PETITIONER:
SINDHI SAHITI MULTIPURPOSE TRANSPORT CO-OPERA-TIVE SOCTETY
Vs.
RESPONDENT:
STATE OF MADHYA PRADESH & ORS.
DATE OF JUDGMENT16/11/1976
BENCH:
RAY, A.N. (CJ)
BEG, M. HAMEEDULLAH
SINGH, JASWANT
CITATION:
1977 AIR 441 1977 SCR (2) 86
1977 SCC (1) 403
ACT
Motor Vehicles Act, 1939 Chapter IV-A, Scheme under,
Whether open to constitutional challenge---S. 68D. objec-
tions against scheme, scope of.
HEADNOTE
The Government of Madhya Pradesh proposed to pass scheme
No. 9-M; regarding the nationalisation of road transport.
The scheme was approved and notified in the State Gazette,
after the appellant’s objections made under section 68D of
the Motor Vehicles Act, 1939, had been heard. The appellant
flied a writ petition in the High Court challenging the
Government’s rejection of his objections, and also impeach-
ing the scheme as published in the gazette. The High Court
dismissed the petition holding that, as Chapter IV-A of the
Act has been included as Entry 125 in the Ninth Schedule to
the Constitution, the scheme cannot be challenged..
Dismissing the appeal the Court,
HELD: 1. Though Chapter IV-A of the Act is not open to
any constitutional challenge, it is open to any aggrieved
person to challenge any scheme on the ground that it is not
a valid scheme as required by the provisions of Chapter IV-A
of the Act. [87 C-D]
2. Under section 68D of the Act the only scope for
objection is whether the scheme is efficient and adequate
and not whether exclusion is complete or partial. [91 A-B]
Objections are confined only to the four grounds of
efficiency, adequacy, economy and proper coordination of
road transport service. There was never any objection to
the Scheme on exclusion related to any of these grounds.
[90 D-E]
Capital Multipurpose Co-operative Society Bhopal and
Ors. v. The State of M.P. & Ors. [1967] 3 S.C.R. 329, ap-
plied.
H.C. Narayanappa & Ors. v. The State of Mysore & Ors.,
[1960] 3 SC.R. 742, referred to:
JUDGMENT
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1166 of
1976.
Appeal by Special Leave from the Judgment and Order
dated the 16th September, 1976 of the Madhya Pradesh High
Court in Misc. Petition No. 1004 of 1974.
M.N. Phadke, S.Q. Hasan and A.C. Ratnaparkhi for the
appellant.
Ram Panjwani, H.S. Parihar and 1. N. Shroff for Respond-
ent. No. 1.
Niren De, Attorney General, Rameshwar Nath and Y.B.
Desai, for Respondent No. 6.
The Judgnent of the Court was delivered by
RAY, C.J.--This appeal is by special leave from the
judgment dated 16 September, 1976 of the High Court of
Madhya Pradesh.
87
The appellant made an application under Articles 226 and
227 of the Constitution in the High Court and impeached the
order dated 21 September 1974 whereby the Government dis-
missed the appellant’s objections against Scheme No. 9-M
relating to Road Transport Nationalisation. The appellant
also impeached the Scheme as published in the Gazette on 11
October, 1974.
The High Court held that in view of the fact that Chap-
ter IV-A of the Motor Vehicles Act, 1939 (hereinafter re-
ferred to as the Act) is included as Entry 125 in the Ninth
Schedule to the Constitution the appellant could not chal-
lenge the Scheme.
The High Court erred in holding that it was not open to
the appellant to challenge the Scheme. The Attorney General
rightly and fairly said that the judgment of the High Court
could not be supported on that ground.
The High Court failed to appreciate that though Chapter
IV-A of the Act is not open to any constitutional challenge
it is open to any aggrieved person to challenge any Scheme
on the ground that it is not a valid Scheme as required by
the provisions of Chapter IV-A of the Act.
