# The State of Bombay v. R. S. Nanji

- **Citation:** [1956] 1 S.C.R. 28
- **Court:** Supreme Court of India
- **Decided:** 1956
- **Bench:** S. R. Das, Acting C.J, Bhagwati, Jagannadhadas, B. P. Sinha, Jafer Imam
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/the-state-of-bombay-v-r-s-nanji-1310
- **Pages:** 15

## Headnote

Fundamental Bights, Infringement of-Acts creating virtual
State monopoly in motor transport busine:s-Application of one Act
to certain groups of owners and another to certain others operating
different routes in different localities-If makes for discrimination
and inequality-If restricts rights to hold property and practise
trade and business-Notification terminating permits for taking over
transp01·t business, if confiscates property without cmnpensationFreedom of inter-state and intra-state trade, if a fundamental rightConstitution of India, hts. 14, 19(1)(!) and (g), 31(2), 301, 3050rissa Motor Vehicles (Regulation of Stage Carriage and Public Carrier's Services) Act, 1947 (Orissa Act XXXVI of 1947), s. 4-0rissa
Motor Vehicles (Amendment) A.ct, 1948 (Orissa Act I of 1949), s. 1.
The petitioners were owners of Stage Carriage Services holding
permits under the Motor Vehicles Act of 1939.
The State Government of Orissa, in pursuance of its scheme of a Nationalised State
Transport as contemplated by the Orissa Motor Vehicles (Regulation
of Stage Carriage and Public Carrier's Services) Act of 1947 (Orissa
Act XXXVI of 194 7) and Orissa Act I of 1949, which amended the
provisions of the Motor Vehicles Act of 1939, issued notifications
under those Acts intimating the owners of different Stage Carriage
Services operating different routes within the districts of Orissa that
,..
with effect from the 1st ol January, 1955, either the Orissa Road
Transport Co. Ltd., or the State Transport Service, formed under
the two Acts 1 would exclusively operate the said routes. The owners
impugned the Acts as unconstitutional and violative of their fundamental rights. It was contended that the two Acts, whose provisions were materially different, discriminated against them and in
favour of the aforesaid transport services as also in their arbitrary
application to different zones and territories of the State and contravened Art. 14 of the Constitution. It was lurther contended that
the provisions of the Acts and rules framed thereunder infringed
Arts- 19(1)(f) and (g) by putting restrictions on the rights to hold
property and to practise trade and business, that the Notifications
S.C.R.
SUPREME COURT REPORTS
29
purporting to take away their transport business amounted to con·
1956
fiscation without compensation and infringed Art. 31(2) and lastly,
that th~ impugned Acts violated freedom of inter-state and intraRam Chandra
state trade guaranteed by Art. 301 of the Constitution.
Palai and others
Held, that the owners of Stage Carriage Services operating The Stat:~/ Orissa
a particular route or in a particular area formed a sepe.rate group or
and others
class by themselves and so long as each one of such a group or class
was governed by the same Act and treated alike, there could be no
discrimination. The Government was the best judge as to which
of the two impugned Acts, or the Act of 1939 which they sought to
amend, should, in its administrative convenience, be e.pplied to a
particular locality or what mode it should follow for the implementation of its scheme and such zonal or territorial divisions it
thought fit to make for that purpose according to different circumstances prevailing in different localities could not be held to be
either discriminatory or violative of the equal protection of law.
That' the position of the permit: holders under the two Acts was
not on a par, e.nd was materially different and they fell into two
distinct classes and, consequently payment of compensation under
one and non-payment under the other did not make for discrimination.
That the contention that the impugned Acts created a.
monopoly in favour of either the Joint-Stock Company or the State
by ousting the private Stage Carriage Services from the business and
thereby infringed Art. 19(1)(f) was no longer tenable in view of Art.
19'( 6) of the Constitution as a.mended by the Constitution (First
Amendment) Act of 1951.
Saghir Ahmad v. The State of U. P. ((1955] 1 S

## Text

1956
The State of
Bombay
v.
R. S. Nanji
lmam·J.
1956
January 20
28
SUPREME COURT REPORTS
(1956]
of the High Court is set aside.
Costs in the appeal in this Court shall be paid by
the appellant to the respondent as directed by the
order granting Special Leave. Each party, however,
will bear his own costs in the High Court.
