27 January 1964
Supreme Court








DATE OF JUDGMENT: 27/01/1964


CITATION:  1964 AIR  962            1964 SCR  (6) 330  CITATOR INFO :  HO         1965 SC1848  (10)  RF         1968 SC1095  (5)  RF         1986 SC 872  (115)  D          1987 SC 294  (37)

ACT: Motor    Vehicles--Nationalisation   of    road    transport service--Preparation        and        enforcement        of scheme--Validity--Issue   of  permits  to  State   Transport Undertakings--Motor  Vehicles  Act,  1939 (4  of  1939),  as amended by Act 1 of 1956, Ch.  IV, ss. 68C, 68D(3),  68F(1)- Andhra Pradesh Motor Vehicles Rules, 1957, rr 4, 141.

HEADNOTE: The respondent corporation appointed an expert committee  to go  into  the  question as to the  working  of  nationalised transport  in  the  State.   The  Committee  laid  down  the criteria for determining the order in which                             331 areas and routes had to be selected for nationalisation  and had  drawn  up a list of the remaining  districts  in  which nationalisation    should   be   successively   taken    up. Accordingly, Nellore would have been the next district to be taken up and the turn of Kurnool district would have come up after nationalisation of the routes in Nellore, Chittore and Cuddapah   districts  were  completed.   This   report   was submitted  to  the  Corporation in February,  1961  and  the Corporation  accepted  it and embodied the approval  in  its Administration  Report  dated  March  24,  1962  which   was published  in  April, 1962.  After the General  Election  in 1962 the Chief Minister assumed office as Chief Minister  on March 12, 1962.  On April 19, 1962, he summoned a conference of   the  Corporation  at  which,  he  suggested  that   the nationalisation of bus routes in the Kurnool district should be  taken up first.  By its resolution dated  4-5-1962,  the Corporation   made  an  alteration  in  the  order  of   the districts,  successively to be taken up for  nationalisation and selected the western half of the Kurnool as the area  to be  nationalised  in the first  instance.   The  appellants,



motor  transport operators whose routes were all in  western half  of  the  Kurnool districts  filed  objections  to  the Schemes  before  the  Transport  Minister.   The   Transport Minister approved the schemes.  Thereafter, the  Corporation applied  to  the Regional Transport Authority  for  permits. The  appellants then challenged the validity of the  schemes in  the High Court and in support of that  allegations  were made in the affidavit that the Chief Minister was  motivated by  bias and personal ill-will against the appellants,  that he  felt  chagrined  at  the  defeat  of  his  partymen  and supporters  and desiring to wreak his vengeance against  the motor  transport operators of the western parts of  Kurnool, his  political  opponents,  instructed  the  Corporation  to change  the order in which the districts should be taken  up for nationalisalion and that the corporation gave effect  to these  instructions and directions.  These allegations  were not denied by the Chief Minister, nor was an affidavit filed by  any person who could claim to know personally about  the truth  about  these allegations.  The  High  Court  repelled these allegations and dismissed the petition.  On appeal  by certificate  the appellants mainly contended: (1)  that  the schemes  did  not  in reality reflect  the  opinion  of  the Corporation as required by s. 68-C of the Act, but that  the schemes  owed  their origin to the direction  of  the  Chief Minister  who  acted  malafide in  directing  the  Transport Undertaking  to  frame the impugned schemes;  (2)  that  the approval  of the schemes by the Transport Minister under  s. 68-D(3) must be held to be vitiated by the malafides of  the Chief  Minister;  (3)  that the  impugned  schemes  did  not conform to the statutory requirements of s. 68-C and rule  4 of the Rules regarding the particulars to be embodied in the schemes; (4) that some of the routes included in the schemes were inter-state routes and that under the proviso to s. 68- D(3) it could not be deemed to be an approved scheme  unless the previous approval of the Central Government had been ob- tained  and  (5)  that even  when  a  transport  undertaking applies for a stage carriage permit under s. 68-F(1) it must comply with the provisions of r. 141 of the Rules. Held:     (1) On the evidence placed in the present case  it must  be held that it was a result of the conference of  the 19th April, 1962 and in 332 order  to  give effect to the wishes of the  Chief  Minister expressed  there, that the impugned schemes were  formulated by  the Corporation and therefore, it would be  vitiated  by malafides  notwithstanding  the interposition of  the  semi- autonomous corporation. Though  the  counter-affidavits contained a  denial  of  the allegation that the Corporation was acting at the behest  of the Chief Minister, there was no explanation for the  choice of  the western portion of Kurnool district  Therefore,  the impugned  schemes were vitiated by the fact that  they  were not  in conformity with the requirements of s. 68-C  of  the Act. (ii) There  was nothing on the record to indicate  that  the Chief Minister influenced the Transport Minister.   Besides, the  Transport Minister stated on oath that  in  considering the objections under s. 68-D(3) and approving the schemes he was  uninfluenced  by  the Chief  Minister.   Therefore,  it cannot  be  held that his approval of the  schemes  did  not satisfy the requirements of the law. (iii)     In the present case some of the variations between the maxima and minima in the number of the vehicles proposed to  be  operated  on  each route  were  such  as  to  really contravene r. 4 of the Andhra Pradesh Motor Vehicles  Rules.



1957. Dosa   Satyanarayanamurthy  v.  The  Andhra  Pradesh   State Transport Corporation, [1961] 1 S.C.R. 642, referred to. (iv) The  route which was proposed to be nationalised  under the  scheme  admittedly lay wholly within  the  State.   The right of the private operators to ply their vehicles  beyond the  State  border was not affected by any of  the  schemes. Therefore,  the proviso to s. 68-D(3) was not attracted  and consequently  the  schemes did not suffer from  the  defects alleged. (v)  The  High Court was right in holking that the  Regional Transport  Authority which is specifically mentioned  in  s. 68-F(1)  is empowered to issue the permit to  the  transport undertaking   "notwithstanding  anything  to  the   contrary contained  in Chapter IV" and that the section rendered  the provisions   of   r.  141  of  the  Motor   Vehicles   Rules inapplicable to cases covered by s. 68-F(1).  No doubt, in a State where there is no Regional Transport Authority at all, but  there  is some other authority which functions  as  the Regional  Transport Authority for the purposes of  the  Act, such an authority might be that which would be  comprehended by  s.  68-F(1)  but where as in  Andhra  Pradesh  there  is admittedly a Regional Transport Authority, it cannot be held that  such  authority is deprived of the power  to  issue  a permit  by reason of s. 68-F(1) merely because the  Regional Transport Authority of that area cannot grant permits  under Chapter IV. 333

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 770 of 1963.                             WITH Civil Appeals Nos. 771-778, 883 and 884 of 1963. Appeals from the judgment and order dated April 19, 1963, of the Andhra Pradesh High Court in Writ Petitions Nos. 267-275 and 289 and 295 of 1963. A.   V.  Viswanatha  Sastri,  P.  Babula  Reddy  and  K.  R. Chaudhuri, for the appellants (in C.A. No. 77/1963). P.   Babula  Reddy and K. R. Chaudhuri, for  the  appellants (in C. A. Nos. 771--777/1963). K.   R.   Chaudhuri,  for  the  appellants  (in   C.A.   No. 778/1963). K.   Srinivasa   Murthy  and  K.  R.  Chaudhuri,   for   the appellants (in C. A. Nos. 883 and 884 of 1963). D.   Narasaraju,  Advocate-General,  Andhra Pradesh,  P.  R. Ramachandra Rao and B.  R. G. K. Achar, for the  respondents (in all the appeals). January  27, 1964.  The Judgment of the Court was  delivered by AYYANGAR  J.-This  batch  of  11  Appeals  which  have  been consolidated  for  hearing are directed against  the  common judgment of the High Court of Andhra Pradesh and are  before us  on  the  grant of a certificate of  fitness  under  Art. 133(1) of the Constitution by the said High Court. The  proceedings concerned in the appeals arise out of  Writ petitions filed before the High Court by the several appellants  before  us under Art. 226  of  the  Constitution challenging  the  validity  of three  Schemes  framed  under Chapter IV-A of the Motor Vehicles Act, 1939,  nationalising motor  transport in certain areas in the Kumool District  of the  State of Andhra Pradesh which for convenience we  shall refer to as the impugned Schemes.  The appellants who impugn the  validity  of the schemes are  the  previously  existing



