# The Sama11th Ttansporl Co. (PJ I.Id v. The Uegio11al Ttattsporl Authority, Nagput 6- Others

- **Citation:** [1961] 1 S.C.R. 642
- **Court:** Supreme Court of India
- **Decided:** 1961
- **Bench:** B. P. Sinha, J. L. Kapur, P. B. G.Ajendbagadkab, K. SuBBA RAO a.nd K. N. WANCHOO
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/the-sama11th-ttansporl-co-pj-i-id-v-the-uegio11al-ttattsporl-authority-nagput-6-2203
- **Pages:** 23

## Headnote

Mota, V ehirles-N aJionalisation of ,oad transport servicesPrcparaJion and enforcement of schcmes-ConstitHtional validity of
rnactment-Varyifl~ frequmcy of services, if variation of the
scheme-Validity of rule-Motor V chicles Act. 1939 (IV of 1939),
as amended by Act 100 of 1956, Ch. IV. ss. 68C, 68E--A11dhra
Pradesh Motor Vehicles R11/es, r. 5-Conslitution of Itidia, Arts. 19
(I)(g), I9(6)(ii), I4.
These petitions by certain stage carriage permit-holders for
appropriate writs quashing seven schemes for nationalisation of
road transport services in West Godavari District, approved
and enforced from different dates by the Government of Andhra
Pradesh, called in question the constitutional validity o!
Ch. IVA o! the Motor Vehicles Act, 1939, as amended by Act
100 of 1956, and the validity o! r. 5 of the Andhra Pradesh
Motor Vehicles Rules framed by the State Government under
s. 68(1) of tbe Act and the note in terms of the said rule appended to the schemes which was said to be inconsistent with
the Act and was as follows:-
"The frequency of services of any of .the notified routes
or within any notified area shall, ii necessary, be varied having
regard to the traffic needs during any period."
Held, that in view of the decision of this Court in H. C.
•
1 S.C.R. SUPREME COURT REPORTR
643
Narayanappa v. The' State of Mysore, it was no longer open to
the petitioners' to contend that the provisions of Ch. IVA of the
Motor Vehicles.Act (IV of 1939), as amended by the Central Act
mo of 1956, were ultra vires the powers of the Parliament.
H. C. Narayanappa v. The State of Mysore, [1960] 3 S.C.R.
742, followed.
Nor was i.t correct to contend that Ch. IVA· of the Act was
invalid on the ground that it infringed Art. l9(1)(g) of the Constitution and was not saved by Art. 19(6) ·as the powers conferred on the State by s. 68C of the Act exceeded the limits of
Art. 19(6)(ii) of the Constitution. Article l9(6)(ii) is couched
in very wide terms, the word 'service' used by it is wide enough
to include all species of motor service and it does not in any
way limit the 'States' power. to confer on itself a monopoly in
respect any area in exclusion of any person or persons.
The only classification that Ch. IVA of the Act makes is
between. the State Transport Undertaking and private transport
undertakings, whether carried on by individuals or firms or
companies, and that classification is reasonably connected wit\l
the object it has in view. It was not, therefore, correct to s~y
that it contravenes Art. 14 of the Constitution. That Chapter.
does not confer any arbitrary ·and discriminatory power upon
the State Transport Undertaking nor does. the quasi-judicia·f.
procedure prescribed by it seek to cover such power.
Any
mala fide or collusive exercise of the power, therefore, in deprivation of an individual's rights can only be a ground for quashing a particular scheme alone but not for declaring the chapter
void.
Since that chapter provides a complete and satisfactory
machinety for reasonably regulating thecxclusion of all or some
of the private operators from a notified area or route it requires
no liberal construction.
Gullapalli Nageswara Rao v. Andhra Pradesh Road Transport
Corporation, [1959] Supp. I S.C.R. 319, referred to.
Saghir Ahmad v. The State of U. P., [1955] I S.C.R. 707, considered.
Official bias inherent in the discharge of a statutory duty,
as has been_ poi·nted out by this Court, is distinct from personal
bias for or against any of the parties. Since in the instant case,
the State Road Transport Corporation was neither legally nor
factually a department of the State Government and the State
Government in deciding the dispute between the said undertaking and the operators of private buses was only discharging its statutory function, no question of official bias could
arise.
Gullapalli N ageswara Rao v. The . State of And hr a Pradesh,
[1960] I S.C.R. 580 and H. C. Narayanappa v. The State of
Mysore, [1960] 3 S.C.R. 742, COQsidered.
Dos

## Text

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The Sama11th
Ttansporl Co.
(PJ I.Id.
v.
The Uegio11al
Ttattsporl
Authority, Nagput
6- Others
St1bba Rao ].
September 8.
642
SUPREME COVRT REPORTS
(1961]
reasons mentioned in the or<lers but were only lo givo
time lo enable the Governmen_t to approve the
scheme, rna.y not be wholly unjnstifie<l.
In the circumstances, though we are disrniRsing the
application, we a.re not awarding any costs to tho
respondents.
Petition dismissed.
DOSA SATYANARAYANAMURTY ETC.
v.