RAM CHANDRA PALA! AND OTHERS
v.
THE STATE OF ORISSA AND OTHERS.
(S. R. DAS, ACTING C.J., BHAGWATI, JAGANNADHADAS, B. P. SINHA AND JAFER IMAM JJ.]
Fundamental Bights, Infringement of-Acts creating virtual
State monopoly in motor transport busine:s-Application of one Act
to certain groups of owners and another to certain others operating
different routes in different localities-If makes for discrimination
and inequality-If restricts rights to hold property and practise
trade and business-Notification terminating permits for taking over
transp01·t business, if confiscates property without cmnpensationFreedom of inter-state and intra-state trade, if a fundamental rightConstitution of India, hts. 14, 19(1)(!) and (g), 31(2), 301, 3050rissa Motor Vehicles (Regulation of Stage Carriage and Public Carrier's Services) Act, 1947 (Orissa Act XXXVI of 1947), s. 4-0rissa
Motor Vehicles (Amendment) A.ct, 1948 (Orissa Act I of 1949), s. 1.
The petitioners were owners of Stage Carriage Services holding
permits under the Motor Vehicles Act of 1939.
The State Government of Orissa, in pursuance of its scheme of a Nationalised State
Transport as contemplated by the Orissa Motor Vehicles (Regulation
of Stage Carriage and Public Carrier's Services) Act of 1947 (Orissa
Act XXXVI of 194 7) and Orissa Act I of 1949, which amended the
provisions of the Motor Vehicles Act of 1939, issued notifications
under those Acts intimating the owners of different Stage Carriage
Services operating different routes within the districts of Orissa that
,..
with effect from the 1st ol January, 1955, either the Orissa Road
Transport Co. Ltd., or the State Transport Service, formed under
the two Acts 1 would exclusively operate the said routes. The owners
impugned the Acts as unconstitutional and violative of their fundamental rights. It was contended that the two Acts, whose provisions were materially different, discriminated against them and in
favour of the aforesaid transport services as also in their arbitrary
application to different zones and territories of the State and contravened Art. 14 of the Constitution. It was lurther contended that
the provisions of the Acts and rules framed thereunder infringed
Arts- 19(1)(f) and (g) by putting restrictions on the rights to hold
property and to practise trade and business, that the Notifications
S.C.R.
SUPREME COURT REPORTS
29
purporting to take away their transport business amounted to con·
1956
fiscation without compensation and infringed Art. 31(2) and lastly,
that th~ impugned Acts violated freedom of inter-state and intraRam Chandra
state trade guaranteed by Art. 301 of the Constitution.
Palai and others
Held, that the owners of Stage Carriage Services operating The Stat:~/ Orissa
a particular route or in a particular area formed a sepe.rate group or
and others
class by themselves and so long as each one of such a group or class
was governed by the same Act and treated alike, there could be no
discrimination. The Government was the best judge as to which
of the two impugned Acts, or the Act of 1939 which they sought to
amend, should, in its administrative convenience, be e.pplied to a
particular locality or what mode it should follow for the implementation of its scheme and such zonal or territorial divisions it
thought fit to make for that purpose according to different circumstances prevailing in different localities could not be held to be
either discriminatory or violative of the equal protection of law.
That' the position of the permit: holders under the two Acts was
not on a par, e.nd was materially different and they fell into two
distinct classes and, consequently payment of compensation under
one and non-payment under the other did not make for discrimination.
That the contention that the impugned Acts created a.
monopoly in favour of either the Joint-Stock Company or the State
by ousting the private Stage Carriage Services from the business and
thereby infringed Art. 19(1)(f) was no longer tenable in view of Art.
19'( 6) of the Constitution as a.mended by the Constitution (First
Amendment) Act of 1951.
Saghir Ahmad v. The State of U. P. ((1955] 1 S.C.R. 707), held
inapplicable.
Bhikaji Narain Dhakras v. The State of Madhya Pradesh
([1955] ~ S.C.R. 589), applied.
That the provisions of the impugned Acts could not be held to
contravene Arts. 19(1)(f) and 31(2) of the Constitution as the Act of
194 7 did provide for compensation for premature termination and
under the Act of 1949, renewal could not be claimed as a matter of
right and any deprivation of proprietary right would be by authority of law.