motor  transport  operators whose permits are liable  to  be modified or cancelled under the provisions of 334 the  Schemes  on  their coming  into  force.   The  impugned schemes were published by Government as G.O.Ms. 292, 293 and 294  of the Home, Transport Department on the 5th  February, 1963 in virtue of the powers conferred on Government by sub- s.  2  of the 68-D of the Motor Vehicles  Act.   The  Andhra Pradesh State Road Transport Corporation which for shortness we  shall refer to as the Corporation, besides the State  of Andhra Pradesh and the Regional Transport Authority, Kurnool were  impleaded as respondents to the petitions.   They  are also  the  respondents before us.  By reason  of  the  first Scheme,  34  routes were intended to be  taken  over,  while under  the 2nd and 3rd, 17 and 13 routes  respectively  were proposed  to be nationalised.  The routes covered  by  these three  schemes  are all in the western half of  the  Kurnool District. Before  adverting to the points requiring  consideration  in the appeals, it would be convenient to set out the  relevant statutory provisions relating to the nationalisation of Road Transport for it is primarily on their construction that the decision of the appeals would turn. Chapter  IV-A  containing  special  provisions  relating  to "State  Transport  Uundertakings" was  introduced  into  the Motor Vehicles Act (Act IV of 1939) by an amendment effected by  Central  Act 1 of 1956 which came into effect  on  16-2- 1957.  The Chapter consists of sections numbered 68-A to 68- 1.  68-A contains definitions and of these it is  sufficient to refer to the definition of "State Transport  Undertaking" which  includes inter alia "any undertaking  providing  road transport  service,  where such undertaking  is  carried  on by......  any Road Transport Corporation  established  under sec.  3  of the Road Transport Corporation  Act  1950."  (to refer to the portion which is material.) (It  might  be  mentioned that the  Corporation,  the  first respondent before us is a body established under this enact- ment.) 68-B reads:--               "The provisions of this Chapter and the  rules               and  orders made thereunder shall have  effect               notwithstanding     anything      inconsistent               therewith               335 contained in Chapter IV of this Act or  in               any  other law for the time being in force  or               in  any instrument having effect by virtue  of               any such law." The next section 68-C which is the one most involved in  the appeals runs:               "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,               complete  or  partial,  of  other  persons  or               otherwise, the State transport undertaking may               prepare  a  scheme 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 every  such               scheme to be published in the Official Gazette               and  also  in such other manner as  the  State               Government may direct." The  first two sub-sections of section 68-D  enable  persons affected by a Scheme published under s. 68-C to file  objec- tions thereto before the State Government within thirty days after  the publication of the Scheme.  It  further  provides for  the State Government considering the objections  raised by  persons  affected by the Scheme after giving  an  oppor- tunity to the objectors and the "undertaking" to be heard in the  matter before approving or modifying the  Scheme.   The Scheme  so approved or modified is required to be  published in  the  State Gazette and on such  publication  it  becomes final  and is to be called "the approved scheme".   This  is followed by sub-sec. (3) which reads:-                "The  scheme  as approved or  modified  under               sub-s. (2) shall  then  be  published  in  the               Official               336               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 under it has been published in               the   Official  Gazette  with   the   previous               approval of the Central Government." Section 68-E provides :               "any  scheme published under sub-s. (3) of  S.               68-D may at any time be cancelled or  modified               by  the  State transport undertaking  and  the               procedure  laid  down in s. 68-C and  s.  68-D               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  68-F is really consequential  on  the               approval of the scheme and sub-s. (1)  thereof               enacts:-               "Where,  in pursuance of an  approved  scheme,               any State Transport Undertaking applies in the               manner  specified  in Chapter IV for  a  stage               carriage  permit or a public carrier’s  permit               or a contract carriage permit in respect of  a               notified area or notified route, the  Regional               Transport Authority shall issue such permit to               the      state     transport      undertaking,               notwithstanding   anything  to  the               contrary contained in Chapter IV." Its  second  sub-section  enables  the  Regional   Transport Authority to refuse renewal of any other permits to  private operators and otherwise to deal with those permits so as  to give effect to the Scheme.  Sections 68-G and 68-H deal with the  payment  of compensation and the methods by  which  the same  should be computed but as these. are not material,  we shall not quote them. 337 Section 68-1 empowers the State Government to make rules for the  purpose  of  carrying into, effect  the  provisions  of Chapter IV-A and among the specific purposes for which  such rules  may  be  framed is one under  s.  68-1(2)  (a)  which provides for the form in which any scheme or approved scheme



may be published under section 68-C or sub-section  (3)  of Section 68-D and as usual a residuary clause reading: "  any other matter which has to be or may be con- sidered." These  draft  schemes  prepared  by  the  Corporation   were published under s. 68-D in the official Gazette on the  29th of  November,  1962.   The  appellants  among  others  filed objections to the schemes and thereafter there was a hearing of  these objections by the Transport Minister of the  State under s. 68-D(2) on the 11th of January, 1963.  The Minister passed  an  order according approval to the schemes  on  the 12th  of February, 1963, and the schemes as  finalised  were published in the Gazette on the next day, February 13, 1963. In   pursuance  of  the  provisions  of  the   schemes   the Corporation  made  application  to  the  Regional  Transport Authority for permits.  Soon thereafter the appellants and a few others filed writ petitions invoking the jurisdiction of the  High Court under Art. 226 of the  Constitution  praying for  the  quashing  of the schemes.   These  petitions  were dismissed by the High Court by a common judgment on the 19th of  April,  1963, holding that the objections  made  to  the validity of the schemes would not be sustained.  The learned Judges,  however,  on  the  application  of  the  Appellants granted a certificate of fitness under Art. 133 in pursuance of which these appeals have been preferred. The  points urged by the appellants before us in support  of their  submission regarding the invalidity of  the  impugned schemes,  were substantially the same as were  urged  before High  Court and which the learned Judges repelled.   Briefly stated the principal ones were:-(1) that the schemes did not in  reality reflect the opinion of the Corporation that  "it was necessary in the public interest that the Road Transport services in the area or over the route, specified in the 134-159 S.C.--22 338 schemes  should be run and operated by the  State  Transport Undertaking" as is required by s. 68-C but that the  schemes owed their origin to the direction of the Chief Minister  of Andhra  Pradesh  who  acted  mala  fide  in  directing   the Transport Undertaking to frame the impugned schemes for  the areas  for which they were purported to be framed; (2)  that the  decision  by  the  Transport  Minister  overruling  the objections raised by the several road transport operators to the  schemes  was also mala fide, in that he  too  acted  in pursuance of the mala fide intentions of the Chief  Minister of  Andhra Pradesh; (3) that the provisions of  the  schemes (and this applied both to the draft schemes published by the Corporation as well as the approved schemes published  under s. 68-D(3) did not conform to the statutory requirements  of s. 68-C and rule 4 of the Rules regarding the particulars to be embodied in the schemes and that in consequence the  core of the scheme was in violation of Rule 68(E) of the Act; (4) that the schemes comprised not merely intrastate routes  but also included inter-state transport routes and in the latter case the procedure prescribed by the proviso to s. 68-D  was not  followed and hence all the impugned schemes  which  are integrated ones are bad and require to be set aside.   There were also a few minor ones which we shall notice and examine later. We  shall  deal with these four points in  the  same  order. Before  taking up the first one viz., that the draft  scheme in  s. 68-D really did not originate from  the  Corporation, the State Transport Undertaking, but that it was done  under the direction of the Chief Minister who, it was alleged  for reasons which were set out in the affidavits and to which we



shall refer presently was stated to have compelled, directed or  induced the Corporation to do so, it would be  necessary to  give  a  short resume of  the  history  of  nationalised transport  in  Andhra Pradesh as well as certain  events  in Andhra  Pradesh  politics  which have been  the  subject  of allegations  in  these proceedings.  The  present  State  of Andhra Pradesh is made up of two distinct areas-(1) what  is known  as the "Telengana area" consisting of nine  districts of  the old Hyderabad State and (2) the "Andhra area"  which separated from Madras i.e. from the composite                             339 Madras  State,  in  October  1953  and  which  comprised  11 districts.  These two areas were integrated under the States Re-organization  Act,  1956, to form the  present  State  of Andhra  Pradesh.  In the Telengana area the  road  transport services  had been run by the Government of the Nizam  since the  year  1932  and by 1956 private  motor  road  transport operators  had been completely eliminated from  this  entire area.   In the Andhra Area comprising the 11 districts  how- ever, nationalisation of motor transport had not been under- taken.   Soon  after the formation of the  State  of  Andhra Pradesh, the Andhra Pradesh State Road Transport Corporation was established with effect from 11th of January, 1958  with a view to take steps for extending nationalised transport to the  Andhra areas of the State.  Certain routes in three  of the  11  Districts Krishna, West Godavari  and  Guntur  were nationalised from 1959 onwards.  The Vijayawada--Masulipatam and Vijayawada-Guntur routes were nationalised in the  first instance and thereafter by about September, 1959, almost the entire  routes in Krishna District were  nationalised.   The next  district  to be taken up was West Godavari  which  was done  in March, 1960.  The process was nearly  completed  in this district by the 1st of February, 1960, except for a few routes.   The Government had sanctioned certain schemes  for nationalisation in Guntur District which were expected to be completed   by  October,  1961.   The  question  which   was thereafter  the subject of consideration was the  manner  in which  and the stages whereby nationalisation of  the  motor transport throughout the State might be brought about.  With this object the Corporation adopted a resolution in 1960  by which  it decided to appoint an expert Committee to go  into question as to the working of nationalised transport with  a view  to  improve its efficiency as well as for  drawing  up plans  for  the  future  expansion  of  the  road  transport services  in  the  State.  The terms of  reference  to  that Committee were comprehensive and it started functioning very soon after the members were appointed.  Shri S. Anantharama- krishnan,  Chairman of Messrs.  Simpson & Co. Ltd.,  Madras, one of the principal motor transport operators of the Madras State,  was the Chairman of the Committee and  it  comprised three other members who were officials of the                             340 Andhra  Pradesh State Government.The Committee made  various recommendations  in  the Report which it  submitted  to  the Corporation  on the 9th February, 1961.  Among  the  several recommendations  which  this  Committee  made,  what  is  of relevance  to the present appeals and on which reliance  was placed in support of the plea that the impugned schemes were vitiated by mala fides are those contained in Chapter IX  of the  Report  and in particular the priorities of  areas  for taking up nationalisation which the Committee recommended in paragraph  125.  They set out in paragraph 124  the  factors which  should be taken into account in fixing the  order  in which  new areas should be taken up for  nationalisation  as being  (1)  "the most profitable areas should  be  taken  up