THE ANDHRA PRADESH STATE ROAD
TRANSPORT CORPOHATION
(B. P. SINHA, c. J., J. L. KAPUR,
P. B. G.AJENDBAGADKAB, K. SuBBA RAO a.nd
K. N. WANCHOO,. J.J.)
Mota, V ehirles-N aJionalisation of ,oad transport servicesPrcparaJion and enforcement of schcmes-ConstitHtional validity of
rnactment-Varyifl~ frequmcy of services, if variation of the
scheme-Validity of rule-Motor V chicles Act. 1939 (IV of 1939),
as amended by Act 100 of 1956, Ch. IV. ss. 68C, 68E--A11dhra
Pradesh Motor Vehicles R11/es, r. 5-Conslitution of Itidia, Arts. 19
(I)(g), I9(6)(ii), I4.
These petitions by certain stage carriage permit-holders for
appropriate writs quashing seven schemes for nationalisation of
road transport services in West Godavari District, approved
and enforced from different dates by the Government of Andhra
Pradesh, called in question the constitutional validity o!
Ch. IVA o! the Motor Vehicles Act, 1939, as amended by Act
100 of 1956, and the validity o! r. 5 of the Andhra Pradesh
Motor Vehicles Rules framed by the State Government under
s. 68(1) of tbe Act and the note in terms of the said rule appended to the schemes which was said to be inconsistent with
the Act and was as follows:-
"The frequency of services of any of .the notified routes
or within any notified area shall, ii necessary, be varied having
regard to the traffic needs during any period."
Held, that in view of the decision of this Court in H. C.
•
1 S.C.R. SUPREME COURT REPORTR
643
Narayanappa v. The' State of Mysore, it was no longer open to
the petitioners' to contend that the provisions of Ch. IVA of the
Motor Vehicles.Act (IV of 1939), as amended by the Central Act
mo of 1956, were ultra vires the powers of the Parliament.
H. C. Narayanappa v. The State of Mysore, [1960] 3 S.C.R.
742, followed.
Nor was i.t correct to contend that Ch. IVA· of the Act was
invalid on the ground that it infringed Art. l9(1)(g) of the Constitution and was not saved by Art. 19(6) ·as the powers conferred on the State by s. 68C of the Act exceeded the limits of
Art. 19(6)(ii) of the Constitution. Article l9(6)(ii) is couched
in very wide terms, the word 'service' used by it is wide enough
to include all species of motor service and it does not in any
way limit the 'States' power. to confer on itself a monopoly in
respect any area in exclusion of any person or persons.
The only classification that Ch. IVA of the Act makes is
between. the State Transport Undertaking and private transport
undertakings, whether carried on by individuals or firms or
companies, and that classification is reasonably connected wit\l
the object it has in view. It was not, therefore, correct to s~y
that it contravenes Art. 14 of the Constitution. That Chapter.
does not confer any arbitrary ·and discriminatory power upon
the State Transport Undertaking nor does. the quasi-judicia·f.
procedure prescribed by it seek to cover such power.
Any
mala fide or collusive exercise of the power, therefore, in deprivation of an individual's rights can only be a ground for quashing a particular scheme alone but not for declaring the chapter
void.
Since that chapter provides a complete and satisfactory
machinety for reasonably regulating thecxclusion of all or some
of the private operators from a notified area or route it requires
no liberal construction.
Gullapalli Nageswara Rao v. Andhra Pradesh Road Transport
Corporation, [1959] Supp. I S.C.R. 319, referred to.
Saghir Ahmad v. The State of U. P., [1955] I S.C.R. 707, considered.
Official bias inherent in the discharge of a statutory duty,
as has been_ poi·nted out by this Court, is distinct from personal
bias for or against any of the parties. Since in the instant case,
the State Road Transport Corporation was neither legally nor
factually a department of the State Government and the State
Government in deciding the dispute between the said undertaking and the operators of private buses was only discharging its statutory function, no question of official bias could
arise.
Gullapalli N ageswara Rao v. The . State of And hr a Pradesh,
[1960] I S.C.R. 580 and H. C. Narayanappa v. The State of
Mysore, [1960] 3 S.C.R. 742, COQsidered.
Dosa Satya11arayana111urty
etc.
v.
The Andhra
Pradesh State
Road Transport
Corporation
D"sa S(l/ya-
""'a)·at11'11111tly
etc.
v.
The Andhra
Pradesh St(t/t
Road
Tran.~P<'"l
Cor/>orati'JH
644
SCPRE~lE C'Ot:RT REPORTS
[1961]
'fhe ohser\'Ution~ madt by this Court in Srini;:asa If..:dd)' v.
The Stale of Mj•.<orc, in rrgord to piecemeal implementatioo of a
sche111~ Y.erc direct(:<t
;.1g~1inst ar:y a.buse of po%·er Uy \vay of
<liscriniination as hcl\\·e1.:11 operator~ and operators in respt>ct of
a single scheme. Since the
~r.\'en scherncs in c~urstion were intended to a\·oid tlic ,·ice inhercr;t in piecen1c1J irnpleroentation
of a single scheme and \\'_Crt: mrant to he implcrncntatcd in their
entirety fron1 diJierent. elates, those observations did not apply
to them.
Srimvasa.Rcddj• , .. The Stale of Mysore, 1190<< i S.C.R 130,
explained.
There can be no doubt that r. 5 of the Andlua Pradesh
~lotor Vehicles Rules in conferring on the State Transport
l'ndertaking the J){)\\'t:r to \'ary the frt•qucncy of st I \'ires, ga,·e
it the power to effect a substantial rn1. 1dification in the scheme,
permissible only under s. 68E of the Act, and as such the rule
rn11st be declared \'Oid.