That freedom of inter-state or intra-state trade guaranteed by
Art. 301 of the Constitution is not one of the fundamental rights
that can be enforced under Art. 32 of the Constitution and Art. 305
as a.mended by the Constitution (Fourth Amendment) Act of 1955
was a complete answer to that contention of the petitioners.
ORIGINAL JURISDICTION: Petitions Nos. 604, 605,
647-649, 663, 671 and 692 of 1954.
Petitions under Article 32 of the Constitution of
India for.the enforcement of tundamental rights.
1956
Ram Ch«nd,.a
30
SUPREME COURT REPORTS
[1956]
S. P. Sinha, (R. Patnaik, with him) for the petitioners in P. Nos. 604, 605, 649 and 663 of 1954.
Palaiandothers
M. 0. Setalvad, Attorney-General of India, (Porus
Th S I v",, 0 .
A. Mehta and P.G. Gokhale, with him) for the respon-
• ta e o,
r.ssa d
t .
)) th p
. .
and others
en S Ill a
e etit1ons.
1956. January 20. The Judgment of the Court
was delivered by
BHAGWATI J.-These petitions under article 32 of
the Constitution are filed by the owners of Stage
Carriage Services plying their buses on several routes
in the districts of the State of Orissa impugning the
provisions of Orissa Act XXXVI of 1947 and Orissa
Act I of 1949 as violative of their fundamental rights.
They raise a common question of law and can be
disposed of by one judgment.
The State of Orissa embarked upon a scheme of
Nationalised State Transport and, as a first step
towards it, enacted an Act styled the Orissa Motor
Vehicles (Regulation of Stage Carriage and Public
Carrier's Services) Act, 1947 (Orissa Act XXXVI of
1947), which modified the provisions of the Motor
Vehicles Act, 1939, for the better regulation of Stage
Carriage and Public Carrier's Services in the Province
of Orissa.
This Act envisaged the formation of a
Joint-Stock Company in which the. Central and the
Provincial Governments shall together have controlling interests for providing in stages or in one stage a
more efficient administration of the {lntire stage
carriage and public carrier's services in the Province
of Orissa. Such a Company was to be authorised to
run stage carriage and public carrier's services in the
Province of Orissa to the exclusion of all other persons in the routes and areas over which it extended
its activities, and with that end in view, the provisions of the Motor Vehicles Act, 1939, were modified
as therein specified.
Section 4 of the Act provided
that the Provincial Government may, if they think
fit, by notification direct that the powers conferred by
the Motor Vehicles Act, 1939, on a Provincial Transport Authority or Regional Transport Authority shall
S.C.R.
SUPREME COURT REPORTS
31
be held in abeyance with respect to the issue, renewal,
t956
suspension or transfer of permits for stage carriage
Ram Chandra
services and public carrier's services. Such a notificaPalai and others
tion was to be effective according to the directions
v.
either in the whole of the Province or in any speci- The State o/Orissa
fied area or in respect of any specified route or routes.
and others
-
_...
On the issue of such a notification, the abovemenBhagwatt J.
tioned powers conferred on the Provincial Transport
-
..
-
..,
Authority or the Regional Transport Authority were
to be held in abeyance and all permits issued, renewed
or transferred by them were to become inoperative
and the Provincial Government alone was to have
the power to issue or renew permits or to grant temporary permits or to suspend or to transfer permits
for stage carriage services and public carrier's services.
Whilst the State of Orissa was examining the question of the formation of such a Company, the merger
of feudatory States of Orissa with the Province of
Orissa took place on the lat January, 1948. Some of
these Durbars had their own transport services and
these were taken over by the State Government of
Orissa. Orissa was then divided into 5 zones for the
purpose of proper development of road transport,
viz., Sambalpur, Keonjhar, Koraput, Ganjam and
Cuttack zones. It was decided by the Government to
nationalise passenger service transport in the first
three zones to be run departmentally based on the
nucleus services taken over from the feudatory States
which had merged. In order to give effect to this
decision, the Orissa Motor Vehicles (Amendment)
Act, 1948 (Orissa Act I of 1949) was enacted which
further amended the Motor Vehicles Act, 1939, in the
manner therein specified. Section I (3) of that Act
provided that the remaining provisions of the Act
shall come into force in such specified areas of the
district or districts as the Provincial Government
may by notification from time to time appoint. The
Provincial Government may also by notification with·
draw the remaining provisions of the Act from any
specified areas. It was further provided that 011 and
from the date when the remaining provisions of the
Act came into force in any specified areas, the
32
SUPREME COURT REPORTS
(1956]
1956
provisions of Orissa Act XXXVI of 1947 shall be
repealed in respect of the said specified areas and
Rarn Chandra
Palai and others when the remaining provisions of the Act were withv.
drawn from any specified areas, the provisions of
TheStateofOrissa Orissa Act XXXVI of 1947 shall be deemed to be
and others
revived in the said specified areas from the date of
publication of the notification of withdrawal.