first;" (2) "from the traffic point of view there should  be contiguous expansion;" (3) "from the administrative point of view  it is convenient to nationalise bus services  district by  district;"  and (4) "the proposal to  form  large  sized divisions should be borne in view." Adopting these  criteria the   Committee   stated   in  paragraph   125   "that   the nationalisation  of  bus transport may be  extended  to  the remaining districts in the Andhra area as indicated below:-                1961-621 guntur District                1962-63-Nellore and Chittor Districts                1963-64-Cuddapah and Kurnool Districts                1964-65-Anantapur and East Godavari Districts                1965-66-Visakhapatnam  and  Srikakulam   Dis-               tricts". The Committee also added in paragraph 126 "we recommend that a policy decision may be taken by Government on the proposal to  extend nationalisation of bus services to the  remaining Andhra Districts during the Third Five Year Plan.  The order in  which  the  new areas will be taken  over  may  also  be decided by Government.  The Corporation will then be able to make  its plans well in advance, and arrange to provide  all the facilities that are needed for expanding its  activities to other districts." This report of the 34I Anantharamakrishnan  Committee  was  the  subject  of   con- sideration  by the Corporation and they accepted  in  March, 1962   the   above  recommendation  regarding   the   phased pro.programme  of nationalisation of districts in the  order indicated  s  and  embodied  this  recommendation  in  their Administration Report for the period January 11, 1958,  (the day  on which the Corporation was formed) to March 31,  1961 which  was  submitted to the Government as  required  by  s. 35(2)  of the Road Transport Corporation Act, 1960,  on  the 7th  of  April,  1962.   In this  last  document  they  said speaking    of   future   trends,   "the    programme    for nationalisation  of transport services in the  remaining  of the Andhra Pradesh is as indicated below:-                1961-62--Guntur District                1962-63--Nellore and Chittor Districts                1963-64--Cuddapah and Kurnool Districts                1964-65--Ananthapur    and   East    Godavari               Districts               1965-66--Vishakhapatnam  and  Srikakulam  Dis-               tricts." In  the impugned schemes, however, the Corporation  made  an alteration in the order of the Districts successively to  be taken  up for nationalisation.  It would be seen that  after Guntur  District which was neatly completed by the  end  ,of 1961  the next districts to be taken up during  the  1962-63 would have been Nellore and Chittor Districts in that  order and it was only thereafter that the District of Cuddapah and after   it  Kurnool  would  be  taken  up.   That  was   the recommendation  of  the  Anantharamakrishnan  Committee  and which had been accepted by the Road Transport Corporation as late  as  April,  1962  and it  may  be  mentioned  in  this connection  that  the Vice-Chairman of  the  Road  Transport Corporation was himself a member of the  Anantharamakrishnan Committee.  By its resolution dated, 4th May, 1962, the Road Transport  Corporation  decided that instead  of  the  above order Kurnool, Nellore and Cuddapah Districts in that  order would be chosen for nationalisation and in the three schemes which  were formulated in pursuance of this  Resolution  the western  half  of  Kurnool was selected as the  area  to  be nationalised in the first instance. 342



As  we have indicated earlier the appellants before  us  are transport operators whose routes are all in the western half of  the, Kurnool District.  It is this change in the  orders of the Districts in which the routes are to be  nationalised and  the  choice of the Western part of  Kurnool  for  being taken up in the first instance that are alleged to be due to the  mala  fide intentions of the Chief  Minister  and  this forms the main ground upon which the validity of the schemes is impugned. The  allegations in this respect may now be stated.  In  the affidavit  in support of the Writ Petition No. 267  of  1963 from which Civil Appeal No. 770 of 1963 arises, this is what is stated:               "The   General  Elections  for   the   various               Constituencies of Assembly and Parliament were               held in February, 1962.  It is well-known that               there are two groups in the Congress and  they               were actively ranged against each other.   The               previous Chief Minister (Shri Sanjivayya)  and               the  present  Chief  Minister  (Shri   Sanjiva               Reddy)   were  both  returned   from   Kurnool                             District   in  general  elections.   T he   then               Chairman  of  the Zila  Parishad  Shri  Vijaya               Bhaskara  Reddy contested unsuccessfully  from               Yemniganpur Constituency in Kurnool  District.               (Yemniganpur  is  in the western part  of  the               Kurnool District).  He is the active supporter               of  the present Chief Minister.  Shri  C.  Ram               Bhopal   son-in-law  of  the   present   Chief               Minister  also unsuccessfully  contested  from               the   Nandikothur  Constituency   in   Kurnool               District. (Nandikothur is also in the  western               part of Kurnool).  The person who successfully               opposed  him Sri P. Venkatakrishna  Reddy  now               M.L.A.  is a partner in ’Venkata  Krishna  Bus               Service Nandikothur.  This firm owns 2 permits               and they stand in the name of Jayaramayya  who               was the Election Agent of Sri Venkata  Krishna               Reddy.   Two  persons  Sri  Ganikhan  and  Sri               Antony Reddy who are staunch supporters of               343               the  present Chief Minister Sri Sanjiva  Reddy               were  selected as Congress candidates  by  the               Parliamentary  Board  at  Delhi  when  Sanjiva               Reddy was the President of the Indian National               Congress,   were   also  defeated   in   their               respective Constituencies.  It was  considered               by   one  and  all  that   leading   transport               operators  among them, (the petitioners)  were               responsible  for the defeat of  these               persons and this enraged the feelings of  Shri               Sanjiva Reddy against the operators in Kurnool               District and particularly the operators  whose               routes  lay  in  the  western  areas  of   the               District  and with a view to cause  them  loss               and    to    ruin    their    business    this               nationalisation  of transport in  the  western               part of Kurnool was directed to be  undertaken               in spite of the Emergency and in spite of  the               incapacity  of the Road Transport  Corporation               to  fulfil their earlier commitments for  want               of  buses.  The undivided brothers of  Sri  T.               Narayan,  a  transport  operator,  namely  Sri               Venkataswamy   contested  the  Assembly   seat



             against   Sri  Sanjiva  Reddy  in  the   Dhone               Constituency from which he was returned and he               refused  to  withdraw  even  though  lots   of               pressure were brought on him.  Sri Rajasekhara               Reddy  and Sri Vijayakumara Reddy sons of  Sri               P.  Ranga  Reddy,  Minister  in  the  previous               Cabinet  are also transport operators  in  the               Kurnool  District.  It is known to  every  one               that  Sri  P.  Ranga Reddy  is  in  the  group               opposed to Sri Sanjiva Reddy.               Sri  Y.  Mahananda  Reddy  another   transport               operator  is  a staunch supporter  of  Sri  P.               Ranga   Reddy.    When   Sanjiva   Reddy   was               President, of the Indian National Congress his               selection,  for  the Congress ticket  was  set               aside by him and one Vengal Reddy was selected               by  the  Pradesh Congress  Committee.   It  is               significant that the three schemes framed  for                             the part of the Kurnool District relat e to  the               areas in               344               which  the  routes on which the  above  stated               persons  are running their buses.  It is  also               significant that the areas in Kurnool District               where the supporters of the present Chief Min-               ister are having permits are not sought to  be               included  in any of the three  nationalisation               schemes.   In  the Nandyal area  most  of  the               transport operators are the supporters of  the               present  Chief Minister and their  routes  are               excluded from the schemes.  It is with a  view               to achieve the object of hitting against those               operators  who have fallen into disfavour  and               to  protect  those who are in his  good  books               that the schemes have been evolved over routes               and parts of the District." Two further matters were also urged as supporting this  plea of mala fides.  The first was that with a view to carry  out the  original programme which was approved and confirmed  by the Corporation in their Administration Report published  on April  7,  1962, the routes in the  Nellore  District  which according to the Anantharamakrishnan Commitee Report had  to be  taken up next were surveyed and though the  elements  of contiguity and profitable nature were both present in regard to  the extension of the services to Nellore, contiguity  by reason  of  the  fact  that  some  buses  belonging  to  the Corporation  and running from Guntur were already plying  in Nellore District and the profitable nature since these  were evaluated   by  the  Anantharamakrishnan   Committee   whose recommendations   were   examined  and   approved   by   the Corporation,  the nationalisation of the routes  in  Nellore was,  however,  abandoned and that of the  western  part  of Kurnool  was  decided upon.  The other  fact  was  that  the National Defence Council passed a reso lution as late as the first  week  of  November, 1962, urging   the  deferring  of further  nationalisation  of  transport  services  for   the present  and it was in the teeth of. this  resolution  which was  passed  at  the meeting at  which  the  Chief  Minister himself  was present that the schemes of nationalisation  of transport services in Kurnool district was published by  the Corporation on the 29th November, 1962.                             345 Before  examining whether these allegations have  been  made out  it would be necessary to explain the legal position  in



