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PETITIONER: A. VISHWANATH RAO ETC.

       Vs.

RESPONDENT: THE STATE OF MYSORE & ORS.

DATE OF JUDGMENT: 16/02/1968

BENCH: RAMASWAMI, V. BENCH: RAMASWAMI, V. SHAH, J.C. MITTER, G.K.

CITATION:  1968 AIR 1095            1968 SCR  (3) 198

ACT: Motor  Vehicles  Act 1939, ss. 68-B, 68-C, 68-D,  and  68-E; Road Transport Act 1950, s. 20; Constitution of India,  Art, 14;--Mysore  State, Transport Corporation  preparing  scheme to,  take over route partly in Mysore and partly  in  Andhra Pradesh--Both  State  Governments  and  Central   Government approving final scheme--failure to prepare scheme  according to   s.  20  of  1950  Act  if  mere   irregularity.--Scheme prescribing  wide  disparity  between  maximum  and  minimum number  of vehicles and services--if fraud on ss.  68-C  and 68-E--Exclusion  only  of  Mysore  and  not  Andhra  Pradesh private operators--if discriminatory.

HEADNOTE: The  appellants  were transport operators  plying  a  ’stake carriage  on an inter-State route 28 miles long of  which  a portion  of  5  miles is situated in  the  State  of  Andhra Pradesh and the rest in the State of Mysore.  A draft scheme was  prepared and published by the second respondent  Mysore State Road Transport Corporation under s. 68-C of the  Motor Vehicles  Act,  1939,  proposing  to  take  over  the  Stage Carriage Services on the route to the complete exclusion  of other  operators.  After objections against the  scheme  had been  heard  by the Chief Minister of the  State  of  Mysore under  s. 68-B of the Act, the draft scheme was approved  by his  order  dated  March  7,  1964  with  two  modifications whereby,  firstly,  it  specified  the  minimum  number   of vehicles and daily services and, secondly, it restricted the exclusion of other operators only to that part of the  route which  was  in  the State of Mysore.  The  approval  of  the Central  Government  was accorded to the  scheme  under  the proviso  to  s. 68-D(3) of the Motor Vehicles  Act  and  the final  scheme was published by the Mysore Government in  its Gazette dated July 16, 1964. The  appellants  challenged the notification of  the  Mysore Government  approving  the final scheme by a  writ  petition under  Art.  226 of the Constitution but  the  petition  was dismissed by the High Court. It  was contended on behalf of the appellants (i)  that  the provisions of s. 20 of the Road Transport Corporations  Act, 1950, were not complied with and the final scheme  published

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by  the first respondent was ultra vires; (ii) that  whereas in the draft scheme the maximum number of vehicles and daily services  were  specified and not the  minimum  number,  the final  scheme provided the maximum number of vehicles as  18 and  the  minimum as one, and the maximum  number  of  daily services  as 10 and the minimum as 3; it was contended  that by permitting such a great disparity between the maximum and minimum  number of vehicles and daily services there  was  a virtual modification of the draft scheme and therefore,  the procedure  prescribed by s. 68-E of the Motor  Vehicles  Act should  have  been  followed; and (iii)  that  the  approved scheme  violated Art. 14 of the Constitution as there was  a complete  exclusion of the private operators on the  portion of  the route located in the Mysore State  while  permitting those  who were plying their vehicles on the portion of  the route lying in the State of Andhra Pradesh. HELD : dismissing the appeal 199 (i) Even assuming that the requirements of s. 20 of the Road Transport Corporations Act should also be followed in a case where the Central Government has given its sanction under s. 68-D  of the Motor Vehicles Act, it must be held that  there had been sufficient compliance with the requirements of  the Road Transport Corporations Act in the present case.  It was not  disputed  that the concurrence of the Stale  of  Andhra Pradesh was secured for the final scheme and the  Government of the State of Mysore had also accorded its approval to it. In these circumstances the omission of the first  respondent to  make the scheme in the precise manner in which s. 20  of the  Road Transport Corporation Act directs the  preparation of  the scheme was a mere irregularity which could not  lead to the nullification of the final scheme. [203 H-204 B] (ii)  In  the  present  case the distance  of  the  rout  in question was a short distance of 28 miles, and the order  of the  Chief Minister shows that there was seasonal  variation of traffic density and during marriage and other seasons  it was  necessary  to operate extra services.  There  was  also variation  on account of auspicious and  inauspicious  days. It was felt by the Chief Minister that the scheme would have to be sufficiently flexible to enable adjustment of services and vehicles to cater for the actual traffic needs.  In  the context of the particular facts of the case the gap  between the minimum and maximum number of vehicles and services  was not so great as to amount to a fraud on s. 68-C and 68-E  of the Motor Vehicles Act. [205 F-H] B.  H.  Aswathanarayan Singh and Ors. v. State of  Mysore  & Ors., [1966] 1 S.C.R. 87, distinguished. (iii)  It is manifest that operators plying in the State  of Mysore  and  those  plying in the State  of  Andhra  Pradesh constitute two different classes of persons and therefore no question  of discrimination can arise if there  is  complete exclusion of the operators within the State of Mysore and if there  is relaxation with regard to those operating  in  the State of Andhra Pradesh. [206 A-B]