Hut· since the note appt>nded to the
~chen1cs in pursuance of th~ rule is St\•crable fro1n the ·schemes',
it should be deleted anrl the schemes must be <l<·clarc·d \'alid.
,
'!'he \\'Ord ·route' in s, 68C ol the :\ct does not-- refer t1J a
p1c-existin~ rontc. It is pcrn1is~iblc under that section to frame
a :scheme in rc~pect of any area or route or any portions thereof, or a ne\\' route, since there is no inherent inconsistency
het\\'t'en an ·area ' and a 'route·.
OmGil'AL JumsDICTION:
\Vrit Petitions ::'.\os. 76,
217 tu 228 of l!l60.
Pct.itionA under Article 32 of tl1e Constit11tion of
India for enforce mer.! of Fundamental l{ights.
A. V. Viswanatha Sallri and T. V. R. Talachaii,
for the petitioners (In p<'lit iuns i'\<Js. 76, 87, na. J04
;;nd 217-~28 c.f 19GO).
T. V. R. Tatachari, for tho petitioners (In petitions
NoR. 72 and 229-233 of 1960).
D. Xnnrnaraju, Admcate General for the State of
ii ndl1ru Pradesh, I'. R. lfrlmcha1ulra Rao and T. M.
Sm, for tho r";ponde11ta (ln all the petit.ionA).
J!)60.
September 8.
Th" .Judgment of the Court
was deli vt•rcd by
S•fbbd llao J.
i:;unBA RAO J .-These pct itiouH are filed under
Art. 32 of t.he ConHt it ution fol' the enforcement of tho
petitioners' fllndamrntal. l'ight to_ carry _on _the_ bus_i·
ness of )llotor trans11ort 111 \\ e•t Gudavan Drntnct m
1 S.C.R. SUPREME COURT REPORTS
645
1960
· the State of Andhra Pradesh by the issuance of writs
of certiorari or any other appropriate writs, orders or
.
Dosa ·Satyudirectfons to quash the schemes of road transport narayanamurty
services as finally approved by the Government of,
Andhra Pradesh on March 21, 1960, and for other
incidental reliefs.
In exercise of the powers conferred by s. 68C of the
Motor Vehicles Act (IV of 1939), as amended by the
Central Act 100 of 1956, (hereinafter called the Act),
Shri Guru Pershad, the Chief Executive Officer,
Andhra Pradesh State Road Transport Corporation,
(hereinafter called the Transport Corporation) published seven proposals dated December 7, 1959, in the
Andhra Pradesh Gazette dated December 17, 1959,
propounding seven schemes for the nationalization 'of
the road transport in respect of different parts of
West Godavari District in that State. Under that
notification objections from the public and affected
parties were invited to be filed within 30 clays of the
publication thereof. Afore than 3000 objections· were
received by the Government against the said schemes.
After considering the objections, the Government
issued notices to the objectors or their representatives
and the representatives of the Transport Corporation
inf01:ming them of the time, pla.c·e and the dates of
h,earing: On the notified dates, namely, March 10, 11
and 12, 1960, 200 objectors were present and most of
them. were represented by Advocates. The Transport
Corporation was also represented by its Chief Executive Officer and its legal advisers. The Minister in
charge of the portfolio. of transport held an enquiry,
consklered the conflicting arguments advanced, gave
definite findings on the points urged, rejected all the
objections· but one and approved the schemes with a
slight modification. The seven schemes wer~ directed
to be put in force from different dates which were
given in the order ma.de by the Minister.
The
aggrieved operators ·who were not satisfied with the
order of the Minister filed the present petitions for the
said reliefs.
Shri A. V. Viswa.natha. Sa.stri, learned counsel for
the petitioners, raised before us the following points;
etc.
v.
The Atidhra
Pradesh State
Road Tian:-.port
Corporation
SUbba R'ao ].
Dosa .-.al ya-
""'"Y""amurty
tic.
v.
TJ,e A.ndlua
Pradesh Stale
Road TraHspo1l
Corporation
Subba Rao ].
646
SUPREME COURT REPORTS
(1961)
(I) The provisions of Ch. IVA of the Act are ultra vires
the powers of Parliament because they are within the
exclusive legislative field of the States. (2) The provisions of Ch. IV A of;the Act infringe the fundamental rights of the petitioners under Art. l9(l)(g) of the
Constitution and are not saved by cl. (6) of the said
Article. (3) The provisions of Ch. IVA a.re a.lso viola.-
live of Art. 14 of the Constitution. (4) The order of
the Government confirming the schemes is vitiated by
the <loctrine of bias and, therefore, void. (5) Though
in fact seven schemes a.re framed, in effect they a.re
component pa.rts of one scheme and that device has
been adopted to circumvent the judgment of this
Court in Srinivasa Reddy v. The State of Mysore(').
(6) The schemes are void inasmuch a.s they "tre prepared a.nd published by the Chief Executive Officer
who was not one of the persons who could act on
behalf of the Transport Corporation under s. 13 of the
ltoa.d Tr~nsport Corporations Act.