relation to which they have to be considered.  To begin with the  schemes  now  impugned  have  been  formulated  by  the Corporation  which  is an independent  semi-autonomous  body brought  into  existence by the State Government  by  acting under  the Road Transport Corporation Act, 1950.   Under  s. 68-C  of the Motor Vehicles Act it is the Corporation  which is  the  State Transport Undertaking which has to  form  the opinion whether "for the purpose of providing an  efficient, adequate, economical and properly coordinated road transport service  it is necessary in the public interest whether  the service  should be run and operated by the  State  Transport Undertaking." Secondly, it is the Corporation that has to be satisfied  that such services should in public interests  be provided  "for any area or route".  In the present case,  it is  undoubtedly  the  Corporation  that  has  published  the schemes under s. 68-C in which these two matters are  stated to have been considered and decided upon by the  Corporation itself.  It was not disputed by the appellants that whatever be  the  inclinations,  desires  or  motives  of  the  Chief Minister,   if  the  Corporation  had  by   an   independent consideration of the situation decided on the formulation of the   impugned   schemes,  their  validity  could   not   be successfully  impugned mearly because the schemes  satisfied the  alleged  grudge which the Chief Minister  bore  to  the affected operators. The  argument  urged by the appellants on this part  of  the case  was however tow-fold: (1) That it was not in fact  the Corporation that formed the opinion indicated in s. 68-C but really  the Chief Minister; (2) That the Chief Minister  was motivated by extraneous considerations, namely, to strike at his political opponents who worked either against himself or his  friends, supporters and relations in the  elections  in February, 1962 and had devised the schemes in order to cause them  loss and compass their ruin.  A subsidiary  point  was also  urged  that  the  Transport  Minister  who  heard  the objections under s. 68-D(2) was also influenced by the Chief Minister.   It  was  thus  said  that  the  Chief   Minister dominated at every stage through 346 which  the schemes passed and that the schemes  were  really the  result  of his improper motive to  ruin  his  political opponents.  It was again not disputed by the respondent that if  these steps were made out the schemes would  be  invalid and ought to be quashed. The  learned Judges of the High Court have on this  part  of the  case  held: (1) That the allegations made  against  the Chief  Minister had not been proved; (2) Assuming,  however, that the Chief Minister was actuated by political motives to hit  at  his  opponents,  still,  the  schemes  which   were published  by  the  Corporation,  had  been  framed  by  the Corporation not at the dictation of the Chief Minister,  but as  a  result  of their own independent  judgment;  and  (3) Lastly  the learned Judgesheld that there was no proof  that the  Transport Minister who heard the objections  raised  by the  appellants to the schemes was influenced by  the  Chief Minister  or  acted at his behest, and  therefore  that  the schemes  framed and approved were fully in  conformity  with the requirements of s. 68-C. The  correctness of these conclusions have  been  challenged before  us  and the first matter that requires  to  be  con- sidered  is as to whether the allegations against the  Chief Minister  have  been  made out.   The  question  raised  has manifestly to be considered from two aspects.  The first  is whether the facts alleged which were stated to have been the cause  of the Chief Minister’s animus against the  transport



operators  in the western part of Kurnool have  been  estab- lished.  In regard to this the first point to be noticed  is that  the  contents  of the affidavit were  not  vague,  but details were given and these were: (1) The existence of  two groups  in  the Congress Party at the time  of  the  General Elections in 1962, the Chief Minister being the head of  one of  them  and of the other Mr. Sanjivayya; (2) That  at  the last General Elections certain candidates who were named and who  are stated to have belonged to the group of  the  Chief Minister  were defeated; (3) The Constituencies  where  they stood  were in the western portion of the Kurnool  District; (4) That this defeat was occasioned by persons belonging  to the other group in the Congress Party whose names are 347 also given (5) That several of these members supporting  the dissident  group were motor transport operators and who  are stated  to have taken a prominent part in the elections  and in  the  defeat  of the candidates belonging  to  the  Chief Minister’s group; (6) The matters in relation to Ranga Reddy and his sons etc.  These are what might be termed  objective facts. If  these allegations were held not proved, then the  entire plea  of  the  appellants on this part of  the  case  fails, because  there  would be no foundation  for  the  submission regarding  the mala fides of the Chief Minister.   If,  how- ever,  these  facts  were held to be made  out,  the  second aspect requires to be examined and that is whether the Court has material to hold that these facts led the Chief Minister to  entertain  feelings  of  personal  hostility  to   these transport  operators  because  of the aid  and  support  the latter gave to the candidates belonging to the group opposed to  him  which led to the defeat of his partymen.   On  this aspect  the  allegations were that the Chief  Minister  felt chagrined  at the defeat of his partymen and supporters  and desiring to wreak his vengeance against the motor  transport operators  of  the western parts of Kurnool,  his  political opponents, instructed the Corporation to change the order in which  the districts should be taken up for  nationalisation and had Kurnool taken up first, departing from what had been decided  upon,  just a little while previously by  the  Cor- poration, and that the Corporation gave effect to these  in- structions and directions by not only taking Kurnool  first, but even in that district eliminating the private  operators from the western portions of the district who were the poli- tical opponents of the Chief Minister.  This, it is obvious, would  be a matter of probabilities and of the inference  to be drawn by the Court from all the circumstances on which no direct evidence can be adduced. It is, no doubt, true that allegations of mala fides and  of improper  motives  on the part of those in  power  are  fre- quently  made  and their frequency has increased  in  recent times.  It is also somewhat unfortunate that allegations  of this nature which have no foundation, in fact, are made in 348 several  of  the cases which have come up  before  this  and other Courts and it is found that they have been made merely with  a view to cause prejudice or in the hope that  whether they  have  basis in fact or not some of it at  least  might stick.  Consequently it has become the duty of the Court  to scrutinise these allegations with care so as to avoid  being in  any manner influenced by them, in cases where they  have no  foundation in fact.  In this task which is thus cast  on the courts it would conduce to a more satisfactory  disposal and consideration of them, if those against whom allegations are made came forward to place before the court either their



denials  or their version of the matter, so that  the  court may  be in a position to judge as to whether the  onus  that lies  upon those who make allegations of mala fides  on  the part  of authorities of the status of those with which  this appealis concerned, have discharged their burden of  proving it.  In  the  absence of such affidavits  or  of  materials, placed  before the Court by these authorities, the Court  is left  to judge of the veracity of the allegations merely  on tests of probability with nothing more substantial by way of answer.   This is precisely the situation in which  we  find ourselves in the present case. The  learned  Judges  of the High Court  have  repelled  the allegations  contained in the affidavits which we  have  set out  earlier on grounds and for reasons which do not  appeal to  us.   As the learned Advocate-General did  not  seek  to support those grounds and that reasoning we do not  consider it  necessary  to  set them out or deal with  them.  If  the reasons given by the learned Judges of the High Court be put aside,   the  position  resolves  itself  into   this   that allegations with particularity and detail have been made  in the petition.  We are here having in mind the allegations we have enumerated and categorised earlier as objective  facts. As  to these there is no denial at all of them, not even  by the  Transport  Minister who though he filed  an  affidavit, confined  himself  to the allegations regarding  his  having been dictated to by the Chief Minister when he approved  the schemes, though it is obvious they are capable of denial and if need be with the same particularity with which they  have been made in the petition.  The learn-                             349 ed  judges of the High Court have not rejected  the  allega- tions  regarding the objective facts on the ground of  their patent improbability or absurdity, nor did the learned Advo- cate-General make any submission on these lines. The  next question is as regards the inference to  be  drawn from  these facts which in the absence of their denial  have to  be  taken  as true.  It is here that we  have  felt  the greatest uneasiness, because if the facts which serve as the foundation for the plea of mala fides are made out, the only question would be whether the inference of mala fides on the part  of  the Chief Minister would be a  reasonable  one  to draw.  It is at this point that we are faced with the neces- sity of having to proceed without there being any  effective answer  to the propriety of drawing the inference which  the appellants  desire.  There has been no denial by  the  Chief Minister,  nor an affidavit by any person who claims or  can claim  to know personally about the truth about these  alle- gations.  The Secretary to the Home Department-one Mr. S. A. lyengar  has  filed a counter-affidavit in which  the  alle- gations  we have set out earlier have been formally  denied. He says, "I have been expressly instructed and authorised by the Hon’ble the Chief Minister to state that the allegations suggesting personal animus and giving mandate are false  and mischievous  and  have been deliberately made to  create  an atmosphere  of sympathy".  The learned Advocate General  did not  suggest that the Court could act upon this  second-hand denial by the Chief Minister, as the statement by Sri S.  A. lyengar  is merely hearsay.  We are, therefore,  constrained to  hold  that the allegations that the Chief  Minister  was motivated   by  bias  and  personal  ill-will  against   the appellants, stands unrebutted. The   learned  Advocate-General  realising  this   position, desired  us to proceed on that basis and his submission  was that  assuming that the allegations made against  the  Chief Minister  were  made out and that he had bias  and  ill-will



