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PETITIONER: GULLAPALLI NAGESWARA RAO AND OTHERS

       Vs.

RESPONDENT: ANDHRA PRADESH STATE ROAD TRANSPORTCORPORATION AND ANOTHER

DATE OF JUDGMENT: 05/11/1958

BENCH: SUBBARAO, K. BENCH: SUBBARAO, K. DAS, SUDHI RANJAN (CJ) BHAGWATI, NATWARLAL H. SINHA, BHUVNESHWAR P. WANCHOO, K.N.

CITATION:  1959 AIR  308            1959 SCR  Supl. (1) 319  CITATOR INFO :  R          1959 SC1376  (2,4)  R          1960 SC1073  (13)  RF         1961 SC  82  (8,12)  RF         1961 SC1361  (8)  F          1961 SC1575  (6)  F          1962 SC1110  (8)  R          1962 SC1183  (10)  R          1962 SC1621  (79,118)  F          1963 SC 416  (7)  RF         1964 SC 381  (75)  R          1964 SC 436  (8,10)  R          1965 SC1017  (16)  RF         1966 SC  81  (5)  R          1966 SC1571  (8)  RF         1967 SC1507  (6)  RF         1967 SC1815  (10)  D          1970 SC1095  (3,8)  F          1971 SC1594  (9)  R          1972 SC1863  (12)  F          1973 SC 974  (8)  RF         1973 SC2237  (3)  D          1974 SC 669  (12)  R          1976 SC2428  (9)  RF         1979 SC 777  (31)  C          1981 SC 660  (4,8)  E          1990 SC1402  (20)  OPN        1990 SC1744  (6)  RF         1991 SC 933  (10)

ACT:        Road  Transport-Nationalisation-Scheme  proposed  by   State        Trans-port Undertaking approved by Government-Procedure,  if        violative of fundamental rights-Scheme, if ultra vires-State        Government,  if must act judicially in approving the  scheme        Colourable  legislation’, Meaning of-Motor Vehicles Act  (IV        Of 1939), as amended by Act 100 of 1956, Ch.  IVA, ss.  68C,        68D-Constitution of India, Art. 31.

HEADNOTE:

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With a view to nationalise the road transport services under Ch.  IV  A  of the Motor Vehicles Act, 1939  (IV  Of  1939), inserted  into  it  by the amending Act  100  of  1956,  the General  Manager  of  Andhra  State  Transport   Undertaking published  a scheme under s. 68C of the Act in the  Official Gazette and invited objections thereto.  By an order of  the Chief Minister the objections were received and heard by the Secretary  to  the  Home Department, who was  in  charge  of Transport,  but  were decided by the  Chief  Minister.   The State Government approved of the scheme and published it  in the  Official  Gazette.  The petitioners,  who  were  plying their  buses  on various routes in the Krishna  District  as permit-holders under the Act, apprehending that their routes would   be  taken  over  by  the  newly  established   State Corporation in implementation of the scheme, applied to this Court  for  the protection of their  fundamental  rights  to carry  on their business.  It was contended, inter alia,  on their  behalf, (i) that Ch.  IVA of the Act was a  piece  of colourable  legislation whose real object was to  take  over their  business, under cover of cancellation of permits,  in contravention  of Art. 31 of the Constitution, (2) that  the scheme  itself  was  ultra vires the Act,  for  the  reason, amongst others, that the State Government whose duty it  was to act judicially in approving the scheme, had  transgressed certain fundamental principles of natural justice. Held   (Per  curiam),  that  the  question   of   colourable legislation  was,  in substance, really one  of  legislative competence   of  the  legislature  that  enacted  it.    The legislature  could  only make laws  within  its  legislative competence.  Its legislative field might be circumscribed by specific  legislative  entries  or  limited  by  fundamental rights  created by the Constitution.  The legislature  could not  over-step  the  field of its  competency,  directly  or indirectly.  It would be for the Court to scrutinize if  the legislature  in purporting to make a law within its  sphere, in effect and substance, 320 reached  beyond it, it had infact the power to the law,  its motive in making it would be irrelevant. K.   C. Gajapaji Narayan Deo v. The’ State of Orissa, [1954] S.C.R. i, followed. The State of Bihar v. Maharajadhiraja sir Kameshwar singh  of darbhangha [1952] S.C R 889 considered So judged; it could not said that CH.  IVA of the Act was  a colourable piece of legislation. The power vested in the Regional’ Transport Authority by  s. 68F  of  the Act involved no transfer of  business  of  the- ,existing permit-holders to the State Transport Undertaking- nor  could  the latter be said thereunder to take  over  any assets  of the former.  Section 68G of the Act in  providing for compensation for un expired period of the permit did not imply  that  CH.  IVA of the Act involved  any  transfer  of property or possession so as to entitle the permit-holder to any  compensation  under  Art. 31(2)  Of  the  Constitution. Chapter  1VA  of  the Act did not,  therefore  infringe  the fundamental  right of the petitioners under’ Art. 31 Of  the Constitution. Per  Das,  C.  J., Bhagwati, and Subba  Rao,  jj.-While  the purpose  of  s.  68C of the Act was no doubt  to  provide  a scheme of road transport service on the lines prescribed  by it,   the  scheme  proposed  might  affect  the  rights   of individual  permit holders by excluding them,  partially  or completely,  from  the business in any particular  route  or routes,  and the procedure prescribed by s. 68D and Rules  8 and  10 framed under the Act, required that  the  Government

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should  hear  both  the objectors and  the  State  Transport Undertaking before approving or modifying the scheme.  There was  no doubt, therefore, that the State was deciding a  lis and it was to do so judicially. Province of Bombay v. Kusaldas S. Advani, [1950] S.C.R. 621, Nagendra  Nath Bora v. Commissioner, Hills Division,  [1958] S.C.R.  124o  and Express Newspapers Ltd. v.  The  Union  of India, [1959] S.C.R. 12, relied on. Franklin v. Minister of Town and Country Planning, [19481 A.   C. 87, held inapplicable. It  was a fundamental principle of natural justice that  the authority empowered to decide a matter must have no bias  in it and another, no less fundamental, was that where the  Act provided for a personal hearing the authority that heard the matter  must also decide it.  The procedure followed in  the instant  case  whereby  the Home  Secretary,  in  charge  of Transport,  himself  a  party  to  the  dispute,  heard  the objections  and  the Chief Minister decided  them,  violated those  principles,  and the order of  the  State  Government approving the scheme, therefore,must be quashed. Per  Sinha and Wanchoo, jj.-The sole object of Ch.  IVA,  of the Act was to nationalise the road, transport services  and the  inquiry  envisaged by it was of  a  limited  character. That inquiry 321 was  meant to find out whether the scheme propounded was  in public interest as required by s. 68C of the Act, and not to adjudicate rival claim of permit-holder on the one hand  and the  State  Transport  Undertaking on the other  ;  for,  on approval  of the scheme, exclusion of private  transport  as proposed  by the scheme was bound to follow as a  matter  of course.   There  could,  therefore,  be  no  lis,  and   the Government  in approving or modifying the scheme  under  Ch. IVA  and the Rules framed thereunder must be held to act  in its normal administrative capacity.  No objections could  be taken, in the instant case, to the procedure adopted by  the Government  in empowering the Secretary to  hear  objections while  the  Chief Minister decided them, and  the  Secretary could in no sense be a party to any dispute. Province of Bombay v. Kusaldas S. Advani, [1950] S.C.R. 621, Nagendra  Nath Bora v. Commissioner, Hills Division,  [1958] S.C.R.  1240  and Express Newspapers Ltd. v.  The  Union  of India, [1959 S.C.R. 12, referred to. Franklin  v. Minister of Town and Country  Planning,  [19481 A.C. 87, applied. Robinson v. Minister of Town and Country Planning, [1947]  I All E. R. 851, referred to.

JUDGMENT: ORIGINAL JURISDICTION: Petition No. 100 of 1958. Petition   under   Article  32  of  the   Constitution   for enforcement of fundamental rights. M.   K.  Nambyar, K. Mangachari, G. Suryanarayana and P.  V. R. Patachari, for the petitioners and intervener. M.   C.  Setalvad, Attorney General for India, R.  Ganapathi lyer,  P.  R.  Ramachandra  Rao  and  T.  M.  Sen,  for  the respondents. 1958.  November 5. The Judgment of Das, C. J., Bhagwati  and Subba  Rao,  JJ., was delivered by Subba Rao, J.  Sinha  and Wanchoo, JJ., delivered separate judgments. SUBBA  RAO, J.-This is an application under Art. 32  of  the Constitution   for  the  enforcement  of   the   petitioners fundamental  right  to  carry  on  the  business  of   motor

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transport  in  Krishna District in Andhra Pradesh,  and  for prohibiting  the respondents from taking over the routes  on which   the  petitioners  have  been  plying   their   stage carriages. 41 322 The  petitioners  have  been  carrying  on  motor  transport business  in  Krishna  District for several  years  past  by obtaining permits under the Motor Vehicles Act, 1939 (IV  of 1939), as amended by Act 100 of 1956, hereinafter called the Act, in respect of various routes.  They estimate the  value of  their  investment  in  the -business at  a  sum  of  Rs. 20,00,000. The  amending  Act inserted a new Chapter IV-A  in  the  Act providing  for the State Transport Undertaking  running  the business to the exclusion, complete or partial, of all other persons doing business in the State.  Chapter IV-A  provided for  a  machinery called the  State  Transport  Undertaking, defined  under s. 68-A(b) as an undertaking  providing  road transport  service,  to run the transport  business  in  the State.   In exercise of the powers conferred by s.  68-C  of the  Act,  one  Shri Guru Pershad,  styled  as  the  General Manager  of  the State Transport Undertaking of  the  Andhra Pradesh  Road Transport, published a scheme for the  purpose of providing an efficient, adequate, economical and properly coordinated transport service in public interest to  operate the transport service mentioned therein with effect from the date notified by the State Government.  Objections were  in- vited within 30 days from the date of the publication of the proposal  in the Official Gazette, viz., November 14,  1957. 138  objections  were  received.   Individual  notices  were issued by the State Government by registered post to all the objectors.    On  December  26,  1957,  the   Secretary   to Government,  Home Department, in charge of transport,  heard the objections. 88 of the objectors represented their  cases through  their advocates ; three of them  represented  their cases  personally and the rest were not present at the  time of hearing.  After considering all the objections and  after giving    an   opportunity   to   the    objectors,    their representatives   and  the  representatives  of  the   State Transport  Undertaking the State Government found  that  the objections to the scheme were devoid of substance.  On  that finding, the State Government approved of the scheme in G.O. Ms. 58, Home (Transport IV), dated January 7, 1958, and  the approved scheme was published in the 323 Andhra  Pradesh Gazette dated January 9, 1958.   The  scheme was ordered to come into force with effect from January  10, 1958.   The Government of Andhra Pradesh also established  a Road   Transport  Corporation  under  the   Road   Transport Corporations  Act,  1950 (LXIV of 1950), called  the  Andhra Pradesh Road Transport Corporation, with effect from January I  I,’  1958, and by its order dated January 11,  1958,  the said  Corporation was empowered to take over the  management of  the  erstwhile  Road  Transport  Department.   The  said Transport  Corporation  is now implementing  the  scheme  of nationalisation  of bus transport under a phased  programme. The  petitioners,  who  are plying their  buses  on  various routes  in Krishna District, apprehending that their  routes would  be  taken  over by the Corporation  pursuant  to  the aforesaid  scheme,  seek the aid of this  Court  to  protect their  fundamental right to carry on their business  against the action of the State Corporation on various grounds. Mr.  M.K. Nambiar, appearing for the  petitioners,  contends that  the  scheme,  in pursuance of  which  the  bus  routes

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operated  by the petitioners are sought to be taken over  by the  State  Road Transport Corporation, is ultra  vires  and illegal  on  two grounds, viz., (a) that the  provisions  of Chapter  IV-A  of the Act violates  the  fundamental  rights secured to the citizens by the Constitution and (b) that the scheme frained under the, Act is ultra vires the Act. The first ground is sought to be supported by the contention that  Chapter  IV-A  of the Act, in  substance  and  effect, authorizes the State to acquire the undertakings of citizens without   providing   for  compensation   for   the   entire undertakings   and   therefore  it  is  a   fraud   on   the Constitution,  particularly  on Art.  31  thereof.   Shortly stated,   his  argument  is  that  under  Art.  31  of   the Constitution  no  law  shall be made  for  the  transfer  of ownership  or  right to possession of any  property  to  the State  or  to  a Corporation without fixing  the  amount  of compensation   or   specifying  the  principles   on   which compensation is to be determined and given, and that Chapter IV-A of the Act is a colourable legislation enabling such  a transfer of ownership without providing 324 for  compensation  for the property transferred,  under  the guise of cancellation of a permit. To appreciate this argument it would be convenient, at  this stage,  to read the relevant provisions of the  Articles  of the  Constitution,  omitting the words unnecessary  for  the purpose of this case. Art. 191 : All citizens shall have the right- (g)  to  practise  any  profession,  or  to  carry  on   any occupation, trade or business. (6)  Nothing  in  sub-clause (g) of the  said  clause  shall affect  the  operation of any existing law in so far  as  it imposes, or prevents the State from making any law imposing, in   the  interests  of  the  general   public,   reasonable restrictions  on the exercise of the right conferred by  the said  sub-clause,  and, in particular, nothing in  the  said sub-clause,  shall affect the operation of any existing  law in so far as it relates to, or prevent the State from making any law relating to-- (i)......................................................... (ii) the carrying on by the State, or by a Corporation owned or controlled by the State, of any trade, business, industry or  service, whether to the exclusion, complete or  partial, of citizens or otherwise. Art. 311: No person shall be deprived of his property save by authority of law. (2)  No   property   shall  be  compulsorily   acquired   or requisitioned  save  for  a  public  purpose  and  save   by authority  of a law which provides for compensation for  the property  so acquired or requisitioned and either fixes  the amount  of the compensation or specifies the  principles  on which,  and the manner in which, the compensation is  to  be determined  and  given; and no such law shall be  called  in question  in any ’Court on the ground that the  compensation provided by that law is not adequate. (2A)  Where a law does not provide for the transfer  of  the ownership  or  right to possession of any  property  to  the State or to a Corporation owned or controlled by the  State, it shall not be deemed to 325 provide for the compulsory acquisition or requisitioning  of property, notwithstanding that it deprives any person of his property." The  Constitution (First) Amendment Act of 1951, which  came into  force on June 18, 1951, amended cl. (6) of Art. 19  by

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adding  sub-cl.  (ii)  to  that  clause,  along  with  other amendments.  Clause (2) of Art. 31 has been amended, and cl. (2A)   has  been  inserted  by  the  Constitution   (Fourth) Amendment  Act, 1955.  Clause (2A) has been inserted with  a view  to supersede the majority decisions of this  Court  in the cases of State of West Bengal v. Subodh Gopal Bose  (1), Dwarkadas  Shriniwas  of  Bombay v.  Sholapur  Spinning  and Weaving Co.  Ltd. (2) and Saghir Ahmed v. State of U.P. (3). In Subodh Gopal’s case, a majority of a Bench of this  Court held: Clauses  (1)  and  (2)  of Art. 31  are  thus  not  mutually exclusive  in scope and content, but should in my  view,  be read  together  and  understood as  dealing  with  the  same subject, namely, the protection of the right to property  by means  of  the limitations on the State  power  referred  to above,  the deprivation contemplated in clause (1) being  no other than the acquisition or taking possession of  property referred  to  in clause (2)." In Dwarkadas’s  case  (1),this Court,  while confirming the aforesaid principle, held  that the word ’acquisition’ has quite a wide concept, meaning the procuring  of  property or the taking of it  permanently  or temporarily  and need not be confined to the acquisition  of legal title by the State in the property taken possession of In  Saghir  Ahmed’s case (3) applying the  said  principles, this Court held (at p. 728): "  If the effect of prohibition of the trade or business  of the  appellants  (citizens)  by  the  impugned   legislation amounts  to deprivation of their property or interest  in  a commercial undertaking within the meaning of Art. 31 (2)  of the  Constitution, does not the legislation  offend  against the  provision of that clause inasmuch as no  provision  for compensation has been made in the Act?  " (1)  [1954] S.C.R. 587, 608. (2) [1954] S.C.R. 674. (3) [1955] 1 S.C.R. 707, 728. 326 It  may  be noted that though the said  decision  was  given after the Constitution (First) Amendment Act 195 1, amending Art.  19 (6), it dealt with a matter that arose  before  the said amendment came into force.  In the aforesaid decisions, this  Court  by  a  majority  broadly  laid  down  the   two principles: (a) that both cls. (1) and (2) of Art. 31  dealt with  the doctrine of ’eminent domain’; they dealt with  the topic of ’compulsory acquisition of property’; and (b)  that the   word   ‘acquisition’  does   not   necessarily   imply acquisition  of  legal title by the State  in  the  property taken  possession  of, but may comprehend  cases  where  the citizen  has been ’substantially dispossessed’ of the  right to  onion  the property, with the result that the  right  to enjoy property has been seriously’ impaired or the value  of the  property has been ’materially’ reduced by the  impugned State legislation. The  Constitution (Fourth) Amendment Act, 1955, amended  cl. (2)  of Art. 31 and inserted cl. (2A) in that Article.   The amendments,  in so far as they are relevant to  the  present purpose, substitute in place of the words ’taken  possession of   or  acquired’  the  words  ’compulsorily  acquired   or requisitioned’  and  provide  an explanation  of  the  words ‘acquired  and  requisitioned’ in cl. (2A).  The  result  is that  unless  the law depriving any person of  his  property provides  for the transfer of the ownership or right to  the possession  of any property to the State, the law  does  not relate  to  ’acqtuisition or requisition’  of  property  and therefore the limitations placed upon the legislature  under