(7) The bchemes
as propounded by the Transport Corporation did not
give the number of vehicles proposed to be operated
in each route a.a it should ha\·e given under r. 4 of the
Andhra Pradesh Motor Vehicles Rules
(heroina.ft~r
called the rules) and tho modification made by the
Minister directing the Transport Corporation to do so
does not also comply with the requirements of the
said rule. (8) In exercise of the power conferred
under r. 5 of the Rules, the State Transport Underta.king conferred upon itself power to vary the frequency of the services and that rule and the note
made pursuant thereto are inconsistent with the provisions of the Act and, therefore, void. (9) The
proposed schemes include three new routes and that
is illegal as the so.id Transport U nderta.king has no
power to.include any new routes in a. scheme proposed
by it. Though many other questions a.re raised in the
petitions, they a.re not pressed before us.
Lea.med Advocate Genera.I for the State of Andhra
Pradesh sought to sustain the schemes a.a approved by
the Minister in thbir entirety.
(1) [196<>] • S.C.R. 130.
I S.C.R. · SUPREME COURT REPORTS
647
We shall now proceed to deal with the contentions
in the order they were raised.
Re. (1) : The first contention does not now; merit a
detailed consideration as jt has been considered and
rejected by this Court in H. C. Narayanappa v. The
State of Mysore (1). In that case, after considering the
question, Shah, J., speaking for this Court, observed:
" We a.re therefore of the view that Chapter IV A
could competently be enacted by the Parliament
under entrj No. 21 read with entry No. 35 of the
Concurrent List.''
Nothing further need be said on this point. With
respect we accept and follow the said decision.
Re. (2): The next contention is based upon Art. 19
of the Constitution. The question is whether Ch. IV A
of the Act is saved by Art. 19(6) of the Constitution.
If Ch. IV A, which provides for the nationalization of
road transport services in the manner prescribed
thereunder is not a permissible legislation covered by
Art. 19(6), it would certainly offend against the fundamental right of the petitioners to do business in motor
transport. The constitutional ·validity of Ch. IV A
of the Act was raised in GuUapalli . N ageswara Rao v.
Andhra Pradesh Road Transport Corporation('). There
it was argued that Ch. IV A of the Act was •a piece of
colourable legislation whose real object was to take
over the business of the petitioners therein under the
cover of cancellation of permits in contravention of
Art. 31 of the Constitution and that plea was rejected
by this Court. But no attack was made cin the va.li:
dity of Ch. IV A of the Act on the ground that it infringed the provisions of Art. 19(l)(g) of the Constitution a.nd was not saved by cl. (6) of the Article. That
point is now raised before us.
Under Art. 19(l)(g),
all citizens shall have the right to carry on trade or
business. The material part of cl. (6) of Art. 19, as
amended by the Constitution (First Amendment) Act,
1951, reads:
"Nothing in sub-clause (g) of the said clause ......
. shall affect )~e operation of any existing law in so far
(1) [1¢0] 3 S.C.R. 742.
(•) [1959] Supp. 1 S.C.R. 319.
·
83
Dosa Satya·
narayana1nurfy
etc.
v.
The Andina
Pradesh State
Road Transport
Corporation
Subba Rao ].
Dosa Sotya·
rarayariami,rty
tic. ...
TIJt Aftd•ra
Prdtsh Stalt
Rood Trarisporl
Corpora hon
Suhb:i Rao ] .
648
SCPRF.:ME COCRT REPORTS
(1961)
as it relateH t-0, or pnwe!1t the State from making any
law relating to ............ the carrying on by t.he State,
or by a corpo:ation ow11e<l or controlled by the State,
of auy trade, busine"s, in<l11Htry or Hervice, whether
to the exclusion, complete or· partial, of citizenH or
other1>.·ise."
The only quest ion is, how for and to what extent
Art. 19(6) secures the validity nf Ch. IVA of the Act
from attack t.h11t it offendR against Art. 19(l)(g)?
Learned counsel for the petitioners contends that
Art. 19(6)(ii) pro\' ides only for partial exclusion of
citizens, th1~t is, the exclusion of a certain class of persons as aw hole and not for partial cxclusiou of some
among the same class.
AH s. 68C, the argument proceeds, enables the Dtate Transport. U ndcrtaking to
frame a scheme for excluding some among the salije
c~ss, the said prr•vision is not Hav<'d by Art. 19(6} of
the Cot\stitution.
Hek"rant portions of s. 68C of the
Act read:
·" WhPre 1111y
~tale trnnsport undertaking is of
opinion that :... . . .. ... . .. .. it is tiecessary iu the public
interest that road-transport serl'ices in general or any
particular clas8 of such service in relation to any area
or route or portion thereof should be run and operated
by the Stat€ transport undertaking, whether to the
exclusion, complete or partial, of other persons or
otherwise ......... ".
Under this section a scheme may he framed in respect
nf road transport service in genera.I or in respect of a.
particul&r class of such service empowering the State
Transport Undertaking to run the said service; it
may be in rPla.tion to any area or. route or a portion
t hert>of; it ma\· al•o be to the exclusion of all or some
of the persons "running the said service in genera.I or a
particular class of it. The section enables the State
to take OYer particular class of a service, say, the bus
service, and exelude all or some of the persons doing
lmsine"" in that class of service.
Learned counsel
says that this section confers a wide power beyond
the 1icnnissible limits of Art.'19(6}(ii) of the Constitution. Tn stato it differently, the. argument is that
while Art. 19(6)(ii) does not enable a .partial exclusion
1 S.C.R. SUPREME COURT REPORTS
649
of some a.mong the sa.me class of service, s. ti!SC permits the said exclusion.