against  the appellants, still there was no proof  that  the Corporation which was an autonomous body was similarly moti- vated and that unless the appellants were able to  establish it, bias or ill-will on the part of the Chief Minister would be irrelevant 350 We  agree  as  already indicated that he is  right  in  this submission.  This takes us to the consideration of the ques- tion  as to whether the Corporation carried out the  mandate of  the Chief Minister as was alleged by the  appellants  or whether  the impugned schemes were formulated by them  as  a result of the opinion which they themselves formed that they were  necessary in public interest for the purposes set  out in s. 68-C of the Act.  On this matter there is an affidavit by  the  Corporation  denying the  allegation  made  by  the appellants that the Corporation acted merely as the tool  of the Chief Minister in order to carry out his behest, and  it is there asserted that the decision to frame the schemes was taken as a result of the independent opinion formed by  them after   an   examination  of  the  entire   question.    The acceptability of these rival assertions were debated  before us most strenuously during the hearing of these appeals. Certain  facts already set out have a bearing on this  ques- tion,  and these we shall recall.   The  Anantharamakrishnan Committee  had  laid down the criteria for  determining  the order  in  which  areas and routes had to  be  selected  for nationalisation, and applying these principles had drawn  up a  list of the remaining districts in which  nationalisation should be successively taken up.  If that order was  follow- ed, Nellore would have been the next district to be taken up and  the  turn of the Kurnool District would  have  come  up after nationalisation of the routes in the Nellore,  Chittor and Cuddapah districts were completed.  This report had been submitted  to the, Corporation in February, 1961  and  after further  detailed examination of these  recommendations  the Corporation  had accepted the recommendation  regarding  the order  of the Districts to be taken up  for  nationalisation and had embodied this approval in its Administration  Report dated March 24, 1962 which was published in April, 1962.  It is  only necessary to add that the Corporation had also  had the  routes in Nellore surveyed a little while  before.   In February,  1962,  however,  the  general  elections  to  the Assembly  and  the Parliamentary  Constituencies  had  taken place  and the allegations of the appellants related to  the feelings  that  arose during the course of  elections.   The present Chief Minister assumed office as Chief                             351 Minister  on March 12, 1962.  On April 19, 1962, it  is  ad- mitted that he summoned a conference of the Corporation  and its  officials at which, and this also is admitted, he  sug- gested that the nationalisation of bus routes in the Kurnool District  should be taken up first.  Now the Chief  Minister himself made a statement as to what he did at this  meeting. It  is  the case of the appellants that it was  the  mandate given  to  the  Corporation by the Chief  Minister  at  this Conference  that brought about this change in the  order  of the districts to be taken up for nationalisation and not the independent opinion of the Corporation as to what was needed in  the public interest as required by s. 68-C.  As  regards his  part  at  the conference, the  Chief  Minister  himself stated in the Assembly on July 26, 1962:               "To   say   that  the  Corporation   will   do               everything for the simple reason that it is an               autonomous body, and also to say that we  will               not  at all interfere, is not fair.   It  will



             not  be  fair.   Now and then  we  shall  have               conferences.   For example,  -the  Corporation               wanted  to nationalise Chittoor district.   We               had  discussions.   Kurnool is  surrounded  by               three   nationalised   districts;   one   side               Mahaboobnagar,  one side Guntur and the  other               side the district of Nellore which is going to               be  nationalised.  I questioned as to why  the               district  of  Kurnool which is  surrounded  by               three nationalised districts is left out,  and               instead  the  district of  Chittoor  which  is               abutting  the borders of Madras and  Bangalore               is  sought  to be taken up.   They  could  not               explain.   I said Kurnool district is  a  very               compact one and three districts around it  are               nationalised.   They  thought  that  was  more               practicable  and reasonable.   Therefore  they               changed their minds.  As a result of such dis-               cussions,  once  in a way we  (Government)  do               interfere but will not interfere in day to day               administration." The conference, as stated earlier, addressed by the Chief Minister was on the 19th of April, 1962.  This was follow- 352 ed by the resolution of the Corporation of May 4, 1962. This ran: .lm15 "The  Corporation noted the discussion which took  place  in the  office  of the Chief Minister on 19th April,  1962,  in regard  to  programme of nationalisation of  Road  Transport Services during the Third Five Year Plan period and resolved that during the Third Five Year Plan three more districts in the  order mentioned could be nationalised,  viz.,  Kurnool, Nellore   and  Cuddapah  in  view  of  difficult   financial position........  Chief Executive Officer explained that  as there is a depot at Kurnool and as Kurnool is contiguous  to the   nationalised   districts,  it  would  be   easier   to nationalise   Kurnool   rather   Nellore   district.     The nationalisation  could be extended to the  Nellore  district after  Kurnool  district is nationalised.   The  Corporation therefore  resolved that Kurnool district could be taken  up for nationalisation in preference to Nellore." In the counter-affidavit which the Corporation filed to, the writ petition the Chief Executive Officer after denying that the  Corporation was actuated by mala fides in  framing  the three  impugned schemes, stated that the acceptance  by  the Corporation of the recommendation of the Anantharamakrishnan Committee  was tentative and that it could not  fetter  them from  discharging its powers and duties under  the  statute. It   gave  the  following  reasons  for  the   decision   to nationalise Road Transport Services in a part of the Kurnool district in preference to other areas: (1) because there  is a Government depot at Kurnool, (2) Kurnool is contiguous  to the  entire  Telangana area which is rationalised  and  also contiguous  to  the nationalised area of  Guntur.   It  also stated  that  the  choice was made in the  interest  of  the maintenance  of service contiguity and coordination  and  it added that "the impending completion of the Rangapur  Bridge over   the  river  Krishna,  which  when   completed   would facilitate  the operation of direct services from  Hyderabad through Kurnoof to the areas beyond." Besides it 353 asserted  that  the  Corporation  which  was  an  autonomous statutory  authority was vested with powers under  the  Road Transport  Act and it was’, therefore, malicious  to  allege



that the decision by the Corporation to prepare the impugned schemes was either influenced by the, Chief Minister or  was under a mandate from him and it asserted that in formulating the  schemes the necessary opinion under s. 68-C was  formed by itself. The  learned  Judges of the High Court  have  accepted  this statement,  made  on  behalf of  the  Corporation  and  have repelled  the  attack made on it based on  the  schemes  not having been formulated as a result of the opinion formed  by the   Corporation  itself.   The  learned   Advocate-General commended   this  approach  and  this  conclusion  for   our acceptance.   He  also  pointed out  that  the  Anantharama- krishnan Committee had themselves indicated in paragraph 126 of  their report that the order in which the new areas  will be  taken over for nationalisation might be decided  by  the Government,  so that the order in which motor  transport  in the  several  districts  should  be  nationalised,  was  not prescribed  by  the Committee as a rigid or  hard  and  fast rule,  but  the order of the districts was treated  even  by them as a flexible one which was capable of and was intended to be, modified by the Government by making policy decisions on these matters taking into account not merely the finances available  for  nationalisation  but  also  other   relevant matters. We have given the matter our best consideration, but we  are unable to agree with the learned Judges of the High Court in their  conclusion.   The  first  matter  which  stands   out prominently  in this connection is the element of  time  and the sequence of dates.  We have already pointed out that the Corporation had as late as March, 1962 considered the entire subject   and  had  accepted  the  recommendation   of   the Anantharamakrishnan  Committee as to the order in which  the transport  in the several districts should  be  nationalised and had set these out in their Administration Report for the three  year  period 1958 to 1961.  It  must,  therefore,  be taken that every factor which the Anantha- 134-159 S.C.-23 354 ramakrishnan Committee had considered relevant and  material for  determining  the  order  of  the  districts  had   been independently  investigated,  examined  and  concurred   in, before  those recommendations were approved.  It means  that upto  March-April, 1962 a consideration of all the  relevant factors  had led the Corporation to a  conclusion  identical with  that of the Anantharamakrishnan Committee.   The  next thing that happened was a conference of the Corporation  and its  officials  with the Chief Minister on April  19,  1962. The proceedings of the Conference are not on the record  nor is  there any evidence as to whether any record was made  of what happened at the conference.  But we have the  statement of  the  Chief  Minister  made on the  floor  of  the  State Assembly  in  which he gave an account  of  what  transpired between him and the Corporation and its officials.  We  have already extracted the relevant portions of that speech  from which  the  following  points emerge:  (1)  that  the  Chief Minister claimed a right to lay down rules of policy for the guidance  of  the  Corporation and,  in  fact,  the  learned Advocate-General  submitted  to  us  that  under  the   Road Transport Corporation Act, 1950, the Government had a  right to give directions as to policy to the Corporation; (2) that the  policy direction that he gave related to  and  included the  order  in which the districts should be  taken  up  for nationalisation; and (3) that applying the criteria that the districts  to be nationalised should be contiguous to  those in  which  nationalised services  already  existed,  Kurnool