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cl.  (2) will not apply to such law.  While  realising  this legal  position brought about by the amendment to  the  Con- stitution, the learned counsel contends that the right to do business  is property as held in Saghir Ahmad’s case(1)  and that  Chapter IV-A of the Act in effect transfers  ownership of that business to the Corporation, owned or controlled  by the  State, though not directly but by the dual  process  of preventing the citizen from doing the business and  enabling the  Corporation  to do the same business in his  place  and that  that  result is effected by a device with  a  view  to avoid payment of (1)  [1955] i S.C.R. 707, 728. 327 compensation  for the entire business so  transferred.   The colourable nature of the legislation, the argument proceeds, lies  in  its  device or contrivance  to  evade  limitations imposed under Art. 31 (2).  To solve the problem  presented, it is necessary to have a correct appreciation of the phrase ‘colourable   legislation’.   This  Court  considered   this question  in  The  State of  Bihar  v.  Maharajadhiraja  Sir Kameshwar   Singh  of  Darbhanga(l).   In  that   case   the constitutional validity of the Bihar Land Reforms Act,  1950 (Bihar  30 of 1950), was questioned.  In the context of  the Bihar  Land  Reforms Act, 1950 (Bihar 30 of  1950),  it  was contended that the impugned Act was a fraud on the Constitu- tion and therefore void.  It -was stated that the Act, while pretending to comply with the Constitutional provisions when it  provided  for  the payment of  compensation,  in  effect produced  a scheme for non-payment of compensation by  shift or  contrivance.  Mahajan, J., as he then was, in  rejecting the argument observed at p.   947, thus: "  All these principles are well-settled.  But the  question is  whether they have any application to the  present  case. It  is by no means easy to impute a dishonest motive to  the legislature of a State and hold that it acted mala fide  and maliciously in passing the Bihar Land Reforms Act or that it perpetrated  a  fraud on the Constitution by  enacting  this law.   It may be that some of the provisions of the Act  may operate harshly on certain persons or a few of the zamindars and  may  be bad if they are in excess  of  the  legislative power of the Bihar Legislature but from that circumstance it does  not follow that the whole enactment is a fraud on  the Constitution.  From the premises that the estates of half-a- dozen  zamindars  may  be expropriated  without  payment  of compensation,  one  cannot jump to the conclusion  that  the whole  of the enactment is a, fraud on the  Constitution  or that  all the provisions as to payment of  compensation  are illusory." The aforesaid observations lend support to the argument that the  doctrine  of colourable legislation  imputes  dishonest motive or mala fides to the State (1)  [1952] S.C.R. 889. 328 making  the  law.   But,  Mukherjea, J.,  as  he  then  was, clarified  the legal position in K. C. Gajapati Narayan  Deo v.  The State of Orissa (1).  It was contended in that  case that   the  Orissa  Estates  Abolition  Act,  1952,  was   a colourable legislation and as such void.  Adverting to  that argument, Mukherjea, J., as he then was, says at p. 10 thus: "  It may be made clear at the outset that the  doctrine  of colourable legislation does not involve any question of bona fides  or  mala fides on the part of the  legislature.   The whole   doctrine  resolves  itself  into  the  question   of competency of a particular legislature to enact a particular law.   If the legislature is competent to pass a  particular

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law,  the  motives  which  impelled it  to  act  are  really irrelevant.   On  the other hand, if the  legislature  lacks competency,  the question of motive does not arise  at  all. Whether a statute is constitutional or not is thus always  a question  of power......... ...... If the Constitution of  a State  distributes the legislative powers amongst  different bodies,  which have to act within their  respective  spheres marked out by specific legislative entries, or if there  are limitations  on  the legislative authority in the  shape  of fundamedtal  rights,  questions do arise as to  whether  the legislature in a particular case has or has not, in  respect to  the  subject matter of the statute or in the  method  of enacting  it, transgressed the limits of its  constitutional powers.   Such  transgression  may be  patent,  manifest  or direct,  but it may also be disguised, covert  and  indirect and it is to this latter class of cases that the  expression ’colourable   legislation’  has  been  applied  in   certain judicial   pronouncements.    The  idea  conveyed   by   the expression  is  that although apparently  a  legislature  in passing a statute purported to act within the limits of  its powers,  yet  in substance and in  reality  it  transgressed these powers, the transgression being veiled by what appears on  proper examination, to be a mere presence  or  disguise. As was said by Duff, J., in Attorney-General for Ontario  v. Reciprocal Insurers (1924 A. C. 328 at p. 337): "  Where  the  law  making authority  is  of  a  limited  or qualified character it may be necessary to examine (1)  [1954] S.C.R. i. 329 with  some strictness the substance of the  legislation  for the  purpose of determining what is that the legislature  is really doing.’ In  other  words,  it is the substance of the  Act  that  is material and not merely the form or outward appearance,  and if  the subject-matter in substance is, something  which  is beyond the powers of that legislature to legislate upon, the form  in  which the law is clothed would not  save  it  from condemnation.    The   legislature   cannot   violate    the constitutional   prohibitions  by  employing   an   indirect method." We  have quoted the observations in extensor as they  neatly summarise the law on the subject.  The legal position may be briefly  stated  thus: The legislature can  only  make  laws within it legislative competence.  Its legislative field may be circumscribed by specific legislative entries or  limited by  fundamental  rights created by  the  Constitution.   The legislature  cannot over-step the field of  its  competency, directly  or indirectly.  The Court will scrutinize the  law to ascertain whether the legislature by device put-ports  to make  a law which, though in form appears to be  within  its sphere,  in effect and substance, reaches beyond it. If,  in fact,  it has power to make the law, its motives  in  making the law are irrelevant. The learned counsel for the petitioners can only succeed  if he  can  establish’  that the  provisions  of  Chapter  IV-A constitute colourable legislation within the meaning of  the aforesaid definition.  To test the validity of the argument, it  may be summarised thus : Business is I property’  within the meaning of Art. 191 (g) of the Constitution.   Chapter IV-A  of the Act transfers the business to  the  Corporation controlled. by the State Government.  Such a law should have provided  for  payment  of  compensation  for  the  business transferred  to the State Corporation ; instead, it  adopted the  device  of  cancelling the permit of  the  citizen  and giving  it to the Corporation and providing compensation  to

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the citizen only for tile unexpired period of the permit. 42 330 We  shall  now  proceed  to ascertain  whether  any  of  the aforesaid   ingredients   of  device  or   contrivance   are established in this case.  Does Chapter IV-A, in effect  and substance,  authorize, in law or fact, the transfer  of  the business  of  the citizens to the State  or  a  Corporation, owned  or controlled by the State ? Under Art. 191 of  the Constitution, every citizen has a fundamental right to carry on  any business subject to reasonable restrictions  imposed by the State under cl. (6) of Art. 19 in the interest of the general  public.   The Constitution (First)  Amendment  Act, 1951,  reserved  to  the State the right  to  make  law  for carrying  on  by  the State or by a  Corporation,  owned  or controlled  by  the State, any business  to  the  exclusion, complete  or  partial, of the citizens  or  otherwise.   The Constitution,  therefore,  enables the State to make  a  law placing reasonable restrictions on the right of a citizen to do  business  or  to  create a monopoly or  to  make  a  law empowering  the State to carry on business to the  exclusion of  a citizen.  The right to carry on business in  transport vehicles  on  public  pathways  is  certainly  one  of   the fundamental   rights  recognized  under  Art.  19   of   the Constitution.   The Motor Vehicles Act, 1939 (IV  of  1939), regulates  the  right  of a citizen to  carry  on  the  said business for protecting the rights of the public  generally. ’Permit’  is  defined under cl. (20) of s. 2 of the  Act  to mean  the  document issued by the Commission or a  State  or Regional  Transport  Authority  authorising  the  use  of  a transport vehicle as a contract carriage or stage  carriage, or  authorising  the owner as a private  carrier  or  public carrier  to  use  such  vehicle.   Section  57  of  the  Act prescribes  the  procedure  for applying  for  and  granting permits  to carry on the business in transport  vehicles  on public  highways.   Section 47 lays down the matters  to  be considered  by  the  Regional  Transport  Authority  in  the disposal  of  applications  for  such  transport   carriers. Section  59  gives the conditions of every permit  and  also prohibits the transfer of permit. from one person to another except  with  the  permission of  the  Transport  Authority. Under  s. 60, the Transport Authority which  granted  permit may cancel the permit or may suspend it for 331 such  period  as  it  thinks fit  for  any  of  the  reasons mentioned  therein.  Section 61 provides for cases where,  a permit-holder dies.  That section enables the success-.  sor to  use the permit for a period of three months and  to  get the permit transferred to him subject to the conditions laid down   therein.   Section  68-F  authorises   the   Regional Transport Authority, for the purpose of giving effect to  an approved  scheme in respect of a notified area  or  notified route,  to  refuse  to entertain  any  application  for  the renewal of any other permit, to cancel any existing  permit, to  modify the terms of any existing permit so as to  render the  permit  ineffective  beyond a specified  date,  and  to reduce  the number of vehicles authorised to be  used  under the  permit.  It is manifest from the  aforesaid  provisions that  the Regional Transport Authority can, in  exercise  of its regulatory power conferred on it in the interest of  the public,  issue  a permit to a ’person in regard to  a  stage carriage  authorising  him to use the same in  a  particular route for a particular period subject to the conditions laid down  in  the  permit,  suspend or  cancel  the  same  under specified conditions, and renew or refuse to renew the  same

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after  the  expiry of the period subject to  the  conditions laid down in the Act.  Under Ch.  IV-A, if a scheme has been promulgated  empowering the State Transport  Undertaking  to take on hand the transport service in relation to any  area, route or portion thereof to the exclusion of any person, who has  been  carrying  on  the business  in  that  route,  the Transport  Authority  is empowered to  cancel  the  existing permit   and   issue  a  permit  to  the   State   Transport Undertaking.   It  cannot  be said  that  if  the  Transport Authority  cancels  the permit of a person carrying  on  his transport  business in a route and gives it to another,  the process in. volves a transfer of business or undertaking  of the  quondam permit-holder to the new entrant.   Indeed  the process does not involve even a transfer of the permit  from one to another.  The true position is that one permit  comes to an end and another permit comes into being.  The power of cancellation of a permit in favour of one and issuing a  new permit to another are 332 necessary steps in the regulatory jurisdiction entrusted  to the  Regional Transport Authority.  The business of one  has nothing  to  do with the business of another; they  are  two independent  businesses  carried  on  under  two   different licences.  If that be the true legal position in the case of issue  of permits -before -Chapter IV-A was inserted in  the Act,  we  cannot see that the power of  cancellation  of  an existing  permit  and  issuing one to  the  State  Transport Undertaking  should  involve  a  transfer  of  the  previous permit-holder’s business to the State Transport Undertaking. The argument that the process contemplated by s. 68-F of the Act  involves  two integrated steps,  viz.,  cancelling  the existing  permit and preventing the  previous  permit-holder from  doing  the  business and then issuing a  permit  to  a nominee  of the State to enable it to do the  same  business and  thereby,  in  effect and  substance,  transferring  the business  of the existing permit-holder to the State or  its nominee,  appears to be attractive, but, in our view, it  is fallacious.  It may be that by the said process the existing permit-holder  is precluded from doing his business  and  it may also be that the State Transport Undertaking carries  on a  similar  business;  but  by no  stretch  of  language  or extension  of  legal fiction can it be said that  the  State Transport  Undertaking is doing the same business which  the previous permit- holder was doing.  If there is no  transfer in the case of cancellation of a permit in favour of one and issue  of a new permit to another, equally there  cannot  be any  such transfer in the case of issue of a permit  to  the State  Transport Undertaking.  Looking at the  business  not simply  from  the standpoint of the right to do  it  or  the activity involved in it, but also from the standpoint of its assets,  it becomes clear that no assets pertaining  to  the business of the quondam permit-holder are transferred to the State Transport Undertaking.  Though the cancellation of the permit has the effect of crippling his business, none of the assets of the business is taken over by the State  Transport Undertaking;  he  is left in the possession  of  the  entire assets  of  the business.  It is no doubt true that  in  the context of the scheme of nationalisation he may not be  able to make 333 use  of his assets in other routes or dispose of them  at  a great  advantage to himself; but, it cannot be said that  by cancelling  the permit, what is left with him is only the  ’ husk’.   In fact the entire assets of the business are  left with  him and the State Transport Undertaking has not  taken

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over the same. Lastly  it is said that ss. 68-G of the Act  which  provides for  payment  of compensation to the holder of  the  permit, indicates  that the legislature proceeded on the basis  that the  cancellation  of  a  permit  involved  a  transfer   of property’ from the previous permit-holder to the State.   In our  view,  no such irresistible conclusion flows  from  the said provision; as the permit is cancelled before the expiry of  the term fixed therein, the legislature thought  it  fit and  proper to give some compensation to  the  permit-holder who  is prevented from doing his business for the  unexpired period  of  the  permit.  Whether it is enacted  by  way  of abundant  caution, as the learned Attorney General says,  or the  provision  is made by the legislature to  mitigate  the hardship  that  is  caused  to  the  permit-holder  by   the premature  cancellation of the permit, we find it  difficult to  draw  the  inference from the said  provision  that  the legislature  assumed  that  a transfer of  the  business  is involved  in  the  process laid down in  Chapter  IV-A.   We therefore bold that Chapter IV-A of the Act does not provide for the transfer of ownership or the right to possession  of any  property  to the State or to a  Corporation,  Owned  or controlled by the State.  Under Art. 31 of the  Constitution unless there is such a transfer, the law shall be deemed not to  provide  for compulsory acquisition  or  requisition  of property  ; and therefore, in such a case,  no  compensation need  be provided for under Art. 31(2) of the  Constitution. We  therefore  hold that Chapter IV-A of the  Act  does  not infringe the fundamental right of the petitioners under Art. 31 of the Constitution of India. The next argument of the learned counsel for the petitioners is that even if Chapter 1V-A of the Act is  constitutionally valid,  the  petitioners could be deprived of  their  rights only in accordance with the law enacted for the purpose  and in the manner provided 334 therein,  and  that  in the present  case,  the  scheme  was promulgated  in  derogation  of the provision  of  the  said Chapter.   The learned counsel contends that the  provisions of Bs. 68-C and 68-D have not been complied with in  framing the  scheme.   The  learned counsel’s  contentions  in  this regard fall under different sub-heads, and we shall  proceed to consider them seriatim. The first contention is that no State Transport  Undertaking is  constituted  under  the Central Act  and  therefore  the scheme   initiated   by  the  said   Transport   Undertaking constituted  under the Motor Vehicles (Hyderabad  Amendment) Act,  1956, ",as bad.  To appreciate this argument  some  of the facts may be stated.  Before the State of Andhra Pradesh was  formed  in November 1956,  eight  districts,  popularly called  the Telengana, which are now in the  Andhra  Pradesh State,  were  formerly  part of  the  Hyderabad  State.   On September 29, 1956, the Motor Vehicles (Hyderabad Amendment) Act, 1956, became law, whereunder Chapter IV-A was  inserted in  the  Central  Act in its application  to  the  State  of Hyderabad.  Under s. 68_ A of Chapter IV-A of that Act,  the State  Transport  Undertaking was defined to mean  the  Road Transport  Department of the State providing  road  service. Under that Act, therefore, the Road Transport Department  of the   Hyderabad  State  was  functioning  as   a   statutory authority.   After the States Reorganisation Act  came  into force,  the  said  eight districts of  the  Hyderabad  State became part of the State of Andhra Pradesh; with the  result that  the Road Transport Department of the  Hyderabad  State became the Road Transport Department of the State of  Andhra

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Pradesh, though it was exercising its powers only in respect of that part of the Andhra Pradesh State, popularly known as Telengana.   After the Andhra Pradesh State was formed,  Sri Guru  Pershad, styled as the General Manager of  the  Andhra Pradesh  Road  Transport Undertaking, published  the  scheme under  s. 68-C of the Act.  The argument is that  the  State Transport  Authority constituted under Chapter IV-A  of  the Hyderabad (Amendment) Act was not legally                             335 constituted  as  the State Transport Undertaking  under  the Central Act and, therefore, the initiation of the scheme  by the  Hyderabad  State Transport Undertaking,  which  has  no legal  status  under the Central Act was bad.   It  is  also pointed  out  that the State Transport Authority  under  the Hyderabad Act differs from that under the Central Act in the following three, respects:    (1)  statutory parentage;  (2) character   and   constitution   ;   and   (3)   territorial jurisdiction; and therefore the authority constituted  under the  Hyderabad  Act cannot function under the  Central  Act. This  argument has no relevancy to the facts of the  present case.   We are not concerned in this case with  a  statutory authority created under one Act and pressed into service for the purpose of another Act, when the latter has adopted  the said statutory authority as one constituted under that  Act. Here  there is the Andhra Pradesh Road Transport  Department providing  road transport service in Telengana, which  is  a part of that State, and that Department, when it was a  part of  the  Hyderabad  State was functioning  as  part  of  the Hyderabad  State Secretariat.  The mere fact that  the  Road Transport  Department  of  the  Andhra  Pradesh  State   was originally  part of a department of another State  and  came under  the definition of the State Transport Undertaking  of the Hyderabad Act could not make the said department any the less  the  Road Transport Department of the  Andhra  Pradesh State.   Assuming.  for a moment that the Hyderabad  Act  is still  in force in the Telengatia area, there is nothing  in law which prevents a department coming under the  definition of  two  statutes.   Under  the  Act,  the  State  Transport Undertaking  means  an Undertaking providing  road  trasport service  where  such undertaking is carried on  by  a  State Government.   This section does not prescribe the  parentage of   the  undertaking  or  impose  a  condition   that   the undertaking should be providing transport service throughout the  State.  The State Government maintained the  department for  providing  road  transport service  and  therefore  the department  clearly  falls within the  definition  of  State Transport Undertaking.  The citation from Salmond on, 336 Jurisprudence to the. effect that the law in creating  legal persons always does so by personifying some real thing  does not  touch  the question that falls to be  decided  in  this case; for, the real thing, viz., the department, falls under the  definition  of  both  the Acts  and  therefore  it  can function as a statutory authority under both the -Acts.   We therefore  hold  that the Road Transport Department  of  the Andhra  Pradesh Government is a State Transport  Undertaking under the Central Act and therefore it was within its  legal competence to initiate the scheme. The  next objection raised is that the scheme was  published by  Sri  Guru  Pershad, the General  Manager  of  the  State Transport  Undertaking and that it has not been  established that  he had been legally authorized to represent the  State Transport  Undertaking, the statutory authority  constituted under  the  Act.  We have already held  that  the  Transport Department of the disintegrated Hyderabad State continued to