JUDGMENT: CIVIL  APPELLATE JURISDICTION ’ Civil Appeals Nos’. 8 and  9 of 1968. Appeals  by special leave from the judgment and order  dated October 27, 1967 of the Mysore High Court in Writ  Petitions Nos. 1720 and 1722 of 1964. P.   Babula  Reddy  and  K.  Rajendra  Chaudhuri,  for   the appellants (in-both the appeals).

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Shyamala  Pappu,  M.  K. Ramamurthi  and  Vineet  Kumar  for respondent No. 2 (in both the appeals). R.  N. Sachthey and S. P. Nayar, for respondent No.  3  (in’ both the appeals). The Judgment of the Court was delivered by Ramaswami,  J.  These appeals are brought by  special  leave from the judgment of the Mysore High Court dated October 27, 1967 dismissing Writ Petitions Nos. 1720 and 1722 of 1964. The  appellants  are  transport  operators  plying  a  stage carriage on the route Yadgir to Narayanapet on the  strength of  permits  issued  by the  Regional  Transport  Authority, Gulbarga.  The route 200 Yadgir to Narayanapet is an inter-State route of a  distance of 28 miles out of which a portion of 5 miles is situated in the State of Andhra Pradesh and the rest is in the State  of Mysore.    A  draft  scheme  was  prepared  by  the   second respondent, Mysore State Road Transport Corporation under s. 68-C  of the Motor Vehicles Act, proposing to take over  the Stage  Carriage Services on the inter-State route Yadgir  to Narayanapet  to the complete exclusion of  other  operators. The  draft scheme was published in the Gazette on  June  21, 1962.  The appellants and some others filed their objections against  the proposed scheme.  The objections were heard  by the Chief Minister of, the State of Mysore under s. 68-D  of the  Motor  Vehicles Act and the draft scheme  was  approved with certain modifications by his order dated March 7, 1964. The approval of the Central Government was later on accorded under the proviso to sub-section (3) of s. 68D of the  Motor Vehicles Act.  The approved scheme made two modifications to the  draft  scheme.   The first was that  it  specified  the minimum  number of vehicles and daily services.  The  second modification  was that it restricted the exclusion of  other operators  only to that part of the route which was  in  the State  of Mysore.  The approved scheme was published by  the Government  of  Mysore in its Gazette dated July  16,  1964. The appellants moved the High Court of Mysore for grant of a writ  under  Art.  226  of the  Constitution  to  quash  the notification  of the Mysore Government dated July  16,  1964 approving  the final scheme.  The main ground  of  challenge was  that the approved scheme violated the provisions of  s. 20  of the Road Transport Corporations Act, 1950 (Act 64  of 1950).  It was also contended that there was an infringement of  the  requirements of s. 68-C and s. 68-E  of  the  Motor Vehicles Act, 1939 (Act 4 of 1939) as modified by Act 100 of 1956,  but the writ applications were dismissed by the  High Court by its judgment dated October 27, 1967. Chapter  IV A was inserted in the Motor Vehicles Act (Act  4 of  1939) by the Amending Act 100 of 1956 with  effect  from February  16, 1957.  Section 68-C which is  incorporated  in Ch. IV A reads:               "Where  any State transport undertaking is  of               opinion  that for the purpose of providing  an               efficient,  adequate, economical and  properly               coordinated  road  transport  service,  it  is               necessary  in the public ’interest  that  road               transport   services   in   general   or   any               particular  class of such service in  relation               to any area or route or portion thereof should               be  run and operated by. the  State  transport               undertaking,  whether to the  exclusion,  com-               plete   or  partial,  of  other   persons   or               otherwise, the State transport undertaking may               prepare a scheme 201

