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PETITIONER: MALIK RAM

       Vs.

RESPONDENT: STATE OF RAJASTHAN

DATE OF JUDGMENT: 14/04/1961

BENCH: WANCHOO, K.N. BENCH: WANCHOO, K.N. GAJENDRAGADKAR, P.B. SARKAR, A.K. DAS, S.K. AYYANGAR, N. RAJAGOPALA

CITATION:  1961 AIR 1575            1962 SCR  (1) 978  CITATOR INFO :  R          1963 SC 222  (36)  RF         1967 SC 603  (2,3,4,7)  RF         1967 SC1815  (11)  RF         1981 SC 660  (6)

ACT: Motor Vehicles-Objection to scheme-Power of Officer appoint- ed     to     hear     such     objection--Recording      of evidence--Cancellation of scheme-Motor Vehicles Act, 1939 (4 of   1939),  s.  68-D(2)--Rajasthan  State  Road   Transport Services (Development) Rules, 1960, r. 7(6).

HEADNOTE: By  s. 68-D(2) of the Motor Vehicles Act, 1939,  "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, it they so desire,  approve  or modify the scheme".  The appellant’s objections to the draft scheme  in  question were heard by  the  Legal  Remembrance, appointed  by the State Government to hear such  objections, under  r.  7(6) of the Rajasthan  State  Transport  Services (Development) Rules, 1960, framed under s. 68-1 of the  Act. The appellant applied to the said Officer for permission  to give  evidence in order that he could show that  the  entire scheme ought to be rejected.  His applications were rejected by  the Officer holding that the Rules did not  provide  for recording  of evidence and that according to a  decision  of the Rajasthan High Court, dated November 9, 1960, s. 68-D(2) of the Act did not empower him to cancel the draft scheme in its entirety.  He, therefore, heard the arguments  addressed on  behalf of the appellant and approved the scheme.   After moving   unsuccessfully  the  Rajasthan  High   Court,   the appellant appealed to this Court by special leave, Held,  that  the Officer was in error on  both  the  points. Section  68-D(2)  of  the  Act  clearly  implies  that   the authority  which  has to approve or modify the  scheme,  has also  the  power,  if it thinks proper,  to  disapprove  the scheme altogether.  The words " may approve" in the section,

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properly construed, must also include "may not approve". The use of the word "shall" in r. 7(6) of the Rules  instead of  the word "may", which is otherwise similar in its  terms to s. 68-D(2) of the Act,.can make no difference. In hearing objections under s. 68-D(2) of the Act, the State Government or its Officers act as a quasi-judicial  tribunal and  regard  being to the nature of the objections  and  the purpose  of  the hearing thereunder, there can be  no  doubt that  production of evidence, both oral and documentary,  is clearly contemplated by the section. 979 Gullapalli  Nageswara  Rao  v. Andhra  Pradesh  State   Road Transport  Corporation, [1959] Supp. 1 S.C.R. 319,  referred to. Bat  that  does not mean that the parties  can  produce  any amount of evidence merely to prolong the proceeding.  It  is for  the State Government or the Officer to  decide  whether the evidence sought to be adduced is necessary and  relevant to  the  enquiry and, if so, they will have all  the  powers that a court has of controlling the giving and recording  of such evidence. Where  a  draft scheme is disapproved under s.  68-D(2)  and thus  stands rejected, any fresh scheme that may have to  be framed, must be framed according to the procedure prescribed by Ch.  IVA of the Act.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 135 of 1961. Appeal  by special leave from the judgment and  order  dated January  3, 1961, of the Rajasthan High Court,  Jodhpur,  in Civil Writ Petition No. 1 of 1961. M. K. Nambiar, R. K. Garg, D. P. Singh, M. K. Ramamurthi and S. C. Agarwala, for the appellant petitioner. H.  N. Sanyal, Additional Solicitor-General of India, C.  C. Kasliwal,  Advocate-General of Rajasthan, Khan Singh and  D. Gupta, for the respondents. 1961.  April 14.  The Judgment of the Court was delivered by WANCHOO,  J.-These  two connected matters arise  out  of  an order  approving  a scheme framed under Chap.  IV-A  of  the Motor Vehicles Act, No. IV of 1939, (hereinafter referred to as  the  Act) and will be disposed of together.   The  brief facts  necessary  for  present  purposes  are  these.    The appellant  was plying a bus  between Jaipur and Ajmer  on  a permit  granted to him for three years by resolution of  the Regional Transport Authority, Jaipur, dated December  16/17, 1958.   In  August, 1960, the State  Government  promulgated rules  under s. 68-1 of the Act, called the Rajasthan  State Road   Transport   Services   (Development)   Rules,    1960 (hereinafter  called the Rules).  The Rules were framed  for carrying  out  the purposes of Chap.  IV-A of  the  Act  and provided  inter  alia  for framing of  schemes,  hearing  of objections, determination and payment of 980 compensation, and other incidental matters.  A draft  scheme was  published  on September 7, 1960, for  taking  over  the Jaipur-Ajmer  route.  The appellant made objections  to  the draft  scheme  within the time allowed by  the  notification thereof.    The   State  Government  appointed   the   Legal Remembrancer to hear and decide the objections under r. 7 of the  Rules.  It appears that in the meantime an  application was  made  under Art. 226 by some bus operators  before  the Rajasthan High Court challenging the constitutionality of s. 68-D of the Act and the legality of the Rules framed by  the