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function  as the Transport Department of the Andhra  Pradesh State  after the merger of Telengana areas with  the  Andhra State.   In  the affidavit filed by the petitioners,  it  is stated that Sri Guru Pershad was the General Manager of  the Road Transport Department of the erstwhile Hyderabad  State, that  he was never appointed as the General Manager  of  the State Transport Undertaking of the Andhra Pradesh State  and that,  therefore,  he  had no legal  authority  whatever  to publish  the  scheme.   In the counter  affidavit  filed  on behalf  of  the  first respondent, it is  averred  that  the General Manager of the Andhra Pradesh Road Transport,  which was  a State Transport Undertaking within the meaning of  s. 68-B of the Act, prepared a scheme and that was published in the  Andhra  Pradesh Gazette on November 14,  1957.   It  is therefore  a  common  case that Sri  Guru  Pershad  was  the General  Manager  of the Road Transport Undertaking  of  the erstwhile  Hyderabad State.  It is not denied that Sri  Guru Pershad  continued  to  be  the  General  Manager  of   that Department  functioning in Andhra Pradesh.  We have  already held  that the same department was the  statutory  authority functioning under                             337 the  Central  Act.  Sri Guru Pershad was  also  the  General Manager of that undertaking.  In the circumstances, there is no substance in the contention that Sri Guru Pershad  should have   been  appointed  as  the  -General  Manager  of   the Undertaking  under  the  Central Act.   This  is  the  first argument  under  a  different garb.   The  preexisting  Road Transport Department of the erstwhile Hyderabad State,  with its General Manager, Sri Guru Pershad, continued to function as a statutory authority under the Central Act and therefore he had the legal authority to represent the State  Transport Undertaking, which was a statutory authority. lie  published the  scheme and subscribed it as Guru Pershad,  the  General Manager  of the State Transport Undertaking (Andhra  Pradesh State Road Transport).  The notification, therefore, must be held to have been issued by the State Transport  Undertaking functioning under the Central Act. The learned counsel then contends that the scheme  published does  not disclose that the State Transport Undertaking  was of  the  opinion  that  the  scheme  was  necessary  in  the interests  of the public and, therefore, -is  the  necessary condition for the initiation of the scheme was not  complied with,  the scheme could not be enforced.  Section 68-C  says that  where  any State Transport Undertaking is  of  opinion that  for  specified reasons it is necessary in  the  public interest that road port service should be run or operated by the  Transport Undertaking, it may prepare a  scheme  giving particulars  of  the scheme and publish it in  the  Official Gazette.  An express recital of the formation of the opinion by the Undertaking in the scheme is not made a condition  of the  validity of the scheme.  The scheme published in  terms of  the section shall give particulars of the nature of  the service proposed to be rendered, the area or route  proposed to be covered and such other particulars respecting thereto. It  is  true that the preparation of the scheme is  made  to depend upon the subjective opinion of the State  Undertaking as regards the necessity for such a scheme.  The 43 338 only  question,  therefore, is whether the  State  Transport Undertaking  formed the opinion before preparing the  scheme and causing it to be published in the Official Gazette.  The scheme  published,  as already noticed, was signed  by  Guru Pershad,  General  Manager,  State  Transport   Undertaking,

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Andhra  Pradesh Road Transport.  The preamble to the  scheme reads : " In exercise of the powers conferred by section 68-C of the Motor  Vehicles  Act, 1939, it is hereby proposed,  for  the purpose of providing an efficient, adequate, economical  and properly  coordinated  road  transport  service  in   public interest, to operate the following transport services as per the  particulars given below with effect from a date  to  be notified by the Government." We have already held that Guru Pershad represented the State Transport Undertaking.  The scheme was proposed by the  said Undertaking  in exercise of the powers under s. 68-C of  the Act  for  the purpose of providing an  efficient,  adequate, economical  and properly coordinated road transport  service in  public  interest.   Except for the fact  that  the  word ’opinion’ is omitted, the first part of the section 68-C  is incorporated  in  the  preamble  of the  scheme  ;  and,  in addition,  it also discloses that the scheme is proposed  in exercise  of  the powers conferred on  the  State  Transport Undertaking  under s. 68-C of the Act.  The State  Transport Authority  can frame a scheme only if it is of opinion  that it  is necessary in public interest that the road  transport service should be run or operated by the Road Transport  Un- dertaking.   When it proposes, for the reasons mentioned  in the  section,  a  scheme  providing  for  such  a  transport undertaking,  it is a manifest expression of its opinion  in that  regard.  We gather from a reading of the  scheme  that the State Transport Undertaking formed the necessary opinion before preparing the scheme and publishing it.  The argument of  the learned counsel carries technicality to  a  breaking point and for the aforesaid reasons, we reject it. The  next  attack of the learned counsel centres  round  the provisions  of  s.  68-D  (2)  of  the  Act.   It  would  be convenient, before adverting to his argument, to read 339 s.   68-D  and the relevant rules made under the Act.   They read : Sec. 68-D : (1) Any person affected by the scheme  published under  s. 68-C may, within thirty days from the date of  the publication  of  the scheme in the  Official  Gazette,  file objections thereto before the State Government. (2)  The   State  Government  may,  after  considering   the objections  and after giving an opportunity to the  objector or his representatives and the representatives of the  State Transport Undertaking to be heard in the matter, if they  so desire, approve or modify the scheme. (3)  The  scheme as approved or modified  under  sub-section (2)  shall then be published in the Official Gazette by  the State  Government and the same shall thereupon become  final and  shall  be called the approved scheme and  the  area  or route to which it relates shall be called the notified  area or notified route. Provided  that  no such scheme which relates to  any  inter- State route shall be deemed to be an approved scheme  unless it has been published in the Official Gazette with  previous approval of the Central Government. Rule 8 : Filing of objections (procedure) Any  person,  concern or authority aggrieved by  the  scheme published  under s. 68-C may, within the  specified  period, file  before  the  Secretary  to  Government  in  charge  of Transport  Department,  objections  and  representations  in writing  setting  forth  concisely the  reasons  in  support thereof Rule 9 : Conditions for submission of objections No  representation  or objection in respect  of  any  scheme

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published in the Official Gazette shall be considered by the Government unless it is made in accordance with rule 8. Rule 10 : Consideration of scheme (Procedure regarding) :- After  the receipt of the objections referred to above,  the Government  may, after fixing the date, time and  place  for holding  an enquiry and after giving if they so  desire,  at least seven clear days’ notice of 340 such  time  and place to the persons  who  filed  objections under  rule 8, proceed to consider the objections  and  pass such orders as they may deem fit after giving an Opportunity to the person of,being heard in person or through authorised representatives." Under the section, the procedure prescribed for the approval of  a  scheme may be summarized thus : The  State  Transport Undertaking  prepares a scheme providing for road  transport service in relation to an area, to be run or operated by the State  Transport  Undertaking,  whether  to  the  exclusion, complete  or partial, of other persons, and publishes it  in the Official Gazette. Any person affected by the scheme may, within  thirty days from the date of its  publication,  file before  the Secretary to Government in charge  of  Transport Department  objections and representations in  writing  with reasons in support thereof.  After receiving the  objections and  representations,  the Government fixes a date  for  the hearing  and after giving an opportunity to the  persons  of being  heard  in person or  by  authorized  representatives, considers  the objections and then modifies or  approves  of the scheme. The  following  procedure  was  in  fact  followed  by   the Government  in this case: After the scheme was prepared  and published  in  the  Official Gazette,  the  petitioners  and others  filed objections before the Secretary to  Government Transport  Department,  within  the  time  prescribed.   138 objections were received and individual notices were  issued by  the Government by registered post to all. the  objectors fixing  the date of the hearing for December 26, 1957.   The Secretary  to  Government,  Home Department,  in  charge  of Transport, heard the representations made by the  objectors, some in person and others through their advocates, and  also the  representation  is made by the General Manager  of  the Road  Transport Undertaking.  The Secretary,  after  hearing the objections, prepared notes and placed the entire matter, with  his notes, before the Chief Minister,  who  considered the  matter and passed orders rejecting the  objections  and approving the scheme; and the approved scheme was thereafter issued in the name of the Governor. 341 On the aforesaid facts, the first contention raised is  that the State Government in approving the scheme was discharging a  quasi-judicial  act and therefore the  Government  should have  given a personal hearing to the objectors  instead  of entrusting  that  duty to its Secretary.   Secondly,  it  is stated that a judicial hearing implies that the same -person hears and gives the decision.  But in this case the  hearing is  given  by the Secretary and the decision  by  the  Chief Minister.  Thirdly, it is contended on the same  hypothesis, that even if the hearing given by the Secretary be deemed to be  a hearing given by the State Government, the hearing  is vitiated by the fact that the Secretary who gave the hearing is the Secretary in charge of the Transport Department.  The Transport  Department, it is stated, in effect was made  the judge  of  its  own  cause, and  this  offends  one  of  the fundamental  principles of judicial procedure.   Lastly,  it was  pointed  out  that though the enquiry  was  posted  for

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hearing  on December 26, 1957, even before the  enquiry  was commenced,  the  Chief Secretary to the Government  gave  an interview  to  the  ’Deccan Chronicle’ and  the  I  Golconda Patrika’ to the effect that the Government bad already taken a  decision  to nationalize the road  transport  in  Krishna District  and  some routes had been  chosen,  including  the Guntur-Vijayawada   route,  thereby  indicating   that   the Government  has  prejudged  the  case  before  holding   the enquiry.   The  learned Attorney General counters  the  said argument  by  stating  that the  State  Government  strictly followed the procedure prescribed under s. 68-C of the  Act, that  the said Government, being an impersonal  body,  (gave the  hearing through the machinery prescribed by  law,  that the  said Government was discharging only an  administrative act  and not a judicial act in the matter of  approving  the scheme, that even if it did perform a judicial act, the Home Secretary  in  charge  of  Transport  Department  had   only collected  the material and the final orders were made  only by  the  Chief  Minister  and  that  the  Secretary’s  press interview  was  nothing more than a mere indication  of  the factum of the proposed scheme. 342 At  the  outset  it  would be  convenient  to  consider  the question  whether the State Government acts  quasijudicially in discharging its functions under s. 68-C of the Act.   The criteria to ascertain whether a particular act is a judicial act  or  an  administrative one, have been  laid  down  with clarity  by  Lord  Justice  Atkin  ’in  Rex  v.  Electricity Commissioners,  Ex Parte London Electricity Joint  Committee Co. (1) elaborated by Lord Justice Scrutton in Rex v. London County   Council,   Ex   Parte   Entertainments   Protection Association  Ltd. (2) and authoritatively re-stated by  this Court  in  Province of Bombay v. Khusaldas S. Advani  (3)  . They  laid  down the following conditions: (a) the  body  of persons must have legal authority; (b) the authority  should be  given  to determine questions affecting  the  rights  of subjects and (c) they should have a duty to act  judicially. In  the last of the cases cited supra, Das, J., as  he  then was, analysed the scope of the third condition thus at  page 725: "  (i) that if a statute empowers an authority not  being  a Court in the ordinary sense, to decide disputes arising  out of  a claim made by one party under the statute which  claim is opposed by another party and to determine the  respective rights  of  the contesting parties who are opposed  to  each other, there is a lis and prima facie and in the absence  of anything  in the statute to the contrary it is the  duty  of the  authority  to act judicially and the  decision  of  the authority is a quasi-judicial act; and (ii)that  if a statutory authority has power to do  any  act which will prejudicially affect the subject, then,  although there  are not two parties apart from the authority and  the contest  is between the authority proposing to the  act  and the  subject  opposing it, the final  determination  of  the authority  will  yet be a quasi. judicial act  provided  the authority is required by the statute to act judicially." In  the  case In re Banwarilal Roy (4) Das, J., as  he  then was, said much to the same effect at page 800: "  A  judicial  or quasi-judicial act, on  the  other  hand, implies more than mere application of the mind (1)  [1924] 1 K.B. 171. (3)  [1950] S.C.R. 621. (2)  [1931] 2 K.B. 215. (4)  [1944] 48 C.W.N. 766. 343

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or  the formation of the opinion.  It has reference  to  the mode or manner in which that opinion is formed.  It  implies a  proposal and an opposition’ and a decision on the  issue. It  vaguely  connotes ’hearing evidence and  opposition’  as Scrutton,  L. J., expressed it.  The degree of formality  of the  procedure  as to receiving or hearing evidence  may  be more or less according to the requirements of the particular statute,  but  there is an indefinable  yet  an  appreciable difference between the method of doing an administrative  or executive act and a judicial or quasi-judicial act." This  statement  is  practically in accord  with  the  first proposition extracted above.  This Court again, in  Nagendra Nath  Bora  v.  Commissioner of Hills Division  (1)  in  the context of the provisions of Eastern Bengal and Assam Excise Act,  1910 (I of 1910), considered the scope of the  concept of  ’judicial act’.  Sinha, J., who delivered the.  judgment of the Court, made the following observations at page 408: "  Whether  or  not  an  administrative  body  or  authority functions  as  a purely administrative one or  in  a  quasi- judicial  capacity, must be determined in each case,  on  an examination  of  the relevant statute and the  rules  framed thereunder." In  Express Newspapers Ltd. v. The Union of India  (2)  this Court  again  reviewed the law on the subject  to  ascertain whether  the  Wage  Board  functioning  under  the   Working Journalists   (Conditions  of  Service)  and   Miscellaneous Provisions  Act,  1955  (45 of 1955)  was  only  discharging administrative   functions   or   quasijudicial   functions. Bhagwati, J., made the following observation at page 613: "  If the functions performed by the Wage Board  would  thus consist  of  the determination of the issues  as  between  a proposition and an opposition on data and materials gathered by  the Board in answers to the questionnaire issued to  all parties interested and the evidence led before it, there  is no doubt that there would be imported in the proceedings  of the Wage Board a duty to act judicially and the functions (1) A.I.R. 1958 S. C. 398. (2) A.I.R. 1958 S.C. 578. 344 performed  by  the  Wage Board would  be  quasi-judicial  in character." The  aforesaid  three  decisions lay down  that  whether  an administrative tribunal has a duty to act judicially  should be  gathered from the provisions of the  particular  statute and the rules made thereunder, and they clearly express  the view  that  if  an  authority  is  called  upon  to   decide respective  rights  of contesting parties or, to put  it  in other  words, if there is a lis, ordinarily there will be  a duty  on the part of the said authority to  act  judicially. Applying   the  aforesaid  test,  let  us   scrutinize   the provisions of ss. 68-C and 68-D and the relevant rules  made under the Act to ascertain whether under the said provisions the   State  Government  performs  a  judicial  act  or   an administrative one.  Section 68-C may be divided into  three parts: (1) The State Transport Undertaking should come to an opinion  that  it is necessary in public interest  that  the road  transport service in general or any particular.  class of such service in relation to any area or route or  portion thereof  should  be run or operated by the  State  Transport Undertaking, whether to the exclusion, complete or  partial, of  other persons or otherwise ; (ii) it forms that  opinion for  the  purpose  of  providing  an  efficient,   adequate, economical and properly co-ordinated road transport service; and  (iii)  after it comes to that opinion,  it  prepares  a scheme  giving  particulars of the nature  of  the  services

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proposed  to  be  rendered, area or  route  proposed  to  be covered and such other particulars respecting thereto as may be prescribed and causes it to be published in the  Official Gazette.  The section, therefore, makes a clear  distinction between  the  purpose for which a scheme is framed  and  the particulars of the scheme.  To state it differently,  though the purpose is to provide an efficient, adequate, economical and  coordinated road transport service in public  interest, the scheme proposed may affect individual rights such as the exclusion,   complete  or  partial,  of  other  persons   or otherwise,  from  the business in any  particular  route  or routes.   Under  s.  68-C, therefore,  the  State  Transport Undertaking  may propose a scheme affecting the  proprietary rights 345 of  individual permit-holders doing transport business in  a particular route or routes.. The said proposal threatens the proprietary right of that individual or individuals.   Under s.  68-D  read with Rules 8 and 10 made under the  Act,  any person  affected by the aforesaid proposed, scheme may  file objections within the -prescribed time before the  Secretary of  the Transport’ Department.  Under the said  provisions,. the  State Government is enjoined to approve or  modify  the scheme  after  holding  an  enquiry  and  after  giving   an opportunity  to the objectors or their  representatives  and the representatives of the State Transport Undertaking to be heard  in  the  matter  in  person  or  through   authorised representatives.   Therefore, the, proceeding prescribed  is closely approximated to that obtaining in courts of justice. There  are two parties to the dispute.  The State  Transport Undertaking,  which is a statutory authority under the  Act, threatens to infringe the rights of a, citizen.  The citizen may  object to the scheme on public grounds or  on  personal grounds.  He may oppose the scheme, on the ground that it is not in the interest of the public or on the ground that  the route  which  he is exploiting should be excluded  from  the scheme for various reasons., There is, therefore, a proposal and an opposition and the third party, the State  Government is  to  decide  that  lis and prima  facie  it  must  do  so judicially.   The  position is put beyond any doubt  by  the provision  in the Act and the Rules which expressly  require that the State Government must decide the dispute  according to the procedure prescribed by the Act and the Rules  framed thereunder, viz., after considering the objections and after hearing. both the parties.  It therefore appears to us  that this is an obvious case where the Act imposes a duty on  the State  Government to decide the act judicially in  approving or   modifying   the  scheme  proposed  by   the   Transport Undertaking. The  learned Attorney General argues that ss. 68-C and  68-D do  not contemplate the enquiry in regard to the  rights  of any parties, that the scheme proposed is 44 346 only  for the purpose of an efficient, adequate,  economical and  properly coordinated bus transport service  and  should relate only to that purpose and that, therefore, the enquiry contemplated under s. 68-D, though assimilated to a judicial procedure, does not make the approval of the scheme any  the less  an  administrative  act.   To  put  it  shortly,   his contention  is  that the Government is discharging  only  an administrative  duty  in  approving  the  scheme  in  public interest  and no rights of the parties are involved  in  the process.   There is some plausibility and attraction in  the argument,  but we cannot accept either the premises  or  the

