Decided on November 09,1960


Cited Judgements :-



Sarjoo Prosad, C.J. - (1.)In this application under Article 226 of the Constitution the petitioners pray for a writ against the respondents restraining them from adopting and approving a scheme, which has been formulated and published for nationalisation of road transport. The main ground on which the petition is founded is the assertion that the provisions of Section 68 D of the Motor Vehicles Act (Act No. IV of 1939 --hereinafter called "the Act") are ultra vires the Constitution of India and that some of the relevant Rules of the Rajasthan State Road Transport Services (Development) Rules, 1960 (hereinafter called "the Rules"), framed under the Act are equally ultra vires the provisions of the Act and the Constitution.
(2.)The petitioners are transport operators having their buses plying on different routes, locally known as Jaipur-Alwar-Med route, Jaipur-Neem-ka-Thana route, and Jaipur-Kotputli route. These routes are overlapped also by the Jaipur-Delhi route and the Jaipur-Pratapgarh route. Some previous schemes of nationalisation of the aforesaid routes purporting to be under Section 68C of the Act and the Rules framed for the purpose were either cancelled by the Government itself or struck down under orders of this Court by an appropriate writ. Thereafter new draft Rules were published on 4-6-1960, and objections invited. The petitioners and other operators filed their objections to the Rules in question and eventually the Rules were published as finalised in a Gazette Extraordinary on 19-8-1960. In pursuance of the Rules a fresh scheme of nationalisation of road transport was published on 8-9-1960, and objections have been invited to the scheme. The petitioners have, therefore, come up to this Court praying for appropriate writs prohibiting the respondents from approving the scheme in question. It is contended that by virtue of Section 68D or the Act the Government has constituted itself a Judge of the dispute vis-a-vis the Transport Undertaking owned, controlled and run by the Government on the one hand and the private bus operators on the other. This is violative of the fundamental principle of natural justice that a person should not be a judge in his own cause. The State Government, it is argued, being deeply interested in the scheme for nationalisation of road transport and having already declared its avowed policy in favour of nationalisation will not be able to judge dispassionately and without any bias the objections preferred by the different operators to the finalisation of the scheme. With reference to the Rules it is contended that they are inconsistent with the provisions of the Act and are in excess of the powers given to the Government under the Act. For instance, it is said that the definition of "State Transport Undertaking " given in Rule 2(1) (e) is ultra vires, being restrictive in its meaning as compared with the comprehensive definition laid down in the Act itself. Rule 3 is said to be vague and lacking in material particulars. The petitioners submit that a scheme of road transport should take account of matters as to whether a particular service already running on a particular route is inefficient, and whether the State undertaking is likely to make it more efficient or adequate and remove the deficiency, and whether economically it is likely to be advantageous to the public if the scheme is given effect to. Similarly it is argued that Clause (b) of Rule 9 gives an arbitrary power to the General Manager to act as a sort of a superior authority so as to dictate to the Regional Transport Authority to act in a certain manner thereby depriving it of its quasi- judicial function under Section 62 of the Act. For the intervener Mr. Vyas has further contended that the use of the word "forthwith" in Clause (c) of this Rule makes it run counter to the provisions of Section 57 of the Act in accordance where with the State Undertaking has to apply for the grant of a permit as held by the Supreme Court. Similarly Rule 11 (1) is attacked on the ground that the General Manager of the State Undertaking is himself appointed a judge in determining the compensation payable to the bus operator.
(3.)On the above contentions we have thus to examine whether Section 68 D of the Act is ultra vires the Constitution and whether the grounds on which the validity of the Rules has been assailed are sustainable. Both parties have, in support of their respective contentions, placed reliance upon certain recent decisions of the Supreme Court which we propose to discuss in their appropriate places. For the present we should first proceed to examine the relevant provisions of the Act, It should be observed at the outset that, as recognised by Art. 298 of the Constitution, the executive power of the Union and of each State extends to the carrying on of any trade or business. Like every ordinary citizen, the Union and the State Government are thus authorised to carry on any trade or business subject to the restrictions which may be imposed by their respective Legislatures in respect of the particular trade or business. Under Article 19(6) of the Constitution, as amended, nothing in Sub-clause (g) of Clause (1) of that Article is to affect the operation of any existing law in so far as it relates to, or prevents the State from making any law relating to the carrying on, by the State or by a corporation owned or controlled by the State, of any trade, business, industry or service, whether to the exclusion, complete or partial, of citizens or otherwise. Such a legislation is, therefore, not liable to question on the ground that it infringes Article 19(1) (g) of the Constitution; nor can the authority of the Parliament to enact laws granting monopolies to the State Government to conduct the business of road, transport be open to any serious challenge. Entry 21 of List III of the Seventh Schedule concurrently, authorises the Union Parliament and the State Legislatures to enact laws in respect of commercial and industrial monopolies, combines and trusts; and the expression "commercial and industrial monopolies" is wide enough to include grant of monopolies to the State and Citizens as well as control of monopolies. These expressions in a constitutional document should not be construed in a narrow or restricted sense. The fact that under Entry 26 of List II of the Seventh Schedule the States have exclusive authority to legislate in respect of trade and commerce within the State, subject to the provisions of Entry 33 of List III, does not derogate from the authority which is conferred by Entry 21 of List 311 concurrently on the Parliament and the State Legislatures. If it is accepted that legislation relating to monopoly in respect of trade and industry is within the exclusive competence of the State, then the anomalous situation would arise that the Union. Parliament would not be competent to legislate is Order to create monopolies in the Union Government in respect of any commercial or trading venture even though such a power is also reserved to the Union under Article 298 of the Constitution.

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