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giving particulars of the nature of the services proposed to be  rendered, the area or route proposed ,to be covered  and such   other  particulars  respecting  thereto  as  may   be prescribed, and shall cause very such scheme to be published in the Official Gazette and also in such other manner as the State Government may direct." Section 68-D provides as follows               "(1)   Any  person  affected  by  the   scheme               published under section 68C may, within thirty               days  from the date of the publication of  the               scheme   in   the   Official   Gazette,   file               objections  thereto  before  the  State   Gov-               ernment.                (2)   The   State   Government   may,   after               considering the objections and after giving an               opportunity    to   the   objector   or    his               representatives  and the-  representatives  of               the State transport undertaking to be heard in               the  matter,  if they so  desire,  approve  or               modify the scheme.               (3)   The scheme as approved or modified under               sub-section (2) shall then be published in the               Official  Gazette by the State Government  and               the  same  shall thereupon  become  final  and               shall  be called the approved scheme  and  the               area  or  route to which it relates  shall  be               called the notified area or notified route:               Provided that no such scheme which relates  to               any inter-State route shall be deemed to be an               approved  scheme unless it has been  published               in  the  Official Gazette  with  the  previous               approval of the Central Government."               Section 68-E states               "Any scheme published under sub-section (3) of               section  68D may at any time be  cancelled  or               modified  by the State  transport  undertaking               and the procedure laid down in section 68C and               section  68D shall, so far as it can  be  made               applicable,  be followed in every  case  where               the  scheme is proposed to be modified  as  if               the,  modification  proposed were  a  separate               scheme." Section 3 of the Road Transport Corporations Act, 1950  pro- vides  for establishment of Road Transport Corporations  and reads as follows :               "The State government, having regard to-               (a)   the  advantages offered to  the  public,               trade and industry by the development of  road               transport;               L4Sup.CI/68-14               202               (b)   the  desirability  of  coordinating  any               form of road transport with any other form  of               transport;               (c)   the   desirability  of   extending   and               improving the facilities for road transport in               any  area  and of providing an  efficient  and               economical  system of road  transport  service               therein; may,  by notification in the Official Gazette,  establish  a Road Transport Corporation for the whole or any part of  the State   under  such  name  as  may  be  specified   in   the notification." Section 4 states :               "Every Corporation shall be body corporate  by