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conclusions.   The scheme proposed may exclude persons,  who have  proprietary rights in a route or routes.  As  we  have pointed  out,  the purpose must be  distinguished  from  the particulars  in  the  scheme.   The  scheme  propounded  may exclude  persons  from a route or routes  and  the  affected party  is given a remedy to apply to the Government and  the Government  is  enjoined to decide the dispute  between  the contesting parties.  The statute clearly, therefore, imposes a  duty upon the Government to act judicially.  Even if  the grounds  of attack against the scheme are confined  only  to the  purpose mentioned in s. 68-C-we cannot agree with  this contention-the position will not be different, for, even  in that  case  there is a dispute between the  State  Transport Undertaking  and  the  person excluded  in  respect  of  the scheme, though the objections are limited to the purpose  of the scheme.  In either view the said two provisions, ss. 68- C and 68-D, comply with the three criteria of a judicial act laid down by this Court. Support  is sought to be drawn for this contention from  the decision  of the House of Lords in Franklin v.  Minister  of Town and Country Planning (1).  As strong reliance is placed on  this decision, it is necessary to consider the  same  in some detail.  The facts of that case are: On August 3, 1946, the  respondent,  Lewis  Silkin, as  Minister  of  Town  and Country  Planning,  prepared the draft  Stevenage  New  Town (Designation)  Order, 1946, under para. 1 of Schedule  1  to the New (1)  [1948] A.C. 87.  347 Towns  Act, 1946, and on or about August 6, 1946, he  caused the  same  to  be  published and  notices  to  be  given  as prescribed  by  paragraph  2  of  Schedule  I  to  the  Act. Thereafter  objections  were  received  from  a  number   of persons,   including  the  appellants.    Accordingly,   the respondent instructed Mr. Arnold Morris, an Inspector of the Ministry  of  Town and Country Planning, to  hold  a  public local  inquiry  as  prescribed by paragraph 3  of  the  said Schedule.   Mr.  Morris held the inquiry at the  Town  Hall, Stevenage, on October 7 and 8, 1946, and on October 25, made a report to the respondent in which he set out a summary  of the  sub.  missions made and the evidence given  by  and  on behalf  of  the objectors and attached  thereto  a  complete transcript  of the proceedings, which began with an  opening statement by Mr. Morris giving a brief recapitulation of the reasons that had led to the designation of Stevenage as  the site  of a New Town.  On November 11, 1946,  the  respondent made the order in terms of paragraph 4 of Schedule I to  the Act.   The appellants applied to the High Court to have  the order quashed.. It was contended, inter alia, that the  said order was not within the powers of the New Towns Act,  1946, or alternatively, that the requirements of the said Act have not been complied with; that the Minister who made the order had stated, before the Bill was made into law, that he would make  the  said order, and therefore he was biassed  in  any consideration  of the said objections.  The House  of  Lords held that the respondent’s functions under the Act were only administrative and that he had complied with the  provisions of  the  statute.  In that view, the order of the  Court  of Appeal  dismissing the applications filed by the  appellants was  confirmed.  Lord Thankerton in his speech at page  102, observed thus: "In  my opinion, no judicial, or quasi-judicial, pinion,  no duty  was  imposed on the respondent, and any  reference  to judicial  duty, or bias, is irrelevant in the present  case. The  respondent’s  duties under s. 1 of the Act and  sch.  1

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thereto  are, in my opinion, purely administrative, but  the Act prescribes certain methods of or steps in, discharge  of that duty.................... it 348 seems  clear also, that the purpose of inviting  objections, and,  where  they  are not Withdrawn I of  having  a  public inquiry, to be held by someone other than the respondent, to whom that person reports, was for the further information of the  respondent in order to the final consideration  of  the Soundness       of       the      scheme’       of       the designation...................  I  am  of  opinion  that  no judicial  duty  is laid on the respondent  in  discharge  of these  statutory  duties,  and that  the  only  question  is whether  he  has complied With the Statutory  directions  to appoint a person to hold the public inquiry, and to consider that person’s report. At  first  sight the facts of this case may appear  to  have some analogy to those in the present case, but on "a  deeper scrutiny  of the facts and the provisions of the  New  Towns Act,  1946,  and  Chapter IV-A of  the  Act,  they  disclose essential differences in fundamentals.  Under the New  Towns Act,  1946,  the following steps for developing a  new  town have  been  laid  down: (1) It is  left  to  the  Minister’s Subjective satisfaction, after consulting local authorities, who  appear  to  him  to be  concerned,  to  make  an  order designating.  a particular area as the site of the  proposed new  town  ;  (2)  when he proposes to  make  an  order,  he prepares  a draft of that order giving the necessary  parti- culars  and publishes it in the London Gazette  calling  for objections to the, proposed order within a prescribed  time; (3) if any objection is made to the proposed order, he shall cause  a public local enquiry to be held and shall  consider the  report of the person by whom the enquiry was held;  and (4)  any person desiring to challenge the validity  of  that order may apply to the High Court and he can get that  order set  aside only if he satisfies the Court that the order  is not within the powers of that Act or that his interests have been  substantially prejudiced by any requirements  of  that Act  not having been complied with.  The steps to  be  taken for  nationalising the Road Transport under the Act  are  as follows:  (1)  The State Transport Undertaking, which  is  a statutory  authority under the Act, proposes a  scheme;  (2) the scheme may provide that the road transport services 349 should   -be  run  or  operated  by  the   State   Transport Undertaking to the exclusion of a person or persons; (3) any Person,   affected   may   file   objections   before    the Government;(4)   the  Government  following  the  rules   of judicial   procedure   decides  the  dispute   between   the Undertaking  and  -the person or  persons  affected;  (5)the dispute  is not necessarily confined only to  the  question- whether the ’statutory requirements have been complied with, but  may  also relate to the question whether  a  particular person  or  persons  should  not. be  excluded;  and  (6)  a personal hearing should be given to both the parties by  the Government.. A  comparison  of the procedural steps under both  the  Acts brings  out  in  bold relief the  nature  of  the  enquiries contemplated  under  the two statutes.  There, there  is  no lis,  no  personal  hearing  and  even  the  public  enquiry contemplated by a third party is presumably confined to  the question  of statutory requirements, or at any rate was  for eliciting further information for the Minister.  Here, there is  a  clear dispute between the two parties.   The  dispute comprehends  not only objections raised on  public  grounds,

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but also in vindication of private rights and-it is required to  be  decided  by  the State  Government  after  giving  a personal’  hearing  and  following  the  rules  of  judicial procedure.   Though  there  may be  some  justification  for holding, on the facts of the case before the House of  Lords that  that  Act did not contemplate a judicial  act-on  that question  we do not propose to express our opinion-there  is absolutely  none  for holding in the present case  that  the Government  is  not performing a judicial  act.   Robson  in ’Justice  and  Administrative  Law’,  commenting  upon   the aforesaid decision, makes the following observation at  page 533: "  It should have been obvious from a cursory glance at  the New  Towns Act that the rules of natural justice  could  not apply  to the Minister’s action in making an order, for  the simple reason that the initiative lies wholly with him.  His role  is  not to consider whether an order made by  a  local authority should be confirmed, nor does he have to determine a  controversy  between  a,  public  authority  and  private interests. 350 The   responsibility  of  seeing  that  the   intention   of Parliament is carried out is placed on him." The aforesaid observations explain the principle  underlying that decision and that principle cannot have any application to   the   facts  of  this  case.   In   I   Principles   of Administrative  Law  by Griffith and Street,  the  following comment   is  found  on  the  aforesaid  decision  :   After considering  the  provisions of s. 1 of the New  Towns  Act, 1946, the authors say- " Like the town-planning legislation, this differs from  the Housing  Acts  in that the Minister is a  party  throughout. Further,  the  Minister  is  not  statutorily  required   to consider  the  objections.  It is obvious,  as  the  statute itself states, that the creation of new towns is of national interest." At page 176, the authors proceed to state: Lord Thankerton did not analyse the meanings of I  judicial’ and  I  administrative  nor did he  specify  the  particular factors   which   motivated  his  classification.    It   is permissible  to  conclude  that he looked at the  Act  as  a whole,  applying a theory of interpretation similar  to  the rule in Heydon’s Case (1584, 3 Co. Rep. 7a, 7b)." At page 178, they conclude thus:  "  It  is submitted, however, that  the  thoroughness  with which  the  Courts analysed the statutes in  the  Errington, Robinson, Johnson and Franklin Cases and the emphasis  which they have placed on the fact that their decisions have  been based  solely on the statute under consideration makes  such an approach inevitable." It is therefore clear that Franklin’s Case is based upon the interpretation   of   the  provisions  of   that   Act   and particularly on the ground that the object of the enquiry is to  further  inform  the mind of the  Minister  and  not  to consider  any issue between the Minister and the  objectors. The  decision in that case is not of any help to decide  the present  case,  which  turns upon the  construction  of  the provisions  of the Act.  For the aforesaid reasons, we  hold that  the  State  Government’s  order under  s.  68-D  is  a judicial act. 351 The  next question is whether the State Government  disposed of  the  objections  of the petitioners  judicially  in  the manner prescribed by the Act.  It is said that under the Act and  rules  framed thereunder, the State  Government  should

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hear  the dispute, but in this case the Secretary in  charge of   the  Transport  Department,  who  is  not   the   State Government,  gave the hearing.  The State Government  is  an impersonal  body  and  it  can  only  function  through  the machinery and in the manner prescribed by law.  Clause  (60) of  s. 2 of the General Clauses Act, 1897, defines  I  State Government’  as respects anything done or to be  done  after the  commencement of the Constitution (VII  Amendment)  Act, 1956,  to  mean, in a State, the Governor, and  in  a  Union Territory, the Central Government.  Under Art. 154(1) of the Constitution,  I the executive power of the State  shall  be vested in the Governor and shall be exercised by him  either directly   or  through  officers  subordinate  to   him   in accordance with this Constitution’.  Article 163 enacts that ’  there  shall  be a Council of Ministers  with  the  Chief Minister  at the head to aid and advise the Governor in  the exercise  of his functions, except in so far as he is by  or under  this Constitution required to exercise his  functions -or any of them in his discretion’.  Article 166(1)  enjoins that  I  all executive action of the Government of  a  State shall be expressed to be taken in the name of the Governor’. Sub-clause  (2) of that Article says that ’orders and  other instruments  made and executed in the name of  the  Governor shall be authenticated in such manner as may be specified in rules  to be made by the Governor’.  And under sub-cl.  (3), ’the  Governor  shall make rules for  tile  more  convenient transaction of the business of the Government of the  State, and for the allocation among Ministers of the said  business in  so far as it is not business with respect to  which  the Governor is by or under this Constitution required to act in his  discretion  ’. In exercise of the powers  conferred  by cls.  (2)  and  (3) of Art. 166  of  the  Constitution,  the Government  of  Madras  made rules  styled  as  ’The  Madras Government  Business  Rules and  Secretariat  Instructions’. Rule 9 thereof prescribes 352 that without prejudice to the provisions of r. 7, the  Minister in charge of a. department shall be  primarily responsible for,the disposal of the business appertaining to that  department.  Rule 21 enacts that except  as  otherwise provided  by  any  other Rule,  cases  shall  ordinarily  be disposed  of  by or under the authority of the  Minister  in charge  who  may,  by means of standing  orders,  give  such directions as he thinks fit for the disposal of cases in the department.  Copies of such standing orders shall be sent to the  Governor and the Chief Minister.  Rule 11 says  that  I all  orders or instruments made or executed by or on  behalf of the Government of the State shall be expressed to be made or  executed  in the name of the Governor’.   Under  r.  12, every  order  or instrument of the Government of  the  State shall  be  signed  either  by  a  Secretary,  an  Additional Secretary,   a  Joint  Secretary,  a  draftsman,  a   Deputy Secretary, an, Under Secretary or an Assistant Secretary  to the Government of the State or such other officers as may be specially empowered in that behalf and such signature  shall be deemed to be the proper authentication of such order or instrument’. After the formation of the Andhra State on, October 3, 1953, the  rules  made  by  the  Governor  of  Madras,  under  the provisions of the States Reorganization Act, Continue to  be the  rules  of  the Andhra State till they  are  amended  in accordance  with’, such law.  The Governor of Andhra  State, in  exercise of the powers conferred by cls. (2) and (3)  of Art.  166  of  the Constitution directed  that  until  other provisions  are  made in this regard, ’the business  of  the

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Government  of Andhra be transacted in accordance  with  the Madras   Government   Business   Rules.   and    Secretariat Instructions  in force on the first day of  October,  1953’. On  October  26,  1956, after the formation  of  the  Andhra Pradesh State, as the Andhra Pradesh was not a new State but a continuation of the Andhra State, though there is  change, in its name, the business rules of the Andhra state continue to  govern the Secretariat of the AndhraPradesh  Government. The effect of the aforesaid provisions may be stated thus: A State Government 353 means  the Governor; the executive power of the State  vests in  the  Governor;  it is exercised by him  directly  or  by officers   subordinate  to  him  in  accordance   with   the provisions of the Constitution; the Ministers headed by  the Chief Minister advise him in the exercise of his  functions; the  Governor made rules enabling the Minister in charge  of particular  department  to dispose of cases before  him  and also  authorizing him, by means of standing orders, to  give such  directions  as he thinks fit for the disposal  of  the cases  in the department.  Pursuant to the rule, the  record discloses,  the  Chief  Minister,  who  was  in  charge   of Transport,  had  made an order directing  the  Secretary  to Government,  Home Department, to hear the  objections  filed against  the scheme proposed by the State  Transport  Autho- rity. The  aforesaid  machinery  evolved  by  the  rules  for  the disposal of cases by the State Government has been  followed in  this case.  The petitioners and others filed  objections to   the  proposed  scheme  before  the  Secretary  to   the Government Transport Department.  He gave a personal hearing to the parties-some of them appeared in person and others by representatives;  the  entire material recorded by  him  was placed before the Chief Minister in charge of Transport, who made  his  order  approving the scheme; and  the  order  was issued  in  the name of the Governor, authenticated  by  the Secretary  in  charge of the Transport Department.   It  may therefore be said that the State Government gave the hearing to  the  petitioners in the manner prescribed by  the  rules made by the Governor. At  this  state, the argument hinted at  but  not  seriously pressed,  may  be  noticed.   The  Rules  the  Governor   is authorised  to  make,  the argument proceeds,  are  only  to regulate  the  acts of the Governor or his  subordinates  in discharge  of the executive power of the  State  Government, and  therefore will not govern the quasi-judicial  functions entrusted to it.  There is a fallacy in this argument.   The concept  of a quasijudicial act implies that the act is  not wholly judicial; 45 354 it  describes  only  a duty cast on the  executive  body  or authority  to  conform  to norms of  judicial  procedure  in performing  some  acts in exercise of its  executive  power. The procedural rules made by the Governor for the convenient transaction  of business of the State Government apply  also to quasi-judicial acts, provided those ’Rules conform to the principles of judicial procedure. The mode of performing quasi-judicial acts by administrative tribunals  has  been the subject of  judicial  decisions  in England  as well as in India.  The House of Lords  in  Local Government  Board  v.  Arlidge (1) in  the  context  of  the Housing,  Town Planning Etc., Act, 1909, made the  following observations at page 132: " My Lords, when the duty of deciding an appeal is  imposed,

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those  whose  duty it is to decide it must  act  judicially. They  must deal with the question referred to  them  without bias,  and  they  must  give to  each  of  the  parties  the opportunity  of  adequately presenting the case  made.   The decision must be come to in the spirit and with the sense of responsibility  of a tribunal whose duty it is to  mete  out justice.  But it does not follow that the procedure of every such tribunal must be the same." In  New Prakash Transport Co., Ltd. v. New Swarna  Transport Co.,  Ltd.  (2)  this Court reviewed the  case  law  on  the subject  and  came  to  the conclusion  that  the  rules  of natural,-justice   vary   with  varying   constitutions   of statutory   bodies,   and  the  rules  prescribed   by   the legislature  under which they have to act, and the  question whether in a particular case they have been contravened must be judged not by any preconceived notion of what they may be but  in  the light of the provisions of  the  relevant  Act. This  Court re-affirmed the principle in Nagendra Nath  Bora v. Commissioner of Hills Division (supra) (3). With  this  background  we shall  proceed  to  consider  the validity  of  the  three alleged  deviations  of  the  State Government from the fundamental judicial procedure.  In  the present case, the officer who received (1) [1915] A.C. 120.             (2) A.I.R. 1958 S.C. 398. (3)  A.I.R. 1958 S.C. 398. 355 the  objections of the parties and heard them personally  or through  their  representatives, was the  Secretary  of  the Transport Department.  Under the ’Madras Government Business Rules  and  Secretariat Instructions’ made by  the  Governor under  Art.  166  of the Constitution, the  Secretary  of  a department  is its head.  One of the parties to the  dispute before  the  State Government was the  Transport  Department functioning  as  a statutory authority under the  Act.   The head  of that department received the objections, heard  the parties,  recorded  the entire  proceedings  and  presumably discussed  the  matter with the Chief  Minister  before  the latter  approved the scheme.  Though the formal orders  were made  by  the Chief Minister, in effect and  substance,  the enquiry was conducted and personal hearing was given by  one of  the  parties to the dispute itself.  It is  one  of  the fundamental principles of judicial procedure that the person or persons who are entrusted with the duty of hearing a case judicially should be those who have no personal bias in  the matter.   In  Ranger  v.  Great  Western  Ry.   Co.(1)  Lord Cranworth, L.C., says: ’A  judge  ought to be, and is supposed to  be,  indifferent between  the  parties.  He has, or is supposed to  have,  no bias inducing him to lean to the one side rather than to the other In ordinary cases it is just ground of exception to  a judge  that he is not indifferent, and the fact that  he  is himself  a  party,  or interested as a  party,  affords  the strongest proof that he cannot be indifferent." In Rex v. Sussex Justices Ex Parte McCarthy (2) Lord Hewart, C. J., observed: " It is said, and, no doubt, truly, that when that gentleman retired in the usual way with the justices, taking with  him the notes of the evidence in case the justices might  desire to  consult him, the justices came to a  conclusion  without consulting  him,  and that he  scrupulously  abstained  from referring  to the case in any way.  But while that is so,  a long  line  of  cases shows that it is not  merely  of  some importance (1)  [1854] 5 H.L.C. 72, 89; 10 E.R. 824, 827. (2)  [1924] 1 K.B. 256, 258.

