
road .transport service ;
( e) that the scheme would not provide an adequate road transport service ;
(f) that the road transport service envisaged by the scheme
would not be economical ; or
(g) that the road transport service provided for by the scheme
would suffer from lack of proper coordination.
Objections falling outside the seven categories
above
set out
would not be admissible inasmuch as they would not have anything
to do with any of the conditions which a scheme must satisfy in
order to be covered by section: 68C.
To this conclusion there is no
challenge from either side, but then it has been vehemently contended
on behalf of the appe:Jlants that a comparison of the road transport
services operating on the route covered by a scheme with those
envisaged by the scheme itself may be necessary in order to find out
if the scheme conforms {o the provisions of section 68C and this
contention is controverted by learned counsel for the respondents
on the strength of Capital Multi-Purpose Co-operative Society Bhopal
and Others v. The State of M.P. & Others,( 1 ) wherein Wanchoo, J.,
speaking for a Bench of this Court which
consisted
of himself,
Bachawat and Ramaswami, JJ., observed :
(1) [1967] 3 S.C.R. 329.
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"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
con1text of
Chapter IV-A. As we have said already Chapter IV-A was
enacted flor nationalisation of road transport services in accordance with the amendment made in article 19(6) of the Constitution. The nationalised road transport under that Chapter can
only be run by the State Transport Undertaking as defined in
section 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 UnJdertaking on the one hand and individual
operators on the other.
"Apar.t 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 can arise,
Section 68-C provides that the
State Trairsport 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 such
an undertaking with individual private operators who are running one transport vehicle or so on individual routes. Secondly,
it would be unusual for the State Transport Undertaking to be
run\ning transport vehicles on individual routes before it produces
a scheme
for nationalisation
of the type
provided for in
Chapter IV-A, though it may be conceded that this may not be
quite impossible, for
some State transport undertaking
might
have entered into competition with private operatQrs and might
have obtained permits under Chapter V;
(see
flor instance
Parbani Transport Co.-operative Society Ltd.
v.
The Regional
Transport Authority, [1960] 3 S.C.R. 177).
Even so, when
the State transport undertaking takes action under Chapter IV-A
of the Act there can. in our opinion be no question of compariso111 ·
between a State transport undertaking running
an
integrated
service and individual operators running one transport vehicle
or more on individual routes.
We are therefore of opinion that
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SARASWATI DEVI v. u.P. STATE (Koshal, J.)
1017
the authority cannot be said. to have gone wrong in not asking
for past records of the Corporation
in
the present case for
purposes of such comparison.
It is true
that
section: 68-C
requires that the scheme should be in public interest. But unless
the scheme is· shown not to be efficient, adequate, economical
and properly coordinated, it will in our opinion generally follow
that it is in the public interest. We do not think therefore that
the comparative merits of the Corporation as against individual
operators require to be judged under Chapter IV-A in the public
interest."
A careful study of these observations would show
that they were
meant to exclude from consideration a comparison between the S.T.U.
and private operators for the purpose of finding out which of them
should be preferred on the basis of their past performance an:d not
to declare irrelevant a comparison between the service envisaged by
the scheme and pre-existing services for the purpose of determining
whether the scheme
as
framed
provides
for the operation of a
service which would be efficient, adequate, economical and properly
coordinated.
Normally, as pointed out by Wanchoo, J., a S.T.U.
takes up a large number of routes
and
puts
a large nbmher of
vehicles on them in order to run an integrated service while private
operators cater to individual routes and may not, therefore, be
in a position to provide what is described
in section
68C
as
"a properly coordinated service".
That does not mean,
however,
that all schemes, howsoever framed, would
in
the very nature of
things provide for services
which conform to the quality insisted
upon by section 68C. As stated above, objections cakulated to
show that a scheme does not provide a road transport service which
can be considered efficient, adequate, economical or properly coordinated would certainly lie; and the adjectives "efficient", "adequate",
"economical" and "properly coordinated" are not absolute but more
or less ·comparative terms.
A service consisting of only one round
trip per day may be adequate if the traffic on the concerned route is
Jean.
On the other hand,
a hundred round
trips
may not be
adequate for a route burdened with heavy traffic. If a private operator
is running 10 buses either way and is sought to be replaced by the
S.T.U. under a scheme which makes provision only for five rounjd
trips per. day the proposed road transport service cannot be considered adequa·e if the number of round trips required to fully
1 cope
with the traffic is more than five.