Scheme No. 9-M relating principally to Jabalpur-Sagar
and Damoh-Hatta routes was published by the State Transport
Undertaking in the State Gazette on 15 November, 1963. The
Scheme was approved and finally published in the State
Gazette on 12 February 1965. Under the Scheme which came
into force with effect from 2 April, 1965 Jabalpur-Sagar
and Damoh-Hatta portions of the routes were reserved for
exclusive operation by the State Transport Undertaking. The
portions Sagar-Bhopal, Rehli-Garhakota, Hatta-Panna, Ka-
tangi-Majhouli and Damoh-Chhatarpur via Hirapur were kept
for joint operation with existing permit holders with the
condition that the permit holders with existing permits were
not to pick up passengers from and to any station lying
between Nohta-Abhana Garhakota or any other two stations on
Jabalpur-Sagar road and Damoh-Hatta and vice-versa.
The Transport Authorities granted fresh permits cover-
ing Abhana Garhakota portion treating it to be a portion of
joint operation with others. This action of the Transport
Authorities was found to be destructive of the true inten-
tion of Scheme No. 9-M.
It thus became necessary to modify Scheme No. 9-M.. The
proposal was then placed before the Board of the State
Transport Undertaking referred to hereinafter as the Under-
taking by, the General Manager. The Board of the Undertak-
ing considered the matter at its meeting held on 20 August
1973 and passed Resolution No. 8354approving the proposal
modifying Scheme No. 9-M. The Board ’Resolution directed
inclusion of Sagar-Rehli-Garhakota-Jabalpur and Patharia-
Damoh routes for exclusive operation by the State Corpora-
tion. The Board directed that the Scheme giving the de-
tails should be placed before the Board for its approval.
In this background Scheme No. 9-M giving details was
prepared and the proposal was placed before the Board of the
Undertaking at the meeting held on
88
29 November, 1973. The Board of the Undertaking approved
the proposal by Resolution No. 1395 and authorised conse-
quential action.
Scheme No. 9-M was published in the Official Gazette
on 7 December 1973. The Scheme was thereafter considered
by the Special Secretary to the State Government in exer-
cise of powers under section 68D of the Act. Under section
68D of the Act persons contemplated in the Act might file
objections and the State Government would hear objections
and then approve or modify the Scheme. The State Government
on 21 September 1974 approved the Scheme after having heard
the objections. The approved Scheme was notified in the
State Gazette dated 11 October 1974. The approved Scheme
came into force with effect from 19 November, 1974.
Scheme No. 9-M as approved, after hearing objections,
provided in clause (2) that the State Road Transport Serv-
ices would be provided on the routes of Jabalpur, Sagar and
Bhopal regions. In clause (2) of the Scheme 25 routes are
set out. Route No. 2 is Jabalpur Bhopal via Patan, Tenduk-
heda, Damoh, Rehli, Sagar and Raisen. Route No. 3 is
Jabalpur-Sagar via Katangi and Damoh. Route No. 4 is Jabal-
pur-Sagar via Patan, Tendukheda, Damoh and Rehli, Route No.
20 is Sagar-Patharia.
In clause (4) of Scheme No. 9-M it is said that no
person other than the Undertaking will be permitted to
provide Roard Transport Services on the routes or portions
thereof specified in clause (2) except as provided in clause
(5).
In clause (5) it is stated that all Road transport Services
will subject to the provisions made in the subsequent
clauses, namely, No. (6) and (7) be provided by the
Undertaking exclusively on JabalpurSagar via Katangi, Damoh
and Damoh-Hatta via Bangnon roads covering portions of the
routes specified in clause (2). The routes which the Under-
taking will operate in conjunction with others are (1)
Jabalpur-patan-Tendukheda-Abhana, (2) Damoh-Patera-Hatta-
Panna, (3) Damoh-Hirapur-Tikamgarh and (4) Damoh-Hirapur-
Chhatarpur portions of the routes specified in clause (2).