L .. :.:
BhagwaliJ.
The effect of these provisions was that in those
areas or districts where a notification under section
4(1) of the Orissa Act XXXVI of 1947 was not issued,
the provisions of the Motor Vehicles Act, 1939, continued to apply; where such a notification was issued,
the provisions of Orissa Act XXXVI of 1947 came to
•
be applied except where, by virtue of the power
reserved under section 1 of Orissa Act I of 1949, the
remaining provisions of that Act were brought into
force by a notification issued in that behalf, in which
case the provisions of Orissa Act XXXVI of 1947
were repealed in respect of the said specified areas
and the provisions of Orissa Act I of 1949 became
applicable. These were the three distinct sets of circumstances which would prevail at a given time after
the enactment of Orissa Act I of 1949 according as
the relevant notifications under section 4(1) ofOrissa
Act XXXVI of 1947 or under section 1(4) of Orissa
"
Act I of 1949 were issued bringing particular area or
areas within the operation of the said respective
Acts.
Whereas a Joint-Stock Company in which the
Central and the Provincial Governments were together
to have controlling interests was envisaged in Orissa
Act XXXVI of 1947, State Transport Service was
envisaged in Orissa Act I of IU49 which defined State
'""
Transport Service to mean . a service in which the
Orissa State has entire or partial financial interest
and which the Provincial Government may by notification declare to be a State Transport Service for the
purposes of the Act. A Joint-Stock Company was
accordingly formed in 1950 which was called the
Orissa Road Transport Co., Ltd. The Transport Services which were run through the Joint-Stock Company were termed the "Rationalised Services". The
>
S.C.R.
SUPREME COURT REPORTS
33
Services which were run through the State Transport
1956
Service were termed the "Nationalised Services".
Ram Chandra
In pursuance of the above scheme of Nationalised Palai and others
State Transport, the State Government of Orissa
v.
issued notifications and press notes which gave in- Th• state ofOrissa
timation to the owners of Stage Carrier Services opeand othero
rating on the several routes within the districts of
BhagwatiJ.
Orissa that with effect from the 1st January 1955
either the Orissa Road Transport Co., Ltd., or the
State Transport Service will be operating the said
respective routes. That was the occasion for the
above petitions being filed by the owners of the Stage
Carriage Services plying their buses on the said respectiv.e routes impugning Orissa Act XXXVI of 1947
· and Orissa Act I of 1949 as unconstitutional and void
as aforesaid.
· . The petitions before us are not confined to the
areas and routes where only Rationalised Services or
Nationalised Services are contemplated to be introduced by the State Government. Petitions Nos. 604
of 1954, 648 of 1954, 664 of 1954, 666 of 1954 and 671
of 1954 are concerned with the nationalisation of the
services and the routes operated upon by the petitioners in those petitions are intended to be served
by the State Transport Service. Petitions Nos. 605
of 1954, 647 of 1954, 649 of 1954, 663 of 1954 and 665
of 1954 are concerned with the rationalisation of the
services and the routes ope~ated upon by the petitioners in those petitions are intended to be served
by the Orissa Road Transport Co .. , Ltd. Petition No.
692 of 1954 is not clear whether the scheme to be put
into operation by the State Government in the route
operated upon by the petitioner therein is intended
to be nationalised or rationalised. One thing, however, is common between all these petitioners that
their permits under which they have been operating
their buses upon those routes for the last several
years are liable to be either terminated or cancelled
or are not to be renewed under the scheme of Nationalised Road Transport Services and either the State
Government or the Transport Authorities will grant
the permits on those routes only to the Orissa Road
6
SUPREME COURT REPORTS
(1956]
1956
Transport Co. Ltd., or the State Transport Service as
the case may be.