Efficiency of the service covered
by a scheme may similarly have to be determined in comparison to
that which pertains to the pre-existing services: Economics and proper
coordination of the service proposed in a scheme may again be
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matters for which a comparison
with
the pre-existing services is
called· for.
In order to find out,
therefore, if the scheme fulfils
tlie requirements of section, 68C a comparison of the attributes of
the two services, such as quality, capacity, financial implications and
coordination would certainly fall within the scope of ~he inquiry to
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be ~onducted by the State Government, although
a comparison,
would not be permissible for the sole purpose of finding out whether
the private operators should be given a preference over the S.T.U.
If such: a comparison as we have held
to be permissible is mled
out, the result would be to shut out from the enquiry held by the
State Government under section 68D most: of the material relevant
for determination of the validity
of the scheme-a result contemplated neither by section 68D rior by Wanchoo, J., in the observations
above quoted, which, on the
other hand,
make it clear that the
proposed scheme may certainly be shown
(in whatever way it is
possible) not to fulfil the criteria of efficiency, adequacy, economy
and proper coordination.
The comparison ruled out by him was
not between the merits of the rival services but between the expectations from their operators in view of their respec~ive past records
includirig these relating to other areas and routes.
The High Court
thus erred in arriving at the conclusion that
The Capital Multipurpose case eschewed all comparison and its finding in that behalf,
in so far as it runs counter to the opinion expressed by us above,
is set aside.
8. We may in pass.Ing refer to what are called objections of a
"personal" nature.
These may be of two types : ( 1 ) those challenging the scheme on the ground that it harms an existing operator
and, (2) those which indicate the details of the services afforded by
an existing operator for the purpose of showing that the service
envisaged by the scheme would iu comparison
not
be efficient,
adequate, etc. Objections of the second type, as we have just above
concluded; would be admissible for the reasons stated.
Those of
the first type, however,
would be wholly irrelevant to the determination of the validity of the scheme in view of the postulates of
section 68C and would, therefore, be inadmissible. This proposition
may appear at first sight to run counter to those observations of
Subba Rao, J., in Gullappalli's case (supra) which we have extracted
above but this is not really so.
Those observations were made in
the course of consideration by this Court of 'the sole question whether
the State Government,
in deciding objections under section 68D,
acted judicially or purely in an administrative capacity. The answer
ro that question, according to Subba Rao, J., depended on whether
the matter before the State Government amounted to a /is ; and it
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SARASWATI DEVI v. U.P. STATE (Kosha/, J.)
1019
was in that connection that he said that the citizen may object to
the scheme on public grounds or on personal grounds and also that
the CoUl't did not agree with
the contention that the grounds of
objeotion against .the scheme were confined. only to those mentioned
in section 68C.
The Coui1t was not called upon to decide
as to
whether the scheme of sections 68C and 68D embraced objections
of a "personal" nature or not and it was only incidentally that
reference thereto was made.
We conclude .that
Gullapalli's case
(supra) is no authority for the proposition
that "personal" objection not confined to the scope of the requirements of section 68C
~re admissible under section 68D.
9. Referring to ground (iii) pressed in the High Court on behalf
of the appellants, Shri Kacker made a serious grouse of the fact
that the impugned order did r~ot, tO . much as mentioned those obje€-
tions made by the appellants which called for a comparison of the
typa held by us to
be permissible
and
htt contended
that tlle
impugned order was bad on that a<:rount.
In reply learned colin~el
for the respondents argued that at
the hearing before the
State
Government no such objections
were
pressed.
Our attention has
been drawn by Mr. Kacker to paragraphs 14, 20(a), 21, 26, 43,
49, 51, 61, 63, 64, 73 and 75 o! the statement of objections forming
anncxure F to the petifion under Article 226 of the Constitution
before the High Court.
A perusal
of those paragraphs makes it
abundantly clear .that quite a few of the objections were such as
were related to it.he purposes mentionled in section 68C and called
for a comparison. of the proposed service with the existing one.
That some of these objections were pres<;:d before the State Government is apparent from the written arguments which were submitted
to Shri S. K. Bhargava who is the author of the impugned order
and which were appended to the petition under Article 226 of the
Constitution of India before the High Court · in the form of
ArnJ3xure J.
The stand of the respondents to the contrary is thus
not well founded.
But then we further find that in the impugned
order its author has devoted five paragraphs to the objections which
cn:
1ed for comparison of both the 'types above discussed.
In paragraphs 24 to 27 the impugned order rightly rejects the objections
which were based on a comparison of the S.T.U.