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356 but  is  of fundamental importance that justice  should  not only be done, but should manifestly and undoubtedly be  seen to  be done.  The question therefore is not whether in  this case  the deputy clerk made any observation or  offered  any criticism which he might not properly have made or  offered; the question is whether he was so related to the case in its civil aspects as to be unfit to act as clerk to the justices in the criminal matter.  The answer to that question depends not upon what actually was done, but upon what might  appear to be done." This  was  followed  in  Rex  v.  Essex  Justices  Ex  Parte Perkins(1).In Franklin’s Case (2), though on a  construction of  the provisions of that Act under consideration  in  that case it was held that the Minister was not acting judicially in  discharging  his  duties,  his  Lordship  accepted   the aforesaid principle and expressd his view on the doctrine of ’bias’ thus, at page 103: "  My  Lords, I could wish that the use of the  word  ’bias’ should  be  confined  to  its  proper  sphere.   Its  proper significance,  in my opinion, is to denote a departure  from the  standard of even-handed justice which the law  requires from  those  who occupy judicial office, or  those  who  are commonly  regarded as holding a quasi-judicial office,  such as  an  arbitrator.  The reason for this  clearly  is  that, having to adjudicate as between two or more parties, he must come  to his adjudication with an independent mind,  without any  inclination  or bias towards one side or other  in  the dispute." The aforesaid decisions accept the fundamental principle  of natural   justice  that  in  the  case   of   quasi-judicial proceedings,  the authority empowered to decide the  dispute between  opposing parties must be one without  bias  towards one  side or other in the dispute.  It is also a  matter  of fundamental importance that a person interested in one party or  the  other should not, even formally, take part  in  the proceedings though in fact he does not influence the mind of the  person, who finally decides the case.  This is  on  the principle that (1) [1927] 2 K.B. 475. (2) [1948] A.C. 87. 357 justice should riot only be done, but should manifestly  and undoubtedly  be seen to be done.  The hearing given  by  the Secretary, Transport Department, certainly offends the  said principle  of  natural justice and the  proceeding  and  the hearing given, in violation of that principle, are bad. The  second objection is that while the Act and  the’  Rules framed  thereunder impose a duty on the State Government  to give  a  personal hearing, the procedure prescribed  by  the Rules  impose a duty on the Secretary to hear and the  Chief Minister   to  decide.   This  divided   responsibility   is destructive  of  the concept of judicial  hearing.   Such  a procedure defeats the object of personal hearing.   Personal hearing  enables  the  authority  concerned  to  watch   the demeanour  of the witnesses and clear-up his  doubts  during the  course  of the arguments, and the party-  appearing  to persuade  the authority by reasoned argument to  accept  his point  of  view.  If one person hears and  another  decides, then  personal  hearing  becomes  an  empty  formality.   We therefore hold that the said procedure followed in this case also offends another basic principle of judicial procedure. The  learned counsel further contends that the mind  of  the State Government was foreclosed before the hearing was given

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and therefore no real enquiry was held by it as contemplated by  the  Act.   This  argument is  based  upon  the  reports published  on  27-12-1957  in  the  ’Deccan  Chronicle’  and ’Golconda  Patrika’.   Therein  it  was  stated  under  date December, 26, as follows : "  The Chief Secretary, Mr. M. P. Pai, told  pressmen  today that  the  Government  has  already  taken  a  decision   to nationalize the road transport in Krishna District and  some routes  had been chosen.  The Guntur-Vijayawada  route  also comes  under  the nationalisation scheme.   About  65  buses would be plying oil these routes." The Chief Secretary was giving this information on  December 6,  1957,  even before the enquiry was  commenced.   On  the basis  of  this  publication,  it  is  contended,  that  the Government  had already taken a decision to nationalize  the road transport before the scheme 358 was approved by the Government and that the entire procedure was  put through to implement the decision already taken  to meet the requirements of the technicalities of law.  In  the counter-affidavit filed by the first respondent it is stated that the scheme was published in the Andhra Pradesh  Gazette dated  24-12-1957  and  that  the  alleged  statement   only referred  to  the said proposal under s. 68-C of  the  Motor Vehicles  Act.   Though  the  wording  of  the   information published  speaks  of the decision of  the  Government,  the Chief  Secretary obviously must have been referring  to  the contents of the notification published two days earlier,  on 24-12-1957.    We  cannot  from  this  publication  in   the newspapers come to the conclusion that the Government having finally  decided  to reject all  possible  objections,  went through  a farce of an enquiry.  We therefore hold, for  the first  two reasons, that the quasi-judicial enquiry held  by the  State Government was vitiated by the, violation of  the aforesaid fundamental principles of natural justice. The last argument of the learned counsel for the petitioners is  that  the Road Transport Corporation,  i.e.,  the  first respondent,  cannot  implement the scheme  proposed  by  the defunct  State Transport Undertaking.  Some of the  relevant facts  are  as  follows  The  State  Transport   Undertaking published  the  scheme in the Andhra Pradesh  Gazette  dated November   14,   1957.   It  also   appeared   through   its representative,   the   General  Manager,   who   made   his representation to the Secretary of the Transport  Department on 26-12-1957.  The State Government approved of the  scheme on  7-1-1958  and the approved scheme was published  in  the Andhra Pradesh Gazette dated 9-1-1958 and it was directed to come into force with effect from 10-1-1958.  The  Government of  Andhra Pradesh established a Road Transport  Corporation under the Road Transport Corporations Act, 1950 (Act LXIV of 1950), for the State of Andhra Pradesh, with effect from  11 - 1- 1958.  The State Government transferred the business of the  Road Transport Department to the said  Corporation  for management.   Thereafter,  the said Corporation  was  taking subsequent steps to implement the scheme. 359 The  argument is that the Road Transport Corporation has  no power under the Road Transport Corporations Act to take over the  business  of  the State Transport  Undertaking  and  to implement  the  scheme initiated by that  Undertaking.   The said  Corporation admittedly comes under the  definition  of ’State  Transport,  Authority’  under  the  Act.   But   the question  is  whether-’  the  said  Corporation  is  also  a successor  to the State Transport Authority  that  initiated the  scheme.   It would certainly be the  successor  if  the

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Corporation was legally entrusted with the duty of  carrying on  the  business the Road Transport  Department  was  doing before.   On  January  9, 1958, in exercise  of  the  powers conferred  by s. 3 of the Road Transport  Corporations  Act, 1950, the Governor of Andhra Pradesh established with effect from  January 11, 1958, a Road Transport Corporation  called the Andhra Pradesh Road Transport Corporation for the  State of Andhra Pradesh.  In exercise of the power conferred by s. 34  of  the  Road  Transport  Corporations  Act,  1950,  the Governor of Andhra Pradesh made an order dated 11th January, 1958, for the following administrative arrangements to  come into force "(I)   The   Andhra  Pradesh  Road   Transport   Corporation (hereinafter referred to as the Corporation) shall take over the management of the existing Road Transport Department  of the Government of Andhra Pradesh. (2)All land and all stores, articles and other goods of  the Road Transport Department shall pass to the Corporation. (3)  (a) Subject to the provisions of sub-paragraphs  (b)and (c),  all the assets and liabilities of the  Road  Transport Department shall pass to the Corporation... The  other  clauses  need  not be  read  as  they  are  only consequential  to  the aforesaid clauses.  It  is  therefore clear from the said order that the Government entrusted  the management  of  the Road Transport Department  to  the  Road Transport  Corporation  and  directed the  transfer  of  all assets and liabilities to the said Corporation.  The  effect of the said order is that the State 360 Corporation  carries on the Road Transport business  in  the place   of   the  State  Transport  Department   which   was functioning as the State Transport Undertaking under the Act before the said order.  If there was no legal impediment  in the  Government transferring the business carried on by  one of  its departments and its assets to the  Corporation,  the Corporation  would be a successor to the pre-existing  State Transport Undertaking.  The petitioners contest the position that  the Government has any such power under s. 34  of  the Road Transport Corporations.  Act, 1950.  Section 34 reads: "(1)  The  State Government may, after consultation  with  a Corporation  established  by such Government,  give  to  the Corporation  general  instructions  to be  followed  by  the Corporation,  and such instructions may  include  directions relating  to  the recruitment,, conditions  of  service  and training  of  its  employees,  wages  to  be  paid  to   the employees,  reserves to be maintained by it and disposal  of its profits and stocks. (2)  In  the exercise of its powers and performance  of  its duties under this Act, the Corporation shall not depart from any general instructions issued under subsection (1)  except with the previous permission of the State Government." The Road Transport Corporation Was constituted for extending and  improving the facilities of the road transport  in  the Andhra   Pradesh  area.   The  Government  transferred   the Undertaking and its assets to that  Corporation and gave  it directions under s. 34  of the Road  Transport  Corporations Act, 1950, to  take   over  the  management  of   the   said undertaking.The fact that under the Road Transport  Corpora- tions  Act the Corporation can acquire an undertaking  after paying  compensation is not of much relevancy for,  in  this case,  the  Corporation  does not  purport  to  acquire  any transport  undertaking of the petitioners.  It has not  been brought   to   our  notice  that  the  said   direction   is inconsistent  with  any  of  the  provisions  of  the   Road Transport Corporations Act, 1950.  We, therefore, hold  that

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the first respondent is the successor to the State Transport Undertaking which                361 proposed  the  scheme  and as admittedly  it  satisfied  the requirements   of  the  definition  of  I   Road   Transport Authority’  under  the  Act,  it is  within  its  rights  in implementing the scheme approved by the Government. In the result, for the reason that the State Government  did not  make  the  enquiry consistent with  the  principles  of natural justice in approving the scheme, the order approving the  scheme is hereby quashed and a direction issued to  the first  respondent  to forbear from taking over  any  of  the routes  in  which the petitioners are engaged  in  transport business.   This  judgment  will  not  preclude  the   State Government  from making the necessary enquiry in  regard  to the  objections filed by the petitioners in accordance  with law.   The petitioners will have liberty to file  additional objections  if  any.   As the  petitioners  have  failed  on substantive points in the case, the parties are directed  to bear their own costs. WANCHOO,   J.-This   petition  under  Article  32   of   the Constitution   challenges  the  scheme  of  road   transport introduced  in the Krishna district of Andhra Pradesh.   The petitioners raise two main contentions, namely, (1) that the provisions of Chapter IV-A of the Motor Vehicles Act,  1939, violate  their  fundamental  rights  guaranteed  under   the Constitution,  and (2) that the scheme introduced  is  ultra vires Chapter IV-A. I have had the advantage of reading the judgment prepared by my  brother Subba Rao, J. I agree with what he has  said  on the first contention and therefore do not propose to  repeat the  facts and the reasons given by him.  I  have,  however, been  unable,  with utmost respect, to  persuade  myself  to agree   fully  with  what  has  been  said  on  the   second contention.  I, therefore, proceed to deal with that only. The second contention of the petitioners is that the  scheme of  road transport, which is sought to -be put into  effect, is  ultra vires Chapter IV-A of the Motor Vehicles Act,  (IV of  1939),  (hereinafter called the Act),  inasmuch  as  the provisions of that Chapter have not 46 362 been strictly followed.  Before I deal with the  contentions of  the petitioners in this matter, I may  indicate  briefly the  steps  required  to be taken before a  scheme  of  road transport  is finalised under Chapter IV-A of the Act.   The first  step is the preparation of the Scheme under  s.  68C, which lays down that 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  for  the purpose.   After  the  scheme  is prepared,  it  has  to  be published  in  the Official Gazette and also in  such  other manner as the State Government may direct.  The next step is that  any person affected by the scheme published  under  s. 68C  may, within thirty days from the date  of  publication, file  objections  thereto before the State  Government;  [s. 68D(l)].  The third step is that the State Government has to consider  the objections and after giving an opportunity  to

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the    objectors   or   their   representatives   and    the representatives  of  the State Transport Undertaking  to  be heard  in the matter, to approve or modify the  scheme;  (s. 68D  (2)).  Finally, the scheme as approved or  modified  is published  in the Official Gazette as the  approved  scheme; (s.  68D(3)).  Then comes the provisions for  putting.  this approved scheme into effect.  Section 68F provides that  the Regional  Transport Authority shall thereupon issue  permits to  the  State Transport Undertaking on its  application  in pursuance  of the approved scheme.  The  Regional  Transport Authority  is  also  given power to  cancel  or  modify  any existing  permit or refuse to renew any existing permit  for this  purpose.  Section 68G provides for compensation  where any existing permit is cancelled or its terms are modified. The main attack of the petitioners is that sections 363 68C and 68D were not complied with.  The particulars of  the attack may be summarised as below:- (1)  There  was no State Transport Undertaking in  existence which could have published the scheme (68C) (2)  Even if a State Transport Undertaking was there, it did not form an opinion as required by s. 68C and in particular, the  General  Manager,  who acted for  the  State  Transport Undertaking, had no authority to do so; (3)S. 68D(2) contemplates a hearing by the State  Government of the objections filed.  There was no such hearing, as  the Home Secretary in-charge of Transport Department, who  heard the  objectors must be deemed to be one of the  parties  who have  to be heard by the State Government, and in any  case, the  hearing  by the Secretary was no hearing by  the  State Government. (4)There  was  no  real  bearing  at  all  and  no   genuine consideration  of the objections by the State Government  as the  issue bad already been prejudged, (vide speech  of  the Chief Secretary on the 26th of December, 1957); and (5)The  scheme could not be enforced by the  Road  Transport Corporation,  which replaced the Road  Transport  Department soon  after  the  scheme  had been  approved  by  the  State Government. It is necessary in order to appreciate and decide the  point raised  on behalf of the petitioners to mention briefly  the facts  relating  to  the  preparation  of  the  scheme   and subsequent  steps  taken for its approval  and  enforcement. The  scheme  was published on November 14, 1957,  under  the authority of Shri Guru Pershad, General Manager of the State Transport Undertaking Andhra Pradesh Road Transport.   Chap- ter  IV-A  of the Act had come into force from the  15th  of February,  1957.   Before that Hyderabad State, as  it  then was, had passed Act XLV of 1956, amending the Motor Vehicles Act  locally and incorporating in it provisions  similar  to the  present  Chapter IV-A.  Under the  Hyderabad  Act,  the State   Transport  Undertaking  was  defined  as  the   Road Transport 364 Department  of the State providing road transport  services. When  the Hyderabad State came to end and what was known  as the Telengana area of that State was merged in the State  of Andhra  Pradesh,  the Road Transport  Department  of  Andhra Pradesh  took  over  the  road  transport  services  in  the Telengana area which were being run by the former  Hyderabad State.  The present scheme was published, as already stated, on  the  14th  of November, 1957, by Shri  Guru  Pershad  on behalf  of the Road Transport Department of Andhra  Pradesh. The objections to the scheme were received by the  Secretary to  Government in charge of the Road  Transport  Department,

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and the objectors were heard by the Home Secretary in charge of  the  Transport  Department  on  the  26th  and  27th  of December,  1957.   The scheme was finally  approved  by  the Governor of Andhra Pradesh on the 7th of January, 1958,  and was to come into force from the 10th of January, 1958.   The approved  scheme was published in the Gazette on January  9, 1958.   In  the meantime, the Government of  Andhra  Pradesh decided to establish a Road Transport Corporation under  the Road  Transport Corporations Act, No. LXIV of 1950, for  the State of Andhra Pradesh.  This decision was published on the 20th  of December, 1957, and the Road Transport  Corporation was to come in existence from the 11th of January, 1958.  It was  to  take  over  the  business  of  the  Road  Transport Department of the State.  The members of the Road  Transport Corporation were appointed on the 9th of January, 1958,  and the Corporation was established with effect from the 11th of January, 1958.  It was this Corporation, which took over the duty   of  implementing  the  approved  scheme,  which   was published on the 9th of January, 1958, and was to come  into effect from the 10th of January, 1958.  The steps  necessary under sections 68F, 68G and 68H of the Act to put the scheme into force were taken by this Corporation. Re. (1).  The argument of the petitioners under this head is put  thus:  There was a State  Transport  Undertaking  under Hyderabad Act, which was operating in the present  Telengana area of Andhra Pradesh.  This 365 was  the Road Transport Department of the  Hyderabad  State, which  became  the statutory body under the  Hyderabad  Act. When,  however,  the  Hyderabad State came to  end  and  the Telengana  area was merged in Andhra Pradesh on the  1st  of November,  1956,  the  State Transport  Undertaking  of  the Hyderabad  State  continued  to function  as  such  for  the Telengana area of Andhra Pradesh.  There was no extension of the  Hyderabad  Act to the rest of Andhra Pradesh,  and  the present  scheme relates to Krishna District which is not  in the  Telengana  area; consequently, it was not open  to  the State  Transport  Undertaking which was existing  under  the Hyderabad Act to frame this scheme for an area which was not in  Telengana.   It was also urged that no  State  Transport Undertaking  was formed as such after the coming into  force of  Chapter IV-A of the Act in February, 1957.  I am of  the opinion that there is no force in this argument.  It is true that   tinder  the  Hyderabad  Act,  the   State   Transport Undertaking  was defined as " the Road Transport  Department of  the  State  providing road  transport  service  ".  When Hyderabad  State came to end on the 1st of  November,  1956, the  Road Transport Department of Andhra Pradesh became  the State  Transport  Undertaking  within  the  meaning  of  the Hyderabad Act, though, as that Act was in force only in  the Telengana area, road transport services could only be run in that area.  When, however, Chapter IV-A of the Act came into force  from the 15th of February, 1957, and applied  to  the whole of the State of Andhra Pradesh, the Hyderabad Act must be deemed to have been repealed by necessary implication, as Chapter  IV-A of the Act covered exactly the same  field  as was covered by the Hyderabad Act.  On the 15th of  February, 1957,  there  was only Road Transport Department  of  Andhra Pradesh,  which  was in existence and  which  was  providing transport  services  in certain areas of  the  State.   Now, under  s. 68A, a State transport undertaking is  defined  as any undertaking providing road transport service, where such undertaking  is carried on by the Central Government or  the State Government..." The Road Transport Department 366