Ram Chantlra
f
ed
k d
Palal and others
The provisions o the impugn
Acts were attac e
v.
on the ground thattherewasdiscriminationin.favour
Th• Slat• o/ 0,1 .. a of the State Transport Service and the Orissa Road
and other•
Transport Co. Ltd. It was urged that the State could
~ -
not discriminate against persons in its own favour as
BhagwatiJ.
well as in favour of the Joint-Stock Company formed
for carrying on motor transport business as that
would be a negation of equality guaranteed under
article 14 of the Constitution. It was also urged that
zonal and territorial discrimination in the application of the impugned Acts arbitrarily offended against
article 14 of the Constitution. A further ground of
attack was that the said provisions of the impugned
Acts and the rules framed thereunder infringed article 19(l)(f) and (g) of the Constitution as they put
restrictions on tile citizens regarding their rights to
hold property and to practice trade or business. Article 31(2) was also alleged to have been infringed because the Gazette Notification of the State of Orissa
purporting to take away the petitioners' motor transport business amounted to confiscation and the interests of the petitioners in a commercial undertaking
"
were purported to be acquired without making any
provisions for compensation. The impugned Acts,
it was alleged, also violated the guarantee of freedom
of inter-State and intra-State trade embodied in article 301 of the Constitution.
Our attention was drawn to the relevant provisions
of the Motor Vehicles Act, 1939, Orissa Act XXXVI
of 1947 and Orissa Act I of 1949 regarding the issue
~
~
and renewal of permits. Under the Motor Vehicles
Act, 1939, the Provincial Transport Authority and
the Regional Tran11port Authority were invested with
the requisite powers in this behalf. Sections 47 and
55 prescribed the matters to be ·considered by the
Regional Transport Authority in considering applications for stage carriage permits and public carrier's
permits and section 58 provided for the dura~ion and
renewal of permits. So far as renewals of permits were
concerned, it was provided that, other conditions
S.C.R.
SUPREME COURT REPORTS
35
being equal, applications for renewal shall be given
1956
preference over new applications for permits. When
Ram Chandra
a notification was issued under section 4(1) of Palai and others
Orissa Act XXXVI of 1947, the powers conferred on
v.
the Provincial Transport Authority or the. Regional Th• State of Orissa
Transport Authority by the Motor Vehicles Act,
andothers
1939, were held in abeyance and the Provincial Government alone was invested with the power to issue
Bhagwati J.
or renew permits. In the granting or refusing to
grant such permits, the Provincial Government was
not bound to take into consideration the matters
specified in sections 47 or 55 of the Mot.or Vehicles
Act, 1939. The Provincial Government was also
authorised by notification to cancel any permit granted under the Motor Vehicles Act, 1939, without
following the provisions of section 60 of that Act.
The only provision which was made in section 6 of
Orissa Act XXXVI of 1947 in this behalf was that
when a permit became inoperative under section 4(2)
or was cancelled under section 5 of that Act, compensation as therein prescribed was payable to such permit holder.
Sections 3 and 4 of Orissa Act I of 1949 added two
further clauses to sections 47 and 55 of the Motor
Vehicles Act, 1939, viz.,
"(g) other conditions being equal, in the interest
of proper co-ordination of transport facilities, the expediency of giving due consideration to a State Transport Service;
(h) the necessity for preventing unhealthy competition in any route or routes or area on which the
State Transport Service may ply;"
It was pointed out that the whole scheme of Orissa
Act XXXVI of 1947 and Orissa Act I of 1949 was to
oust the owners of stage carriage service from business and create a virtual monopoly in favour of the
Orissa Road Transport Co. Ltd. or the State Transport Service and thus discriminate against persons in
favour of the Joint-Stock Company or the State.
Even though the Provincial Government was invested
with power to issue or renew the permits which would
become inoperative, under section 4(2) (b) of Orissa
36
SUPREME COURT REPORTS
[1956]
1956
Act XXXVI of 1947, that power woul<l be exercised
only having regard to the obi"ect which the State GovRam Chandra
Palai and others ernment had in view in enacting that Act and the
v.
only result would be the issue of permits in favour of
The State of Orissa the Orissa Road Transport Co. Ltd. The position
and others
under Orissa Act I of 1949 would be no better in spite
BhagwatiJ.
of clauses (g) and (h) having been added to sections
47 and 55 of the Motor Vehicles Act, 1939, because
the expediency of giving due consideration to a State
Transport Service and tbe necessity for preventing
unhealthy competition therein mentioned would also
have the effect of eliminating the private-owned stage
carriage service altogether and replacing in its stead
the State Transport Service.