answered this test better than Chittoor and he, applying the tests  he  laid down, therefore suggested  that  instead  of Chittoor, Kurnool should be taken up next.  One matter  that emerges  from  this  is that it was as a  result  of  policy decision taken by the Chief Minister and the direction given to   the  Corporation  that  Kurnool  was  taken   up.   for nationalisation next after Guntur.  It is also to be noticed that  if the direction by the Chief Minister, was  a  policy decision,  the Corporation was under the law bound  to  give effect to it (vide, s. 34 of the Road Transport  Corporation Act,  1950).   We are not here concerned with  the  question whether a policy decision contemplated by s. 34 of the  Road Transport  Act could relate to a matter which under s.  68-C of the Act is left to the unfettered discretion and judg- 355 ment  of the Corporation, where that is the State  Undertak- ing,  or again whether or not the policy decision has to  be by  a formal Government order in writing, for what is  rele- vant is whether the materials placed before the Court estab- lish  that the Corporation gave effect to it as a  direction which  they  were expected to and did obey.   If  the  Chief Minister  was  impelled  by  motives  of  personal  ill-will against the Road Transport Operators in the western part  of Kurnool  and  he gave the direction to  the  Corporation  to change  the order of the districts as originally planned  by them  and  instead  take  up  Kurnool  first  in  order   to prejudicially  affect  his  political  opponents,  and   the Corporation carried out his directions it does not need much argument  to  show that the resultant scheme framed  by  the Corporation   would   also  be  vitiated   by   mala   fides notwithstanding  the  interposition of  the  semi-autonomous Corporation. It  is  also to be noticed that the Chief  Minister  in  his statement  to  the  Assembly stated that  when  he  made  an enquiry  of  the Corporation as to why they did  not  choose Kurnool   as  the  next  district,  the  officials  of   the Corporation   had  no  answer  to  give.   It  is   somewhat remarkable  that  the Corporation and its  officials  should have  remained silent and tongue-tied  notwithstanding  that its  Vice-Chairman was a member of  the  Anantharamakrishnan Committee and had as a member thereof considered the  entire question  in all its aspects and laid down (1) the  criteria for  determining the order of priority; and (2) by  applying these tests had laid down the priorities among the districts and  more than this, the entire body of the Corporation  had considered  the several recommendations of the Committee  in their  report  and while rejecting some  had  accepted  this particular  recommendation regarding the order in which  the districts should be taken up and this last one had  happened within a month or so before the conference addressed by  the Chief  Minister.  If in these circumstances  the  appellants allege that whatever views the Corporation entertained  they were compelled to or gave effect to the wishes of the  Chief Minister,  it  could  not  be  said  that  the  same  is  an unreasonable  inference  from facts.  It  is  also  somewhat remarkable  that  within a little over two weeks  from  this Conference by its 356 resolution  of May 4, 1962, the Corporation dropped  Nellore altogether,  a district which was contiguous to  Guntur  and proceeded  to take up the nationalisation of the  routes  of the  western part of the, Kurnool district and were able  to find reasons for taking the step.  It is also worthy of note that  in  the resolution of the 4th May, 1962, of  the  Cor- poration only one reason was given for preferring Kurnool to



Nellore, namely, the existence of a depot at Kurnool because the other reason given, namely, that Kurnool was  contiguous to  an  area of nationalised transport  equally  applied  to Nellore  and, in fact, this was one of the criteria  on  the basis  of  which the  Anantharamakrishnan  Committee  itself decided  the  order  of priority among  the  districts.   As regards  the  depot  at Kurnool which was  one  of  the  two reasons  set  out in the resolution for the choice  of  that district  in  the first instance, learned  Counsel  for  the appellants  submitted that this reason was one  invented  to justify  the Corporation’s action directed against them  and to  obviate the comment that the reason for the  change  was political and not for providing an adequate service for  the area.   He submitted that the so-called depot was  merely  a garage  with a few repairing tools and not any  full-fledged repairing workshop.  None of the affidavits filed on  behalf of  the appellants, however, made any  allegation  regarding the nature of the facility afforded at this ’depot-and so we are not in a position to act merely on the arguments adduced to  us  at the bar.  It has however to be noticed  that  the existence  of this ’depot’ at Kurnool escaped the notice  of the Anantharamakrishnan Committee, who in their report  have devoted  some  attention  to the need  for  depots  and  the equipment  these  should  possess and  referred  to  certain deficiencies  which  they noticed in the depots  which  they inspected.   The officials of the Corporation did  not  evi- dently bring this depot at Kurnool to the notice of the Com- mittee.   Again,  when in their Administration  Report,  the Corporation  accepted  the recommendations  as  regards  the order  in which the districts, should be  nationalised,  the existence of this depot at Kurnool seems also to have escap- ed  the attention of the Corporation itself, as a factor  to be taken into account in making the choice of the  district. But we are basing no; conclusion on this feature.  357 When the Transport Corporation, however, filed the  counter- affidavit it was not content to rest merely with the reasons given  in  the  resolution as those which  were  taken  into account  in  arriving at the decision but  added  one  more, namely,  the impending completion of the bridge at  Rangapur across the Krishna as a further reason which had been  taken into account for arriving at a decision.  What the Court  is concerned  with and what is relevant to the enquiry  in  the appeal is not whether theoretically or on a consideration of the  arguments for and against, now advanced the  choice  of Kurnool as the next district selected for nationalisation of transport  was  wise or improper, but  a  totally  different question  whether  this choice of Kurnool was  made  by  the Corporation  as required by s. 68-C or, whether this  choice was  in fact and in substance, made by the  Chief  Minister, and  implemented  by him by utilising the machinery  of  the Corporation  as alleged by the appellants.  On the  evidence placed in the case we are satisfied that it was as a  result of  the conference of the 19th April, 1962, and in order  to give  effect to the wishes of the Chief  Minister  expressed there, that the schemes now impugned were formulated by  the Corporation. The next submission of the learned Advocate-General was that even assuming the Chief Minister directed the order in which districts were to be taken up for nationalisation, still the scheme  framed by the Corporation could not be  assailed  as not  in conformity with the requirements of s. 68-C  of  the Act  so  long as the choice of the "area" in which  and  the routes  in it to be run by the Corporation was made by  them alone.   This argument proceeds from the  circumstance  that



even  taking  it  that  the  Chief  Minister  directed   the Corporation to take up the nationalisation of the routes  in the  Kurnool  district in the first instance, there  was  no allegation that he gave any direction regarding the area  in the  district and the routes.  We fail to see any  force  in this  argument.  If the choice of the district was  that  of the  Chief  Minister, the fact that within the area  of  the district pointed out to them, the Corporation selected  some area within the district and the routes within that area, 358 cannot  on  any  reasonable construction of  s.  68-C  be  a sufficient compliance with the statute.  We are disposed  to read  the word ’area’ in the section as meaning such  ’area’ in  the  entire  State as the  Corporation  should  consider proper and not as the learned Advocate-General would read as area within a circumscribed part of the State determined  by an outside authority. Besides-.  there is really little or no  explanation  forth- coming from the Corporation for choosing the western part of the  Kurnool district for the exclusion of the private  ope- rators  in  the first instance.   The  principal  allegation regarding mala fides on the part of the Chief Minister  made by  the  appellants  was directed to  demonstrate  that  the object  of  the present schemes was to  eliminate  operators whose routes lay on the western side of the district.  It is also stated in the affidavits that the friends or supporters of the Chief Minister were operating motor transport in  the eastern  part  of Kurnool.  Therefore it might  be  expected that   the  counter-affidavits  filed  offered  a   rational explanation  as to why this portion of the Kurnool  district was chosen in the first instance in preference to the  other portion of the district.  Needless to say the resolution  of the Corporation of May 4, 1962, offers no assistance in this matter  and  a,,; we have said earlier though  the  counter- affidavits  contained  a denial of the allegation  that  the Corporation was acting at the behest of the Chief  Minister, there  is  no  explanation for the  choice  of  the  western portion.   Our  conclusion therefore is  that  the  impugned schemes  are  vitiated  by the fact that they  were  not  in conformity with the requirements of s. 68-C. The next question is as regards the approval of the  schemes by the Transport Minister under s. 68-D(3).  It was the case of  the  appellants  that just  like  the  Corporation,  the Transport  Minister also merely, carried out the  wishes  of the  Chief Minister and that therefore the approval  by  the Transport  Minister must be held to be vitiated by the  mala fides  of the Chief Minister.  In regard to  this,  however, two matters have to be remembered.  The first is that  there is nothing on the record to show that the Chief                             359 Minister  influenced his colleague and beyond the fact  that both  the Chief Minister as well as the  Transport  Minister are  members  of  the same Council of  Ministers,  there  is nothing  to indicate that the Chief Minister influenced  the Transport Minister.  The other matter is that the  Transport Minister  had stated on oath that in considering the  objec- tions  under  s.  68D(3) and approving the  schemes  he  was uninfluenced by the Chief Minister.  We, therefore, consider that  there  is  no basis for  holding  that  the  Transport Minister’s approval of the schemes does not satisfy the  re- quirements of the law. In view that we take the schemes have to be set aside as not in conformity with s. 68-C of the Act, the other  objections raised do not require consideration but in view, however, of the arguments addressed to us on them we shall briefly  deal