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of  Andhra  Pradesh was obviously an  undertaking  providing road  transport service though only in a part of the  State, and  was  carried  on  by the  State  Government  of  Andhra Pradesh.  Therefore, the Road Transport Department of Andhra Pradesh  became  the State Transport Undertaking  under  the definition in Is. 68A.  The fact that this undertaking which came in existence by virtue of the definition on the 15th of February,  1957, was at that time providing  road  transport services only in a part of the State, would not make it  any the less a State Transport Undertaking within the meaning of that  term  and  there is  nothing  in  Chapter.IV-A,  which precludes  a State Transport Undertaking, which is  for  the time  being  providing transport services in a part  of  the State,  from extending its activities and framing  a  scheme for  other parts of the State.  I am, therefore, of  opinion that  a  State  Transport Undertaking was  in  existence  in November, 1957, when the scheme was prepared and  published, and it was the Road Transport Department of Andhra Pradesh. Re. (2).  The contentions on this head are two-fold.  In the first place, it is urged that the General Manager, who acted for  the State Transport Undertaking had no authority to  do so on its behalf This is a question of fact and should  have been  specifically  raised  in  the  petition.   All   that, however, is said about the authority of Shri Guru Pershad is to  be  found in paragraph 11 (e) of the petition  in  these words: "Mr.   Guru  Pershad  was the General Manager  of  the  Road Transport  Department of the erstwhile Hyderabad State.   He was  never  appointed  as Manager  of  the  State  Transport Undertaking  of  Andhra Pradesh, and therefore,  he  has  no legal authority whatever to publish a scheme ". Now, it is obvious that this objection was only confined  to one  point, namely, that Shri Guru Pershad had no  authority to  act  for  the  State  Transport  Undertaking  of  Andhra Pradesh,  as  he  was -never appointed as  manager  of  that undertaking.   It was not the case of the  petitioners  that even  if  he  had been appointed as Manager  of  the  Andhra Pradesh State Transport 367 Undertaking, he would have no authority to frame and publish a  scheme  on behalf of that undertaking.  It  appears  that Shri Guru Pershad, who was the Manager of the road transport services  when they were run by the former Hyderabad  State, continued  to  be  such  after the  Telengana  area  of  the Hyderabad  State  was  merged  in  Andhra  Pradesh.   It  is unthinkable  that  Shri Guru Pershad should  have  issued  a notification  in the Gazette on the 14th of November,  1957, styling  himself  as  "  General  Manager,  State  Transport Undertaking, Andhra Pradesh Road Transport ", if he was  not in  fact  the  General Manager of the  Andhra  Pradesh  Road Transport.   It  must,  therefore, be held  that  Shri  Guru Pershad  was the General Manager of the Andhra Pradesh  Road Transport,   and,   therefore,  of   the   State   Transport Undertaking.  His authority to publish the scheme, if he was the  Manager of Andhra Pradesh State Transport  Undertaking, has not been attacked.  The scheme was published on the 14th of  November,  1957, by Shri Guru Pershad as  such  Manager. The petitioners cannot at this stage be allowed to challenge his authority to do so, when they did not specifically raise this point in their petitions.  When, therefore, he prepared and published the scheme, it must be held that he did so  on behalf of the State Transport Undertaking. The second part of this contention is that the  notification of  the  14th November, 1957, does not say  that  the  State Transport  Undertaking was of opinion that it was  necessary

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in  the  public interest that the  road  transport  services should   be  run  and  operated  by  the   State   Transport Undertaking.  The actual words used in the notification  are these:- "In exercise of the powers conferred by s. 68C of the  Motor Vehicles  Act, 1939, it is hereby proposed, for the  purpose of providing an efficient, adequate, economical and properly coordinated  road transport service in public  interest,  to operate   the  following  transport  service  as   per   the particulars  given  below  with effect from  a  date  to  be notified by the Government." No  doubt, the words " that the State Transport  Undertaking is  of  opinion  " are not expressly to  be  found  in  this notification ; but at the same time it is impossible that  a proposal  like  this  should be prepared  and  published  on behalf  of  the  State  Transport  Undertaking  without  its forming  an  opinion  that it was necessary  in  the  public interest to do so.  I am of opinion that the State Transport Undertaking must have formed the opinion necessary under  s. 68C before it published its proposal and invited  objections to the same.  There 175 no exact form of words provided  for this  purpose,  and it would be quite in order to  draw  the inference  from the words used in the notification  that  it was  published  after the State  Transport  Undertaking  had formed  the  opinion  necessary  under  s.  68C.   In   this connexion,  reference  may  be made to paragraph  2  of  the counter-affidavit  filed  on behalf of  the  Andhra  Pradesh State Road Transport Corporation, where it is said that  the General  Manager of the Andhra Pradesh Road Transport  which was the State Transport Undertaking, was of opinion that the transport services in the Krishna District of Andhra Pradesh should  be  operated in the public interest  by  the  Andhra Pradesh Road Transport.  It was, however, urged on behalf of the petitioners that this only disclosed the opinion of  the General Manager and not of the State Transport  Undertaking; but,  as  I have already said above, the  authority  of  the General  Manager to speak on behalf of the  State  Transport Undertaking   was  never  specifically  challenged  in   the petition.  There is, therefore, no force in this contention, and it must be rejected. Re.  (3).   This contention relates to the  hearing  by  the State  Government under s. 68-D(2).  In order  to  determine this question, it is necessary to consider whether the State Government,  when  it gives a hearing under s.  68-D(2),  is acting as a quasi-judicial tribunal or is merely  performing administrative functions.  If the State Government acts as a quasi-judicial tribunal certain considerations apply to  the nature  of the hearing granted ; if, on the other hand,  the State Government acts administratively, certain other 369 considerations  apply  in determining the propriety  of  the hearing  in  fact  given in this case.   The  contention  on behalf  of the petitioners is that the hearing  contemplated is  as  a  quasi-judicial tribunal.   The  learned  Attorney General,  on  the  other  hand,  contends  that  the   State Government  merely  acts administratively when  it  gives  a hearing  under  this provision.  What constitutes  a  quasi- judicial  act has been considered by this Court in  Province of Bombay v. Kusaldas S. Advani (1).  The principle has been summarised  by Das J. (as he then was) at p. 725,  in  these words: The principles, as I apprehend them are: (i)that  if  a statute empowers an authority,  not  being  a Court in the ordinary sense, to decide disputes arising  out of  a claim made by one party under the statute which  claim

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is opposed by another party and to determine the  respective rights  of  the contesting parties who are opposed  to  each other, there is a lis and prima facie and in the absence  of anything  in the statute to the contrary it is the  duty  of the  authority  to act judicially and the  decision  of  the authority is a quasi-judicial act; and (ii)that  if a statutory authority has power to do  any  act which will prejudicially affect the subject, then,  although there  are not two parties apart from the authority and  the contest is between the authority proposing to do the act and the  subject  opposing it, the final  determination  of  the authority  will  yet be a quasi-judicial  act  provided  the authority is required by the statute to act judicially. In  other words, while the presence of two  parties  besides the  deciding authority will prima facie and in the  absence of  any other factor impose upon the authority the  duty  to act  judicially,  the  absence of two such  parties  is  not decisive  in  taking  the act of the authority  out  of  the category   of  quasi-judicial  act  if  the   authority   is nevertheless required by the statute to act judicially." Now,  it may be mentioned that the statute is not likely  to provide in so many words that the authority (1)  [1950] S.C.R. 621. 47 370 giving  the hearing is required to act judicially; that  can only be inferred from the express provisions of the statute. In  the present case, it is urged by Mr.  Nambiar  appearing for  the petitioners that there were two parties before  the State Government, which was the deciding authority under  s. 68D(2), namely, the objectors and the representatives of the State  Transport Undertaking.  Therefore, according to  him, prima  facie,  there would be a duty to act  judicially  and there is no other factor which would take away the inference to  be deduced from the presence of two parties  before  the State  Government, which has to decide the matter.   Whether there  is  any other factor will, however, depend  upon  the circumstances  of  each case, and the nature of  the  matter under  hearing  and the scope of the hearing.   The  learned Attorney General contends that if one looks at the nature of the  matter  to  be heard and considers  the  scope  of  the hearing  before the State Government in this case  the  only conclusion  possible  is  that  the  State  Government  acts administratively  when  it  gives a  hearing  under  section 68(2). What  then  is the nature of the hearing  before  the  State Government   ?  Article  19(6)(ii)  is  of  help   in   this connection.   It provides that nothing in sub-clause (g)  of article 19(1), which deals among other things with the right to  carry on trade or business shall prevent the State  from making  any law relating to the carrying on by the State  or by  a corporation owned or controlled by the State,  of  any trade,  or business, whether to the exclusion,  complete  or partial,  of citizens or otherwise.  Chapter IV-A  has  been inserted  in the Act to carry out this purpose, so that  the State  may  operate  transport services  to  the  exclusion, complete or partial, of citizens.  The scheme which has been published  provides that there will be a complete  exclusion of citizens when the scheme is enforced in the area to which it  relates.  Now, the question is whether the exclusion  of citizens  as a whole is also an issue to be decided  by  the State  Government  when it hears  objections.   Mr.  Nambiar submits  that  the  most  important  thing  for  the   State Government  to  decide is whether there should  be  complete exclusion of citizens

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371 on  the  enforcement of the scheme.   The  learned  Attorney General  on the other hand contends that all that the  State Government has to do is to see whether the scheme  published is  in the interest of the public and also whether  it  will provide  an  efficient, adequate,  economical  and  properly coordinated road transport service.  The argument  continues that  if the State Government comes to that conclusion,  the complete  exclusion  which the scheme  provides  ipso  facto follows,  and  the State Government has not  to  decide  the matter  of exclusion as a separate issue.  In  other  words, the  argument is that the State Government is not to  decide between the competing claims of citizens providing transport privately  and  the State  Transport  Undertaking  providing transport  to  the  exclusion of  citizens,  and  there  is, therefore, no real lis in this case.  It is also pointed out that objection can not only be filed by the bus operators of that area who are to be excluded but also by anybody who  is affected  by  the  scheme,  including  the  members  of  the travelling  public.   Giving, my best consideration  to  the arguments  on  either side on this aspect of the  matter,  I have  come to the conclusion that the scope of  the  hearing before  the  State  Government is of  a  limited  character, though the decision may affect citizens providing transport, the  question whether private citizens should or should  not be  allowed to provide transport is really not a  matter  in issue  before  the  State Government.  What  is  in  dispute before the State Government is only whether the scheme  that is  proposed  by  the  State  Transport  Undertaking  is  an efficient,  adequate,  economical and  properly  coordinated scheme  for road transport service and whether it is in  the interest  of the public.  If the State Government  comes  to the conclusion that it is so, a complete exclusion  proposed automatically  follows and the question of exclusion is  not to  be  determined  as  a  separate  issue  as  between  the objectors  and the State Transport Undertaking.  It is  true that the State Government has the right to modify the scheme and  in so doing it may drop a part of the scheme; but  here again it is not modifying the scheme because of any right of a 372 private  citizen  to carry on road transport  service  in  a particular area but because it considers that the scheme  so far  as that particular area is concerned is not  efficient, adequate,  economical  or  properly coordinated  or  in  the public  interest.  Unless it comes to that  conclusion  with respect to any part of the area. comprised in-the scheme and modifies  it,  the consequence of  complete  exclusion  ipso facto  follows.  What I wish to emphasise is that the  State Government  is  not  determining  whether  there  should  be Statemonopoly  or private enterprise when it is  considering objections under s. 68D(2); it is only deciding whether  the scheme put forward before it is such as can be approved with or without modifications within the four corners of the  law laid down under s. 68C.  If it comes to that conclusion, the complete or partial exclusion follows.  If on the other hand it modifies any part of the scheme, exclusion fails to  that extent.  Considering, therefore, the nature and the scope of the  hearing  under s. 68D(2) it seems to me that  there  is really no lis.  Even though there may be two parties  before the   State   Government  at  the  bearing,  there   is   no determination  of the rights of the parties before it.   The determination is only of the efficiency etc. of the  scheme. proposed   and  whether  it  is  in  the  public   interest. Therefore, it cannot be said that the nature of the  hearing

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in  this  case makes the State Government  a  quasi-judicial tribunal  and  the decision a quasijudicial act  within  the meaning of the principles laid down in Advani’s Case(1). I  may  in this connexion refer to Franklin v.  Minister  of Town and Country Planning (2).  The facts there were  these: Under the New Towns Act, 1946, the Minister prepared a draft order  for  a new town and caused it to  be  published,  and notices  were  given to the  persons  affected.   Thereafter objections  were received from a number of persons who  were the owners and occupiers of dwelling-houses and lands in the affected  area.   The Act provided that on  receipt  of  the objections, an inspector was to hold a public local  inquiry into the objections and make a report to (I) [1950] S.C.R. 621. (2) [1948] A.C. 87. 373 the Minister.  Thereupon, the Minister made the order  under the  Act.  These proceedings, as provided by the  Act,  were taken  with respect to a place called Stevenage in 1946  and the Minister passed the necessary order eventually.  Some of the  owners  and  occupiers  of  dwelling-houses  and  lands situate at Stevenage applied to the Court to have the  order quashed, on the ground, among others, that the  requirements of the said Act had not been complied with and the interests of   the  appellants  had  been  substantially   prejudiced. According  to  them,  the New  Towns  Act,  1946,  impliedly required  that  the objections of the appellants  should  be fairly and properly considered by the Minister and that  the Minister should give fair and proper effect to the result of such consideration in deciding whether the said order should be made and that such implied requirements were not complied with.   It was held in that case that the Minister  of  Town and Country Planning had no judicial or -quasi-judicial duty imposed  on him and the procedure followed was according  to the requirements of the Act. Now,  substitute  in the place of the New Towns  Act,  1946, Chapter  IV-A  of the Act; substitute in the  place  of  the draft  order of the Minister, the draft scheme of the  State Transport Undertaking ; and substitute in place of the final order,  the  final approval of the  State  Government  after hearing the objections.  It would seem, therefore, that  the parallel between the present case and Franklin’s case (1) is complete.   There a draft order was published,  followed  by objections  and  an inquiry and hearing and a  final  order. Here  also a draft scheme is published, followed  by  objec- tions  and hearing, and final approval.  There the  interest of  persons occupying lands and houses in the area  proposed to  be  affected by the order were involved. Here  also  the interests of the bus-operators at least, if not also of  the travelling  public, are involved.  In spite of that  it  was held  that  the Minister had no judicial  or  quasi-judicial duty  imposed on him by the Act, and the reason was that  he was merely considering whether the scheme should go through. Once  he  came  to  that  conclusion  after  following   the procedure (1)  [1948] A.C. 87. 374 provided  in the Act, the’ effect on those  occupying  lands and   dwelling  houses  would  follow,  according   to   the provisions of the Act.  Here also once the State  Government decides that the scheme should be approved, the effect would be  complete  or partial exclusion of the bus  operators  of that  area,  as  envisaged  in  the  scheme.   To  my  mind, therefore,  the present case is parallel to Franklin’s  case (1)  and  on  a parity of reasoning I would  hold  that  the

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function of the State Government was administrative when  it considered  the  objections under s. 68D(2) and  not  quasi- judicial.   The only difference that I see between  the  two cases  is that the New Towns Act provided  specifically  for hearing  of  the objections by an Inspector and not  by  the Minister while this is not so in the present case.  I  shall consider  the  effect  of this later; but  this  has  in  my opinion, little, if any, bearing on the question whether the State  Government was acting quasi-judicially when  deciding objections under s. 68D(2). I may also in this connexion refer to Nagendra Nath Bora  v. Commissioner  of  Hills Division (2), where it was  held  by this   Court   that   the  question  whether   or   not   an administrative   body  or  authority  functions  as   purely administrative  or  in a quasi-judicial  capacity,  must  be determined  in each case on an examination of  the  relevant statute  and rules framed thereunder.  Similar was the  view expressed  by this Court in Express Newspapers Ltd.  v.  The Union of India (3), when considering the functions performed by  a wage Board, and it was observed that whether the  wage Board  exercised judicial or quasi-judicial functions is  to be  determined  by the relevant provisions  of  the  statute incorporating it and it would be impossible to lay down  any universal rule which would help in the determination of this question.  Applying, therefore, the principles laid down  by this  Court  in  these cases and  taking  into  account  the express  provisions contained in Chapter IV-A and the  Rules framed thereunder, the conclusion at which I arrive is  that the hearing under s. 68D(2) was not before a  quasi-judicial tribunal and the decision was not a quasi-judicial act and (I) [1948] A.C. 87.              (2) A. I.R. 1958 S.C. 398. (3)  A.I.R. 1958 S.C. 878. 375 the State Government was acting purely administratively. Having  reached  this  decision, let me  see  what  actually happened  in  this case.  The matter pertains  to  the  Road Transport  Department  which  was in  charge  of  the  Chief Minister.  The Home Secretary works under the Chief Minister and  was  in charge of the Road Transport  Department.   The Chief  Minister  ordered, when the objections  were  put  up before  him, that the representation should be heard by  the Home Secretary, and thereupon, the Home Secretary heard  the objectors  and a note of the hearing was placed  before  the Chief  Minister for orders.  The Chief Minister then  passed the  order  approving the scheme.  The main attack  on  this kind of hearing is two-fold.  It is urged in the first place that  rule 10 framed under Chapter IV-A of the Act  provides that  the  objectors will be given an opportunity  of  being heard  in person or through authorised representatives.   It is  said  that in view of this rule it was not open  to  the Chief  Minister  to direct the Home Secretary  to  bear  the objections  when  the decision was to be made by  the  Chief Minister.   It  is pointed out that in Franklin’s  case  (1) there  was a specific provision that an Inspector will  hold an inquiry and hear the objections and make his report,  and thereafter  the  Minister will pass the final order  on  the report  of  the  Inspector.   There  is  no  such   specific provision  in  the  Act  or the Rules  in  this  case,  and, therefore,  the  hearing  by the  Home  Secretary  in  these circumstances  cannot be said to be a hearing by  the  State Government  or  the  Chief Minister who had  to  decide  the objections.   The  learned Attorney General relies  in  this connexion  on  the Rules of Business  framed  under  article 166(3) of the Constitution which provides for the making  of rules for the more convenient transaction of the business of