In clause (7) of the Scheme is set out a list of
permits granted by the Regional Transport Authorities and
modified as indicated therein. In Item No. 20 of the list is
set out the name of United. Transport and in Items 22 and 23
is set out the name of S.S.M. Trading Company, Society.
The route of Damoh-jabalpur via Abhana, Patan which was in
the name of United Transport Company was modified to remain
operative on the route of Abhana-Jabalpur via Tendukheda,
Patan. The route of Sagar-Jabalpur via Reihli, Gerhakota,
Abhana, Tejgarh, Patan which had been given to S.S.M. Trad-
ing Company was modified to Abhana-Jabalpur via Tendukheda,
Patna.
It, therefore, appears from the Scheme that the routes
(1) Jabalpur-Patan- Tendukheda-Abhana, (2) Damoh-Patera-
Hatta-Panna, (3) Damoh-Hirapur-Tikamgarh, (4) Damoh-
Hirapur-Chhattarpur were to be operated by the Undertaking
in conjunction with existing permit holders.
89
The appellant under section 68D of the Act preferred
objections to the Scheme. The objections were four in
number. First the Scheme is mala fide as it is intended
"to avert (sic) issuance of permits on these routes to
private operators". Second the Scheme is published without
the undertaking forming the requisite opinion under section
68C of the Act. Third the Scheme is discriminatory. Two
permits of the appellant are proposed to be curtailed where-
as 14 permits on Sagar-Rehli-Garhakota route have been left
over. Fourth the Scheme does not fulfil the four-fold tests
in section 68C of the Act.
The Government heard the objections. The State Secre-
tary rejected the objections and approved the Scheme on 21
September 1974. The State Secretary held that no mala fide
was proved. He also rightly held that nationalisation of
Road Transport Service would result in the legal effect of
stoppage of issue of permits on the routes mentioned in the
Scheme. In short, nationalisation of routes cannot be said
to be mala fide. The State Secertary found that the under-
taking considered the Scheme and formed the requisite opin-
ion under Section 68C of the Act. The State Secretary found
that there was no discrimination. There was nothing to
prove that similarly situated operators were treated dif-
ferently. There was no proof that the undertaking knew of
the existence of the alleged permit of the appellant or of
others. The State Secretary also found that the operators on
Sagar-Garhakota-Patharia route were operating because it was
not taken for exclusive operation. In other words, the
Scheme does not concern the route on which the 14 operators
are alleged t0 be plying. The State Secretary also found
that the four purposes in section 68C of the Act were ful-
filled.
The appellant repeated some of the objections to the
Scheme raised before the State Secretary and added new ones.
The appellant’s contentions here were these. First Scheme
No. 9-M which was finalised was not the opinion formed by
the undertaking. Second the appellant asked for resolution
of the undertaking dated 20 August 1973 and this was not
given. Therefore, no opportunity was given to the appellant
to raise objections under section 68D of the Act. Third,
Scheme No 9-M does not fulfil the four-fold purposes, name-
ly, providing (a) efficient, (b) adequate, (c) economical
and (d) properly coordinated road transport service as
mentioned in section 68C of the Act. Fourth curtailment of
route Sagar-Rehli-Garhakota is contrary to clause (5) of the
Scheme.
Chapter IV-A of the Act contains sections 68-A to 68-I.
These provisions in Chapter IV--A are under the heading
"Special provisions relating to State Transport Undertak-
ings".
The Scheme recites that the Undertaking formed the
opinion that for purposes of providing efficient, adequate,
economical and properly coordinated road transport service
provided in clause (2) of the Scheme, it is necessary in
the public interest that the road transport service in
relation to the said routes should be run and operated by
the Undertaking in accordance with the Scheme. There is
thus in-
90
trinsic evidence inherent in the Scheme that the Undertaking
formed the opinion for the Scheme. The State Secretary
rightly rejected the contention of the appellant which was
repeated here.