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             the  name  notified  under  section  3  having               perpetual  succession and a common  seal,  and               shall by the said name sue and be sued." Section 18 is to the following effect               "It shall be the general duty of a Corporation               so to exercise its powers as progressively  to               provide or secure or promote the provision of,               an   efficient,   adequate,   economical   and               properly coordinated system of road  transport               services in the State or part of the State for               which  it is established and in  any  extended               area:               provided that nothing in this section shall be               construed as imposing on a Corporation, either               directly  of  duty or  liability  enforce  any               court or tribunal to which it would               not otherwise be subject." Section 19(1) provides as follows:               "(1) Subject to the provisions of this Act,  a               Corporation shall have power-               (a) to operate road transport services in  the               State and in any extended area; Section 20 deals with extension of the operation of the road transport  service of a Corporation to areas within  another State. Section 20 reads as follows :               "20. (1 ) If a Corporation considers it to  be               expedient in the public interest to extend the               operation   of  any  of  its  road   transport               services to any route or area situated  within               another State, it may, with the permis-               203               sion  of the State Government, negotiate  with               the Government of the other.  State  regarding               the proposed extension.               (2)   If  the  Government of the  other  State               approves    the   proposed   extension,    the               Corporation  shall  prepare a scheme  for  the               purpose  and  forward the same  to  the  other               Government  for  its consent, and  after  such               consent  has  been received,  the  Corporation               may,  with the previous approval of the  State               Government, sanction the scheme.               (3)   After the scheme has been so sanctioned,               it  shall be competent for the Corporation  to               extend  the  operation of its  road  transport               service  to  such route or area and  when  the               operation of such service is so extended,  the               Corporation shall operate the service on  that               route   or  in  that  area  subject   to   the               provisions  of any law in force in  the  other               State  within  which  such route  or  area  is               situated. Section 2(c) defines an "extended area" to mean "any area or route  to which the operation of any road transport  service of a Corporation has been extended in the manner provided in section 20." On  behalf of the appellants it was contended, in the  first place,  that the provisions of s. 20 of the  Road  Transport Corporations Act, 1950 were not complied with and the  final scheme  published by respondent No. 1 was ultra  vires.   We are  unable to accept this argument as correct.  It  is  not necessary  to  examine in this case, whether  there  is  any inconsistency  between the provisions of s. 20 of  the  Road Transport Corporations Act, 1950 and the proviso to s.  68-D of  the  Motor Vehicles Act.  It is also  not  necessary  to

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express any opinion as to whether the requirements of s.  20 of  the Road Transport Corporations Act should  be  complied with  even  in the case of a scheme relating  to  interState route to which the Central Government has accorded  approval under the proviso to s. 68-D of the Motor Vehicles Act.   We shall  assume  in  favour of the  appellants  that  the  re- quirements  of s. 20 of the Road Transport Corporations  Act should  also  be  followed  in  a  case  where  the  Central Government  has  given sanction under s. 68-D of  the  Motor Vehicles Act.  Even upon that assumption we hold that  there has  been sufficient compliance with the requirements of  s. 20  of  the Road Transport Corporations Act in  the  present case.  It is not disputed that the concurrence of the  State of  Andhra Pradesh was secured for the final scheme and  the Government of the State of 204 Mysore  had  also  accorded its approval to  it.   In  these circumstances  the omission of respondent No. 1 to make  the scheme  in  the precise manner in which s., 20 of  the  Road Transport  Corporations Act directs the preparation of   the scheme  is  a  mere irregularity which cannot  lead  to  the nullification  of  the final scheme published  on  July  16, 1964. We pass on to consider the next contention of the appellants that in the draft scheme the maximum number of vehicles  and daily services was specified and not the minimum but in  the final  scheme approved under s. 68-D of the  Motor  Vehicles Act  there  was  specification  of  the  minimum  number  of vehicles  and  daily  services in respect of  the  route  in question.   The  approved  scheme stated  that  the  maximum number  of  vehicles was 18 and the minimum was 1.  It  was, also,  stated that the maximum number of daily services  was 10 and the minimum was 3. It was maintained on behalf of the appellants  that  by  prescribing the  maximum  and  minimum number of vehicles and daily services and by permitting such a great disparity between the maximum and minimum number  of vehicles and daily services there was a virtual modification of the draft scheme and the procedure prescribed by s.  68-E of the Motor Vehicles Act should have been followed.  In our opinion, there is no justification for this argument.  It is true that in B. H. Aswathanarayan Singh and Ors. v. State of Mysore and Ors.(1), it was pointed out by this Court that if the proportion which the minimum bears to the maximum Is  so great,  and the gap between the two, is so wide as  to  make the prescription of the maximum and the minimum amount to  a fraud on ss. 68-C and 68-E, the scheme will stand  vitiated. But  at  the  same time it was explained  that  it  was  not possible  to lay down specifically at what stage the  fixing of minimum and maximum would turn into fraud; but it is only when  the  gap between the minimum and maximum is  so  great that it amounts to fraud on the Act that it will be open  to a court to hold that the scheme is not in compliance with s. 68-C and is hit by s. 68-E.  The gap between the minimum and maximum would depend upon a number of factors,  particularly on  the variation in the demand for transport  at  different seasons of the year.  At page 97 of the Report, Wanchoo, J., as he then was, speaking for the Court, observed as follows:               "There  is  no  doubt that  though  fixing  of               minimum  and  maximum number of  vehicles  and               trips   with   respect  to   each   route   is               permissible under s. 68-C and would not be hit               by s. 68-E, the proportion between the minimum               and maximum should not be so great as to  make               the fixing of minimum and maximum a fraud on               (1)   [1966] 1 S.C.R. 87.