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the  Government of the State, a copy of which was  shown  to us.  It is said in paragraph 13(1) of the  counter-affidavit that these Rules do not provide for personal hearing; but it is  open  to  the Minister to pass a standing  order  as  he thinks  fit  for the disposal of business in  his  Ministry. Consequently, in exercise of this power, the (1)  [1948] A.C. 87. 376 Chief  Minister  passed  an order that  the  Home  Secretary should  hear these representations in order to  comply  with the provision of Chapter IV-A and Rule 10, even though there is no provision in the Rules of Business for oral hearing by the  Minister or the Secretary.  It is urged by Mr.  Nambiar that  the  order passed by the Chief Minister in  this  case that  the hearing should be given by the Home Secretary  was not  a standing order but an order in this particular  case. That  seems  to  me  to be correct ;  but  the  question  is whether,  when an administrative hearing of this  nature  is being  given  under  a rule which provides  that  the  State Government  should  give  a  hearing  to  objectors,  it  is necessary that the Minister who decides must also hear.   It seems to me that where the hearing is administrative, it  is not  essential  that the Minister must hear, so  long  as  a hearing is given by an officer of the Government.  I may  in this  connexion  refer to article 154 of  the  Constitution, which  provides that the executive power of the State  shall be  vested  in the Governor and shall be  exercised  by  him either  directly or through officers subordinate to  him  in accordance  with  the  Constitution.   This  being  an   ad- ministrative hearing comes within the executive power of the State  and there would be no infirmity if the Governor,  who in view of the provisions of the General Clauses Act, is the State  Government, authorised through the Chief  Minister  a subordinate officer to give the hearing.  Reference in  this connection  may  also be made to Local Government  Board  v. Arlidge  (1), which dealt with the manner of hearing  of  an appeal by the Local Government Board under the Housing, Town Planning &c., Act, 1909.  The following observations of Lord Haldane at p. 132 are apposite in this context :- "  In the case of a Court of Law tradition in  this  country has  prescribed certain principles to which in the main  the procedure must conform.  But what that procedure is to be in detail must depend on the nature of the tribunal.  In modern times  it has become increasingly common for  Parliament  to give an appeal (1)  [1915] A.C. 120, 132. 377 in  matters which really pertain to  administration,  rather than  to  the  exercise  of the  judicial  functions  of  an ordinary   Court,   to  authorities  whose   functions   are administrative and not in the ordinary sense judicial.  Such a  body  as  the  local Government Board  has  the  duty  of enforcing obligations on the individual which are imposed in the interest of the community.  Its, character is that of an organization   with,  executive  functions.   In   this   it resembles  other  great  departments of  the  State.   When, therefore,  Parliament  entrusts it  with  judicial  duties, Parliament must be taken, in the absence of any  declaration to the contrary, to have intended it to follow the procedure which is its own, and is necessary if it is to be capable of doing its work efficiently." These observations show that when one is dealing with a body like  the State Government one has to take into account  the procedure  usually  followed  by  the  State  Government  in matters that come before it.  In these circumstances if  the

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Minister  ordered, in the absence of specific rules  on  the point, that the hearing should be by the Secretary, he  was, in  my  opinion, complying with the  essential  requirement, namely,  that there should be an oral hearing by  the  State Government  before  the  decision of  the  objections.   The bifurcation of the function of hearing from the function  of deciding  cannot in the circumstances, when the hearing  was administrative,  be said to be improper or against rule  10, and was necessary in order that the Government may  function efficiently.  Therefore, I am of opinion that the hearing by the  Secretary was sufficient compliance of rule  10,  which required  a  personal  hearing before the  decision  of  the objections. The  second ground of attack under this head is that in  any case  the Home Secretary who was also in charge of the  Road Transport  Department was not the right person to  hear  the objections on the ground that the scheme was put forward  by his department.  Here again the fact that the hearing was of an  administrative nature has to be borne in mind.   Bearing that in 48 378 mind and also considering that it was the Chief Minister who finally  decided  the  matter and approved  the  scheme,  it cannot  be  said that the Home Secretary in  charge  of  the Transport  Department  was an improper person  to  give  the hearing.   After  all,  the  scheme was  put  forward  as  a proposal.   It  was open to approval or  modification  after hearing  the  objections.  The body which  put  forward  the scheme was the State Transport Undertaking which was a  limb of  the  Government.  The Government has in a case  of  this kind to hear objections against a scheme prepared by one  of its  own limbs.  In these circumstances, if the Head of  the Department, namely, the Secretary hears the oral  objections on  a  scheme prepared by some one in  that  department  who would necessarily be under him, like the General Manager  of the  Road Transport Department, it does not follow that  the Secretary is an improper person to give the hearing  because he  hears his subordinate who put forward the  scheme  also, along  with the objectors.  Further, the Secretary  in  this case  is  not  the deciding authority  which  is  the  Chief Minister’  He  made notes of the hearing  and  conveyed  the arguments  to  the  Chief Minister, and as  the  matter  was purely  administrative, the procedure cannot be said  to  be improper.  I am, therefore, of opinion that the  contentions under this head must be rejected. Re.  (4).  It is said that there was no real hearing at  all and no genuine consideration of the objections as the  issue had already been pre-judged, and reliance in this  connexion is placed on the statement of the Chief Secretary dated  the 26th of December, 1957.  It appears that the Chief Secretary said  that  the Government had already taken a  decision  to nationalise  transport in Krishna District and  some  routes had  been  chosen.  Learned Attorney General  contends  that this  only  refers  to the scheme  which  had  already  been published on the 14th of November, 1957.  Mr. Nambiar on the other hand contends that it goes much further and shows that the Government had already made up their mind to nationalise road transport in Krishna District and therefore the hearing which  the  State Government gave to the  objectors  to  the scheme was 370 a  farce.  Now, taking into account what I have  said  above about the scope of the hearing under s. 68D(2), it would  be clear  that there was no prejudging of the issue so  far  as

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the  scheme  was  concerned.   It is  true  that  the  Chief Secretary  said  that  there  would  be  nationalisation  in Krishna  District, which meant of course complete  exclusion of the private bus operators;’ but I have already said  that the  scope  of the hearing under s. 68D(2)  is  to  consider whether  the  scheme is efficient, etc., and  is  in  public interest.  If the answer is yes, complete exclusion follows. Therefore, when the Chief Secretary said that the Government had  decided  to  nationalise  road  transport  in   Krishna District,  he was certainly not saying that  the  Government was  wedded to the scheme which was published and  to  which objections  had been invited.  The speech merely  emphasises the  aspect of complete exclusion; but it nowhere says  that the  scheme  which  was to bring about  the  exclusion  into effect  had  already  been approved.  I may  again  in  this connection  refer to Franklin’s case (ibid), where  also  an argument  was raised that the Minister was biased so far  as any  consideration of the draft order was concerned,  as  he had  said in an earlier speech that he would make  the  said order.  It was held that as the Minister had no judicial  or quasi-judicial duty imposed on him, consideration of bias in the execution of this duty was irrelevant, the sole question being whether or not he genuinely considered the report  and the objections.  In the present case also, the sole question was  whether  the objections to the  scheme  were  genuinely considered.   If  after  genuine  consideration  they   were approved,  complete exclusion would follow.  Simply  because the Chief Secretary said that the Government had decided  to nationalise  road transport in Krishna District, it did  not follow  that  the Government was not  prepared  to  consider fairly the objections to the scheme on the approval of which nationalisation  would  follow through  complete  exclusion. Considering,  therefore, that the hearing before  the  State Government under s. 68D(2) was purely administrative,  there is no force in this objection. 380 Re.  (5).  It is urged that the scheme was proposed  by  the Andhra  Pradesh  Road  Transport  Department  as  the  State Transport  Undertaking within the meaning of s. 68A and  was approved while that undertaking was still in existence.  But immediately  after -the scheme was approved the  Undertaking came to an end and the Road Transport Corporation came  into existence  and  that  Corporation could not  carry  out  the scheme   which  had  been  approved  before  it  came   into existence.   The  argument seems to be that the  body  which prepared  the scheme and got it approved is the  body  which can  enforce  it,  and as  the  Road  Transport  Corporation neither  prepared it nor got it approved, it cannot  enforce it.   I  am  of  opinion that there  is  no  force  in  this contention.   The  Road  Transport  Corporation  came   into existence  oil the 11th of January, 1958.  On the same  date the State Government passed an order under s. 34 of the Road Transport  Corporation  Act  No. LIV of  1950  by  which  it directed  that the Corporation shall take the management  of the  Road Transport Department of the Government of  Andhra, Pradesh  and  all assets and liabilities of  the  Department shall  pass  to  the Corporation.  The  staff  of  the  Road Transport  Department were given option to serve  under  the Corporation  and direction was given that those who  opt  to serve  the Corporation shall be employed by the  Corporation subject  to  the  regulations made under  the  Act  and  the assurance given by the Government to the employees. It was urged in the first place that such an order could not be passed under s. 34 of the Road Transport Corporation Act. Section  34,  however, gives very wide powers to  the  State

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Government to give directions to the Corporation,  including directions relating to the recruitment, condition of service and  training  of  its employees, wages to be  paid  to  the employee, reserve to be maintained by it and disposal of its profits or stocks.  In the circumstances, it was open to the State  Government, under the wide powers Conferred by s.  34 of   the  Road  Transport  Corporation  Act,  to   ask   the Corporation which was being created to take over the assets, liabilities and the employees of the Road Transport 381 Department  which  was being wound up.  Now, the  effect  of this  order  was to make the Road  Transport  Corporation  a successor of the Road Transport Department.  It is true that there  is nothing in Chapter IV-A of the Act which  provides for  succession of one kind of undertaking as defined in  s. 68A(b)  by another kind of undertaking as  defined  therein, but  when  in  fact  it  happens  that  the  Road  Transport Corporation  is  ordered under s. 34 of the  Road  Transport Corporation Act to take over everything from the Road Trans- port  Department,  there is no reason why it should  not  be considered  to  be  the  successor  of  the  Road  Transport Department  which  was  at that  time  the  State  Transport Undertaking.   If the Road Transport Corporation is  thus  a successor  of the State Transport Undertaking from the  11th of  January,  1958, I do not see why it cannot  enforce  the scheme  which had already been approved at the  instance  of its  predecessor.  I can see no sense in requiring the  Road Transport  Corporation to go through all these  steps  which had  been  gone through by its predecessor, except  that  it would delay the coming into force of the scheme ;  probably, the  argument has been raised merely for the sake of  delay. But  I am of opinion that the Road Transport Corporation  in this  case  being  the  successor  of  the  State  Transport Undertaking  which got the Scheme prepared and  approved  is en-titled to enforce it under s. 68-F of Chapter IV-A in the absence  of  any provision to the contrary in  the  Chapter. This contention also fails. In view of what I have said above on the second  contention, the petition fails and I would dismiss it with costs. SINHA, J.-I have had the advantage of perusing the judgments prepared by our brothers, Subba Rao and Wanchoo, JJ.   After giving  my best consideration to the opinions  expressed  in the  two judgments, I have come to the conclusion that I  am not in a position to agree with all the conclusions  arrived at  by  our brother Subba Rao. Two  main  controversies  were  raised  on  behalf  of   the petitioners, namely, (1) that the provisions of Chapter 382 IVA of the Motor Vehicles Act, 1939 (which will be  referred to  in the course of this judgment as the Act), violate  the fundamental rights guaranteed to citizens of India under the Constitution, and (2) that the scheme framed under the  Act, was ultra vires the Act.  I agree with my brother Subba  Rao that  the said Chapter IVA of the Act does not infringe  any fundamental  rights  of  the  petitioners,  and  that  those provisions  are constitutionally valid.  I also  agree  with him  in  holding that the Road Transport Department  of  the Andhra Pradesh Government, is a State Transport  Undertaking under the Central Act; that the Notification publishing  the scheme  had  been  validly done,  and  that  the  conditions precedent  to  the  initiation  of  the  scheme,  had   been fulfilled.   But I do not agree with him in  his  conclusion that  the  State  Government,  in  approving  the  published scheme,  was  discharging  any  judicial  or  quasi-judicial function.   On  the  other hand, I  agree  with  my  brother

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Wanchoo  in  his  conclusion that in  so  doing,  the  State Government  was  only performing its  normal  administrative function. As  my learned brothers aforesaid have stated  the  relevant facts in detail, it is not necessary for me to repeat  them, but as I differ from my learned brother Subba Rao, with whom some of my colleagues on the Constitution Bench have agreed, and  for  whose  opinions, I have the  greatest  respect,  I should  state  my reasons for differing from  them  and  for agreeing  with our brother Wanchoo.  It may be taken as  the settled  view  of  this Court that the  question  whether  a certain  decision  envisaged in a statute,  is  judicial  or quasijudicial or only administrative in character, must  de- pend  upon the terms of the statute law itself,  apart  from any pre-conceived notions about the functions of a court  or other  tribunals  vested with the duty and  jurisdiction  to decide  controversies as a judicial body, vide  Province  of Bombay  v.  Kusaldas S. Advani (1), Nagendra  Nath  Bora  v. Commissioner  of  Hills Division(2) and  Express  Newspapers Limited  v.  Union of India (3).  Now, let us see  what  has been envisaged by the im- (1) [1950] S.C.R. 621.           (2) A.I.R. 1958 S.C. 398. (3)  A.I.R. 1958 S.C. 578. 383 pugned provisions of Chapter IVA of the Act.  The first step in  the  process  is the preparation of  a  scheme  of  road transport service by a State Transport Undertaking "for  the purpose of providing an efficient, adequate, economical  and properly coordinated road transport service." Such a  scheme may  be  to  the exclusion, complete or  partial,  of  other persons  or otherwise.  The second step would be to  publish such a scheme in the Official Gazette and also in such other manner   as   the  State  Government  may   direct,   giving particulars  of  the nature of the service  proposed  to  be rendered,  area  or route proposed to be covered  and  other prescribed  particulars-(s. 68-C).  The third step  in  that process  is  the filing of objections to the scheme  by  any person   affected  by  the  scheme  so   published.    Those objections  have  to be filed before  the  State  Government within  thirty days from the date of the publication of  the scheme-(s. 68-D (1)).  The fourth step is to be taken by the State Government, of considering the objections after giving an opportunity to the objectors or their representatives and the  representatives of the State Transport Undertaking,  to be  heard-(s.  68-D(2) ). And the last step  is  that  after hearing  all concerned, the State Government may approve  or modify the scheme.  It is noteworthy that this section  does not contemplate an outright rejection of the scheme but only a modification, if it is necessary.  The scheme as  approved or  modified,  has  then to be  published  in  the  Official Gazette,  and thereupon, the scheme becomes final.   Such  a scheme  is  called the "approved scheme ", and the  area  or route  to which it relate,,;, is called the "notified  area" or  "notified route"-Is. 68-D(3) ). The approved scheme  may at any time be cancelled, or modified by the State Transport Undertaking,  according to the procedure already  indicated, as  contained in S. 68-C and s. 68-D, if it is  proposed  to modify it-(s.  68-E). The provisions of Chapter IV, relating to  the  grant of stage carriage permits,  etc.,  have  been abrogated so as to make it obligatory on the Regional Trans- port  Authority  to  issue permits applied for  by  a  State Transport Undertaking, in pursuance of the approved  scheme. Not only that, with a view to giving effect 384 to  the  approved scheme in respect of a  notified  area  or

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notified  route, the Regional Transport Authority  has  been authorized  to refuse renewal of any permit, to  cancel  any existing  permit,  or to modify the terms  of  any  existing permit-(s.  68-F).   The provisions of s.  64,  relating  to appeals  by aggrieved persons against orders of  refusal  to grant a permit, or of revocation or suspension of a  permit, or  of refusal to renew a permit, etc., have been  abrogated in so far as those orders have been passed under s. 68-F. A review of the provisions aforesaid, contained in ss.  68-C to   68-F   in  Chapter  IV-A,  leads   to   the   following conclusions:- (1)A  State  Transport Undertaking has  been  authorized  to determine  whether or not it is in the public interest  that road transport services in general, or any particular  class of  service,  should  be  run  and  operated  by  the  State Undertaking,  in relation to any area or route or a  portion thereof,  keeping  in  view  the  purpose  of  providing  an efficient,  adequate,  economical and  properly  coordinated road  transport  service.   It is for  the  State  Transport Undertaking  to  prepare  a scheme  in  furtherance  of  its determination  in favour of such a service, and  to  publish the same in the Official Gazette and elsewhere, with a  view to informing the public, including those who may be affected by  such  a scheme. (2)  Objections  to such a scheme may be  taken  by  parties interested, but such objections are not claims. (3)  The  State  Government  is  authorized  to  decide  the question  whether the proposed scheme should be approved  or modified, after hearing the parties or their representatives in  support  of  their objections to  the  scheme.   As  the objections  have to be directed to the merits of the  scheme proposed by the State Transport Undertaking,  there  is  no  question  of  any  lis  between conflicting claims. (4)  No  particular  person  or  body  of  persons  in   the Governmental  hierarchy of officers, has been designated  as the  Authority to hear the objections and to pronounce  upon them,  unlike  the provisions in Chapter  IV.   Neither  the provisions  in Chapter IV-A nor the rules made in  pursuance of s. 68-1, contemplate 385 adducing  evidence or calling witnesses in support of or  in opposition to the proposed scheme. (5)The  right of appeal as contemplated by s. 64 in  Chapter IV,  has  been expressly abrogated by s.  68-F(3).   Nor  is there any provision in Chapter IV-A, requiring reasons to be given  in  writing  for  an  order.  passed  by  a  Regional Transport Authority under s. 68-F(1) and (2), as  contrasted with s. 57(7) in Chapter IV, which requires the Authority to give its reasons in writing for refusing an application  for a  permit  of  any kind, because such an order  is  open  to appeal, revision or review. The  question now arises whether, in view of the  provisions of  Chapter IV-A, summarized above, and the  conclusions  as indicated  above, the determination by the State  Government is judicial or quasi-judicial in character, as contended for the petitioners, or only of an administrative character,  as contended  on  behalf of the respondents.  In order  that  a determination  may  be characterized as judicial  or  quasi- judicial, it is essential that it should be objective, based on evidence pro and con (not necessarily given in accordance with  the  strict  rules  of  evidence)  by  a   determinate authority  who should not have the right to delegate such  a function of a judicial character.  Section 68-D(2)  authori- zes  the  State  Government to decide  whether  or  not  the