; The answer to this argument depends upon the true
mea.ning of the provisions of the said Article. Under
sub.cl. (ii) of Art, 19(6), the State can make a law
relating to the carrying on by the State or by a corporation, owned or controlled by the State, of any
particular business, industry or service, whether to the
exclusion, complete or partial, of citizens or otherwise.
Article 19(6) is only a saving provision and the la.w
made empowering the State to carry on a business is
secured from attack on the ground of infringement of
the fundamental rights of a citizen to the extent it
does not E'Xceed the limits of the scope of the said ptovision .. Sub.cfause (ii) is couched in very wide terms.
Under it the State can make law for carrying on a
business or service to the·exclusion, complete or partial, of citizens or otherwise .. The law, therefore, ca.n
provide for carrying on a service to the exclusion of all
the citizens; it may exclud_e some of the citizens only;
.it may do business in the entire State or a portion of
the State, in a specified route or a part thereof. The
·word "service" is wide enough to take in not only
the general motor service but all the species of motor
service. There are, therefore, no limitations on the
State's power to make laws conferring monopoly OD
it in respect of an are\t, and person or persons to be
excluded. In this view, it must be held that s. 680
does not exceed the limits prescribed by Art. J 9(6)(ii)
of the Constitution.
.
·
_ Re, (3): The next contention is that the provisions
of Ch. IV A of the Acii, and particularly tho_se of
s. 68C thereof, offend against Art. 14 of the Constitution. The argument is that Ch. IVA enables the
State to make a discrimination between the State
. Road Transport Corporation on the one hand. and
private operators and private trwnsport undertakings
on the other, and also to make a. similar discrimination between the private operators or the private
transport undertakings, and that this·discrill)ination
is left to the arbitrary. discretion of the Transport Corporation. It is true that the provisions of this Chapter
Dosa Siityanarayananiurt_y
etc.
v.
The Andhra
P.radesh State
Road Transport
Corp~ration
Subba Rao J.
Dosa Satyona1ayonann,rty
etc.
v.
The A1idhra
Pradesh State
Road Transport
Corporation
Subba Rao ].
650
SUPREME COURT REPORTS
[1961]
enable a scheme to be framed conforring a monopoly
on tho State in respect of transport services to tho
partial or complete exclusion of other persons. However, the provisions of the scheme do not make any
distinction between individuals operating a transport
service and private transport undertakings; they are
all treated as one class and tho classification is only
made between tho State Transport Undertaking and
private transport undertakings, whe.ther the business
is carried on by individuals or firms or companies.
Tho only question, therefore, is whether such a claBBi·
fication offends against the equality clause of tho Constitution. Article 14 says:
"The State shall not deny to any person equality
before the law or the equal protection of the laws
within tho territory of India."
This doctrine of equality has been so frequently considered by this Court that it does not require any
further consideration. It has been· held that this
Article does not prohibit reasonable classification for
the purpose of legislation, but such a classification
cannot be arbitrary but must be based upon differences which have rational relation to the object sought
to be achieved. Doubtless in the prPsent case, the
Legislature placed the State Transport Undertaking
in a class different from other undertakings. The
question is whether the classification made in Ch. IV A
of the Act is just and bas reasonable relation to the
object of the legislation. The object of Ch. IVA, as
disclosed by the provisions of s. 68C, is to provide in
the interest of the public an efficient, adequate, economical and properly coordinated 1oad transport service.
To achieve that object s. 68C confers a power on the
State Transport Undertaking t-0 prepare a scheme
t-0 run the service, whether
to the exclusion,
complete or partial, of other persons or otherwise.
The
classification bas certainly reasonable nexus
to the object sought to .be achieved. Ordinarily
a State Transport Undertaking, compared with persons or private undertakings, should be in a better
position than others to carry on the said services for
the benefit of the public; administratively, financially
1 S.C.R. SUPREME COURT REPORTS
651
and technically it can be expect~d to be in a far better
position than others. · It can provide more wellequipped buses, give better amenities to the travelling-Pu_blic, keep regular timings, repair or replace the
buses in emergencies. It may also employ efficient
supervisory staff to keep things going at an appreciably high standard .. We are not suggesting that there
are no individuals or private companies who can efficiently run the service. But the State, compared with
individuals, should certainly be in a better position t.o
achieve the object, namely, to improve the road
transport service in all its diverse aspects. In such a
situation, when the legislature, which must be presumed to understand and correctly appreciate the needs
of its own people, makes a classification between a
State Transport Undertaking and others carrying on
the business of transport services, we cannot say that
there is no reasonable basis for such a classification.
But it is said that s. 68C of the Act and other provisions of Ch. IV A thereof confer an arbitrary power
upon the State Transport Undertaking to discriminate
between individuals and the said Undertaking, between
individuals and private undertakings, and between
individuals and individuals. But· the scheme of
Ch. IV A, w hi oh has been considered by this Court in
Gullapalli Nageswara Rao v. Andhra Pradesh State
Road Transport Corporation('), evolves a machinery
for keeping the State Transpor:. Undertaking within
bounds and from acting in an arbitrary manner, for
B. 68C lays down the legislative policy in clear and
understandable terms and the State Transport Undertaking can initiate a scheme only for providing an
efficient, adequate, economical and properly coordinated road transport service. "Another condition which
it.Jays down is that the scheme is necessary in the
pullHo interest. The scheme so framed is po blished,
with all necessary particulars, in the official Gazette
and also in such manner as the State Government
may direct; persons affected by the scheme may file
objections within the prescribed time ; the State
Government, after considering the objections and
(1) [1959] Supp. I S.C.R, 319.