It was also pointed out that the State Government
had arbitrarily and without any rational basis selected
certain districts like Gan-jam and Puri and parts of
Cuttack District for starting the Orissa Road Transport Co. Ltd., and had introduced Staie Transport
Service in certain other districts such as Sambalpur,
Keonjhar, Bolangir and some parts of Cuttack District. Orissa Act XXXVI of 1947 was applied to the
former Districts while Orissa Act I of 1949 was applied to the latter Districts. The provisions of both
the Acts being materially different as set out above
the application nf one Act to particular districts of
the State and of the other Act to the other districts
of the State was violative of the guarantee of equal
protection of laws enshrined in Article 14 of the Constitution. The owners of stage carriage services to
whom Orissa Act XXXVI of 1947 applied had the
additional advantage of having compensation granted to them in accordance with the terms of section 6
thereof which advantage was not available to those
owners of stage carriage services to whom Orissa Act
I of 1949 was applied.
There was also a further
advantage which was available to the persons to
whom Orissa Act XXXVI of 1947 applied and it was
section 8 of the Act which provided that, when permits had been cancelled by the Provincial Government under the provisions of the Act, the Provincial
Government may, by notification, require such
"-
-.
... -
-
S.C.R.
SUPREME COURT REPORTS
37
permit holders or owners to sell any specified vehicle
1956
or vehicles and any other movable or immoveable
Ram Chandra
property used in connection with the operation and Palai 01,d others
maintenance of such vehicle or vehicles, to the Comv.
pany, when so constituted, at the rates assessed in the The state o/Orissa
prescribed manner. This advantage was not available
and others
to the persons to whom Orissa Act I of 1949 applied.
It has, however, to be remembered that the Scheme
of Nationalised State Transport had its origin in the
White Paper published by the Government of India
towards the end of the year 1944 with a view to
removing the difficulties coming in the way of proper
development of road transport and the need for
cheap, efficient and rapid road transport services and
the elimination of wasteful competition had been
emphasized therein. The matter was discussed at the
meeting of the Transport Advisory Council held in
1945 and the Transport Advisory Council had then
drafted a code of principles and practice for regulating the co-ordination of rail-road transport services
which were later ratified by the State Government
and accepted by the Government of India.
It was
this scheme which was embarked upon by the State
of Orissa and several steps were taken by the State
Government in order to implement that scheme. The
first step towards such implementation was the enactment of Orissa Act XX XVI of 1947 which envisaged
the formation of a Joint-Stock Company in which the
Central and the Provincial Governments shall together
have controlling interests.
Before such a Company
could be formed the feudatory States in Orissa had
merged in the Province on the 1st January 1948 and
the State Government had on its hand transport services which were owned by such States and had been
taken over by the State Government of Orissa. These
transport services formed the nucleus on the basis of
which the State Government thought of adopting
another mode of implementing the scheme of Nationalised State Transport and Orissa Act I of 1949 was
passed envisaging the State Transport Service which
would also serve the same purpose. When these two
modes of implementation, viz., the formation of a
Bhagu-ati J.
38
SUPREME. COURT REPORTS
[1956]
1956
Joint-Stock Company and the starting of the State
Ram Chandra
Transport Service, were adopted by the State GovPalai anti others ernment, the question naturally arose as to how these
T,
two different ideas could be worked out for the fulfilThe.SM• of Orissa ment of the end in view.
The nucleus of transport
and others
services which had been owned by the State Government had to be utilised so far as it was available and
Bhagwati},
h
.
avmg regard to the situation as it obtained, the
State Government naturally thought of applying
Orissa Act I of 1949 to certain districts of the
State leaving the other districts to be served by
the mode envisaged in Orissa Act XXXVI of 1947.
Such a zonal or territorial or geographical division
of the several districts of the State for implementation of the scheme of Nationalised State Transport
by either the formation of a Joint-Stock Company or
the running of the State Transport Service was based
on the availability of the transport services acquired
by the State Government from the various merging
States and if such a division was made having regard
to the situation as it thus obtained, no challenge
could be made against it on the ground of discriminatfon or the denial of equal protection of laws.