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             205               ss.  68-C  and 68-E of the, Act.   It  is  not               possible  to  lay down  specifically  at  what               stage the fixing of minimum and maximum  would               turn  into fraud; but it is only when the  gap               between  the minimum and maximum is  so  great               that  it amounts to fraud on the Act  that  it               will  be  open  to a court to  hold  that  the               scheme  is not in compliance with s. 68-C  and               is  hit  by  s. 68-E.   The  gap  between  the               minimum and maximum would depend upon a number               of factors, particularly on the, variation  in               the demand for transport at different  seasons               of, the year.  Even so if the approved  scheme               were to fix minimum and maximum with very wide               disparity between the two, it may be  possible               for  the  court to hold  after  examining  the               facts of the case that such fixation is not in               accordance  with s. 68-C and is a fraud on  s.               68-E.  But, with respect, it seems to us  that               a  variation in minimum and maximum from 6  to               12 or 5 to. 9. can hardly be of such an  order               as  to  amount  to  fraud  on  the  Act.   The               observations with respect to fixing of minimum               and  maximum number of vehicles and  trips  in               the  scheme  made in Rowjee’s case  [(1964)  6               S.C.R.  330]  must  therefore  be  treated  as               obiter  as in that case they did  not  require               determination.  In the present case the gap is               not of such a wide nature.  " In  the  present  case,  the  distance  between  Yadgir  and Narayanapet  is a short distance of twenty-eight  miles  and the  order  of  the  Chief Minister  shows  that  there  was seasonal  variation of traffic density and  during  marriage and  other  seasons  it  was  necessary  to  operate   extra services.  There was also variation on account of auspicious and  inauspicious  days.   The scheme  had  to  provide  for operating  extra services during Jathras, Car festivals  and other  occasions  like Dasara fair at Mysore, Ulvi  fair  at Ulvi,  Shivrarathri fair at Gokam etc.  It was felt  by  the Chief Minister that the scheme will have to be  sufficiently flexible to enable the State Transport Undertaking to adjust its services and vehicles to cater to Shandy or weekly Bazar traffic to various places.  In the context of the particular facts  of this case we are of opinion that the  gap  between the  fixation of minimum and the maximum number of  vehicles and  of  daily services is not so great as to  amount  to  a fraud  on  s. 68-C and 68-E of the Motor Vehicles  Act.   We accordingly  reject the argument of the appellants  on  this aspect of the case. Lastly,  it was contended that the approved scheme  violated Art.  14  of  the  Constitution  as  there  was  a  complete exclusion  of the private operators ’on the portion  of  the route located in the Mysore State while permitting those who are plying their 206 vehicles on the portion of the route lying in Andhra Pradesh State.   We do not consider there is any substance  in  this argument.  It is manifest that operators plying in the State of  Mysore and those plying in the State of  Andhra  Pradesh constitute two different classes of persons and therefore no question  of discrimination can arise if there  is  complete exclusion of the operators within the State of Mysore and if there  is relaxation with regard to those Operating  in  the State of Andhra Pradesh.

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For the reasons expressed we hold that there is no merit  in these  appeals which are accordingly dismissed  with  costs- there will be one set of hearing fees for both the appeals. R.K.P.S.                                             Appeals dismissed. 207