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proposed scheme should be approved or modified.’ The  "State Government"  may  mean the Governor himself or  any  of  his Ministers  or  Deputy  Ministers  or  any  officers  in  the Secretariat, according to the rules of business  promulgated under  Art. 166 of the Constitution.  Section 68-D(2)  could not  have  meant  that the Governor himself or  any  of  his Ministers  should personally hear the objections-that  would be throwing too great a burden on them.  The objections  may be  heard by any one who has been delegated that power.   If that  is correct, the function to be performed under s.  68- D(2),  does  not  satisfy the test of  a  judicial  hearing. Under  that section, the objections may be heard by ’A’  and the decision arrived at by ’B’.  If that is 49 386 a regular procedure under that section, that is not an index of a judicial process. Another   very  important  consideration  pointing  to   the conclusion that the determination under s. 68-D(2) is not of a  judicial character (using it in the comprehensive  sense, including  ’quasi-judicial’, which expression has  not  been approved by high judicial authorities), is that no objective tests have been laid down in Chapter IV-A with reference  to which,  the  determination  has  to  be  arrived  at.    The expressions "efficient", "adequate", "economical", "properly coordinated"  and "public interest", are matters of  opinion and policy as s. 68-C itself indicates, and do not lay  down any  objective  tests.  If I am right  in  that  conclusion, there  cannot  be any question of  evidence  forthcoming  in proof  of  something which is subjective  to  the  authority determining that matter. A  very  fundamental consideration in  this  connection,  is whether  ss.  68-C and 68-D contemplate any lis.   In  other words,  what  is the proper scope and ambit of  the  inquiry envisaged  by  those  sections ?  The  scheme  prepared  and published  in accordance with s. 68-C, by a State  Transport Undertaking,  is  placed before the public  only  after  the Undertaking has reached the conclusion that it is  necessary in the public interest.  After the scheme has been  prepared and published as aforesaid, the objections to be filed under s. 68-D have reference to the basic question whether or  not the  scheme  as  published, was in  public  interest.   Such objections are open to any person or organization, e.g.,  an Automobile Association, and are not limited only to  persons who  are providing road transport services.  In my  opinion, it is a mistake to suppose that the objections  contemplated by s. 68-D(l), could be on grounds personal to the objectors who are engaged in the business of providing road  transport services.   It  is  not open to  any  particular  individual carrying  on  the  business  of  providing  road   transport services,  to claim that his route should be  excluded  from the  operation  of the published scheme.  I am led  to  that conclusion  by  the effective words of s.  68-D(l),  namely, "file objections thereto", that is, to the scheme  published under s. 68-C. 387 The  objections  have  to be limited to the  merits  of  the scheme as propounded by the State Transport Undertaking.  It will, therefore, be opening the gates too wide to hold  that the  objections  have  reference  to  particular  routes  or portions  of routes covered by private  transport  services. The  underlying  purpose of inviting objections, is  not  to invite   "claims"  by  individual  businessmen  engaged   in providing  road transport services, but to bring out  useful information bearing on the feasibility and soundness of  the

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scheme,  as  propounded  by  the  Undertaking.   Once,   the Government  has decided upon a policy of nationalization  of road transport facilities, the question of safeguarding  the interest of individual businessmen in that line, is no  more relevant.  What is relevant. for the purpose of the  inquiry by the Government, on receipt of objections, is whether  the published  scheme is in the interest of the public.   In  my opinion,  therefore,  it is erroneous to  suppose  that  the object  of s. 68-D(l) is to afford any remedy to  a  private individual  in  his personal interest.  Particulars  of  the scheme required to be published under s. 68C, are meant  for the  information  of  the public, so  that  persons  feeling interested  in  a  public  venture  like  that,  may   offer intelligent and constructive criticism with reference to the merits  of the scheme.  It is equally erroneous  to  suppose that   there  are  two  parties-one,  represented   by   the Undertaking,  and the other, represented by persons who  are engaged   in  the  business  of  providing  road   transport services-and  that the Government is the third party,  which is the arbitrator between the two contesting parties.  That, in my opinion, is not a correct reading of the provisions of Chapter  IV-A of the Act.  The whole aim and object of  that Chapter is to replace individual businessmen engaged in that trade,  by  nationalised road transport services  which  are meant to be run in the interest of the community as a whole, and thus to serve the best public interest.  The  Government is  as much interested in the scheme as the  Road  Transport Undertaking   which  is  a  creature  and  a  limb  of   the Government,   brought   into  existence  with  a   view   to implementing  the  policy  of  the  Government  to   provide nationalised 388 road transport services.  That being the whole scheme of the policy  of nationalisation, it is not correct  to  represent the State Transport Undertaking as entering into competition with other individuals or incorporated bodies whose business it  is  to provide the same kind  of  transport  facilities. That  is made clear by the provisions of s. 68-F, which,  as indicated   above,  make  it  obligatory  on  the   Regional Transport  Authority to issue permits as applied for by  the State Transport Undertaking.  It follows from the  foregoing observations  that  there is no question of  the  Government functioning  as  an adjudicating authority  as  between  the rival claims of the Undertaking and private persons  engaged in  the  same  kind of activity, or that  the  Secretary  to Government  in  the Department of Road  Transport,  when  he personally heard the objections, was functioning as a judge, or that he was disqualified, by any bias, from hearing those objections.   If  we  carry this line of  reasoning  to  its logical conclusion, then even the Minister in-charge of  the Department,  may  be  said to  be  equally  interested,  and therefore,  equally  biased,  and  thus,  disqualified  from hearing   those   objections   and   coming   to   his   own determination,  as  contemplated  in  s.  68-D(2).   In   my opinion, the concept that a person should not be a judge  in his  own  cause,  is  wholly  foreign  to  the  scheme   and provisions of Chapter IV-A of the Act. The scheme as prepared and published, may have proposed,  as it  did  in the instant case, completely  to  exclude  other persons  from  providing  road  transport  service  in   the notified  area  by  the  notified  routes.   But  the  State Government is not concerned with determining whether any  or some  or all of the objectors could be permitted to  provide or  continue  to provide their own road  transport  service. The  State  Government under s. 68-D(2) has only  to  decide

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whether  or  not the proposed scheme should be  approved  or modified  in any way.  The decision to be arrived at by  the State  Government,  is confined to the scheme,  and  is  not concerned  with  rival  claims  by  persons  providing  road transport  service in the same area or by the  same  routes. That,  in my opinion, is the reason why under that  section, the State Government has not been authorized altogether to. 389 cancel  the scheme, but only to approve or modify  it.   The State  Government  has  to  examine  the  soundness  of  the declaration made by the Road Transport Undertaking that  the proposed  scheme  is  in  public  interest.   The  stage  of cancellation comes, if at all, later under s.     68-E, when experience gained in working the approved    scheme,     may lead the State Transport Undertaking to the conclusion  that it should be cancelled or modified.But at the initial stage, that  is  to  say, under s. 68-D,  the  proposed  scheme  is already  there only to be approved or modified in the  light of  the objections raised, if any.  It has been held and  it may   be  taken  as  well-settled  that  when  there  is   a competition between a number of applicants for a  particular route  for  supplying road transport service,  the  Regional Transport Authority or any other Authority deciding  between those  conflicting claims, has to determine the matter in  a quasijudicial  way, because they are  determining  questions affecting the rights of individuals.  But in the  proceeding before  the State Government, no such rival -claims have  to be  decided upon.  What has to be determined is whether  the proposed  scheme  will  serve  public  interest.   Thus,  in proceedings  under Chapter IV of the Act, individual  claims have  to be decided upon, whereas under Chapter IVA,  it  is the  collective interest of the community as a whole,  which is   the  subjectmatter  of  determination  by   the   State Government.   In  other words, the proposed  scheme  is  the outcome  of the decision by a limb of the  State  Government (State  Transport Undertaking), which has come to  the  con- clusion  that it is in the public interest that road  trans- port  service should be run and operated by the State.   The calling of objections by persons affected by the scheme,  is not with a view to deciding between the rival claims of  the State  Undertaking and individuals providing road  transport services in the areas or routes proposed to be covered.  The State  Transport Undertaking has not made any claim at  this stage.   Such a claim arises after the determination by  the State  Government  Under s. 68D(2).  That stage  is  reached when  the  State Transport Undertaking applies  for  permits under s. 68F.  Such a claim for a permit, once 390 made  by  the Undertaking, is no more a rival  claim  to  be treated along with the claims of other individuals providing such  road transport services, but an absolute  claim  which under  that  section  shall  be  granted  by  the   Regional Transport  Authority which is authorized even to  cancel  an existing  permit or modify the terms of an existing  permit, or to refuse renewal of permits, with a view to implementing the  approved scheme.  In my opinion, therefore, it  is  not correct to view the proceedings under Chapter IVA before the State  Government as a lis between any rival claims,  unlike proceedings  under Chapter IV of the Act.  In view of  these considerations,  I would hold that there is no  lis  between rival claims, no determinate tribunal to determine any  lis, and no procedure prescribed in Chapter IVA approximating  or even simulating judicial procedure.  That being so, there is no  question  of any bias, because there can be  none  in  a determination which is come to by officers of the Government

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in the discharge of their administrative duties. As already indicated, the question now under  consideration, does not admit of a general answer.  The answer must  depend upon the relevant statutory provisions, and one case decided on   its  own  basic  statutory  provisions,  cannot  be   a controlling   authority   for  another;  but,  by   way   of illustration, reported cases dealing with similar questions, have been referred to.  My learned brother Wanchoo, J.,  has referred in detail to Franklin’s case, hence, I need not add any  observations with reference to that case.  But  another case,  namely,  Robinson  v. Minister of  Town  and  Country Planning (1), perhaps, not referred to at the bar, seems  to me to be instructive in so far as it has discussed this very question with reference to the provisions of s. 1(1) of  the Town  and  Country  Planning Act, 1944, which  is  in  these terms:- :- "  Where the Minister of Town and Country Planning (in  this Act  referred to as ’the Minister’) is satisfied that it  is requisite,  for the purpose of dealing  satisfactorily  with extensive  war  damage  in  the area  of  a  local  planning authority, that a part or parts of their (I)  [1947] 1 All E.R. 851, 853, 854. 391 area,  consisting of land shown to his satisfaction to  have sustained  war  damage or of such land together  with  other land  contiguous  or adjacent thereto, should  be  laid  out afresh and redeveloped as a whole, an order declaring all or any  of  the land in such a part of their area  to  be  land subject  to compulsory purchase for dealing with war  damage may be made by the Minister if an application in that behalf is  made  to him by the authority before the  expiration  of five  years  from  such date as the Minister  may  by  order appoint   as  being  the  date  when  the  making  of   such applications has become practicable.  A part of the area  of a  local  planning  authority as to which  the  Minister  is satisfied  as  aforesaid is in this Act referred  to  as  an ’area of extensive war damage’." Lord  Greene, M. R., who delivered the leading  judgment  of the Court of Appeal, reversing that of Henn Collins, J. thus summarized the procedure laid down in the Act :- " The procedural provisions in connection with the obtaining of  an order under the sub-section may, so far as  relevant, be summarised as follows: (a) Under sub-s. (4) at least  two months  before  the application is made the  authority  must publish a notice in a local newspaper; (b) under sub-s.  (5) the  application  must  ’designate’ the land  to  which  the application  relates by reference to a map with  or  without descriptive matter ; (c) under sub-s. (6) the a  application must be accompanied by a statement illustrated by a map, for indicating the manner in which it is intended that the  land in  the area of extensive war damage should be laid  out  as respects  its  internal arrangement and in relation  to  the existing  or intended lay-out of the  surrounding  locality, and the manner in which it is intended that such land should be  used whether for purposes requiring the carrying out  of development  or  otherwise’;  (d) under sub-s.  (7)  if  the Minister  is satisfied that these particulars  are  adequate for enabling the expediency of the making of an order’ to be properly considered, he notifies the authority who must then advertise  for  objections; (e) under sched.  I  unless  the Minister, apart from an objection (which must be accompanied by a 392 written  statement  of its grounds) decides  to  refuse  the application  or to make an agreed modification to  meet  the

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objection, he must ’consider the grounds of the objection as set  out  in  the  statement’ and may  call  for  a  further statement.  Under para. 4 of the schedule the Minister,  ’if satisfied that he is sufficiently informed, ’for the purpose of his deciding as aforesaid (sc. whether or not to make the order applied for), as to the matters to which the objection relates’  he  may decide to make the order  without  further investigation.   Subject,  to this, the Minister  (para.  5) must give the objector an opportunity of appearing before  a person nominated by the Minister and, if the objector avails himself  of  this, a similar opportunity to  the  authority. Under  para.  6,  if it appears to  the  Minister  that  the matters   to   which   the  objection   relates   call   for investigation  by  a public inquiry, he must cause  such  an inquiry to be held, in which case, the requirements of para. 5  as  to a private hearing need not be complied  with;  (f) under  s. 1(8), subject to the provisions of sched.  1,  the Minister  may make the order with or  without  modification, except  that  he cannot extend the area unless  all  persons interested consent." In  the case of Phoenix Assurance Co., Ltd. v.  Minister  of Town  and Country Planning (1), Henn Collins, J.  considered the  nature of the order to be passed under s. I (I) of  the Town  and  Country  Planning  Act, 1944,  and  came  to  the conclusion  that  the Minister’s function was  of  a  quasi- judicial  character.  He followed that decision in the  case which  came  up before the Court of Appeal  in  Robinson  v. Minister  of Town and, Country Planning (2).  The  Court  of Appeal  reversed the decision of the learned Judge, and  did not  approve of his decision in Phoenix Assurance Co.,  Ltd. v. Minister of Town and Country Planning (1).  In the course of his judgment, Lord Greene, M. R., observed as follows  at page 859:- "  It  is the case of an original order to be  made  by  the Minister as an executive authority who is at liberty to base his opinion on whatever material he thinks fit, (I) [1947] 1 All E.R. 454. (2) [1947] 1 All E. R. 851, 853, 854. 393 whether  obtained  in the ordinary course of  his  executive functions  or derived from what is brought out at  a  public inquiry  if  there is one.  To say that, in  coming  to  his decision,  he  is in any sense acting  in  a  quasi-judicial capacity  is  to  misunderstand the nature  of  the  process altogether.  I am not concerned to dispute that the  inquiry itself must be conducted on what may be described as  quasi- judicial  principles,  but this is quite a  different  thing from  saying that any such principles are applicable to  the doing of the executive act itself, i.e. , the making of  the order.   The  inquiry is only a step in  the  process  which leads  to  that  result, and there is,  in  my  opinion,  no justification for saying that the executive decision to make the  order can be controlled by the courts by  reference  to the  evidence  or lack of evidence at the inquiry  which  is here  relied on. Such a theory treats the executive  act  as though  it  were a judicial decision (or, if the  phrase  is preferred, a quasi-judicial decision) which it most emphati- cally is not." I  have  devoted considerable space to the decision  of  the Court  of  Appeal, (supra), to show  the  close  resemblance between  the procedure envisaged in the Act of  the  British Parliament, and the law as laid down in Chapter IV-A of  the Act.  In the reported case also, there had to be an  inquiry if  objections  were raised to the notified scheme  of  town planning, and the Minister concerned had to consider all the

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evidence  led  on behalf of the objectors.   In  that  case, unlike the instant case, there was a provision for receiving evidence pro and con, but even then, the Court of Appeal did not hold that the function of the Minister was of a judicial or  quasi-judicial character, chiefly on the ground that  no objective  tests were possible in coming to his  conclusions before  passing the order under the relevant section of  the Act of Parliament. For the reasons given above, I have come to the  conclusion, in   agreement  with  my  brother  Wanchoo,  J.,  that   the Government or the Minister concerned, when passing an  order under  s.  68-D(2), had not to  discharge  a  quasi-judicial function, but was acting only in its or 50 394 his  administrative  capacity.  It follows  from  this  con- clusion that all considerations flowing from the basic  idea of  the proceedings before the State Government being  of  a quasi-judicial  character,  are wholly out of the  way.   It must,  therefore,  be  held  that the  order  of  the  State Government,  impugned  in  this case, is  not  open  to  any interference by the courts.  I would, therefore, dismiss the petition with costs. ORDER In  view of the opinion of the majority the order  approving the  scheme is hereby quashed and a direction issued to  the first  respondent  to forbear from taking over  any  of  the routes  in  which the petitioners are engaged  in  transport business.  This will not preclude the State Government  from making  the  necessary enquiry in regard to  the  objections filed  by  the  petitioners in  accordance  with  law.   The petitioners will have liberty to file additional objections, if any.  The parties to bear their own costs.