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State  Government.  This application was dismissed  and  the High Court inter alia decided while considering r. 7(6) that it  was  not open to the officer hearing the  objections  to cancel  the draft scheme and seems to have held  that  there was  no such power even under s. 68-D(2) of the  Act.   This decision  was given on November 9, 1960.  The  draft  scheme came  up for consideration before the officer  appointed  to hear  objections on November 21,, 1960.  An application  was made  before him that the appellant should be  permitted  to give  evidence on points of fact which were narrated in  the application  in order that the officer may be in a  position to  decide  the  objections justly.   This  application  was rejected  by  the officer on the ground that  there  was  no provision  in  the  Rules  for  recording  of  evidence   of witnesses.   The  matter then came up for  consideration  on November  23,  1960.  On that date another  application  was made in which it was said that the appellant wanted to  lead evidence  to show that the draft scheme must be rejected  in its  entirety, and it was contended that the view  taken  by the Rajasthan High Court to the effect that it was not  open to the officer to cancel a draft scheme was incorrect.  This application  was  also  rejected by  the  officer  with  the observation that he was bound hand and foot by the  decision of the Rajasthan High Court and if there was anything  wrong in the interpretation given by the High Court the remedy lay elsewhere.   Thereafter  the officer gave a hearing  to  the appellant in the sense that he heard arguments on behalf  of the appellant and approved the draft scheme 981 by  his order dated December 7, 1960.  The  approved  scheme was then published on December 12,1960.  On January 9, 1961, the Regional Transport Authority informed the appellant that his permit was cancelled, as from January 26, 1961, or  such later date from which the buses of Rajasthan State  Roadways begin  to  operate  on the above-mentioned  route.   In  the meantime,  the appellant unsuccessfully moved the  Rajasthan High Court, and his prayer for leave to appeal to this Court was  also rejected.  The appellant then applied for  special leave to appeal to this Court which was granted; and that is how the matter has come up before us. Two  main points have been urged before us on behalf of  the appellant, namely, (i) the officer was wrong in the view  he took that it was not open to him to reject the draft  scheme in  its entirety, and (ii) the officer was wrong in  holding that   he   could  not  take  evidence,  whether   oral   or documentary, and all that he had to do under s. 68-D of  the Act  was to hear arguments on either side.  It is  contended that in view of     these two wrong decisions of the officer his approach to     what  he  had  to  do  in  dealing  with objections under s. 68-D  was  quite  incorrect.,  with  the result that there was no effective hearing of the objections and any approval given to the scheme in these  circumstances is liable to be set aside and the appellant is entitled  "to be  heard" in the real sense in which those words were  used in s. 68-D (2). Re. (i). Section  68-D  (2) with which we are concerned is  in  these words:-               "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." The  view taken by the Rajasthan High Court in its  decision

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of  November 9, 1960, seen-is to be that this  section  does not  justify what it called the cancellation of the  scheme. We are of the opinion that this view is 982 not correct.  What s. 68-D(2) provides is that after hearing the parties, the State Government may approve or modify  the draft scheme.  This in our opinion clearly implies that  the authority which has to approve or modify the scheme has  the power  also, if it so thinks fit, not to approve the  scheme at all.  What is before the.  State Government under s. 68-D (2)  is a draft scheme.  That sub-section provides that  the State Government may approve or modify the scheme; that does not  mean that the State Government is bound to approve  the scheme with or without modifications.  An authority to which power has been given to approve or modify some proposal  has certainly  in our opinion the power to say that it will  not approve the proposal at all, for the words "may approve"  on a reasonable interpretation include "may not approve".  If a person  may approve he is not bound to approve.  Up  to  the stage when the hearing takes place under sub-s.(2) the draft scheme is merely a proposal before the State Government  and it  will only become effective if it approves of it with  or without  modifications.  But this power clearly implies  the power  to say that it does not approve the draft  scheme  at all;  and  if  it says that, the  draft  scheme  will  stand rejected  and  the State Transport Undertaking may  have  to submit another scheme for approval.  When s. 68-E speaks  of cancellation it refers to a scheme already approved under s. 68-D(3),  and in that con. text the word  "cancellation"  is properly  used.  But the fact that s. 68-E provides for  the cancellation  of a scheme which has already  been  approved, does  not mean that it is not open to the  State  Government under s. 68-D(2) to say, after hearing the objections,  that it does not approve the scheme at all which is put up before it as a draft for approval.  We are therefore of the opinion that under s. 68-D(2) it is open to the State Government  to say after hearing objections that it does not approve of the draft  scheme  at all, in which case the draft  scheme  will stand rejected and the State Transport Undertaking may  have to  frame  a fresh scheme in accordance with  the  procedure provided in Chap.  IV-A.  The officer therefore was wrong 983 in holding that he had no power to reject the scheme in  the sense  that  he could withhold approval  of  it  altogether, though we may add that he came to that conclusion because of the earlier decision of the Rajasthan High Court. As for r. 7(6) of the Rules it is in similar terms as s. 68- D(2)  and must therefore mean what we have said  above  with respect to s. 68-D(2).  If, however, by the use of the  word "shall" in r. 7(6) in place of the word "may" which  appears in  s. 68-D(2) the intention is to curtail the power of  the officer  hearing  the objections, the rule would be  bad  as going beyond what is provided in s. 68-D(2).  But we do  not think that the use of the word "shall" in r. 7(6) makes  any difference,  for  the  word "shall" had  to  be  used  there according to the rules of English Grammar and has no greater force than the word "may used in s. 68-D(2) The  learned Additional Solicitor-General who  appeared  for the  State  of Rajasthan did not contest that what  we  have said above was the true position in s. 68-D(2) and r. 7(6). Re. (ii) The next question is the scope of the hearing under s. 68- D(2).  The officer has held that the scope of the hearing is confined only to hearing of arguments and no more, and  that is  why he rejected the prayer of the appellant for  leading