.q
,Dosa Satya·
narayanamurty
etc.
v
The Andhra
Pradesh'- -State
Road Transport
Corporation
Subba Rao J.
652
Sl'PllEME COCHT REPORTS
[l!J61]
ryoo
giving an opportunity to the objectors or their
representatives and the representa.ti\·cs of thti 8tate
Do.~a Sal) aT
U
ransport
ndertaking to be heard in the matter,
narayana111u,.ty
'"·
may approve or modify the fcheme; the scheme HO
v.
approved or fil(>dified is published. The rules framed
The Andhrn
under the Act provide for personal hearing.
]f the
Pradt<h State State Transport Undertaking seeks to modify a.
Road hampo•I schem<>, it will have to follow the Harn" 1iroeed11re lwfnrn
· CorporaJ1011
doing so: see ss. 68C, 680 and 68E of t.h(> Act.
It
Subba Roo J. will be seen from tho provisions of Ch. IVA nf the Art
that th1• State Trnnsport Undertaking, l.iefor(l pro·
pounding a. scht·m~, arrives at the decision on objec.
' tive criteria.· Th() parties affected a.nd the l'ublic !He
given every opportunity to place tlwir ohjectionR
bPfore tho Government, and the Ciovernm•·nt., after
following the prescribed quasi.judicial proc,,dure, con.
firms or modities the scheme.
Thn sclll'lll(', before it
is finalised, is subjected to puhlic gaze and scrutiny
and the validity and appropriateness oft he proviHions
are tested by a. qua.si-judir:ial process.
The Gov<·rn.
ment cannot be equated to a. Court; but the procedure
proscribed accords with tho principl<·s of na.tmal
justice. It is said that th(l State Transport U n<l•.·r.
taking is either the State Government or a corporation, owned br controlled by the Sta.tP, a.nrl as such
the entiro quasi-judicial procedure prescribed is only a.
cloak to screen the exercise of an abtiolute and arbitrary power on the part of the.Government.
We
cannot say that. Ch. l VA is such a device. The Lcgis.
lature ma.de a sincere attempt to protect a.s fa.r as
possible individual rights from the arbitrary acts of
the executive. Once it is conceded that Ch. IV A of
the Act is constitutionally good and that the Legislature can validly make la.w for nationalization of the
road transport service, the procedure laid down for
implementing the said policy cannot, in our view, be
said to bo unreasonable. It in a.ny pa.rt.icula.r case
the mala fides of the auth0tit.ies eonc~rned a.nd eollu.
sion between tho Staw Transport Undertaking and
the ~~ale Government to deprive particular persons of
their right to do road transport businoss or to drive
~ut particular persons from the trade on extraneous
1 S.C.R. SUPREME COURT REPORTS
653
considerations, are established, that may be a ground
for striking down that particular scheme.
But the
provisions of Ch. IV A cannot be struck down ou the
ground that they confer an arbitrary power on the
State Transport Undertaking and on the State Government to discriminate between individuri,ls and the
State Transport Undertaking, between individualirand
private undertakings, and between individuals and
individuals.
This question was raised in Saghir Ah'rflad v. The
State of U. P. (1). That case dealt with the provisions
of the U. P. Road Transport Act, 1951 (U. P. Act II
of 1951).
Under s. 42(3) of that Act the Government
was exempt from taking permits.for its own vehicles
. and it could run any number of buses as it liked without the necessity of taking out permits for them. Jn
furtherance of the State policy to establish a complete
State monopoly in respect of road transport busin~~s,
the transport authorities b!'gan not only to cancel the
'permits alreaJy issued to private operators but also
refused to issue permits to others, who would otherwiee be entitled tu them. The constitutional validity
of that section was questioned. It may also be mentioned thri,t though that decision- was given after the
Constitution (First Amendment) Act, Hl51, it was not
based upon that amendment, as the Constitution
before the amendment g-0verned the rights of the
parties therein. ln that situation, adverting to the
argument based upon Art. 14 of the Constitution,
Mukherjea, J., a~ he then was, made the following
observations at p. 731:
" There is no doubt that clas~ification is inherent
in the concept of & monopoly ; and if the object of
legislation is. to create monopoly in favonr of the State
with regard to a particular business, obviously, the
State cannot but be differentiated from ordinary citizens and placed in a 'separate category so far as the
running of the business' is concerned and this classification would have a perfectly rational relation to the
object of the statute."
Section 3 of that Act provided that " where the Sto.te
(I) (1955] I S.C.R. 707.
Dosa Satyanarayanamurty
etc.
v.
The Anihra
Prade.~k State
Road Transport
Corporation
Subba Rao ].
654
SUPREME COURT REPORTS
[1961]
1960
Government is satisfied that it is necessary, in the
Dos• Saty•-
interest of genera.I public and for subserving the
na•·~··••"'"''Y common good, so to direct, it may declare that the
,,,_
Road Transport Services in genera.I, or any particular
v.
class of such service on any route or port.ion thereof,
The Andhm
shall be run and operated by the State Government
'"•de.<h Stale
I . I
b
h S
G
·
·
Road hmospo•t e~c ns1_vt y ?{ y t e ta.t
1
e I ovhern
8
ment
0
m COllJUncCo•P"'""""
tlon wit 1 ra1 way or pa.rt y iy t e ta.te 'overnment
a.nd partly by othors in accordance with the provisu&ha Rao J. sions of this Act". It was contended therein that, as
the State could choose any and evory person it liked
for the purpose of being associated with the transport
service and as there were no rules to guide its d iscretion, that provision would offend against Art. 14 of
the Constitution. It was pointed out on behalf of the
State that the discrl'tion under s. 3 of that Act was
not uncontrolled as that could only be done by granting of permits in accordance with the provisions of
the Motor Vehicles Act.