with them. The next point that was urged was that the schemes were  not in conformity with s. 68-C of the Act for another reason.  A scheme  to  be  published by the  Transport  Undertaking  is required  by s. 68-C to give "particulars of the  nature  of the  services  proposed  to  be  rendered  and  such   other particulars  respecting  thereto  as  may  be   prescribed", prescribed, of course, meaning "prescribed by rules".  These particulars,  it is obvious, are required to be set  out  in the scheme, so that (a) transport operators running vehicles on  the  routes  might know that they are  affected  by  the scheme  and might, if they see sufficient  reason  therefor, prefer  objections under s. 68-D(1); and (b)  the  operators and others formulate their objections properly, particularly in  the matter of pointing out the deficiency or  inadequacy of the schemes or the services proposed to be run under  the schemes  for  the approving authority to consider.   It  was urged  on behalf of the appellants that the impugned  scheme did not furnish particulars required by this provision.  The draft  scheme,  as  published under s.  68-C,  and  that  as approved  finally,  contains six columns which  are  respec- tively  headed  (1) Serial Number; (2) Name  of  the  Route, indicating its course; (3) Length of the route in miles; (4) 360 Number  of vehicles proposed to be operated on each  route-, (5)  Total number of trips each way to be performed on  each route;  and (6) The nature of the services.  Now. columns  4 and 5 do not contain the precise number of vehicles proposed to be operated or the precise total of the trips each way to be  performed  daily.  But on the other hand each  of  these columns  is  sub-divided into two-4 and 4(a), 5 and  5  (a). Under  column  4  is given the minimum  number  of  vehicles proposed  to be operated and under 4(a) the maximum  number. Similarly  column  5 sets out the minimum number,  of  total trips each way and 5 (a) the maximum number.  Now in several of  these the variation between the maximum and the  minimum in columns 4 and 5 is 1 to 2 i.e. if one is the minimum  two is the maximum, and similarly if two is the minimum, four is the maximum, but there are others in which the variation  is even more pronounced. for instance, in scheme number one, in serial number 15 the minimum is one and the maximum three in both columns 4 and 5 and in serial number 16 the  proportion between, the maximum and minimum is even more pronounced for in column 4 it is 1 to 4. The position is similar in  regard to  serial  No. 20.  The objection that is  raised  to  this method  of  specifying the maximum and the  minimum  of  the number  of vehicles which will be put on the route  and  the number  of trips which these vehicles will operate is,  that one  of the objects of the schemes is the  provision,  among others, of an adequate road transport service.  It is common ground  that the persons affected by the schemes may  object to  the scheme on the ground that it does not offer an  ade- quate  service and that this would be a relevant matter  for consideration by the authority approving the scheme.  It is, therefore,  urged  on  behalf of  the  appellants  that  the schemes as promulgated which disclose not the actual  number of vehicles that would run or the number of trips which  the vehicles would make, do not enable the affected objectors to raise  their objections to the adequacy of the service  pro- posed  and similarly do not afford requisite information  to the approving authority under s. 68D(3) to decide whether to approve the scheme or not.  Besides this general  objection, it is pointed out that the specification of a minimum 361 and  a  maximum in columns 4 and 5 is contrary to  what  has



been prescribed by the Andhra Pradesh Motor Vehicles  Rules, 1957,  made in relation to "the particulars to be  contained in  schemes  under Ch.  IV-A." Rule 4 of these  Rules  which have  statutory force under s. 68-C requires  draft  schemes and  approved schemes to contain inter alia "the  number  of vehicles proposed to be operated on each route and the total number  of trips to be performed daily on each route." By  a rule  framed  on  the  26th of  December,  1958,  the  State Government  framed a rule numbered as Rule 5 of these  Rules which reads:               "5. The State Transport Undertaking may at its               discretion, vary the frequency of services  on               any  of  the  notified routes  or  within  any               notified  area having regard to the  needs  of               traffic   during   any   period,   either   by               increasing  or decreasing the number of  trips               of  the  existing buses or  by  increasing  or               decreasing the number of buses." The  validity  of  Rule 5 was one of the  matters  that  was raised for consideration by this Court in Dosa  Satyanaraya- namurty  etc.  v. The Andhra Pradesh  State  Road  Transport Corporation(1) and this Court held that Rule 5 was repugnant to s. 68-E which reads:               "Any  scheme published under sub-s. (3) of  s.               68-D may at any time be cancelled or  modified               by  the  State Transport Undertaking  and  the               procedure  laid  down in s. 68-C and  s.  68-D               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               modifications   proposed   were   a   separate               scheme." and struck it down.  Thereafter rule 5 was deleted, but rule 4  remains  as  we  have set out.   The  question  for  con- sideration is whether the prescription of maxima and  minima in  columns 4 & 5 is in conformity with the requirements  of Rule  4.  It was submitted on behalf of the  appellants  (1) that the reason why these maxima and minima were put [1966] 1 S.C.R. 642. 362 down in the schemes, contravening Rule 4, was in reality  to avoid the operation of s. 68-E and to get over the  decision of  this  Court striking down Rule 5 and that for  the  same reason  which  underlay the decision of this Court  in  Dosa Satyanarayanamurty’s case(1) the prescription of maxima  and minima  contravened  s.  68-E  as  it  operates  in  no  way dissimilar  to  Rule 5 and that as this  vice  pervades  the entirety  of the scheme as published, all the three  schemes should be set aside.  In further support of their submission the  appellants  relied  on  the  affidavit  filed  by   the Assistant  Secretary to the Transport Department who  stated that  the  prescription  of maxima and  minima  was  adopted because  "it  enabled the Corporation  to  provide  adequate services with reference to the public needs, without  having to go through the elaborate gamut of modifying the  approved scheme for the purpose." The  learned  Judges of the High Court  have  repelled  this contention on the ground of the analogy furnished by ss.  46 and  48  of  the  Act under  which  applications  for  State carriage permits by private operators and the permits grant- ed  to  them are required to state the minimum  and  maximum number of daily services proposed to be provided in relation to  each  route  or area, was an indication  that  a  scheme specifying the maxima and minima of the number of buses  and services was in conformity with and did not contravene  Rule



4.  The  learned Advocate-General adopted the same  line  of argument  and submitted that the language of Rule 4 did  not in terms prohibit the specification of a minimum and maximum and  that  Rule  5 which this Court  struck  down  as  being repugnant  to s. 68-E was attracted only when the maxima  or minima  set  out  in  the scheme  was  departed  from.   He, however, conceded that the gap, between the minimum and  the maximum specified in a scheme might be so wide as to  render the same a contradiction of Rule 4 but he submitted that the variations in the 3 schemes before us between columns 4  and 4 (a) and columns 5 and 5 (a) respectively were so slight as not to amount to a failure to fix the number of vehicles  to be operated or the trips they would do on the routes. (1)  [1961] 1 S.C.R. 642.                             363 In  the  case before us in view of the  conclusion  we  have reached  that some of the variations between the maxima  and the minima in the number of vehicles proposed to be operated on  each route are such as, adopting the test  suggested  by the  learned Advocate-General himself, to really  contravene Rule  4 we have not thought it necessary to  finally  decide the  larger question, whether the mere prescription  of  the maxima  and minima, particularly for the reasons set out  in the  affidavit of the Assistant Secretary to  the  Transport Department,  constitutes a violation of s. 68-E as  also  of Rule  4 of the Motor Vehicles Rules, 1957 as to require  the same  to  be  struck down.  We might,  however,  mention  in passing that we are not much impressed by the argument based on  ss.  46  and  48.  It must be  remembered  that  we  are concerned with a requirement of Ch.  IV-A and under s.  68-B of the Act, not only the provisions of that Chapter but  the rules  made  thereunder are to have  effect  notwithstanding anything  in Ch.  IV in which s. 46 and s. 48  occur.   This apart,  the  rule-making authority had the  analogy  of  the provisions of ss. 46 and 48 before it, but yet chose not  to adopt  the  same  phraseology  as  was  employed  in   these sections.   Besides, as the provisions of Ch.   IV-A  invade the rights of private operators to carry on business and  is justified  as  a reasonable restriction on their  rights  in public  interest,  it might very well have  been  considered that  a  more precise indication should be afforded  by  the scheme  to  enable its adequacy to be tested by  the  quasi- judicial  procedure  which  has to be  followed  before  the scheme becomes effective.  However, as stated already, there is  no  need to decide this matter finally in  view  of  our conclusion  that the scheme contravenes Rule 4 even  on  the test  submitted by the Advocate-General.  In saying this  we have  in  mind routes 15, 16, 18 and 20 of scheme No.  1  in which  the variation in the number of vehicles is 1 to 3,  1 to  4  and 3 to 8 and similarly in scheme No. 2  route  No.1 where the variation is 6 to 12 and in scheme No. 3 route No. 1  the  variation is 5 to 9. We might mention that  we  have taken  into  account  not  merely  the  proportion  but  the variation  in the number.  We have set these out  as  merely illustrative and we have not thought it necessary to make an exhaustive list of all the routes. 364 The  next objection was that some of the routes included  in the  scheme  were  inter-State routes  and  that  under  the proviso  to  s. 68D(3) it could not be deemed to be  an  ap- proved  scheme unless the previous approval of  the  Central Government had been obtained.  We consider this objection as without   force.   The  route  which  is  proposed   to   be nationalised under the scheme admittedly lies wholly  within the State.  The right of the private operators to ply  their