It appears from the order of the State Secretary who
heard the objections of the appellant against the Scheme
that the Secretary never made an order directing the Under-
taking to produce the resolution dated 20 August, 1973.
In the writ petition filed by the appellant in the High
Court the appellant stated in paragraph 19 that the State
Secretary instead of directing the Undertaking to produce
these documents only observed that the Undertaking might
think over the request adding that he might himself call for
the said documents, if thought necessary. It also appears
from the judgment of the High Court that the proceedings
before the State Secretary indicated that the appellant’s
case was argued without any insistence on the. production of
the resolution. The High Court also noticed that the State
Secretary made no such direction. The fact that he made no
such direction shows that he found it possible to give the
decision without production of it. The contention of the
appellant is without any merit.
The State Secretary rightly held that the four-fold
purposes indicated in section 68C of the Act are estab-
lished. This Court in Capital Multipurpose Cooperative
Society Bhopal & Ors. v. The State of M.P. & Ors(1), said
that the right of a person to object to the Scheme is to be
confined only to the four grounds, namely, that the Scheme
did not provide (a) efficient, (b) adequate, (c) economical
and (d) properly coordinated transport services. The Scheme
in the present case amply establishes that it fulfils the
four purposes mentioned in the Act.
It has to be’ remembered that the Scheme in clause (2)
as well as in clause (5) mentions the exclusive operation of
the Undertaking on these routes in the public interest. A
mere allegation that the Scheme does not fulfil the purposes
does not amount to any allegation and far less any proof.
The appellant laid emphasis on the contention that the
appellant’s permits in respect of the portion Garhakota to
Sagar via Rehli ought not to have been curtailed because the
route was not reserved for exclusive operation by the State
Transport Undertaking under clause (5). It is a matter of
policy as to what routes should be curtailed for the opera-
tion of the Scheme. Courts do not judge such policy deci-
sions. The appellant’s permits on the Garhakota-Rehli-
Sagar routes expired on 26 and 30 September, 1976. The
appellant has been granted fresh temporary permit on the
route which is of conjoint operation. This temporary permit
was granted to the appellant on 25 September, 1976. The
appellant has taken advantage of it.
It has to be shown that unless the appellant is allowed
to operate on Sagar-Rehli-Garhakota route the Scheme will
not be efficient, adequate, economical and properly coordi-
nated. The appellant did not allege and substantiate the
case. This case cannot be entertained also for the reason
that it is idle to suggest that the appellant will have not
only Abhana-Jabalpur via Tendukheda Patan route but also
SagarRehli-Garhakota route as of right.
------------------------
(1) [1967] 3 S.C.R. 329.
91
It is not only competent but also conscionable that a
Scheme for nationalisation can be complete or partial. The
efficiency as well as adequacy of the Scheme is advanced by
such policy decisions of complete or partial nationalization
of routes. See H.C. Narayanappa & Ors, v. The State of
Mysore & Ors. C) Under section 68D of the Act the only
scope for objection is whether the Scheme is efficient and
adequate and not whether exclusion is complete or partial.
Objections axe confined only to the four grounds of effi-
ciency, adequacy, economy and proper coordination of road
transport service. Exclusion can be attacked only on these
four grounds. There was never any objection to the Scheme
on exclusion related to any of these grounds. The State
Secretary in his order, on hearing the objections, rightly
said that the Sagar-Rehli-Garhakota-Patharia route is not to
be taken for exclusive operation because there is no mention
at all of the route. The Scheme in clause (5) has specifi-
cally mentioned which routes are for operation by the State
Transport Undertaking in conjunction with others. The
exclusion of the appellant from route on which the appellant
had earlier operated cannot be said to challenge efficiency,
adequacy, economy or proper coordination.
For these reasons the appeal is dismissed. In view of
the order of the High Court as to costs parties will pay and
bear their own costs.
M.R. Appeal dis-
missed.
(1) [1960] 3 S.C.R. 742.
92