Accepting the const1 uction
auggested, this Court hdd that the discretion to be
exercised by the State would be a. regulated discretion
guided by statutory rules.
But in the instant case,
no liberal const.ruction of the provisions need t.... resorted to, for Cb. IV A of the Act in specific terms
pcovides a. complete ·a.nd, in the circumsta.nceit; satisfactory machinery for reasonably regulating the
exclusion of a.II or some of the private opera.tors from
the notified area. or route. We, therefore, hold that
the provisions of Ch. IV A of the Act do not infringe
the equality clause enshrined in Art 14 of the Constitution.
Re. (4):
By the next contention the lea.med counsel attacks the validity of the scheme on tbe ground
tha.t the Go\'ernment is actuated by bia.s against the
private opera.tors of buses in We-st Goda.va.ri District,
and indeed had predetermined the issue.
In the petitions it was alleged that the Government had complete control over the Road Transport Corporation,
that the entire administration and control over such
road transport undertaking vested in the Government,
that the Chi~f Secretary to the Government of Andhra.
Pra.de6h was its chairman and that, therefore, the
•
;•
1 S.C.R. SUPREME COURT REPORTS
655
entire scheme, from its _inception to its final approval,
was really the act of the Government. On this
hypothesis it was contended that the Government
itself was made a judge in its own cause anQ. that,
therefore, its decision was _vitiated by legal bias. That
apart-, it was also pleaded that a sub.committee, con-
. sisting of Ministers, Secretaries and officers of connect;
ed departments and presided over by the .Minister in
charge of t.ransport, decided in its meeting of January
28, 1960, that under the scheme of nationalization of
bus service, the State Government would take over
the bus services in \Vest Godavari District and Guntur District before the end _of that year and, therefore,
the Minister in charge of the portfolio of transport,
he having predetermined the issue, disqualified himself to decide the dispute between the State Transport
Undertaking and the petitioners.
The self same
questions were raised in Gullapalli Nageswara Rao v.
The State of Andhra Pradesh (1). There, as in this
case, if, was contended that the Chief Minister, who
was in charge of the portfolio of transport, could· not
b<! a judge in his own cause, as he was biased against
the private operators. This Court pointed out the
distinct.ion between official bias of an authority which
is inherent in a statutory duty imposed on it and personal bias of the said authority in favour of, or against,
one of the parties. In dealing with official bias this
Court, after considering the relevant English decisions,
observed at p. 587 thus :
·
"These deci.~ions show that in England a stat.utory invasion of the common 111.w objection on the
ground of bias is tolerated by decisions, but the invasion is confined strictly to the limits of the statutory
exception. It is not out of place here to notice that
in England the Parliament is supreme and therefore
a statutory law, however repugnant to the principles
of natural justice, is valid ; whereas in India· the law
made by Parliament or a State Legislature should
stand the test of fundamental rights declared in Part
III of the Con&titution."
(1) [1960] I S.C.R 5F.o.
84
·DC'sa Satya.
narayanamurty
etc.
v.
The And!ira
Pradesl~ State
Road Transport
Corporation
Subba Rao J.
Dosa Satya·
narayanam"rly
etc.
v.
The Andhra
Pradesh State
Rodd Transport
Corporation
Subba Rao j.
656
SUPREME COURT REPORTS
[1961)
Then this Court proceeded to state that the provi·
sions of the Act did not sanction any dereliction of the
principles of natural justice, for the Act visualized in
case of conflict between the undertaking and the
operators of private buses that the State Government
should sit in judgment and resolve the conflict. Much
to the same effect has been stated by Sh ab, J., in
H. C. Narayanappa v. The State of Mysore(') though
in slightly different phraseology. The learned Judge
stated:
"It is also true that the Government on w bom
the duty to decide I-he dispute rests, is substantially a
party to the dispute but if tho Government or the
authority to whom the power is delegated acts judicially in approving or modifying the scheme, the approval or modification is not op~n to challrnge on a presumption of biaH.
The :\linister or the officer of the
Government who is invested with the power to hear
objections to the scheme is acting in his official capacity and unless thne is reliable evidence t-0 show that
he is biased, his decision will not be liable to be called
in question, merely because he is a limb of the
Government."
In the above cases the transport department of the
Government wa.s the transport undertaking, but here
the State Road Transport Corporation, which is a body
corporate having a perpetual succession a.nd common
seal, is tho transport authority. Though under the provisions of the Act, the State Government has some
control, it cannot be said either legally or factually
tha.t1.he said Corporation is a. department of the State
Government. The State Government, therefore, in
deciding the dispute between the said undertaking a.nd
the opera.tors of private buses is only discharging its
statutory functions. This objection, therefore, ha.a no
merits. Nor ca.u we sa.y that it ha.s been established
that the Minister in charge of the portfolio of trans-
. port ha.s been actuated by personal bias. The fact
that he· presided over the sub-committee constituted
to implement the scheme of nationalization of bus
services i~ the West Godavari District does not in
(1) [196<>] 3 S.C.R. 741.