vehicles  beyond the State border is not affected by any  of the  schemes.  It would, therefore, follow that the  proviso to  s. 68-D(3) is not attracted and consequently the  scheme does not suffer from the defect alleged. The  next  point  made was that  the  language  employed  to indicate  the  nature  of the service in  column  6  of  the schemes  was vague, with the result that operators who  had, in  fact, been affected by the scheme understood  the  words employed as not affecting them and consequently did not make objections  as they were entitled to under s.  68-D(2).   We have examined the language employed and we consider that the submission does not deserve serious consideration nor we are satisfied  that  any party was really  misled  by  ambiguous phrasing  of  column  6 of the  scheme.   In  fact,  learned Counsel  did not press this objection after the  matter  was discussed during arguments. The next series of objections to the schemes are those which arise  in  Civil Appeals Nos. 771 to 778.   The  point  most strenuously  contended  related to an illegality  which  was alleged  to  have  occurred in  the  implementation  of  the scheme.  Under s. 68-(1) the State Transport Undertaking has to  make the application in the manner specified in  Chapter IV-A  for  "a  Stage  Carriage  permit...........  "to   the Regional Transport Authority" and that Authority is directed to  grant  the  permit to  the  Undertaking  notwithstanding anything to the contrary in Ch.  IV.  In accordance with the provisions   of  this  section  the  State  Road   Transport Corporation made an application for the grant of permits  to the  Regional Transport Authority.  The objection raised  is that  the  application had to be made not  to  the  Regional Transport  Authority but only to the State Transport  Autho- rity which authority alone, it is urged, is competent to en-                             365 tertain  applications  for the grant of  permits  where  the length  of the route is 100 miles or over and such route  is over  a  Trunk Road.  Three of the routes in scheme  2  with which  Civil Appeal Nos. 773, 776 and 777 are concerned  are of  a length beyond 100 miles and the roadway on  which  the route  lies are admittedly Trunk Roads.  Under Rule  141  of the  Madras  Motor  Vehicles Act  Rules  permits  on  routes covering  a distance of over 100 miles on Trunk Roads  could be  granted only by the State Transport Authority.   It  was this  Authority that had granted the permits to  operate  on these  three  routes to the respective appellants  in  these appeals.   The  argument  is  that  even  when  a  Transport Undertaking applies for a stage carriage permit under s. 68- F(1) it must comply with the provisions of Rule 141.  On the basis of this reasoning the appellants in these three  Civil Appeals  have applied for a writ of prohibition against  the Regional  Transport Authority before whom  the  applications have been filed.  Section 68-F(1) reads:               "68-F(1).  Where, in pursuance of an  approved               scheme any State transport undertaking applies               in  the manner specified in Chapter IV  for  a               stage  carriage permit or a  public  carrier’s               permit  or  a  contract  carriage  permit   in               respect of a notified area or notified  route,               the  Regional Transport Authority shall  issue               such    permit   to   the   State    transport               undertaking,  notwithstanding anything to  the               contrary contained in Chapter IV." The  learned  Judges of the High Court have  held  that  the Regional Transport Authority which is specifically mentioned in  s.  68-F(1)  is empowered to issue  the  permit  to  the transport  undertaking  "notwithstanding  anything  to   the



contrary  contained  in  Chapter IV" and  that  the  section rendered  the provisions of Rule 141 of the  Motor  Vehicles Rules inapplicable to cases covered by s. 68-F(1).  We  find ourselves in agreement with this view.  Besides, s. 68-B  of the Act enacts:               "68-B.  The provisions of this Chapter and the               rules  and orders made thereunder  shall  have               effect               366               notwithstanding  anything inconsistent  there-               with contained in Chapter IV of this Act or in               any law for the time being in force or in  any               instrument having effect by virtue of any such               law." Therefore  any  provisions  in  Chapter  IV  which  are  in- consistent  with  those contained in Chapter IV-A  would  to that  extent be superseded.  No doubt, s. 68-F(1) speaks  of an  application in the manner specified in Ch.  IV which  if the  words stood alone are capable of -being  understood  as meaning  the  authority to whom the application  has  to  be made, but as the authority to issue the permit in  pursuance of  the application is specified as the  Regional  Transport Authority  and  as that authority is directed to  issue  the permit  notwithstanding anything in Ch.  IV so much  of  Ch. IV or the Rules made thereunder, which specify the authority to grant the permit as being someone other than the Regional Transport Authority, is to that extent superseded.  It was pointed  out that under Rule 141 the State Transport  Autho- rity  was  itself  vested with the powers  of  the  Regional Transport  Authority where the route was of the  description mentioned  earlier,  but  this, in  our  opinion,  makes  no difference.  No doubt, in a State where there is no Regional Transport Authority at all [vide e.g. proviso to s.  44(1)], but  there  is some other authority which functions  as  the Regional  Transport Authority for the purposes of  the  Art, such an Authority might be that which would be  comprehended by s. 68-F(1) but where as in Andhra Pradesh there is admit- tedly  a Regional Transport Authority, we cannot  accede  to the submission that such authority is deprived of the  power to issue a permit by reason of s. 68F(1) merely because  the Regional  Transport  Authority  of that  area  cannot  grant permits under Ch.  IV There  were certain other points urged in Civil  Appeal  No. 771 which arose only if the Regional Transport Authority  to whom  applications  under  s. 68-F(1)  were  made,  was  not competent  to entertain application and issue a permit.   In view  of our conclusion as regards the point urged in  Civil Appeal No. 771 of 1963 do not arise.                             367 There remains for being dealt with one minor point which was urged  in Civil Appeals Nos. 883 and 884 which  we  consider entirely   without  substance.   The  point  was  that   the description  of  the route in the scheme was too  vague  and misleading,  so  much so that the appellants  did  not  file their objections before the Government.  Taking the case  of Civil  Appeal  No.  883, it is by an  operator  who  runs  a service  from Uravakonda to Adoni.  Serial No. 16 of  scheme No.1  describes  the route as Adoni to Uravakonda.   It  was urged  that as the scheme notified the route Adoni  to  Ura- vakonda  but not Uravakonda to Adoni, the appellant  thought that  his route was not affected.  The objection is  on  its very  face  frivolous because throughout the scheme,  it  is only the terminal points that are specified and that  speci- fication carries with it and obviously implies that the ope- ration of transport between the two terminii is intended  to



be  nationalised.  The complaint in Civil Appeal No. 884  is the  same, only the route is different.  This completes  all the points that are urged before us. In  view of our conclusion that the schemes are vitiated  by non-compliance  with  the requirements of s.  68-C  and  the Rules made thereunder, we hold that they have to be  quashed as not warranted by law. The  appeals are accordingly allowed and the appellants  are granted  a  declaration  that the schemes  are  invalid  and cannot  be  enforced.  The appellants would be  entitled  to their costs here and in the High Court-one hearing fee’. Appeals allowed. AYYANGAR  J.-When  the  judgment in the  above  appeals  was pronounced on January 27, 1964 the learned Advocate for  the appellants brought to our notice the following order  passed by this Court on June 10, 1963 when the interim stay of  the operation  of  the schemes which are impugned in  the  above appeals,  was  vacated  on  the  opposition  by  the   State Government:               "Stay vacated on the learned  Advocate-General               for               Andhra Pradesh giving an undertaking that               368               in  case the appeals succeed, the  State  will               compensate   the  appellants  for   the   loss               incurred  by them during the period  that  the               appeals  were pending in this Court by  reason               of the fact that they were not allowed to  ply               their buses on the routes under the respective               permits   granted   to  them.    The   learned               AdvocateGeneral  further undertakes that  this               amount  of compensation will be determined  in               the present proceedings themselves.  No  order               as to costs." The  learned Counsel requested us that we should  give  some directions  in  terms of this undertaking.  In view  of  the above we would add the following at the end of the  judgment which was pronounced on January 27, 1964:               "In view of the order passed by this Court  on               June 10, 1963, when the interim order of  stay               was vacated at the instance of the respondent,               recording  the undertaking on the part of  the               State that it would compensate the  appellants               for  the  loss  incurred by  them  during  the               period when the appeals were pending in  this,               Court,  there  will be a declaration  to  that               effect, and the High Court will determine  the               amount so payable and pass suitable directions               for the payment thereof."