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evidence, whether oral or documentary.  Now it has been held by this Court in Gullapalli Nageswara Rao v. Andhra  Pradesh State Road Transport Corporation (1) that a State Government acts  as  a quasi-judicial tribunal when  giving  a  hearing under s. 68-D.  The purpose of the hearing is that the State Government  has  to satisfy itself that the opinion  of  the State  Transport  Undertaking formed under s.  68-C,  namely that  the  scheme  is  for  the  purpose  of  providing   an efficient,  adequate,  economical and  properly  coordinated road transport service, is correct.  The objections are  all made  to  show  that  the scheme does  not  provide  for  an efficient,  adequate,  economical and  properly  coordinated road transport (1) [1959] Supp. 1 S.C.R. 319 984 service.   In  order therefore to arrive at  the  conclusion that  the draft scheme provides for a transport  service  of this  nature,  the  State  Government  as  a  quasi-judicial authority may require materials to come to that conclusion.. A hearing before a quasi-judicial authority does not  merely mean an argument; it may in proper cases include the  taking of evidence, both oral and documentary.  It seems to us that in  the circumstances of the provision contained in  s.  68- D(2)  and the purpose of the hearing thereunder,  taking  of evidence, whether oral or documentary, that maybe desired to be  produced  by either party, may be necessary  before  the State  Government  can  arrive at  a  just  conclusion  with respect  to the objections to the draft scheme.   We  cannot therefore  agree with the officer that there is  no  warrant for  taking  any evidence at all at a hearing under  s.  68- D(2).   It  seems  to  us, considering  the  nature  of  the objections  and the purpose for which the hearing is  given, that production of evidence, either oral or documentary,  is comprehended within the hearing contemplated in s.  68-D(2). The  officer therefore was wrong in loading that it was  not open to the parties to produce evidence before him and  they were confined only to submit their arguments on the basis of the  draft  scheme  on  the  one  hand  and  their   written objections on the other. We  may  however point out that the production  of  evidence (documentary  or  oral) does not mean that the  parties  can produce  any  amount of evidence they like and  prolong  the proceedings  inordinately  and  the  State  Government  when giving  the  hearing would be powerless to check  this.   We need  only  point out that though evidence may  have  to  be taken under s. 68-D(2) it does not follow that the  evidence would be necessary in every case.  It will therefore be  for the  State  Government,  or  as in  this  case  the  officer concerned,  to  decide  in case any party  desires  to  lead evidence  whether  firstly  the evidence  is  necessary  and relevant  to  the inquiry before it.  If it  considers  that evidence is necessary, it will give a reasonable opportunity to  the party desiring to produce evidence to give  evidence relevant to the enquiry and within reason and it 985 would have all the powers of controlling the giving and  the recording of evidence that any court has.  Subject therefore to  this  over-riding power of the State Government  or  the officer giving the hearing, the parties are entitled to give evidence  either documentary or oral during a hearing  under s. 68-D(2). In  view  of  what we have said above the  approach  of  the officer  in this case was wrong on both the points.  He  was wrong in his view that it was not open to him to reject  the scheme  in  toto and withhold approval altogether.   He  was

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also  wrong in the view that it was not open to him to  take evidence, whether oral or documentary, though of course,  as we  have said above the control on this evidence must be  in him.   The  result of this wrong approach to  our  mind  has certainly  been that the appellant did not get a hearing  to which he was entitled under s. 68.D(2). In the circumstances we  must hold that the approval of the scheme was without  a proper   hearing  under  s.  68-D(2),  which,  even   though arguments  were  heard in full in this  case,  vitiates  the approval  given to the scheme by the officer concerned.   We therefore  allow the appeal and set aside the order  of  the officer  concerned approving the scheme and direct that  the draft  scheme  be reconsidered by the said officer  or  such other officer as the State Government may appoint  hereafter after  giving a hearing in the light of the observations  we have made above.  The appellant will get his costs from  the State of Rajasthan. In  the  circumstances  no order is necessary  in  the  writ petition, which is hereby dismissed.  We pass no order as to costs in the writ petition.                             Petition dismissed.          124 986