•
l S.C.R. SUPREME COURT REPORTS
657
itself establish any such bias. Indeed, in the counterr96o
affidavit filed on behalf of the first respondent the conh
f
d
Dosa Satya·
tents and authenticity of t e reports o the procee · narayanamurty
ings of the sub-committee published in the Telugu
,10.
daily "Andhra Patrica" were not admitted. Even if
v.
the sub.committee ca.me to such a decision, it is not
Th• Andhra
possible to hold that it was a final and irrevocable Pradesh State
.1
• •
• d
·
f th
· •
f th A t It Road Transport
uec1s1on m eroga.t1on o
e prov1s1ons o
e c .
Corporation
was only a. policy decision and in the circumstances
could only mean that the sub-committee advised the Subba Rao J.
State. Government to implement the policy of nationalization· of bus services in that particular district. The
said decision could not either expressly or by necessary implication inv:olve a predetermination of the
issue: it can only mean that the policy would be
implemented subject to the provisions of the Act. It
is not suggested that the Minister in charge of the con.
cerned portfolio has any personal bias against the
operators of private buses or any of them. We, therefore, hold that it has not been established that the
Minister in charge of the portfolio of transport had
persona.I bias against the operators of private buses
and, therefore, disqualified himself from hearing the
objections under Ch. IV A of the Act.
Re. (5): The next contention is based upon the observations of this Court in Shrinivasa Reddy v. The State
.of Mysore (1).
After elaborating on the scope of s. 68C
of the Act, Wanchoo, J., observed at p. 136 thus:
"Therefore, the scheme tg be framed must be
such as is capable of being carried out all at once and
that is why the U,ndertaking has been given the power
to frame a scheme for an area. or route or even a. portion thereof ......•...... lf the Undertaking at that stage
has the power to carry it out piecemeal, it woul~
possible for it to abuse the power of implementation
and to discriminate against some opera.tors and iri'•,
favour of others included in the scheme and also to
break up the integrity of the scheme and in a sense
modify it against the terms of s. 68E."
Based on these observations it is contended that the
State Government intended to frame only one scheme
(1) [1960) 2 S.C.R. 130.
uss
SCl'REME COURT l{EPORTS
[1961]
1960
for tho entire district though it wa.s not in a position
to implement the scheme in the entire district a.t one
Dosti S11tyad h
,
b
a.n
t e ea.me time,
ut to circumvent the obscrv·a.-
11aroyanantur1y
'''·
tions of this Court it had split up one scheme into
v.
seven scbcmt>s.
Tht> first re~pondcnt in its counterTh• A•dMa
a.ffida.vit met this allegation in the foll(lwing wa.y:
Pmdesh 51• 1• · "Having rl'ga.rd f.o the rcsourcl!s of the Undertaking
Road Tratuport ,
~
J
d
J
111 men, m teria an n10ney, ca<" 1 sclwmo ha.s been so
Co,poralion
Sitbba Rao ].
framed
th~t it is cape.hie of bciug ea.rri<"d out a.II a.t
·oucc, and in full, without breaking its integrity. Tho
State Transport. Undertaking will carry out each of
the published schemes on a ·date fixed by the Statti
Government for the implt·menlatiuu of each scheme".
The M iuister in his order also ad vcrtcd to this aspoct
and observed.: "In this case, A!'ve11 different schemes
ha.ve been framed.
Each scheme is a st>pa.ra.te and
independent scheme by itsr·lf. In terms of the notification, each scheme after approve.I will come into force
only from a. da.te to be fixed by the i;overnmt•nt.
Though different dates ma.y be fixed for each scheme,
each scheme will be implemented in its .entirety.
Xo
piecemeal implementation of any one scheme will be
done".
Indeed the order of the Minister fixed specific
dates from whieh ea.ch of the schemes shall come into
force.
This Court did not lay down that there eaunot
Lo a.ny phased programme in the nationalization of
transport services in a Sta.le or in a district; nor did
it hold that there canuot be more t ban oue schcnw for
a district or a part of a district. The olJservatirms of
this Court in regard to the implementat.ion of a i;cheme
piecemeal were aimed at to prcvl'ut an ab11He of power
by discriminating age.inst _ o(Jllitl operal(Jl'S and iu
fa. vour of others in res poet of a. bing le scheme. ln the
present cast', se\·t•n o;chcuws were framed not to
circumvent tho observatious of this Cuurt, but only to
a.void the vice inherent in piecemeal implementation.
Not only seven separate schemes \\ere framed in
respect of separate areas of thr district, Lut also the
Government made it clca.r that each scheme should be
implemented in its entirety commencing from diffcrcut
dates.
We do not, therefore, sec any legitimate objection to the framing of seven separate schemes.
l S.C.R. SUPREME COURT REPORTS
659
Re. (6): This contention questions the validity of
the schemes on the ground that the Chief Executive
·
d h R d T
C
Dosa SatyaOfficer of the Andhra Pra es
oa
ransport ornarayanamur•y
poration is not empowered to publish the schemes and,
e1c.
therefore, the schemes were not validly published. Inv.
exercise of the powers conferre·d by s. 68C of the Act,
The Andlira
the Andhra Pradesh State Road Transport Corpora.-
Pradesh Stale
tion proposed the schemes n.nd published them in the Road Transporl
Corporation
Andhra Pradesh Gazette, Part II, p. 1310.