What was·essential was that, as between the owners
of stage carriage services operating on a particular
route or in a particular area, no discrimination should
be made and all should be treated alike. "If each one
of such owners had the same Act applied to them
they could not be heard to complain about any discrimination. They formed a separate group or class
by themselves to be treated in a particular manner
having regard to the exigencies of the situation and
the Government was the best judge of the circumstances which obtained within the particular locality
which necessitated the application of one Act or the
other for the implementation of the scheme. If the
State Transport Services were not sufficient in number
and could not fully serve the purpose sought to be
achieved, the State Government would well be within
its rights to form a Joint-Stock Company as envisaged
in Orissa Act XXXVI of 1947 a,nd if such a JointStock Company could not be formed within a
-
..
S.C.R.
SUPREME COURT REPORTS
39
measurable distance of time, the State Government
1966
could very well allow the old order of things· to continue
Ram Chandra
under which the owners of stage carriage services Palai and others
would be governed only by the provisions of the
v.
Motor Vehicles Act, 1939. It all depended upon the The State of Orissa
administrative convenience as to whether the State
and others
Government could adopt one mode of implementation
BlragwatiJ.
of the scheme or the other and no blame could be laid
at its door if, in the circumstances of this case, it
adopted one mode of implementation in one district
or part of a district and adopted another mode of
implementation in another district or another part of
a district provided, however, as we have stated above,
all persons who were operating on a particular route
or routes or were located in a particular area or district were treated equally and without any discrimination inter se.
Such zonal or territorial or geographical division, therefore, would not be violative of
the equal protection of laws.
A further argument which was addressed before us
on behalf of the petitioners may be noted here and it
was thatOrissa Act I of 1949 had been applied to some
of them and that Act provided for no compensation to be given to them as in the case of those owners
of stage carriage services to whom Orissa Act XX XVI
of 1947 had been applied. That, it was contended,
was discriminatory as between the several owners of
stage carriage services and thus violated Article 14
of the Constitution. This argument, however, ignores
the fact that under Orissa Act XXXVI of 1947, the
permits issued or renewed in favour of the owners of
stage carriage services by the Provincial Transport
Authority or the Regional Transport Authority cease
t'o be operative or are cancelled by the Provincial
Government as the case may be and compensation is
given to such permit holders for such premature termination or cancellation of their permits. The owners
of stage carriage services to whom Orissa Act I of
1949 is applied stand, however, on a different footing.
Their permits continue for the normal period and the
considerations which are laid down in clauses (f) and
(g) which have been thereby added to sections 47 and
55 of the Motor Vehicles Act, 1939, would come into
40
SUPREME COURT REPORTS
(1956]
1956
play when these permits which have expired by lapse
of time come to be considered for renewal on applicaRani Chandra
Palai and others tions made by permit holders in that behalf. These
v.
permits may or may not be renewed in favour of these
The State of Orissa permit holders but the non-renewal of such permits
and others
would not be on a par with the premature termination or cancellation of the permits held by the owners
Bhagwati J.
f
•
·
h
h
o stage carnage services to w om t e provisions of
Orissa Act XXXVI of 1947 were applied. The two
positions, therefore, are not similar and the permit
holders under Orissa Act I of 1949 do not fall in the
same class or group as the permit holders under Orissa
Act XXXVI of 1947.
There is no question, therefore, of any discrimination between these two classes
or groups of permit holders and it cannot be validly
urged that the provisions of the impugned Acts in so
far as they applied to different classes or groups of
permit holders are in any manner violative of the
fundamental right embodied in article 14 of the Constitution.
The argument that the provisions of the impugned
Acts were designed with a view to oust the private
stage carriage services from business altogether and
were intended to create a virtual monopoly in favour
of the Joint-Stock Company or the State as the case
may be is also now of no avail. Saghir Ahmad's
case(1) was particularly relied upon by the petitioners
in support of their contentions but article 19(6) of
the Constitution as amended by the · Constitution
(First Amendment) Act, 1951, enacts that "Nothing
in sub-clause (g) shall affect the opera ti on of any
existing law in so far as it imposes, or prevent the
State from making any law imposing, in the interests
of the general public, reasonable restrictions on the
exercise of the right conferred by the said sub-clause,.
and, in particular, nothing in the said sub-clause,
shall affect the operation of any existing law in so
far as it relates to, or prevent the State from making
any law relating to,-
(i) .......................... .
(ii) the carrying on by the State, or by a corporation owned or controlled by the State, of any trade,
(1) [1956] 1 S.C.R. 707.
r-
-
,I
S.C.R.
SUPREME COURT REPORTS
41
business, industry or service, whethe1· to the exclu1956
sion, complete or partial, of citizens or otherwise".
Ram Chandra
This amendment excludes all argument in regard to Palai and others
the alleged ousting of the private-owned stage carriv.
age services and the creation of a virtual monopoly in The State of Orissa
favour of the Joint-Stock Company or the State. The
andothers
Orissa Road Transport Co. Ltd. which is a Joint-Stock
BhagwatiJ.
Company formed under the provisions of Orissa Act
XXXVI of 1947 and the State Transport Services
which are envisaged in Orissa Act I of 1949 would,
therefore, be able to carry on their business even if it
resulted in the complete elimination of the privateowned stage carriage services without any violation
of the fundamental right guaranteed under article
19(1)(g) ofthe Constitution.
It was attempted to be argued on behalf of the
petitioners that the amendment of article 19(6) of
the Constitution would not affect the position as it
obtained under t.he impugned Acts because these Acts
had been long in operation before the amendment
came into force and the petitioners were entitled to
relief based on our decision in Saghir Ahmad's case,
supra. A similar argument was sought to be advanced before us in Petitions Nos. 189 to 193 of 1955
-Bhikaji Narain Dhakras v. The State of Madhya
Pradesh & Another(1)-and that argument was repelled
by us in the manner following:
"The contention of the respondents before us is
that although the amending Act, on the authority of
our decision in Saghir Ahmad's case (supra), became
on and from the 26th January 1950 void as against
the citizens to the extent of its inconsistency with
the provisions of article 19(1)(g), nevertheless, after
the 18th June 1951 when clause (6) was amended by
the Constitution (First Amendment) Act, 1951 the
amending Act ceased to be inconsistent with the
fundamental right guaranteed by article 19(1)(g) read
with the amended clause (6) of that article, because
that clause, as it now stands, permits the creation by
law of State monopoly in respect, inter alia~ of motor
transport business and it became operative again
(1) (1955) 2 S.C.R. 589.
6
42
SUPREME COURT REPORTS
[1956]
1956
even as against the citizens ................ In our judgment
the contentions put forward by the respondents as
Ram Chandr'a
Palai and others to the effect of the Constitution (First Amendment)
v.
Act, 1951 are well-founded and the objections urged
The State o/Orissa against them by the petitioners are untenable and
a .. d others
must be negatived".
It is hardly necessary for us to consider the further ·"- -
BhagwatiJ,
·
d b
h
·
h
h
content10n urge
y t e petitioners, viz., t at t e
fundamental right guaranteed under article l9(l)(f)
and under article 31 (2) had been violated.
If the
permits held by them under the Motor Vehicles Act,
1939, were prematurely terminated or cancelled
under the provisions of Orissa Act XXXVI of 1947
compensation was provided by the Act itself.
If
there was no renewal of their permits on the expiration thereof after they had run for their normal
period by virtue of the provisions of Orissa Act I of
1949, no claim could be made by them on the sc·ore
of such non-renewal because renewal was not a
matter of right. The Provincial Transport Authority or the Regional Transport. Authority would be
well within their rights to refuse such renewal having
regard to the provisions of the amended sections 47
and 55 of the Motor Vehicles Act, 1939, and, if at all
there was any deprivation of their proprietary rights,
it would be by authority of law.
Nor need we pause to consider the last contention
urged on behalf of the petitioners that the impugned
Acts violated the guarantee of freedom of inter-State
and intra-State trade or business embodied in article
301 of the Constitution. In the first instance, it is
not a fundamental right conferred by Part III of the
Constitution which can be enforced by a petition
.. ·
under article 32.
Moreover, article 305 as it stood
before tbe amendment and the amended article 305
which came into effect after the Constitution (Fourth
Amendment) Act, 1955, afford a complete answer to
this contention of the petitioners.
The result, therefore, is that there is no substance
in any of the contentions urged on behalf of the petitioners and the petitions must, therefore, stand dismissed as ordered by us already.